Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 20, 2017 | Jun. 30, 2016 | |
Document Document And Entity Information [Abstract] | |||
Entity Registrant Name | INTUITIVE SURGICAL INC | ||
Entity Central Index Key | 1,035,267 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ISRG | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 38,786,979 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 25,194,062,637 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,036.6 | $ 714.6 |
Short-term investments | 1,518 | 845.2 |
Accounts receivable, net of allowances of $1.9 and $2.1 at December 31, 2016 and 2015, respectively | 430.2 | 394.3 |
Inventory | 182.3 | 167.9 |
Prepaids and other current assets | 83.3 | 73.5 |
Total current assets | 3,250.4 | 2,195.5 |
Property, plant and equipment, net | 458.4 | 432.1 |
Long-term investments | 2,283.3 | 1,788 |
Deferred tax assets | 150.9 | 167.8 |
Intangible and other assets, net | 142.8 | 122.8 |
Goodwill | 201.1 | 201.1 |
Total assets | 6,486.9 | 4,907.3 |
Current liabilities: | ||
Accounts payable | 68.5 | 52.6 |
Accrued compensation and employee benefits | 136.4 | 117.3 |
Deferred revenue | 240.6 | 225.6 |
Other accrued liabilities | 151 | 96.4 |
Total current liabilities | 596.5 | 491.9 |
Other long-term liabilities | 112.6 | 95.9 |
Total liabilities | 709.1 | 587.8 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, 2.5 shares authorized, $0.001 par value, issuable in series; no shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 0 | 0 |
Common stock, 100.0 shares authorized, $0.001 par value, 38.8 shares and 37.4 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 0 | 0 |
Additional paid-in capital | 4,211.8 | 3,429.8 |
Retained earnings | 1,574.9 | 899.2 |
Accumulated other comprehensive loss | (8.9) | (9.5) |
Total stockholders’ equity | 5,777.8 | 4,319.5 |
Total liabilities and stockholders’ equity | $ 6,486.9 | $ 4,907.3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance | $ 1.9 | $ 2.1 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued | 38,800,000 | 37,400,000 |
Common stock, shares outstanding | 38,800,000 | 37,400,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Product | $ 2,187.4 | $ 1,919.6 | $ 1,702.7 |
Service | 517 | 464.8 | 429 |
Total revenue | 2,704.4 | 2,384.4 | 2,131.7 |
Cost of revenue: | |||
Product | 663.3 | 647.2 | 569.9 |
Service | 151 | 159.3 | 148 |
Total cost of revenue | 814.3 | 806.5 | 717.9 |
Gross profit | 1,890.1 | 1,577.9 | 1,413.8 |
Operating expenses: | |||
Selling, general and administrative | 705.3 | 640.5 | 691 |
Research and development | 239.6 | 197.4 | 178 |
Total operating expenses | 944.9 | 837.9 | 869 |
Income from operations | 945.2 | 740 | 544.8 |
Interest and other income, net | 35.6 | 18.5 | 4.2 |
Income before taxes | 980.8 | 758.5 | 549 |
Income tax expense | 244.9 | 169.7 | 130.2 |
Net income | $ 735.9 | $ 588.8 | $ 418.8 |
Net income per share: | |||
Basic (usd per share) | $ 19.21 | $ 15.87 | $ 11.35 |
Diluted (usd per share) | $ 18.73 | $ 15.54 | $ 11.11 |
Shares used in computing net income per share: | |||
Basic (shares) | 38.3 | 37.1 | 36.9 |
Diluted (shares) | 39.3 | 37.9 | 37.7 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 735.9 | $ 588.8 | $ 418.8 |
Other comprehensive income (loss): | |||
Change in foreign currency translation gains (losses) | 2 | (1.2) | (2.5) |
Available-for-sale investments: | |||
Change in unrealized losses, net of tax | (4.6) | (3.2) | (3.9) |
Less: Reclassification adjustment for net gains (losses) on investments recognized during the year, net of tax | 0.2 | (0.8) | 2 |
Net change, net of tax effect | (4.4) | (4) | (1.9) |
Derivative instruments: | |||
Change in unrealized gains | 4.1 | 7.8 | 8.6 |
Less: Reclassification adjustment for gains (losses) on derivative instruments recognized during the year, net of tax | (0.6) | (7.4) | (7.5) |
Net change, net of tax effect | 3.5 | 0.4 | 1.1 |
Employee benefit plans: | |||
Change in unrealized losses, net of tax | (0.7) | (0.4) | (4.2) |
Less: Reclassification adjustment for gains (losses) on employee benefit plans recognized during the year, net of tax | 0.2 | 0.8 | 0.3 |
Net change, net of tax effect | (0.5) | 0.4 | (3.9) |
Other comprehensive gains (losses) | 0.6 | (4.4) | (7.2) |
Total comprehensive income | $ 736.5 | $ 584.4 | $ 411.6 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (loss) |
Beginning balances (shares) at Dec. 31, 2013 | 38.2 | ||||
Beginning balance at Dec. 31, 2013 | $ 3,501.4 | $ 0 | $ 2,519.9 | $ 979.4 | $ 2.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of options and under stock purchase plan (in shares) | 0.9 | ||||
Issuance of common stock through employee stock plans | 283.6 | 283.6 | |||
Income tax benefit from employee stock plans | 13.9 | 13.9 | |||
Share-based compensation expense related to employee stock plans | 168.9 | 168.9 | |||
Repurchase and retirement of common stock (in shares) | (2.5) | ||||
Repurchase and retirement of common stock | (1,000) | (89.5) | (910.5) | ||
Net income | 418.8 | 418.8 | |||
Other comprehensive loss | (7.2) | (7.2) | |||
Ending balances (shares) at Dec. 31, 2014 | 36.6 | ||||
Ending balance at Dec. 31, 2014 | 3,379.4 | $ 0 | 2,896.8 | 487.7 | (5.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of options and under stock purchase plan (in shares) | 1.2 | ||||
Issuance of common stock through employee stock plans | 361.1 | 361.1 | |||
Income tax benefit from employee stock plans | 21.4 | 21.4 | |||
Taxes paid related to net share settlement of equity awards | (11) | (1.1) | (9.9) | ||
Share-based compensation expense related to employee stock plans | 167.9 | 167.9 | |||
Repurchase and retirement of common stock (in shares) | (0.4) | ||||
Repurchase and retirement of common stock | (183.7) | (16.3) | (167.4) | ||
Net income | 588.8 | 588.8 | |||
Other comprehensive loss | $ (4.4) | (4.4) | |||
Ending balances (shares) at Dec. 31, 2015 | 37.4 | 37.4 | |||
Ending balance at Dec. 31, 2015 | $ 4,319.5 | $ 0 | 3,429.8 | 899.2 | (9.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of options and under stock purchase plan (in shares) | 1.5 | ||||
Issuance of common stock through employee stock plans | 580.9 | 580.9 | |||
Income tax benefit from employee stock plans | 29.8 | 29.8 | |||
Taxes paid related to net share settlement of equity awards | (24) | (2.2) | (21.8) | ||
Share-based compensation expense related to employee stock plans | 177.6 | 177.6 | |||
Repurchase and retirement of common stock (in shares) | (0.1) | ||||
Repurchase and retirement of common stock | (42.5) | (4.1) | (38.4) | ||
Net income | 735.9 | 735.9 | |||
Other comprehensive loss | $ 0.6 | 0.6 | |||
Ending balances (shares) at Dec. 31, 2016 | 38.8 | 38.8 | |||
Ending balance at Dec. 31, 2016 | $ 5,777.8 | $ 0 | $ 4,211.8 | $ 1,574.9 | $ (8.9) |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 735.9 | $ 588.8 | $ 418.8 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and loss on disposal of property, plant, and equipment, net | 73.9 | 65.1 | 52 |
Amortization of intangible assets | 18.2 | 24.4 | 22.4 |
Loss (gain) on investment, accretion of discounts, and amortization of premiums on investments, net | 35.9 | 26.4 | 33.9 |
Deferred income taxes | 18.7 | 4.6 | (35) |
Income tax benefits from employee stock plans | 29.8 | 21.5 | 13.9 |
Excess tax benefit from employee stock plans | (44.1) | (34.3) | (24) |
Share-based compensation expense | 177.6 | 167.9 | 168.9 |
Changes in operating assets and liabilities, net of effects of acquisition: | |||
Accounts receivable | (35.9) | (79.2) | (13.7) |
Inventory | (46.7) | (10.7) | (26.8) |
Prepaids and other assets | (28.7) | (10.5) | (67.6) |
Accounts payable | 15.9 | (11.3) | 17.7 |
Accrued compensation and employee benefits | 18.7 | 21.5 | 21.4 |
Deferred revenue | 19.9 | 8.2 | 19.8 |
Other liabilities | 53.8 | (10.5) | 63.4 |
Net cash provided by operating activities | 1,042.9 | 771.9 | 665.1 |
Investing activities: | |||
Purchase of investments | (2,585.5) | (1,827.4) | (1,344.6) |
Proceeds from sales of investments | 389.9 | 233.1 | 665.9 |
Proceeds from maturities of investments | 970.1 | 825.8 | 714.7 |
Purchase of property, plant and equipment, intellectual property | (53.9) | (81) | (105.6) |
Acquisition of business, net of cash acquired | 0 | 0 | (84.3) |
Net cash used in investing activities | (1,279.4) | (849.5) | (153.9) |
Financing activities: | |||
Proceeds from issuance of common stock relating to employee stock plans | 580.9 | 361.1 | 283.6 |
Excess tax benefit from employee stock plans | 44.1 | 34.3 | 24 |
Taxes paid related to net share settlement of equity awards | (24) | (11) | 0 |
Repurchase and retirement of common stock | (42.5) | (183.7) | (1,000) |
Other financing activities | 0 | (7.3) | 0 |
Net cash provided by (used in) financing activities | 558.5 | 193.4 | (692.4) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (1.5) | (0.6) |
Net increase (decrease) in cash and cash equivalents | 322 | 114.3 | (181.8) |
Cash and cash equivalents, beginning of year | 714.6 | 600.3 | 782.1 |
Cash and cash equivalents, end of year | $ 1,036.6 | $ 714.6 | $ 600.3 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of the Business | DESCRIPTION OF THE BUSINESS Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci ® Surgical Systems and related instruments and accessories, which taken together, are advanced surgical systems that the Company considers an advanced generation of surgery. This advanced generation of surgery, which the Company calls da Vinci Surgery, combines the benefits of MIS for patients with the ease of use, precision and dexterity of open surgery. A da Vinci Surgical System consists of a surgeon’s console, a patient-side cart and a high performance vision system. The da Vinci Surgical System translates a surgeon’s natural hand movements, which are performed on instrument controls at a console, into corresponding micro-movements of instruments positioned inside the patient through small incisions, or ports. The da Vinci Surgical System is designed to provide its operating surgeons with intuitive control, range of motion, fine tissue manipulation capability and 3-D, HD vision while simultaneously allowing surgeons to work through the small ports enabled by MIS procedures. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements. The accounting estimates that require management’s most significant, difficult and subjective judgments include the valuation and recognition of investments, the valuation of the revenue and allowance for sales returns and doubtful accounts, the estimation of hedging transactions, the valuation of inventory, the assessment of recoverability of intangible assets and their estimated useful lives, revenue recognition, the valuation and recognition of share-based compensation, the recognition and measurement of current and deferred income tax assets and liabilities, and legal contingencies estimates. Actual results could differ materially from these estimates. Concentrations of Credit Risk and Other Risks and Uncertainties The carrying amounts for financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. Marketable securities and derivative instruments are stated at their estimated fair values, based on quoted market prices for the same or similar instruments. The counterparties to the agreements relating to the Company’s investment securities and derivative instruments consist of various major corporations, financial institutions, municipalities and government agencies of high credit standing. The Company’s accounts receivable are derived from net revenue to customers and distributors located throughout the world. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. The Company provides reserves for potential credit losses but has not experienced significant losses to date. As of December 31, 2016 , and 2015 , 73% and 69% , respectively, of accounts receivable were from domestic customers. No single customer represented more than 10% of total revenue for the years ended December 31, 2016 , 2015 , and 2014 . During the years ended December 31, 2016 , 2015 , and 2014 , domestic revenue accounted for 72% , 71% , and 70% of total revenue, respectively, while outside of the U.S. revenue accounted for 28% , 29% , and 30% , respectively, of total revenue for each of the years then ended. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from date of purchase of 90 days or less to be cash equivalents. Investments Available-for-sale investments. The Company’s investments consist of U.S. treasury and U.S. government agency securities, taxable and tax exempt municipal notes, corporate notes and bonds, commercial paper, and money market funds. The Company has designated all investments as available-for-sale and therefore, such investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income. For securities sold prior to maturity, the cost of securities sold is based on the specific identification method. Realized gains and losses on the sale of investments are recorded in interest and other income, net in the Consolidated Statements of Income. Investments with original maturities greater than approximately three months and remaining maturities less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments. Other-than-temporary impairment. All of the Company’s investments are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary included the extent and length of time the investment's fair value has been lower than its cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security prior the expected recovery of the investment's amortized cost basis. During the year ended December 31, 2014, the Company recorded pre-tax other-than-temporary losses of $8.5 million related to equity investments. No such charges were recorded during the years ended December 31, 2016, and 2015. Fair Value Measurements The Company measures the fair value of money market funds, corporate equity securities and certain U.S. Treasury securities based on quoted prices in active markets for identical assets as Level 1 securities. Marketable securities, measured at fair value using Level 2 inputs, are primarily comprised of U.S. and non-U.S. government agencies and corporate debt securities. The Company reviews trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. This approach results in the Level 2 classification of these securities within the fair value hierarchy. Inventory Inventory is stated at the lower of standard cost, which approximates actual costs, or market, on a first-in, first-out basis. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets generally as follows: Useful Lives Building Up to 30 years Building improvements Up to 15 years Leasehold improvements Lesser of useful life or term of lease Equipment and furniture 5 years Operating lease assets Greater of lease term or 1 to 5 years Computer and office equipment 3 years Enterprise-wide software 5 years Purchased software Lesser of 3 years or life of license Depreciation expense for the years ended December 31, 2016 , 2015 , and 2014 was $70.7 million , $61.1 million , and $52.0 million , respectively. Capitalized Software Costs for Internal Use Internally developed software primarily includes enterprise-level business software that the Company customizes to meet its specific operational needs. The Company capitalized costs for internal use software of $11.8 million , $14.8 million , and $12.0 million during the years ended December 31, 2016 , 2015 , and 2014 , respectively. Upon being placed in service, these costs are depreciated over an estimated useful life of up to 5 years. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually during the fourth fiscal quarter, or as circumstances indicate their value may no longer be recoverable. Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets. The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. As of December 31, 2016 , there has been no impairment of goodwill. Intangible assets are carried at cost, net of accumulated amortization. The Company does not have intangible assets with indefinite useful lives other than goodwill. Amortization is recorded on a straight-line basis over the intangible assets' useful lives, which range from approximately 1 to 9 years. Impairment of Long-lived assets The Company evaluates long-lived assets, which include amortizable intangible and tangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. The Company recognizes such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No material impairment losses were incurred in the periods presented. Revenue Recognition The Company’s revenue consists of product revenue resulting from the sales of systems, instruments and accessories, and service revenue. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or service has been rendered, the price is fixed or determinable, and collectability is reasonably assured. Revenue is presented net of taxes collected from customers that are remitted to government authorities. The Company generally recognizes revenue at the following points in time: • System sales. For systems sold directly to end customers, revenue is recognized when acceptance occurs, which is deemed to have occurred upon customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For systems sold through distributors, revenue is recognized when title and risk of loss has transferred, which generally occurs at the time of shipment. Distributors do not have price protection rights and the Company’s system arrangements generally do not provide a right of return. The da Vinci Surgical Systems are delivered with a software component. However, because the software and non-software elements function together to deliver the system’s essential functionality, the Company's arrangements are excluded from being accounted for under software revenue recognition guidance. • Instruments and accessories. Revenue from sales of instruments and accessories is generally recognized at the time of shipment. The Company allows its customers in the normal course of business to return unused products for a limited period of time subsequent to initial purchase and records an allowance against revenue recognized based on historical experience. • Service. Service revenue is recognized ratably over the term of the service period. Revenue related to services performed on a time-and-materials basis is recognized when it is earned and billable. The Company offers its customers the opportunity to trade in their older systems for credit towards the purchase of a newer generation system. The Company generally does not provide specified price trade-in rights or upgrade rights at the time of system purchase. Such trade-in or upgrade transactions are separately negotiated based on the circumstances at the time of the trade-in or upgrade, based on the then fair value of the system, and are generally not based on any pre-existing rights granted by the Company. Accordingly, such trade-ins and upgrades are not considered as separate deliverables in the arrangement for a system sale. As part of a trade-in transaction, the customer receives a new generation system in exchange for its pre-owned system. The trade-in credit is negotiated at the time of the trade-in and is applied towards the purchase price of the new generation unit. Traded-in systems can be reconditioned and resold. The Company accounts for trade-ins consistent with the guidance in AICPA Technical Practice Aid 5100.01, Equipment Sales Net of Trade-Ins (“ TPA 5100.01” ). The Company applies the accounting guidance by crediting system revenue for the negotiated price of the new generation system, while the difference between (a) the trade-in allowance and (b) the net realizable value of the traded-in system less a normal profit margin is treated as a sales allowance. The value of the traded-in system is determined as the amount, after reconditioning costs are added, that will allow a normal profit margin on the sale of the reconditioned unit to be generated. When there is no market for the traded-in units, no value is assigned. Traded-in units are reported as a component of inventory until reconditioned and resold, or otherwise disposed. In addition, customers may also have the opportunity to upgrade their systems, for example, by adding a fourth arm to a three-arm system or adding a second surgeon console for use with the da Vinci Si and Xi Surgical System. Such upgrades are performed by completing component level upgrades at the customer’s site. Upgrade revenue is recognized when the component level upgrades are complete and all revenue recognition criteria are met. The Company's system sale arrangements contain multiple elements including a system(s), system accessories, instruments, accessories, and system service. The Company generally delivers all of the elements, other than service, within days of entering into the system sale arrangement. Each of these elements is a separate unit of accounting. System accessories, instruments, accessories, and service are also sold on a stand-alone basis. For multiple-element arrangements, revenue is allocated to each unit of accounting based on their relative selling prices. Relative selling prices are based first on vendor specific objective evidence of fair value (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on management's best estimate of the selling price (“ESP”) when VSOE and TPE do not exist. The Company’s system sales arrangements generally include a one -year period of free service and four additional years of service that are generally billed for separately on an annual basis at a contractually stated price. The revenue allocated to the free service period is deferred and recognized ratably over the free service period. Amounts billed for the additional years of service are recorded into deferred revenue when they are billed and recognized ratably over the service period. Deferred revenue, for the periods presented, was primarily comprised of contract consideration related to services not yet performed. Because the Company has neither VSOE nor TPE for its systems, the allocation of revenue is based on ESP for the systems sold. The objective of ESP is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines ESP for its systems by considering multiple factors, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews ESP and maintains internal controls over establishing and updating these estimates. Leases The Company enters into sales-type lease and operating lease arrangements with certain qualified customers to purchase or rent its systems. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. Revenue related to multiple-element arrangements are allocated to lease and non-lease elements based on their relative selling prices as prescribed by the Company's revenue recognition policy. Lease elements generally include a da Vinci Surgical System, while non-lease elements generally include service, instruments and accessories. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers the following terms: (1) whether title of the system transfers automatically or for a nominal fee at the end of the term of the lease, (2) whether the present value of the minimum lease payments are equal to or greater than 90% of the fair market value of the system at the inception of the lease, (3) whether the life of the lease exceeds 75% of the life of the asset, and (4) whether there is an option to purchase the asset at a "bargain price" at the end of the lease term. The Company generally recognizes revenue from sales-type lease arrangements at the time the system is accepted by the customer, assuming all other revenue recognition criteria have been met. Revenue from sales-type leases is presented as product revenue. Revenue from operating lease arrangements is recognized as earned over the lease term, which is generally on a straight-line basis and is presented as product revenue. Operating lease revenue for the years ended December 31, 2016, 2015, and 2014 was $16.6 million , $7.0 million , and $1.3 million , respectively. Allowance for Sales Returns and Doubtful Accounts The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends, and changes in customer demand and acceptance of the Company's products. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Share-Based Compensation The Company accounts for share-based employee compensation plans using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. Expected Term: The expected term represents the weighted-average period that the stock options are expected to be outstanding prior to being exercised. The Company determines expected term based on historical exercise patterns and its expectation of the time it will take for employees to exercise options still outstanding. Expected Volatility: The Company uses market-based implied volatility for purposes of valuing options granted. Market-based implied volatility is derived based on at least one -year traded options on the Company’s common stock. The extent to which the Company relies on market-based volatility when valuing options, depend among other things, on the availability of traded options on the Company’s stock and the term of such options. Due to sufficient volume of the traded options, the Company used 100% market-based implied volatility to value options granted, which the Company believes is more representative of future stock price trends than historical volatility. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The fair value of restricted stock units is determined based on the closing quoted price of the Company’s common stock on the day of the grant. See “ Note 9. Share-Based Compensation, ” for a detailed discussion of the Company’s stock plans and share-based compensation expense. Computation of Net Income per Share Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and dilutive potential shares outstanding during the period. Dilutive potential shares primarily consist of employee stock options and restricted stock units. U.S. GAAP requires that employee equity share options, non-vested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of equity awards, which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional-paid-in-capital (“APIC”) when the award becomes deductible are all assumed to be used to repurchase shares. Research and Development Expenses Research and development expenses include amortization of intangible assets, costs associated with co-development R&D licensing arrangements, costs of prototypes, salaries, benefits and other headcount related costs, contract and other outside service fees, and facilities and overhead costs. Foreign Currency and Other Hedging Instruments For subsidiaries whose local currency is their functional currency, their assets and liabilities are translated into U.S. dollars at exchange rates at the balance sheet date and revenues and expenses are translated using average exchange rates in effect during the period. Gains and losses from foreign currency translation are included in accumulated other comprehensive income (loss) within stockholders’ equity in the Consolidated Balance Sheets. For all non-functional currency account balances, the re-measurement of such balances to the functional currency results in either a foreign exchange gain or loss, which is recorded to interest and other income, net in the Consolidated Statements of Income in the same accounting period that the re-measurement occurred. The Company uses derivatives to partially offset its business exposure to foreign currency exchange risk. The terms of the Company's derivative contracts are generally twelve months or shorter. The Company typically hedges portions of its forecasted foreign currency exposure associated with revenue and expenses. The Company may also enter into foreign currency forward contracts to offset the foreign currency exchange gains and losses generated by re-measurement of certain assets and liabilities denominated in non-functional currencies. The hedging program is not designated for trading or speculative purposes. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments. The Company records all derivatives on the Consolidated Balance Sheets at fair value. The effective portions of cash flow hedges are recorded in other comprehensive income (loss) (“OCI”) until the hedged item is recognized in earnings. Derivative instruments designated as cash flow hedges are de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two month time period. Gains and losses in OCI associated with such derivative instruments are reclassified immediately into earnings through interest and other income, net. Any subsequent changes in fair value of such derivative instruments also are reflected in current earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through earnings in interest and other income, net. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are expected more likely than not to be realized in the future. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. As of December 31, 2016 and 2015 , 86% and 88% of long-lived assets were in the United States. Revenue is attributed to a geographic region based on the location of the end customer. For the years ended December 31, 2016 , 2015 , and 2014 , 72% , 71% , and 70% , respectively, of net revenue were generated in the United States. Legal Contingencies The Company is involved in a number of legal proceedings involving product liability, intellectual property, shareholder derivative actions, securities class actions, and other matters. A liability and related charge are recorded to earnings in the Company's consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is reevaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If a material loss is reasonably possible, but not probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred. When determining the estimated probable loss or range of losses, significant judgment is required to be exercised in order to estimate the amount and timing of the loss to be recorded. Estimates of probable losses resulting from litigation are inherently difficult to make, particularly when the matters are in early procedural stages with incomplete facts and information. The final outcome of legal proceedings is dependent on many variables difficult to predict, and therefore, the ultimate cost to entirely resolve such matters may be materially different than the amount of current estimates. Consequently, new information or changes in judgments and estimates could have a material adverse effect on the Company's business, financial condition, and results of operations or cash flows. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The new standard, as amended, becomes effective for the Company in the first quarter of fiscal year 2018, but allows the Company to adopt the standard one year earlier if it so chooses. The Company currently plans to adopt this accounting standard in the first quarter of fiscal year 2018. The Company currently anticipates adopting this ASU using the full retrospective method to restate each prior reporting period presented in our consolidated financial statements. While the Company is continuing to assess the effect of this new standard, the Company currently believes that contractual future billings related to services included in our multi-year contracts will be considered performance obligations that should be part of the contract consideration allocated to all deliverables. Under the current standard future service billings are considered to be contingent revenue. Accordingly, the amount of contract consideration allocated to the performance obligations identified in the Company’s system arrangements would be different under the new standard than the amount allocated under the current standard. The Company currently expects that under the new standard a greater amount of the contract consideration would be allocated to the product-related performance obligations, which are generally delivered upfront. In addition, the Company also expects that incremental contract acquisition costs of obtaining revenue generating contracts, such as sales commissions paid in connection with system sales with multi-year service commitments, would be capitalized and amortized over the economic life of the contract. Under the current guidance, the Company expenses such costs when incurred. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The Company is still in the process of evaluating the effect of the new standard on the Company’s historical financial statements. While the Company has not completed its evaluation, the Company currently believes that the impact to revenue and expense recognized will not be material to any of the years presented. As the Company completes its evaluation of this new standard, new information may arise that could change the Company's current understanding of the impact to revenue and expense recognized. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). The new standard also requires expanded disclosures regarding leasing arrangements. The new standard becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. The new standard is required to be adopted using the modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company generally does not finance purchases of equipment or other capital, but does lease some of its facilities. The Company’s customers finance purchases of da Vinci systems and ancillary products, including directly with the Company. It is currently unknown whether the new standard will change customer buying patterns or behaviors. The Company is evaluating the effect that this new standard will have on its Consolidated Financial Statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-based Payment Accounting . This ASU simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU requires that excess tax benefits and deficiencies be recognized as income tax benefit or expense in the income statement, instead of in equity as under the current guidance. In addition, these amounts will be classified as an operating activity in the statement of cash flows, instead of as a financing activity as they are currently presented. The Company currently plans to implement this ASU as required in the first quarter of fiscal year 2017. The Company also plans to apply the presentation requirements related to the presentation of excess tax benefits in the statement of cash flows retrospectively. The Company does not believe that a cumulative effect adjustment will be recorded in the year of adoption, but the Company anticipates increased income tax expense volatility as a result of adopting this ASU. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory , which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the tr |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Investments The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or short-term or long-term investments as of December 31, 2016 , and 2015 (in millions): Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments December 31, 2016 Cash $ 227.7 $ — $ — $ 227.7 $ 227.7 $ — $ — Level 1: Money market funds 612.4 — — 612.4 612.4 — — U.S. treasuries 625.9 0.1 (2.0 ) 624.0 157.9 168.4 297.7 Subtotal 1,238.3 0.1 (2.0 ) 1,236.4 770.3 168.4 297.7 Level 2: Commercial paper 139.6 — — 139.6 31.1 108.5 — Corporate securities 1,471.8 0.7 (5.0 ) 1,467.5 2.9 555.4 909.2 U.S. government agencies 938.7 0.5 (2.9 ) 936.3 — 342.7 593.6 Non-U.S. government securities 18.5 — — 18.5 — 16.0 2.5 Municipal securities 815.4 — (3.5 ) 811.9 4.6 327.0 480.3 Subtotal 3,384.0 1.2 (11.4 ) 3,373.8 38.6 1,349.6 1,985.6 Total assets measured at fair value $ 4,850.0 $ 1.3 $ (13.4 ) $ 4,837.9 $ 1,036.6 $ 1,518.0 $ 2,283.3 Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments December 31, 2015 Cash $ 202.6 $ — $ — $ 202.6 $ 202.6 $ — $ — Level 1: Money market funds 430.6 — — 430.6 430.6 — — U.S. treasuries & corporate equity securities 253.6 — (1.8 ) 251.8 50.6 52.4 148.8 Subtotal 684.2 — (1.8 ) 682.4 481.2 52.4 148.8 Level 2: Commercial paper 76.4 — — 76.4 3.8 72.6 — Corporate securities 1,131.0 0.8 (3.0 ) 1,128.8 — 384.5 744.3 U.S. government agencies 618.5 — (1.5 ) 617.0 27.0 194.8 395.2 Non-U.S. government securities 28.8 — (0.1 ) 28.7 — 10.3 18.4 Municipal securities 611.9 0.6 (0.6 ) 611.9 — 130.6 481.3 Subtotal 2,466.6 1.4 (5.2 ) 2,462.8 30.8 792.8 1,639.2 Total assets measured at fair value $ 3,353.4 $ 1.4 $ (7.0 ) $ 3,347.8 $ 714.6 $ 845.2 $ 1,788.0 There were no transfers between Level 1 and Level 2 measurements during the year ended December 31, 2016 , and there were no changes in the valuation techniques used. The following table summarizes the contractual maturities of the Company’s marketable cash equivalents and available-for-sale investments (excluding cash and money market funds), at December 31, 2016 (in millions): Amortized Cost Fair Value Mature in less than one year $ 1,714.9 $ 1,714.5 Mature in one to five years 2,295.0 2,283.3 Total $ 4,009.9 $ 3,997.8 Realized gains and losses, net of tax, were not material for any of the periods presented. As of December 31, 2016 , and 2015 , net unrealized losses on investments of $8.6 million and $4.2 million , net of tax, respectively, were included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets. The following tables present the breakdown of the available-for-sale investments with unrealized losses at December 31, 2016 , and 2015 (in millions): Unrealized losses less than 12 months Unrealized losses 12 months or greater Total December 31, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate securities $ 1,056.1 $ (5.0 ) $ — $ — $ 1,056.1 $ (5.0 ) U.S. Treasuries 357.1 (2.0 ) — — 357.1 (2.0 ) U.S. Government and agency securities 538.2 (2.9 ) — — 538.2 (2.9 ) Municipal securities 728.8 (3.5 ) — — 728.8 (3.5 ) $ 2,680.2 $ (13.4 ) $ — $ — $ 2,680.2 $ (13.4 ) December 31, 2015 Corporate securities $ 869.9 $ (3.0 ) $ — $ — $ 869.9 $ (3.0 ) U.S. Treasuries and equity securities 231.2 (1.8 ) — — 231.2 (1.8 ) U.S. Government and agency securities 561.7 (1.5 ) — — 561.7 (1.5 ) Municipal securities 340.0 (0.6 ) — — 340.0 (0.6 ) Non-U.S. government securities 28.7 (0.1 ) — — 28.7 (0.1 ) $ 2,031.5 $ (7.0 ) $ — $ — $ 2,031.5 $ (7.0 ) The unrealized losses on the available-for-sale investments are related to corporate securities and government securities. The Company determined these unrealized losses to be temporary. Factors considered in determining whether a loss is temporary included the length of time and extent to which the investment's fair value has been less than the cost basis; the financial condition and near-term prospects of the investee; extent of the loss related to credit of the issuer; the expected cash flows from the security; the Company’s intent to sell the security; and whether or not the Company will be required to sell the security before the recovery of its amortized cost. Foreign currency derivatives The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on net cash flow from foreign currency denominated sales, expenses, and intercompany balances and other monetary assets or liabilities denominated in currencies other than the U.S. dollar ("USD"). The derivative assets and liabilities are measured using Level 2 fair value inputs. Cash Flow Hedges The Company enters into currency forward contracts as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the USD, primarily the European Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), and the Korean Won (“KRW”). The Company also enters into currency forward contracts as cash flow hedges to hedge certain forecasted expense transactions denominated in EUR and Swiss Franc (“CHF”). For these derivatives, the Company reports the after-tax gain or loss from the hedge as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassifies into earnings in the same period in which the hedge transaction affects earnings. The Company reclassified net gains of $0.9 million , $7.2 million , and $7.5 million to revenue related to the hedged revenue transactions for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The amounts reclassified to expenses related to the hedged transactions and the ineffective portions of cash flow hedges were not material for the periods presented. Other Derivatives Not Designated as Hedging Instruments Other derivatives not designated as hedging instruments consist primarily of forward contracts that the Company uses to hedge intercompany balances and other monetary assets or liabilities denominated in currencies other than the USD, primarily the EUR, GBP, JPY, KRW, and CHF. These derivative instruments are used to hedge against balance sheet foreign currency exposures. The related gains and losses were as follows (in millions): Years Ended December 31, 2016 2015 2014 Recognized gains (losses) in interest and other income, net $ 6.4 $ 7.0 $ 5.7 Foreign exchange gains (losses) related to balance sheet re-measurement $ (5.6 ) $ (7.9 ) $ (6.9 ) The notional amounts for derivative instruments provide one measure of the transaction volume. Total gross notional amounts (in USD) for derivatives and aggregate gross fair value outstanding at the end of each period were as follows (in millions): Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments December 31, December 31, December 31, December 31, Notional amounts: Forward contracts $ 109.7 $ 89.1 $ 143.7 $ 128.7 Gross fair value recorded in: Prepaid and other current assets $ 6.2 $ 2.0 $ 5.6 $ 2.6 Other accrued liabilities $ 1.0 $ 0.5 $ 0.6 $ 0.2 |
Balance Sheet Details and Other
Balance Sheet Details and Other Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details and Other Financial Information | BALANCE SHEET DETAILS AND OTHER FINANCIAL INFORMATION The following table provides details of the inventories (in millions): December 31, 2016 2015 Inventory: Raw materials $ 54.8 $ 53.3 Work-in-process 13.4 10.2 Finished goods 114.1 104.4 Total inventory $ 182.3 $ 167.9 The following table provides details of the property, plant and equipment, net (in millions): December 31, 2016 2015 Property, plant and equipment, net: Land $ 131.7 $ 131.7 Building and building/leasehold improvements 199.5 191.5 Machinery and equipment 217.7 197.6 Operating lease assets 34.7 15.0 Computer and office equipment 41.3 35.7 Capitalized software 114.2 84.5 Construction-in-process 41.2 43.2 Gross property, plant and equipment 780.3 699.2 Less: Accumulated depreciation* (321.9 ) (267.1 ) Total property, plant and equipment, net $ 458.4 $ 432.1 *Accumulated depreciation associated with operating lease assets $ (6.8 ) $ (2.6 ) The following table provides details of the other accrued liabilities—short term (in millions): December 31, 2016 2015 Other accrued liabilities—short term: Taxes payable $ 40.4 $ 11.4 Tolled product liability claims accrued 20.5 24.4 Other accrued liabilities 90.1 60.6 Total other accrued liabilities—short-term $ 151.0 $ 96.4 The following table provides details of the other long-term liabilities balance sheet item (in millions): December 31, 2016 2015 Other long-term liabilities: Income taxes—long term $ 84.9 $ 74.3 Other long-term liabilities 27.7 21.6 Total other long-term liabilities $ 112.6 $ 95.9 Supplemental Cash flow Information The following table provides supplemental cash flow information (in millions): Years Ended December 31, 2016 2015 2014 Income taxes paid $ 138.4 $ 110.3 $ 176.8 Supplemental non-cash investing activities: Equipment transfers from inventory to property, plant and equipment $ 39.3 $ 26.7 $ 27.2 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | LEASES (a) Lease Receivables Lease receivables relating to sales-type lease arrangements are presented on the Consolidated Balance Sheets as follows (in millions): December 31, 2016 2015 Gross lease receivables $ 104.3 $ 67.1 Unearned income (4.8 ) (3.4 ) Allowance for credit loss (0.6 ) (0.4 ) Net investment in sales-type leases 98.9 63.3 Reported as: Prepaids and other current assets 29.8 16.1 Intangible and other assets, net 69.1 47.2 Total, net $ 98.9 $ 63.3 Contractual maturities of gross lease receivables at December 31, 2016 , are as follows (in millions): Fiscal Year Amount 2017 32.1 2018 31.6 2019 22.0 2020 12.5 2021 5.1 2022 and thereafter 1.0 Total $ 104.3 (b) Operating Leases The Company's operating lease terms are generally less than five years. Future minimum lease payments related to noncancelable portion of operating leases at December 31, 2016 are as follows (in millions): Fiscal Year Amount 2017 24.4 2018 22.7 2019 19.9 2020 13.7 2021 4.5 2022 and thereafter 0.5 Total $ 85.7 Contingent rental revenue relating to operating lease arrangements were not material for the periods presented. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The following table summarizes the components of gross intangible asset, accumulated amortization, and net intangible asset balances as of December 31, 2016 , and 2015 (in millions): December 31, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and developed technology $ 158.7 $ (141.6 ) $ 17.1 $ 159.7 $ (129.6 ) $ 30.1 Distribution rights and others 9.2 (9.1 ) 0.1 9.2 (8.0 ) 1.2 Customer relationships 28.6 (14.3 ) 14.3 28.6 (10.2 ) 18.4 Total intangible assets $ 196.5 $ (165.0 ) $ 31.5 $ 197.5 $ (147.8 ) $ 49.7 Amortization expense related to intangible assets was $18.2 million , $24.4 million , and $22.4 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The estimated future amortization expense related to intangible assets as of December 31, 2016 , is as follows (in millions): Fiscal Year Amount 2017 $ 12.5 2018 8.6 2019 3.6 2020 3.4 2021 2.3 2022 and thereafter 1.1 Total $ 31.5 |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES OPERATING LEASES The Company leases space for operations in United States, Mexico, Japan, South Korea, and certain other foreign countries. The Company also leases automobiles for certain sales and field service employees. These leases have varying terms up to fifteen years . Future minimum lease commitments under the Company’s operating leases as of December 31, 2016 , are as follows (in millions): Fiscal Year Amount 2017 $ 7.1 2018 5.7 2019 3.5 2020 2.8 2021 2.6 2022 and thereafter 15.0 Total $ 36.7 Other commitments include an estimated amount of approximately $345.8 million relating to the Company's open purchase orders and contractual obligations that occur in the ordinary course of business, including commitments with suppliers, for which we have not received the goods or services. CONTINGENCIES The Company is involved in a variety of claims, lawsuits, investigations and proceedings relating to securities laws, product liability, intellectual property, insurance, contract disputes, employee related, and other matters. Certain of these lawsuits and claims are described in further detail below. It is not possible to predict what the outcome of these matters will be and the Company cannot guarantee that any resolution will be reached on commercially reasonable terms, if at all. With the exception of the charges recorded related to the Company’s estimate of the probable loss associated with the tolled product liability claims described below, the Company has determined that an estimate of either probable losses or range of loss related to material pending or threatened litigation matters cannot be determined as of December 31, 2016. Nevertheless, it is possible that future legal costs (including settlements, judgments, legal fees and other related defense costs) could have a material adverse effect on the Company's business, financial position, or future results of operations. The Company is also a party to various other legal actions that arise in the ordinary course of business and does not believe that any of these other legal actions will have a material adverse impact on the Company's business, financial position, or future results of operations. In accordance with U.S. GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to each case. Purported Shareholder Class Action Lawsuits filed April 26, 2013 and May 24, 2013 On April 26, 2013, a purported class action lawsuit entitled Abrams v. Intuitive Surgical, et al. , No. 5-13-cv-1920, was filed against a number of the Company's current and former officers and directors in the United States District Court for the Northern District of California. A substantially identical complaint, entitled Adel v. Intuitive Surgical, et al. , No. 5:13-cv-02365, was filed in the same court against the same defendants on May 24, 2013. The Adel case was voluntarily dismissed without prejudice on August 20, 2013. On October 15, 2013, plaintiffs in the Abrams matter filed an amended complaint. The case has since been re-titled In re Intuitive Surgical Securities Litigation, No. 5:13-cv-1920. The plaintiffs seek unspecified damages on behalf of a putative class of persons who purchased or otherwise acquired the Company's common stock between February 6, 2012, and July 18, 2013. The amended complaint alleges that the defendants violated federal securities laws by allegedly making false and misleading statements and omitting certain material facts in certain public statements and in the Company's filings with the SEC. On November 18, 2013, the court appointed the Employees’ Retirement System of the State of Hawaii as lead plaintiff and appointed lead counsel. The Company filed a motion to dismiss the amended complaint on December 16, 2013, which was granted in part and denied in part on August 21, 2014. The plaintiffs elected not to further amend their complaint at that time. On October 22, 2014, the court granted the Company’s motion for leave to file a motion for reconsideration of the court’s August 21, 2014, order. The Company filed its motion for reconsideration on November 5, 2014. Following opposition and reply briefing, the court denied the motion on December 15, 2014, allowing the case to move forward on the claims that remain. The plaintiffs moved for class certification on September 1, 2015, the Company filed its opposition on October 15, 2015, and the plaintiffs filed their reply on November 16, 2015. On January 21, 2016, the court held a hearing on the motion. While that motion remained pending, on October 11, 2016, the Company sent plaintiffs’ lead counsel Labaton Sucharow LLP a letter enclosing a draft motion for sanctions pursuant to Federal Rule of Civil Procedure 11, primarily based on statements to the court that lacked a proper factual basis. In response, on November 1, 2016, plaintiffs’ local counsel withdrew from the case entirely and withdrew their signatures from the disputed pleadings. On November 2, 2016, Labaton Sucharow filed a motion for leave to file an amended complaint that did not include the disputed statements. On November 16, 2016, the Company filed an opposition to plaintiffs’ motion, along with an independent motion to strike the amended complaint and the pleadings from which plaintiffs’ local counsel withdrew their signatures. Following additional briefing, the motion for leave to amend and motion to strike were fully submitted to the Court on November 23, 2016, and December 7, 2016, respectively. At a conference on December 15, 2016, the court informed the parties that it would issue written rulings by January 30, 2017, addressing the motion to amend and motion to strike. At the Company’s request, the court vacated the case schedule in the interim, with instructions for the parties to devise a new schedule within 15 days of its rulings. On December 22, 2016, the court entered an order granting plaintiffs’ motion for class certification. In a footnote, the court indicated that it will grant plaintiffs’ motion for leave to file an amended complaint. On January 25, 2017, the court entered an order granting plaintiffs’ motion for leave to amend the complaint and denying the Company’s motion to strike. On January 5, 2017, the Company filed a Petition for Permission to Appeal from the court’s December 22, 2016 order granting class certification in the Ninth Circuit Court of Appeals. The Court of Appeals has not yet ruled on the Company’s Petition. Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position, or future results of operations. Purported Derivative Actions filed on February 3, 2014, February 21, 2014, March 21, 2014, June 3, 2014, and March 5, 2015 On February 3, 2014, an alleged stockholder, Robert Berg, caused a purported stockholder’s derivative lawsuit entitled Berg v. Guthart et al. , No. 4:14-CV-00515, to be filed in the United States District Court for the Northern District of California. The lawsuit names the Company as a nominal defendant and names a number of the Company’s current and former officers and directors as defendants. The plaintiff seeks to recover, on the Company’s behalf, unspecified damages purportedly sustained by the Company in connection with allegedly misleading statements and/or omissions made in connection with the Company’s financial reporting for the period between 2012 and early 2014. The plaintiff also seeks a series of changes to the Company’s corporate governance policies and an award of attorneys’ fees. On April 3, 2014, the case was related to In re Intuitive Surgical Securities Litigation. On July 30, 2014, the court granted Berg’s motion to be appointed lead plaintiff, denied the City of Birmingham’s motion seeking such appointment (see below for additional description), and re-titled the matter In re Intuitive Surgical, Inc. Shareholder Derivative Litigation , No. 4:14-CV-00515. On August 13, 2014, the plaintiffs filed a consolidated complaint, making allegations substantially similar to the allegations in the original complaint. On September 12, 2014, the Company filed a motion to dismiss the consolidated complaint. The plaintiffs filed an opposition on October 9, 2014, and the Company filed its reply on October 30, 2014. The court denied the Company's motion to dismiss on November 16, 2015. On January 26, 2016, the Company moved to stay this lawsuit in favor of Public School Teachers’ Pension and Retirement Fund of Chicago v. Guthart et al. (see below for additional description). Plaintiff opposed the motion to stay on February 16, 2016, the Company filed its reply on March 1, 2016, and a hearing was set for June 16, 2016. While the motion was pending, however, the Company and the plaintiff agreed in principle that the plaintiff would file a motion to intervene in the Public School Teachers’ Pension and Retirement Fund of Chicago action and withdraw his opposition to the motion to stay. On March 17, 2016, the parties jointly requested that the court not rule on the motion to stay while the agreement was being implemented. Following additional negotiations, the plaintiff filed an unopposed motion to intervene on April 29, 2016. After additional briefing, on May 23, 2016, the court in the Public School Teacher's Pension and Retirement Fund of Chicago action granted the motion. Accordingly, on May 31, 2016, the parties filed a stipulation requesting that the court stay In re Intuitive Surgical, Inc. Shareholder Derivative Litigation . The court granted the stay on June 2, 2016. Additional discussions between the parties ensued, and on September 15, 2016, they executed a confidential Memorandum of Understanding that contains the essential terms of a settlement to which the parties have agreed in principle. That settlement, which is still being finalized, will provide for a dismissal with prejudice and release of all claims brought in both the In re Intuitive Surgical, Inc. Shareholder Derivative Litigation action and the Public School Teachers’ Pension and Retirement Fund of Chicago action, as well as City of Plantation Police Officers’ Employees’ Retirement System v. Guthart et al. (see below for additional description). The settlement will be subject to court approval as described below. In the interim, the In re Intuitive Surgical, Inc. Shareholder Derivative Litigation action remains stayed. It is probable that the final settlement agreement will include terms that will require the Company to reimburse the plaintiffs' lawyers' legal fees. At this time, the Company is unable to estimate the probable amount of those legal fees. Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position or future results of operations. On February 21, 2014, a second alleged stockholder caused a substantially similar purported stockholder’s derivative lawsuit entitled Public School Teachers’ Pension and Retirement Fund of Chicago v. Guthart et al. , No. CIV 526930, to be filed in the Superior Court of the State of California, County of San Mateo, against the same parties and seeking the same relief. On March 26, 2014, the case was removed to the United States District Court for the Northern District of California, where it was related to In re Intuitive Surgical Securities Litigation and Berg v. Guthart on April 30, 2014. The district court remanded the case back to San Mateo County Superior Court on June 30, 2014. On August 28, 2014, the Company filed a motion seeking to stay the case in favor of the federal action and asking that the plaintiff be required to post a bond on the grounds that the action was duplicative and was not in the Company’s best interests. On November 13, 2014, the superior court entered an order denying in part the Company’s motion to stay and denying the Company's request for plaintiff's bond. On November 18, 2014, the Company petitioned the First Appellate District of the California, Court of Appeal for a writ of mandate directing the superior court to stay the case in its entirety. At the same time, the Company requested an immediate stay of proceedings pending resolution of the petition. On November 19, 2014, the court of appeal granted the Company’s request for an immediate stay of the proceedings and set a briefing schedule for the petition. The plaintiff filed its opposition to the petition on December 8, 2014, and the Company filed its reply on December 22, 2014. The petition was denied on January 8, 2015. On January 20, 2015, the Company filed a demurer (moved to dismiss the complaint). The plaintiff filed its opposition to the demurrer on February 10, 2015, and the Company filed its reply on February 20, 2015. A hearing was held on February 27, 2015, and the court overruled the demurrer on March 27, 2015. The court's order was entered on April 2, 2015. On June 19, 2015, the Company moved for summary judgment, and a hearing on the Company's motion was set for September 4, 2015. On July 6, 2015, the court amended the case schedule, and the Company withdrew its motion for summary judgment. The court later further amended the case schedule, and trial was eventually reset for September 16, 2016. On May 23, 2016, the court granted an unopposed motion to intervene filed by the plaintiffs in In re Intuitive Surgical, Inc. Shareholder Derivative Litigation and City of Birmingham Relief and Retirement System v. Guthart et al. (see above and below for additional description). The Company filed a new motion for summary judgment on June 1, 2016, and the plaintiff filed a motion for summary adjudication regarding certain affirmative defenses on June 2, 2016. Following opposition and reply briefing, the court heard argument on the motions for summary judgment and summary adjudication on August 24, 2016. While the motions were pending, on September 15, 2016, the parties executed the confidential Memorandum of Understanding described above, which contains the essential terms of a settlement to which the parties have agreed in principle. That settlement, which is still being finalized, will provide for a dismissal with prejudice and release of all claims brought in the Public School Teachers’ Pension and Retirement Fund of Chicago action, as well as the In re Intuitive Surgical, Inc. Shareholder Derivative Litigation action and the City of Plantation Police Officers’ Employees’ Retirement System action (see above and below, respectively, for additional description). The settlement will be subject to court approval. The parties notified the court of the Memorandum of Understanding on September 15, 2016, and on September 16, 2016, the court entered an order vacating the trial date, ruling that the motions for summary judgment and summary adjudication (along with other pre-trial motions) are moot, and scheduling an approval hearing regarding the settlement for January 17, 2017. At the hearing on that date, the parties informed the court that they are still finalizing the settlement and thus are not yet in a position to seek court approval. In response; the court scheduled a status conference for February 17, 2017; the date for the approval hearing has yet to be determined. Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position, or future results of operations. On March 21, 2014, a third alleged stockholder caused a substantially similar purported stockholder’s derivative lawsuit entitled City of Birmingham Relief and Retirement System v. Guthart et al. , No. 5-14-CV-01307, to be filed in the United States District Court for the Northern District of California against the same parties and seeking the same relief. On April 8, 2014, the lawsuit was related to In re Intuitive Surgical Securities Litigation and Berg v. Guthart. On July 30, 2014, the court consolidated the case with Berg v. Guthart and, as noted above, granted Berg’s motion to be appointed lead plaintiff and denied the City of Birmingham’s motion seeking such appointment. Accordingly, the City of Birmingham Relief and Retirement System action will be resolved by the pending settlement of the In re Intuitive Surgical, Inc. Shareholder Derivative Litigation action (see above for additional description). Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position, or future results of operations. On June 3, 2014, a fourth alleged stockholder caused a substantially similar purported stockholder’s derivative lawsuit entitled City of Plantation Police Officers’ Employees’ Retirement System v. Guthart et al. , C.A. No. 9726-CB, to be filed in the Court of Chancery of the State of Delaware. The Company filed a motion to stay proceedings in favor of the earlier-filed stockholder derivative lawsuits pending in federal and state courts in California. In light of the Company’s motion, the plaintiff agreed to a stay of all proceedings in the case in favor of the earlier-filed actions. While the case was stayed, the parties agreed that the plaintiff would file a motion to intervene in the Public School Teachers’ Pension and Retirement Fund of Chicago action (see above for additional description). The plaintiff filed an unopposed motion to intervene on April 29, 2016. After additional briefing, on May 23, 2016, the court in the Public School Teachers’ Pension and Retirement Fund of Chicago action granted the plaintiff’s motion. However, on June 21, 2016, in response to discovery requests, the plaintiff admitted that it did not continuously hold the Company’s stock during all relevant times. Accordingly, on July 21, 2016, the plaintiff filed a request for dismissal as an additional plaintiff in the Public School Teachers’ Pension and Retirement Fund of Chicago action, which the court in that action granted with prejudice on July 22, 2016. On September 15, 2016, the parties executed the confidential Memorandum of Understanding described above, which contains the essential terms of a settlement to which the parties have agreed in principle. That settlement, which is still being finalized, will provide for a dismissal with prejudice and release of all claims brought in the City of Plantation Police Officers’ Employees’ Retirement System action, as well as both the In re Intuitive Surgical, Inc. Shareholder Derivative Litigation action and the Public School Teachers’ Pension and Retirement Fund of Chicago action (see above for additional description). The settlement will be subject to court approval as described above. In the interim, the City of Plantation Police Officers’ Employees’ Retirement System action remains stayed. Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position, or future results of operations. On March 5, 2015, a fifth alleged stockholder caused a substantially similar purported stockholder’s derivative lawsuit entitled Back v. Guthart et al. , No. 3:15-CV-01037, to be filed in the United States District Court for the Northern District of California. On April 7, 2015, the lawsuit was related to In re Intuitive Surgical Securities Litigation and Berg v. Guthart . The Company filed a motion to dismiss the complaint on July 10, 2015. On August 13, 2015, the parties stipulated to a complete stay of the matter and the court entered an order reflecting the stay on August 17, 2015. The Company believes the settlement of the cases described above will make this action moot and will move for dismissal on that basis. Based on currently available information, the Company does not believe the resolution of this matter will have a material adverse effect on the Company's business, financial position, or future results of operations. Product Liability Litigation The Company is currently named as a defendant in approximately 52 individual product liability lawsuits filed in various state and federal courts by plaintiffs who allege that they or a family member underwent surgical procedures that utilized the da Vinci Surgical System and sustained a variety of personal injuries and, in some cases, death as a result of such surgery. The Company has also received a large number of product liability claims from plaintiffs' attorneys, many of which are subject to certain tolling agreements further discussed below. The Company has also been named as a defendant in a multi-plaintiff lawsuit filed in Missouri state court. In total, plaintiffs in that case seek damages on behalf of 55 patients who had da Vinci Surgeries in 22 different states. The cases raise a variety of allegations including, to varying degrees, that plaintiffs’ injuries resulted from purported defects in the da Vinci Surgical System and/or failure on the Company's part to provide adequate training resources to the healthcare professionals who performed plaintiffs’ surgeries. The cases further allege that the Company failed to adequately disclose and/or misrepresented the potential risks and/or benefits of the da Vinci Surgical System. Plaintiffs also assert a variety of causes of action, including for example, strict liability based on purported design defects, negligence, fraud, breach of express and implied warranties, unjust enrichment, and loss of consortium. Plaintiffs seek recovery for alleged personal injuries and, in many cases, punitive damages. The Company has reached confidential settlements in many of the filed cases. Plaintiffs’ attorneys have also engaged in well-funded national advertising efforts seeking patients dissatisfied with da Vinci Surgery. The Company has received a significant number of such claims from plaintiffs’ attorneys that it believes are a result of these advertising efforts. A substantial number of claims relate to alleged complications from surgeries performed with certain versions of Monopolar Curved Scissor (“MCS”) instruments which included an MCS tip cover accessory that was the subject of a market withdrawal in 2012 and MCS instruments that were the subject of a recall in 2013. In an effort to avoid the expense and distraction of defending multiple lawsuits, the Company entered into tolling agreements to pause the applicable statutes of limitations for many of these claims and engaged in confidential mediation efforts. After an extended confidential mediation process with legal counsel for many of the claimants covered by the tolling agreements, the Company determined during 2014 that, while it denies any and all liability, in light of the costs and risks of litigation, settlement of certain claims was appropriate. During the year ended December 31, 2016, and 2015, the Company recorded pre-tax charges of $8.3 million and $13.8 million , respectively, to reflect the estimated cost of settling a number of the product liability claims covered by the tolling agreements. The Company’s estimate of the anticipated cost of resolving these claims is based on negotiations with attorneys for claimants who have participated in the mediation process. Nonetheless, it is possible that more claims will be made by additional individuals and that the claimants whose claims were not resolved through the mediation program, as well as those claimants who have not participated in mediations, will choose to pursue greater amounts in a court of law. Consequently, the final outcome of these claims is dependent on many variables that are difficult to predict and the ultimate cost associated with these product liability claims may be materially different than the amount of the current estimate and accruals and could have a material adverse effect on the Company's business, financial position, and future results of operations. Although there is a reasonable possibility that a loss in excess of the amount recognized exists, the Company is unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. As of December 31, 2016, and 2015, a total of $20.5 million and $24.4 million , respectively, were included in other accrued liabilities in the accompanying Consolidated Balance Sheets related to the tolled product liability claims. In February 2011, the Company was named as a defendant in a product liability action that had originally been filed in Washington State Superior Court for Kitsap County against the healthcare providers and hospital involved in a decedent’s surgery on such decedent's behalf (Josette Taylor, as Personal Representative of the Estate of Fred E. Taylor, deceased; and on behalf of the Estate of Fred E. Taylor v. Intuitive Surgical, Inc., No. 09-2-03136-5). In Taylor, plaintiff asserted wrongful death and product liability claims against the Company, generally alleging that the decedent died four years after surgery as a result of injuries purportedly suffered during the surgery, which was conducted with the use of the da Vinci Surgical System. The plaintiff in Taylor asserted that such injuries were caused, in whole or in part, by the Company's purported failure to properly train, warn, and instruct the surgeon. The lawsuit sought unspecified damages for past medical expenses, pain and suffering, loss of consortium as well as punitive damages. A trial commenced on April 15, 2013. On May 23, 2013, the jury returned a defense verdict, finding that the Company was not negligent. Judgment was entered in the Company's favor on June 7, 2013. Subsequent to the verdict, the plaintiff filed a notice of appeal. That appeal was denied on July 7, 2015. On July 27, 2015, plaintiff filed a motion for reconsideration with the Court of Appeal; the Court of Appeal denied the motion for reconsideration on August 10, 2015. On September 9, 2015, plaintiff filed a Petition for Review with the Washington State Supreme Court. On February 10, 2016, the Washington Supreme Court issued an order granting the plaintiff’s Petition for Review. Oral argument on the appeal before the Washington Supreme Court was heard on June 7, 2016. The court will issue an opinion at a future time. Insurance Litigation In October 2013, the Company was named as a defendant in an insurance action entitled Illinois Union Insurance Co. v. Intuitive Surgical, Inc. , No. 3:13-cv-04863-JST, filed in the United States District Court for the Northern District of California. Plaintiff Illinois Union Insurance Co. (“Illinois Union”) seeks to rescind the Life Sciences Products-Completed Operations Liability Policy issued by plaintiff to the Company, which provides coverage for product liability claims first made against the Company during the policy period March 1, 2013, to March 1, 2014. In December 2013, the Company was named as a defendant in another insurance action entitled Navigators Specialty Insurance Co. v. Intuitive Surgical, Inc. , No. 5:13-cv-05801-JST, also filed in the Northern District of California. Plaintiff Navigators Specialty Insurance Co. (“Navigators”) alleges that the Follow Form Excess Liability Insurance Policy issued by plaintiff to the Company for product liability claims first made against the Company during the policy period March 1, 2013 to March 1, 2014, should be rescinded. These cases have been consolidated under docket number 3:13-cv-04863. Both plaintiffs generally allege that the Company did not disclose the existence of tolling agreements or the number of claimants incorporated within those agreements, and allege that those agreements were material to plaintiffs’ underwriting processes. On October 20, 2015, the Company filed a complaint alleging breach of contract and bad faith against Illinois Union and Navigators in an action entitled Intuitive Surgical Inc. v. Illinois Union Insurance Co., et al. , No. 3:15-cv-04834-JST, based on the defendants failure to indemnify the Company for losses incurred in the defense and settlement of certain product liability claims brought against the Company during the insurance policy period March 1, 2013 to March 1, 2014. The Company’s breach of contract and bad faith action against the insurers has been consolidated with the insurers’ rescission actions for all purposes except for trial. Both Illinois Union and Navigators moved to dismiss the Company's complaint in that action. The court denied both Illinois Union and Navigators’ motions to dismiss the breach of contract claims against the insurers, denied the motion to dismiss the bad faith claim against Illinois Union, and granted the motion to dismiss the bad faith claim against Navigators. On March 15, 2016, Illinois Union and Navigators filed motions for summary judgment. On May 26, 2016, the Company and Navigators filed a notice with the court that they had reached a confidential settlement of the litigation between the two parties. On May 27, 2016, the Court denied Illinois Union’s motion for summary judgment. Illinois Union sought leave to move for reconsideration of the Court’s order denying Illinois Union’s motion for summary judgment, which the court denied. On July 27, 2016, Illinois Union filed a motion to stay the case and for permission to file an interlocutory appeal with respect to the denial of summary judgment with the U.S. Court of Appeals for the Ninth Circuit. The Court denied the motion to stay on October 11, 2016. On September 15, 2016, the Court dismissed both the Company’s breach of contract claim against Navigators and Navigators’ rescission case against the Company with prejudice. Based on currently available information, the Company does not believe the Navigators settlement or resolution of the Illinois Union matter will have a material adverse effect on the Company's business, financial position, or future results of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY STOCK REPURCHASE PROGRAM The Company's Board of Directors (the “Board”) has authorized an aggregate of $6.2 billion of funding for the Company’s common stock repurchase program (the “Repurchase Program”) since originally established in March 2009, of which the most recent authorization occurred in December 2016 when the Board increased the authorized amount available under Repurchase Program to $3.0 billion . As of December 31, 2016 , the remaining amount of share repurchases authorized by the Board was approximately $2,991.6 million under the Repurchase Program. The $42.5 million of share repurchases for the year ended December 31, 2016 , were repurchased in the open market. On January 24, 2017, subsequent to the end of fiscal year 2016, the Company entered into an accelerated share repurchase program (the “ASR Program”) with Goldman, Sachs & Co. (“Goldman”) to repurchase $2.0 billion of the Company’s common stock. On January 27, 2017, the Company made a payment of $2.0 billion to Goldman and Goldman delivered to the Company an initial delivery of approximately 2.4 million shares of the Company’s common stock, which represents 80% of the payment amount divided by the closing price of the Company’s common stock on January 23, 2017. The total number of shares that the Company will repurchase under the ASR Program will be based generally on the daily volume-weighted average price per share of the Company's common stock during the repurchase period, less a discount. Depending on the circumstances at settlement, Goldman may be required to deliver additional shares of common stock to the Company or the Company may be required either to deliver shares of common stock or make a cash payment to Goldman. Final settlement of the ASR Program is expected to be completed by the end of the fourth quarter of 2017, although the completion date may be accelerated at Goldman’s option during an acceleration period prior to the scheduled termination date. The following table provides the stock repurchase activities during the years ended December 31, 2016 , 2015 , and 2014 (in millions, except per share amounts): Years Ended December 31, 2016 2015 2014 Shares repurchased 0.1 0.4 2.5 Average price per share $ 605.10 $ 502.23 $ 397.52 Value of shares repurchased $ 42.5 $ 183.7 $ 1,000.0 The Company uses the par value method of accounting for its stock repurchases. As a result of the share repurchases during the years ended December 31, 2016 , 2015 , and 2014 , the Company reduced common stock and additional paid-in capital by an aggregate of $4.1 million , $16.3 million , and $89.5 million , respectively, and charged $38.4 million , $167.4 million , $910.5 million , respectively, to retained earnings. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) net of tax, for the years ended December 31, 2016 , and 2015 are as follows (in millions): Year Ended December 31, 2016 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 1.5 $ (4.2 ) $ (3.3 ) $ (3.5 ) $ (9.5 ) Other comprehensive income before reclassifications 4.1 (4.6 ) 2.0 (0.7 ) 0.8 Reclassified from accumulated other comprehensive income (loss) (0.6 ) 0.2 — 0.2 (0.2 ) Net current-period other comprehensive income (loss) 3.5 (4.4 ) 2.0 (0.5 ) 0.6 Ending balance $ 5.0 $ (8.6 ) $ (1.3 ) $ (4.0 ) $ (8.9 ) Year Ended December 31, 2015 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 1.1 $ (0.2 ) $ (2.1 ) $ (3.9 ) $ (5.1 ) Other comprehensive income before reclassifications 7.8 (3.2 ) (1.2 ) (0.4 ) 3.0 Reclassified from accumulated other comprehensive income (loss) (7.4 ) (0.8 ) — 0.8 (7.4 ) Net current-period other comprehensive income (loss) 0.4 (4.0 ) (1.2 ) 0.4 (4.4 ) Ending balance $ 1.5 $ (4.2 ) $ (3.3 ) $ (3.5 ) $ (9.5 ) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Stock Plans 2010 Incentive Award Plan In April 2010, the Company’s stockholders approved the 2010 Incentive Award Plan (“2010 Plan”). Under this plan, the Company issues nonqualified stock options (“NSOs”) and restricted stock units (“RSUs”) to employees and certain consultants. The 2010 Plan generally permits NSOs to be granted at no less than the fair market value of the common stock on the date of grant, with terms of 10 years from the date of grant. The 2010 Plan expires in 2020. In April 2016, the Company's stockholders approved an amended and restated 2010 Plan to provide for an increase in the number of shares of common stock reserved for issuance from 6,250,000 to 7,050,000 . As of December 31, 2016 , approximately 1.7 million shares were reserved for future issuance under the 2010 Plan. A maximum of 0.8 million of these shares can be awarded as RSUs. 2009 Employment Commencement Incentive Plan In October 2009, the Board of Directors adopted the 2009 Employment Commencement Incentive Plan (“New Hire Plan”). The New Hire Plan provides for the shares to be used exclusively for the grant of RSUs and NSOs to new employees (“New Hire Options”), who were not previously employees or non-employee directors of the Company. The Compensation Committee approves all equity awards under the New Hire Plan, which are granted to newly-hired employees once a month on the fifth business day of each month after their hire. Options are granted at an exercise price not less than the fair market value of the stock on the date of grant and have a term not to exceed 10 years. In April 2015, the Board of Directors amended and restated the New Hire Plan to provide for an increase in the number of shares of common stock authorized for issuance pursuant to awards granted under the New Hire Plan from 1,155,000 to 1,455,000 . As of December 31, 2016 , approximately 0.1 million shares were reserved for future issuance under the New Hire Plan. 2000 Equity Incentive Plan In March 2000, the Board of Directors adopted the 2000 Equity Incentive Plan (“2000 Plan”), which took effect upon the closing of the Company’s initial public offering. Under this plan, certain employees, consultants and non-employee directors could be granted Incentive Stock Options (“ISOs”) and Nonstatutory Stock Options (“NSOs”) to purchase shares of the Company’s common stock. The 2000 Plan permitted ISOs to be granted at an exercise price not less than the fair value on the date of the grant and NSOs at an exercise price not less than 85% of the fair value on the date of grant. Options granted under the 2000 Plan generally expire 10 years from the date of grant and become exercisable upon grant subject to repurchase rights in favor of the Company until vested. The 2000 Plan expired in March 2010. However, options granted prior to the plan’s expiration continue to remain outstanding until their original expiration date. Employee Option Vesting Prior to 2012, annual stock options were granted to employees on February 15 of each year or the next business day if the date was not a business day (“Annual Grant”). The grants generally vested 6/48 upon completion of 6 months service and 1/48 per month thereafter. Beginning in 2013, the Company split the annual grant into a grant on February 15 (or the next business day if the date is not a business day) and a separate grant on August 15 (or the next business day if the date is not a business day). The February 15 grants vest 6/48 upon completion of 6 months service and 1/48 per month thereafter. The August 15 stock option grants vest 7/48 at the end of one month and 1/48 per month thereafter through a 3.5 year vesting period. Prior to 2014, New Hire Options generally vested 6/48 upon completion of 6 months service and 1/48 per month thereafter. Beginning in 2014, New Hire Options generally vest 12/48 upon completion of one year service and 1/48 per month thereafter. Option vesting terms are determined by the Board of Directors and, in the future, may vary from past practices. 2000 Non-Employee Directors’ Stock Option Plan In March 2000, the Board of Directors adopted the 2000 Non-Employee Directors’ Stock Option Plan (the “Directors’ Plan”). In October 2009, the automatic evergreen increase provisions were eliminated so that no further automatic increases will be made to the number of shares reserved for issuance under the Directors’ Plan. In addition, the common stock authorized for issuance under the Directors’ Plan was reduced to 150,000 . Options are granted at an exercise price not less than the fair market value of the stock on the date of grant and have a term not to exceed 10 years. Prior to 2016, initial stock option grants to new non-employee directors vest over a three -year period with 12/36 of the shares vesting after one year from the date of grant and 1/36 of the shares vesting monthly thereafter. Annual stock option grants vest one year from the date of the grant. Since 2016, new non-employee directors receive pro-rated stock option grants that vest on the same term as the annual stock option grants. As of December 31, 2016 , approximately 48,000 shares were reserved for future issuance under the Directors’ Plan. 2000 Employee Stock Purchase Plan In March 2000, the Board of Directors adopted the 2000 Employee Stock Purchase Plan (the “ESPP”). Employees are generally eligible to participate in the ESPP if they are customarily employed by the Company for more than 20 hours per week and more than 5 months in a calendar year and are not 5% stockholders of the Company. Under the ESPP, eligible employees may select a rate of payroll deduction up to 15% of their eligible compensation subject to certain maximum purchase limitations. The duration for each offering period is 24 months and is divided into four purchase periods of approximately six months in length. Offerings are concurrent. The purchase price of the shares under the offering is the lesser of 85% of the fair market value of the shares on the offering date or 85% of the fair market value of the shares on the purchase date. A two -year look-back feature in the ESPP causes the offering period to reset if the fair value of the Company’s common stock on the first or last day of the purchase period is less than that on the original offering date. ESPP purchases by employees are settled with newly-issued common stock from the ESPP’s previously authorized and available pool of shares. The Company issued 0.1 million , 0.1 million and 0.1 million shares under the ESPP, representing approximately $32.5 million , $31.2 million , and $29.4 million in employee contributions for the years ended December 31, 2016 , 2015 , and 2014 , respectively. As of December 31, 2016 , there were approximately 0.1 million shares reserved for future issuance under the ESPP. Restricted Stock Units Beginning in 2014, equity awards granted to employees and non-employee directors include a mix of stock options and RSUs. The RSUs to employees vest in one-fourth increments annually over a four -year period. Prior to 2016, initial RSUs granted to new non-employee directors are vested in one-third increments over a three -year period. Annual RSU grants to non-employee directors vest one year from the date of grant. Since 2016, new non-employee directors receive pro-rated RSU grants that vest on the same term as the annual RSU grants. The number of shares issued on the date the RSUs vest is net of the minimum statutory tax withholdings, which are paid in cash to the appropriate taxing authorities on behalf of the Company’s employees. Stock Option Information Option activity during fiscal 2016 under all the stock plans was as follows (in millions, except per share amounts): Stock Options Outstanding Number Outstanding Weighted Average Exercise Price Per Share Balance at December 31, 2015 4.2 $ 421.00 Options granted 0.3 $ 616.97 Options exercised (1.3 ) $ 410.98 Options forfeited/expired (0.1 ) $ 494.64 Balance at December 31, 2016 3.1 $ 445.09 The aggregate intrinsic value of stock options exercised under our stock plans determined as of the date of option exercise was $273.3 million , $196.5 million , and $146.2 million during the years ended December 31, 2016 , 2015 , and 2014 , respectively. Cash received from option exercises and employee stock purchase plans for the years ended December 31, 2016 , 2015 , and 2014 was $580.9 million , $361.1 million , and $283.6 million , respectively. The income tax benefit realized from stock options exercised was $82.9 million for the year ended December 31, 2016 . The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2016 (number of shares and aggregate intrinsic value in millions): Options Outstanding Options Exercisable Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value (1) Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value (1) $95.89 - $341.19 0.8 3.0 $ 279.22 0.8 $ 279.22 $343.83 - $459.14 0.8 6.8 $ 416.51 0.6 $ 410.32 $466.70 - $517.31 0.7 6.3 $ 508.52 0.6 $ 509.04 $518.29 - $614.78 0.6 7.4 $ 550.88 0.4 $ 557.95 $618.96 - $718.04 0.2 9.6 $ 685.31 — $ 692.54 Total 3.1 6.0 $ 445.09 $ 593.3 2.4 5.2 $ 417.93 $ 516.4 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $634.17 at December 31, 2016 , which would have been received by the option holders had all in-the-money option holders exercised their options as of that date. As of December 31, 2016 , a total of 3.0 million shares of stock options vested and expected to vest had a weighted average remaining contractual life of 5.9 years, an aggregate intrinsic value of $587.5 million , and a weighted average exercise price of $442.48 . Restricted Stock Units Information RSU activity for the year ended December 31, 2016 , was as follows (in millions, except per share amounts): Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2015 0.4 $ 485.55 Granted 0.3 $ 553.76 Vested (0.1 ) $ 481.84 Forfeited — $ 509.75 Unvested balance at December 31, 2016 0.6 $ 524.17 As of December 31, 2016 , 0.5 million shares of RSUs were expected to vest with an aggregate intrinsic value of $336.2 million . During the year ended December 31, 2016 , approximately 35,000 RSUs were forfeited. The aggregate vesting date fair value of RSUs vested was $65.3 million , $29.5 million and $0 million during the years ended December 31, 2016 , 2015 , and 2014 , respectively. Share-Based Compensation Expense The following table summarizes share-based compensation expense (in millions): Years Ended December 31, 2016 2015 2014 Cost of sales—products $ 25.2 $ 22.8 $ 19.1 Cost of sales—services 12.4 12.9 13.5 Total cost of sales 37.6 35.7 32.6 Selling, general and administrative 97.4 94.7 99.0 Research and development 43.0 37.7 37.5 Share-based compensation expense before income taxes 178.0 168.1 169.1 Income tax effect 56.1 51.8 53.5 Share-based compensation expense after income taxes $ 121.9 $ 116.3 $ 115.6 The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s share-based compensation plans and rights to acquire stock granted under the Company’s employee stock purchase plan. The weighted average estimated fair values of stock options, the rights to acquire stock granted, and RSUs, as well as the weighted average assumptions used in calculating the fair values of stock options and rights to acquire stock under the ESPP that were granted during the years ended December 31, 2016 , 2015 , and 2014 , were as follows: Years Ended December 31, STOCK OPTION PLANS 2016 2015 2014 Risk free interest rate 1.1 % 1.6 % 1.5 % Expected term (years) 4.2 4.3 4.3 Volatility 26 % 28 % 31 % Fair value at grant date $ 141.18 $ 131.47 $ 122.39 EMPLOYEE STOCK PURCHASE PLAN Risk free interest rate 0.6 % 0.4 % 0.2 % Expected term (years) 1.2 1.2 1.2 Volatility 30 % 31 % 33 % Fair value at grant date $ 172.71 $ 146.72 $ 124.60 RESTRICTED STOCK UNITS Fair value at grant date $ 553.76 $ 511.92 $ 441.36 As share-based compensation expense recognized in the Consolidated Statements of Income during the years ended December 31, 2016 , 2015 , and 2014 , is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Share-based compensation accounting requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimated. As of December 31, 2016 , there were a total of $80.3 million , $200.3 million , and $9.0 million , of total unrecognized compensation expense related to unvested stock options, restricted stock units, and employee stock purchases, respectively. The unrecognized compensation expense is expected to be recognized over a weighted average period of 2.2 years for unvested stock options, 2.6 years for unvested restricted stock units, and 1.0 year for rights granted to acquire stock under the ESPP. Excess tax benefits are realized tax deductions for exercised options and vested RSUs in excess of the deferred tax assets attributable to share-based compensation expense for such equity awards. Excess tax benefits of $44.1 million , $34.3 million , and $24.0 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively, have been classified as a financing cash inflow. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income before provision for income taxes for the years ended December 31, 2016 , 2015 , and 2014 , consisted of the following (in millions): Years Ended December 31, 2016 2015 2014 U.S. $ 653.0 $ 425.1 $ 353.0 Foreign 327.8 333.4 196.0 Total income before provision for income taxes $ 980.8 $ 758.5 $ 549.0 The provision for income taxes for the years ended December 31, 2016 , 2015 , and 2014 consisted of the following (in millions): Years Ended December 31, 2016 2015 2014 Current Federal $ 207.0 $ 148.7 $ 150.5 State 13.4 8.4 7.0 Foreign 5.4 7.6 7.5 $ 225.8 $ 164.7 $ 165.0 Deferred Federal $ 18.3 $ 7.5 $ (30.9 ) State 0.6 0.5 (0.6 ) Foreign 0.2 (3.0 ) (3.3 ) $ 19.1 $ 5.0 $ (34.8 ) Total income tax expense $ 244.9 $ 169.7 $ 130.2 Income tax expense differs from amounts computed by applying the statutory federal income rate of 35% for the years ended December 31, 2016 , 2015 , and 2014 as a result of the following (in millions): Years Ended December 31, 2016 2015 2014 Federal tax at statutory rate $ 343.3 $ 265.5 $ 192.2 Increase (reduction) in tax resulting from: State taxes, net of federal benefits 14.0 8.9 6.4 Foreign rate differential (86.2 ) (67.4 ) (47.4 ) Research and development credit (7.8 ) (6.4 ) (5.0 ) Share-based compensation not benefited 3.6 6.9 7.7 Domestic production activities deduction (8.0 ) (5.3 ) (4.6 ) Reversal of unrecognized tax benefits (15.8 ) (6.4 ) (20.3 ) Reversal of share-based compensation from intercompany charges — (25.0 ) — Other 1.8 (1.1 ) 1.2 Total income tax expense $ 244.9 $ 169.7 $ 130.2 Deferred income taxes reflect tax carry forwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions): December 31, 2016 2015 Deferred tax assets: Share-based compensation expense $ 122.2 $ 140.5 Expenses deducted in later years for tax purposes 47.4 47.1 Research and other credits 15.6 13.5 Other 9.8 7.5 Gross deferred tax assets $ 195.0 $ 208.6 Valuation allowance (17.2 ) (15.2 ) Deferred tax assets $ 177.8 $ 193.4 Deferred tax liabilities: Fixed assets $ (25.2 ) $ (24.0 ) Intangible assets (2.3 ) (2.0 ) Other (0.2 ) (0.5 ) Deferred tax liabilities $ (27.7 ) $ (26.5 ) Net deferred tax assets $ 150.1 $ 166.9 The Company has not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of its foreign subsidiaries as of December 31, 2016 , because the Company intends to indefinitely reinvest such earnings outside the U.S. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. As of December 31, 2016 , the cumulative amount of earnings upon which U.S. income taxes have not been provided was approximately $1,454.2 million . Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable at this time. The Company has a tax holiday in effect for its business operations in Switzerland which will continue until the end of year 2017 to the extent certain terms and conditions continue to be met. This tax holiday provides for a lower rate of taxation in Switzerland based on various thresholds of investment and employment in such jurisdiction. As of December 31, 2016 , the Company remained in compliance with the terms of the holiday. At the end of the tax holiday, Swiss taxable income may be taxed at a higher rate depending on the applicable federal and cantonal rules. Tax benefit from the Swiss tax holiday for the year ended December 31, 2016 , was approximately $10.0 million , or $0.25 per diluted share. As of December 31, 2016 , and 2015 , the Company had valuation allowances of $17.2 million and $15.2 million , respectively, primarily related to California deferred tax assets generated by California R&D credit forwards which have no expiration period. The Company recorded a valuation allowance against its California deferred tax assets as it is more likely than not these deferred tax assets will not be realized as a result of the computation of California taxes under the single sales factor. The Company recorded a net increase of its gross unrecognized tax benefits of approximately $13.6 million during the year ended December 31, 2016 . The net increase was primarily due to increases related to 2016 uncertain tax positions, partially offset by the reversal of gross unrecognized tax benefits in connection with the expiration of certain statutes of limitation in various jurisdictions. The Company had gross unrecognized tax benefits of approximately $106.0 million , $92.4 million , and $75.5 million as of December 31, 2016 , 2015 , and 2014 , respectively, which if recognized, would result in a reduction of the Company’s effective tax rate. The Company included interest expense accrued on unrecognized tax benefits as a component of its income tax expense. As of December 31, 2016 , 2015 , and 2014 , gross interest related to unrecognized tax benefits accrued was approximately $3.7 million , $2.9 million , and $2.5 million , respectively. The Company classified a majority of its net unrecognized tax benefits and related interest in Other accrued liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amounts of gross unrecognized income tax benefits for the years ended December 31, 2016 , 2015 , and 2014 are as follows (in millions): Years Ended December 31, 2016 2015 2014 Beginning balance $ 92.4 $ 75.5 $ 74.0 Increases related to tax positions taken during the current year 29.9 28.9 22.3 Increases related to tax positions taken during a prior year — 0.3 — Decreases related to tax positions taken during a prior year (0.5 ) — — Decreases related to settlements with tax authorities — (11.4 ) (19.1 ) Decreases related to expiration of statute of limitations (15.8 ) (0.9 ) (1.7 ) Ending balance $ 106.0 $ 92.4 $ 75.5 The Company files federal, state and foreign income tax returns in many U.S. and OUS jurisdictions. Years before 2013 are closed for the significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. While it is reasonably possible that a benefit could be recorded, due to the uncertainty related to the timing and potential outcome of audits, the Company cannot estimate the range of reasonably possible change in unrecognized tax benefits that may occur in the next 12 months. The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company's management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NET INCOME PER SHARE The following table presents the computation of basic and diluted net income per share (in millions, except per share amounts): Years Ended December 31, 2016 2015 2014 Net income $ 735.9 $ 588.8 $ 418.8 Basic: Weighted-average shares outstanding 38.3 37.1 36.9 Basic net income per share $ 19.21 $ 15.87 $ 11.35 Diluted: Weighted-average shares outstanding used in basic calculation 38.3 37.1 36.9 Add: Dilutive potential shares 1.0 0.8 0.8 Weighted-average shares used in computing diluted net income per share 39.3 37.9 37.7 Diluted net income per share $ 18.73 $ 15.54 $ 11.11 Share-based compensation awards of approximately 0.2 million , 1.7 million , and 2.4 million shares for the years ended December 31, 2016 , 2015 , and 2014 , respectively, were outstanding, but were not included in the computation of diluted net income per share because the effect of including such shares would have been antidilutive in the periods presented. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The Company sponsors various retirement plans for its eligible U.S. and non-U.S. employees. For employees in the U.S., the Company maintains the Intuitive Surgical, Inc. 401(k) Plan (the “Plan”). As allowed under Section 401(k) of the Internal Revenue Code, the Plan provides tax-deferred salary contributions for eligible U.S. employees. The Plan allows employees to contribute up to 75% of their annual compensation to the Plan on a pre-tax and after-tax basis. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Code. Beginning in 2015, the Company began matching contributions made to the Plan by the employees. The Company matches 200% of employee contributions up to $1,500 per calendar year per person. All matching employer contributions vest immediately. |
Selected Quarterly Data
Selected Quarterly Data | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Data | Three Months Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Revenue $ 756.9 $ 682.9 $ 670.1 $ 594.5 Gross profit (3) $ 527.2 $ 487.0 $ 470.9 $ 405.0 Net income (1)(2)(3) $ 204.0 $ 211.0 $ 184.5 $ 136.4 Net income per common share Basic $ 5.26 $ 5.45 $ 4.82 $ 3.62 Diluted $ 5.13 $ 5.31 $ 4.71 $ 3.54 (1) Includes discrete tax benefits as follows: Audit settlement and expiration of the statutes of limitations in multiple jurisdictions $ — $ 15.8 $ — $ — (2) Includes pre-tax litigation charges $ 5.5 $ — $ 4.4 $ 2.2 (3) Includes pre-tax medical device excise tax refund benefit $ — $ 7.1 $ — $ — Three Months Ended December 31, 2015 September 30, 2015 June 30, March 31, Revenue $ 676.5 $ 589.7 $ 586.1 $ 532.1 Gross profit $ 458.8 $ 395.8 $ 386.5 $ 336.8 Net income (1)(2) $ 190.0 $ 167.3 $ 134.5 $ 97.0 Net income per common share Basic $ 5.09 $ 4.49 $ 3.64 $ 2.64 Diluted $ 4.99 $ 4.40 $ 3.56 $ 2.57 (1) Includes discrete tax benefits as follows: Audit settlement and expiration of the statutes of limitations in multiple jurisdictions $ — $ — $ 7.8 $ — Reversal of the share-based compensation intercompany charges as a result of U.S. Tax Court opinion $ — $ 29.3 $ — $ — Reinstatement of the 2015 federal R&D tax credit $ 6.4 $ — $ — $ — (2) Includes pre-tax litigation charges (recoveries) $ (0.6 ) $ — $ 6.6 $ 7.2 |
Valuation And Qualifying Accoun
Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation And Qualifying Accounts | Balance at Beginning of Year Additions Deductions (1) Balance at End of Year Allowance for doubtful accounts and loan credit losses, and sales returns Year ended December 31, 2016 $ 9.4 $ 24.6 $ (23.2 ) $ 10.8 Year ended December 31, 2015 $ 5.5 $ 22.3 $ (18.4 ) $ 9.4 Year ended December 31, 2014 $ 5.8 $ 22.2 $ (22.5 ) $ 5.5 (1) Primarily represents products returned. |
Summary Of Significant Accoun22
Summary Of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements. The accounting estimates that require management’s most significant, difficult and subjective judgments include the valuation and recognition of investments, the valuation of the revenue and allowance for sales returns and doubtful accounts, the estimation of hedging transactions, the valuation of inventory, the assessment of recoverability of intangible assets and their estimated useful lives, revenue recognition, the valuation and recognition of share-based compensation, the recognition and measurement of current and deferred income tax assets and liabilities, and legal contingencies estimates. Actual results could differ materially from these estimates. |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties The carrying amounts for financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. Marketable securities and derivative instruments are stated at their estimated fair values, based on quoted market prices for the same or similar instruments. The counterparties to the agreements relating to the Company’s investment securities and derivative instruments consist of various major corporations, financial institutions, municipalities and government agencies of high credit standing. The Company’s accounts receivable are derived from net revenue to customers and distributors located throughout the world. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. The Company provides reserves for potential credit losses but has not experienced significant losses to date. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from date of purchase of 90 days or less to be cash equivalents. |
Investments | Investments Available-for-sale investments. The Company’s investments consist of U.S. treasury and U.S. government agency securities, taxable and tax exempt municipal notes, corporate notes and bonds, commercial paper, and money market funds. The Company has designated all investments as available-for-sale and therefore, such investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income. For securities sold prior to maturity, the cost of securities sold is based on the specific identification method. Realized gains and losses on the sale of investments are recorded in interest and other income, net in the Consolidated Statements of Income. Investments with original maturities greater than approximately three months and remaining maturities less than one year are classified as short-term investments. Investments with remaining maturities greater than one year are classified as long-term investments. Other-than-temporary impairment. All of the Company’s investments are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary included the extent and length of time the investment's fair value has been lower than its cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security prior the expected recovery of the investment's amortized cost basis. During the year ended December 31, 2014, the Company recorded pre-tax other-than-temporary losses of $8.5 million related to equity investments. No such charges were recorded during the years ended December 31, 2016, and 2015. |
Fair Value Measurements | Fair Value Measurements The Company measures the fair value of money market funds, corporate equity securities and certain U.S. Treasury securities based on quoted prices in active markets for identical assets as Level 1 securities. Marketable securities, measured at fair value using Level 2 inputs, are primarily comprised of U.S. and non-U.S. government agencies and corporate debt securities. The Company reviews trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. This approach results in the Level 2 classification of these securities within the fair value hierarchy. |
Inventories | Inventory Inventory is stated at the lower of standard cost, which approximates actual costs, or market, on a first-in, first-out basis. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets generally as follows: Useful Lives Building Up to 30 years Building improvements Up to 15 years Leasehold improvements Lesser of useful life or term of lease Equipment and furniture 5 years Operating lease assets Greater of lease term or 1 to 5 years Computer and office equipment 3 years Enterprise-wide software 5 years Purchased software Lesser of 3 years or life of license |
Capitalized Software Costs for Internal Use | Capitalized Software Costs for Internal Use Internally developed software primarily includes enterprise-level business software that the Company customizes to meet its specific operational needs. The Company capitalized costs for internal use software of $11.8 million , $14.8 million , and $12.0 million during the years ended December 31, 2016 , 2015 , and 2014 , respectively. Upon being placed in service, these costs are depreciated over an estimated useful life of up to 5 years. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually during the fourth fiscal quarter, or as circumstances indicate their value may no longer be recoverable. Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets. The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. As of December 31, 2016 , there has been no impairment of goodwill. Intangible assets are carried at cost, net of accumulated amortization. The Company does not have intangible assets with indefinite useful lives other than goodwill. Amortization is recorded on a straight-line basis over the intangible assets' useful lives, which range from approximately 1 to 9 years. |
Impairment of Long-lived assets | Impairment of Long-lived assets The Company evaluates long-lived assets, which include amortizable intangible and tangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. The Company recognizes such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No material impairment losses were incurred in the periods presented. |
Revenue Recognition | Revenue Recognition The Company’s revenue consists of product revenue resulting from the sales of systems, instruments and accessories, and service revenue. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or service has been rendered, the price is fixed or determinable, and collectability is reasonably assured. Revenue is presented net of taxes collected from customers that are remitted to government authorities. The Company generally recognizes revenue at the following points in time: • System sales. For systems sold directly to end customers, revenue is recognized when acceptance occurs, which is deemed to have occurred upon customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For systems sold through distributors, revenue is recognized when title and risk of loss has transferred, which generally occurs at the time of shipment. Distributors do not have price protection rights and the Company’s system arrangements generally do not provide a right of return. The da Vinci Surgical Systems are delivered with a software component. However, because the software and non-software elements function together to deliver the system’s essential functionality, the Company's arrangements are excluded from being accounted for under software revenue recognition guidance. • Instruments and accessories. Revenue from sales of instruments and accessories is generally recognized at the time of shipment. The Company allows its customers in the normal course of business to return unused products for a limited period of time subsequent to initial purchase and records an allowance against revenue recognized based on historical experience. • Service. Service revenue is recognized ratably over the term of the service period. Revenue related to services performed on a time-and-materials basis is recognized when it is earned and billable. The Company offers its customers the opportunity to trade in their older systems for credit towards the purchase of a newer generation system. The Company generally does not provide specified price trade-in rights or upgrade rights at the time of system purchase. Such trade-in or upgrade transactions are separately negotiated based on the circumstances at the time of the trade-in or upgrade, based on the then fair value of the system, and are generally not based on any pre-existing rights granted by the Company. Accordingly, such trade-ins and upgrades are not considered as separate deliverables in the arrangement for a system sale. As part of a trade-in transaction, the customer receives a new generation system in exchange for its pre-owned system. The trade-in credit is negotiated at the time of the trade-in and is applied towards the purchase price of the new generation unit. Traded-in systems can be reconditioned and resold. The Company accounts for trade-ins consistent with the guidance in AICPA Technical Practice Aid 5100.01, Equipment Sales Net of Trade-Ins (“ TPA 5100.01” ). The Company applies the accounting guidance by crediting system revenue for the negotiated price of the new generation system, while the difference between (a) the trade-in allowance and (b) the net realizable value of the traded-in system less a normal profit margin is treated as a sales allowance. The value of the traded-in system is determined as the amount, after reconditioning costs are added, that will allow a normal profit margin on the sale of the reconditioned unit to be generated. When there is no market for the traded-in units, no value is assigned. Traded-in units are reported as a component of inventory until reconditioned and resold, or otherwise disposed. In addition, customers may also have the opportunity to upgrade their systems, for example, by adding a fourth arm to a three-arm system or adding a second surgeon console for use with the da Vinci Si and Xi Surgical System. Such upgrades are performed by completing component level upgrades at the customer’s site. Upgrade revenue is recognized when the component level upgrades are complete and all revenue recognition criteria are met. The Company's system sale arrangements contain multiple elements including a system(s), system accessories, instruments, accessories, and system service. The Company generally delivers all of the elements, other than service, within days of entering into the system sale arrangement. Each of these elements is a separate unit of accounting. System accessories, instruments, accessories, and service are also sold on a stand-alone basis. For multiple-element arrangements, revenue is allocated to each unit of accounting based on their relative selling prices. Relative selling prices are based first on vendor specific objective evidence of fair value (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on management's best estimate of the selling price (“ESP”) when VSOE and TPE do not exist. The Company’s system sales arrangements generally include a one -year period of free service and four additional years of service that are generally billed for separately on an annual basis at a contractually stated price. The revenue allocated to the free service period is deferred and recognized ratably over the free service period. Amounts billed for the additional years of service are recorded into deferred revenue when they are billed and recognized ratably over the service period. Deferred revenue, for the periods presented, was primarily comprised of contract consideration related to services not yet performed. Because the Company has neither VSOE nor TPE for its systems, the allocation of revenue is based on ESP for the systems sold. The objective of ESP is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines ESP for its systems by considering multiple factors, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews ESP and maintains internal controls over establishing and updating these estimates. |
Leases | Leases The Company enters into sales-type lease and operating lease arrangements with certain qualified customers to purchase or rent its systems. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. Revenue related to multiple-element arrangements are allocated to lease and non-lease elements based on their relative selling prices as prescribed by the Company's revenue recognition policy. Lease elements generally include a da Vinci Surgical System, while non-lease elements generally include service, instruments and accessories. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers the following terms: (1) whether title of the system transfers automatically or for a nominal fee at the end of the term of the lease, (2) whether the present value of the minimum lease payments are equal to or greater than 90% of the fair market value of the system at the inception of the lease, (3) whether the life of the lease exceeds 75% of the life of the asset, and (4) whether there is an option to purchase the asset at a "bargain price" at the end of the lease term. The Company generally recognizes revenue from sales-type lease arrangements at the time the system is accepted by the customer, assuming all other revenue recognition criteria have been met. Revenue from sales-type leases is presented as product revenue. Revenue from operating lease arrangements is recognized as earned over the lease term, which is generally on a straight-line basis and is presented as product revenue. |
Allowance for Sales Returns and Doubtful Accounts | Allowance for Sales Returns and Doubtful Accounts The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends, and changes in customer demand and acceptance of the Company's products. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based employee compensation plans using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. Expected Term: The expected term represents the weighted-average period that the stock options are expected to be outstanding prior to being exercised. The Company determines expected term based on historical exercise patterns and its expectation of the time it will take for employees to exercise options still outstanding. Expected Volatility: The Company uses market-based implied volatility for purposes of valuing options granted. Market-based implied volatility is derived based on at least one -year traded options on the Company’s common stock. The extent to which the Company relies on market-based volatility when valuing options, depend among other things, on the availability of traded options on the Company’s stock and the term of such options. Due to sufficient volume of the traded options, the Company used 100% market-based implied volatility to value options granted, which the Company believes is more representative of future stock price trends than historical volatility. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The fair value of restricted stock units is determined based on the closing quoted price of the Company’s common stock on the day of the grant. See “ Note 9. Share-Based Compensation, ” for a detailed discussion of the Company’s stock plans and share-based compensation expense. |
Computation of Net Income per Share | Computation of Net Income per Share Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and dilutive potential shares outstanding during the period. Dilutive potential shares primarily consist of employee stock options and restricted stock units. U.S. GAAP requires that employee equity share options, non-vested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of equity awards, which is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional-paid-in-capital (“APIC”) when the award becomes deductible are all assumed to be used to repurchase shares. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include amortization of intangible assets, costs associated with co-development R&D licensing arrangements, costs of prototypes, salaries, benefits and other headcount related costs, contract and other outside service fees, and facilities and overhead costs. |
Foreign Currency and Other Hedging Instruments | Foreign Currency and Other Hedging Instruments For subsidiaries whose local currency is their functional currency, their assets and liabilities are translated into U.S. dollars at exchange rates at the balance sheet date and revenues and expenses are translated using average exchange rates in effect during the period. Gains and losses from foreign currency translation are included in accumulated other comprehensive income (loss) within stockholders’ equity in the Consolidated Balance Sheets. For all non-functional currency account balances, the re-measurement of such balances to the functional currency results in either a foreign exchange gain or loss, which is recorded to interest and other income, net in the Consolidated Statements of Income in the same accounting period that the re-measurement occurred. The Company uses derivatives to partially offset its business exposure to foreign currency exchange risk. The terms of the Company's derivative contracts are generally twelve months or shorter. The Company typically hedges portions of its forecasted foreign currency exposure associated with revenue and expenses. The Company may also enter into foreign currency forward contracts to offset the foreign currency exchange gains and losses generated by re-measurement of certain assets and liabilities denominated in non-functional currencies. The hedging program is not designated for trading or speculative purposes. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments. The Company records all derivatives on the Consolidated Balance Sheets at fair value. The effective portions of cash flow hedges are recorded in other comprehensive income (loss) (“OCI”) until the hedged item is recognized in earnings. Derivative instruments designated as cash flow hedges are de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two month time period. Gains and losses in OCI associated with such derivative instruments are reclassified immediately into earnings through interest and other income, net. Any subsequent changes in fair value of such derivative instruments also are reflected in current earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through earnings in interest and other income, net. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are expected more likely than not to be realized in the future. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. |
Segments | Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. As of December 31, 2016 and 2015 , 86% and 88% of long-lived assets were in the United States. Revenue is attributed to a geographic region based on the location of the end customer. For the years ended December 31, 2016 , 2015 , and 2014 , 72% , 71% , and 70% , respectively, of net revenue were generated in the United States. |
Legal Contingencies | Legal Contingencies The Company is involved in a number of legal proceedings involving product liability, intellectual property, shareholder derivative actions, securities class actions, and other matters. A liability and related charge are recorded to earnings in the Company's consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is reevaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If a material loss is reasonably possible, but not probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred. When determining the estimated probable loss or range of losses, significant judgment is required to be exercised in order to estimate the amount and timing of the loss to be recorded. Estimates of probable losses resulting from litigation are inherently difficult to make, particularly when the matters are in early procedural stages with incomplete facts and information. The final outcome of legal proceedings is dependent on many variables difficult to predict, and therefore, the ultimate cost to entirely resolve such matters may be materially different than the amount of current estimates. Consequently, new information or changes in judgments and estimates could have a material adverse effect on the Company's business, financial condition, and results of operations or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The new standard, as amended, becomes effective for the Company in the first quarter of fiscal year 2018, but allows the Company to adopt the standard one year earlier if it so chooses. The Company currently plans to adopt this accounting standard in the first quarter of fiscal year 2018. The Company currently anticipates adopting this ASU using the full retrospective method to restate each prior reporting period presented in our consolidated financial statements. While the Company is continuing to assess the effect of this new standard, the Company currently believes that contractual future billings related to services included in our multi-year contracts will be considered performance obligations that should be part of the contract consideration allocated to all deliverables. Under the current standard future service billings are considered to be contingent revenue. Accordingly, the amount of contract consideration allocated to the performance obligations identified in the Company’s system arrangements would be different under the new standard than the amount allocated under the current standard. The Company currently expects that under the new standard a greater amount of the contract consideration would be allocated to the product-related performance obligations, which are generally delivered upfront. In addition, the Company also expects that incremental contract acquisition costs of obtaining revenue generating contracts, such as sales commissions paid in connection with system sales with multi-year service commitments, would be capitalized and amortized over the economic life of the contract. Under the current guidance, the Company expenses such costs when incurred. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The Company is still in the process of evaluating the effect of the new standard on the Company’s historical financial statements. While the Company has not completed its evaluation, the Company currently believes that the impact to revenue and expense recognized will not be material to any of the years presented. As the Company completes its evaluation of this new standard, new information may arise that could change the Company's current understanding of the impact to revenue and expense recognized. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). The new standard also requires expanded disclosures regarding leasing arrangements. The new standard becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. The new standard is required to be adopted using the modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company generally does not finance purchases of equipment or other capital, but does lease some of its facilities. The Company’s customers finance purchases of da Vinci systems and ancillary products, including directly with the Company. It is currently unknown whether the new standard will change customer buying patterns or behaviors. The Company is evaluating the effect that this new standard will have on its Consolidated Financial Statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-based Payment Accounting . This ASU simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU requires that excess tax benefits and deficiencies be recognized as income tax benefit or expense in the income statement, instead of in equity as under the current guidance. In addition, these amounts will be classified as an operating activity in the statement of cash flows, instead of as a financing activity as they are currently presented. The Company currently plans to implement this ASU as required in the first quarter of fiscal year 2017. The Company also plans to apply the presentation requirements related to the presentation of excess tax benefits in the statement of cash flows retrospectively. The Company does not believe that a cumulative effect adjustment will be recorded in the year of adoption, but the Company anticipates increased income tax expense volatility as a result of adopting this ASU. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory , which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This ASU will be effective for the Company in first quarter of 2018 with early adoption permitted. This ASU is required to be adopted using the modified retrospective approach, with a cumulative catch-up adjustment to retained earnings in the period of adoption. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. |
Summary Of Significant Accoun23
Summary Of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives Of The Assets | Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets generally as follows: Useful Lives Building Up to 30 years Building improvements Up to 15 years Leasehold improvements Lesser of useful life or term of lease Equipment and furniture 5 years Operating lease assets Greater of lease term or 1 to 5 years Computer and office equipment 3 years Enterprise-wide software 5 years Purchased software Lesser of 3 years or life of license The following table provides details of the property, plant and equipment, net (in millions): December 31, 2016 2015 Property, plant and equipment, net: Land $ 131.7 $ 131.7 Building and building/leasehold improvements 199.5 191.5 Machinery and equipment 217.7 197.6 Operating lease assets 34.7 15.0 Computer and office equipment 41.3 35.7 Capitalized software 114.2 84.5 Construction-in-process 41.2 43.2 Gross property, plant and equipment 780.3 699.2 Less: Accumulated depreciation* (321.9 ) (267.1 ) Total property, plant and equipment, net $ 458.4 $ 432.1 *Accumulated depreciation associated with operating lease assets $ (6.8 ) $ (2.6 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Cash and Available-For-Sale Securities | The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or short-term or long-term investments as of December 31, 2016 , and 2015 (in millions): Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments December 31, 2016 Cash $ 227.7 $ — $ — $ 227.7 $ 227.7 $ — $ — Level 1: Money market funds 612.4 — — 612.4 612.4 — — U.S. treasuries 625.9 0.1 (2.0 ) 624.0 157.9 168.4 297.7 Subtotal 1,238.3 0.1 (2.0 ) 1,236.4 770.3 168.4 297.7 Level 2: Commercial paper 139.6 — — 139.6 31.1 108.5 — Corporate securities 1,471.8 0.7 (5.0 ) 1,467.5 2.9 555.4 909.2 U.S. government agencies 938.7 0.5 (2.9 ) 936.3 — 342.7 593.6 Non-U.S. government securities 18.5 — — 18.5 — 16.0 2.5 Municipal securities 815.4 — (3.5 ) 811.9 4.6 327.0 480.3 Subtotal 3,384.0 1.2 (11.4 ) 3,373.8 38.6 1,349.6 1,985.6 Total assets measured at fair value $ 4,850.0 $ 1.3 $ (13.4 ) $ 4,837.9 $ 1,036.6 $ 1,518.0 $ 2,283.3 Reported as: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments December 31, 2015 Cash $ 202.6 $ — $ — $ 202.6 $ 202.6 $ — $ — Level 1: Money market funds 430.6 — — 430.6 430.6 — — U.S. treasuries & corporate equity securities 253.6 — (1.8 ) 251.8 50.6 52.4 148.8 Subtotal 684.2 — (1.8 ) 682.4 481.2 52.4 148.8 Level 2: Commercial paper 76.4 — — 76.4 3.8 72.6 — Corporate securities 1,131.0 0.8 (3.0 ) 1,128.8 — 384.5 744.3 U.S. government agencies 618.5 — (1.5 ) 617.0 27.0 194.8 395.2 Non-U.S. government securities 28.8 — (0.1 ) 28.7 — 10.3 18.4 Municipal securities 611.9 0.6 (0.6 ) 611.9 — 130.6 481.3 Subtotal 2,466.6 1.4 (5.2 ) 2,462.8 30.8 792.8 1,639.2 Total assets measured at fair value $ 3,353.4 $ 1.4 $ (7.0 ) $ 3,347.8 $ 714.6 $ 845.2 $ 1,788.0 |
Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments | The following table summarizes the contractual maturities of the Company’s marketable cash equivalents and available-for-sale investments (excluding cash and money market funds), at December 31, 2016 (in millions): Amortized Cost Fair Value Mature in less than one year $ 1,714.9 $ 1,714.5 Mature in one to five years 2,295.0 2,283.3 Total $ 4,009.9 $ 3,997.8 |
Schedule Of Available-For-Sale Investments With Unrealized Losses | The following tables present the breakdown of the available-for-sale investments with unrealized losses at December 31, 2016 , and 2015 (in millions): Unrealized losses less than 12 months Unrealized losses 12 months or greater Total December 31, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate securities $ 1,056.1 $ (5.0 ) $ — $ — $ 1,056.1 $ (5.0 ) U.S. Treasuries 357.1 (2.0 ) — — 357.1 (2.0 ) U.S. Government and agency securities 538.2 (2.9 ) — — 538.2 (2.9 ) Municipal securities 728.8 (3.5 ) — — 728.8 (3.5 ) $ 2,680.2 $ (13.4 ) $ — $ — $ 2,680.2 $ (13.4 ) December 31, 2015 Corporate securities $ 869.9 $ (3.0 ) $ — $ — $ 869.9 $ (3.0 ) U.S. Treasuries and equity securities 231.2 (1.8 ) — — 231.2 (1.8 ) U.S. Government and agency securities 561.7 (1.5 ) — — 561.7 (1.5 ) Municipal securities 340.0 (0.6 ) — — 340.0 (0.6 ) Non-U.S. government securities 28.7 (0.1 ) — — 28.7 (0.1 ) $ 2,031.5 $ (7.0 ) $ — $ — $ 2,031.5 $ (7.0 ) |
Derivative Instruments Used to Hedge against Balance Sheet Foreign Currency Exposures | These derivative instruments are used to hedge against balance sheet foreign currency exposures. The related gains and losses were as follows (in millions): Years Ended December 31, 2016 2015 2014 Recognized gains (losses) in interest and other income, net $ 6.4 $ 7.0 $ 5.7 Foreign exchange gains (losses) related to balance sheet re-measurement $ (5.6 ) $ (7.9 ) $ (6.9 ) |
Gross Notional Amounts for Outstanding Derivatives | Total gross notional amounts (in USD) for derivatives and aggregate gross fair value outstanding at the end of each period were as follows (in millions): Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments December 31, December 31, December 31, December 31, Notional amounts: Forward contracts $ 109.7 $ 89.1 $ 143.7 $ 128.7 Gross fair value recorded in: Prepaid and other current assets $ 6.2 $ 2.0 $ 5.6 $ 2.6 Other accrued liabilities $ 1.0 $ 0.5 $ 0.6 $ 0.2 |
Balance Sheet Details and Oth25
Balance Sheet Details and Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Details of the Inventory Balance Sheet Item | The following table provides details of the inventories (in millions): December 31, 2016 2015 Inventory: Raw materials $ 54.8 $ 53.3 Work-in-process 13.4 10.2 Finished goods 114.1 104.4 Total inventory $ 182.3 $ 167.9 |
Details of the Property, Plant and Equipment, Net Balance Sheet Item | Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets generally as follows: Useful Lives Building Up to 30 years Building improvements Up to 15 years Leasehold improvements Lesser of useful life or term of lease Equipment and furniture 5 years Operating lease assets Greater of lease term or 1 to 5 years Computer and office equipment 3 years Enterprise-wide software 5 years Purchased software Lesser of 3 years or life of license The following table provides details of the property, plant and equipment, net (in millions): December 31, 2016 2015 Property, plant and equipment, net: Land $ 131.7 $ 131.7 Building and building/leasehold improvements 199.5 191.5 Machinery and equipment 217.7 197.6 Operating lease assets 34.7 15.0 Computer and office equipment 41.3 35.7 Capitalized software 114.2 84.5 Construction-in-process 41.2 43.2 Gross property, plant and equipment 780.3 699.2 Less: Accumulated depreciation* (321.9 ) (267.1 ) Total property, plant and equipment, net $ 458.4 $ 432.1 *Accumulated depreciation associated with operating lease assets $ (6.8 ) $ (2.6 ) |
Details of the Other Accrued Liabilities—Short Term Balance Sheet Item | The following table provides details of the other accrued liabilities—short term (in millions): December 31, 2016 2015 Other accrued liabilities—short term: Taxes payable $ 40.4 $ 11.4 Tolled product liability claims accrued 20.5 24.4 Other accrued liabilities 90.1 60.6 Total other accrued liabilities—short-term $ 151.0 $ 96.4 |
Details of the Other Long-Term Liabilities Balance Sheet Item | The following table provides details of the other long-term liabilities balance sheet item (in millions): December 31, 2016 2015 Other long-term liabilities: Income taxes—long term $ 84.9 $ 74.3 Other long-term liabilities 27.7 21.6 Total other long-term liabilities $ 112.6 $ 95.9 |
Supplemental Cash Flow Information | The following table provides supplemental cash flow information (in millions): Years Ended December 31, 2016 2015 2014 Income taxes paid $ 138.4 $ 110.3 $ 176.8 Supplemental non-cash investing activities: Equipment transfers from inventory to property, plant and equipment $ 39.3 $ 26.7 $ 27.2 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Lease Receivables Relating to Sales-type Lease Arrangements | Lease receivables relating to sales-type lease arrangements are presented on the Consolidated Balance Sheets as follows (in millions): December 31, 2016 2015 Gross lease receivables $ 104.3 $ 67.1 Unearned income (4.8 ) (3.4 ) Allowance for credit loss (0.6 ) (0.4 ) Net investment in sales-type leases 98.9 63.3 Reported as: Prepaids and other current assets 29.8 16.1 Intangible and other assets, net 69.1 47.2 Total, net $ 98.9 $ 63.3 |
Contractual Maturities of Gross Lease Receivables | Contractual maturities of gross lease receivables at December 31, 2016 , are as follows (in millions): Fiscal Year Amount 2017 32.1 2018 31.6 2019 22.0 2020 12.5 2021 5.1 2022 and thereafter 1.0 Total $ 104.3 |
Schedule Of Future Minimum Lease Receivables Under Operating Leases | The Company's operating lease terms are generally less than five years. Future minimum lease payments related to noncancelable portion of operating leases at December 31, 2016 are as follows (in millions): Fiscal Year Amount 2017 24.4 2018 22.7 2019 19.9 2020 13.7 2021 4.5 2022 and thereafter 0.5 Total $ 85.7 Future minimum lease commitments under the Company’s operating leases as of December 31, 2016 , are as follows (in millions): Fiscal Year Amount 2017 $ 7.1 2018 5.7 2019 3.5 2020 2.8 2021 2.6 2022 and thereafter 15.0 Total $ 36.7 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table summarizes the components of gross intangible asset, accumulated amortization, and net intangible asset balances as of December 31, 2016 , and 2015 (in millions): December 31, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and developed technology $ 158.7 $ (141.6 ) $ 17.1 $ 159.7 $ (129.6 ) $ 30.1 Distribution rights and others 9.2 (9.1 ) 0.1 9.2 (8.0 ) 1.2 Customer relationships 28.6 (14.3 ) 14.3 28.6 (10.2 ) 18.4 Total intangible assets $ 196.5 $ (165.0 ) $ 31.5 $ 197.5 $ (147.8 ) $ 49.7 |
Schedule Of Estimated Future Amortization Expense Of Intangible Assets | The estimated future amortization expense related to intangible assets as of December 31, 2016 , is as follows (in millions): Fiscal Year Amount 2017 $ 12.5 2018 8.6 2019 3.6 2020 3.4 2021 2.3 2022 and thereafter 1.1 Total $ 31.5 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Lease Commitments Under Operating Leases | The Company's operating lease terms are generally less than five years. Future minimum lease payments related to noncancelable portion of operating leases at December 31, 2016 are as follows (in millions): Fiscal Year Amount 2017 24.4 2018 22.7 2019 19.9 2020 13.7 2021 4.5 2022 and thereafter 0.5 Total $ 85.7 Future minimum lease commitments under the Company’s operating leases as of December 31, 2016 , are as follows (in millions): Fiscal Year Amount 2017 $ 7.1 2018 5.7 2019 3.5 2020 2.8 2021 2.6 2022 and thereafter 15.0 Total $ 36.7 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule Of Stock Repurchase Activities | The following table provides the stock repurchase activities during the years ended December 31, 2016 , 2015 , and 2014 (in millions, except per share amounts): Years Ended December 31, 2016 2015 2014 Shares repurchased 0.1 0.4 2.5 Average price per share $ 605.10 $ 502.23 $ 397.52 Value of shares repurchased $ 42.5 $ 183.7 $ 1,000.0 |
Components of Accumulated Other Comprehensive Income (Loss), Net of Tax | The components of accumulated other comprehensive income (loss) net of tax, for the years ended December 31, 2016 , and 2015 are as follows (in millions): Year Ended December 31, 2016 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 1.5 $ (4.2 ) $ (3.3 ) $ (3.5 ) $ (9.5 ) Other comprehensive income before reclassifications 4.1 (4.6 ) 2.0 (0.7 ) 0.8 Reclassified from accumulated other comprehensive income (loss) (0.6 ) 0.2 — 0.2 (0.2 ) Net current-period other comprehensive income (loss) 3.5 (4.4 ) 2.0 (0.5 ) 0.6 Ending balance $ 5.0 $ (8.6 ) $ (1.3 ) $ (4.0 ) $ (8.9 ) Year Ended December 31, 2015 Gains (Losses) on Hedge Instruments Unrealized Gains (Losses) on Available-for-Sale Securities Foreign Currency Translation Gains (Losses) Employee Benefit Plans Total Beginning balance $ 1.1 $ (0.2 ) $ (2.1 ) $ (3.9 ) $ (5.1 ) Other comprehensive income before reclassifications 7.8 (3.2 ) (1.2 ) (0.4 ) 3.0 Reclassified from accumulated other comprehensive income (loss) (7.4 ) (0.8 ) — 0.8 (7.4 ) Net current-period other comprehensive income (loss) 0.4 (4.0 ) (1.2 ) 0.4 (4.4 ) Ending balance $ 1.5 $ (4.2 ) $ (3.3 ) $ (3.5 ) $ (9.5 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary Of Stock Option Activity Under All Stock Plans | Option activity during fiscal 2016 under all the stock plans was as follows (in millions, except per share amounts): Stock Options Outstanding Number Outstanding Weighted Average Exercise Price Per Share Balance at December 31, 2015 4.2 $ 421.00 Options granted 0.3 $ 616.97 Options exercised (1.3 ) $ 410.98 Options forfeited/expired (0.1 ) $ 494.64 Balance at December 31, 2016 3.1 $ 445.09 |
Summary Of Significant Ranges Of Outstanding And Exercisable Options | The following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2016 (number of shares and aggregate intrinsic value in millions): Options Outstanding Options Exercisable Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value (1) Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value (1) $95.89 - $341.19 0.8 3.0 $ 279.22 0.8 $ 279.22 $343.83 - $459.14 0.8 6.8 $ 416.51 0.6 $ 410.32 $466.70 - $517.31 0.7 6.3 $ 508.52 0.6 $ 509.04 $518.29 - $614.78 0.6 7.4 $ 550.88 0.4 $ 557.95 $618.96 - $718.04 0.2 9.6 $ 685.31 — $ 692.54 Total 3.1 6.0 $ 445.09 $ 593.3 2.4 5.2 $ 417.93 $ 516.4 (1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $634.17 at December 31, 2016 , which would have been received by the option holders had all in-the-money option holders exercised their options as of that date. |
Summary of RSU Activity | RSU activity for the year ended December 31, 2016 , was as follows (in millions, except per share amounts): Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2015 0.4 $ 485.55 Granted 0.3 $ 553.76 Vested (0.1 ) $ 481.84 Forfeited — $ 509.75 Unvested balance at December 31, 2016 0.6 $ 524.17 |
Summary Of Share-Based Compensation Expense | The following table summarizes share-based compensation expense (in millions): Years Ended December 31, 2016 2015 2014 Cost of sales—products $ 25.2 $ 22.8 $ 19.1 Cost of sales—services 12.4 12.9 13.5 Total cost of sales 37.6 35.7 32.6 Selling, general and administrative 97.4 94.7 99.0 Research and development 43.0 37.7 37.5 Share-based compensation expense before income taxes 178.0 168.1 169.1 Income tax effect 56.1 51.8 53.5 Share-based compensation expense after income taxes $ 121.9 $ 116.3 $ 115.6 |
Schedule Of Estimated Fair Values Of The Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions and Fair Value of RSUs | The weighted average estimated fair values of stock options, the rights to acquire stock granted, and RSUs, as well as the weighted average assumptions used in calculating the fair values of stock options and rights to acquire stock under the ESPP that were granted during the years ended December 31, 2016 , 2015 , and 2014 , were as follows: Years Ended December 31, STOCK OPTION PLANS 2016 2015 2014 Risk free interest rate 1.1 % 1.6 % 1.5 % Expected term (years) 4.2 4.3 4.3 Volatility 26 % 28 % 31 % Fair value at grant date $ 141.18 $ 131.47 $ 122.39 EMPLOYEE STOCK PURCHASE PLAN Risk free interest rate 0.6 % 0.4 % 0.2 % Expected term (years) 1.2 1.2 1.2 Volatility 30 % 31 % 33 % Fair value at grant date $ 172.71 $ 146.72 $ 124.60 RESTRICTED STOCK UNITS Fair value at grant date $ 553.76 $ 511.92 $ 441.36 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Income Before Provision For Income Taxes | Income before provision for income taxes for the years ended December 31, 2016 , 2015 , and 2014 , consisted of the following (in millions): Years Ended December 31, 2016 2015 2014 U.S. $ 653.0 $ 425.1 $ 353.0 Foreign 327.8 333.4 196.0 Total income before provision for income taxes $ 980.8 $ 758.5 $ 549.0 |
Schedule Of Provision For Income Taxes | The provision for income taxes for the years ended December 31, 2016 , 2015 , and 2014 consisted of the following (in millions): Years Ended December 31, 2016 2015 2014 Current Federal $ 207.0 $ 148.7 $ 150.5 State 13.4 8.4 7.0 Foreign 5.4 7.6 7.5 $ 225.8 $ 164.7 $ 165.0 Deferred Federal $ 18.3 $ 7.5 $ (30.9 ) State 0.6 0.5 (0.6 ) Foreign 0.2 (3.0 ) (3.3 ) $ 19.1 $ 5.0 $ (34.8 ) Total income tax expense $ 244.9 $ 169.7 $ 130.2 |
Schedule Of Income Tax Difference From The Statutory Rate | Income tax expense differs from amounts computed by applying the statutory federal income rate of 35% for the years ended December 31, 2016 , 2015 , and 2014 as a result of the following (in millions): Years Ended December 31, 2016 2015 2014 Federal tax at statutory rate $ 343.3 $ 265.5 $ 192.2 Increase (reduction) in tax resulting from: State taxes, net of federal benefits 14.0 8.9 6.4 Foreign rate differential (86.2 ) (67.4 ) (47.4 ) Research and development credit (7.8 ) (6.4 ) (5.0 ) Share-based compensation not benefited 3.6 6.9 7.7 Domestic production activities deduction (8.0 ) (5.3 ) (4.6 ) Reversal of unrecognized tax benefits (15.8 ) (6.4 ) (20.3 ) Reversal of share-based compensation from intercompany charges — (25.0 ) — Other 1.8 (1.1 ) 1.2 Total income tax expense $ 244.9 $ 169.7 $ 130.2 |
Schedule Of Deferred Tax Assets | Deferred income taxes reflect tax carry forwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions): December 31, 2016 2015 Deferred tax assets: Share-based compensation expense $ 122.2 $ 140.5 Expenses deducted in later years for tax purposes 47.4 47.1 Research and other credits 15.6 13.5 Other 9.8 7.5 Gross deferred tax assets $ 195.0 $ 208.6 Valuation allowance (17.2 ) (15.2 ) Deferred tax assets $ 177.8 $ 193.4 Deferred tax liabilities: Fixed assets $ (25.2 ) $ (24.0 ) Intangible assets (2.3 ) (2.0 ) Other (0.2 ) (0.5 ) Deferred tax liabilities $ (27.7 ) $ (26.5 ) Net deferred tax assets $ 150.1 $ 166.9 |
Schedule Of Gross Unrecognized Income Tax Benefits | A reconciliation of the beginning and ending amounts of gross unrecognized income tax benefits for the years ended December 31, 2016 , 2015 , and 2014 are as follows (in millions): Years Ended December 31, 2016 2015 2014 Beginning balance $ 92.4 $ 75.5 $ 74.0 Increases related to tax positions taken during the current year 29.9 28.9 22.3 Increases related to tax positions taken during a prior year — 0.3 — Decreases related to tax positions taken during a prior year (0.5 ) — — Decreases related to settlements with tax authorities — (11.4 ) (19.1 ) Decreases related to expiration of statute of limitations (15.8 ) (0.9 ) (1.7 ) Ending balance $ 106.0 $ 92.4 $ 75.5 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted Net Income Per Share | The following table presents the computation of basic and diluted net income per share (in millions, except per share amounts): Years Ended December 31, 2016 2015 2014 Net income $ 735.9 $ 588.8 $ 418.8 Basic: Weighted-average shares outstanding 38.3 37.1 36.9 Basic net income per share $ 19.21 $ 15.87 $ 11.35 Diluted: Weighted-average shares outstanding used in basic calculation 38.3 37.1 36.9 Add: Dilutive potential shares 1.0 0.8 0.8 Weighted-average shares used in computing diluted net income per share 39.3 37.9 37.7 Diluted net income per share $ 18.73 $ 15.54 $ 11.11 |
Selected Quarterly Data (Tables
Selected Quarterly Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule Of Selected Quarterly Data | Three Months Ended December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 Revenue $ 756.9 $ 682.9 $ 670.1 $ 594.5 Gross profit (3) $ 527.2 $ 487.0 $ 470.9 $ 405.0 Net income (1)(2)(3) $ 204.0 $ 211.0 $ 184.5 $ 136.4 Net income per common share Basic $ 5.26 $ 5.45 $ 4.82 $ 3.62 Diluted $ 5.13 $ 5.31 $ 4.71 $ 3.54 (1) Includes discrete tax benefits as follows: Audit settlement and expiration of the statutes of limitations in multiple jurisdictions $ — $ 15.8 $ — $ — (2) Includes pre-tax litigation charges $ 5.5 $ — $ 4.4 $ 2.2 (3) Includes pre-tax medical device excise tax refund benefit $ — $ 7.1 $ — $ — Three Months Ended December 31, 2015 September 30, 2015 June 30, March 31, Revenue $ 676.5 $ 589.7 $ 586.1 $ 532.1 Gross profit $ 458.8 $ 395.8 $ 386.5 $ 336.8 Net income (1)(2) $ 190.0 $ 167.3 $ 134.5 $ 97.0 Net income per common share Basic $ 5.09 $ 4.49 $ 3.64 $ 2.64 Diluted $ 4.99 $ 4.40 $ 3.56 $ 2.57 (1) Includes discrete tax benefits as follows: Audit settlement and expiration of the statutes of limitations in multiple jurisdictions $ — $ — $ 7.8 $ — Reversal of the share-based compensation intercompany charges as a result of U.S. Tax Court opinion $ — $ 29.3 $ — $ — Reinstatement of the 2015 federal R&D tax credit $ 6.4 $ — $ — $ — (2) Includes pre-tax litigation charges (recoveries) $ (0.6 ) $ — $ 6.6 $ 7.2 |
Summary Of Significant Accoun34
Summary Of Significant Accounting Policies - Estimated Useful Lives Of Assets (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | Up to 30 years |
Property, plant and equipment, estimated useful lives | 30 years |
Building improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | Up to 15 years |
Property, plant and equipment, estimated useful lives | 15 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | Lesser of useful life or term of lease |
Lab equipment and furniture | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 5 years |
Operating lease assets | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | Greater of lease term or 1 to 5 years |
Operating lease assets | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 5 years |
Operating lease assets | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 1 year |
Computer and office equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 3 years |
Enterprise-wide software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 5 years |
Purchased software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | Lesser of 3 years or life of license |
Property, plant and equipment, estimated useful lives | 3 years |
Summary Of Significant Accoun35
Summary Of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2016USD ($)customersegment | Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($)customer | |
Summary Of Significant Accounting Policies [Line Items] | |||
Other-than-temporary impairment losses | $ 0 | $ 0 | $ 8,500,000 |
Depreciation expense | $ 70,700,000 | 61,100,000 | 52,000,000 |
Number of operating segments | segment | 1 | ||
Impairment of goodwill | $ 0 | ||
System sales arrangement, free service period | 1 year | ||
System sales arrangement, additional period of service | 4 years | ||
Operating lease revenue | $ 16,600,000 | 7,000,000 | 1,300,000 |
Market-based implied volatility (period) | 1 year | ||
Market-based implied volatility (percent) | 1 | ||
Cash flow hedges de-designated (period) | 2 months | ||
Likelihood of tax benefits being realized upon ultimate settlement | 50.00% | ||
Enterprise-wide software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, estimated useful lives | 5 years | ||
Internal use software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Capitalized computer software, gross | $ 11,800,000 | $ 14,800,000 | $ 12,000,000 |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life, intangible asset | 1 year | ||
Sales-type leases term | 24 months | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life, intangible asset | 9 years | ||
Sales-type leases term | 84 months | ||
Derivative, term of contract | 12 months | ||
Maximum | Internal use software | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, estimated useful lives | 5 years | ||
United States | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Long-lived assets, percent | 86.00% | 88.00% | |
Accounts Receivable | United States | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 73.00% | 69.00% | |
Total Revenue | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of customers representing more than 10% of total revenue | customer | 0 | 0 | 0 |
Total Revenue | United States | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 72.00% | 71.00% | 70.00% |
Total Revenue | International | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 28.00% | 29.00% | 30.00% |
Financial Instruments - Summary
Financial Instruments - Summary Of Cash And Available-For-Sale Securities (Detail) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | $ 4,850 | $ 3,353.4 | ||
Gross Unrealized Gains | 1.3 | 1.4 | ||
Gross Unrealized Losses | (13.4) | (7) | ||
Fair Value | 4,837.9 | 3,347.8 | ||
Cash and Cash Equivalents | 1,036.6 | 714.6 | $ 600.3 | $ 782.1 |
Short-term Investments | 1,518 | 845.2 | ||
Long-term Investments | 2,283.3 | 1,788 | ||
Cash | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 227.7 | 202.6 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 227.7 | 202.6 | ||
Cash and Cash Equivalents | 227.7 | 202.6 | ||
Short-term Investments | 0 | 0 | ||
Long-term Investments | 0 | 0 | ||
Level 1 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 1,238.3 | 684.2 | ||
Gross Unrealized Gains | 0.1 | 0 | ||
Gross Unrealized Losses | (2) | (1.8) | ||
Fair Value | 1,236.4 | 682.4 | ||
Cash and Cash Equivalents | 770.3 | 481.2 | ||
Short-term Investments | 168.4 | 52.4 | ||
Long-term Investments | 297.7 | 148.8 | ||
Level 1 | Money market funds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 612.4 | 430.6 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 612.4 | 430.6 | ||
Cash and Cash Equivalents | 612.4 | 430.6 | ||
Short-term Investments | 0 | 0 | ||
Long-term Investments | 0 | 0 | ||
Level 1 | U.S. treasuries & corporate equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 625.9 | 253.6 | ||
Gross Unrealized Gains | 0.1 | 0 | ||
Gross Unrealized Losses | (2) | (1.8) | ||
Fair Value | 624 | 251.8 | ||
Cash and Cash Equivalents | 157.9 | 50.6 | ||
Short-term Investments | 168.4 | 52.4 | ||
Long-term Investments | 297.7 | 148.8 | ||
Level 2 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 3,384 | 2,466.6 | ||
Gross Unrealized Gains | 1.2 | 1.4 | ||
Gross Unrealized Losses | (11.4) | (5.2) | ||
Fair Value | 3,373.8 | 2,462.8 | ||
Cash and Cash Equivalents | 38.6 | 30.8 | ||
Short-term Investments | 1,349.6 | 792.8 | ||
Long-term Investments | 1,985.6 | 1,639.2 | ||
Level 2 | Commercial paper | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 139.6 | 76.4 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 139.6 | 76.4 | ||
Cash and Cash Equivalents | 31.1 | 3.8 | ||
Short-term Investments | 108.5 | 72.6 | ||
Long-term Investments | 0 | 0 | ||
Level 2 | Corporate securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 1,471.8 | 1,131 | ||
Gross Unrealized Gains | 0.7 | 0.8 | ||
Gross Unrealized Losses | (5) | (3) | ||
Fair Value | 1,467.5 | 1,128.8 | ||
Cash and Cash Equivalents | 2.9 | 0 | ||
Short-term Investments | 555.4 | 384.5 | ||
Long-term Investments | 909.2 | 744.3 | ||
Level 2 | U.S. government agencies | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 938.7 | 618.5 | ||
Gross Unrealized Gains | 0.5 | 0 | ||
Gross Unrealized Losses | (2.9) | (1.5) | ||
Fair Value | 936.3 | 617 | ||
Cash and Cash Equivalents | 0 | 27 | ||
Short-term Investments | 342.7 | 194.8 | ||
Long-term Investments | 593.6 | 395.2 | ||
Level 2 | Non-U.S. government securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 18.5 | 28.8 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | (0.1) | ||
Fair Value | 18.5 | 28.7 | ||
Cash and Cash Equivalents | 0 | 0 | ||
Short-term Investments | 16 | 10.3 | ||
Long-term Investments | 2.5 | 18.4 | ||
Level 2 | Municipal securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 815.4 | 611.9 | ||
Gross Unrealized Gains | 0 | 0.6 | ||
Gross Unrealized Losses | (3.5) | (0.6) | ||
Fair Value | 811.9 | 611.9 | ||
Cash and Cash Equivalents | 4.6 | 0 | ||
Short-term Investments | 327 | 130.6 | ||
Long-term Investments | $ 480.3 | $ 481.3 |
Financial Instruments - Summa37
Financial Instruments - Summary Of Contractual Maturities Of Cash Equivalents And Available-For-Sale Investments (Detail) $ in Millions | Dec. 31, 2016USD ($) |
Amortized Cost | |
Mature in less than one year | $ 1,714.9 |
Mature in one to five years | 2,295 |
Total | 4,009.9 |
Fair Value | |
Mature in less than one year | 1,714.5 |
Mature in one to five years | 2,283.3 |
Total | $ 3,997.8 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |||
Net unrealized losses on investments | $ (8.6) | $ (4.2) | |
Net gains reclassified to revenue | $ 0.9 | $ 7.2 | $ 7.5 |
Financial Instruments - Schedul
Financial Instruments - Schedule Of Available-For-Sale Investments With Unrealized Losses (Detail) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | $ 2,680.2 | $ 2,031.5 |
Unrealized losses less than 12 months | (13.4) | (7) |
Unrealized losses 12 months or greater Fair Value | 0 | 0 |
Unrealized losses 12 months or greater | 0 | 0 |
Total Fair Value | 2,680.2 | 2,031.5 |
Total Unrealized Losses | (13.4) | (7) |
Corporate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | 1,056.1 | 869.9 |
Unrealized losses less than 12 months | (5) | (3) |
Unrealized losses 12 months or greater Fair Value | 0 | 0 |
Unrealized losses 12 months or greater | 0 | 0 |
Total Fair Value | 1,056.1 | 869.9 |
Total Unrealized Losses | (5) | (3) |
U.S. Treasuries and equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | 357.1 | 231.2 |
Unrealized losses less than 12 months | (2) | (1.8) |
Unrealized losses 12 months or greater Fair Value | 0 | 0 |
Unrealized losses 12 months or greater | 0 | 0 |
Total Fair Value | 357.1 | 231.2 |
Total Unrealized Losses | (2) | (1.8) |
U.S. Government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | 538.2 | 561.7 |
Unrealized losses less than 12 months | (2.9) | (1.5) |
Unrealized losses 12 months or greater Fair Value | 0 | 0 |
Unrealized losses 12 months or greater | 0 | 0 |
Total Fair Value | 538.2 | 561.7 |
Total Unrealized Losses | (2.9) | (1.5) |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | 728.8 | 340 |
Unrealized losses less than 12 months | (3.5) | (0.6) |
Unrealized losses 12 months or greater Fair Value | 0 | 0 |
Unrealized losses 12 months or greater | 0 | 0 |
Total Fair Value | 728.8 | 340 |
Total Unrealized Losses | $ (3.5) | (0.6) |
Non-U.S. government securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses less than 12 months Fair Value | 28.7 | |
Unrealized losses less than 12 months | (0.1) | |
Unrealized losses 12 months or greater Fair Value | 0 | |
Unrealized losses 12 months or greater | 0 | |
Total Fair Value | 28.7 | |
Total Unrealized Losses | $ (0.1) |
Financial Instruments - Derivat
Financial Instruments - Derivative Instruments Used to Hedge against Balance Sheet Foreign Currency Exposures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign exchange gains (losses) related to balance sheet re-measurement | $ (5.6) | $ (7.9) | $ (6.9) |
Foreign Exchange Forward | Other income | Derivatives Not Designated as Hedging Instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Recognized gains (losses) in interest and other income, net | $ 6.4 | $ 7 | $ 5.7 |
Financial Instruments - Gross N
Financial Instruments - Gross Notional Amounts for Outstanding Derivatives (Details) - Forward contracts - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | $ 109.7 | $ 89.1 |
Derivatives Not Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | 143.7 | 128.7 |
Prepaid and other current assets | Derivatives Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | 6.2 | 2 |
Prepaid and other current assets | Derivatives Not Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | 5.6 | 2.6 |
Other accrued liabilities | Derivatives Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | 1 | 0.5 |
Other accrued liabilities | Derivatives Not Designated as Hedging Instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amounts of outstanding currency forward contracts | $ 0.6 | $ 0.2 |
Balance Sheet Details and Oth42
Balance Sheet Details and Other Financial Information - Inventory (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory: | ||
Raw materials | $ 54.8 | $ 53.3 |
Work-in-process | 13.4 | 10.2 |
Finished goods | 114.1 | 104.4 |
Total inventory | $ 182.3 | $ 167.9 |
Balance Sheet Details and Oth43
Balance Sheet Details and Other Financial Information - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Property, plant and equipment, net: | ||
Land | $ 131.7 | $ 131.7 |
Building and building/leasehold improvements | 199.5 | 191.5 |
Machinery and equipment | 217.7 | 197.6 |
Operating lease assets | 34.7 | 15 |
Computer and office equipment | 41.3 | 35.7 |
Capitalized software | 114.2 | 84.5 |
Construction-in-process | 41.2 | 43.2 |
Gross property, plant and equipment | 780.3 | 699.2 |
Less: Accumulated depreciation | (321.9) | (267.1) |
Total property, plant and equipment, net | 458.4 | 432.1 |
Accumulated depreciation associated with operating lease assets | $ (6.8) | $ (2.6) |
Balance Sheet Details and Oth44
Balance Sheet Details and Other Financial Information - Other Accrued Liabilities—Short Term (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Taxes payable | $ 40.4 | $ 11.4 |
Tolled product liability claims accrued | 20.5 | 24.4 |
Other accrued liabilities | 90.1 | 60.6 |
Total other accrued liabilities—short-term | $ 151 | $ 96.4 |
Balance Sheet Details and Oth45
Balance Sheet Details and Other Financial Information - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Income taxes—long term | $ 84.9 | $ 74.3 |
Other long-term liabilities | 27.7 | 21.6 |
Total other long-term liabilities | $ 112.6 | $ 95.9 |
Balance Sheet Details and Oth46
Balance Sheet Details and Other Financial Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Income taxes paid | $ 138.4 | $ 110.3 | $ 176.8 |
Supplemental non-cash investing activities: | |||
Equipment transfers from inventory to property, plant and equipment | $ 39.3 | $ 26.7 | $ 27.2 |
Leases - Lease Receivables (Det
Leases - Lease Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Leases [Abstract] | ||
Gross lease receivables | $ 104.3 | $ 67.1 |
Unearned income | (4.8) | (3.4) |
Allowance for credit loss | (0.6) | (0.4) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Net investment in sales-type leases | 98.9 | 63.3 |
Capital Leases, Future Minimum Payments Receivable, Fiscal Year Maturity [Abstract] | ||
2,017 | 32.1 | |
2,018 | 31.6 | |
2,019 | 22 | |
2,020 | 12.5 | |
2,021 | 5.1 | |
2022 and thereafter | 1 | |
Total | 104.3 | |
Prepaid and other current assets | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Net investment in sales-type leases | 29.8 | 16.1 |
Intangible and other assets, net | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Net investment in sales-type leases | $ 69.1 | $ 47.2 |
Leases - Operating Leases (Deta
Leases - Operating Leases (Details) $ in Millions | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 24.4 |
2,018 | 22.7 |
2,019 | 19.9 |
2,020 | 13.7 |
2,021 | 4.5 |
2022 and thereafter | 0.5 |
Total | $ 85.7 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense related to intangible assets | $ 18.2 | $ 24.4 | $ 22.4 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 196.5 | $ 197.5 |
Accumulated Amortization | (165) | (147.8) |
Net Carrying Amount | 31.5 | 49.7 |
Patents and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 158.7 | 159.7 |
Accumulated Amortization | (141.6) | (129.6) |
Net Carrying Amount | 17.1 | 30.1 |
Distribution rights and others | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9.2 | 9.2 |
Accumulated Amortization | (9.1) | (8) |
Net Carrying Amount | 0.1 | 1.2 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 28.6 | 28.6 |
Accumulated Amortization | (14.3) | (10.2) |
Net Carrying Amount | $ 14.3 | $ 18.4 |
Intangible Assets - Schedule 51
Intangible Assets - Schedule Of Estimated Future Amortization Expense Of Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 12.5 | |
2,018 | 8.6 | |
2,019 | 3.6 | |
2,020 | 3.4 | |
2,021 | 2.3 | |
2022 and thereafter | 1.1 | |
Net Carrying Amount | $ 31.5 | $ 49.7 |
Commitments And Contingencies -
Commitments And Contingencies - Schedule Of Future Minimum Lease Commitments Under Operating Leases (Detail) $ in Millions | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 7.1 |
2,018 | 5.7 |
2,019 | 3.5 |
2,020 | 2.8 |
2,021 | 2.6 |
2022 and thereafter | 15 |
Total | $ 36.7 |
Commitments and Contingencies53
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)statepatientDefendant | Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease maximum term (in years) | 15 years | |
Other commitments | $ 345.8 | |
Commitments And Contingencies [Line Items] | ||
Accrued liabilities, product liability claims | $ 20.5 | $ 24.4 |
da Vinci Surgical System Product Liability Matters | ||
Commitments And Contingencies [Line Items] | ||
Number of individual defendants involved in lawsuit | Defendant | 52 | |
Number of patients on behalf of which damages are sought | patient | 55 | |
Number of Surgeries Performed with da Vinci Surgical System in United States | state | 22 | |
Loss Contingency Accrual, Period Increase (Decrease) | $ 8.3 | $ 13.8 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) shares in Millions | Jan. 27, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 24, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, remaining authorized amount | $ 2,991,600,000 | ||||
Repurchase of common stock | $ 42,500,000 | $ 183,700,000 | $ 1,000,000,000 | ||
Shares repurchased (shares) | 0.1 | 0.4 | 2.5 | ||
Aggregate reduction in common stock and additional paid-in capital during stock repurchases | $ 4,100,000 | $ 16,300,000 | $ 89,500,000 | ||
Amount charged to retained earnings during stock repurchases | 38,400,000 | $ 167,400,000 | $ 910,500,000 | ||
Goldman | ASR Program | Subsequent event | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchase of common stock | $ 2,000,000,000 | ||||
Shares repurchased (shares) | 2.4 | ||||
Payment amount divided by closing price, percent | 80.00% | ||||
Common stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | 6,200,000,000 | ||||
Stock repurchase program, increased to authorized amount | $ 3,000,000,000 | ||||
Common stock | Goldman | ASR Program | Subsequent event | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 2,000,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule Of Stock Repurchase Activities (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Shares repurchased (shares) | 0.1 | 0.4 | 2.5 |
Average price per share (usd per share) | $ 605.10 | $ 502.23 | $ 397.52 |
Value of shares repurchased | $ 42.5 | $ 183.7 | $ 1,000 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Accumulated Other Comprehensive Income, Net of Tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 4,319.5 | $ 3,379.4 | $ 3,501.4 |
Other comprehensive income before reclassifications | 0.8 | 3 | |
Reclassified from accumulated other comprehensive income (loss) | (0.2) | (7.4) | |
Other comprehensive gains (losses) | 0.6 | (4.4) | (7.2) |
Ending balance | 5,777.8 | 4,319.5 | 3,379.4 |
Gains (Losses) on Hedge Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 1.5 | 1.1 | |
Other comprehensive income before reclassifications | 4.1 | 7.8 | |
Reclassified from accumulated other comprehensive income (loss) | (0.6) | (7.4) | |
Other comprehensive gains (losses) | 3.5 | 0.4 | |
Ending balance | 5 | 1.5 | 1.1 |
Unrealized Gains (Losses) on Available-for-Sale Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (4.2) | (0.2) | |
Other comprehensive income before reclassifications | (4.6) | (3.2) | |
Reclassified from accumulated other comprehensive income (loss) | 0.2 | (0.8) | |
Other comprehensive gains (losses) | (4.4) | (4) | |
Ending balance | (8.6) | (4.2) | (0.2) |
Foreign Currency Translation Gains (Losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (3.3) | (2.1) | |
Other comprehensive income before reclassifications | 2 | (1.2) | |
Reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive gains (losses) | 2 | (1.2) | |
Ending balance | (1.3) | (3.3) | (2.1) |
Employee Benefit Plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (3.5) | (3.9) | |
Other comprehensive income before reclassifications | (0.7) | (0.4) | |
Reclassified from accumulated other comprehensive income (loss) | 0.2 | 0.8 | |
Other comprehensive gains (losses) | (0.5) | 0.4 | |
Ending balance | (4) | (3.5) | (3.9) |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (9.5) | (5.1) | 2.1 |
Other comprehensive gains (losses) | 0.6 | (4.4) | (7.2) |
Ending balance | $ (8.9) | $ (9.5) | $ (5.1) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)period$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Apr. 21, 2016shares | Apr. 23, 2015shares | Jan. 31, 2013shares | Oct. 31, 2009shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Aggregate intrinsic value of options exercised under stock option plans | $ | $ 273.3 | $ 196.5 | $ 146.2 | ||||
Cash received from option exercises and employee stock purchase plans | $ | $ 580.9 | 361.1 | 283.6 | ||||
Number of options vested and expected to vest | shares | 3,000,000 | ||||||
Weighted average remaining contractual life of shares vested and expected to vest, years | 5 years 10 months 20 days | ||||||
Aggregate intrinsic value of shares vested and expected to vest | $ | $ 587.5 | ||||||
Options vested and expected to vest, weighted-average exercise price per share | $ / shares | $ 442.48 | ||||||
Excess tax benefit from employee stock plans | $ | $ 44.1 | 34.3 | 24 | ||||
Share-based compensation charges, income tax effect | $ | 56.1 | 51.8 | 53.5 | ||||
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options | $ | $ 82.9 | ||||||
2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation, options, expiration term (in years) | 10 years | ||||||
Number of shares of common stock reserved for issuance (shares) | shares | 7,050,000 | 6,250,000 | |||||
Shares were reserved for future issuance (shares) | shares | 1,700,000 | ||||||
2009 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation, options, expiration term (in years) | 10 years | ||||||
Number of shares of common stock reserved for issuance (shares) | shares | 1,455,000 | 1,155,000 | |||||
Shares were reserved for future issuance (shares) | shares | 100,000 | ||||||
2000 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation, options, expiration term (in years) | 10 years | ||||||
Minimum exercise price of NSOs, percentage of fair value | 85.00% | ||||||
2000 Non-Employee Directors' Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation, options, expiration term (in years) | 10 years | ||||||
Number of shares of common stock reserved for issuance (shares) | shares | 150,000 | ||||||
Shares were reserved for future issuance (shares) | shares | 48,000 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation expense | $ | $ 200.3 | ||||||
Weighted average period unrecognized compensation expenses are expected to be recognized, years | 2 years 7 months 6 days | ||||||
Expected to vest (in shares) | shares | 500,000 | ||||||
Aggregate intrinsic value | $ | $ 336.2 | ||||||
Canceled (shares) | shares | 35,000 | ||||||
Vested in period, aggregate fair value | $ | $ 65.3 | $ 29.5 | $ 0 | ||||
Restricted Stock Units (RSUs) | 2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares were reserved for future issuance (shares) | shares | 800,000 | ||||||
Restricted Stock Units (RSUs) | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||||
Share based vesting period | 4 years | ||||||
Restricted Stock Units (RSUs) | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based vesting period | 1 year | ||||||
Annual Grant Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vesting upon six months of service | 12.50% | ||||||
Percentage vesting per month after six months of service | 2.0833% | ||||||
Annual Grant Options | 2000 Non-Employee Directors' Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based vesting period | 1 year | ||||||
New Hire Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vesting upon one year of service | 25.00% | ||||||
Percentage vesting per month after one year | 2.0833% | ||||||
Initial Grant Options | 2000 Non-Employee Directors' Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vesting upon one year of service | 33.3333% | ||||||
Percentage vesting per month after one year | 2.7778% | ||||||
Stock options granted initial vesting period, years | 3 years | ||||||
Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares were reserved for future issuance (shares) | shares | 100,000 | ||||||
Minimum hours employed per week | 20 hours | ||||||
Minimum months employed per year | 5 months | ||||||
Maximum percentage of employees on stockholders to participate in ESPP | 5.00% | ||||||
Percentage of employee payroll deduction under the stock plan, maximum | 15.00% | ||||||
Duration for each offering period | 24 months | ||||||
Number of shorter purchase periods that each offering period is divided into | period | 4 | ||||||
Duration of each shorter offering period | 6 months | ||||||
Discount on fair market value on the offering date | 85.00% | ||||||
Discount on fair market value on the purchase date | 85.00% | ||||||
Period of look-back that could cause offering period to reset | 2 years | ||||||
Employee stock purchase plan, shares issued | shares | 100,000 | 100,000 | 100,000 | ||||
Employee stock purchase plan, value of shares issued | $ | $ 32.5 | $ 31.2 | $ 29.4 | ||||
Total unrecognized compensation expense | $ | $ 9 | ||||||
Weighted average period unrecognized compensation expenses are expected to be recognized, years | 1 year | ||||||
Nonvested Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation expense | $ | $ 80.3 | ||||||
Weighted average period unrecognized compensation expenses are expected to be recognized, years | 2 years 2 months 12 days | ||||||
Initial RSU grants | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.3333% | ||||||
Share based vesting period | 3 years | ||||||
February Grant | Annual Grant Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vesting upon six months of service | 12.50% | ||||||
Percentage vesting per month after six months of service | 2.0833% | ||||||
February Grant | Annual Grant Options | 2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based vesting period | 4 years | ||||||
August Grant | Annual Grant Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vesting at the end of one month | 14.5833% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 2.0833% | ||||||
August Grant | Annual Grant Options | 2010 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based vesting period | 3 years 6 months |
Share-Based Compensation - Summ
Share-Based Compensation - Summary Of Stock Option Activity Under All Stock Plans (Detail) shares in Millions | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number Outstanding | |
Beginning balance (shares) | shares | 4.2 |
Options granted (shares) | shares | 0.3 |
Options exercised (shares) | shares | (1.3) |
Options forfeited/expired (shares) | shares | (0.1) |
Ending balance (shares) | shares | 3.1 |
Weighted Average Exercise Price Per Share | |
Beginning balance (usd per share) | $ / shares | $ 421 |
Options granted (usd per share) | $ / shares | 616.97 |
Options exercised (usd per share) | $ / shares | 410.98 |
Options forfeited/expired (usd per share) | $ / shares | 494.64 |
Ending balance (usd per share) | $ / shares | $ 445.09 |
Share-Based Compensation - Outs
Share-Based Compensation - Outstanding and Exercisable Options Ranges (Detail) $ / shares in Units, shares in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Number of Shares | shares | 3.1 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 11 months 16 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 445.09 |
Options Outstanding, Aggregate Intrinsic Value | $ | $ 593,300,000 |
Options Exercisable, Number of Shares | shares | 2.4 |
Options Exercisable, Weighted Average Remaining Contractual Life | 5 years 2 months 22 days |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 417.93 |
Options Exercisable, Aggregate Intrinsic Value | $ | $ 516,400,000 |
Closing stock price (usd per share) | $ | $ 634.17 |
Exercise Price Range 1 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (usd per share) | $ 95.89 |
Range of Exercise Prices, maximum (usd per share) | $ 341.19 |
Options Outstanding, Number of Shares | shares | 0.8 |
Options Outstanding, Weighted Average Remaining Contractual Life | 2 years 11 months 19 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 279.22 |
Options Exercisable, Number of Shares | shares | 0.8 |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 279.22 |
Exercise Price Range 2 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (usd per share) | 343.83 |
Range of Exercise Prices, maximum (usd per share) | $ 459.14 |
Options Outstanding, Number of Shares | shares | 0.8 |
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 9 months 10 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 416.51 |
Options Exercisable, Number of Shares | shares | 0.6 |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 410.32 |
Exercise Price Range 3 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (usd per share) | 466.70 |
Range of Exercise Prices, maximum (usd per share) | $ 517.31 |
Options Outstanding, Number of Shares | shares | 0.7 |
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 3 months 14 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 508.52 |
Options Exercisable, Number of Shares | shares | 0.6 |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 509.04 |
Exercise Price Range 4 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (usd per share) | 518.29 |
Range of Exercise Prices, maximum (usd per share) | $ 614.78 |
Options Outstanding, Number of Shares | shares | 0.6 |
Options Outstanding, Weighted Average Remaining Contractual Life | 7 years 4 months 27 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 550.88 |
Options Exercisable, Number of Shares | shares | 0.4 |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 557.95 |
Exercise Price Range 5 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (usd per share) | 618.96 |
Range of Exercise Prices, maximum (usd per share) | $ 718.04 |
Options Outstanding, Number of Shares | shares | 0.2 |
Options Outstanding, Weighted Average Remaining Contractual Life | 9 years 7 months 10 days |
Options Outstanding, Weighted Average Exercise Price Per Share (usd per share) | $ 685.31 |
Options Exercisable, Number of Shares | shares | 0 |
Options Exercisable, Weighted Average Exercise Price Per Share (usd per share) | $ 692.54 |
Share-Based Compensation - Su60
Share-Based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | |||
Unvested beginning balance (shares) | 400 | ||
Granted (shares) | 300 | ||
Vested (shares) | (100) | ||
Canceled (shares) | 35 | ||
Unvested ending balance (shares) | 600 | 400 | |
Weighted Average Grant Date Fair Value | |||
Unvested beginning balance (usd per share) | $ 485.55 | ||
Fair value at grant date (usd per share) | 553.76 | $ 511.92 | $ 441.36 |
Vested (usd per share) | 481.84 | ||
Canceled (usd per share) | 509.75 | ||
Unvested ending balance (usd per share) | $ 524.17 | $ 485.55 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | $ 178 | $ 168.1 | $ 169.1 |
Income tax effect | 56.1 | 51.8 | 53.5 |
Share-based compensation expense after income taxes | 121.9 | 116.3 | 115.6 |
Total cost of sales | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | 37.6 | 35.7 | 32.6 |
Total cost of sales | Cost of sales—products | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | 25.2 | 22.8 | 19.1 |
Total cost of sales | Cost of sales—services | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | 12.4 | 12.9 | 13.5 |
Selling, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | 97.4 | 94.7 | 99 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense before income taxes | $ 43 | $ 37.7 | $ 37.5 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule Of Estimated Fair Value Of Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STOCK OPTION PLANS | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate | 1.10% | 1.60% | 1.50% |
Expected term (years) | 4 years 2 months | 4 years 3 months 18 days | 4 years 3 months 18 days |
Volatility (percent) | 26.00% | 28.00% | 31.00% |
Weighted average fair value at grant date (usd per share) | $ 141.18 | $ 131.47 | $ 122.39 |
EMPLOYEE STOCK PURCHASE PLAN | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate | 0.60% | 0.40% | 0.20% |
Expected term (years) | 1 year 2 months 12 days | 1 year 2 months 12 days | 1 year 2 months 12 days |
Volatility (percent) | 30.00% | 31.00% | 33.00% |
Weighted average fair value at grant date (usd per share) | $ 172.71 | $ 146.72 | $ 124.60 |
RESTRICTED STOCK UNITS | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at grant date (usd per share) | $ 553.76 | $ 511.92 | $ 441.36 |
Income Taxes - Schedule Of Inco
Income Taxes - Schedule Of Income Before Provision For Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income before provision for income taxes, U.S. | $ 653 | $ 425.1 | $ 353 |
Income before provision for income taxes, Foreign | 327.8 | 333.4 | 196 |
Income before taxes | $ 980.8 | $ 758.5 | $ 549 |
Income Taxes - Schedule Of Prov
Income Taxes - Schedule Of Provision For Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Current income taxes, Federal | $ 207 | $ 148.7 | $ 150.5 |
Current income taxes, State | 13.4 | 8.4 | 7 |
Current income taxes, Foreign | 5.4 | 7.6 | 7.5 |
Current income taxes | 225.8 | 164.7 | 165 |
Deferred income taxes, Federal | 18.3 | 7.5 | (30.9) |
Deferred income taxes, State | 0.6 | 0.5 | (0.6) |
Deferred income taxes, Foreign | 0.2 | (3) | (3.3) |
Deferred income taxes | 19.1 | 5 | (34.8) |
Total income tax expense | $ 244.9 | $ 169.7 | $ 130.2 |
Income Taxes - Schedule Of In65
Income Taxes - Schedule Of Income Tax Difference From Statutory Rate (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal tax at statutory rate | $ 343.3 | $ 265.5 | $ 192.2 |
State taxes, net of federal benefits | 14 | 8.9 | 6.4 |
Foreign rate differential | (86.2) | (67.4) | (47.4) |
Research and development credit | (7.8) | (6.4) | (5) |
Share-based compensation not benefited | 3.6 | 6.9 | 7.7 |
Domestic production activities deduction | (8) | (5.3) | (4.6) |
Reversal of unrecognized tax benefits | (15.8) | (6.4) | (20.3) |
Reversal of share-based compensation from intercompany charges | 0 | (25) | 0 |
Other | 1.8 | (1.1) | 1.2 |
Total income tax expense | $ 244.9 | $ 169.7 | $ 130.2 |
Income Taxes - Schedule Of Defe
Income Taxes - Schedule Of Deferred Tax Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Share-based compensation expense | $ 122.2 | $ 140.5 |
Expenses deducted in later years for tax purposes | 47.4 | 47.1 |
Research and other credits | 15.6 | 13.5 |
Other | 9.8 | 7.5 |
Gross deferred tax assets | 195 | 208.6 |
Valuation allowance | (17.2) | (15.2) |
Deferred tax assets | 177.8 | 193.4 |
Deferred tax liabilities: | ||
Fixed assets | (25.2) | (24) |
Intangible assets | (2.3) | (2) |
Other | (0.2) | (0.5) |
Deferred tax liabilities | (27.7) | (26.5) |
Net deferred tax assets | $ 150.1 | $ 166.9 |
Income Taxes - Schedule Of Gros
Income Taxes - Schedule Of Gross Unrecognized Income Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 92.4 | $ 75.5 | $ 74 |
Increases related to tax positions taken during the current year | 29.9 | 28.9 | 22.3 |
Increases related to tax positions taken during a prior year | 0 | 0.3 | 0 |
Decreases related to tax positions taken during a prior year | (0.5) | 0 | 0 |
Decreases related to settlements with tax authorities | 0 | (11.4) | (19.1) |
Decreases related to expiration of statute of limitations | (15.8) | (0.9) | (1.7) |
Ending balance | $ 106 | $ 92.4 | $ 75.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% | |
Cumulative amount of earnings upon which U.S. income taxes have not been provided | $ 1,454.2 | |||
Income Tax Holiday [Line Items] | ||||
Valuation allowance | 17.2 | $ 15.2 | ||
Unrecognized tax benefits, period increase (decrease) | 13.6 | |||
Total gross unrecognized tax benefits | 106 | 92.4 | $ 75.5 | $ 74 |
Interest and penalties related to unrecognized tax benefits accrued | 3.7 | $ 2.9 | $ 2.5 | |
Swiss Federal Tax Administration (FTA) | ||||
Income Tax Holiday [Line Items] | ||||
Tax benefit from tax holiday | $ 10 | |||
Tax benefit from tax holiday (in dollars per share) | $ 0.25 |
Net Income Per Share - Computat
Net Income Per Share - Computation Of Basic And Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 204 | $ 211 | $ 184.5 | $ 136.4 | $ 190 | $ 167.3 | $ 134.5 | $ 97 | $ 735.9 | $ 588.8 | $ 418.8 |
Weighted-average shares outstanding basic (shares) | 38.3 | 37.1 | 36.9 | ||||||||
Basic net income per share (usd per share) | $ 5.26 | $ 5.45 | $ 4.82 | $ 3.62 | $ 5.09 | $ 4.49 | $ 3.64 | $ 2.64 | $ 19.21 | $ 15.87 | $ 11.35 |
Weighted-average shares outstanding basic (shares) | 38.3 | 37.1 | 36.9 | ||||||||
Add: Dilutive potential shares | 1 | 0.8 | 0.8 | ||||||||
Weighted-average shares used in computing diluted net income per share (shares) | 39.3 | 37.9 | 37.7 | ||||||||
Diluted net income per share (usd per share) | $ 5.13 | $ 5.31 | $ 4.71 | $ 3.54 | $ 4.99 | $ 4.40 | $ 3.56 | $ 2.57 | $ 18.73 | $ 15.54 | $ 11.11 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Employee stock options excluded from computation of diluted net income per share | 0.2 | 1.7 | 2.4 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Compensation and Retirement Disclosure [Abstract] | |
Maximum rate of employees' contribution to 401(k) plan | 75.00% |
Employer match percentage | 200.00% |
Employer matching contributions | $ 1,500 |
Selected Quarterly Data - Sched
Selected Quarterly Data - Schedule Of Selected Quarterly Data (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Revenue | $ 756.9 | $ 682.9 | $ 670.1 | $ 594.5 | $ 676.5 | $ 589.7 | $ 586.1 | $ 532.1 | $ 2,704.4 | $ 2,384.4 | $ 2,131.7 |
Gross profit | 527.2 | 487 | 470.9 | 405 | 458.8 | 395.8 | 386.5 | 336.8 | 1,890.1 | 1,577.9 | 1,413.8 |
Net income | $ 204 | $ 211 | $ 184.5 | $ 136.4 | $ 190 | $ 167.3 | $ 134.5 | $ 97 | $ 735.9 | $ 588.8 | $ 418.8 |
Basic net income per share (usd per share) | $ 5.26 | $ 5.45 | $ 4.82 | $ 3.62 | $ 5.09 | $ 4.49 | $ 3.64 | $ 2.64 | $ 19.21 | $ 15.87 | $ 11.35 |
Diluted net income per share (usd per share) | $ 5.13 | $ 5.31 | $ 4.71 | $ 3.54 | $ 4.99 | $ 4.40 | $ 3.56 | $ 2.57 | $ 18.73 | $ 15.54 | $ 11.11 |
Audit settlement and expiration of the statutes of limitations in multiple jurisdictions | $ 0 | $ 15.8 | $ 0 | $ 0 | $ 0 | $ 0 | $ 7.8 | $ 0 | |||
Reversal of the share-based compensation intercompany charges as a result of U.S. Tax Court opinion | 0 | 29.3 | 0 | 0 | |||||||
Reinstatement of the 2015 federal R&D tax credit | 6.4 | 0 | 0 | 0 | |||||||
Includes pre-tax litigation charges (recoveries) | 5.5 | 0 | 4.4 | 2.2 | $ (0.6) | $ 0 | $ 6.6 | $ 7.2 | |||
Includes pre-tax medical device excise tax refund benefit | $ 0 | $ 7.1 | $ 0 | $ 0 |
Valuation And Qualifying Acco73
Valuation And Qualifying Accounts (Detail) - Allowance for doubtful accounts and loan credit losses, and sales returns - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 9.4 | $ 5.5 | $ 5.8 |
Additions | 24.6 | 22.3 | 22.2 |
Deductions | (23.2) | (18.4) | (22.5) |
Balance at End of Year | $ 10.8 | $ 9.4 | $ 5.5 |