Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 27, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Edwards Lifesciences Corp | ' |
Entity Central Index Key | '0001099800 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 106,974,215 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_CONDENSED_BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $404.10 | $420.40 |
Short-term investments (Note 6) | 1,111 | 516.5 |
Accounts and other receivables, net of allowances of $5.8 and $5.4, respectively | 322.9 | 328 |
Inventories (Note 5) | 303.6 | 308.9 |
Deferred income taxes | 29.5 | 33.4 |
Prepaid expenses | 48.5 | 46.8 |
Other current assets | 89.6 | 71.8 |
Total current assets | 2,309.20 | 1,725.80 |
Long-term accounts receivable, net of allowances of $6.3 and $6.8, respectively | 8.1 | 7.3 |
Long-term investments (Note 6) | 92 | 21.9 |
Property, plant and equipment, net | 429.3 | 421.6 |
Goodwill | 379 | 385.4 |
Other intangible assets, net (Note 7) | 25.8 | 33.5 |
Deferred income taxes | 68.7 | 79 |
Other assets | 37.9 | 35.4 |
Total assets | 3,350 | 2,709.90 |
Current liabilities | ' | ' |
Accounts payable and accrued liabilities (Note 5) | 427.8 | 345.6 |
Long-term debt (Note 8) | 596.4 | 593.1 |
Other long-term liabilities | 282.4 | 226.8 |
Commitments and contingencies (Note 13) | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $.01 par value, authorized 50.0 shares, no shares outstanding | ' | ' |
Common stock, $1.00 par value, 350.0 shares authorized, 128.0 and 126.0 shares issued, and 106.9 and 109.3 shares outstanding, respectively | 128 | 126 |
Additional paid-in capital | 810 | 671.2 |
Retained earnings | 2,732.70 | 2,030.80 |
Accumulated other comprehensive loss | -70.6 | -27.6 |
Treasury stock, at cost, 21.1 and 16.7 shares, respectively | -1,556.70 | -1,256 |
Total stockholders' equity | 2,043.40 | 1,544.40 |
Total liabilities and stockholders' equity | $3,350 | $2,709.90 |
CONSOLIDATED_CONDENSED_BALANCE1
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
CONSOLIDATED CONDENSED BALANCE SHEETS | ' | ' |
Accounts and other receivables, allowances | $5.80 | $5.40 |
Long-term accounts receivable, allowances | $6.30 | $6.80 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, authorized shares | 50 | 50 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 350 | 350 |
Common stock, shares issued | 128 | 126 |
Common stock, shares outstanding | 106.9 | 109.3 |
Treasury stock, shares | 21.1 | 16.7 |
CONSOLIDATED_CONDENSED_STATEME
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ' | ' | ' | ' |
Net sales | $607.40 | $495.60 | $1,704.90 | $1,509.50 |
Cost of sales | 168.1 | 128.2 | 465.2 | 372.8 |
Gross profit | 439.3 | 367.4 | 1,239.70 | 1,136.70 |
Selling, general and administrative expenses | 222.2 | 177.8 | 634.9 | 546.8 |
Research and development expenses | 87.6 | 84.1 | 262.5 | 244.4 |
Intellectual property litigation expense (income), net (Note 3) | 0.9 | 4.3 | -741 | -68.3 |
Special charges (Note 4) | 3 | ' | 60.5 | ' |
Interest expense, net | 2.5 | 1 | 9.1 | 1.2 |
Other expense, net | 2.5 | 0.4 | 2.6 | 1.7 |
Income before provision for income taxes | 120.6 | 99.8 | 1,011.10 | 410.9 |
Provision for income taxes | 26 | 23 | 309.2 | 96.9 |
Net income | $94.60 | $76.80 | $701.90 | $314 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.89 | $0.69 | $6.61 | $2.79 |
Diluted (in dollars per share) | $0.87 | $0.68 | $6.49 | $2.74 |
Weighted-average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 106.4 | 111 | 106.2 | 112.5 |
Diluted (in shares) | 108.4 | 112.9 | 108.1 | 114.7 |
CONSOLIDATED_CONDENSED_STATEME1
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net income | $94.60 | $76.80 | $701.90 | $314 |
Other comprehensive (loss) income, net of tax (Note 14) | ' | ' | ' | ' |
Foreign currency translation adjustments | -53.4 | 18.9 | -59.6 | -0.7 |
Unrealized gain (loss) on cash flow hedges | 23.8 | -13.3 | 16.4 | -3.4 |
Unrealized gain (loss) on available-for-sale investments | 0.1 | -0.5 | -0.1 | -0.9 |
Reclassification of net realized investment loss to earnings | ' | ' | 0.3 | ' |
Other comprehensive (loss) income | -29.5 | 5.1 | -43 | -5 |
Comprehensive income | $65.10 | $81.90 | $658.90 | $309 |
CONSOLIDATED_CONDENSED_STATEME2
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income | $701.90 | $314 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 50.3 | 45.8 |
Stock-based compensation (Note 12) | 36.1 | 35.9 |
Excess tax benefit from stock plans | -34.2 | -63.3 |
Loss (gain) on investments | 3.9 | -1 |
Deferred income taxes | 2.2 | 1.4 |
Other | 3.6 | 2.1 |
Changes in operating assets and liabilities: | ' | ' |
Accounts and other receivables, net | -10.7 | 9.2 |
Inventories | -19 | -41.3 |
Accounts payable and accrued liabilities | 201.8 | 33.3 |
Prepaid expenses and other current assets | -9.8 | 19.1 |
Other | 3 | 6.2 |
Net cash provided by operating activities | 929.1 | 361.4 |
Cash flows from investing activities | ' | ' |
Capital expenditures | -48.4 | -88.9 |
Purchases of held-to-maturity investments | -1,600 | -373.9 |
Proceeds from held-to-maturity investments | 912.6 | 302.8 |
Investments in trading securities, net | -11.8 | -0.6 |
Proceeds from (investments in) unconsolidated affiliates, net | 1 | -1.5 |
Other | 1.6 | -3.7 |
Net cash used in investing activities | -745 | -165.8 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of debt | 220.3 | 705.1 |
Payments on debt | -219 | -359.8 |
Purchases of treasury stock | -300.7 | -474.2 |
Excess tax benefit from stock plans | 34.2 | 63.3 |
Proceeds from stock plans | 71.3 | 36.9 |
Equity forward contract related to accelerated share repurchase agreement | ' | -22.7 |
Other | -5 | 5.8 |
Net cash used in financing activities | -198.9 | -45.6 |
Effect of currency exchange rate changes on cash and cash equivalents | -1.5 | 10.1 |
Net (decrease) increase in cash and cash equivalents | -16.3 | 160.1 |
Cash and cash equivalents at beginning of period | 420.4 | 310.9 |
Cash and cash equivalents at end of period | 404.1 | 471 |
Cash paid during the year for: | ' | ' |
Income taxes | 200.3 | 32.1 |
Non-cash investing and financing transactions: | ' | ' |
Capital expenditures accruals | 7.4 | 6.6 |
Capital lease obligations incurred | $13.30 | ' |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | ' |
1. BASIS OF PRESENTATION | |
The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences Corporation's Annual Report on Form 10-K for the year ended December 31, 2013. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been condensed or omitted. | |
In the opinion of management of Edwards Lifesciences Corporation ("Edwards Lifesciences" or the "Company"), the interim consolidated condensed financial statements reflect all adjustments considered necessary for a fair statement of the interim periods. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. | |
Recently Adopted Accounting Standards | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on income taxes impacting the presentation of unrecognized tax benefits. The guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss or similar tax loss carryforwards, or tax credit carryforwards. The guidance was effective for annual reporting periods beginning after December 15, 2013 and interim periods therein. The adoption of this guidance did not have a material impact on the Company's consolidated condensed financial statements. | |
New Accounting Standards Not Yet Adopted | |
In May 2014, the FASB issued an update to the accounting guidance on revenue recognition. The new guidance provides a comprehensive, principles-based approach to revenue recognition, and supersedes most previous revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires improved disclosures on the nature, amount, timing and uncertainty of revenue that is recognized. The guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. The new guidance can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is currently assessing the impact this guidance will have on its consolidated financial statements, and has not yet selected a transition method. | |
CHANGE_IN_ACCOUNTING_PRINCIPLE
CHANGE IN ACCOUNTING PRINCIPLE | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
CHANGE IN ACCOUNTING PRINCIPLE | ' | |||||||||||||
CHANGE IN ACCOUNTING PRINCIPLE | ' | |||||||||||||
2. CHANGE IN ACCOUNTING PRINCIPLE | ||||||||||||||
Effective January 1, 2014, the Company changed its method of accounting for certain intellectual property litigation expenses related to the defense and enforcement of its issued patents. Previously, the Company capitalized these legal costs if a favorable outcome in the patent defense was determined to be probable, and amortized the capitalized legal costs over the life of the related patent. As of December 31, 2013, the Company had remaining unamortized capitalized legal costs of $23.7 million, which, under the previous accounting method, would have been amortized through 2021. Under the new method of accounting, these legal costs are expensed in the period they are incurred. The Company has retrospectively adjusted the comparative financial statements of prior periods to apply this new method of accounting. | ||||||||||||||
The Company believes this change in accounting principle is preferable because (1) as more competitors enter the Company's key product markets and the threat of complex intellectual property litigation across multiple jurisdictions increases, it will become more difficult for the Company to accurately assess the probability of a favorable outcome in such litigation, and (2) it will enhance the comparability of the Company's financial results with those of its peer group because it is the predominant accounting practice in the Company's industry. | ||||||||||||||
The accompanying consolidated condensed financial statements and related notes have been adjusted to reflect the impact of this change retrospectively to all prior periods presented. The cumulative effect of the change in accounting principle was a decrease in retained earnings of $12.2 million as of January 1, 2013. The following tables present the effects of the retrospective application of the change in accounting principle (in millions): | ||||||||||||||
As of December 31, 2013 | ||||||||||||||
Consolidated Condensed Balance Sheet | As Reported | As Adjusted | ||||||||||||
Other intangible assets, net | $ | 57.2 | $ | 33.5 | ||||||||||
Deferred income taxes | 70.1 | 79 | ||||||||||||
Total assets | 2,724.70 | 2,709.90 | ||||||||||||
Retained earnings | 2,045.60 | 2,030.80 | ||||||||||||
Total stockholders' equity | 1,559.20 | 1,544.40 | ||||||||||||
Total liabilities and stockholders' equity | 2,724.70 | 2,709.90 | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||
Consolidated Condensed Statement of Operations | As Reported | As Adjusted | As Reported | As Adjusted | ||||||||||
Cost of sales | $ | 129.7 | $ | 128.2 | $ | 376.9 | $ | 372.8 | ||||||
Gross profit | 365.9 | 367.4 | 1,132.60 | 1,136.70 | ||||||||||
Selling, general and administrative expenses(a) | 180.5 | 177.8 | 555.1 | 546.8 | ||||||||||
Intellectual property litigation expense (income), net(a) | — | 4.3 | — | (68.3 | ) | |||||||||
Special gain(a) | — | — | (83.6 | ) | — | |||||||||
Income before provision for income taxes | 99.9 | 99.8 | 413.8 | 410.9 | ||||||||||
Provision for income taxes | 23 | 23 | 97.9 | 96.9 | ||||||||||
Net income | 76.9 | 76.8 | 315.9 | 314 | ||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.69 | $ | 0.69 | $ | 2.81 | $ | 2.79 | ||||||
Diluted | $ | 0.68 | $ | 0.68 | $ | 2.75 | $ | 2.74 | ||||||
(a) | ||||||||||||||
The above amounts also reflect certain reclassifications of previously reported amounts related to intellectual property litigation to conform to classifications used in the current year. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||
Consolidated Condensed Statement of Comprehensive Income | As Reported | As Adjusted | As Reported | As Adjusted | ||||||||||
Net income | $ | 76.9 | $ | 76.8 | $ | 315.9 | $ | 314 | ||||||
Comprehensive income | 82 | 81.9 | 310.9 | 309 | ||||||||||
Nine Months Ended | ||||||||||||||
September 30, 2013 | ||||||||||||||
Consolidated Condensed Statement of Cash Flows | As Reported | As Adjusted | ||||||||||||
Net income | $ | 315.9 | $ | 314 | ||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 49.9 | 45.8 | ||||||||||||
Other | 2.4 | 2.1 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Prepaid expenses and other current assets | 20.1 | 19.1 | ||||||||||||
Other | (1.1 | ) | 6.2 |
INTELLECTUAL_PROPERTY_LITIGATI
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET | ' | ||||
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET | ' | ||||
3. INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET | |||||
In May 2014, the Company entered into an agreement with Medtronic, Inc. and its affiliates ("Medtronic") to settle all outstanding patent litigation between the companies, including all cases related to transcatheter heart valves. Pursuant to the agreement, all pending cases or appeals in courts and patent offices worldwide have been dismissed, and the parties will not litigate patent disputes with each other in the field of transcatheter valves for the eight-year term of the agreement. Under the terms of a patent cross-license that is part of the agreement, Medtronic made a one-time, upfront payment to the Company in the amount of $750.0 million. In addition, Medtronic will pay the Company quarterly license royalty payments through April 2022. For sales in the United States, the royalty payments will be based on a percentage of Medtronic's sales of transcatheter aortic valves, subject to a minimum annual payment of $40.0 million and a maximum annual payment of $60.0 million. A separate royalty payment will be calculated based on sales of Medtronic transcatheter aortic valves manufactured in the United States but sold elsewhere. | |||||
The Company accounted for the settlement agreement as a multiple-element arrangement and allocated the total consideration to the identifiable elements based upon their relative fair value. The consideration assigned to each element was as follows: | |||||
Past damages | $ | 754.3 | |||
License agreement | 238 | ||||
Covenant not to sue | 77.7 | ||||
| | | | | |
Total | $ | 1,070.00 | |||
| | | | | |
| | | | | |
The Company recognized the upfront payment of $750.0 million in "Intellectual Property Litigation Expense (Income), net" during the second quarter of 2014. The accounting guidance limits the amount to be recognized upfront to the amount of cash received. The remaining fair value associated with the past damages element, as well as the license agreement and the covenant not to sue, will be recognized in "Net Sales" over the term of the license agreement as delivery occurs since the Company considers the future royalties to be part of its revenue-earning activities that constitute its ongoing major or central operations. | |||||
In February 2013, the Company received $83.6 million from Medtronic in satisfaction of the initial April 2010 jury award of damages for infringement of the United States Andersen transcatheter heart valve patent, including accrued interest. | |||||
The Company incurred external legal costs related to intellectual property litigation of $0.9 million and $4.3 million for the three months ended September 30, 2014 and 2013, respectively, and $9.0 million and $15.3 million for the nine months ended September 30, 2014 and 2013, respectively. | |||||
SPECIAL_CHARGES
SPECIAL CHARGES | 9 Months Ended |
Sep. 30, 2014 | |
SPECIAL CHARGES | ' |
SPECIAL CHARGES | ' |
4. SPECIAL CHARGES | |
Asset Write-down | |
In September 2014, due to a strategic shift of the Company's investment initiatives, the Company decided to refocus resources from its automated glucose monitoring program. As a result, the Company recorded a charge of $3.0 million to write down an intangible asset and fixed assets, and to record severance costs. In addition, the Company recorded a $2.0 million charge to "Cost of Sales," primarily related to the disposal of inventory and equipment held by customers. | |
Charitable Foundation Contribution | |
In June 2014, the Company contributed $50.0 million to the Edwards Lifesciences Foundation, a related-party not-for-profit organization intended to provide philanthropic support to health- and community-focused charitable organizations. The contribution was irrevocable and was recorded as an expense at the time of payment. | |
Settlement | |
In March 2014, the Company recorded a $7.5 million charge to settle past and future obligations related to one of its intellectual property agreements. | |
COMPOSITION_OF_CERTAIN_FINANCI
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
5. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ||||||||
Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Inventories | ||||||||
Raw materials | $ | 62.4 | $ | 57.8 | ||||
Work in process | 77.7 | 82.2 | ||||||
Finished products | 163.5 | 168.9 | ||||||
| | | | | | | | |
$ | 303.6 | $ | 308.9 | |||||
| | | | | | | | |
| | | | | | | | |
Accounts payable and accrued liabilities | ||||||||
Accounts payable | $ | 59.9 | $ | 48.4 | ||||
Employee compensation and withholdings | 156.4 | 101.1 | ||||||
Clinical trial accruals | 45.5 | 37.2 | ||||||
Property, payroll and other taxes | 32.3 | 31.6 | ||||||
Capital lease obligation | 13.6 | — | ||||||
Accrued rebates | 11.2 | 15 | ||||||
Taxes payable | 9.2 | 7.1 | ||||||
Realignment reserves | 7.6 | 9.5 | ||||||
Deferred income taxes | 7.1 | 7.2 | ||||||
Fair value of derivatives | 2.2 | 17.2 | ||||||
Other accrued liabilities | 82.8 | 71.3 | ||||||
| | | | | | | | |
$ | 427.8 | $ | 345.6 | |||||
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INVESTMENTS
INVESTMENTS | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
INVESTMENTS | ' | |||||||||||||||||||||||||
INVESTMENTS | ' | |||||||||||||||||||||||||
6. INVESTMENTS | ||||||||||||||||||||||||||
Held-to-maturity Investments | ||||||||||||||||||||||||||
Held-to-maturity investments at the end of each period were as follows (in millions): | ||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Cost | Gross | Gross | Fair | Cost | Gross | Gross | Fair | |||||||||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | Value | |||||||||||||||||||||
Gains | Losses | Gains | Losses | |||||||||||||||||||||||
Bank time deposits | $ | 1,006.50 | $ | — | $ | — | $ | 1,006.50 | $ | 516.5 | $ | — | $ | — | $ | 516.5 | ||||||||||
Commercial paper | 87.3 | — | — | 87.3 | — | — | — | — | ||||||||||||||||||
U.S. government and agency securities | 51.7 | 0.1 | (0.1 | ) | 51.7 | — | — | — | — | |||||||||||||||||
Asset-backed securities | 9.1 | — | — | 9.1 | — | — | — | — | ||||||||||||||||||
Corporate debt securities | 25 | — | — | 25 | — | — | — | — | ||||||||||||||||||
Municipal securities | 6.1 | — | — | 6.1 | — | — | — | — | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,185.70 | $ | 0.1 | $ | (0.1 | ) | $ | 1,185.70 | $ | 516.5 | $ | — | $ | — | $ | 516.5 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
The cost and fair value of held-to-maturity investments, by contractual maturity, as of September 30, 2014 were as follows: | ||||||||||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Due in 1 year or less | $ | 1,111.00 | $ | 1,111.00 | ||||||||||||||||||||||
Due after 1 year through 5 years | 58 | 57.9 | ||||||||||||||||||||||||
Instruments not due at a single maturity date | 16.7 | 16.8 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
$ | 1,185.70 | $ | 1,185.70 | |||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
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Actual maturities may differ from the contractual maturities due to call or prepayment rights. | ||||||||||||||||||||||||||
Investments in Unconsolidated Affiliates | ||||||||||||||||||||||||||
The Company has a number of equity investments in privately and publicly held companies. Investments in these unconsolidated affiliates are recorded in "Long-term Investments" on the consolidated condensed balance sheets, and are as follows: | ||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||
Cost | $ | — | $ | 0.4 | ||||||||||||||||||||||
Unrealized gains | 0.6 | 0.4 | ||||||||||||||||||||||||
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Fair value of available-for-sale investments | 0.6 | 0.8 | ||||||||||||||||||||||||
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Equity method investments | ||||||||||||||||||||||||||
Cost | 12.7 | 14.1 | ||||||||||||||||||||||||
Equity in losses | (2.7 | ) | (2.7 | ) | ||||||||||||||||||||||
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Carrying value of equity method investments | 10 | 11.4 | ||||||||||||||||||||||||
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Cost method investments | ||||||||||||||||||||||||||
Carrying value of cost method investments | 6.7 | 9.7 | ||||||||||||||||||||||||
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Total investments in unconsolidated affiliates | $ | 17.3 | $ | 21.9 | ||||||||||||||||||||||
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In March 2014, the Company recorded an other-than-temporary impairment charge of $3.5 million related to one of its cost method investments. | ||||||||||||||||||||||||||
OTHER_INTANGIBLE_ASSETS
OTHER INTANGIBLE ASSETS | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
7. OTHER INTANGIBLE ASSETS | ||||||||||||||||||||
Other intangible assets consisted of the following (in millions): | ||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Carrying | Amortization | Carrying | |||||||||||||||||
Value | Value | |||||||||||||||||||
Amortizable intangible assets | ||||||||||||||||||||
Patents | $ | 181.2 | $ | (167.4 | ) | $ | 13.8 | $ | 181.6 | $ | (163.5 | ) | $ | 18.1 | ||||||
Developed technology | 46.1 | (36.3 | ) | 9.8 | 43.3 | (35.1 | ) | 8.2 | ||||||||||||
Other | 10.5 | (8.3 | ) | 2.2 | 10.7 | (8.1 | ) | 2.6 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
237.8 | (212.0 | ) | 25.8 | 235.6 | (206.7 | ) | 28.9 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Unamortizable intangible assets | ||||||||||||||||||||
In-process research and development | — | — | — | 4.6 | — | 4.6 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
$ | 237.8 | $ | (212.0 | ) | $ | 25.8 | $ | 240.2 | $ | (206.7 | ) | $ | 33.5 | |||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The net carrying value of patents as of December 31, 2013 has been adjusted to reflect the Company's change in its method of accounting for certain legal costs related to the defense and enforcement of issued patents. For further information, see Note 2. | ||||||||||||||||||||
In June 2014, the Company transferred its remaining in-process research and development assets, which related to technology acquired from BMEYE, B.V., to developed technology because the Company had received United States Food and Drug Administration approval for the product. | ||||||||||||||||||||
Amortization expense related to other intangible assets was $2.2 million and $2.5 million for the three months ended September 30, 2014 and 2013, respectively, and $6.3 million and $7.5 million for the nine months ended September 30, 2014 and 2013, respectively. Estimated amortization expense for each of the years ending December 31 is as follows (in millions): | ||||||||||||||||||||
2014 | $ | 8.5 | ||||||||||||||||||
2015 | 7.5 | |||||||||||||||||||
2016 | 7.4 | |||||||||||||||||||
2017 | 6.7 | |||||||||||||||||||
2018 | 1.3 | |||||||||||||||||||
The Company expenses costs incurred to renew or extend the term of acquired intangible assets. | ||||||||||||||||||||
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2014 | |
DEBT | ' |
DEBT | ' |
8. DEBT | |
In October 2013, the Company issued $600.0 million of 2.875% fixed-rate unsecured senior notes due October 15, 2018 (the "Notes"). Interest is payable semi-annually in arrears, with the first payment due in April 2014. The effective interest rate is 2.983%. Issuance costs of $5.4 million, as well as a $3.0 million discount on the Notes, are being amortized to interest expense over the term of the Notes. As of September 30, 2014, the carrying value of the Notes was $596.4 million. | |
In July 2014, the Company entered into a Five-Year Credit Agreement ("the Credit Agreement") which matures on July 18, 2019, and the previous Four-Year Credit Agreement was terminated. The Credit Agreement provides up to an aggregate of $750.0 million in borrowings in multiple currencies. The Company may increase the amount available under the Credit Agreement, subject to agreement of the lenders, by up to an additional $250.0 million in the aggregate. Borrowings generally bear interest at the London interbank offered rate ("LIBOR") plus a spread ranging from 1.0% to 1.5%, depending on the leverage ratio, as defined in the Credit Agreement. The Company also pays a facility fee ranging from 0.125% to 0.25%, depending on the leverage ratio, on the entire credit commitment available, whether or not drawn. The facility fee is expensed as incurred. Issuance costs of $3.0 million are being amortized to interest expense over the term of the Credit Agreement. As of September 30, 2014, there were no borrowings outstanding under the Credit Agreement. The Credit Agreement is unsecured and contains various financial and other covenants, including a maximum leverage ratio and a minimum interest coverage ratio, as defined in the Credit Agreement. The Company was in compliance with all covenants as of September 30, 2014. | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||
9. FAIR VALUE MEASUREMENTS | |||||||||||
The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, accounts and other receivables, investments, accounts payable, certain accrued liabilities and borrowings under a revolving credit agreement. The carrying value of these financial instruments generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. As of September 30, 2014, the fair value of the notes payable, based on Level 2 inputs, was $608.2 million. | |||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company prioritizes the inputs used to determine fair values in one of the following three categories: | |||||||||||
Level 1—Quoted market prices in active markets for identical assets or liabilities. | |||||||||||
Level 2—Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. | |||||||||||
Level 3—Unobservable inputs that are not corroborated by market data. | |||||||||||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. | |||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||
The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis (in millions): | |||||||||||
September 30, 2014 | Level 1 | Level 2 | Total | ||||||||
Assets | |||||||||||
Investments held for deferred compensation plans | $ | 26.8 | $ | — | $ | 26.8 | |||||
Available-for-sale investments | 0.6 | — | 0.6 | ||||||||
Derivatives | — | 34.2 | 34.2 | ||||||||
| | | | | | | | | | | |
$ | 27.4 | $ | 34.2 | $ | 61.6 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Liabilities | |||||||||||
Derivatives | $ | — | $ | 3.3 | $ | 3.3 | |||||
Deferred compensation plans | 27.1 | — | 27.1 | ||||||||
| | | | | | | | | | | |
$ | 27.1 | $ | 3.3 | $ | 30.4 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
December 31, 2013 | |||||||||||
Assets | |||||||||||
Investments held for deferred compensation plans | $ | 15.1 | $ | — | $ | 15.1 | |||||
Available-for-sale investments | 0.8 | — | 0.8 | ||||||||
Derivatives | — | 13.8 | 13.8 | ||||||||
| | | | | | | | | | | |
$ | 15.9 | $ | 13.8 | $ | 29.7 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Liabilities | |||||||||||
Derivatives | $ | — | $ | 17.2 | $ | 17.2 | |||||
Deferred compensation plans | 15.5 | — | 15.5 | ||||||||
| | | | | | | | | | | |
$ | 15.5 | $ | 17.2 | $ | 32.7 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred Compensation Plans | |||||||||||
The Company holds investments in trading securities related to its deferred compensation plans. The investments are in a variety of stock and bond mutual funds. The fair values of these investments and the corresponding liabilities are based on quoted market prices and are categorized as Level 1. | |||||||||||
Available-for-sale Investments | |||||||||||
The Company has a number of long-term equity investments in companies that are in various stages of development. Certain of these investments have been designated as available-for-sale. These investments are carried at fair market value based on quoted market prices and are categorized as Level 1. | |||||||||||
Derivative Instruments | |||||||||||
The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and foreign currency option contracts to manage foreign currency exposures, and interest rate swap agreements to manage its interest rate exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of foreign currency derivative financial instruments was estimated by discounting expected cash flows using quoted market interest rates and foreign exchange rates. The fair value of the interest rate swap agreements was determined based on a discounted cash flow analysis reflecting the contractual terms of the agreements and the 6-month LIBOR forward interest rate curve. Judgment was employed in interpreting market data to develop estimates of fair value; accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts. The derivative instruments are categorized as Level 2. | |||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
10. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||
The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk, as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. | ||||||||||||||||||||
Notional Amount | ||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Foreign currency forward exchange contracts | $ | 789.6 | $ | 805.5 | ||||||||||||||||
Interest rate swap agreements | 300 | 300 | ||||||||||||||||||
Foreign currency option contracts | 8.4 | — | ||||||||||||||||||
The Company uses derivative financial instruments to manage interest rate and foreign currency risks. It is the Company's policy not to enter into derivative financial instruments for speculative purposes. The Company uses interest rate swaps to convert a portion of its fixed-rate debt into variable-rate debt. These interest rate swaps are designated as fair value hedges and meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. The Company uses foreign currency forward exchange contracts to offset the changes due to currency rate movements in the amount of future cash flows associated with intercompany transactions and certain third-party expenses expected to occur within the next 13 months. These foreign currency forward exchange contracts are designated as cash flow hedges. Certain of the Company's locations have assets and liabilities denominated in currencies other than their functional currencies resulting from intercompany and third-party transactions. The Company uses foreign currency forward exchange contracts and foreign currency option contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with certain of these assets and liabilities. All foreign currency forward exchange contracts and foreign currency option contracts are denominated in currencies of major industrial countries, principally the Euro and the Japanese yen. | ||||||||||||||||||||
All derivative financial instruments are recognized at fair value in the consolidated condensed balance sheets. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The gain or loss on fair value hedges is classified in net interest expense, as they hedge the interest rate risk associated with the Company's fixed-rate debt. The Company reports in "Accumulated Other Comprehensive Loss" the effective portion of the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same period in which the underlying hedged transactions affect earnings. Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current period earnings. For the nine months ended September 30, 2014 and 2013, the Company did not record any gains or losses due to hedge ineffectiveness. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated condensed statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from derivative financial instruments are reported as operating activities in the consolidated condensed statements of cash flows. | ||||||||||||||||||||
Derivative financial instruments involve credit risk in the event the counterparty should default. It is the Company's policy to execute such instruments with global financial institutions that the Company believes to be creditworthy. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. The master-netting agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements. | ||||||||||||||||||||
The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Derivatives designated as hedging | Balance Sheet | September 30, | December 31, | |||||||||||||||||
instruments | Location | 2014 | 2013 | |||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 32 | $ | 13.8 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Foreign currency contracts | Accrued and other liabilities | $ | 2.2 | $ | 13.2 | |||||||||||||||
Interest rate swap agreements | Other long-term liabilities | $ | 1.1 | $ | 4 | |||||||||||||||
Derivatives not designated as hedging | ||||||||||||||||||||
instruments | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other assets | $ | 2.2 | $ | — | |||||||||||||||
The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): | ||||||||||||||||||||
Gross Amounts Not | ||||||||||||||||||||
Offset in the | ||||||||||||||||||||
Gross | Consolidated Balance | |||||||||||||||||||
Amounts | Sheet | |||||||||||||||||||
Offset in the | ||||||||||||||||||||
Consolidated | Net Amounts | |||||||||||||||||||
Balance Sheet | Presented in the | |||||||||||||||||||
Consolidated | ||||||||||||||||||||
September 30, 2014 | Gross | Balance Sheet | Financial | Cash | Net | |||||||||||||||
Amounts | Instruments | Collateral | Amount | |||||||||||||||||
Received | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 34.2 | $ | — | $ | 34.2 | $ | (1.7 | ) | $ | — | $ | 32.5 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 2.2 | $ | — | $ | 2.2 | $ | (1.7 | ) | $ | — | $ | 0.5 | |||||||
Interest rate swap agreements | $ | 1.1 | $ | — | $ | 1.1 | $ | — | $ | — | $ | 1.1 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 13.8 | $ | — | $ | 13.8 | $ | (9.5 | ) | $ | — | $ | 4.3 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 13.2 | $ | — | $ | 13.2 | $ | (9.5 | ) | $ | — | $ | 3.7 | |||||||
Interest rate swap agreements | $ | 4 | $ | — | $ | 4 | $ | — | $ | — | $ | 4 | ||||||||
The following tables present the effect of derivative instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (in millions): | ||||||||||||||||||||
Amount of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||||||||||||
Recognized in OCI | Reclassified from | |||||||||||||||||||
on Derivative | Accumulated OCI | |||||||||||||||||||
(Effective Portion) | into Income | |||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, | Location of Gain or | September 30, | ||||||||||||||||||
(Loss) Reclassified from | ||||||||||||||||||||
Accumulated OCI | ||||||||||||||||||||
Derivatives in cash flow hedging | 2014 | 2013 | into Income | 2014 | 2013 | |||||||||||||||
relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 36.1 | $ | (14.4 | ) | Cost of sales | $ | (2.6 | ) | $ | 7.3 | |||||||||
Amount of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||||||||||||
Recognized in OCI | Reclassified from | |||||||||||||||||||
on Derivative | Accumulated OCI | |||||||||||||||||||
(Effective Portion) | into Income | |||||||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | Location of Gain or | September 30, | ||||||||||||||||||
(Loss) Reclassified from | ||||||||||||||||||||
Accumulated OCI | ||||||||||||||||||||
Derivatives in cash flow hedging | 2014 | 2013 | into Income | 2014 | 2013 | |||||||||||||||
relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 31.7 | $ | 13.3 | Cost of sales | $ | 5.4 | $ | 18.3 | |||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives in fair value hedging | Derivative | 2014 | 2013 | |||||||||||||||||
relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense, net | $ | (1.8 | ) | $ | — | ||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives in fair value hedging | Derivative | 2014 | 2013 | |||||||||||||||||
relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense, net | $ | 2.9 | $ | — | |||||||||||||||
The gains on the interest rate swap agreements are fully offset by the changes in the fair value of the fixed-rate debt being hedged. | ||||||||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives not designated as hedging | Derivative | 2014 | 2013 | |||||||||||||||||
instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense, net | $ | 7.5 | $ | (0.3 | ) | ||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives not designated as hedging | Derivative | 2014 | 2013 | |||||||||||||||||
instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense, net | $ | 4.3 | $ | 14.1 | |||||||||||||||
The Company expects that during the next twelve months it will reclassify to earnings a $2.2 million gain currently recorded in "Accumulated Other Comprehensive Loss." | ||||||||||||||||||||
DEFINED_BENEFIT_PLANS
DEFINED BENEFIT PLANS | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
DEFINED BENEFIT PLANS | ' | |||||||||||||
DEFINED BENEFIT PLANS | ' | |||||||||||||
11. DEFINED BENEFIT PLANS | ||||||||||||||
The components of net periodic benefit cost for the three and nine months ended September 30, 2014 and 2013 were as follows (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Service cost | $ | 1.7 | $ | 2 | $ | 5.2 | $ | 5.9 | ||||||
Interest cost | 0.6 | 0.5 | 1.8 | 1.5 | ||||||||||
Expected return on plan assets | (0.5 | ) | (0.3 | ) | (1.4 | ) | (0.9 | ) | ||||||
Amortization of actuarial loss, prior service credit and other | 0.1 | 0.2 | 0.2 | 0.7 | ||||||||||
| | | | | | | | | | | | | | |
Net periodic benefit cost | $ | 1.9 | $ | 2.4 | $ | 5.8 | $ | 7.2 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
12. STOCK-BASED COMPENSATION | ||||||||||||||
Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and nine months ended September 30, 2014 and 2013 was as follows (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of sales | $ | 1.6 | $ | 1.6 | $ | 4.6 | $ | 4.5 | ||||||
Selling, general and administrative expenses | 8.7 | 8.6 | 26.1 | 26.2 | ||||||||||
Research and development expenses | 1.9 | 1.7 | 5.4 | 5.2 | ||||||||||
| | | | | | | | | | | | | | |
Total stock-based compensation expense | $ | 12.2 | $ | 11.9 | $ | 36.1 | $ | 35.9 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
At September 30, 2014, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units and employee stock purchase plan ("ESPP") subscription awards amounted to $95.0 million, which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 31 months. | ||||||||||||||
During the nine months ended September 30, 2014, the Company granted 1.4 million stock options at a weighted-average exercise price of $82.85 and 0.3 million shares of restricted stock units at a weighted-average grant-date fair value of $81.02. The Company also granted 39,000 shares of market-based restricted stock units at a weighted-average grant-date fair value of $108.75. The market-based restricted stock units vest based on a combination of certain service and market conditions. The actual number of shares issued will be determined based on the Company's total shareholder return relative to a selected industry peer group over a three-year performance period, and may range from 0% to 175% of the targeted number of shares granted. | ||||||||||||||
Fair Value Disclosures | ||||||||||||||
The fair value of the market-based restricted stock units was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. The weighted-average assumptions used to determine the fair value of the market-based restricted stock units granted during the nine months ended September 30, 2014 and 2013 included a risk-free interest rate of 0.9% and 0.4%, respectively, and an expected volatility rate of 31.7% and 33.4%, respectively. | ||||||||||||||
The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods: | ||||||||||||||
Option Awards | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Average risk-free interest rate | 1.6 | % | 1.4 | % | 1.5 | % | 0.8 | % | ||||||
Expected dividend yield | None | None | None | None | ||||||||||
Expected volatility | 30.6 | % | 30.8 | % | 30.7 | % | 30.7 | % | ||||||
Expected term (years) | 4.7 | 4.9 | 4.6 | 4.6 | ||||||||||
Fair value, per share | $ | 25.9 | $ | 19.46 | $ | 23.42 | $ | 19.47 | ||||||
The Black-Scholes option pricing model was used with the following weighted-average assumptions for ESPP subscriptions granted during the following periods: | ||||||||||||||
ESPP | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Average risk-free interest rate | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||
Expected dividend yield | None | None | None | None | ||||||||||
Expected volatility | 28.9 | % | 30.2 | % | 29.9 | % | 33.4 | % | ||||||
Expected term (years) | 0.7 | 0.6 | 0.6 | 0.6 | ||||||||||
Fair value, per share | $ | 20.9 | $ | 16.05 | $ | 17.19 | $ | 20.31 |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
13. COMMITMENTS AND CONTINGENCIES | |
Edwards Lifesciences is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits related primarily to products and services currently or formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such cases and claims raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Upon resolution of any such legal matter or other claim, Edwards Lifesciences may incur charges in excess of established reserves. The Company is not able to estimate the amount or range of any loss for legal contingencies for which there is no reserve or additional loss for matters already reserved. While any such charge related to matters could have a material adverse impact on Edwards Lifesciences' net income or cash flows in the period in which it is recorded or paid, management does not believe that any such charge relating to any currently pending lawsuit would have a material adverse effect on Edwards Lifesciences' financial position, results of operations or liquidity. | |
Edwards Lifesciences is subject to various environmental laws and regulations both within and outside of the United States. The operations of Edwards Lifesciences, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance will not have a material impact on Edwards Lifesciences' financial position, results of operations or liquidity. | |
In September 2014, the Company committed to purchase its Draper, Utah facility for $17.0 million under a purchase option provided in the lease agreement. The payment will be due upon close of escrow, which is expected to be in December 2014. | |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
14. ACCUMULATED OTHER COMPREHENSIVE LOSS | |||||||||||||||||
Presented below is a summary of activity for each component of "Accumulated Other Comprehensive Loss" for the nine months ended September 30, 2014. | |||||||||||||||||
Foreign | Unrealized Gain | Unrealized Gain | Unrealized | Total | |||||||||||||
Currency | on Cash Flow | on Available-for- | Pension | Accumulated | |||||||||||||
Translation | Hedges | sale Investments | Costs | Other | |||||||||||||
Adjustments | Comprehensive | ||||||||||||||||
Loss | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2013 | $ | (20.2 | ) | $ | 3.5 | $ | 0.3 | $ | (11.2 | ) | $ | (27.6 | ) | ||||
Other comprehensive (loss) gain before reclassifications | (59.6 | ) | 31.7 | (0.1 | ) | — | (28.0 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (5.4 | ) | 0.3 | — | (5.1 | ) | ||||||||||
Deferred income tax benefit | — | (9.9 | ) | — | — | (9.9 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
September 30, 2014 | $ | (79.8 | ) | $ | 19.9 | $ | 0.5 | $ | (11.2 | ) | $ | (70.6 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
The following table provides information about amounts reclassified from "Accumulated Other Comprehensive Loss" (in millions): | |||||||||||||||||
Three Months | Nine Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2014 | Affected Line on Consolidated Condensed | |||||||||||||||
Details about Accumulated Other | 2014 | 2013 | 2014 | 2013 | Statements of Operations | ||||||||||||
Comprehensive Loss Components | |||||||||||||||||
Gain on cash flow hedges | $ | (2.6 | ) | $ | 7.3 | $ | 5.4 | $ | 18.3 | Cost of sales | |||||||
1 | (2.8 | ) | (2.0 | ) | (7.0 | ) | Provision for income taxes | ||||||||||
| | | | | | | | | | | | | | | |||
$ | (1.6 | ) | $ | 4.5 | $ | 3.4 | $ | 11.3 | Net of tax | ||||||||
| | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | |||
Gain on available-for-sale investments | $ | — | $ | — | $ | (0.3 | ) | $ | — | Other expense, net | |||||||
— | — | — | — | Provision for income taxes | |||||||||||||
| | | | | | | | | | | | | | | |||
$ | — | $ | — | $ | (0.3 | ) | $ | — | Net of tax | ||||||||
| | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | |||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
15. EARNINGS PER SHARE | ||||||||||||||
Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during a period. Employee equity share options, nonvested shares and similar equity instruments granted by the Company are treated as potential common shares in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of restricted stock units, market-based restricted stock units, and in-the-money options. The dilutive impact of the restricted stock units, market-based restricted stock units, and in-the-money options is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of compensation expense for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in "Additional Paid-in Capital" when the award becomes deductible are assumed to be used to repurchase shares. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. | ||||||||||||||
The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic: | ||||||||||||||
Net income | $ | 94.6 | $ | 76.8 | $ | 701.9 | $ | 314 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic earnings per share | $ | 0.89 | $ | 0.69 | $ | 6.61 | $ | 2.79 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted: | ||||||||||||||
Net income | $ | 94.6 | $ | 76.8 | $ | 701.9 | $ | 314 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 | ||||||||||
Dilutive effect of stock plans | 2 | 1.9 | 1.9 | 2.2 | ||||||||||
| | | | | | | | | | | | | | |
Dilutive weighted-average shares outstanding | 108.4 | 112.9 | 108.1 | 114.7 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted earnings per share | $ | 0.87 | $ | 0.68 | $ | 6.49 | $ | 2.74 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Stock options, restricted stock units, and market-based restricted stock units to purchase 1.5 million and 3.6 million shares for the three months ended September 30, 2014 and 2013, respectively, and 3.2 million and 3.2 million for the nine months ended September 30, 2014 and 2013, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. | ||||||||||||||
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2014 | |
INCOME TAXES | ' |
INCOME TAXES | ' |
16. INCOME TAXES | |
The Company's effective income tax rates were 21.6% and 23.0% for the three months ended September 30, 2014 and 2013, respectively, and 30.6% and 23.6% for the nine months ended September 30, 2014 and 2013, respectively. | |
The effective tax rate for the nine months ended September 30, 2014 included (1) $262.1 million of tax expense associated with a $750.0 million litigation settlement payment received from Medtronic in May 2014 (see Note 3) and (2) $6.2 million of tax benefits from the remeasurement of uncertain tax positions. | |
The federal research credit expired on December 31, 2013 and has not been reinstated as of September 30, 2014. Therefore, the effective income tax rates for the three and nine months ended September 30, 2014 were calculated without an assumed benefit for the federal research credit. In 2013, the federal research credit related to 2013 favorably impacted the effective tax rate by approximately 1.3 percentage points. The effective income tax rate for the nine months ended September 30, 2013 included (1) an $8.4 million benefit for the full year 2012 federal research credit, which was reinstated on January 2, 2013 and (2) $31.3 million of tax expense associated with the $83.6 million litigation award received from Medtronic in February 2013 (see Note 3). | |
The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for matters it believes are more likely than not to require settlement, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the consolidated condensed financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues and issuance of new legislation, regulations or case law. | |
As of September 30, 2014 and December 31, 2013, the liability for income taxes associated with uncertain tax positions was $180.6 million and $127.7 million, respectively. The Company estimates that these liabilities would be reduced by $30.2 million and $30.9 million, respectively, from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes and timing adjustments. The net amounts of $150.4 million and $96.8 million, respectively, if not required, would favorably affect the Company's effective tax rate. | |
At September 30, 2014, all material state, local and foreign income tax matters have been concluded for years through 2008. During the third quarter of 2013, the Internal Revenue Service ("IRS") completed its fieldwork for the 2009 and 2010 tax years. The case is currently in suspense pending finalization of an Advance Pricing Agreement ("APA") and Joint Committee of Taxation approval. The IRS began its examination of the 2011 and 2012 tax years during the fourth quarter of 2013. The Company has also entered into an APA process between the Switzerland and United States governments for the years 2009 through 2013 covering transfer pricing matters. The transfer pricing matters are significant to the Company's consolidated condensed financial statements, and the final outcome of the negotiations between the two governments is uncertain. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
17. SEGMENT INFORMATION | ||||||||||||||
Edwards Lifesciences conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease. | ||||||||||||||
The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic segments based on net sales and income before provision for income taxes ("pre-tax income"). The accounting policies of the segments are substantially the same as those described in Note 2 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013. Segment net sales and segment pre-tax income are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent. Net sales by geographic area are based on the location of the customer. | ||||||||||||||
Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest expense, global marketing expenses, corporate research and development expenses, manufacturing variances, corporate headquarters costs, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment pre-tax income, due to the Company's methodology for cost build-up, it is impractical to determine the amount of depreciation expense included in each segment, and, therefore, a portion is maintained at the corporate level. The Company neither discretely allocates assets to its operating segments, nor evaluates the operating segments using discrete asset information. | ||||||||||||||
The table below presents information about Edwards Lifesciences' reportable segments (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Segment Net Sales | ||||||||||||||
United States | $ | 296.3 | $ | 232.1 | $ | 760.7 | $ | 700.5 | ||||||
Europe | 175.6 | 146.2 | 539.5 | 462.4 | ||||||||||
Japan | 68.7 | 69.2 | 197.1 | 209.5 | ||||||||||
Rest of World | 69.2 | 65.4 | 208 | 183 | ||||||||||
| | | | | | | | | | | | | | |
Total segment net sales | $ | 609.8 | $ | 512.9 | $ | 1,705.30 | $ | 1,555.40 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Segment Pre-tax Income | ||||||||||||||
United States | $ | 177.4 | $ | 135.1 | $ | 427 | $ | 410.6 | ||||||
Europe | 77.3 | 66.2 | 245.2 | 212.4 | ||||||||||
Japan | 31.9 | 31.6 | 91.4 | 102 | ||||||||||
Rest of World | 18.3 | 20.1 | 58.3 | 50.1 | ||||||||||
| | | | | | | | | | | | | | |
Total segment pre-tax income | $ | 304.9 | $ | 253 | $ | 821.9 | $ | 775.1 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net Sales Reconciliation | ||||||||||||||
Segment net sales | $ | 609.8 | $ | 512.9 | $ | 1,705.30 | $ | 1,555.40 | ||||||
Foreign currency | (2.4 | ) | (17.3 | ) | (0.4 | ) | (45.9 | ) | ||||||
| | | | | | | | | | | | | | |
Consolidated net sales | $ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Pre-tax Income Reconciliation | ||||||||||||||
Segment pre-tax income | $ | 304.9 | $ | 253 | $ | 821.9 | $ | 775.1 | ||||||
Unallocated amounts: | ||||||||||||||
Corporate items | (176.5 | ) | (144.6 | ) | (489.2 | ) | (427.6 | ) | ||||||
Special charges (Note 4) | (3.0 | ) | — | (60.5 | ) | — | ||||||||
Intellectual property litigation (expense) income, net (Note 3) | (0.9 | ) | (4.3 | ) | 741 | 68.3 | ||||||||
Interest expense, net | (2.5 | ) | (1.0 | ) | (9.1 | ) | (1.2 | ) | ||||||
Foreign currency | (1.4 | ) | (3.3 | ) | 7 | (3.7 | ) | |||||||
| | | | | | | | | | | | | | |
Consolidated pre-tax income | $ | 120.6 | $ | 99.8 | $ | 1,011.10 | $ | 410.9 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Enterprise-Wide Information | ||||||||||||||
Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in millions) | ||||||||||||||
Net Sales by Geographic Area | ||||||||||||||
United States | $ | 296.3 | $ | 232.1 | $ | 760.7 | $ | 700.5 | ||||||
Europe | 176.9 | 144.4 | 551 | 454.2 | ||||||||||
Japan | 66.8 | 56.7 | 192.2 | 176 | ||||||||||
Rest of World | 67.4 | 62.4 | 201 | 178.8 | ||||||||||
| | | | | | | | | | | | | | |
$ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net Sales by Major Product and Service Area | ||||||||||||||
Transcatheter Heart Valves | $ | 267.2 | $ | 191.8 | $ | 676.1 | $ | 594.2 | ||||||
Surgical Heart Valve Therapy | 203.4 | 172 | 620 | 523.8 | ||||||||||
Critical Care | 136.8 | 131.8 | 408.8 | 391.5 | ||||||||||
| | | | | | | | | | | | | | |
$ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||
Long-lived Tangible Assets by Geographic Area | ||||||||||||||
United States | $ | 323.6 | $ | 308.2 | ||||||||||
Europe | 40.3 | 40.9 | ||||||||||||
Japan | 9.4 | 10.8 | ||||||||||||
Rest of World | 93.9 | 97.1 | ||||||||||||
| | | | | | | | |||||||
$ | 467.2 | $ | 457 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
BASIS OF PRESENTATION | ' |
Recently Adopted Accounting Standards and New Accounting Standards Not Yet Adopted | ' |
Recently Adopted Accounting Standards | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on income taxes impacting the presentation of unrecognized tax benefits. The guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss or similar tax loss carryforwards, or tax credit carryforwards. The guidance was effective for annual reporting periods beginning after December 15, 2013 and interim periods therein. The adoption of this guidance did not have a material impact on the Company's consolidated condensed financial statements. | |
New Accounting Standards Not Yet Adopted | |
In May 2014, the FASB issued an update to the accounting guidance on revenue recognition. The new guidance provides a comprehensive, principles-based approach to revenue recognition, and supersedes most previous revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires improved disclosures on the nature, amount, timing and uncertainty of revenue that is recognized. The guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods therein. The new guidance can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is currently assessing the impact this guidance will have on its consolidated financial statements, and has not yet selected a transition method. | |
CHANGE_IN_ACCOUNTING_PRINCIPLE1
CHANGE IN ACCOUNTING PRINCIPLE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
CHANGE IN ACCOUNTING PRINCIPLE | ' | |||||||||||||
Schedule of effects of retrospective application of change in accounting principle | ' | |||||||||||||
The following tables present the effects of the retrospective application of the change in accounting principle (in millions): | ||||||||||||||
As of December 31, 2013 | ||||||||||||||
Consolidated Condensed Balance Sheet | As Reported | As Adjusted | ||||||||||||
Other intangible assets, net | $ | 57.2 | $ | 33.5 | ||||||||||
Deferred income taxes | 70.1 | 79 | ||||||||||||
Total assets | 2,724.70 | 2,709.90 | ||||||||||||
Retained earnings | 2,045.60 | 2,030.80 | ||||||||||||
Total stockholders' equity | 1,559.20 | 1,544.40 | ||||||||||||
Total liabilities and stockholders' equity | 2,724.70 | 2,709.90 | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||
Consolidated Condensed Statement of Operations | As Reported | As Adjusted | As Reported | As Adjusted | ||||||||||
Cost of sales | $ | 129.7 | $ | 128.2 | $ | 376.9 | $ | 372.8 | ||||||
Gross profit | 365.9 | 367.4 | 1,132.60 | 1,136.70 | ||||||||||
Selling, general and administrative expenses(a) | 180.5 | 177.8 | 555.1 | 546.8 | ||||||||||
Intellectual property litigation expense (income), net(a) | — | 4.3 | — | (68.3 | ) | |||||||||
Special gain(a) | — | — | (83.6 | ) | — | |||||||||
Income before provision for income taxes | 99.9 | 99.8 | 413.8 | 410.9 | ||||||||||
Provision for income taxes | 23 | 23 | 97.9 | 96.9 | ||||||||||
Net income | 76.9 | 76.8 | 315.9 | 314 | ||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.69 | $ | 0.69 | $ | 2.81 | $ | 2.79 | ||||||
Diluted | $ | 0.68 | $ | 0.68 | $ | 2.75 | $ | 2.74 | ||||||
(a) | ||||||||||||||
The above amounts also reflect certain reclassifications of previously reported amounts related to intellectual property litigation to conform to classifications used in the current year. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, 2013 | September 30, 2013 | |||||||||||||
Consolidated Condensed Statement of Comprehensive Income | As Reported | As Adjusted | As Reported | As Adjusted | ||||||||||
Net income | $ | 76.9 | $ | 76.8 | $ | 315.9 | $ | 314 | ||||||
Comprehensive income | 82 | 81.9 | 310.9 | 309 | ||||||||||
Nine Months Ended | ||||||||||||||
September 30, 2013 | ||||||||||||||
Consolidated Condensed Statement of Cash Flows | As Reported | As Adjusted | ||||||||||||
Net income | $ | 315.9 | $ | 314 | ||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 49.9 | 45.8 | ||||||||||||
Other | 2.4 | 2.1 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Prepaid expenses and other current assets | 20.1 | 19.1 | ||||||||||||
Other | (1.1 | ) | 6.2 |
INTELLECTUAL_PROPERTY_LITIGATI1
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET | ' | ||||
Schedule of allocation of consideration to identifiable elements of settlement agreement | ' | ||||
Past damages | $ | 754.3 | |||
License agreement | 238 | ||||
Covenant not to sue | 77.7 | ||||
| | | | | |
Total | $ | 1,070.00 | |||
| | | | | |
| | | | | |
COMPOSITION_OF_CERTAIN_FINANCI1
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | ' | |||||||
Schedule of inventories | ' | |||||||
Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Inventories | ||||||||
Raw materials | $ | 62.4 | $ | 57.8 | ||||
Work in process | 77.7 | 82.2 | ||||||
Finished products | 163.5 | 168.9 | ||||||
| | | | | | | | |
$ | 303.6 | $ | 308.9 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of accounts payable and accrued liabilities | ' | |||||||
Accounts payable and accrued liabilities | ||||||||
Accounts payable | $ | 59.9 | $ | 48.4 | ||||
Employee compensation and withholdings | 156.4 | 101.1 | ||||||
Clinical trial accruals | 45.5 | 37.2 | ||||||
Property, payroll and other taxes | 32.3 | 31.6 | ||||||
Capital lease obligation | 13.6 | — | ||||||
Accrued rebates | 11.2 | 15 | ||||||
Taxes payable | 9.2 | 7.1 | ||||||
Realignment reserves | 7.6 | 9.5 | ||||||
Deferred income taxes | 7.1 | 7.2 | ||||||
Fair value of derivatives | 2.2 | 17.2 | ||||||
Other accrued liabilities | 82.8 | 71.3 | ||||||
| | | | | | | | |
$ | 427.8 | $ | 345.6 | |||||
| | | | | | | | |
| | | | | | | | |
INVESTMENTS_Tables
INVESTMENTS (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
INVESTMENTS | ' | |||||||||||||||||||||||||
Schedule of held-to-maturity investments | ' | |||||||||||||||||||||||||
Held-to-maturity investments at the end of each period were as follows (in millions): | ||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Cost | Gross | Gross | Fair | Cost | Gross | Gross | Fair | |||||||||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | Value | |||||||||||||||||||||
Gains | Losses | Gains | Losses | |||||||||||||||||||||||
Bank time deposits | $ | 1,006.50 | $ | — | $ | — | $ | 1,006.50 | $ | 516.5 | $ | — | $ | — | $ | 516.5 | ||||||||||
Commercial paper | 87.3 | — | — | 87.3 | — | — | — | — | ||||||||||||||||||
U.S. government and agency securities | 51.7 | 0.1 | (0.1 | ) | 51.7 | — | — | — | — | |||||||||||||||||
Asset-backed securities | 9.1 | — | — | 9.1 | — | — | — | — | ||||||||||||||||||
Corporate debt securities | 25 | — | — | 25 | — | — | — | — | ||||||||||||||||||
Municipal securities | 6.1 | — | — | 6.1 | — | — | — | — | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,185.70 | $ | 0.1 | $ | (0.1 | ) | $ | 1,185.70 | $ | 516.5 | $ | — | $ | — | $ | 516.5 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Schedule of cost and fair value of held-to-maturity investments, by contractual maturity | ' | |||||||||||||||||||||||||
The cost and fair value of held-to-maturity investments, by contractual maturity, as of September 30, 2014 were as follows: | ||||||||||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Due in 1 year or less | $ | 1,111.00 | $ | 1,111.00 | ||||||||||||||||||||||
Due after 1 year through 5 years | 58 | 57.9 | ||||||||||||||||||||||||
Instruments not due at a single maturity date | 16.7 | 16.8 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
$ | 1,185.70 | $ | 1,185.70 | |||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Schedule of investments in unconsolidated affiliates | ' | |||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||
Cost | $ | — | $ | 0.4 | ||||||||||||||||||||||
Unrealized gains | 0.6 | 0.4 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Fair value of available-for-sale investments | 0.6 | 0.8 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Equity method investments | ||||||||||||||||||||||||||
Cost | 12.7 | 14.1 | ||||||||||||||||||||||||
Equity in losses | (2.7 | ) | (2.7 | ) | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Carrying value of equity method investments | 10 | 11.4 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Cost method investments | ||||||||||||||||||||||||||
Carrying value of cost method investments | 6.7 | 9.7 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total investments in unconsolidated affiliates | $ | 17.3 | $ | 21.9 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
OTHER_INTANGIBLE_ASSETS_Tables
OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
OTHER INTANGIBLE ASSETS | ' | |||||||||||||||||||
Schedule of other intangible assets | ' | |||||||||||||||||||
Other intangible assets consisted of the following (in millions): | ||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Carrying | Amortization | Carrying | |||||||||||||||||
Value | Value | |||||||||||||||||||
Amortizable intangible assets | ||||||||||||||||||||
Patents | $ | 181.2 | $ | (167.4 | ) | $ | 13.8 | $ | 181.6 | $ | (163.5 | ) | $ | 18.1 | ||||||
Developed technology | 46.1 | (36.3 | ) | 9.8 | 43.3 | (35.1 | ) | 8.2 | ||||||||||||
Other | 10.5 | (8.3 | ) | 2.2 | 10.7 | (8.1 | ) | 2.6 | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
237.8 | (212.0 | ) | 25.8 | 235.6 | (206.7 | ) | 28.9 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Unamortizable intangible assets | ||||||||||||||||||||
In-process research and development | — | — | — | 4.6 | — | 4.6 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
$ | 237.8 | $ | (212.0 | ) | $ | 25.8 | $ | 240.2 | $ | (206.7 | ) | $ | 33.5 | |||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of estimated amortization expense | ' | |||||||||||||||||||
Estimated amortization expense for each of the years ending December 31 is as follows (in millions): | ||||||||||||||||||||
2014 | $ | 8.5 | ||||||||||||||||||
2015 | 7.5 | |||||||||||||||||||
2016 | 7.4 | |||||||||||||||||||
2017 | 6.7 | |||||||||||||||||||
2018 | 1.3 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||
Summary of financial instruments measured at fair value on a recurring basis | ' | ||||||||||
The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis (in millions): | |||||||||||
September 30, 2014 | Level 1 | Level 2 | Total | ||||||||
Assets | |||||||||||
Investments held for deferred compensation plans | $ | 26.8 | $ | — | $ | 26.8 | |||||
Available-for-sale investments | 0.6 | — | 0.6 | ||||||||
Derivatives | — | 34.2 | 34.2 | ||||||||
| | | | | | | | | | | |
$ | 27.4 | $ | 34.2 | $ | 61.6 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Liabilities | |||||||||||
Derivatives | $ | — | $ | 3.3 | $ | 3.3 | |||||
Deferred compensation plans | 27.1 | — | 27.1 | ||||||||
| | | | | | | | | | | |
$ | 27.1 | $ | 3.3 | $ | 30.4 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
December 31, 2013 | |||||||||||
Assets | |||||||||||
Investments held for deferred compensation plans | $ | 15.1 | $ | — | $ | 15.1 | |||||
Available-for-sale investments | 0.8 | — | 0.8 | ||||||||
Derivatives | — | 13.8 | 13.8 | ||||||||
| | | | | | | | | | | |
$ | 15.9 | $ | 13.8 | $ | 29.7 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Liabilities | |||||||||||
Derivatives | $ | — | $ | 17.2 | $ | 17.2 | |||||
Deferred compensation plans | 15.5 | — | 15.5 | ||||||||
| | | | | | | | | | | |
$ | 15.5 | $ | 17.2 | $ | 32.7 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||||||||
Summary of derivative financial instruments used to manage currency exchange rate risk and interest rate risk | ' | |||||||||||||||||||
Notional Amount | ||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Foreign currency forward exchange contracts | $ | 789.6 | $ | 805.5 | ||||||||||||||||
Interest rate swap agreements | 300 | 300 | ||||||||||||||||||
Foreign currency option contracts | 8.4 | — | ||||||||||||||||||
Schedule of location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets | ' | |||||||||||||||||||
The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Derivatives designated as hedging | Balance Sheet | September 30, | December 31, | |||||||||||||||||
instruments | Location | 2014 | 2013 | |||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other current assets | $ | 32 | $ | 13.8 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Foreign currency contracts | Accrued and other liabilities | $ | 2.2 | $ | 13.2 | |||||||||||||||
Interest rate swap agreements | Other long-term liabilities | $ | 1.1 | $ | 4 | |||||||||||||||
Derivatives not designated as hedging | ||||||||||||||||||||
instruments | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Foreign currency contracts | Other assets | $ | 2.2 | $ | — | |||||||||||||||
Schedule of effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets | ' | |||||||||||||||||||
The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): | ||||||||||||||||||||
Gross Amounts Not | ||||||||||||||||||||
Offset in the | ||||||||||||||||||||
Gross | Consolidated Balance | |||||||||||||||||||
Amounts | Sheet | |||||||||||||||||||
Offset in the | ||||||||||||||||||||
Consolidated | Net Amounts | |||||||||||||||||||
Balance Sheet | Presented in the | |||||||||||||||||||
Consolidated | ||||||||||||||||||||
September 30, 2014 | Gross | Balance Sheet | Financial | Cash | Net | |||||||||||||||
Amounts | Instruments | Collateral | Amount | |||||||||||||||||
Received | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 34.2 | $ | — | $ | 34.2 | $ | (1.7 | ) | $ | — | $ | 32.5 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 2.2 | $ | — | $ | 2.2 | $ | (1.7 | ) | $ | — | $ | 0.5 | |||||||
Interest rate swap agreements | $ | 1.1 | $ | — | $ | 1.1 | $ | — | $ | — | $ | 1.1 | ||||||||
December 31, 2013 | ||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||
Foreign currency contracts | $ | 13.8 | $ | — | $ | 13.8 | $ | (9.5 | ) | $ | — | $ | 4.3 | |||||||
Derivative Liabilities | ||||||||||||||||||||
Foreign currency contracts | $ | 13.2 | $ | — | $ | 13.2 | $ | (9.5 | ) | $ | — | $ | 3.7 | |||||||
Interest rate swap agreements | $ | 4 | $ | — | $ | 4 | $ | — | $ | — | $ | 4 | ||||||||
Schedule of effect of derivative instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income | ' | |||||||||||||||||||
The following tables present the effect of derivative instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (in millions): | ||||||||||||||||||||
Amount of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||||||||||||
Recognized in OCI | Reclassified from | |||||||||||||||||||
on Derivative | Accumulated OCI | |||||||||||||||||||
(Effective Portion) | into Income | |||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
September 30, | Location of Gain or | September 30, | ||||||||||||||||||
(Loss) Reclassified from | ||||||||||||||||||||
Accumulated OCI | ||||||||||||||||||||
Derivatives in cash flow hedging | 2014 | 2013 | into Income | 2014 | 2013 | |||||||||||||||
relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 36.1 | $ | (14.4 | ) | Cost of sales | $ | (2.6 | ) | $ | 7.3 | |||||||||
Amount of Gain or (Loss) | Amount of Gain or (Loss) | |||||||||||||||||||
Recognized in OCI | Reclassified from | |||||||||||||||||||
on Derivative | Accumulated OCI | |||||||||||||||||||
(Effective Portion) | into Income | |||||||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | Location of Gain or | September 30, | ||||||||||||||||||
(Loss) Reclassified from | ||||||||||||||||||||
Accumulated OCI | ||||||||||||||||||||
Derivatives in cash flow hedging | 2014 | 2013 | into Income | 2014 | 2013 | |||||||||||||||
relationships | ||||||||||||||||||||
Foreign currency contracts | $ | 31.7 | $ | 13.3 | Cost of sales | $ | 5.4 | $ | 18.3 | |||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives in fair value hedging | Derivative | 2014 | 2013 | |||||||||||||||||
relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense, net | $ | (1.8 | ) | $ | — | ||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives in fair value hedging | Derivative | 2014 | 2013 | |||||||||||||||||
relationships | ||||||||||||||||||||
Interest rate swap agreements | Interest expense, net | $ | 2.9 | $ | — | |||||||||||||||
The gains on the interest rate swap agreements are fully offset by the changes in the fair value of the fixed-rate debt being hedged. | ||||||||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives not designated as hedging | Derivative | 2014 | 2013 | |||||||||||||||||
instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense, net | $ | 7.5 | $ | (0.3 | ) | ||||||||||||||
Amount of Gain or (Loss) | ||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivative | ||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||
Location of Gain or (Loss) | September 30, | |||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||
Derivatives not designated as hedging | Derivative | 2014 | 2013 | |||||||||||||||||
instruments | ||||||||||||||||||||
Foreign currency contracts | Other expense, net | $ | 4.3 | $ | 14.1 |
DEFINED_BENEFIT_PLANS_Tables
DEFINED BENEFIT PLANS (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
DEFINED BENEFIT PLANS | ' | |||||||||||||
Components of net periodic benefit cost | ' | |||||||||||||
The components of net periodic benefit cost for the three and nine months ended September 30, 2014 and 2013 were as follows (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Service cost | $ | 1.7 | $ | 2 | $ | 5.2 | $ | 5.9 | ||||||
Interest cost | 0.6 | 0.5 | 1.8 | 1.5 | ||||||||||
Expected return on plan assets | (0.5 | ) | (0.3 | ) | (1.4 | ) | (0.9 | ) | ||||||
Amortization of actuarial loss, prior service credit and other | 0.1 | 0.2 | 0.2 | 0.7 | ||||||||||
| | | | | | | | | | | | | | |
Net periodic benefit cost | $ | 1.9 | $ | 2.4 | $ | 5.8 | $ | 7.2 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||||
Schedule of stock-based compensation expense | ' | |||||||||||||
Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and nine months ended September 30, 2014 and 2013 was as follows (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of sales | $ | 1.6 | $ | 1.6 | $ | 4.6 | $ | 4.5 | ||||||
Selling, general and administrative expenses | 8.7 | 8.6 | 26.1 | 26.2 | ||||||||||
Research and development expenses | 1.9 | 1.7 | 5.4 | 5.2 | ||||||||||
| | | | | | | | | | | | | | |
Total stock-based compensation expense | $ | 12.2 | $ | 11.9 | $ | 36.1 | $ | 35.9 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of weighted-average assumptions for options granted | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Average risk-free interest rate | 1.6 | % | 1.4 | % | 1.5 | % | 0.8 | % | ||||||
Expected dividend yield | None | None | None | None | ||||||||||
Expected volatility | 30.6 | % | 30.8 | % | 30.7 | % | 30.7 | % | ||||||
Expected term (years) | 4.7 | 4.9 | 4.6 | 4.6 | ||||||||||
Fair value, per share | $ | 25.9 | $ | 19.46 | $ | 23.42 | $ | 19.47 | ||||||
Schedule of weighted-average assumptions for ESPP subscriptions granted | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Average risk-free interest rate | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||
Expected dividend yield | None | None | None | None | ||||||||||
Expected volatility | 28.9 | % | 30.2 | % | 29.9 | % | 33.4 | % | ||||||
Expected term (years) | 0.7 | 0.6 | 0.6 | 0.6 | ||||||||||
Fair value, per share | $ | 20.9 | $ | 16.05 | $ | 17.19 | $ | 20.31 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||||||||||||||
Summary of activity for each component of Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Foreign | Unrealized Gain | Unrealized Gain | Unrealized | Total | |||||||||||||
Currency | on Cash Flow | on Available-for- | Pension | Accumulated | |||||||||||||
Translation | Hedges | sale Investments | Costs | Other | |||||||||||||
Adjustments | Comprehensive | ||||||||||||||||
Loss | |||||||||||||||||
(in millions) | |||||||||||||||||
December 31, 2013 | $ | (20.2 | ) | $ | 3.5 | $ | 0.3 | $ | (11.2 | ) | $ | (27.6 | ) | ||||
Other comprehensive (loss) gain before reclassifications | (59.6 | ) | 31.7 | (0.1 | ) | — | (28.0 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (5.4 | ) | 0.3 | — | (5.1 | ) | ||||||||||
Deferred income tax benefit | — | (9.9 | ) | — | — | (9.9 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
September 30, 2014 | $ | (79.8 | ) | $ | 19.9 | $ | 0.5 | $ | (11.2 | ) | $ | (70.6 | ) | ||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Schedule of amounts reclassified from Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
The following table provides information about amounts reclassified from "Accumulated Other Comprehensive Loss" (in millions): | |||||||||||||||||
Three Months | Nine Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2014 | Affected Line on Consolidated Condensed | |||||||||||||||
Details about Accumulated Other | 2014 | 2013 | 2014 | 2013 | Statements of Operations | ||||||||||||
Comprehensive Loss Components | |||||||||||||||||
Gain on cash flow hedges | $ | (2.6 | ) | $ | 7.3 | $ | 5.4 | $ | 18.3 | Cost of sales | |||||||
1 | (2.8 | ) | (2.0 | ) | (7.0 | ) | Provision for income taxes | ||||||||||
| | | | | | | | | | | | | | | |||
$ | (1.6 | ) | $ | 4.5 | $ | 3.4 | $ | 11.3 | Net of tax | ||||||||
| | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | |||
Gain on available-for-sale investments | $ | — | $ | — | $ | (0.3 | ) | $ | — | Other expense, net | |||||||
— | — | — | — | Provision for income taxes | |||||||||||||
| | | | | | | | | | | | | | | |||
$ | — | $ | — | $ | (0.3 | ) | $ | — | Net of tax | ||||||||
| | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | |||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||
Schedule of computation of basic and diluted earnings per share | ' | |||||||||||||
The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic: | ||||||||||||||
Net income | $ | 94.6 | $ | 76.8 | $ | 701.9 | $ | 314 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic earnings per share | $ | 0.89 | $ | 0.69 | $ | 6.61 | $ | 2.79 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted: | ||||||||||||||
Net income | $ | 94.6 | $ | 76.8 | $ | 701.9 | $ | 314 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 | ||||||||||
Dilutive effect of stock plans | 2 | 1.9 | 1.9 | 2.2 | ||||||||||
| | | | | | | | | | | | | | |
Dilutive weighted-average shares outstanding | 108.4 | 112.9 | 108.1 | 114.7 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted earnings per share | $ | 0.87 | $ | 0.68 | $ | 6.49 | $ | 2.74 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
SEGMENT INFORMATION | ' | |||||||||||||
Information about reportable segments | ' | |||||||||||||
The table below presents information about Edwards Lifesciences' reportable segments (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Segment Net Sales | ||||||||||||||
United States | $ | 296.3 | $ | 232.1 | $ | 760.7 | $ | 700.5 | ||||||
Europe | 175.6 | 146.2 | 539.5 | 462.4 | ||||||||||
Japan | 68.7 | 69.2 | 197.1 | 209.5 | ||||||||||
Rest of World | 69.2 | 65.4 | 208 | 183 | ||||||||||
| | | | | | | | | | | | | | |
Total segment net sales | $ | 609.8 | $ | 512.9 | $ | 1,705.30 | $ | 1,555.40 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Segment Pre-tax Income | ||||||||||||||
United States | $ | 177.4 | $ | 135.1 | $ | 427 | $ | 410.6 | ||||||
Europe | 77.3 | 66.2 | 245.2 | 212.4 | ||||||||||
Japan | 31.9 | 31.6 | 91.4 | 102 | ||||||||||
Rest of World | 18.3 | 20.1 | 58.3 | 50.1 | ||||||||||
| | | | | | | | | | | | | | |
Total segment pre-tax income | $ | 304.9 | $ | 253 | $ | 821.9 | $ | 775.1 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | |||||||||||||
The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions): | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net Sales Reconciliation | ||||||||||||||
Segment net sales | $ | 609.8 | $ | 512.9 | $ | 1,705.30 | $ | 1,555.40 | ||||||
Foreign currency | (2.4 | ) | (17.3 | ) | (0.4 | ) | (45.9 | ) | ||||||
| | | | | | | | | | | | | | |
Consolidated net sales | $ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Pre-tax Income Reconciliation | ||||||||||||||
Segment pre-tax income | $ | 304.9 | $ | 253 | $ | 821.9 | $ | 775.1 | ||||||
Unallocated amounts: | ||||||||||||||
Corporate items | (176.5 | ) | (144.6 | ) | (489.2 | ) | (427.6 | ) | ||||||
Special charges (Note 4) | (3.0 | ) | — | (60.5 | ) | — | ||||||||
Intellectual property litigation (expense) income, net (Note 3) | (0.9 | ) | (4.3 | ) | 741 | 68.3 | ||||||||
Interest expense, net | (2.5 | ) | (1.0 | ) | (9.1 | ) | (1.2 | ) | ||||||
Foreign currency | (1.4 | ) | (3.3 | ) | 7 | (3.7 | ) | |||||||
| | | | | | | | | | | | | | |
Consolidated pre-tax income | $ | 120.6 | $ | 99.8 | $ | 1,011.10 | $ | 410.9 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Enterprise-wide information | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended | Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
(in millions) | ||||||||||||||
Net Sales by Geographic Area | ||||||||||||||
United States | $ | 296.3 | $ | 232.1 | $ | 760.7 | $ | 700.5 | ||||||
Europe | 176.9 | 144.4 | 551 | 454.2 | ||||||||||
Japan | 66.8 | 56.7 | 192.2 | 176 | ||||||||||
Rest of World | 67.4 | 62.4 | 201 | 178.8 | ||||||||||
| | | | | | | | | | | | | | |
$ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net Sales by Major Product and Service Area | ||||||||||||||
Transcatheter Heart Valves | $ | 267.2 | $ | 191.8 | $ | 676.1 | $ | 594.2 | ||||||
Surgical Heart Valve Therapy | 203.4 | 172 | 620 | 523.8 | ||||||||||
Critical Care | 136.8 | 131.8 | 408.8 | 391.5 | ||||||||||
| | | | | | | | | | | | | | |
$ | 607.4 | $ | 495.6 | $ | 1,704.90 | $ | 1,509.50 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||
Long-lived Tangible Assets by Geographic Area | ||||||||||||||
United States | $ | 323.6 | $ | 308.2 | ||||||||||
Europe | 40.3 | 40.9 | ||||||||||||
Japan | 9.4 | 10.8 | ||||||||||||
Rest of World | 93.9 | 97.1 | ||||||||||||
| | | | | | | | |||||||
$ | 467.2 | $ | 457 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
CHANGE_IN_ACCOUNTING_PRINCIPLE2
CHANGE IN ACCOUNTING PRINCIPLE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2013 |
Patents | Change in method of accounting for certain intellectual property litigation expenses related to defense and enforcement of issued patents | Change in method of accounting for certain intellectual property litigation expenses related to defense and enforcement of issued patents | Change in method of accounting for certain intellectual property litigation expenses related to defense and enforcement of issued patents | Change in method of accounting for certain intellectual property litigation expenses related to defense and enforcement of issued patents | ||||||
As Reported | As Reported | As Reported | As Reported | |||||||
Change in accounting principle | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized capitalized legal costs | ' | ' | ' | ' | ' | $23.70 | ' | ' | ' | ' |
Cumulative effect of change in accounting principle on retained earnings | ' | ' | ' | ' | ' | ' | 12.2 | ' | ' | ' |
Consolidated Condensed Balance Sheet | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other intangible assets, net | 25.8 | ' | 25.8 | ' | 33.5 | ' | ' | ' | ' | 57.2 |
Deferred income taxes | 68.7 | ' | 68.7 | ' | 79 | ' | ' | ' | ' | 70.1 |
Total assets | 3,350 | ' | 3,350 | ' | 2,709.90 | ' | ' | ' | ' | 2,724.70 |
Retained earnings | 2,732.70 | ' | 2,732.70 | ' | 2,030.80 | ' | ' | ' | ' | 2,045.60 |
Total stockholders' equity | 2,043.40 | ' | 2,043.40 | ' | 1,544.40 | ' | ' | ' | ' | 1,559.20 |
Total liabilities and stockholders' equity | 3,350 | ' | 3,350 | ' | 2,709.90 | ' | ' | ' | ' | 2,724.70 |
Consolidated Condensed Statement of Operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of sales | 168.1 | 128.2 | 465.2 | 372.8 | ' | ' | ' | 129.7 | 376.9 | ' |
Gross profit | 439.3 | 367.4 | 1,239.70 | 1,136.70 | ' | ' | ' | 365.9 | 1,132.60 | ' |
Selling, general and administrative expenses | 222.2 | 177.8 | 634.9 | 546.8 | ' | ' | ' | 180.5 | 555.1 | ' |
Intellectual property litigation expense (income), net | 0.9 | 4.3 | -741 | -68.3 | ' | ' | ' | ' | ' | ' |
Special gain | 3 | ' | 60.5 | ' | ' | ' | ' | ' | -83.6 | ' |
Income before provision for income taxes | 120.6 | 99.8 | 1,011.10 | 410.9 | ' | ' | ' | 99.9 | 413.8 | ' |
Provision for income taxes | 26 | 23 | 309.2 | 96.9 | ' | ' | ' | 23 | 97.9 | ' |
Net income | 94.6 | 76.8 | 701.9 | 314 | ' | ' | ' | 76.9 | 315.9 | ' |
Earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.89 | $0.69 | $6.61 | $2.79 | ' | ' | ' | $0.69 | $2.81 | ' |
Diluted (in dollars per share) | $0.87 | $0.68 | $6.49 | $2.74 | ' | ' | ' | $0.68 | $2.75 | ' |
Consolidated Condensed Statement of Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 94.6 | 76.8 | 701.9 | 314 | ' | ' | ' | 76.9 | 315.9 | ' |
Comprehensive income | 65.1 | 81.9 | 658.9 | 309 | ' | ' | ' | 82 | 310.9 | ' |
Consolidated Condensed Statement of Cash Flows | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 94.6 | 76.8 | 701.9 | 314 | ' | ' | ' | 76.9 | 315.9 | ' |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | 50.3 | 45.8 | ' | ' | ' | ' | 49.9 | ' |
Other | ' | ' | 3.6 | 2.1 | ' | ' | ' | ' | 2.4 | ' |
Changes in operating assets and liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expenses and other current assets | ' | ' | -9.8 | 19.1 | ' | ' | ' | ' | 20.1 | ' |
Other | ' | ' | $3 | $6.20 | ' | ' | ' | ' | ($1.10) | ' |
INTELLECTUAL_PROPERTY_LITIGATI2
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET (Details) (Medtronic litigation settlement, USD $) | 1 Months Ended | 1 Months Ended | 3 Months Ended | |||||
In Millions, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | Jun. 30, 2014 | 31-May-14 | 31-May-14 | 31-May-14 |
Estimated fair value | United States | United States | Past damages | Past damages | License agreement | Covenant not to sue | ||
Minimum | Maximum | Estimated fair value | Estimated fair value | Estimated fair value | ||||
Settlement agreement | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement | '8 years | ' | ' | ' | ' | ' | ' | ' |
Amount of upfront payment received | $750 | ' | ' | ' | ' | ' | ' | ' |
Annual royalty payment | ' | ' | 40 | 60 | ' | ' | ' | ' |
Consideration | ' | 1,070 | ' | ' | ' | 754.3 | 238 | 77.7 |
Upfront payment recognized | $750 | ' | ' | ' | $750 | ' | ' | ' |
INTELLECTUAL_PROPERTY_LITIGATI3
INTELLECTUAL PROPERTY LITIGATION EXPENSE (INCOME), NET (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 28, 2013 |
Intellectual property | Intellectual property | Intellectual property | Intellectual property | CoreValve, Inc. | |
Litigation (income) expense | ' | ' | ' | ' | ' |
Amount of payment received from Medtronic in satisfaction of initial April 2010 jury award of damages for infringement, including accrued interest | ' | ' | ' | ' | $83.60 |
External legal costs related to intellectual property litigation | $0.90 | $4.30 | $9 | $15.30 | ' |
SPECIAL_CHARGES_Details
SPECIAL CHARGES (Details) (Automated glucose monitoring program, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Special charges | ' |
Asset Write-down | ' |
Charges from refocus of resources | $3 |
Cost of sales | ' |
Asset Write-down | ' |
Charges from refocus of resources | $2 |
SPECIAL_CHARGES_Details_2
SPECIAL CHARGES (Details 2) (Edwards Lifesciences Foundation, Charitable foundation contribution, USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Edwards Lifesciences Foundation | Charitable foundation contribution | ' |
Related party transaction | ' |
Related party expense | $50 |
SPECIAL_CHARGES_Details_3
SPECIAL CHARGES (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 |
Intellectual property agreement | |||
Licensing of intellectual property | ' | ' | ' |
Special charges (Note 4) | $3 | $60.50 | $7.50 |
COMPOSITION_OF_CERTAIN_FINANCI2
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials | $62.40 | $57.80 |
Work in process | 77.7 | 82.2 |
Finished products | 163.5 | 168.9 |
Total inventories | 303.6 | 308.9 |
Accounts payable and accrued liabilities | ' | ' |
Accounts payable | 59.9 | 48.4 |
Employee compensation and withholdings | 156.4 | 101.1 |
Clinical trial accruals | 45.5 | 37.2 |
Property, payroll and other taxes | 32.3 | 31.6 |
Capital lease obligation | 13.6 | ' |
Accrued rebates | 11.2 | 15 |
Taxes payable | 9.2 | 7.1 |
Realignment reserves | 7.6 | 9.5 |
Deferred income taxes | 7.1 | 7.2 |
Fair value of derivatives | 2.2 | 17.2 |
Other accrued liabilities | 82.8 | 71.3 |
Accounts payable and accrued liabilities | $427.80 | $345.60 |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Held-to-maturity investments | ' | ' |
Cost | $1,185.70 | $516.50 |
Gross Unrealized Gains | 0.1 | ' |
Gross Unrealized Losses | -0.1 | ' |
Total | 1,185.70 | 516.5 |
Bank time deposits | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 1,006.50 | 516.5 |
Total | 1,006.50 | 516.5 |
Commercial paper | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 87.3 | ' |
Total | 87.3 | ' |
U.S. government and agency securities | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 51.7 | ' |
Gross Unrealized Gains | 0.1 | ' |
Gross Unrealized Losses | -0.1 | ' |
Total | 51.7 | ' |
Asset-backed securities | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 9.1 | ' |
Total | 9.1 | ' |
Corporate debt securities | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 25 | ' |
Total | 25 | ' |
Municipal securities | ' | ' |
Held-to-maturity investments | ' | ' |
Cost | 6.1 | ' |
Total | $6.10 | ' |
INVESTMENTS_Details_2
INVESTMENTS (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Cost | ' | ' |
Due in 1 year or less | $1,111 | ' |
Due after 1 year through 5 years | 58 | ' |
Instruments not due at a single maturity date | 16.7 | ' |
Total | 1,185.70 | 516.5 |
Fair Value | ' | ' |
Due in 1 year or less | 1,111 | ' |
Due after 1 year through 5 years | 57.9 | ' |
Instruments not due at a single maturity date | 16.8 | ' |
Total | $1,185.70 | $516.50 |
INVESTMENTS_Details_3
INVESTMENTS (Details 3) (USD $) | 1 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Available-for-sale investments | ' | ' | ' |
Cost | ' | ' | $0.40 |
Unrealized gains | ' | 0.6 | 0.4 |
Fair value of available-for-sale investments | ' | 0.6 | 0.8 |
Equity method investments | ' | ' | ' |
Cost | ' | 12.7 | 14.1 |
Equity in losses | ' | -2.7 | -2.7 |
Carrying value of equity method investments | ' | 10 | 11.4 |
Cost method investments | ' | ' | ' |
Carrying value of cost method investments | ' | 6.7 | 9.7 |
Total investments in unconsolidated affiliates | ' | 17.3 | 21.9 |
Other-than-temporary impairment cost method investments | $3.50 | ' | ' |
OTHER_INTANGIBLE_ASSETS_Detail
OTHER INTANGIBLE ASSETS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Amortizable intangible assets | ' | ' |
Cost | $237.80 | $235.60 |
Accumulated Amortization | -212 | -206.7 |
Net Carrying Value | 25.8 | 28.9 |
Unamortizable intangible assets | ' | ' |
Gross intangible Assets | 237.8 | 240.2 |
Total Net Carrying Amount of Intangible Assets | 25.8 | 33.5 |
In-process research and development | ' | ' |
Unamortizable intangible assets | ' | ' |
Net Carrying Value | ' | 4.6 |
Patents | ' | ' |
Amortizable intangible assets | ' | ' |
Cost | 181.2 | 181.6 |
Accumulated Amortization | -167.4 | -163.5 |
Net Carrying Value | 13.8 | 18.1 |
Developed technology | ' | ' |
Amortizable intangible assets | ' | ' |
Cost | 46.1 | 43.3 |
Accumulated Amortization | -36.3 | -35.1 |
Net Carrying Value | 9.8 | 8.2 |
Other | ' | ' |
Amortizable intangible assets | ' | ' |
Cost | 10.5 | 10.7 |
Accumulated Amortization | -8.3 | -8.1 |
Net Carrying Value | $2.20 | $2.60 |
OTHER_INTANGIBLE_ASSETS_Detail1
OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
OTHER INTANGIBLE ASSETS | ' | ' | ' | ' | ' |
Amortization expense related to other intangible assets | $2.20 | $2.50 | $6.30 | $7.50 | ' |
Estimated amortization expense | ' | ' | ' | ' | ' |
2014 | ' | ' | ' | ' | 8.5 |
2015 | ' | ' | ' | ' | 7.5 |
2016 | ' | ' | ' | ' | 7.4 |
2017 | ' | ' | ' | ' | 6.7 |
2018 | ' | ' | ' | ' | $1.30 |
DEBT_Details
DEBT (Details) (USD $) | Oct. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Jul. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Senior Notes due 2018 | Senior Notes due 2018 | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | Credit Facility | |
Carrying value | Credit agreement, maturity July 2015 | Credit agreement, maturity July 2019 | Credit agreement, maturity July 2019 | Credit agreement, maturity July 2019 | Credit agreement, maturity July 2019 | Credit agreement, maturity July 2019 | Credit agreement, maturity July 2019 | ||
Minimum | Maximum | LIBOR | LIBOR | ||||||
Minimum | Maximum | ||||||||
Debt and credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | $600,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | 2.88% | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate (as a percent) | 2.98% | ' | ' | ' | ' | ' | ' | ' | ' |
Term | ' | ' | '4 years | '5 years | ' | ' | ' | ' | ' |
Issuance costs | 5,400,000 | ' | ' | 3,000,000 | ' | ' | ' | ' | ' |
Issuance discount | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Value of the Notes | ' | 596,400,000 | ' | ' | ' | ' | ' | ' | ' |
Maximum aggregate borrowings under the facility | ' | ' | ' | ' | 750,000,000 | ' | ' | ' | ' |
Optional increase in amount available, subject to lender approval | ' | ' | ' | ' | ' | ' | 250,000,000 | ' | ' |
Percent spread added to reference rate of unsecured credit facility | ' | ' | ' | ' | ' | ' | ' | 1.00% | 1.50% |
Facility fee (as a percent) | ' | ' | ' | ' | ' | 0.13% | 0.25% | ' | ' |
Borrowings outstanding under the facility | ' | ' | ' | ' | $0 | ' | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (Fair value, Level 2, USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Fair value | Level 2 | ' |
Financial instruments | ' |
Fair value of notes payable | $608.20 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Available-for-sale investments | $0.60 | $0.80 |
Fair Value on a Recurring Basis | Level 1 | ' | ' |
Assets | ' | ' |
Investments held for deferred compensation plans | 26.8 | 15.1 |
Available-for-sale investments | 0.6 | 0.8 |
Total assets | 27.4 | 15.9 |
Liabilities | ' | ' |
Deferred compensation plans | 27.1 | 15.5 |
Total liabilities | 27.1 | 15.5 |
Fair Value on a Recurring Basis | Level 2 | ' | ' |
Assets | ' | ' |
Derivatives | 34.2 | 13.8 |
Total assets | 34.2 | 13.8 |
Liabilities | ' | ' |
Derivatives | 3.3 | 17.2 |
Total liabilities | 3.3 | 17.2 |
Fair Value on a Recurring Basis | Fair value | ' | ' |
Assets | ' | ' |
Investments held for deferred compensation plans | 26.8 | 15.1 |
Available-for-sale investments | 0.6 | 0.8 |
Derivatives | 34.2 | 13.8 |
Total assets | 61.6 | 29.7 |
Liabilities | ' | ' |
Derivatives | 3.3 | 17.2 |
Deferred compensation plans | 27.1 | 15.5 |
Total liabilities | $30.40 | $32.70 |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Foreign currency forward exchange contracts | Foreign currency forward exchange contracts | Interest rate swap agreements | Interest rate swap agreements | Foreign currency option contracts | ||
Derivative Financial Instruments | ' | ' | ' | ' | ' | ' |
Notional Amount | ' | $789.60 | $805.50 | $300 | $300 | $8.40 |
Maximum period of time currency rate movements in future cash flows associated with intercompany transactions and certain third-party expenses are hedged | '13 months | ' | ' | ' | ' | ' |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Designated as hedging instruments | Foreign currency contracts | Other current assets | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative assets | $32 | $13.80 |
Designated as hedging instruments | Foreign currency contracts | Accrued and other liabilities | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative liabilities | 2.2 | 13.2 |
Designated as hedging instruments | Interest rate swap agreements | Other long-term liabilities | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative liabilities | 1.1 | 4 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other assets | ' | ' |
Derivatives designated as hedging instruments | ' | ' |
Fair value of derivative assets | $2.20 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign currency contracts | ' | ' |
Derivative Asset | ' | ' |
Gross Amounts | $34.20 | $13.80 |
Net Amounts Presented in the Consolidated Balance Sheet | 34.2 | 13.8 |
Derivative Assets, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Financial Instruments | -1.7 | -9.5 |
Net amount | 32.5 | 4.3 |
Derivative Liabilities | ' | ' |
Gross Amounts | 2.2 | 13.2 |
Net Amounts Presented in the Consolidated Balance Sheet | 2.2 | 13.2 |
Derivative Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Financial Instruments | -1.7 | -9.5 |
Net amount | 0.5 | 3.7 |
Interest rate swap agreements | ' | ' |
Derivative Liabilities | ' | ' |
Gross Amounts | 1.1 | 4 |
Net Amounts Presented in the Consolidated Balance Sheet | 1.1 | 4 |
Derivative Liabilities, Gross Amounts Not Offset in the Consolidated Balance Sheet | ' | ' |
Net amount | $1.10 | $4 |
DERIVATIVE_INSTRUMENTS_AND_HED5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Expected reclassification of gain recorded in accumulated other comprehensive loss into earnings during next twelve months | ' | ' | $2.20 | ' |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other expense, net | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Amount of Gain or (Loss) Recognized in Income on Derivative | 7.5 | -0.3 | 4.3 | 14.1 |
Derivatives in cash flow hedging relationships | Foreign currency contracts | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 36.1 | -14.4 | 31.7 | 13.3 |
Derivatives in cash flow hedging relationships | Foreign currency contracts | Cost of sales | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | -2.6 | 7.3 | 5.4 | 18.3 |
Derivatives in fair value hedging relationship | Interest rate swap agreements | Interest expense, net | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' | ' |
Amount of Gain or (Loss) Recognized in Income on Derivative | ($1.80) | ' | $2.90 | ' |
DEFINED_BENEFIT_PLANS_Details
DEFINED BENEFIT PLANS (Details) (Defined benefit pension plans, USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Defined benefit pension plans | ' | ' | ' | ' |
Components of net periodic benefit cost | ' | ' | ' | ' |
Service cost | $1.70 | $2 | $5.20 | $5.90 |
Interest cost | 0.6 | 0.5 | 1.8 | 1.5 |
Expected return on plan assets | -0.5 | -0.3 | -1.4 | -0.9 |
Amortization of actuarial loss, prior service credit and other | 0.1 | 0.2 | 0.2 | 0.7 |
Net periodic benefit cost | $1.90 | $2.40 | $5.80 | $7.20 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Allocation of stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation expense | $12.20 | $11.90 | $36.10 | $35.90 |
Unrecognized compensation expense related to nonvested stock options, restricted stock units, market-based restricted stock units and employee stock purchase subscriptions | 95 | ' | 95 | ' |
Period over which unrecognized compensation expense is expected to be recognized | ' | ' | '31 months | ' |
Cost of sales | ' | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation expense | 1.6 | 1.6 | 4.6 | 4.5 |
Selling, general and administrative expenses | ' | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation expense | 8.7 | 8.6 | 26.1 | 26.2 |
Research and development expenses | ' | ' | ' | ' |
Allocation of stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation expense | $1.90 | $1.70 | $5.40 | $5.20 |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Option Awards | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Options granted (in shares) | ' | ' | 1,400,000 | ' |
Weighted-average exercise price of options granted (in dollars per share) | ' | ' | $82.85 | ' |
Average risk-free interest rate (as a percent) | 1.60% | 1.40% | 1.50% | 0.80% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility (as a percent) | 30.60% | 30.80% | 30.70% | 30.70% |
Expected term | '4 years 8 months 12 days | '4 years 10 months 24 days | '4 years 7 months 6 days | '4 years 7 months 6 days |
Fair value, per share | $25.90 | $19.46 | $23.42 | $19.47 |
ESPP | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Average risk-free interest rate (as a percent) | 0.10% | 0.10% | 0.10% | 0.10% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility (as a percent) | 28.90% | 30.20% | 29.90% | 33.40% |
Expected term | '8 months 12 days | '7 months 6 days | '7 months 6 days | '7 months 6 days |
Fair value, per share | $20.90 | $16.05 | $17.19 | $20.31 |
Restricted stock units | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Awards granted (in shares) | ' | ' | 300,000 | ' |
Weighted-average grant-date fair value of shares granted (in dollar per share) | ' | ' | $81.02 | ' |
Market-based restricted stock units | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Awards granted (in shares) | ' | ' | 39,000 | ' |
Weighted-average grant-date fair value of shares granted (in dollar per share) | ' | ' | $108.75 | ' |
Average risk-free interest rate (as a percent) | ' | ' | 0.90% | 0.40% |
Expected volatility (as a percent) | ' | ' | 31.70% | 33.40% |
Market-based restricted stock units | Total shareholder return relative to selected industry peer group | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' |
Market-based restricted stock units | Total shareholder return relative to selected industry peer group | Minimum | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Percentage of targeted number of shares granted | ' | ' | 0.00% | ' |
Market-based restricted stock units | Total shareholder return relative to selected industry peer group | Maximum | ' | ' | ' | ' |
Weighted-average assumptions for MRSUs, options and ESPP subscriptions granted | ' | ' | ' | ' |
Percentage of targeted number of shares granted | ' | ' | 175.00% | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (Purchase commitment, Draper, Utah facility, USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Purchase commitment | Draper, Utah facility | ' |
Commitments and contingencies | ' |
Amount committed to purchase under purchase option provided in the lease agreement | $17 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Foreign Currency Translation Adjustments | Unrealized Gain on Cash Flow Hedges | Unrealized Gain on Available-for-Sale Investments | Unrealized Pension Costs | Unrealized Pension Costs | ||
Changes in accumulated other comprehensive loss components | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ($27.60) | ($20.20) | $3.50 | $0.30 | ($11.20) | ($11.20) |
Other comprehensive (loss) gain before reclassifications | -28 | -59.6 | 31.7 | -0.1 | ' | ' |
Amounts reclassified from accumulated other comprehensive loss | -5.1 | ' | -5.4 | 0.3 | ' | ' |
Deferred income tax benefit | -9.9 | ' | -9.9 | ' | ' | ' |
Balance at the end of the period | ($70.60) | ($79.80) | $19.90 | $0.50 | ($11.20) | ($11.20) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' |
Cost of sales | ($168.10) | ($128.20) | ($465.20) | ($372.80) |
Other expense, net | -2.5 | -0.4 | -2.6 | -1.7 |
Provision for income taxes | -26 | -23 | -309.2 | -96.9 |
Net income | 94.6 | 76.8 | 701.9 | 314 |
Gain on cash flow hedges | Amount Reclassified from Accumulated Other Comprehensive Loss | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' |
Cost of sales | -2.6 | 7.3 | 5.4 | 18.3 |
Provision for income taxes | 1 | -2.8 | -2 | -7 |
Net income | -1.6 | 4.5 | 3.4 | 11.3 |
Gain on available-for-sale investments | Amount Reclassified from Accumulated Other Comprehensive Loss | ' | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | ' | ' | ' | ' |
Other expense, net | ' | ' | -0.3 | ' |
Net income | ' | ' | ($0.30) | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Basic: | ' | ' | ' | ' |
Net income | $94.60 | $76.80 | $701.90 | $314 |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 |
Basic earnings per share (in dollars per share) | $0.89 | $0.69 | $6.61 | $2.79 |
Diluted: | ' | ' | ' | ' |
Net income | $94.60 | $76.80 | $701.90 | $314 |
Weighted-average shares outstanding | 106.4 | 111 | 106.2 | 112.5 |
Dilutive effect of stock plans (in shares) | 2 | 1.9 | 1.9 | 2.2 |
Dilutive weighted-average shares outstanding | 108.4 | 112.9 | 108.1 | 114.7 |
Diluted earnings per share (in dollars per share) | $0.87 | $0.68 | $6.49 | $2.74 |
EARNINGS_PER_SHARE_Details_2
EARNINGS PER SHARE (Details 2) (Stock compensation plan) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stock compensation plan | ' | ' | ' | ' |
Anti-dilutive securities | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | 1.5 | 3.6 | 3.2 | 3.2 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Feb. 28, 2013 | Sep. 30, 2013 | 31-May-14 | Sep. 30, 2014 |
CoreValve, Inc. | CoreValve, Inc. | Medtronic litigation settlement | Medtronic litigation settlement | ||||||
INCOME TAXES | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective income tax rates (as a percent) | 21.60% | 23.00% | 30.60% | 23.60% | ' | ' | ' | ' | ' |
Re-measurement of uncertain tax positions | ' | ' | $6.20 | ' | ' | ' | ' | ' | ' |
Favorable impact of the federal research credit on the effective income tax rate (as a percent) | ' | ' | ' | ' | 1.30% | ' | ' | ' | ' |
Tax benefit related to federal research credit | ' | ' | ' | 8.4 | ' | ' | ' | ' | ' |
Liability for income taxes associated with uncertain tax positions | 180.6 | ' | 180.6 | ' | 127.7 | ' | ' | ' | ' |
Offsetting tax benefits associated with correlative effects of potential transfer pricing adjustments, state income taxes and timing adjustments | 30.2 | ' | 30.2 | ' | 30.9 | ' | ' | ' | ' |
Net liability for income taxes associated with uncertain tax positions | 150.4 | ' | 150.4 | ' | 96.8 | ' | ' | ' | ' |
LEGAL PROCEEDINGS | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax expense | 26 | 23 | 309.2 | 96.9 | ' | ' | 31.3 | ' | 262.1 |
Litigation settlement payment received from Medtronic | ' | ' | ' | ' | ' | $83.60 | ' | $750 | ' |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | $607.40 | $495.60 | $1,704.90 | $1,509.50 |
Pre-tax income | 120.6 | 99.8 | 1,011.10 | 410.9 |
Unallocated amounts: | ' | ' | ' | ' |
Special charges (Note 4) | -3 | ' | -60.5 | ' |
Intellectual property litigation (expense) income, net (Note 3) | -0.9 | -4.3 | 741 | 68.3 |
Interest expense, net | -2.5 | -1 | -9.1 | -1.2 |
Total segment | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | 609.8 | 512.9 | 1,705.30 | 1,555.40 |
Pre-tax income | 304.9 | 253 | 821.9 | 775.1 |
Total segment | United States | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | 296.3 | 232.1 | 760.7 | 700.5 |
Pre-tax income | 177.4 | 135.1 | 427 | 410.6 |
Total segment | Europe | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | 175.6 | 146.2 | 539.5 | 462.4 |
Pre-tax income | 77.3 | 66.2 | 245.2 | 212.4 |
Total segment | Japan | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | 68.7 | 69.2 | 197.1 | 209.5 |
Pre-tax income | 31.9 | 31.6 | 91.4 | 102 |
Total segment | Rest of World | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | 69.2 | 65.4 | 208 | 183 |
Pre-tax income | 18.3 | 20.1 | 58.3 | 50.1 |
Reconciling items (Unallocated amounts), foreign currency | ' | ' | ' | ' |
Information about reportable segments and reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income | ' | ' | ' | ' |
Net sales | -2.4 | -17.3 | -0.4 | -45.9 |
Pre-tax income | -1.4 | -3.3 | 7 | -3.7 |
Corporate, non-segment | ' | ' | ' | ' |
Unallocated amounts: | ' | ' | ' | ' |
Corporate items | ($176.50) | ($144.60) | ($489.20) | ($427.60) |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | $607.40 | $495.60 | $1,704.90 | $1,509.50 | ' |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' |
Long-lived tangible assets | 467.2 | ' | 467.2 | ' | 457 |
Transcatheter Heart Valves | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 267.2 | 191.8 | 676.1 | 594.2 | ' |
Surgical Heart Valve Therapy | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 203.4 | 172 | 620 | 523.8 | ' |
Critical Care | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 136.8 | 131.8 | 408.8 | 391.5 | ' |
United States | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 296.3 | 232.1 | 760.7 | 700.5 | ' |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' |
Long-lived tangible assets | 323.6 | ' | 323.6 | ' | 308.2 |
Europe | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 176.9 | 144.4 | 551 | 454.2 | ' |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' |
Long-lived tangible assets | 40.3 | ' | 40.3 | ' | 40.9 |
Japan | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 66.8 | 56.7 | 192.2 | 176 | ' |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' |
Long-lived tangible assets | 9.4 | ' | 9.4 | ' | 10.8 |
Rest of World | ' | ' | ' | ' | ' |
Net Sales by Geographic Area and by Major Product and Service Area | ' | ' | ' | ' | ' |
Net sales | 67.4 | 62.4 | 201 | 178.8 | ' |
Long-lived Tangible Assets by Geographic Area | ' | ' | ' | ' | ' |
Long-lived tangible assets | $93.90 | ' | $93.90 | ' | $97.10 |