Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Edwards Lifesciences Corp | ||
Entity Central Index Key | 1,099,800 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 21,062,047,999 | ||
Entity Common Stock, Shares Outstanding | 212,495,798 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 930.1 | $ 718.4 |
Short-term investments (Note 6) | 341 | 506.3 |
Accounts receivable, net (Note 5) | 365.5 | 315.4 |
Other receivables | 49.1 | 56.4 |
Inventories (Note 5) | 396.6 | 339.9 |
Prepaid expenses | 45.9 | 45.1 |
Other current assets | 111.8 | 66.4 |
Total current assets | 2,240 | 2,047.9 |
Long-term investments (Note 6) | 532.1 | 379.9 |
Property, plant, and equipment, net (Note 5) | 580 | 482.5 |
Goodwill (Note 8) | 626.1 | 628.3 |
Other intangible assets, net (Note 8) | 204.8 | 205.4 |
Deferred income taxes | 203.8 | 180.5 |
Other assets | 123.2 | 131.8 |
Total assets | 4,510 | 4,056.3 |
Current liabilities | ||
Accounts payable | 97.1 | 63.9 |
Accrued and other liabilities (Note 5) | 435.4 | 412.3 |
Total current liabilities | 532.5 | 476.2 |
Long-term debt (Note 9) | 822.3 | 596.9 |
Uncertain tax positions (Note 16) | 229.8 | 194.7 |
Other long-term liabilities | 306.4 | 285.4 |
Commitments and contingencies (Notes 9 and 17) | ||
Stockholders' equity (Note 13) | ||
Preferred stock, $.01 par value, authorized 50.0 shares, no shares outstanding | 0 | 0 |
Common stock, $1.00 par value, 350.0 shares authorized, 242.6 and 239.1 shares issued, and 211.6 and 215.4 shares outstanding, respectively | 242.6 | 239.1 |
Additional paid-in capital | 1,167.8 | 946.8 |
Retained earnings | 3,906.3 | 3,336.8 |
Accumulated other comprehensive loss | (198.4) | (182.6) |
Treasury stock, at cost, 31.0 and 23.7 shares, respectively | (2,499.3) | (1,837) |
Total stockholders' equity | 2,619 | 2,503.1 |
Total liabilities and stockholders' equity | $ 4,510 | $ 4,056.3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 242,600,000 | 239,100,000 |
Common stock, shares outstanding (in shares) | 211,600,000 | 215,400,000 |
Treasury stock, shares (in shares) | 31,000,000 | 23,700,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net sales | $ 2,963.7 | $ 2,493.7 | $ 2,322.9 |
Cost of sales | 797.4 | 617.2 | 625.6 |
Gross profit | 2,166.3 | 1,876.5 | 1,697.3 |
Selling, general, and administrative expenses | 904.7 | 850.7 | 858 |
Research and development expenses | 443.3 | 383.1 | 346.5 |
Intellectual property litigation expenses (income), net (Note 3) | 32.6 | 7 | (740.4) |
Special charges (Note 4) | 34.5 | 0 | 70.7 |
Interest expense | 19.2 | 17.2 | 17.2 |
Interest income | (10.8) | (7.9) | (6.4) |
Other expense, net (Note 15) | 4.9 | 4 | 7.7 |
Income before provision for income taxes | 737.9 | 622.4 | 1,144 |
Provision for income taxes (Note 16) | 168.4 | 127.5 | 332.9 |
Net income | $ 569.5 | $ 494.9 | $ 811.1 |
Earnings per share: | |||
Basic (in dollars per share) | $ 2.67 | $ 2.30 | $ 3.81 |
Diluted (in dollars per share) | $ 2.61 | $ 2.25 | $ 3.74 |
Weighted-average number of common shares outstanding: | |||
Basic (in shares) | 213 | 215.5 | 213 |
Diluted (in shares) | 217.8 | 220.3 | 217 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 569.5 | $ 494.9 | $ 811.1 |
Other comprehensive loss, net of tax (Note 14): | |||
Foreign currency translation adjustments | (16.1) | (65.1) | (96.2) |
Unrealized gain (loss) on cash flow hedges | 4.9 | (20.5) | 28.8 |
Defined benefit pension plans—net actuarial (loss) gain and other | (6.2) | 5.4 | (5.6) |
Unrealized gain (loss) on available-for-sale investments | 0.5 | (2.6) | (0.3) |
Reclassification of net realized investment loss to earnings | 1.1 | 1.1 | 0 |
Other comprehensive loss, net of tax | (15.8) | (81.7) | (73.3) |
Comprehensive income | $ 553.7 | $ 413.2 | $ 737.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 569.5 | $ 494.9 | $ 811.1 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 71.2 | 65.8 | 68.6 |
Stock-based compensation (Notes 2 and 13) | 56.9 | 49.9 | 48.3 |
Excess tax benefit from stock plans (Notes 2 and 13) | (64.3) | (41.3) | (49.4) |
Deferred income taxes | (37.4) | (95) | (71.1) |
Purchased in-process research and development (Note 4) | 34.5 | 0 | 10.6 |
Other | 7.9 | 11 | 13.9 |
Changes in operating assets and liabilities: | |||
Accounts and other receivables, net | (56.7) | (38.3) | (26.8) |
Inventories | (65.6) | (67.7) | (30.5) |
Accounts payable and accrued liabilities | 74 | 29.4 | 112.9 |
Income taxes | 105.1 | 134.5 | 128.1 |
Prepaid expenses and other current assets | (12.6) | (0.2) | (0.9) |
Other | 21.9 | 6.7 | 7.5 |
Net cash provided by operating activities | 704.4 | 549.7 | 1,022.3 |
Cash flows from investing activities | |||
Capital expenditures | (176.1) | (102.7) | (82.9) |
Purchases of held-to-maturity investments (Note 6) | (594.7) | (928.5) | (1,956.4) |
Proceeds from held-to-maturity investments (Note 6) | 852.5 | 1,260.1 | 1,611.2 |
Purchases of available-for-sale investments (Note 6) | (470.4) | (380.3) | (160.4) |
Proceeds from available-for-sale investments (Note 6) | 232.6 | 179.6 | 1.7 |
Investments in unconsolidated affiliates (Note 6) | (7.6) | (5.1) | (11.2) |
Proceeds from unconsolidated affiliates (Note 6) | 1.9 | 3 | 2.1 |
Investments in trading securities, net | (9.8) | (9.2) | (14.4) |
Acquisitions (Notes 7 and 8) | 0 | (331.6) | (15) |
Investments in intangible assets and in-process research and development | (41.3) | (3.8) | (10.8) |
Proceeds from sale of assets | 2.4 | 2.4 | 3.1 |
Other | (1.2) | 0 | 0 |
Net cash used in investing activities | (211.7) | (316.1) | (633) |
Cash flows from financing activities | |||
Proceeds from issuance of debt | 253.5 | 31.4 | 226.3 |
Payments on debt and capital lease obligations | (31.4) | (29.5) | (239) |
Purchases of treasury stock | (662.3) | (280.1) | (300.9) |
Proceeds from stock plans | 103.3 | 87.2 | 113.3 |
Excess tax benefit from stock plans (Notes 2 and 13) | 64.3 | 41.3 | 49.4 |
Other | 4.1 | (8.9) | (2.1) |
Net cash used in financing activities | (268.5) | (158.6) | (153) |
Effect of currency exchange rate changes on cash and cash equivalents | (12.5) | (10.4) | (2.9) |
Net increase in cash and cash equivalents | 211.7 | 64.6 | 233.4 |
Cash and cash equivalents at beginning of year | 718.4 | 653.8 | 420.4 |
Cash and cash equivalents at end of year | 930.1 | 718.4 | 653.8 |
Cash paid during the year for: | |||
Interest | 16.1 | 14.1 | 15.5 |
Income taxes | 99.9 | 86.9 | 274.7 |
Non-cash investing and financing transactions: | |||
Capital expenditures accruals | 22.7 | 15.1 | 8.3 |
Capital additions transferred from inventory | 3.8 | 3 | 4 |
Capital lease obligations incurred | $ 0.4 | $ 0 | $ 13.3 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2013 | 126 | 16.7 | ||||
Beginning balance at Dec. 31, 2013 | $ 1,544.4 | $ 126 | $ (1,256) | $ 671.2 | $ 2,030.8 | $ (27.6) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 811.1 | 811.1 | ||||
Other comprehensive loss, net of tax | (73.3) | (73.3) | ||||
Common stock issued under equity plans, including tax benefits (in shares) | 2.9 | |||||
Common stock issued under equity plans, including tax benefits | 161.8 | $ 2.9 | 158.9 | |||
Stock-based compensation expense | 48.3 | 48.3 | ||||
Purchases of treasury stock (in shares) | 4.4 | |||||
Purchases of treasury stock | (300.9) | $ (300.9) | ||||
Ending balance (in shares) at Dec. 31, 2014 | 128.9 | 21.1 | ||||
Ending balance at Dec. 31, 2014 | 2,191.4 | $ 128.9 | $ (1,556.9) | 878.4 | 2,841.9 | (100.9) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 494.9 | 494.9 | ||||
Other comprehensive loss, net of tax | (81.7) | (81.7) | ||||
Common stock issued under equity plans, including tax benefits (in shares) | 2 | |||||
Common stock issued under equity plans, including tax benefits | 128.7 | $ 2 | 126.7 | |||
Stock-based compensation expense | 49.9 | 49.9 | ||||
Purchases of treasury stock (in shares) | 2.6 | |||||
Purchases of treasury stock | (280.1) | $ (280.1) | ||||
Stock issued to effect stock split (in shares) | 108.2 | |||||
Stock issued to effect stock split | 0 | $ 108.2 | (108.2) | |||
Ending balance (in shares) at Dec. 31, 2015 | 239.1 | 23.7 | ||||
Ending balance at Dec. 31, 2015 | 2,503.1 | $ 239.1 | $ (1,837) | 946.8 | 3,336.8 | (182.6) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 569.5 | 569.5 | ||||
Other comprehensive loss, net of tax | (15.8) | (15.8) | ||||
Common stock issued under equity plans, including tax benefits (in shares) | 3.5 | |||||
Common stock issued under equity plans, including tax benefits | 167.6 | $ 3.5 | 164.1 | |||
Stock-based compensation expense | 56.9 | 56.9 | ||||
Purchases of treasury stock (in shares) | 7.3 | |||||
Purchases of treasury stock | (662.3) | $ (662.3) | ||||
Ending balance (in shares) at Dec. 31, 2016 | 242.6 | 31 | ||||
Ending balance at Dec. 31, 2016 | $ 2,619 | $ 242.6 | $ (2,499.3) | $ 1,167.8 | $ 3,906.3 | $ (198.4) |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Edwards Lifesciences Corporation ("Edwards Lifesciences" or the "Company") conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. Edwards Lifesciences is focused on technologies that treat structural heart disease and critically ill patients. The products and technologies provided by Edwards Lifesciences are categorized into the following main areas: Transcatheter Heart Valve Therapy, Surgical Heart Valve Therapy, and Critical Care. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Edwards Lifesciences and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company reviews its investments in other entities to determine whether the Company is the primary beneficiary of a variable interest entity ("VIE"). The Company would be the primary beneficiary of the VIE, and would be required to consolidate the VIE, if it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant to the VIE. Based on the Company's analysis, it determined it is not the primary beneficiary of any VIEs; however, future events may require VIEs to be consolidated if the Company becomes the primary beneficiary. Use of Estimates The consolidated financial statements of Edwards Lifesciences have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") which have been applied consistently in all material respects. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Foreign Currency Translation When the local currency of the Company's foreign entities is the functional currency, all assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments for these entities are deferred and reported in stockholders' equity as a component of " Accumulated Other Comprehensive Loss ." The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in " Other Expense, net. " Revenue Recognition The Company recognizes revenue when it is realized or realizable and earned. Revenue is considered realized or realizable and earned upon delivery of the product, provided that an agreement of sale exists, the sales price is fixed or determinable, and collection is reasonably assured. In the case of certain products where the Company maintains consigned inventory at customer locations, revenue is recognized at the time the customer has used the inventory. The Company's principal sales terms provide for title and risk of loss transferring upon delivery to the customer, limited right of return, and no unusual provisions or conditions. When the Company recognizes revenue from the sale of its products, an estimate of various sales returns and allowances is recorded which reduces product sales and accounts receivable. These adjustments include estimates for rebates, returns, and other sales allowances. These provisions are estimated and recorded at the time of sale based upon historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. Other than in limited circumstances, product returns are not significant because returns are generally not allowed unless the product is damaged at time of receipt. In addition, the Company may allow customers to return previously purchased products for next-generation product offerings. For these transactions, the Company defers recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. The Company's sales adjustment related to distributor rebates given to the Company's United States distributors represents the difference between the Company's sales price to the distributor (at the Company's distributor "list price") and the negotiated price to be paid by the end-customer. This distributor rebate is recorded by the Company as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. The Company validates the distributor rebate accrual quarterly through either a review of the inventory reports obtained from its distributors or an estimate of its distributor's inventory. This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. The Company periodically monitors current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. The Company also offers volume rebates to certain group purchasing organizations ("GPOs") and customers based upon target sales levels. For volume rebates offered to GPOs, the rebates are recorded as a reduction to sales and an obligation to the GPOs, as the Company expects to pay in cash. For volume rebates offered to customers, the rebates are recorded as a reduction to sales and accounts receivable, as the Company expects a net payment from the customer. The provision for volume rebates is estimated based on customers' contracted rebate programs and historical experience of rebates paid. The Company periodically monitors its customer rebate programs to ensure that the allowance and liability for accrued rebates is fairly stated. Shipping and Handling Costs Shipping costs, which are costs incurred to physically move product from the Company's premises to the customer's premises, are included in " Selling, General, and Administrative Expenses ." Handling costs, which are costs incurred to store, move, and prepare products for shipment, are included in " Cost of Sales ." For the years ended December 31, 2016 , 2015 , and 2014 , shipping costs of $64.1 million , $58.8 million , and $60.5 million , respectively, were included in " Selling, General, and Administrative Expenses ." Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are valued at cost, which approximates fair value. Investments The Company invests its excess cash in fixed-rate debt securities, including time deposits, commercial paper, U.S. government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. Investments with maturities of one year or less are classified as short-term, and investments with maturities greater than one year are classified as long-term. Investments that the Company has the ability and intent to hold until maturity are classified as held-to-maturity and carried at amortized cost. Investments that are classified as available-for-sale are carried at fair value with unrealized gains and losses included in " Accumulated Other Comprehensive Loss ." The Company determines the appropriate classification of its investments in fixed-rate debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company also has long-term equity investments in companies that are in various stages of development. These investments are designated as available-for-sale. Other investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company's investment and adjusted each period for the Company's share of the investee's income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment's fair value. Realized gains and losses on investments that are sold are determined using the specific identification method, or the first-in, first-out method, depending on the investment type, and recorded to " Other Expense, net ." Income relating to investments in fixed-rate debt securities is recorded to " Interest Income. " The Company periodically reviews its investments for impairment. When the fair value of an investment declines below cost, management uses the following criteria to determine if such a decline should be considered other-than-temporary and result in a recognized loss: • the duration and extent to which the market value has been less than cost; • the financial condition and near term prospects of the investee/issuer; • the reasons for the decline in market value; • the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value; and • the investee's performance against product development milestones. Allowance for Doubtful Accounts The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. When evaluating its allowances for doubtful accounts related to receivables from customers in certain European countries that have historically paid beyond the stated terms, the Company's analysis considers a number of factors including evidence of the customer's ability to comply with credit terms, economic conditions, and procedures implemented by the Company to collect the historical receivables. Additional allowances for doubtful accounts may be required if there is deterioration in past due balances, if economic conditions are less favorable than the Company has anticipated, or for customer-specific circumstances, such as financial difficulty. The allowance for doubtful accounts related to both short-term and long-term receivables was $12.8 million and $13.1 million at December 31, 2016 and 2015 , respectively. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market value. Market value for raw materials is based on replacement costs, and for other inventory classifications is based on net realizable value. A write-down for excess or slow moving inventory is recorded for inventory which is obsolete, nearing its expiration date (generally triggered at six months prior to expiration), is damaged, or slow moving (generally defined as quantities in excess of a two -year supply). The allowance for excess and slow moving inventory was $29.1 million and $30.1 million at December 31, 2016 and 2015 , respectively. The Company allocates to inventory general and administrative costs that are related to the production process. These costs include insurance, manufacturing accounting personnel, human resources personnel, and information technology. During the years ended December 31, 2016 , 2015 , and 2014 , the Company allocated $37.2 million , $30.6 million , and $29.1 million , respectively, of general and administrative costs to inventory. General and administrative costs included in inventory at December 31, 2016 and 2015 were $22.9 million and $16.8 million , respectively. At December 31, 2016 and 2015 , approximately $64.2 million and $58.8 million , respectively, of the Company's finished goods inventories were held on consignment. Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Depreciation is principally calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, from 3 to 15 years for machinery and equipment, and from 3 to 7 years for software. Leasehold improvements are amortized over the life of the related facility leases or the asset, whichever is shorter. Straight-line and accelerated methods of depreciation are used for income tax purposes. Depreciation expense for property, plant, and equipment was $63.6 million , $58.7 million , and $57.5 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Impairment of Goodwill and Long-lived Assets Goodwill is reviewed for impairment annually in the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The Company identifies its reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including existing goodwill, to those reporting units. The fair value of the reporting unit is estimated based on the Company's market capitalization and a market revenue multiple. If the carrying value of the reporting unit exceeds its estimated fair value, then the Company measures the amount of the impairment loss by comparing the implied fair value of goodwill to its carrying value. In 2016 , 2015 , and 2014 , the Company did not record any impairment loss as the fair value of each reporting unit significantly exceeded its respective carrying value. Indefinite-lived intangible assets relate to in-process research and development ("IPR&D") acquired in business combinations. The estimated fair values of IPR&D projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the projects. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If the project is abandoned, all remaining capitalized amounts are written off immediately. Indefinite-lived intangible assets are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. IPR&D projects acquired in an asset acquisition are expensed unless the project has an alternative future use. In 2016 , 2015 , and 2014 , the Company did not record any impairment loss related to its IPR&D assets. Management reviews the carrying amounts of other finite-lived intangible assets and long-lived tangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and adjusting the amount, if necessary. The factors used to assess the likelihood of realization are both historical experience and the Company's forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company's effective tax rate on future earnings. When assessing whether a windfall tax benefit relating to stock-based compensation has been realized, the Company follows the with and without approach, under which the windfall benefit is recognized only if an incremental benefit is provided after considering all other tax attributes presently available to the Company. Consideration is given only to the direct impact of stock awards when calculating the amount of windfalls and shortfalls. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes the financial statement benefit of a tax position only after determining that a position would more likely than not be sustained based upon its technical merit if challenged by the relevant taxing authority and taken by management to the court of last resort. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority. The Company recognizes interest and penalties related to income tax matters in income tax expense. Research and Development Costs Research and development costs are charged to expense when incurred. 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 and in-the-money options. The dilutive impact of the 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): Years Ended December 31, 2016 2015 2014 Basic: Net income $ 569.5 $ 494.9 $ 811.1 Weighted-average shares outstanding 213.0 215.5 213.0 Basic earnings per share $ 2.67 $ 2.30 $ 3.81 Diluted: Net income $ 569.5 $ 494.9 $ 811.1 Weighted-average shares outstanding 213.0 215.5 213.0 Dilutive effect of stock plans 4.8 4.8 4.0 Dilutive weighted-average shares outstanding 217.8 220.3 217.0 Diluted earnings per share $ 2.61 $ 2.25 $ 3.74 Stock options and restricted stock units to purchase approximately 0.9 million , 1.4 million , and 4.8 million shares for the years ended December 31, 2016 , 2015 , and 2014 , respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. Stock-based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options, restricted stock units (service-based, market-based, and performance-based), and employee stock purchase subscriptions. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. For performance-based restricted stock units, the Company recognizes stock-based compensation expense if and when the Company concludes that it is probable that the performance condition will be achieved, net of estimated forfeitures. The Company reassesses the probability of vesting at each quarter end and adjusts the stock-based compensation expense based on its probability assessment. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon exercise of stock options or vesting of restricted stock units, the Company issues common stock. Total stock-based compensation expense was as follows (in millions): Years Ended December 31, 2016 2015 2014 Cost of sales $ 8.4 $ 6.8 $ 6.1 Selling, general, and administrative expenses 38.0 34.3 34.9 Research and development expenses 10.5 8.8 7.3 Total stock-based compensation expense $ 56.9 $ 49.9 $ 48.3 Upon retirement, all unvested stock options and performance-based restricted stock units are immediately forfeited. In addition, upon retirement, a participant will immediately vest in 25% of service-based restricted stock units for each full year of employment with the Company measured from the grant date. All remaining unvested service-based restricted stock units are immediately forfeited. For market-based restricted stock units, upon retirement and in certain other specified cases, a participant will receive a pro-rated portion of the shares that would ultimately be issued based on attainment of the performance goals as determined on the vesting date. The pro-rated portion is based on the participant's whole months of service with the Company during the performance period prior to the date of termination. Derivatives 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 local currency 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 principally from intercompany and local currency 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. The Company also uses foreign currency forward exchange contracts to protect its net investment in certain foreign subsidiaries from adverse changes in foreign currency exchange rates. These foreign currency forward exchange contracts are designated as net investment hedges. 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 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. The effective portions of net investment hedges are reported in " Accumulated Other Comprehensive Loss " as a part of the cumulative translation adjustment, and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The ineffective portions of cash flow hedges and net investment hedges are recorded in current period earnings. During 2016 , 2015 , and 2014 , 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 statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities. 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. Recently Adopted Accounting Standards In September 2015, the Financial Accounting Standards Board ("FASB") issued an update to the guidance on business combinations. The new guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this guidance did not impact the Company's consolidated financial statements. In April 2015, the FASB issued an amendment to the accounting guidance on the presentation of debt issuance costs. The guidance requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt, consistent with debt discounts. In August 2015, the FASB clarified that for a line-of-credit arrangement, a company can continue to defer and present debt issuance costs as an asset and subsequently amortize the debt issuance costs over the term of the line-of-credit arrangement, whether or not there are any outstanding borrowings on the line-of-credit arrangement. The guidance was effective for annual reporting periods beginning after December 31, 2015 and interim periods within those periods, and must be applied retrospectively to each prior reporting period presented. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. New Accounting Standards Not Yet Adopted In January 2017, the FASB issued an amendment to the guidance on intangible assets. The amendment simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Instead, under this amendment, an entity performs its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this guidance will impact its consolidated financial statements. In January 2017, the FASB issued an amendment to the guidance on business combinations. The amendment clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. In August 2016, the FASB issued an amendment to the guidance on the statement of cash flows. The standard addresses eight specific cash flow issues, and is intended to reduce the diversity in practice around how certain transactions are classified within the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted. This guidance will impact how the Company classifies contingent consideration payments made after a business combination. Contingent consideration payments that are not made soon after the acquisition date will be classified as a financing activity up to the amount of the contingent consideration liability recognized at the acquisition date, with any excess classified as an operating activity. The Company does not expect the adoption of the other provisions of this guidance will have a material impact on its consolidated financial statements. In March 2016, the FASB issued an amendment to the guidance on stock compensation. The amendment simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company anticipates that adoption of this guidance will introduce more volatility to its effective tax rate, generally reducing the rate. In February 2016, the FASB issued an amendment to the guidance on leases. The amendment improves transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. 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. In August 2015, the FASB issued an update to the guidance to defer the effective date by one year, such that the new standard will be effective for annual reporting periods beginning after December 15, 2017 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 assessing all of the potential impacts of the revenue recognition guidance and has not yet selected an adoption method. The Company will adopt the |
INTELLECTUAL PROPERTY LITIGATIO
INTELLECTUAL PROPERTY LITIGATION EXPENSES (INCOME), NET | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
INTELLECTUAL PROPERTY LITIGATION EXPENSES (INCOME), NET | INTELLECTUAL PROPERTY LITIGATION EXPENSES (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 for past damages 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, subject to certain conditions, the royalty payments will be based on a percentage of Medtronic's sales of transcatheter aortic valves, with 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 (in millions): Past damages $ 754.3 License agreement 238.0 Covenant not to sue 77.7 Total $ 1,070.0 The Company recognized the upfront payment of $750.0 million in " Intellectual Property Litigation Expenses (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. The Company incurred external legal costs related to intellectual property litigation of $32.6 million , $7.0 million , and $9.6 million during 2016 , 2015 , and 2014 , respectively. The increase in intellectual property litigation expenses in 2016 was primarily due to the resolution of an intellectual property litigation matter, and the increased costs associated with ongoing litigation in the United States and Europe. LEGAL PROCEEDINGS On October 30, 2015, Boston Scientific Scimed, Inc., a subsidiary of Boston Scientific Corporation ("Boston Scientific"), filed a lawsuit in the district court in Düsseldorf, Germany against Edwards Lifesciences and its German subsidiary, Edwards Lifesciences Services GmbH, alleging that Edwards Lifesciences’ SAPIEN 3 heart valve infringes certain claims of a Boston Scientific German national patent arising from EP 2 749 254 B1 (the "'254 patent") related to paravalvular sealing technology. On February 26, 2016, Boston Scientific added the German national patent arising from EP 2 926 766 (the "'766 Patent") to the infringement allegations. On April 8, 2016, Boston Scientific filed a similar patent infringement action in district court in Paris, France relating to these patents. The complaints seek unspecified money damages and injunctive relief. The Company intends to defend itself vigorously in these matters. Trial in the German matter was held in February 2017 and the German district court's decision is expected in the first quarter of 2017. The French suit has been stayed pending the outcome of validity proceedings on the '766 and '254 patents. On November 2, 2015, Edwards Lifesciences LLC, a U.S. subsidiary of Edwards Lifesciences, filed a lawsuit against Sadra Medical, Inc. and Boston Scientific Scimed, Inc., two subsidiaries of Boston Scientific, in the United Kingdom in the High Court of Justice, Chancery Division, Patents Court to declare invalid and revoke the U.K. national patent corresponding to the '254 patent. Edwards Lifesciences later added Boston Scientific’s UK national patent corresponding to the '766 patent to this invalidity lawsuit. The Boston Scientific subsidiaries filed counterclaims against Edwards Lifesciences and three of its European subsidiaries alleging that the SAPIEN 3 heart valve infringes certain claims of the same patents and seeking unspecified monetary damages and injunctive relief. Trial on the U.K. matter was held in January 2017 and a decision is expected in the first half of 2017. On November 23, 2015, Edwards Lifesciences PVT, Inc., a U.S. subsidiary of Edwards Lifesciences, filed a lawsuit in the district court in Düsseldorf, Germany for patent infringement against Boston Scientific and a German subsidiary, Boston Scientific Medizintechnik GmbH, alleging that the Lotus heart valve infringes certain claims of Edwards Lifesciences’ German national patents EP 1 441 672 B1 and 2 255 753 B1 related to prosthetic valve and delivery system technology. Edwards Lifesciences later added its German national patent EP 2 399 550 to this suit. The complaint seeks unspecified monetary damages and injunctive relief. Trial in the German matter was held in February 2017 and the German district court's decision is expected in the first quarter of 2017. O n April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences in the Federal District Court in the District of Delaware alleging that the SAPIEN 3 heart valve infringes certain claims of Boston Scientific’s U.S. Patent 8,992,608 (the "'608 patent") related to paravalvular sealing technology and seeking unspecified monetary damages and injunctive relief. On June 9, 2016, Edwards Lifesciences LLC and Edwards Lifesciences PVT, Inc. filed counterclaims alleging that Boston Scientific’s Lotus heart valve infringes Edwards Lifesciences’ U.S. Patents 9,168,133; 9,339,383; and 7,510,575 related to prosthetic valve technology. Trial is scheduled for July 2018. On October 12, 2016, Edwards Lifesciences filed an Inter Partes Review ("IPR") request with the U.S. Patent and Trademark Office challenging the validity of Boston Scientific’s '608 patent. Also on April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences in the Federal District Court in the Central District of California alleging that five of its transcatheter heart valve delivery systems and a valve crimper infringe certain claims of eight Boston Scientific U.S. patents. The complaints seek unspecified monetary damages and injunctive relief. Trial is scheduled for May 2018. The Company intends to defend itself vigorously in these matters and has filed an IPR request related to the crimping device patent. Because the ultimate outcome of the above matters involve judgments, estimates and inherent uncertainties, and cannot be predicted with certainty, charges related to such matters could have a material adverse impact on Edwards Lifesciences' financial position, results of operations, and liquidity. In addition, 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 (the "Other Lawsuits"). The Other Lawsuits raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Management does not believe that any charge relating to the Other Lawsuits would have a material adverse effect on Edwards Lifesciences’ overall financial position, results of operations, or liquidity. However, the resolution of one or more of the Other Lawsuits in any reporting period, could have a material adverse impact on Edwards Lifesciences' net income or cash flows for that period. 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. 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. |
SPECIAL CHARGES
SPECIAL CHARGES | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
SPECIAL CHARGES | SPECIAL CHARGES Years Ended December 31, 2016 2015 2014 (in millions) Acquisition of IPR&D $ 34.5 $ — $ 10.2 Charitable foundation contribution — — 50.0 Settlement — — 7.5 Asset write-down — — 3.0 Total special charges $ 34.5 $ — $ 70.7 Acquisition of IPR&D In May 2016, the Company entered into two separate agreements to acquire technologies for use in its transcatheter heart valve programs. In connection with these agreements, the Company recorded an IPR&D charge totaling $34.5 million . The acquired technologies are in the early stages of development and have no alternative uses. Additional design developments, bench testing, pre-clinical studies, and human clinical studies must be successfully completed prior to selling any product using these technologies. In December 2014, the Company acquired technology for use in its transcatheter mitral valve program. In connection with this acquisition, the Company recorded a $10.2 million IPR&D charge, including related expenses. The acquired technology has no alternative uses. Additional design developments, bench testing, pre-clinical studies, and human clinical studies must be successfully completed prior to selling any product. Under the terms of the purchase agreement, the Company must pay an additional $10.0 million if, within 9 years of the acquisition closing date, the Company receives CE Mark for a transcatheter mitral valve repair or replacement product that incorporates the acquired technology. 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. 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. |
COMPOSITION OF CERTAIN FINANCIA
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Components of selected captions in the consolidated balance sheets are as follows: As of December 31, 2016 2015 (in millions) Accounts receivable, net Trade accounts receivable $ 374.5 $ 322.2 Allowance for doubtful accounts (9.0 ) (6.8 ) $ 365.5 $ 315.4 Inventories Raw materials $ 60.6 $ 63.8 Work in process 102.4 64.1 Finished products 233.6 212.0 $ 396.6 $ 339.9 Property, plant, and equipment, net Land $ 30.1 $ 25.1 Buildings and leasehold improvements 367.2 293.4 Machinery and equipment 346.5 328.6 Equipment with customers 37.4 34.6 Software 100.6 97.4 Construction in progress 79.6 75.2 961.4 854.3 Accumulated depreciation (381.4 ) (371.8 ) $ 580.0 $ 482.5 Accrued and other liabilities Employee compensation and withholdings $ 216.1 $ 209.4 Research and development accruals 40.0 38.6 Property, payroll, and other taxes 35.3 34.5 Accrued rebates 36.1 23.9 Accrued marketing expenses 12.6 9.6 Taxes payable 5.9 14.5 Litigation reserves (Note 17) 7.8 5.6 Fair value of derivatives 3.3 4.2 Other accrued liabilities 78.3 72.0 $ 435.4 $ 412.3 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Debt Securities Investments in debt securities at the end of each period were as follows (in millions): December 31, 2016 December 31, 2015 Held-to-maturity Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 217.0 $ — $ — $ 217.0 $ 440.1 $ — $ — $ 440.1 U.S. government and agency securities 16.1 — (0.1 ) 16.0 32.5 — (0.2 ) 32.3 Asset-backed securities 0.3 — — 0.3 1.2 — — 1.2 Corporate debt securities 3.0 — — 3.0 16.4 — — 16.4 Municipal securities 1.9 — — 1.9 5.2 — — 5.2 $ 238.3 $ — $ (0.1 ) $ 238.2 $ 495.4 $ — $ (0.2 ) $ 495.2 Available-for-sale Commercial paper $ 35.4 $ — $ — $ 35.4 $ 28.1 $ — $ — $ 28.1 U.S. government and agency securities 143.4 — (0.7 ) 142.7 38.7 — (0.2 ) 38.5 Asset-backed securities 86.0 — (0.2 ) 85.8 62.8 — (0.2 ) 62.6 Corporate debt securities 333.6 0.4 (1.5 ) 332.5 230.0 — (1.3 ) 228.7 Municipal securities 4.6 — (0.1 ) 4.5 4.7 — — 4.7 $ 603.0 $ 0.4 $ (2.5 ) $ 600.9 $ 364.3 $ — $ (1.7 ) $ 362.6 The cost and fair value of investments in debt securities, by contractual maturity, as of December 31, 2016 were as follows: Held-to-Maturity Available-for-Sale Cost Fair Value Cost Fair Value (in millions) Due in 1 year or less $ 230.9 $ 230.9 $ 110.2 $ 110.1 Due after 1 year through 5 years — — 406.9 405.1 Instruments not due at a single maturity date 7.4 7.3 85.9 85.7 $ 238.3 $ 238.2 $ 603.0 $ 600.9 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 balance sheets, and are as follows: December 31, 2016 2015 (in millions) Available-for-sale investments Cost $ — $ — Unrealized gains 0.1 0.2 Fair value of available-for-sale investments 0.1 0.2 Equity method investments Cost 9.5 10.9 Equity in losses (3.9 ) (4.2 ) Carrying value of equity method investments 5.6 6.7 Cost method investments Carrying value of cost method investments 28.2 21.3 Total investments in unconsolidated affiliates $ 33.9 $ 28.2 In December 2015, the Company made a $1.5 million investment in Harpoon Medical, Inc. ("Harpoon Medical"). As part of the agreement, the Company also paid $11.5 million , included in " Other Assets ," for an exclusive option to acquire Harpoon Medical for up to $250.0 million , depending upon the achievement of certain milestones and regulatory approvals. Harpoon Medical is developing a surgical device for minimally invasive mitral valve repair and the treatment of mitral valve regurgitation that is currently in the clinical testing phase, and is financed primarily through equity investments. In December 2014, the Company made a $10.0 million investment in one of its existing cost method investees, CardioKinetix, Inc. ("CardioKinetix"), for a total investment carrying value of $14.4 million . As part of the agreement, the Company also paid $15.0 million , included in " Other Assets, " for an exclusive option to acquire CardioKinetix for up to $375.0 million , depending upon the achievement of certain milestones and regulatory approvals. CardioKinetix is pioneering a catheter-based treatment for heart failure that is currently in the clinical testing phase, and is financed primarily through equity investments. Harpoon Medical and CardioKinetix are VIEs; however, the Company has determined that it is not the primary beneficiary of these VIEs since the Company does not have the power to direct the activities of the VIEs that most significantly impact their economic performance. The Company made this determination based on the development stage of the VIEs' products; the Company's inability to exercise influence over the VIEs, based on the Company's ownership percentage and voting rights, as well as its lack of involvement in day-to-day operations and management decisions; and the fact that the option to acquire each of the VIEs is currently significantly out of the money. Accordingly, the Company accounts for these investments as cost method investments. The Company's maximum exposure to loss as a result of its involvement with CardioKinetix and Harpoon Medical is limited to the carrying amount of its investment and the cost of the option to acquire each of these entities. During 2016 , 2015 , and 2014 , the gross realized gains or losses from sales of available-for-sale investments were not material. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Valtech Cardio Ltd. On November 26, 2016, the Company entered into an agreement and plan of merger to acquire Valtech Cardio Ltd. ("Valtech") for approximately $340.0 million , subject to certain adjustments, with the potential for up to an additional $350.0 million in pre-specified milestone-driven payments over the next 10 years. The transaction closed on January 23, 2017, and the consideration paid included the issuance of approximately 2.8 million shares of the Company's common stock (fair value of $266.5 million ) and cash of $84.3 million . Acquisition-related costs of $4.1 million were recorded in “ Selling, General, and Administrative Expenses ” during the year ended December 31, 2016. Prior to the close of the transaction, Valtech spun off its early-stage transseptal mitral valve replacement technology program. Concurrent with the closing, the Company entered into an agreement for an exclusive option to acquire that program and its associated intellectual property for approximately $200.0 million , subject to certain adjustments. The option expires 2 years after the closing date of the transaction, but can be extended by up to a year depending on the results of certain clinical trials. The initial purchase accounting for this transaction has not yet been completed given the short period of time between the acquisition date and the issuance of these financial statements. Valtech is a developer of a transcatheter mitral and tricuspid valve repair system. The Company plans to add this technology to its portfolio of mitral and tricuspid repair products. The acquisition will be accounted for as a business combination, and is expected to consist primarily of goodwill, developed technology, and in-process research and development. The Company is in the process of evaluating the potential impact of the business combination on its consolidated financial statements. CardiAQ Valve Technologies, Inc. On July 3, 2015, the Company entered into an agreement and plan of merger to acquire CardiAQ Valve Technologies, Inc. ("CardiAQ") for an aggregate cash purchase price of $350.0 million , subject to certain adjustments. The transaction closed on August 26, 2015, and the cash purchase price after the adjustments was $348.0 million . In addition, the Company agreed to pay an additional $50.0 million if a certain European regulatory approval is obtained within 48 months of the acquisition closing date. The Company recognized in " Other Long-term Liabilities " a $30.3 million liability for the estimated fair value of this contingent milestone payment. The fair value of the contingent milestone payment will be remeasured each quarter, with changes in the fair value recognized within operating expenses on the consolidated statements of operations. For further information on the fair value of the contingent milestone payment, see Note 10. In connection with the acquisition, the Company placed $30.0 million of the purchase price into escrow to satisfy any claims for indemnification made in accordance with the merger agreement. Pending resolution of an outstanding claim under the agreement and plan of merger, any remaining funds will be disbursed to CardiAQ’s former shareholders. Acquisition-related costs of $1.2 million were recorded in “ Selling, General, and Administrative Expenses ” during the year ended December 31, 2015. CardiAQ is a developer of a transcatheter mitral valve replacement system. The Company plans to integrate the acquired technology platform into its mitral heart valve program. The acquisition was accounted for as a business combination. Tangible and intangible assets acquired were recorded based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. The following table summarizes the fair values of the assets acquired and liabilities assumed (in millions): Current assets $ 28.1 Property and equipment, net 0.2 Goodwill 258.9 IPR&D 190.0 Current liabilities assumed (32.9 ) Deferred income taxes (66.0 ) Contingent consideration (30.3 ) Total cash purchase price 348.0 Less: cash acquired (27.9 ) Total cash purchase price, net of cash acquired $ 320.1 Goodwill includes expected synergies and other benefits the Company believes will result from the acquisition. Goodwill was assigned to the Company’s United States segment and is not deductible for tax purposes. IPR&D has been capitalized at fair value as an intangible asset with an indefinite life and will be assessed for impairment in subsequent periods. The fair value of the IPR&D was determined using the income approach. This approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return. The discount rate used to determine the fair value of the IPR&D was 16.5% . Completion of successful design developments, bench testing, pre-clinical studies and human clinical studies are required prior to selling any product. The risks and uncertainties associated with completing development within a reasonable period of time include those related to the design, development, and manufacturability of the product, the success of pre-clinical and clinical studies, and the timing of regulatory approvals. The valuation assumed $97.7 million of additional research and development expenditures would be incurred prior to the date of product introduction, and the Company does not currently anticipate significant changes to forecasted research and development expenditures associated with the CardiAQ program. The Company's valuation model also assumed net cash inflows would commence in late 2018, if successful clinical trial experiences lead to a CE mark approval. Upon completion of development, the underlying research and development intangible asset will be amortized over its estimated useful life. The Company disclosed in early February 2017 that it had voluntarily paused enrollment in its clinical trials for the Edwards-CardiAQ valve to perform further design validation testing on a feature of the valve. This testing has been completed and, in collaboration with clinical investigators, the Company has decided to resume screening patients for enrollment in its clinical trials. The results of operations for CardiAQ have been included in the accompanying consolidated financial statements from the date of acquisition. Pro forma results have not been presented as the results of CardiAQ are not material in relation to the consolidated financial statements of the Company. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS On July 3, 2015, the Company acquired CardiAQ (see Note 7). This transaction resulted in an increase to goodwill of $258.9 million and IPR&D of $190.0 million . The changes in the carrying amount of goodwill, by segment, during the years ended December 31, 2016 and 2015 were as follows: United Europe Total (in millions) Goodwill at December 31, 2014 $ 308.3 $ 67.7 $ 376.0 Goodwill acquired during the year 258.9 — 258.9 Currency translation adjustment — (6.6 ) (6.6 ) Goodwill at December 31, 2015 567.2 61.1 628.3 Goodwill acquired during the year — — — Currency translation adjustment — (2.2 ) (2.2 ) Goodwill at December 31, 2016 $ 567.2 $ 58.9 $ 626.1 Other intangible assets consist of the following (in millions): December 31, 2016 2015 Cost Accumulated Net Cost Accumulated Net Amortizable intangible assets Patents $ 187.6 $ (177.0 ) $ 10.6 $ 180.6 $ (172.3 ) $ 8.3 Developed technology 43.0 (39.6 ) 3.4 43.6 (37.9 ) 5.7 Other 9.8 (9.0 ) 0.8 10.0 (8.6 ) 1.4 240.4 (225.6 ) 14.8 234.2 (218.8 ) 15.4 Unamortizable intangible assets IPR&D 190.0 — 190.0 190.0 — 190.0 $ 430.4 $ (225.6 ) $ 204.8 $ 424.2 $ (218.8 ) $ 205.4 Goodwill and IPR&D resulting from purchase business combinations are not subject to amortization. Other acquired intangible assets with definite lives are amortized on a straight-line basis over their expected useful lives. The Company expenses costs incurred to renew or extend the term of acquired intangible assets. Amortization expense related to other intangible assets for the years ended December 31, 2016 , 2015 , and 2014 was $7.6 million , $7.1 million , and $8.4 million , respectively. Estimated amortization expense for each of the years ending December 31 is as follows (in millions): 2017 $ 7.3 2018 2.2 2019 1.7 2020 1.2 2021 1.0 |
DEBT, CREDIT FACILITIES, AND LE
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS | DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS In October 2013, the Company issued $600.0 million of fixed-rate unsecured senior notes (the "Notes"). Interest is payable semi-annually in arrears, with payment due in April and October. The Company may redeem the Notes, in whole or in part, at any time and from time to time at specified redemption prices. In addition, upon the occurrence of certain change of control triggering events, the Company may be required to repurchase all or a portion of the Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest. The Notes also include covenants that limit the Company's ability to incur secured indebtedness, enter into sale and leaseback transactions, and consolidate, merge, or transfer all or substantially all of its assets. The following is a summary of the Notes as of December 31, 2016 and 2015 : December 31, 2016 2015 Amount Effective Amount Effective (in millions) (in millions) Fixed-rate 2.875% notes due October 15, 2018 $ 600.0 2.983 % $ 600.0 2.983 % Unamortized discount (1.2 ) (1.7 ) Unamortized debt issuance costs (1.9 ) (3.0 ) Hedge accounting fair value adjustments (see Note 11) 0.4 1.6 Total carrying amount $ 597.3 $ 596.9 As of December 31, 2016 and 2015 , the fair value of the Notes, based on Level 2 inputs, was $609.6 million and $607.7 million , respectively. Issuance costs of $5.4 million , as well as the issuance discount on the Notes, are being amortized to interest expense over the term of the Notes. The Company has a Five -Year Credit Agreement ("the Credit Agreement") which matures on July 18, 2019. 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. During 2016 , the spread over LIBOR was 1.0 % and the facility fee was 0.125% . Issuance costs of $3.0 million are being amortized to interest expense over the term of the Credit Agreement. As of December 31, 2016, borrowings of $225.0 million , which were drawn at the end of 2016, were outstanding under the Credit Agreement. All amounts outstanding under the Credit Agreement have been classified as long-term obligations in accordance with the terms of 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 at December 31, 2016 . The weighted-average interest rate under all debt obligations was 3.1% and 2.9% at December 31, 2016 and 2015 , respectively. Certain facilities and equipment are leased under operating leases expiring at various dates. Most of the operating leases contain renewal options. Total expense for all operating leases was $22.9 million , $22.5 million , and $22.9 million for the years 2016 , 2015 , and 2014 , respectively. Future minimum lease payments (including interest) under non-cancelable operating leases and aggregate debt maturities at December 31, 2016 were as follows (in millions): Operating Aggregate 2017 $ 22.3 $ — 2018 16.5 600.0 2019 8.4 225.0 2020 5.5 — 2021 3.3 — Thereafter 16.6 — Total obligations and commitments $ 72.6 $ 825.0 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The consolidated 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 long-term notes payable. See Note 9 for further information on the fair value of the Notes. 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 as of December 31, 2016 and 2015 (in millions): December 31, 2016 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 44.1 $ — $ — $ 44.1 Available-for-sale investments: Corporate debt securities — 332.5 — 332.5 Asset-backed securities — 85.8 — 85.8 U.S. government and agency securities 100.7 42.0 — 142.7 Commercial paper — 35.4 — 35.4 Municipal securities — 4.5 — 4.5 Equity investments in unconsolidated affiliates 0.1 — — 0.1 Investments held for deferred compensation plans 46.0 — — 46.0 Derivatives — 35.2 — 35.2 $ 190.9 $ 535.4 $ — $ 726.3 Liabilities Derivatives $ — $ 3.3 $ — $ 3.3 Deferred compensation plans 46.7 — — 46.7 Contingent consideration obligation — — 31.6 31.6 $ 46.7 $ 3.3 $ 31.6 $ 81.6 December 31, 2015 Assets Cash equivalents $ 3.5 $ 8.5 $ — $ 12.0 Available-for-sale investments: Corporate debt securities — 228.7 — 228.7 Asset-backed securities — 62.6 — 62.6 U.S. government and agency securities 9.6 28.9 — 38.5 Commercial paper — 28.1 — 28.1 Municipal securities — 4.7 — 4.7 Equity investments in unconsolidated affiliates 0.1 — — 0.1 Investments held for deferred compensation plans 35.3 — — 35.3 Derivatives — 23.3 — 23.3 $ 48.5 $ 384.8 $ — $ 433.3 Liabilities Derivatives $ — $ 4.2 $ — $ 4.2 Deferred compensation plans 35.5 — — 35.5 Contingent consideration obligation — — 30.5 30.5 $ 35.5 $ 4.2 $ 30.5 $ 70.2 The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2016 (in millions): Balance at December 31, 2015 $ 30.5 Additions — Changes in fair value (recorded in " Research and Development Expenses ") 1.1 Balance at December 31, 2016 $ 31.6 Cash Equivalents and Available-for-sale Investments The Company estimates the fair values of its money market funds based on quoted prices in active markets for identical assets. The Company estimates the fair values of its commercial paper, U.S. government and agency securities, asset-backed securities, and corporate debt securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker-dealer quotes on the same or similar securities, benchmark yields, credit spreads, prepayment and default projections based on historical data, and other observable inputs. The Company independently reviews and validates the pricing received from the third-party pricing service by comparing the prices to prices reported by a secondary pricing source. The Company’s validation procedures have not resulted in an adjustment to the pricing received from the pricing service. Investments in unconsolidated affiliates are long-term equity investments in companies that are in various stages of development. Certain of the Company's investments in unconsolidated affiliates are designated as available-for-sale. These investments are carried at fair market value based on quoted market prices. Deferred Compensation Plans The Company holds investments in trading securities related to its deferred compensation plans. The investments are in a variety of stock, bond, and money market mutual funds. The fair values of these investments and the corresponding liabilities are based on quoted market prices. Derivative Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and 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 based on quoted market foreign exchange rates and market discount 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. Contingent Consideration Obligation The Company recorded a contingent consideration obligation related to its acquisition of CardiAQ (Note 7). The $50.0 million contingent consideration obligation has been recorded at its estimated fair value, which was determined using a probability weighted discounted cash flow analysis that considered significant unobservable inputs. These inputs included a 1.9% discount rate used to present value the projected cash flows, a 65.0% probability of milestone achievement, and a projected payment date in 2018. The use of different assumptions could have a material effect on the estimated fair value amount. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes. Notional Amount December 31, 2016 December 31, 2015 (in millions) Foreign currency forward exchange contracts $ 949.7 $ 1,061.6 Interest rate swap agreements 300.0 300.0 The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets (in millions): Fair Value Balance Sheet Location December 31, 2016 December 31, 2015 Derivatives designated as hedging instruments Assets Foreign currency contracts Other current assets $ 28.6 $ 15.0 Interest rate swap agreements Other assets $ 0.4 $ 1.6 Liabilities Foreign currency contracts Accrued and other liabilities $ 3.3 $ 4.2 Derivatives not designated as hedging instruments Assets Foreign currency contracts Other current assets $ 6.2 $ — Foreign currency contracts Other assets $ — $ 6.7 The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet December 31, 2016 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative Assets Foreign currency contracts $ 34.8 $ — $ 34.8 $ (3.3 ) $ — $ 31.5 Interest rate swap agreements $ 0.4 $ — $ 0.4 $ — $ — $ 0.4 Derivative Liabilities Foreign currency contracts $ 3.3 $ — $ 3.3 $ (3.3 ) $ — $ — December 31, 2015 Derivative Assets Foreign currency contracts $ 21.7 $ — $ 21.7 $ (4.0 ) $ — $ 17.7 Interest rate swap agreements $ 1.6 $ — $ 1.6 $ — $ — $ 1.6 Derivative Liabilities Foreign currency contracts $ 4.2 $ — $ 4.2 $ (4.0 ) $ — $ 0.2 The following tables present the effect of derivative instruments on the consolidated statements of operations and consolidated statements of comprehensive income: Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income 2016 2015 2016 2015 (in millions) (in millions) Cash flow hedges Foreign currency contracts $ 16.1 $ 35.3 Cost of sales $ 8.4 $ 67.1 Selling, general, and administrative expenses $ (0.4 ) $ 0.9 Net investment hedges Foreign currency contracts $ (4.1 ) $ 2.9 Other expense, net $ — $ — Amount of Gain or (Loss) Recognized in Income on Derivative (a) Location of Gain or (Loss) Recognized in Income on Derivative 2016 2015 2014 (in millions) Fair value hedges Interest rate swap agreements Interest expense $ (1.2 ) $ 1.2 $ 4.4 _______________________________________________________________________________ (a) The gains and losses 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 Location of Gain or (Loss) Recognized in Income on Derivative 2016 2015 2014 (in millions) Derivatives not designated as hedging instruments Foreign currency contracts Other expense, net $ 8.6 $ 6.6 $ 13.7 The Company expects that during 2017 it will reclassify to earnings a $2.6 million gain currently recorded in " Accumulated Other Comprehensive Loss ." For the years ended December 31, 2016 , 2015 , and 2014 , the Company did not record any gains or losses due to hedge ineffectiveness. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Benefit Plans Edwards Lifesciences maintains defined benefit pension plans in Japan and certain European countries. Information regarding the Company's defined benefit pension plans is as follows: Years Ended 2016 2015 (in millions) Change in projected benefit obligation: Beginning of year $ 118.1 $ 123.1 Service cost 6.8 7.0 Interest cost 1.2 1.5 Participant contributions 1.9 1.8 Actuarial loss (gain) 6.5 (1.4 ) Benefits paid (3.7 ) (1.3 ) Plan amendment 1.9 (2.9 ) Settlements — (4.1 ) Currency exchange rate changes and other (4.0 ) (5.6 ) End of year $ 128.7 $ 118.1 Change in fair value of plan assets: Beginning of year $ 75.1 $ 73.8 Actual return on plan assets 1.4 1.3 Employer contributions 6.3 6.1 Participant contributions 1.9 1.8 Settlements — (4.1 ) Benefits paid (3.7 ) (1.3 ) Currency exchange rate changes and other (2.4 ) (2.5 ) End of year $ 78.6 $ 75.1 Years Ended 2016 2015 (in millions) Funded Status Projected benefit obligation $ (128.7 ) $ (118.1 ) Plan assets at fair value 78.6 75.1 Underfunded status $ (50.1 ) $ (43.0 ) Net amounts recognized on the consolidated balance sheet: Other long-term liabilities $ 50.1 $ 43.0 Accumulated other comprehensive loss, net of tax: Net actuarial loss $ (18.0 ) $ (20.0 ) Net prior service (cost) credit (4.6 ) 5.1 Deferred income tax benefit 5.0 3.5 Total $ (17.6 ) $ (11.4 ) The accumulated benefit obligation ("ABO") for all defined benefit pension plans was $116.9 million and $103.7 million as of December 31, 2016 and 2015 , respectively. The projected benefit obligation and ABO were in excess of plan assets for all pension plans as of December 31, 2016 and 2015 . The components of net periodic benefit cost are as follows (in millions): Years Ended 2016 2015 2014 Service cost, net $ 6.8 $ 7.0 $ 6.3 Interest cost 1.2 1.5 2.2 Expected return on plan assets (1.3 ) (1.5 ) (1.6 ) Settlement — 0.6 — Amortization of actuarial loss 0.7 1.0 0.5 Amortization of prior service credit (0.7 ) (0.4 ) (0.3 ) Net periodic pension benefit cost $ 6.7 $ 8.2 $ 7.1 The net actuarial loss and prior service cost that will be amortized from " Accumulated Other Comprehensive Loss " into net periodic benefits cost in 2017 are expected to be $0.7 million and $0.3 million , respectively. Expected long-term returns for each of the plans' strategic asset classes were developed through consultation with investment advisors. Several factors were considered, including survey of investment managers' expectations, current market data, minimum guaranteed returns in certain insurance contracts, and historical market returns over long periods. Using policy target allocation percentages and the asset class expected returns, a weighted-average expected return was calculated. To select the discount rates for the defined benefit pension plans, the Company uses a modeling process that involves matching the expected duration of its benefit plans to a yield curve constructed from a portfolio of AA-rated fixed-income debt instruments, or their equivalent. For each country, the Company uses the implied yield of this hypothetical portfolio at the appropriate duration as a discount rate benchmark. The weighted-average assumptions used to determine the benefit obligations are as follows: December 31, 2016 2015 Discount rate 0.7 % 1.0 % Rate of compensation increase 2.5 % 2.7 % Social securities increase 1.4 % 1.6 % Pension increase 1.8 % 2.0 % The weighted-average assumptions used to determine the net periodic benefit cost are as follows: Years ended December 31, 2016 2015 2014 Discount rate 1.0 % 1.4 % 2.2 % Expected return on plan assets 1.6 % 1.9 % 2.6 % Rate of compensation increase 2.7 % 3.0 % 3.1 % Social securities increase 1.6 % 1.6 % 1.8 % Pension increase 2.0 % 2.0 % 2.0 % Plan Assets The Company's investment strategy for plan assets is to seek a competitive rate of return relative to an appropriate level of risk and to earn performance rates of return in accordance with the benchmarks adopted for each asset class. Risk management practices include diversification across asset classes and investment styles, and periodic rebalancing toward asset allocation targets. The Administrative and Investment Committee decides on the defined benefit plan provider in each location and that provider decides the target allocation for the Company's defined benefit plan at that location. The target asset allocation selected reflects a risk/return profile the Company feels is appropriate relative to the plans' liability structure and return goals. In certain plans, asset allocations may be governed by local requirements. Target weighted-average asset allocations at December 31, 2016 , by asset category, are as follows: Insurance contracts 77.9 % Equity securities 10.9 % Debt securities 11.2 % Total 100.0 % The fair values of the Company's defined benefit plan assets at December 31, 2016 and 2015 , by asset category, are as follows (in millions): December 31, 2016 Level 1 Level 2 Level 3 Total Asset Category Cash $ 4.3 $ — $ — $ 4.3 Equity securities: United States equities 3.5 — — 3.5 International equities 6.9 — — 6.9 Debt securities: United States government bonds 0.9 — — 0.9 International government bonds 4.5 — — 4.5 Insurance contracts — — 58.5 58.5 $ 20.1 $ — $ 58.5 $ 78.6 December 31, 2015 Asset Category Cash $ 2.7 $ — $ — $ 2.7 Equity securities: United States equities 3.5 — — 3.5 International equities 7.3 — — 7.3 Debt securities: United States government bonds 0.7 — — 0.7 International government bonds 4.1 — — 4.1 Insurance contracts — — 56.8 56.8 $ 18.3 $ — $ 56.8 $ 75.1 The following table summarizes the changes in fair value of the Company's defined benefit plan assets that have been classified as Level 3 for the years ended December 31, 2016 and 2015 (in millions): Insurance Balance at December 31, 2014 $ 58.4 Actual return on plan assets: Relating to assets still held at December 31, 2015 (0.3 ) Purchases, sales and settlements 0.7 Currency exchange rate impact (2.0 ) Balance at December 31, 2015 56.8 Actual return on plan assets: Relating to assets still held at December 31, 2016 1.7 Purchases, sales and settlements 1.8 Currency exchange rate impact (1.8 ) Balance at December 31, 2016 $ 58.5 Equity and debt securities are valued at fair value based on quoted market prices reported on the active markets on which the individual securities are traded. The insurance contracts are valued at the cash surrender value of the contracts, which is deemed to approximate its fair value. The following benefit payments, which reflect expected future service, as appropriate, at December 31, 2016 , are expected to be paid (in millions): 2017 $ 4.5 2018 4.0 2019 4.0 2020 4.6 2021 4.5 2021-2025 44.6 As of December 31, 2016 , expected employer contributions for 2017 are $6.1 million . Defined Contribution Plans The Company's employees in the United States and Puerto Rico are eligible to participate in a qualified defined contribution plan. In the United States, participants may contribute up to 25% of their eligible compensation (subject to tax code limitation) to the plan. Edwards Lifesciences matches the first 3% of the participant's annual eligible compensation contributed to the plan on a dollar-for-dollar basis. Edwards Lifesciences matches the next 2% of the participant's annual eligible compensation to the plan on a 50% basis. In Puerto Rico, participants may contribute up to 25% of their annual compensation (subject to tax code limitation) to the plan. Edwards Lifesciences matches the first 4% of participant's annual eligible compensation contributed to the plan on a 50% basis. The Company also provides a 2% profit sharing contribution calculated on eligible earnings for each employee. Matching contributions relating to Edwards Lifesciences employees were $17.3 million , $15.3 million , and $12.8 million in 2016 , 2015 , and 2014 , respectively. The Company also has nonqualified deferred compensation plans for a select group of employees. The plans provide eligible participants the opportunity to defer eligible compensation to future dates specified by the participant with a return based on investment alternatives selected by the participant. The amount accrued under these nonqualified plans was $46.7 million and $35.5 million at December 31, 2016 and 2015 , respectively. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK Treasury Stock In July 2014, the Board of Directors approved a stock repurchase program authorizing the Company to purchase up to $750.0 million of the Company's common stock. In November 2016, the Board of Directors approved a new stock repurchase program providing for an additional $1.0 billion of repurchases of our common stock. The repurchase programs do not have an expiration date. Stock repurchased under these programs may be used to offset obligations under the Company's employee stock-based benefit programs and stock-based business acquisitions, and will reduce the total shares outstanding. During 2016 , 2015 , and 2014 , the Company repurchased 7.3 million , 2.6 million , and 4.4 million shares, respectively, at an aggregate cost of $662.3 million , $280.1 million , and $300.9 million , respectively, including shares purchased under the accelerated share repurchase ("ASR") agreements described below and shares acquired to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees. The timing and size of any future stock repurchases are subject to a variety of factors, including expected dilution from stock plans, cash capacity, and the market price of our common stock. Accelerated Share Repurchase In February 2016, Edwards entered into ASR agreements to repurchase $325.0 million of the Company's common stock based on the volume-weighted average price ("VWAP") of the Company's common stock during the term of the agreements, less a discount. Upon entering into the agreements, Edwards received an initial delivery of 3.2 million shares. The initial shares were valued at $83.60 per share based on the closing price of the Company's common stock on the date of the agreements, and represented approximately 82% of the total contract value. In April 2016, one of the ASR agreements concluded at a VWAP less discount per share price of $84.39 , and the Company received an additional 0.3 million shares under that agreement. In October 2016, the remaining ASR agreement concluded at a VWAP less discount per share price of $101.82 , and the Company received an additional 44 thousand shares under that agreement. The ASR agreements were accounted for as two separate transactions: (a) the value of the initial delivery of shares was recorded as shares of common stock acquired in a treasury stock transaction on the acquisition date and (b) the remaining amount of the purchase price paid was recorded as a forward contract indexed to the Company's own common stock and was recorded in " Additional Paid-in Capital " on the consolidated balance sheets. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. The Company determined that the forward contract indexed to the Company's common stock met all the applicable criteria for equity classification and, therefore, was not accounted for as a derivative instrument. Employee and Director Stock Plans The Edwards Lifesciences Corporation Long-term Stock Incentive Compensation Program (the "Program") provides for the grant of incentive and non-qualified stock options, restricted stock, and restricted stock units for eligible employees and contractors of the Company. Under the Program, these grants are awarded at a price equal to the fair market value at the date of grant based upon the closing price on that date. Options to purchase shares of the Company's common stock granted under the Program generally vest over predetermined periods of between three to four years and expire seven years after the date of grant. Service-based restricted stock units of the Company's common stock granted under the Program generally vest over predetermined periods ranging from three to five years after the date of grant. Market-based restricted stock units of the Company's common stock granted under the Program vest over three years 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 stockholder return relative to a selected industry peer group. Performance-based restricted stock units vest based on a combination of certain service conditions and upon achievement of specified milestones. On May 12, 2016, an amendment and restatement of the Program was approved by the Company's stockholders. Under the amended Program, the number of shares of common stock available for issuance under the Program was 107.8 million shares. No more than 11.2 million shares reserved for issuance may be granted in the form of restricted stock or restricted stock units. The Company also maintains the Nonemployee Directors Stock Incentive Compensation Program (the "Nonemployee Directors Program"). Under the Nonemployee Directors Program, upon a director's initial election to the Board, the director receives an initial grant of stock options or restricted stock units equal to a fair market value on grant date of $0.2 million , not to exceed 20,000 shares. These grants vest over three years from the date of grant, subject to the director's continued service. In addition, annually each nonemployee director may receive up to 40,000 stock options or 16,000 restricted stock units of the Company's common stock, or a combination thereof, provided that in no event may the total value of the combined annual award exceed $0.2 million . These grants generally vest over one year from the date of grant. Under the Nonemployee Directors Program, an aggregate of 2.8 million shares of the Company's common stock has been authorized for issuance. The Company has an employee stock purchase plan for United States employees and a plan for international employees (collectively "ESPP"). Under the ESPP, eligible employees may purchase shares of the Company's common stock at 85% of the lower of the fair market value of Edwards Lifesciences common stock on the effective date of subscription or the date of purchase. Under the ESPP, employees can authorize the Company to withhold up to 12% of their compensation for common stock purchases, subject to certain limitations. The ESPP is available to all active employees of the Company paid from the United States payroll and to eligible employees of the Company outside the United States, to the extent permitted by local law. The ESPP for United States employees is qualified under Section 423 of the Internal Revenue Code. The number of shares of common stock authorized for issuance under the ESPP was 13.8 million shares. The fair value of each option award and employee stock purchase subscription is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following tables. The risk-free interest rate is estimated using the U.S. Treasury yield curve and is based on the expected term of the award. Expected volatility is estimated based on a blend of the weighted-average of the historical volatility of Edwards Lifesciences' stock and the implied volatility from traded options on Edwards Lifesciences' stock. The expected term of awards granted is estimated from the vesting period of the award, as well as historical exercise behavior, and represents the period of time that awards granted are expected to be outstanding. The Company uses historical data to estimate forfeitures and has estimated an annual forfeiture rate of 6.0% . The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods: Option Awards 2016 2015 2014 Average risk-free interest rate 1.1 % 1.4 % 1.5 % Expected dividend yield None None None Expected volatility 33 % 30 % 31 % Expected life (years) 4.5 4.6 4.6 Fair value, per share $ 31.00 $ 18.13 $ 11.75 The Black-Scholes option pricing model was used with the following weighted-average assumptions for ESPP subscriptions granted during the following periods: ESPP 2016 2015 2014 Average risk-free interest rate 0.3 % 0.2 % 0.1 % Expected dividend yield None None None Expected volatility 29 % 28 % 30 % Expected life (years) 0.6 0.6 0.6 Fair value, per share $ 22.09 $ 15.59 $ 8.59 The fair value of 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 during the years ended December 31, 2016 , 2015 , and 2014 included a risk-free interest rate of 1.0% , 1.0% , and 0.9% , respectively, and an expected volatility rate of 30.0% , 31.0% , and 31.7% , respectively. Stock option activity during the year ended December 31, 2016 under the Program and the Nonemployee Directors Program was as follows (in millions, except years and per-share amounts): Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2015 11.6 $ 41.14 Options granted 1.0 105.30 Options exercised (2.4 ) 30.49 Options forfeited (0.2 ) 54.95 Outstanding as of December 31, 2016 10.0 49.85 3.6 years $ 450.4 Exercisable as of December 31, 2016 6.5 40.99 2.8 years 345.3 Vested and expected to vest as of December 31, 2016 9.6 49.08 3.5 years 437.1 The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2016 under the Program and the Nonemployee Directors Program (in millions, except per-share amounts): Shares Weighted- Average Grant-Date Fair Value Nonvested as of December 31, 2015 1.6 $ 47.99 Granted (a) 0.4 84.67 Vested (0.5 ) 35.06 Forfeited (0.1 ) 51.97 Nonvested as of December 31, 2016 1.4 63.59 _______________________________________________________________________________ (a) Includes 46,200 shares of market-based restricted stock units granted during 2016 , which represents the targeted number of shares to be issued, and 107,755 shares related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of target. As described above, the actual number of shares ultimately issued is determined based on the Company's total stockholder return relative to a selected industry peer group. The intrinsic value of stock options exercised and restricted stock units vested during the years ended December 31, 2016 , 2015 , and 2014 were $237.6 million , $164.4 million , and $158.8 million , respectively. The intrinsic value of stock options is calculated as the amount by which the market price of the Company's common stock exceeds the exercise price of the option. During the years ended December 31, 2016 , 2015 , and 2014 , the Company received cash from exercises of stock options of $73.1 million , $63.6 million , and $93.2 million , respectively, and realized tax benefits from exercises of stock options and vesting of restricted stock units of $78.5 million , $53.7 million , and $51.9 million , respectively. The total grant-date fair value of stock options vested during the years ended December 31, 2016 , 2015 , and 2014 were $24.1 million , $23.1 million , and $22.6 million , respectively. As of December 31, 2016 , the total remaining unrecognized compensation expense related to nonvested stock options, restricted stock units, and employee stock purchase subscriptions amounted to $96.8 million , which will be amortized over the weighted-average remaining requisite service period of 30 months . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Presented below is a summary of activity for each component of " Accumulated Other Comprehensive Loss " for the years ended December 31, 2016 , 2015 , and 2014 . Foreign Currency Translation Adjustments Unrealized Gain on Cash Flow Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Pension Costs (a) Total Accumulated Other Comprehensive Loss (in millions) December 31, 2013 $ (20.2 ) $ 3.5 $ 0.3 $ (11.2 ) $ (27.6 ) Other comprehensive (loss) income before reclassifications (96.2 ) 54.3 (0.8 ) (7.1 ) (49.8 ) Amounts reclassified from accumulated other comprehensive loss — (7.6 ) 0.4 0.2 (7.0 ) Deferred income tax (expense) benefit — (17.9 ) 0.1 1.3 (16.5 ) December 31, 2014 (116.4 ) 32.3 — (16.8 ) (100.9 ) Other comprehensive (loss) income before reclassifications (64.0 ) 35.3 (2.6 ) 5.4 (25.9 ) Amounts reclassified from accumulated other comprehensive loss — (68.0 ) 1.1 1.2 (65.7 ) Deferred income tax (expense) benefit (1.1 ) 12.2 — (1.2 ) 9.9 December 31, 2015 (181.5 ) 11.8 (1.5 ) (11.4 ) (182.6 ) Other comprehensive (loss) income before reclassifications (17.6 ) 16.1 0.7 (7.7 ) (8.5 ) Amounts reclassified from accumulated other comprehensive loss — (8.0 ) 1.1 — (6.9 ) Deferred income tax benefit (expense) 1.5 (3.2 ) (0.2 ) 1.5 (0.4 ) December 31, 2016 $ (197.6 ) $ 16.7 $ 0.1 $ (17.6 ) $ (198.4 ) _______________________________________________________________________________ (a) For the years ended December 31, 2016 , 2015 , and 2014 , the change in unrealized pension costs consisted of the following (in millions): Pre-Tax Tax Benefit (Expense) Net of Tax 2016 Prior service credit arising during period $ (9.0 ) $ 1.0 $ (8.0 ) Amortization of prior service credit (0.7 ) — (0.7 ) Net prior service cost arising during period (9.7 ) 1.0 (8.7 ) Net actuarial gain arising during period 2.0 0.5 2.5 Unrealized pension credits, net $ (7.7 ) $ 1.5 $ (6.2 ) 2015 Prior service credit arising during period $ 2.9 $ (0.3 ) $ 2.6 Amortization of prior service credit (0.4 ) 0.1 (0.3 ) Net prior service credit arising during period 2.5 (0.2 ) 2.3 Net actuarial gain arising during period 4.1 (1.0 ) 3.1 Unrealized pension costs, net $ 6.6 $ (1.2 ) $ 5.4 2014 Prior service cost arising during period $ 0.8 $ — $ 0.8 Amortization of prior service credit (0.3 ) — (0.3 ) Net prior service credit arising during period 0.5 — 0.5 Net actuarial loss arising during period (7.4 ) 1.3 (6.1 ) Unrealized pension credits, net $ (6.9 ) $ 1.3 $ (5.6 ) The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Years Ended December 31, Details about Accumulated Other Comprehensive Loss Components 2016 2015 Affected Line on Consolidated Statements of Operations Gain on cash flow hedges $ 8.0 $ 68.0 Cost of sales (3.4 ) (25.0 ) Provision for income taxes $ 4.6 $ 43.0 Net of tax Gain (loss) on available-for-sale investments $ (1.1 ) $ (1.1 ) Other expense, net — — Provision for income taxes $ (1.1 ) $ (1.1 ) Net of tax Amortization of pension adjustments $ — $ (1.2 ) (a) — 0.2 Provision for income taxes $ — $ (1.0 ) Net of tax _______________________________________________________________________________ (a) This item is included in the components of net periodic benefit costs. See Note 12 for additional information. |
OTHER EXPENSE, NET
OTHER EXPENSE, NET | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE, NET | OTHER EXPENSE, NET Years Ended December 31, 2016 2015 2014 (in millions) Charitable foundation contribution $ 5.0 $ — $ — Foreign exchange losses, net 0.5 4.8 2.0 (Gain) loss on investments (0.2 ) (0.1 ) 4.5 Promissory note impairment — — 4.0 Insurance settlement gain — — (3.7 ) Lease contract termination costs — — 1.0 Other (0.4 ) (0.7 ) (0.1 ) Total other expense, net $ 4.9 $ 4.0 $ 7.7 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's income before provision for income taxes was generated from United States and international operations as follows (in millions): Years Ended December 31, 2016 2015 2014 United States $ 378.2 $ 182.8 $ 791.1 International, including Puerto Rico 359.7 439.6 352.9 $ 737.9 $ 622.4 $ 1,144.0 The provision for income taxes consists of the following (in millions): Years Ended December 31, 2016 2015 2014 Current United States: Federal $ 153.4 $ 102.4 $ 341.5 State and local 12.1 7.4 23.3 International, including Puerto Rico 27.4 33.5 34.8 Current income tax expense $ 192.9 $ 143.3 $ 399.6 Deferred United States: Federal $ (19.6 ) $ (12.5 ) $ (46.4 ) State and local (4.3 ) (2.6 ) (8.1 ) International, including Puerto Rico (0.6 ) (0.7 ) (12.2 ) Deferred income tax benefit (24.5 ) (15.8 ) (66.7 ) Total income tax provision $ 168.4 $ 127.5 $ 332.9 The components of deferred tax assets and liabilities are as follows (in millions): December 31, 2016 2015 Deferred tax assets Compensation and benefits $ 100.8 $ 94.0 Benefits from uncertain tax positions 56.7 50.0 Net tax credit carryforwards 45.6 39.3 Net operating loss carryforwards 30.2 27.0 Accrued liabilities 29.4 24.2 Inventories 11.5 11.9 State income taxes 2.4 0.5 Investments 2.6 2.6 Other intangible assets 4.2 3.8 Other 3.1 4.5 Total deferred tax assets 286.5 257.8 Deferred tax liabilities Property, plant, and equipment (28.2 ) (25.1 ) Cash flow hedges (1.2 ) (0.4 ) Deferred tax on foreign earnings (6.0 ) (10.9 ) Inventories (4.1 ) (0.9 ) Other intangible assets (4.2 ) (4.1 ) Other (0.2 ) (0.5 ) Total deferred tax liabilities (43.9 ) (41.9 ) Valuation allowance (47.7 ) (45.2 ) Net deferred tax assets $ 194.9 $ 170.7 During 2016 , net deferred tax assets increased $24.2 million , including items that were recorded to stockholders' equity and which did not impact the Company's income tax provision. The valuation allowance of $47.7 million as of December 31, 2016 reduces certain deferred tax assets to amounts that are more likely than not to be realized. This allowance primarily relates to the net operating loss carryforwards of certain United States and non-United States subsidiaries, and to the deferred tax assets established for impairment losses on certain investments and for certain non-United States credit carryforwards. A valuation allowance of $2.6 million has been provided for other-than-temporary impairments and unrealized losses related to certain investments that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments. Net operating loss carryforwards and the related carryforward periods at December 31, 2016 are summarized as follows (in millions): Carryforward Tax Benefit Valuation Net Tax Carryforward United States state net operating losses $ 10.6 $ 0.6 $ (0.3 ) $ 0.3 2017-2034 Non-United States net operating losses 57.2 14.3 (13.9 ) 0.4 2017-2025 Non-United States net operating losses 46.4 15.6 (15.6 ) — Indefinite Total $ 114.2 $ 30.5 $ (29.8 ) $ 0.7 Tax credit carryforwards and the related carryforward periods at December 31, 2016 are summarized as follows (in millions): Carryforward Valuation Net Tax Carryforward California research expenditure tax credits $ 76.6 $ — $ 76.6 Indefinite Puerto Rico purchases credit 14.4 (14.4 ) — Indefinite Total $ 91.0 $ (14.4 ) $ 76.6 The Company has $76.6 million of California research expenditure tax credits it expects to use in future periods. The credits may be carried forward indefinitely. Based upon anticipated future taxable income, the Company expects that it is more likely than not that all California research expenditure tax credits will be utilized, although the utilization of the full benefit is expected to occur over a number of years and into the distant future. Accordingly, no valuation allowance has been provided. The United States state net operating loss carryforwards include $6.0 million of losses attributable to windfall stock option deductions. A net benefit of $0.3 million will be recorded to " Additional Paid-in Capital " when realized as a reduction to income taxes payable. Approximately $9.0 million of the California research expenditure tax credit carryforwards are attributable to windfall stock option deductions and will be recorded as a benefit to " Additional Paid-in Capital " when realized as a reduction to income taxes payable. Deferred income taxes have not been provided on the undistributed earnings of certain of the Company's foreign subsidiaries of approximately $2,187.1 million as of December 31, 2016 since these amounts are intended to be indefinitely reinvested in foreign operations. It is not practicable to calculate the deferred taxes associated with these earnings because of the variability of multiple factors that would need to be assessed at the time of any assumed repatriation; however, foreign tax credits would likely be available to reduce federal income taxes in the event of distribution. In making this assertion, the Company evaluates, among other factors, the profitability of its United States and foreign operations and the need for cash within and outside the United States, including cash requirements for capital improvement, acquisitions, market expansion, and stock repurchase programs. The Company does not expect any earnings for certain of its other foreign subsidiaries to be indefinitely reinvested and records the tax impact in net income currently. The Company has received tax incentives in certain non-U.S. tax jurisdictions, the primary benefit of which will expire in 2024. The tax reductions as compared to the local statutory rates were $77.4 million ( $0.32 per diluted share), $59.1 million ( $0.25 per diluted share), and $68.3 million ( $0.31 per diluted share) for the years ended December 31, 2016 , 2015 , and 2014 , respectively. A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in millions): Years Ended December 31, 2016 2015 2014 Income tax expense at U.S. federal statutory rate $ 258.3 $ 217.8 $ 400.4 Foreign income taxed at different rates (88.6 ) (105.8 ) (67.1 ) State and local taxes, net of federal tax benefit 9.7 3.1 19.3 Tax credits, federal and state (21.3 ) (15.7 ) (13.5 ) Build (release) of reserve for uncertain tax positions for prior years 4.6 3.3 (4.8 ) U.S. tax on foreign earnings, net of credits 5.1 20.5 (3.1 ) Nondeductible stock-based compensation 3.6 2.3 2.1 Other (3.0 ) 2.0 (0.4 ) Income tax provision $ 168.4 $ 127.5 $ 332.9 The effective income tax rate for the year ended December 31, 2016 was higher than the rate for the year ended December 31, 2015 primarily because of fluctuations in the relative contribution of the Company's foreign operations and United States operations to worldwide pre-tax income, offset by an increase in benefits from the federal and California research credits. The effective income tax rate for December 31, 2014 included (1) $262.1 million of tax expense associated with a $750.0 million litigation settlement payment received in May 2014 (see Note 3) and (2) $4.8 million of tax benefits from the remeasurement of uncertain tax positions. Uncertain Tax Positions As of December 31, 2016 and 2015 , the gross uncertain tax positions were $245.5 million and $216.1 million , respectively. The Company estimates that these liabilities would be reduced by $44.9 million and $40.6 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 $200.6 million and $175.5 million , respectively, if not required, would favorably affect the Company's effective tax rate. A reconciliation of the beginning and ending amount of uncertain tax positions, excluding interest, penalties, and foreign exchange, is as follows (in millions): December 31, 2016 2015 2014 Uncertain gross tax positions, January 1 $ 216.1 $ 192.3 $ 127.7 Current year tax positions 29.0 29.6 75.9 Increase prior year tax positions 2.7 2.2 0.6 Decrease prior year tax positions (0.9 ) (7.4 ) (10.5 ) Settlements (0.3 ) (0.4 ) (1.0 ) Lapse of statutes of limitations (1.1 ) (0.2 ) (0.4 ) Uncertain gross tax positions, December 31 $ 245.5 $ 216.1 $ 192.3 The Company recognizes interest and penalties, if any, related to uncertain tax positions in the provision for income taxes. As of December 31, 2016 , the Company had accrued $14.7 million (net of $10.8 million tax benefit) of interest related to uncertain tax positions, and as of December 31, 2015 , the Company had accrued $10.7 million (net of $7.6 million tax benefit) of interest related to uncertain tax positions. During 2016 , 2015 , and 2014 , the Company recognized interest expense, net of tax benefit, of $4.0 million , $3.9 million , and $2.3 million , respectively, in " Provision for Income Taxes " on the consolidated statements of operations. 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 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. Management believes that adequate amounts of tax and related penalty and interest have been provided in income tax expense for any adjustments that may result from these uncertain tax positions. At December 31, 2016 , all material state, local, and foreign income tax matters have been concluded for years through 2008. The Internal Revenue Service ("IRS") has substantially completed its fieldwork for the 2009 through 2012 tax years. However, the audits are currently in suspense pending a final determination with respect to a pending application for an Advance Pricing Agreement ("APA"). The IRS began its examination of the 2014 tax year during the fourth quarter of 2016. The Company has been pursuing an APA between the Switzerland and United States governments for the years 2009 through 2013 covering transfer pricing matters with the possibility of a roll-forward of the results to subsequent years. These discussions remain ongoing as of December 31, 2016. These transfer pricing matters are significant to the Company's consolidated financial statements as the disputed amounts are material, and the final outcome is uncertain. The Company continues to believe its positions are supportable. During 2014, the Company filed with the IRS a request for a pre-filing agreement associated with a tax return filing position on a portion of the litigation settlement payment received in May 2014 (see Note 3). During the first quarter of 2015, the IRS accepted the Company's request into the pre-filing agreement program. The closing agreement for this matter was finalized during the fourth quarter of 2016. There remains a disputed issue and the Company expects to enter the Fast-Track Appeals process during 2017. The Company made an advance payment of tax in December 2015 to prevent the further accrual of interest on any potential deficiency only and not to signify any potential agreement to a contrary position that may be taken by the IRS. The Company believes that adequate amounts of tax and related penalty and interest have been provided in income tax expense for any adjustments that may result from its uncertain tax positions. Based upon the information currently available and numerous possible outcomes, the Company cannot reasonably estimate what, if any, changes in its existing uncertain tax positions may occur in the next 12 months and thus have recorded the gross uncertain tax positions as a long-term liability. However, if the APA and/or the appeals process related to the pre-filing agreement is finalized in the next 12 months, it is reasonably possible that these events could result in a significant change in the Company's uncertain tax positions within the next 12 months. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | INTELLECTUAL PROPERTY LITIGATION EXPENSES (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 for past damages 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, subject to certain conditions, the royalty payments will be based on a percentage of Medtronic's sales of transcatheter aortic valves, with 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 (in millions): Past damages $ 754.3 License agreement 238.0 Covenant not to sue 77.7 Total $ 1,070.0 The Company recognized the upfront payment of $750.0 million in " Intellectual Property Litigation Expenses (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. The Company incurred external legal costs related to intellectual property litigation of $32.6 million , $7.0 million , and $9.6 million during 2016 , 2015 , and 2014 , respectively. The increase in intellectual property litigation expenses in 2016 was primarily due to the resolution of an intellectual property litigation matter, and the increased costs associated with ongoing litigation in the United States and Europe. LEGAL PROCEEDINGS On October 30, 2015, Boston Scientific Scimed, Inc., a subsidiary of Boston Scientific Corporation ("Boston Scientific"), filed a lawsuit in the district court in Düsseldorf, Germany against Edwards Lifesciences and its German subsidiary, Edwards Lifesciences Services GmbH, alleging that Edwards Lifesciences’ SAPIEN 3 heart valve infringes certain claims of a Boston Scientific German national patent arising from EP 2 749 254 B1 (the "'254 patent") related to paravalvular sealing technology. On February 26, 2016, Boston Scientific added the German national patent arising from EP 2 926 766 (the "'766 Patent") to the infringement allegations. On April 8, 2016, Boston Scientific filed a similar patent infringement action in district court in Paris, France relating to these patents. The complaints seek unspecified money damages and injunctive relief. The Company intends to defend itself vigorously in these matters. Trial in the German matter was held in February 2017 and the German district court's decision is expected in the first quarter of 2017. The French suit has been stayed pending the outcome of validity proceedings on the '766 and '254 patents. On November 2, 2015, Edwards Lifesciences LLC, a U.S. subsidiary of Edwards Lifesciences, filed a lawsuit against Sadra Medical, Inc. and Boston Scientific Scimed, Inc., two subsidiaries of Boston Scientific, in the United Kingdom in the High Court of Justice, Chancery Division, Patents Court to declare invalid and revoke the U.K. national patent corresponding to the '254 patent. Edwards Lifesciences later added Boston Scientific’s UK national patent corresponding to the '766 patent to this invalidity lawsuit. The Boston Scientific subsidiaries filed counterclaims against Edwards Lifesciences and three of its European subsidiaries alleging that the SAPIEN 3 heart valve infringes certain claims of the same patents and seeking unspecified monetary damages and injunctive relief. Trial on the U.K. matter was held in January 2017 and a decision is expected in the first half of 2017. On November 23, 2015, Edwards Lifesciences PVT, Inc., a U.S. subsidiary of Edwards Lifesciences, filed a lawsuit in the district court in Düsseldorf, Germany for patent infringement against Boston Scientific and a German subsidiary, Boston Scientific Medizintechnik GmbH, alleging that the Lotus heart valve infringes certain claims of Edwards Lifesciences’ German national patents EP 1 441 672 B1 and 2 255 753 B1 related to prosthetic valve and delivery system technology. Edwards Lifesciences later added its German national patent EP 2 399 550 to this suit. The complaint seeks unspecified monetary damages and injunctive relief. Trial in the German matter was held in February 2017 and the German district court's decision is expected in the first quarter of 2017. O n April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences in the Federal District Court in the District of Delaware alleging that the SAPIEN 3 heart valve infringes certain claims of Boston Scientific’s U.S. Patent 8,992,608 (the "'608 patent") related to paravalvular sealing technology and seeking unspecified monetary damages and injunctive relief. On June 9, 2016, Edwards Lifesciences LLC and Edwards Lifesciences PVT, Inc. filed counterclaims alleging that Boston Scientific’s Lotus heart valve infringes Edwards Lifesciences’ U.S. Patents 9,168,133; 9,339,383; and 7,510,575 related to prosthetic valve technology. Trial is scheduled for July 2018. On October 12, 2016, Edwards Lifesciences filed an Inter Partes Review ("IPR") request with the U.S. Patent and Trademark Office challenging the validity of Boston Scientific’s '608 patent. Also on April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences in the Federal District Court in the Central District of California alleging that five of its transcatheter heart valve delivery systems and a valve crimper infringe certain claims of eight Boston Scientific U.S. patents. The complaints seek unspecified monetary damages and injunctive relief. Trial is scheduled for May 2018. The Company intends to defend itself vigorously in these matters and has filed an IPR request related to the crimping device patent. Because the ultimate outcome of the above matters involve judgments, estimates and inherent uncertainties, and cannot be predicted with certainty, charges related to such matters could have a material adverse impact on Edwards Lifesciences' financial position, results of operations, and liquidity. In addition, 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 (the "Other Lawsuits"). The Other Lawsuits raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Management does not believe that any charge relating to the Other Lawsuits would have a material adverse effect on Edwards Lifesciences’ overall financial position, results of operations, or liquidity. However, the resolution of one or more of the Other Lawsuits in any reporting period, could have a material adverse impact on Edwards Lifesciences' net income or cash flows for that period. 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. 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Edwards Lifesciences conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease. The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic segments based on net sales and 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. 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): Years Ended December 31, 2016 2015 2014 Segment Net Sales United States $ 1,615.7 $ 1,262.8 $ 1,047.3 Europe 745.9 842.9 741.4 Japan 279.6 297.2 270.8 Rest of World 303.6 315.1 285.1 Total segment net sales $ 2,944.8 $ 2,718.0 $ 2,344.6 Segment Pre-tax Income United States $ 1,050.2 $ 747.8 $ 605.6 Europe 360.9 409.1 328.1 Japan 139.6 139.4 125.2 Rest of World 73.0 82.2 78.6 Total segment pre-tax income $ 1,623.7 $ 1,378.5 $ 1,137.5 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): Years Ended December 31, 2016 2015 2014 Net Sales Reconciliation Segment net sales $ 2,944.8 $ 2,718.0 $ 2,344.6 Foreign currency 18.9 (224.3 ) (21.7 ) Consolidated net sales $ 2,963.7 $ 2,493.7 $ 2,322.9 Pre-tax Income Reconciliation Segment pre-tax income $ 1,623.7 $ 1,378.5 $ 1,137.5 Unallocated amounts: Corporate items (826.1 ) (711.3 ) (659.2 ) Special charges (34.5 ) — (70.7 ) Intellectual property (expenses) income, net (32.6 ) (7.0 ) 740.4 Interest expense, net (8.4 ) (9.3 ) (10.8 ) Foreign currency 15.8 (28.5 ) 6.8 Consolidated pre-tax income $ 737.9 $ 622.4 $ 1,144.0 Enterprise-Wide Information Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated financial statements. As of or for the Years Ended 2016 2015 2014 (in millions) Net Sales by Geographic Area United States $ 1,615.7 $ 1,262.9 $ 1,047.3 Europe 749.0 717.3 744.5 Japan 309.3 246.2 257.9 Rest of World 289.7 267.3 273.2 $ 2,963.7 $ 2,493.7 $ 2,322.9 Net Sales by Major Product Area Transcatheter Heart Valve Therapy $ 1,628.5 $ 1,180.3 $ 943.6 Surgical Heart Valve Therapy 774.9 785.0 826.1 Critical Care 560.3 528.4 553.2 $ 2,963.7 $ 2,493.7 $ 2,322.9 Long-lived Tangible Assets by Geographic Area United States $ 555.5 $ 473.6 $ 347.6 Europe 27.9 36.0 42.1 Japan 8.0 8.1 8.5 Rest of World 108.6 96.0 93.9 $ 700.0 $ 613.7 $ 492.1 |
QUARTERLY FINANCIAL RESULTS AND
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) | QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) Years Ended December 31, First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (in millions, except per share data) 2016 Net sales $ 697.3 $ 759.3 $ 739.4 $ 767.7 $ 2,963.7 Gross profit 517.0 556.8 538.0 554.5 2,166.3 Net income 143.0 126.6 141.4 158.5 569.5 Earnings per common share: Basic 0.67 0.60 0.66 0.74 2.67 Diluted 0.66 0.58 0.65 0.73 2.61 Market price: High $ 89.93 $ 112.00 $ 121.73 $ 121.75 $ 121.75 Low 72.20 86.73 98.02 81.12 72.20 2015 Net sales $ 590.3 $ 616.8 $ 615.5 $ 671.1 $ 2,493.7 Gross profit 454.3 458.2 468.8 495.2 1,876.5 Net income 123.4 112.7 118.1 140.7 494.9 Earnings per common share: Basic 0.57 0.52 0.55 0.65 2.30 Diluted 0.56 0.51 0.54 0.64 2.25 Market price: High $ 75.21 $ 73.65 $ 79.50 $ 83.43 $ 83.43 Low 61.99 61.38 62.53 70.32 61.38 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | VALUATION AND QUALIFYING ACCOUNTS Additions Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions From Reserves Balance at End of Period (in millions) Year ended December 31, 2016 Allowance for doubtful accounts (a) $ 13.1 $ 1.5 $ — $ (1.8 ) $ 12.8 Tax valuation allowance (b) 45.2 1.2 1.3 — 47.7 Year ended December 31, 2015 Allowance for doubtful accounts (a) $ 11.3 $ 3.8 $ — $ (2.0 ) $ 13.1 Tax valuation allowance (b) 47.7 4.8 — (7.3 ) 45.2 Year ended December 31, 2014 Allowance for doubtful accounts (a) $ 12.2 $ 0.8 $ — $ (1.7 ) $ 11.3 Tax valuation allowance (b) 46.4 2.0 — (0.7 ) 47.7 _______________________________________________________________________________ (a) The deductions related to allowances for doubtful accounts represent accounts receivable which are written off. (b) The tax valuation allowances are provided for other-than-temporary impairments and unrealized losses related to certain investments that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments, and net operating loss and credit carryforwards that may not be recognized due to insufficient taxable income. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Edwards Lifesciences and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company reviews its investments in other entities to determine whether the Company is the primary beneficiary of a variable interest entity ("VIE"). The Company would be the primary beneficiary of the VIE, and would be required to consolidate the VIE, if it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant to the VIE. Based on the Company's analysis, it determined it is not the primary beneficiary of any VIEs; however, future events may require VIEs to be consolidated if the Company becomes the primary beneficiary. |
Use of Estimates | Use of Estimates The consolidated financial statements of Edwards Lifesciences have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") which have been applied consistently in all material respects. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation When the local currency of the Company's foreign entities is the functional currency, all assets and liabilities are translated into United States dollars at the rate of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted-average exchange rate prevailing during the period. The effects of foreign currency translation adjustments for these entities are deferred and reported in stockholders' equity as a component of " Accumulated Other Comprehensive Loss ." The effects of foreign currency transactions denominated in a currency other than an entity's functional currency are included in " Other Expense, net. " |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when it is realized or realizable and earned. Revenue is considered realized or realizable and earned upon delivery of the product, provided that an agreement of sale exists, the sales price is fixed or determinable, and collection is reasonably assured. In the case of certain products where the Company maintains consigned inventory at customer locations, revenue is recognized at the time the customer has used the inventory. The Company's principal sales terms provide for title and risk of loss transferring upon delivery to the customer, limited right of return, and no unusual provisions or conditions. When the Company recognizes revenue from the sale of its products, an estimate of various sales returns and allowances is recorded which reduces product sales and accounts receivable. These adjustments include estimates for rebates, returns, and other sales allowances. These provisions are estimated and recorded at the time of sale based upon historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. Other than in limited circumstances, product returns are not significant because returns are generally not allowed unless the product is damaged at time of receipt. In addition, the Company may allow customers to return previously purchased products for next-generation product offerings. For these transactions, the Company defers recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer. The Company's sales adjustment related to distributor rebates given to the Company's United States distributors represents the difference between the Company's sales price to the distributor (at the Company's distributor "list price") and the negotiated price to be paid by the end-customer. This distributor rebate is recorded by the Company as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. The Company validates the distributor rebate accrual quarterly through either a review of the inventory reports obtained from its distributors or an estimate of its distributor's inventory. This distributor inventory information is used to verify the estimated liability for future distributor rebate claims based on historical rebates and contract rates. The Company periodically monitors current pricing trends and distributor inventory levels to ensure the credit for future distributor rebates is fairly stated. The Company also offers volume rebates to certain group purchasing organizations ("GPOs") and customers based upon target sales levels. For volume rebates offered to GPOs, the rebates are recorded as a reduction to sales and an obligation to the GPOs, as the Company expects to pay in cash. For volume rebates offered to customers, the rebates are recorded as a reduction to sales and accounts receivable, as the Company expects a net payment from the customer. The provision for volume rebates is estimated based on customers' contracted rebate programs and historical experience of rebates paid. The Company periodically monitors its customer rebate programs to ensure that the allowance and liability for accrued rebates is fairly stated. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping costs, which are costs incurred to physically move product from the Company's premises to the customer's premises, are included in " Selling, General, and Administrative Expenses ." Handling costs, which are costs incurred to store, move, and prepare products for shipment, are included in " Cost of Sales ." |
Cash Equivalents | Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are valued at cost, which approximates fair value. |
Investments | Investments The Company invests its excess cash in fixed-rate debt securities, including time deposits, commercial paper, U.S. government and agency securities, asset-backed securities, corporate debt securities, and municipal debt securities. Investments with maturities of one year or less are classified as short-term, and investments with maturities greater than one year are classified as long-term. Investments that the Company has the ability and intent to hold until maturity are classified as held-to-maturity and carried at amortized cost. Investments that are classified as available-for-sale are carried at fair value with unrealized gains and losses included in " Accumulated Other Comprehensive Loss ." The Company determines the appropriate classification of its investments in fixed-rate debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company also has long-term equity investments in companies that are in various stages of development. These investments are designated as available-for-sale. Other investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company's investment and adjusted each period for the Company's share of the investee's income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment's fair value. Realized gains and losses on investments that are sold are determined using the specific identification method, or the first-in, first-out method, depending on the investment type, and recorded to " Other Expense, net ." Income relating to investments in fixed-rate debt securities is recorded to " Interest Income. " The Company periodically reviews its investments for impairment. When the fair value of an investment declines below cost, management uses the following criteria to determine if such a decline should be considered other-than-temporary and result in a recognized loss: • the duration and extent to which the market value has been less than cost; • the financial condition and near term prospects of the investee/issuer; • the reasons for the decline in market value; • the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value; and • the investee's performance against product development milestones. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. When evaluating its allowances for doubtful accounts related to receivables from customers in certain European countries that have historically paid beyond the stated terms, the Company's analysis considers a number of factors including evidence of the customer's ability to comply with credit terms, economic conditions, and procedures implemented by the Company to collect the historical receivables. Additional allowances for doubtful accounts may be required if there is deterioration in past due balances, if economic conditions are less favorable than the Company has anticipated, or for customer-specific circumstances, such as financial difficulty. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market value. Market value for raw materials is based on replacement costs, and for other inventory classifications is based on net realizable value. A write-down for excess or slow moving inventory is recorded for inventory which is obsolete, nearing its expiration date (generally triggered at six months prior to expiration), is damaged, or slow moving (generally defined as quantities in excess of a two -year supply). The allowance for excess and slow moving inventory was $29.1 million and $30.1 million at December 31, 2016 and 2015 , respectively. The Company allocates to inventory general and administrative costs that are related to the production process. These costs include insurance, manufacturing accounting personnel, human resources personnel, and information technology. |
Property, Plant and Equipment | Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Depreciation is principally calculated for financial reporting purposes on the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, from 3 to 15 years for machinery and equipment, and from 3 to 7 years for software. Leasehold improvements are amortized over the life of the related facility leases or the asset, whichever is shorter. Straight-line and accelerated methods of depreciation are used for income tax purposes. |
Impairment of Goodwill and Long-lived Assets | Impairment of Goodwill and Long-lived Assets Goodwill is reviewed for impairment annually in the fourth quarter of each fiscal year or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The Company identifies its reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including existing goodwill, to those reporting units. The fair value of the reporting unit is estimated based on the Company's market capitalization and a market revenue multiple. If the carrying value of the reporting unit exceeds its estimated fair value, then the Company measures the amount of the impairment loss by comparing the implied fair value of goodwill to its carrying value. In 2016 , 2015 , and 2014 , the Company did not record any impairment loss as the fair value of each reporting unit significantly exceeded its respective carrying value. Indefinite-lived intangible assets relate to in-process research and development ("IPR&D") acquired in business combinations. The estimated fair values of IPR&D projects acquired in a business combination which have not reached technological feasibility are capitalized and accounted for as indefinite-lived intangible assets subject to impairment testing until completion or abandonment of the projects. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If the project is abandoned, all remaining capitalized amounts are written off immediately. Indefinite-lived intangible assets are reviewed for impairment annually, or whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. IPR&D projects acquired in an asset acquisition are expensed unless the project has an alternative future use. In 2016 , 2015 , and 2014 , the Company did not record any impairment loss related to its IPR&D assets. Management reviews the carrying amounts of other finite-lived intangible assets and long-lived tangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and adjusting the amount, if necessary. The factors used to assess the likelihood of realization are both historical experience and the Company's forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in the Company's effective tax rate on future earnings. When assessing whether a windfall tax benefit relating to stock-based compensation has been realized, the Company follows the with and without approach, under which the windfall benefit is recognized only if an incremental benefit is provided after considering all other tax attributes presently available to the Company. Consideration is given only to the direct impact of stock awards when calculating the amount of windfalls and shortfalls. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company's uncertain tax positions and determining its provision for income taxes. The Company recognizes the financial statement benefit of a tax position only after determining that a position would more likely than not be sustained based upon its technical merit if challenged by the relevant taxing authority and taken by management to the court of last resort. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority. The Company recognizes interest and penalties related to income tax matters in income tax expense. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense when incurred. |
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during a period. 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 and in-the-money options. The dilutive impact of the 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. |
Stock-based Compensation | Stock-based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values. Stock-based awards consist of stock options, restricted stock units (service-based, market-based, and performance-based), and employee stock purchase subscriptions. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period (vesting period) on a straight-line basis. For performance-based restricted stock units, the Company recognizes stock-based compensation expense if and when the Company concludes that it is probable that the performance condition will be achieved, net of estimated forfeitures. The Company reassesses the probability of vesting at each quarter end and adjusts the stock-based compensation expense based on its probability assessment. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon exercise of stock options or vesting of restricted stock units, the Company issues common stock. Total stock-based compensation expense was as follows (in millions): Years Ended December 31, 2016 2015 2014 Cost of sales $ 8.4 $ 6.8 $ 6.1 Selling, general, and administrative expenses 38.0 34.3 34.9 Research and development expenses 10.5 8.8 7.3 Total stock-based compensation expense $ 56.9 $ 49.9 $ 48.3 Upon retirement, all unvested stock options and performance-based restricted stock units are immediately forfeited. In addition, upon retirement, a participant will immediately vest in 25% of service-based restricted stock units for each full year of employment with the Company measured from the grant date. All remaining unvested service-based restricted stock units are immediately forfeited. For market-based restricted stock units, upon retirement and in certain other specified cases, a participant will receive a pro-rated portion of the shares that would ultimately be issued based on attainment of the performance goals as determined on the vesting date. The pro-rated portion is based on the participant's whole months of service with the Company during the performance period prior to the date of termination. |
Derivatives | Derivatives 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 local currency 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 principally from intercompany and local currency 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. The Company also uses foreign currency forward exchange contracts to protect its net investment in certain foreign subsidiaries from adverse changes in foreign currency exchange rates. These foreign currency forward exchange contracts are designated as net investment hedges. 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 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. The effective portions of net investment hedges are reported in " Accumulated Other Comprehensive Loss " as a part of the cumulative translation adjustment, and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The ineffective portions of cash flow hedges and net investment hedges are recorded in current period earnings. During 2016 , 2015 , and 2014 , 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 statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities. 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. |
Recently Adopted Accounting Standards and New Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In September 2015, the Financial Accounting Standards Board ("FASB") issued an update to the guidance on business combinations. The new guidance requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this guidance did not impact the Company's consolidated financial statements. In April 2015, the FASB issued an amendment to the accounting guidance on the presentation of debt issuance costs. The guidance requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt, consistent with debt discounts. In August 2015, the FASB clarified that for a line-of-credit arrangement, a company can continue to defer and present debt issuance costs as an asset and subsequently amortize the debt issuance costs over the term of the line-of-credit arrangement, whether or not there are any outstanding borrowings on the line-of-credit arrangement. The guidance was effective for annual reporting periods beginning after December 31, 2015 and interim periods within those periods, and must be applied retrospectively to each prior reporting period presented. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. New Accounting Standards Not Yet Adopted In January 2017, the FASB issued an amendment to the guidance on intangible assets. The amendment simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Instead, under this amendment, an entity performs its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this guidance will impact its consolidated financial statements. In January 2017, the FASB issued an amendment to the guidance on business combinations. The amendment clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. In August 2016, the FASB issued an amendment to the guidance on the statement of cash flows. The standard addresses eight specific cash flow issues, and is intended to reduce the diversity in practice around how certain transactions are classified within the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted. This guidance will impact how the Company classifies contingent consideration payments made after a business combination. Contingent consideration payments that are not made soon after the acquisition date will be classified as a financing activity up to the amount of the contingent consideration liability recognized at the acquisition date, with any excess classified as an operating activity. The Company does not expect the adoption of the other provisions of this guidance will have a material impact on its consolidated financial statements. In March 2016, the FASB issued an amendment to the guidance on stock compensation. The amendment simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company anticipates that adoption of this guidance will introduce more volatility to its effective tax rate, generally reducing the rate. In February 2016, the FASB issued an amendment to the guidance on leases. The amendment improves transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. 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. In August 2015, the FASB issued an update to the guidance to defer the effective date by one year, such that the new standard will be effective for annual reporting periods beginning after December 15, 2017 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 assessing all of the potential impacts of the revenue recognition guidance and has not yet selected an adoption method. The Company will adopt the new guidance effective January 1, 2018. Although the Company has not yet completed its assessment of the new revenue recognition guidance, the Company's analysis of contracts related to the sale of its heart valve therapy products under the new revenue recognition guidance supports the recognition of revenue at a point-in-time, which is consistent with its current revenue recognition model. Heart valve therapy sales accounted for approximately 80% of the Company's sales for the year ended December 31, 2016. The Company is currently assessing the potential impact of the guidance on contracts related to the sale of its critical care products, specifically sales outside of the United States. |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): Years Ended December 31, 2016 2015 2014 Basic: Net income $ 569.5 $ 494.9 $ 811.1 Weighted-average shares outstanding 213.0 215.5 213.0 Basic earnings per share $ 2.67 $ 2.30 $ 3.81 Diluted: Net income $ 569.5 $ 494.9 $ 811.1 Weighted-average shares outstanding 213.0 215.5 213.0 Dilutive effect of stock plans 4.8 4.8 4.0 Dilutive weighted-average shares outstanding 217.8 220.3 217.0 Diluted earnings per share $ 2.61 $ 2.25 $ 3.74 |
Schedule of Stock-Based Compensation Expense | Total stock-based compensation expense was as follows (in millions): Years Ended December 31, 2016 2015 2014 Cost of sales $ 8.4 $ 6.8 $ 6.1 Selling, general, and administrative expenses 38.0 34.3 34.9 Research and development expenses 10.5 8.8 7.3 Total stock-based compensation expense $ 56.9 $ 49.9 $ 48.3 |
INTELLECTUAL PROPERTY LITIGAT30
INTELLECTUAL PROPERTY LITIGATION EXPENSES (INCOME), NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Consideration Assigned to Identifiable Elements | The consideration assigned to each element was as follows (in millions): Past damages $ 754.3 License agreement 238.0 Covenant not to sue 77.7 Total $ 1,070.0 |
SPECIAL CHARGES (Tables)
SPECIAL CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Special Charges | Years Ended December 31, 2016 2015 2014 (in millions) Acquisition of IPR&D $ 34.5 $ — $ 10.2 Charitable foundation contribution — — 50.0 Settlement — — 7.5 Asset write-down — — 3.0 Total special charges $ 34.5 $ — $ 70.7 |
COMPOSITION OF CERTAIN FINANC32
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Selected Captions in the Consolidated Balance Sheets | Components of selected captions in the consolidated balance sheets are as follows: As of December 31, 2016 2015 (in millions) Accounts receivable, net Trade accounts receivable $ 374.5 $ 322.2 Allowance for doubtful accounts (9.0 ) (6.8 ) $ 365.5 $ 315.4 Inventories Raw materials $ 60.6 $ 63.8 Work in process 102.4 64.1 Finished products 233.6 212.0 $ 396.6 $ 339.9 Property, plant, and equipment, net Land $ 30.1 $ 25.1 Buildings and leasehold improvements 367.2 293.4 Machinery and equipment 346.5 328.6 Equipment with customers 37.4 34.6 Software 100.6 97.4 Construction in progress 79.6 75.2 961.4 854.3 Accumulated depreciation (381.4 ) (371.8 ) $ 580.0 $ 482.5 Accrued and other liabilities Employee compensation and withholdings $ 216.1 $ 209.4 Research and development accruals 40.0 38.6 Property, payroll, and other taxes 35.3 34.5 Accrued rebates 36.1 23.9 Accrued marketing expenses 12.6 9.6 Taxes payable 5.9 14.5 Litigation reserves (Note 17) 7.8 5.6 Fair value of derivatives 3.3 4.2 Other accrued liabilities 78.3 72.0 $ 435.4 $ 412.3 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments in Debt Securities | Investments in debt securities at the end of each period were as follows (in millions): December 31, 2016 December 31, 2015 Held-to-maturity Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 217.0 $ — $ — $ 217.0 $ 440.1 $ — $ — $ 440.1 U.S. government and agency securities 16.1 — (0.1 ) 16.0 32.5 — (0.2 ) 32.3 Asset-backed securities 0.3 — — 0.3 1.2 — — 1.2 Corporate debt securities 3.0 — — 3.0 16.4 — — 16.4 Municipal securities 1.9 — — 1.9 5.2 — — 5.2 $ 238.3 $ — $ (0.1 ) $ 238.2 $ 495.4 $ — $ (0.2 ) $ 495.2 Available-for-sale Commercial paper $ 35.4 $ — $ — $ 35.4 $ 28.1 $ — $ — $ 28.1 U.S. government and agency securities 143.4 — (0.7 ) 142.7 38.7 — (0.2 ) 38.5 Asset-backed securities 86.0 — (0.2 ) 85.8 62.8 — (0.2 ) 62.6 Corporate debt securities 333.6 0.4 (1.5 ) 332.5 230.0 — (1.3 ) 228.7 Municipal securities 4.6 — (0.1 ) 4.5 4.7 — — 4.7 $ 603.0 $ 0.4 $ (2.5 ) $ 600.9 $ 364.3 $ — $ (1.7 ) $ 362.6 |
Schedule of Cost and Fair Value of Investments in Debt Securities, by Contractual Maturity | The cost and fair value of investments in debt securities, by contractual maturity, as of December 31, 2016 were as follows: Held-to-Maturity Available-for-Sale Cost Fair Value Cost Fair Value (in millions) Due in 1 year or less $ 230.9 $ 230.9 $ 110.2 $ 110.1 Due after 1 year through 5 years — — 406.9 405.1 Instruments not due at a single maturity date 7.4 7.3 85.9 85.7 $ 238.3 $ 238.2 $ 603.0 $ 600.9 |
Schedule of Investments in Unconsolidated Affiliates | Investments in these unconsolidated affiliates are recorded in " Long-term Investments " on the consolidated balance sheets, and are as follows: December 31, 2016 2015 (in millions) Available-for-sale investments Cost $ — $ — Unrealized gains 0.1 0.2 Fair value of available-for-sale investments 0.1 0.2 Equity method investments Cost 9.5 10.9 Equity in losses (3.9 ) (4.2 ) Carrying value of equity method investments 5.6 6.7 Cost method investments Carrying value of cost method investments 28.2 21.3 Total investments in unconsolidated affiliates $ 33.9 $ 28.2 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed (in millions): Current assets $ 28.1 Property and equipment, net 0.2 Goodwill 258.9 IPR&D 190.0 Current liabilities assumed (32.9 ) Deferred income taxes (66.0 ) Contingent consideration (30.3 ) Total cash purchase price 348.0 Less: cash acquired (27.9 ) Total cash purchase price, net of cash acquired $ 320.1 |
GOODWILL AND OTHER INTANGIBLE35
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill, by Segment | The changes in the carrying amount of goodwill, by segment, during the years ended December 31, 2016 and 2015 were as follows: United Europe Total (in millions) Goodwill at December 31, 2014 $ 308.3 $ 67.7 $ 376.0 Goodwill acquired during the year 258.9 — 258.9 Currency translation adjustment — (6.6 ) (6.6 ) Goodwill at December 31, 2015 567.2 61.1 628.3 Goodwill acquired during the year — — — Currency translation adjustment — (2.2 ) (2.2 ) Goodwill at December 31, 2016 $ 567.2 $ 58.9 $ 626.1 |
Schedule of Finite-Lived Other Intangible Assets | Other intangible assets consist of the following (in millions): December 31, 2016 2015 Cost Accumulated Net Cost Accumulated Net Amortizable intangible assets Patents $ 187.6 $ (177.0 ) $ 10.6 $ 180.6 $ (172.3 ) $ 8.3 Developed technology 43.0 (39.6 ) 3.4 43.6 (37.9 ) 5.7 Other 9.8 (9.0 ) 0.8 10.0 (8.6 ) 1.4 240.4 (225.6 ) 14.8 234.2 (218.8 ) 15.4 Unamortizable intangible assets IPR&D 190.0 — 190.0 190.0 — 190.0 $ 430.4 $ (225.6 ) $ 204.8 $ 424.2 $ (218.8 ) $ 205.4 |
Schedule of Indefinite-Lived Other Intangible Assets | Other intangible assets consist of the following (in millions): December 31, 2016 2015 Cost Accumulated Net Cost Accumulated Net Amortizable intangible assets Patents $ 187.6 $ (177.0 ) $ 10.6 $ 180.6 $ (172.3 ) $ 8.3 Developed technology 43.0 (39.6 ) 3.4 43.6 (37.9 ) 5.7 Other 9.8 (9.0 ) 0.8 10.0 (8.6 ) 1.4 240.4 (225.6 ) 14.8 234.2 (218.8 ) 15.4 Unamortizable intangible assets IPR&D 190.0 — 190.0 190.0 — 190.0 $ 430.4 $ (225.6 ) $ 204.8 $ 424.2 $ (218.8 ) $ 205.4 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for each of the years ending December 31 is as follows (in millions): 2017 $ 7.3 2018 2.2 2019 1.7 2020 1.2 2021 1.0 |
DEBT, CREDIT FACILITIES, AND 36
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Summary of the Notes | The following is a summary of the Notes as of December 31, 2016 and 2015 : December 31, 2016 2015 Amount Effective Amount Effective (in millions) (in millions) Fixed-rate 2.875% notes due October 15, 2018 $ 600.0 2.983 % $ 600.0 2.983 % Unamortized discount (1.2 ) (1.7 ) Unamortized debt issuance costs (1.9 ) (3.0 ) Hedge accounting fair value adjustments (see Note 11) 0.4 1.6 Total carrying amount $ 597.3 $ 596.9 |
Schedule of Future Minimum Lease Payments (Including Interest) Under Non-Cancelable Operating Leases and Aggregate Debt Maturities | Future minimum lease payments (including interest) under non-cancelable operating leases and aggregate debt maturities at December 31, 2016 were as follows (in millions): Operating Aggregate 2017 $ 22.3 $ — 2018 16.5 600.0 2019 8.4 225.0 2020 5.5 — 2021 3.3 — Thereafter 16.6 — Total obligations and commitments $ 72.6 $ 825.0 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on a Recurring Basis | The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis as of December 31, 2016 and 2015 (in millions): December 31, 2016 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 44.1 $ — $ — $ 44.1 Available-for-sale investments: Corporate debt securities — 332.5 — 332.5 Asset-backed securities — 85.8 — 85.8 U.S. government and agency securities 100.7 42.0 — 142.7 Commercial paper — 35.4 — 35.4 Municipal securities — 4.5 — 4.5 Equity investments in unconsolidated affiliates 0.1 — — 0.1 Investments held for deferred compensation plans 46.0 — — 46.0 Derivatives — 35.2 — 35.2 $ 190.9 $ 535.4 $ — $ 726.3 Liabilities Derivatives $ — $ 3.3 $ — $ 3.3 Deferred compensation plans 46.7 — — 46.7 Contingent consideration obligation — — 31.6 31.6 $ 46.7 $ 3.3 $ 31.6 $ 81.6 December 31, 2015 Assets Cash equivalents $ 3.5 $ 8.5 $ — $ 12.0 Available-for-sale investments: Corporate debt securities — 228.7 — 228.7 Asset-backed securities — 62.6 — 62.6 U.S. government and agency securities 9.6 28.9 — 38.5 Commercial paper — 28.1 — 28.1 Municipal securities — 4.7 — 4.7 Equity investments in unconsolidated affiliates 0.1 — — 0.1 Investments held for deferred compensation plans 35.3 — — 35.3 Derivatives — 23.3 — 23.3 $ 48.5 $ 384.8 $ — $ 433.3 Liabilities Derivatives $ — $ 4.2 $ — $ 4.2 Deferred compensation plans 35.5 — — 35.5 Contingent consideration obligation — — 30.5 30.5 $ 35.5 $ 4.2 $ 30.5 $ 70.2 |
Summary of Changes in Fair Value of Contingent Consideration Obligation | The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2016 (in millions): Balance at December 31, 2015 $ 30.5 Additions — Changes in fair value (recorded in " Research and Development Expenses ") 1.1 Balance at December 31, 2016 $ 31.6 |
DERIVATIVE INSTRUMENTS AND HE38
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Financial Instruments Used to Manage Currency Exchange and Interest Rate Risk | The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes. Notional Amount December 31, 2016 December 31, 2015 (in millions) Foreign currency forward exchange contracts $ 949.7 $ 1,061.6 Interest rate swap agreements 300.0 300.0 |
Schedule of Location and Fair Value Amounts of Derivative Instruments | The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets (in millions): Fair Value Balance Sheet Location December 31, 2016 December 31, 2015 Derivatives designated as hedging instruments Assets Foreign currency contracts Other current assets $ 28.6 $ 15.0 Interest rate swap agreements Other assets $ 0.4 $ 1.6 Liabilities Foreign currency contracts Accrued and other liabilities $ 3.3 $ 4.2 Derivatives not designated as hedging instruments Assets Foreign currency contracts Other current assets $ 6.2 $ — Foreign currency contracts Other assets $ — $ 6.7 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Assets | The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet December 31, 2016 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative Assets Foreign currency contracts $ 34.8 $ — $ 34.8 $ (3.3 ) $ — $ 31.5 Interest rate swap agreements $ 0.4 $ — $ 0.4 $ — $ — $ 0.4 Derivative Liabilities Foreign currency contracts $ 3.3 $ — $ 3.3 $ (3.3 ) $ — $ — December 31, 2015 Derivative Assets Foreign currency contracts $ 21.7 $ — $ 21.7 $ (4.0 ) $ — $ 17.7 Interest rate swap agreements $ 1.6 $ — $ 1.6 $ — $ — $ 1.6 Derivative Liabilities Foreign currency contracts $ 4.2 $ — $ 4.2 $ (4.0 ) $ — $ 0.2 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Liabilities | The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet December 31, 2016 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative Assets Foreign currency contracts $ 34.8 $ — $ 34.8 $ (3.3 ) $ — $ 31.5 Interest rate swap agreements $ 0.4 $ — $ 0.4 $ — $ — $ 0.4 Derivative Liabilities Foreign currency contracts $ 3.3 $ — $ 3.3 $ (3.3 ) $ — $ — December 31, 2015 Derivative Assets Foreign currency contracts $ 21.7 $ — $ 21.7 $ (4.0 ) $ — $ 17.7 Interest rate swap agreements $ 1.6 $ — $ 1.6 $ — $ — $ 1.6 Derivative Liabilities Foreign currency contracts $ 4.2 $ — $ 4.2 $ (4.0 ) $ — $ 0.2 |
Schedule of Effect of Derivative Instruments | The following tables present the effect of derivative instruments on the consolidated statements of operations and consolidated statements of comprehensive income: Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income 2016 2015 2016 2015 (in millions) (in millions) Cash flow hedges Foreign currency contracts $ 16.1 $ 35.3 Cost of sales $ 8.4 $ 67.1 Selling, general, and administrative expenses $ (0.4 ) $ 0.9 Net investment hedges Foreign currency contracts $ (4.1 ) $ 2.9 Other expense, net $ — $ — Amount of Gain or (Loss) Recognized in Income on Derivative (a) Location of Gain or (Loss) Recognized in Income on Derivative 2016 2015 2014 (in millions) Fair value hedges Interest rate swap agreements Interest expense $ (1.2 ) $ 1.2 $ 4.4 _______________________________________________________________________________ (a) The gains and losses 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 Location of Gain or (Loss) Recognized in Income on Derivative 2016 2015 2014 (in millions) Derivatives not designated as hedging instruments Foreign currency contracts Other expense, net $ 8.6 $ 6.6 $ 13.7 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Information Regarding Defined Benefit Pension Plans | Information regarding the Company's defined benefit pension plans is as follows: Years Ended 2016 2015 (in millions) Change in projected benefit obligation: Beginning of year $ 118.1 $ 123.1 Service cost 6.8 7.0 Interest cost 1.2 1.5 Participant contributions 1.9 1.8 Actuarial loss (gain) 6.5 (1.4 ) Benefits paid (3.7 ) (1.3 ) Plan amendment 1.9 (2.9 ) Settlements — (4.1 ) Currency exchange rate changes and other (4.0 ) (5.6 ) End of year $ 128.7 $ 118.1 Change in fair value of plan assets: Beginning of year $ 75.1 $ 73.8 Actual return on plan assets 1.4 1.3 Employer contributions 6.3 6.1 Participant contributions 1.9 1.8 Settlements — (4.1 ) Benefits paid (3.7 ) (1.3 ) Currency exchange rate changes and other (2.4 ) (2.5 ) End of year $ 78.6 $ 75.1 Years Ended 2016 2015 (in millions) Funded Status Projected benefit obligation $ (128.7 ) $ (118.1 ) Plan assets at fair value 78.6 75.1 Underfunded status $ (50.1 ) $ (43.0 ) Net amounts recognized on the consolidated balance sheet: Other long-term liabilities $ 50.1 $ 43.0 Accumulated other comprehensive loss, net of tax: Net actuarial loss $ (18.0 ) $ (20.0 ) Net prior service (cost) credit (4.6 ) 5.1 Deferred income tax benefit 5.0 3.5 Total $ (17.6 ) $ (11.4 ) |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost are as follows (in millions): Years Ended 2016 2015 2014 Service cost, net $ 6.8 $ 7.0 $ 6.3 Interest cost 1.2 1.5 2.2 Expected return on plan assets (1.3 ) (1.5 ) (1.6 ) Settlement — 0.6 — Amortization of actuarial loss 0.7 1.0 0.5 Amortization of prior service credit (0.7 ) (0.4 ) (0.3 ) Net periodic pension benefit cost $ 6.7 $ 8.2 $ 7.1 |
Schedule of Weighted-Average Assumptions Used to Determine Benefit Obligations | The weighted-average assumptions used to determine the benefit obligations are as follows: December 31, 2016 2015 Discount rate 0.7 % 1.0 % Rate of compensation increase 2.5 % 2.7 % Social securities increase 1.4 % 1.6 % Pension increase 1.8 % 2.0 % The weighted-average assumptions used to determine the net periodic benefit cost are as follows: Years ended December 31, 2016 2015 2014 Discount rate 1.0 % 1.4 % 2.2 % Expected return on plan assets 1.6 % 1.9 % 2.6 % Rate of compensation increase 2.7 % 3.0 % 3.1 % Social securities increase 1.6 % 1.6 % 1.8 % Pension increase 2.0 % 2.0 % 2.0 % |
Schedule of Target Weighted-Average Asset Allocations and Fair Value | Target weighted-average asset allocations at December 31, 2016 , by asset category, are as follows: Insurance contracts 77.9 % Equity securities 10.9 % Debt securities 11.2 % Total 100.0 % The fair values of the Company's defined benefit plan assets at December 31, 2016 and 2015 , by asset category, are as follows (in millions): December 31, 2016 Level 1 Level 2 Level 3 Total Asset Category Cash $ 4.3 $ — $ — $ 4.3 Equity securities: United States equities 3.5 — — 3.5 International equities 6.9 — — 6.9 Debt securities: United States government bonds 0.9 — — 0.9 International government bonds 4.5 — — 4.5 Insurance contracts — — 58.5 58.5 $ 20.1 $ — $ 58.5 $ 78.6 December 31, 2015 Asset Category Cash $ 2.7 $ — $ — $ 2.7 Equity securities: United States equities 3.5 — — 3.5 International equities 7.3 — — 7.3 Debt securities: United States government bonds 0.7 — — 0.7 International government bonds 4.1 — — 4.1 Insurance contracts — — 56.8 56.8 $ 18.3 $ — $ 56.8 $ 75.1 |
Summary of Changes in Fair Value of Defined Benefit Plan Assets Classified as Level 3 | The following table summarizes the changes in fair value of the Company's defined benefit plan assets that have been classified as Level 3 for the years ended December 31, 2016 and 2015 (in millions): Insurance Balance at December 31, 2014 $ 58.4 Actual return on plan assets: Relating to assets still held at December 31, 2015 (0.3 ) Purchases, sales and settlements 0.7 Currency exchange rate impact (2.0 ) Balance at December 31, 2015 56.8 Actual return on plan assets: Relating to assets still held at December 31, 2016 1.7 Purchases, sales and settlements 1.8 Currency exchange rate impact (1.8 ) Balance at December 31, 2016 $ 58.5 |
Schedule of Benefit Payments Which Reflect Expected Future Service | The following benefit payments, which reflect expected future service, as appropriate, at December 31, 2016 , are expected to be paid (in millions): 2017 $ 4.5 2018 4.0 2019 4.0 2020 4.6 2021 4.5 2021-2025 44.6 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Weighted-Average Assumptions for Options Granted | The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods: Option Awards 2016 2015 2014 Average risk-free interest rate 1.1 % 1.4 % 1.5 % Expected dividend yield None None None Expected volatility 33 % 30 % 31 % Expected life (years) 4.5 4.6 4.6 Fair value, per share $ 31.00 $ 18.13 $ 11.75 |
Schedule of Weighted-Average Assumptions for ESPP Subscriptions | The Black-Scholes option pricing model was used with the following weighted-average assumptions for ESPP subscriptions granted during the following periods: ESPP 2016 2015 2014 Average risk-free interest rate 0.3 % 0.2 % 0.1 % Expected dividend yield None None None Expected volatility 29 % 28 % 30 % Expected life (years) 0.6 0.6 0.6 Fair value, per share $ 22.09 $ 15.59 $ 8.59 |
Schedule of Stock Option Activity | Stock option activity during the year ended December 31, 2016 under the Program and the Nonemployee Directors Program was as follows (in millions, except years and per-share amounts): Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding as of December 31, 2015 11.6 $ 41.14 Options granted 1.0 105.30 Options exercised (2.4 ) 30.49 Options forfeited (0.2 ) 54.95 Outstanding as of December 31, 2016 10.0 49.85 3.6 years $ 450.4 Exercisable as of December 31, 2016 6.5 40.99 2.8 years 345.3 Vested and expected to vest as of December 31, 2016 9.6 49.08 3.5 years 437.1 |
Schedule of Restricted Stock Unit Activity | The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2016 under the Program and the Nonemployee Directors Program (in millions, except per-share amounts): Shares Weighted- Average Grant-Date Fair Value Nonvested as of December 31, 2015 1.6 $ 47.99 Granted (a) 0.4 84.67 Vested (0.5 ) 35.06 Forfeited (0.1 ) 51.97 Nonvested as of December 31, 2016 1.4 63.59 _______________________________________________________________________________ (a) Includes 46,200 shares of market-based restricted stock units granted during 2016 , which represents the targeted number of shares to be issued, and 107,755 shares related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of target. As described above, the actual number of shares ultimately issued is determined based on the Company's total stockholder return relative to a selected industry peer group. |
ACCUMULATED OTHER COMPREHENSI41
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summary of Activity for Each Component of Accumulated Other Comprehensive Loss | Presented below is a summary of activity for each component of " Accumulated Other Comprehensive Loss " for the years ended December 31, 2016 , 2015 , and 2014 . Foreign Currency Translation Adjustments Unrealized Gain on Cash Flow Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Pension Costs (a) Total Accumulated Other Comprehensive Loss (in millions) December 31, 2013 $ (20.2 ) $ 3.5 $ 0.3 $ (11.2 ) $ (27.6 ) Other comprehensive (loss) income before reclassifications (96.2 ) 54.3 (0.8 ) (7.1 ) (49.8 ) Amounts reclassified from accumulated other comprehensive loss — (7.6 ) 0.4 0.2 (7.0 ) Deferred income tax (expense) benefit — (17.9 ) 0.1 1.3 (16.5 ) December 31, 2014 (116.4 ) 32.3 — (16.8 ) (100.9 ) Other comprehensive (loss) income before reclassifications (64.0 ) 35.3 (2.6 ) 5.4 (25.9 ) Amounts reclassified from accumulated other comprehensive loss — (68.0 ) 1.1 1.2 (65.7 ) Deferred income tax (expense) benefit (1.1 ) 12.2 — (1.2 ) 9.9 December 31, 2015 (181.5 ) 11.8 (1.5 ) (11.4 ) (182.6 ) Other comprehensive (loss) income before reclassifications (17.6 ) 16.1 0.7 (7.7 ) (8.5 ) Amounts reclassified from accumulated other comprehensive loss — (8.0 ) 1.1 — (6.9 ) Deferred income tax benefit (expense) 1.5 (3.2 ) (0.2 ) 1.5 (0.4 ) December 31, 2016 $ (197.6 ) $ 16.7 $ 0.1 $ (17.6 ) $ (198.4 ) _______________________________________________________________________________ (a) For the years ended December 31, 2016 , 2015 , and 2014 , the change in unrealized pension costs consisted of the following (in millions): Pre-Tax Tax Benefit (Expense) Net of Tax 2016 Prior service credit arising during period $ (9.0 ) $ 1.0 $ (8.0 ) Amortization of prior service credit (0.7 ) — (0.7 ) Net prior service cost arising during period (9.7 ) 1.0 (8.7 ) Net actuarial gain arising during period 2.0 0.5 2.5 Unrealized pension credits, net $ (7.7 ) $ 1.5 $ (6.2 ) 2015 Prior service credit arising during period $ 2.9 $ (0.3 ) $ 2.6 Amortization of prior service credit (0.4 ) 0.1 (0.3 ) Net prior service credit arising during period 2.5 (0.2 ) 2.3 Net actuarial gain arising during period 4.1 (1.0 ) 3.1 Unrealized pension costs, net $ 6.6 $ (1.2 ) $ 5.4 2014 Prior service cost arising during period $ 0.8 $ — $ 0.8 Amortization of prior service credit (0.3 ) — (0.3 ) Net prior service credit arising during period 0.5 — 0.5 Net actuarial loss arising during period (7.4 ) 1.3 (6.1 ) Unrealized pension credits, net $ (6.9 ) $ 1.3 $ (5.6 ) |
Change in Unrealized Pension Costs | For the years ended December 31, 2016 , 2015 , and 2014 , the change in unrealized pension costs consisted of the following (in millions): Pre-Tax Tax Benefit (Expense) Net of Tax 2016 Prior service credit arising during period $ (9.0 ) $ 1.0 $ (8.0 ) Amortization of prior service credit (0.7 ) — (0.7 ) Net prior service cost arising during period (9.7 ) 1.0 (8.7 ) Net actuarial gain arising during period 2.0 0.5 2.5 Unrealized pension credits, net $ (7.7 ) $ 1.5 $ (6.2 ) 2015 Prior service credit arising during period $ 2.9 $ (0.3 ) $ 2.6 Amortization of prior service credit (0.4 ) 0.1 (0.3 ) Net prior service credit arising during period 2.5 (0.2 ) 2.3 Net actuarial gain arising during period 4.1 (1.0 ) 3.1 Unrealized pension costs, net $ 6.6 $ (1.2 ) $ 5.4 2014 Prior service cost arising during period $ 0.8 $ — $ 0.8 Amortization of prior service credit (0.3 ) — (0.3 ) Net prior service credit arising during period 0.5 — 0.5 Net actuarial loss arising during period (7.4 ) 1.3 (6.1 ) Unrealized pension credits, net $ (6.9 ) $ 1.3 $ (5.6 ) |
Schedule of Information About Amounts Reclassified from Accumulated Other Comprehensive Loss | The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Years Ended December 31, Details about Accumulated Other Comprehensive Loss Components 2016 2015 Affected Line on Consolidated Statements of Operations Gain on cash flow hedges $ 8.0 $ 68.0 Cost of sales (3.4 ) (25.0 ) Provision for income taxes $ 4.6 $ 43.0 Net of tax Gain (loss) on available-for-sale investments $ (1.1 ) $ (1.1 ) Other expense, net — — Provision for income taxes $ (1.1 ) $ (1.1 ) Net of tax Amortization of pension adjustments $ — $ (1.2 ) (a) — 0.2 Provision for income taxes $ — $ (1.0 ) Net of tax _______________________________________________________________________________ (a) This item is included in the components of net periodic benefit costs. See Note 12 for additional information. |
OTHER EXPENSE, NET (Tables)
OTHER EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expense, Net | Years Ended December 31, 2016 2015 2014 (in millions) Charitable foundation contribution $ 5.0 $ — $ — Foreign exchange losses, net 0.5 4.8 2.0 (Gain) loss on investments (0.2 ) (0.1 ) 4.5 Promissory note impairment — — 4.0 Insurance settlement gain — — (3.7 ) Lease contract termination costs — — 1.0 Other (0.4 ) (0.7 ) (0.1 ) Total other expense, net $ 4.9 $ 4.0 $ 7.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Provisions for Income Taxes | The Company's income before provision for income taxes was generated from United States and international operations as follows (in millions): Years Ended December 31, 2016 2015 2014 United States $ 378.2 $ 182.8 $ 791.1 International, including Puerto Rico 359.7 439.6 352.9 $ 737.9 $ 622.4 $ 1,144.0 |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following (in millions): Years Ended December 31, 2016 2015 2014 Current United States: Federal $ 153.4 $ 102.4 $ 341.5 State and local 12.1 7.4 23.3 International, including Puerto Rico 27.4 33.5 34.8 Current income tax expense $ 192.9 $ 143.3 $ 399.6 Deferred United States: Federal $ (19.6 ) $ (12.5 ) $ (46.4 ) State and local (4.3 ) (2.6 ) (8.1 ) International, including Puerto Rico (0.6 ) (0.7 ) (12.2 ) Deferred income tax benefit (24.5 ) (15.8 ) (66.7 ) Total income tax provision $ 168.4 $ 127.5 $ 332.9 |
Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows (in millions): December 31, 2016 2015 Deferred tax assets Compensation and benefits $ 100.8 $ 94.0 Benefits from uncertain tax positions 56.7 50.0 Net tax credit carryforwards 45.6 39.3 Net operating loss carryforwards 30.2 27.0 Accrued liabilities 29.4 24.2 Inventories 11.5 11.9 State income taxes 2.4 0.5 Investments 2.6 2.6 Other intangible assets 4.2 3.8 Other 3.1 4.5 Total deferred tax assets 286.5 257.8 Deferred tax liabilities Property, plant, and equipment (28.2 ) (25.1 ) Cash flow hedges (1.2 ) (0.4 ) Deferred tax on foreign earnings (6.0 ) (10.9 ) Inventories (4.1 ) (0.9 ) Other intangible assets (4.2 ) (4.1 ) Other (0.2 ) (0.5 ) Total deferred tax liabilities (43.9 ) (41.9 ) Valuation allowance (47.7 ) (45.2 ) Net deferred tax assets $ 194.9 $ 170.7 |
Summary of Net Operating Loss Carryforwards | Net operating loss carryforwards and the related carryforward periods at December 31, 2016 are summarized as follows (in millions): Carryforward Tax Benefit Valuation Net Tax Carryforward United States state net operating losses $ 10.6 $ 0.6 $ (0.3 ) $ 0.3 2017-2034 Non-United States net operating losses 57.2 14.3 (13.9 ) 0.4 2017-2025 Non-United States net operating losses 46.4 15.6 (15.6 ) — Indefinite Total $ 114.2 $ 30.5 $ (29.8 ) $ 0.7 |
Summary of Tax Credit Carryforwards | Tax credit carryforwards and the related carryforward periods at December 31, 2016 are summarized as follows (in millions): Carryforward Valuation Net Tax Carryforward California research expenditure tax credits $ 76.6 $ — $ 76.6 Indefinite Puerto Rico purchases credit 14.4 (14.4 ) — Indefinite Total $ 91.0 $ (14.4 ) $ 76.6 |
Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate | A reconciliation of the United States federal statutory income tax rate to the Company's effective income tax rate is as follows (in millions): Years Ended December 31, 2016 2015 2014 Income tax expense at U.S. federal statutory rate $ 258.3 $ 217.8 $ 400.4 Foreign income taxed at different rates (88.6 ) (105.8 ) (67.1 ) State and local taxes, net of federal tax benefit 9.7 3.1 19.3 Tax credits, federal and state (21.3 ) (15.7 ) (13.5 ) Build (release) of reserve for uncertain tax positions for prior years 4.6 3.3 (4.8 ) U.S. tax on foreign earnings, net of credits 5.1 20.5 (3.1 ) Nondeductible stock-based compensation 3.6 2.3 2.1 Other (3.0 ) 2.0 (0.4 ) Income tax provision $ 168.4 $ 127.5 $ 332.9 |
Reconciliation of Beginning and Ending Amount of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions, excluding interest, penalties, and foreign exchange, is as follows (in millions): December 31, 2016 2015 2014 Uncertain gross tax positions, January 1 $ 216.1 $ 192.3 $ 127.7 Current year tax positions 29.0 29.6 75.9 Increase prior year tax positions 2.7 2.2 0.6 Decrease prior year tax positions (0.9 ) (7.4 ) (10.5 ) Settlements (0.3 ) (0.4 ) (1.0 ) Lapse of statutes of limitations (1.1 ) (0.2 ) (0.4 ) Uncertain gross tax positions, December 31 $ 245.5 $ 216.1 $ 192.3 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Information About Reportable Segments and Reconciliation of Segment Net Sales and 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): Years Ended December 31, 2016 2015 2014 Net Sales Reconciliation Segment net sales $ 2,944.8 $ 2,718.0 $ 2,344.6 Foreign currency 18.9 (224.3 ) (21.7 ) Consolidated net sales $ 2,963.7 $ 2,493.7 $ 2,322.9 Pre-tax Income Reconciliation Segment pre-tax income $ 1,623.7 $ 1,378.5 $ 1,137.5 Unallocated amounts: Corporate items (826.1 ) (711.3 ) (659.2 ) Special charges (34.5 ) — (70.7 ) Intellectual property (expenses) income, net (32.6 ) (7.0 ) 740.4 Interest expense, net (8.4 ) (9.3 ) (10.8 ) Foreign currency 15.8 (28.5 ) 6.8 Consolidated pre-tax income $ 737.9 $ 622.4 $ 1,144.0 The table below presents information about Edwards Lifesciences' reportable segments (in millions): Years Ended December 31, 2016 2015 2014 Segment Net Sales United States $ 1,615.7 $ 1,262.8 $ 1,047.3 Europe 745.9 842.9 741.4 Japan 279.6 297.2 270.8 Rest of World 303.6 315.1 285.1 Total segment net sales $ 2,944.8 $ 2,718.0 $ 2,344.6 Segment Pre-tax Income United States $ 1,050.2 $ 747.8 $ 605.6 Europe 360.9 409.1 328.1 Japan 139.6 139.4 125.2 Rest of World 73.0 82.2 78.6 Total segment pre-tax income $ 1,623.7 $ 1,378.5 $ 1,137.5 |
Schedule of Enterprise-Wide Information | Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated financial statements. As of or for the Years Ended 2016 2015 2014 (in millions) Net Sales by Geographic Area United States $ 1,615.7 $ 1,262.9 $ 1,047.3 Europe 749.0 717.3 744.5 Japan 309.3 246.2 257.9 Rest of World 289.7 267.3 273.2 $ 2,963.7 $ 2,493.7 $ 2,322.9 Net Sales by Major Product Area Transcatheter Heart Valve Therapy $ 1,628.5 $ 1,180.3 $ 943.6 Surgical Heart Valve Therapy 774.9 785.0 826.1 Critical Care 560.3 528.4 553.2 $ 2,963.7 $ 2,493.7 $ 2,322.9 Long-lived Tangible Assets by Geographic Area United States $ 555.5 $ 473.6 $ 347.6 Europe 27.9 36.0 42.1 Japan 8.0 8.1 8.5 Rest of World 108.6 96.0 93.9 $ 700.0 $ 613.7 $ 492.1 |
QUARTERLY FINANCIAL RESULTS A45
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Results and Market for the Company's Stock | Years Ended December 31, First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (in millions, except per share data) 2016 Net sales $ 697.3 $ 759.3 $ 739.4 $ 767.7 $ 2,963.7 Gross profit 517.0 556.8 538.0 554.5 2,166.3 Net income 143.0 126.6 141.4 158.5 569.5 Earnings per common share: Basic 0.67 0.60 0.66 0.74 2.67 Diluted 0.66 0.58 0.65 0.73 2.61 Market price: High $ 89.93 $ 112.00 $ 121.73 $ 121.75 $ 121.75 Low 72.20 86.73 98.02 81.12 72.20 2015 Net sales $ 590.3 $ 616.8 $ 615.5 $ 671.1 $ 2,493.7 Gross profit 454.3 458.2 468.8 495.2 1,876.5 Net income 123.4 112.7 118.1 140.7 494.9 Earnings per common share: Basic 0.57 0.52 0.55 0.65 2.30 Diluted 0.56 0.51 0.54 0.64 2.25 Market price: High $ 75.21 $ 73.65 $ 79.50 $ 83.43 $ 83.43 Low 61.99 61.38 62.53 70.32 61.38 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Costs (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Shipping costs | $ 64.1 | $ 58.8 | $ 60.5 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments (Narrative) (Details) | Dec. 31, 2016 |
Limited partnerships or limited liability corporations | Minimum | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 12.8 | $ 13.1 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Period prior to expiration date which triggers write-down of inventory | 6 months | ||
Period used to evaluate slow-moving inventory levels | 2 years | ||
Allowance for excess and slow moving inventory | $ 29.1 | $ 30.1 | |
General and administrative costs allocated to inventory | 37.2 | 30.6 | $ 29.1 |
General and administrative costs included in inventory | 22.9 | 16.8 | |
Finished goods inventories held on consignment | $ 64.2 | $ 58.8 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant, and Equipment (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense for property, plant and equipment | $ 63.6 | $ 58.7 | $ 57.5 |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 10 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 40 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 15 years | ||
Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic: | |||||||||||
Net income | $ 158.5 | $ 141.4 | $ 126.6 | $ 143 | $ 140.7 | $ 118.1 | $ 112.7 | $ 123.4 | $ 569.5 | $ 494.9 | $ 811.1 |
Weighted-average shares outstanding (in shares) | 213 | 215.5 | 213 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.74 | $ 0.66 | $ 0.60 | $ 0.67 | $ 0.65 | $ 0.55 | $ 0.52 | $ 0.57 | $ 2.67 | $ 2.30 | $ 3.81 |
Diluted: | |||||||||||
Net income | $ 158.5 | $ 141.4 | $ 126.6 | $ 143 | $ 140.7 | $ 118.1 | $ 112.7 | $ 123.4 | $ 569.5 | $ 494.9 | $ 811.1 |
Weighted-average shares outstanding (in shares) | 213 | 215.5 | 213 | ||||||||
Dilutive effect of stock plans (in shares) | 4.8 | 4.8 | 4 | ||||||||
Dilutive weighted-average shares outstanding (in shares) | 217.8 | 220.3 | 217 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.73 | $ 0.65 | $ 0.58 | $ 0.66 | $ 0.64 | $ 0.54 | $ 0.51 | $ 0.56 | $ 2.61 | $ 2.25 | $ 3.74 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per Share (Narrative) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock compensation plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | 0.9 | 1.4 | 4.8 |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allocation of stock-based compensation expense | |||
Total stock-based compensation expense | $ 56.9 | $ 49.9 | $ 48.3 |
Cost of sales | |||
Allocation of stock-based compensation expense | |||
Total stock-based compensation expense | 8.4 | 6.8 | 6.1 |
Selling, general, and administrative expenses | |||
Allocation of stock-based compensation expense | |||
Total stock-based compensation expense | 38 | 34.3 | 34.9 |
Research and development expenses | |||
Allocation of stock-based compensation expense | |||
Total stock-based compensation expense | $ 10.5 | $ 8.8 | $ 7.3 |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-based Compensation (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage vesting upon retirement for each full year of employment subsequent to the grant date | 25.00% |
SUMMARY OF SIGNIFICANT ACCOUN55
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivatives (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Period when cash flows associated with future transactions and certain local currency expenses are expected to occur | 13 months |
SUMMARY OF SIGNIFICANT ACCOUN56
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Standards Not Yet Adopted (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Heart valve therapy product | Total Company sales | |
Concentration Risk [Line Items] | |
Heart valve therapy sales (as a percent) | 80.00% |
INTELLECTUAL PROPERTY LITIGAT57
INTELLECTUAL PROPERTY LITIGATION EXPENSES (INCOME), NET - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
May 31, 2014 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | |||||
External legal costs related to intellectual property litigation | $ 32.6 | $ 7 | $ (740.4) | ||
Intellectual property | |||||
Loss Contingencies [Line Items] | |||||
External legal costs related to intellectual property litigation | $ 32.6 | $ 7 | $ 9.6 | ||
Medtronic litigation settlement | |||||
Loss Contingencies [Line Items] | |||||
Term of agreement | 8 years | ||||
Upfront payment received for past damages | $ 750 | $ 750 | |||
Medtronic litigation settlement | United States | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Annual royalty payments | 40 | ||||
Medtronic litigation settlement | United States | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Annual royalty payments | $ 60 |
INTELLECTUAL PROPERTY LITIGAT58
INTELLECTUAL PROPERTY LITIGATION EXPENSES (INCOME), NET - Schedule of Consideration Assigned to Identifiable Elements (Details) - Medtronic litigation settlement - Fair Value $ in Millions | May 31, 2014USD ($) |
Settlement agreement | |
Total | $ 1,070 |
Past damages | |
Settlement agreement | |
Total | 754.3 |
License agreement | |
Settlement agreement | |
Total | 238 |
Covenant not to sue | |
Settlement agreement | |
Total | $ 77.7 |
SPECIAL CHARGES - Schedule of S
SPECIAL CHARGES - Schedule of Special Charges (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |||||
Acquisition of IPR&D | $ 34.5 | $ 10.2 | $ 34.5 | $ 0 | $ 10.2 |
Charitable foundation contribution | 0 | 0 | 50 | ||
Settlement | 0 | 0 | 7.5 | ||
Asset write-down | 0 | 0 | 3 | ||
Total special charges | $ 34.5 | $ 0 | $ 70.7 |
SPECIAL CHARGES - Acquisition o
SPECIAL CHARGES - Acquisition of IPR&D (Narrative) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2016USD ($)agreement | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Other Income and Expenses [Abstract] | |||||
Number of separate agreements entered into to acquire technologies | agreement | 2 | ||||
Acquisition of IPR&D | $ 34.5 | $ 10.2 | $ 34.5 | $ 0 | $ 10.2 |
IPR&D Purchase agreement | |||||
Other Commitments [Line Items] | |||||
IPR&D contingent payment | $ 10 | $ 10 | |||
Period after acquisition closing date during which an additional payment may become due | 9 years |
SPECIAL CHARGES - Charitable Fo
SPECIAL CHARGES - Charitable Foundation Contribution (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Company contribution to the Edwards Lifesciences Foundation | $ 0 | $ 0 | $ 50 | |
Contribution to the Edwards Lifesciences Foundation | Edwards Lifesciences Foundation | ||||
Related Party Transaction [Line Items] | ||||
Company contribution to the Edwards Lifesciences Foundation | $ 50 |
SPECIAL CHARGES - Settlement (N
SPECIAL CHARGES - Settlement (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Charge to settle past and future obligations | $ 0 | $ 0 | $ 7.5 | |
Intellectual property agreement | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Charge to settle past and future obligations | $ 7.5 |
SPECIAL CHARGES - Asset Write-d
SPECIAL CHARGES - Asset Write-down (Narrative) (Details) - Discontinued operations - Automated glucose monitoring program $ in Millions | 1 Months Ended |
Sep. 30, 2014USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Charge to write down an intangible asset and fixed assets, and to record severance costs | $ 3 |
Charge related to disposal of inventory and equipment held by customers | $ 2 |
COMPOSITION OF CERTAIN FINANC64
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts receivable, net | ||
Trade accounts receivable | $ 374.5 | $ 322.2 |
Allowance for doubtful accounts | (9) | (6.8) |
Total accounts receivable, net | 365.5 | 315.4 |
Inventories | ||
Raw materials | 60.6 | 63.8 |
Work in process | 102.4 | 64.1 |
Finished products | 233.6 | 212 |
Total inventories | 396.6 | 339.9 |
Property, plant, and equipment, net | ||
Land | 30.1 | 25.1 |
Buildings and leasehold improvements | 367.2 | 293.4 |
Machinery and equipment | 346.5 | 328.6 |
Equipment with customers | 37.4 | 34.6 |
Software | 100.6 | 97.4 |
Construction in progress | 79.6 | 75.2 |
Total property, plant and equipment, gross | 961.4 | 854.3 |
Accumulated depreciation | (381.4) | (371.8) |
Total property, plant and equipment, net | 580 | 482.5 |
Accrued and other liabilities | ||
Employee compensation and withholdings | 216.1 | 209.4 |
Research and development accruals | 40 | 38.6 |
Property, payroll, and other taxes | 35.3 | 34.5 |
Accrued rebates | 36.1 | 23.9 |
Accrued marketing expenses | 12.6 | 9.6 |
Taxes payable | 5.9 | 14.5 |
Litigation reserves (Note 17) | 7.8 | 5.6 |
Fair value of derivatives | 3.3 | 4.2 |
Other accrued liabilities | 78.3 | 72 |
Total accrued and other liabilities | $ 435.4 | $ 412.3 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Held-to-maturity | ||
Cost | $ 238.3 | $ 495.4 |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (0.1) | (0.2) |
Fair Value | 238.2 | 495.2 |
Available-for-sale | ||
Cost | 603 | 364.3 |
Gross Unrealized Gains | 0.4 | 0 |
Gross Unrealized Losses | (2.5) | (1.7) |
Fair Value | 600.9 | 362.6 |
Bank time deposits | ||
Held-to-maturity | ||
Cost | 217 | 440.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 217 | 440.1 |
Commercial paper | ||
Available-for-sale | ||
Cost | 35.4 | 28.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 35.4 | 28.1 |
U.S. government and agency securities | ||
Held-to-maturity | ||
Cost | 16.1 | 32.5 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.1) | (0.2) |
Fair Value | 16 | 32.3 |
Available-for-sale | ||
Cost | 143.4 | 38.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.7) | (0.2) |
Fair Value | 142.7 | 38.5 |
Asset-backed securities | ||
Held-to-maturity | ||
Cost | 0.3 | 1.2 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 0.3 | 1.2 |
Available-for-sale | ||
Cost | 86 | 62.8 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.2) | (0.2) |
Fair Value | 85.8 | 62.6 |
Corporate debt securities | ||
Held-to-maturity | ||
Cost | 3 | 16.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3 | 16.4 |
Available-for-sale | ||
Cost | 333.6 | 230 |
Gross Unrealized Gains | 0.4 | 0 |
Gross Unrealized Losses | (1.5) | (1.3) |
Fair Value | 332.5 | 228.7 |
Municipal securities | ||
Held-to-maturity | ||
Cost | 1.9 | 5.2 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1.9 | 5.2 |
Available-for-sale | ||
Cost | 4.6 | 4.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.1) | 0 |
Fair Value | $ 4.5 | $ 4.7 |
INVESTMENTS - Schedule of Cost
INVESTMENTS - Schedule of Cost and Fair Value of Investments in Debt Securities, by Contractual Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Cost | ||
Due in 1 year or less | $ 230.9 | |
Due after 1 year through 5 years | 0 | |
Instruments not due at a single maturity date | 7.4 | |
Cost | 238.3 | $ 495.4 |
Fair Value | ||
Due in 1 year or less | 230.9 | |
Due after 1 year through 5 years | 0 | |
Instruments not due at a single maturity date | 7.3 | |
Total | 238.2 | 495.2 |
Cost | ||
Due in 1 year or less | 110.2 | |
Due after 1 year through 5 years | 406.9 | |
Instruments not due at a single maturity date | 85.9 | |
Cost | 603 | 364.3 |
Fair Value | ||
Due in 1 year or less | 110.1 | |
Due after 1 year through 5 years | 405.1 | |
Instruments not due at a single maturity date | 85.7 | |
Total | $ 600.9 | $ 362.6 |
INVESTMENTS - Schedule of Inv67
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale investments | ||
Cost | $ 0 | $ 0 |
Unrealized gains | 0.1 | 0.2 |
Fair value of available-for-sale investments | 0.1 | 0.2 |
Equity method investments | ||
Cost | 9.5 | 10.9 |
Equity in losses | (3.9) | (4.2) |
Carrying value of equity method investments | 5.6 | 6.7 |
Cost method investments | ||
Carrying value of cost method investments | 28.2 | 21.3 |
Total investments in unconsolidated affiliates | $ 33.9 | $ 28.2 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Cost method investment | |||
Total investment carrying value | $ 21.3 | $ 28.2 | |
Exclusive option to acquire | Harpoon Medical | High | |||
Cost method investment | |||
Exclusive option price to acquire business upon achievement of certain milestones and regulatory approvals | 250 | ||
Exclusive option to acquire | CardioKinetix | High | |||
Cost method investment | |||
Exclusive option price to acquire business upon achievement of certain milestones and regulatory approvals | $ 375 | ||
Harpoon Medical | Exclusive option to acquire | |||
Cost method investment | |||
Payment for exclusive option to acquire | 11.5 | ||
CardioKinetix | Exclusive option to acquire | |||
Cost method investment | |||
Payment for exclusive option to acquire | 15 | ||
Variable interest entity, not primary beneficiary | Harpoon Medical | |||
Cost method investment | |||
Investment in cost method investee | $ 1.5 | ||
Variable interest entity, not primary beneficiary | CardioKinetix | |||
Cost method investment | |||
Investment in cost method investee | 10 | ||
Total investment carrying value | $ 14.4 |
ACQUISITIONS - Valtech Cardio,
ACQUISITIONS - Valtech Cardio, Ltd. (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | Jan. 23, 2017 | Dec. 31, 2016 |
Valtech | ||
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 4.1 | |
Subsequent Event | Valtech | ||
Business Acquisition [Line Items] | ||
Purchase price subject to certain adjustments | $ 340 | |
Potential additional pre-specified milestone-driven payments | $ 350 | |
Period to make additional pre-specified milestone-driven payments | 10 years | |
Issuance of shares of common stock (in shares) | 2.8 | |
Fair value of shares issued | $ 266.5 | |
Cash paid to acquire business | 84.3 | |
Subsequent Event | Valtech spin off | ||
Business Acquisition [Line Items] | ||
Exclusive option price to acquire Valtech spin off and its associated intellectual property | $ 200 | |
Term of exclusive option | 2 years |
ACQUISITIONS - CardiAQ Valve Te
ACQUISITIONS - CardiAQ Valve Technologies, Inc. (Narrative) (Details) - CardiAQ - USD ($) $ in Millions | Aug. 26, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||
Cash purchase price subject to certain adjustments | $ 350 | |
Cash purchase price after adjustments | 348 | |
Additional payments if certain European regulatory approval is obtained | $ 50 | |
Period to obtain certain European regulatory approval | 48 months | |
Liability for estimated fair value of contingent milestone payment | $ 30.3 | |
Portion of purchase price in escrow | 30 | |
Additional research and development expenditures to be incurred prior to product introduction | $ 97.7 | |
IPR&D | ||
Business Acquisition [Line Items] | ||
Discount rate used to determine fair value | 16.50% | |
Selling, general, and administrative expenses | ||
Business Acquisition [Line Items] | ||
Acquisition-related costs | $ 1.2 |
ACQUISITIONS - Summary of Fair
ACQUISITIONS - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Aug. 26, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 626.1 | $ 628.3 | $ 376 | |
Total cash purchase price, net of cash acquired | $ 0 | $ 331.6 | $ 15 | |
CardiAQ | ||||
Business Acquisition [Line Items] | ||||
Current assets | $ 28.1 | |||
Property and equipment, net | 0.2 | |||
Goodwill | 258.9 | |||
IPR&D | 190 | |||
Current liabilities assumed | (32.9) | |||
Deferred income taxes | (66) | |||
Contingent consideration | (30.3) | |||
Total cash purchase price | 348 | |||
Less: cash acquired | (27.9) | |||
Total cash purchase price, net of cash acquired | $ 320.1 |
GOODWILL AND OTHER INTANGIBLE72
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Jul. 03, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 26, 2015 |
Finite-Lived Intangible Assets [Line Items] | |||||
Increase to goodwill | $ 0 | $ 258.9 | |||
Amortization expense related to other intangible assets | $ 7.6 | $ 7.1 | $ 8.4 | ||
CardiAQ | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Increase to goodwill | $ 258.9 | ||||
Increase to IPR&D | $ 190 | ||||
CardiAQ | IPR&D | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Increase to IPR&D | $ 190 |
GOODWILL AND OTHER INTANGIBLE73
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Changes in the Carrying Amount of Goodwill, by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | ||
Beginning balance | $ 628.3 | $ 376 |
Goodwill acquired during the year | 0 | 258.9 |
Currency translation adjustment | (2.2) | (6.6) |
Ending balance | 626.1 | 628.3 |
United States | ||
Goodwill | ||
Beginning balance | 567.2 | 308.3 |
Goodwill acquired during the year | 0 | 258.9 |
Currency translation adjustment | 0 | 0 |
Ending balance | 567.2 | 567.2 |
Europe | ||
Goodwill | ||
Beginning balance | 61.1 | 67.7 |
Goodwill acquired during the year | 0 | 0 |
Currency translation adjustment | (2.2) | (6.6) |
Ending balance | $ 58.9 | $ 61.1 |
GOODWILL AND OTHER INTANGIBLE74
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Amortizable intangible assets | ||
Cost | $ 240.4 | $ 234.2 |
Accumulated Amortization | (225.6) | (218.8) |
Net Carrying Value | 14.8 | 15.4 |
Unamortizable intangible assets | ||
Cost | 430.4 | 424.2 |
Accumulated Amortization | (225.6) | (218.8) |
Net Carrying Value | 204.8 | 205.4 |
IPR&D | ||
Unamortizable intangible assets | ||
Cost and Net Carrying Value | 190 | 190 |
Patents | ||
Amortizable intangible assets | ||
Cost | 187.6 | 180.6 |
Accumulated Amortization | (177) | (172.3) |
Net Carrying Value | 10.6 | 8.3 |
Unamortizable intangible assets | ||
Accumulated Amortization | (177) | (172.3) |
Developed technology | ||
Amortizable intangible assets | ||
Cost | 43 | 43.6 |
Accumulated Amortization | (39.6) | (37.9) |
Net Carrying Value | 3.4 | 5.7 |
Unamortizable intangible assets | ||
Accumulated Amortization | (39.6) | (37.9) |
Other | ||
Amortizable intangible assets | ||
Cost | 9.8 | 10 |
Accumulated Amortization | (9) | (8.6) |
Net Carrying Value | 0.8 | 1.4 |
Unamortizable intangible assets | ||
Accumulated Amortization | $ (9) | $ (8.6) |
GOODWILL AND OTHER INTANGIBLE75
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Estimated Amortization Expense (Details) $ in Millions | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 7.3 |
2,018 | 2.2 |
2,019 | 1.7 |
2,020 | 1.2 |
2,021 | $ 1 |
DEBT, CREDIT FACILITIES, AND 76
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Weighted-average interest rate under all debt obligations (as a percent) | 3.10% | 2.90% | ||
Total expense for all operating leases | $ 22,900,000 | $ 22,500,000 | $ 22,900,000 | |
Senior Notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Fixed-rate unsecured senior notes | $ 600,000,000 | |||
Price equal to principal amount, plus accrued and unpaid interest (as a percent) | 101.00% | |||
Issuance costs | 5,400,000 | |||
Senior Notes due 2018 | Level 2 | ||||
Debt Instrument [Line Items] | ||||
Fair value of the Notes, based on Level 2 inputs | 609,600,000 | $ 607,700,000 | ||
Credit Facility | Credit agreement, maturity July 2019 | ||||
Debt Instrument [Line Items] | ||||
Issuance costs | $ 3,000,000 | |||
Term of the Credit Agreement | 5 years | |||
Aggregate borrowings in multiple currencies | $ 750,000,000 | |||
Borrowings under credit agreement during the period | $ 225,000,000 | |||
Credit Facility | Credit agreement, maturity July 2019 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate during the period | 1.00% | |||
Credit Facility | Credit agreement, maturity July 2019 | High | ||||
Debt Instrument [Line Items] | ||||
Additional amount available, subject to lender approval | $ 250,000,000 | |||
Facility fee (as a percent) | 0.25% | |||
Facility fee during the period (as a percent) | 0.125% | |||
Credit Facility | Credit agreement, maturity July 2019 | High | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.50% | |||
Credit Facility | Credit agreement, maturity July 2019 | Low | ||||
Debt Instrument [Line Items] | ||||
Facility fee (as a percent) | 0.125% | |||
Credit Facility | Credit agreement, maturity July 2019 | Low | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.00% |
DEBT, CREDIT FACILITIES, AND 77
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS - Summary of the Notes (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Amount | $ 825 | |
Senior Notes due 2018 | ||
Debt Instrument [Line Items] | ||
Amount | $ 600 | $ 600 |
Fixed interest rate | 2.875% | |
Effective Interest Rate | 2.983% | 2.983% |
Unamortized discount | $ (1.2) | $ (1.7) |
Unamortized debt issuance costs | (1.9) | (3) |
Hedge accounting fair value adjustments (see Note 11) | 0.4 | 1.6 |
Total carrying amount | $ 597.3 | $ 596.9 |
DEBT, CREDIT FACILITIES, AND 78
DEBT, CREDIT FACILITIES, AND LEASE OBLIGATIONS - Schedule of Future Minimum Lease Payments (Including Interest) Under Non-Cancelable Operating Leases and Aggregate Debt Maturities (Details) $ in Millions | Dec. 31, 2016USD ($) |
Operating Leases | |
2,017 | $ 22.3 |
2,018 | 16.5 |
2,019 | 8.4 |
2,020 | 5.5 |
2,021 | 3.3 |
Thereafter | 16.6 |
Total obligations and commitments | 72.6 |
Aggregate Debt Maturities | |
2,017 | 0 |
2,018 | 600 |
2,019 | 225 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total obligations and commitments | $ 825 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Fair Value on a Recurring Basis - Fair Value - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash equivalents | $ 44.1 | $ 12 |
Investments held for deferred compensation plans | 46 | 35.3 |
Derivatives | 35.2 | 23.3 |
Total assets | 726.3 | 433.3 |
Liabilities | ||
Derivatives | 3.3 | 4.2 |
Deferred compensation plans | 46.7 | 35.5 |
Contingent consideration obligation | 31.6 | 30.5 |
Total liabilities | 81.6 | 70.2 |
Level 1 | ||
Assets | ||
Cash equivalents | 44.1 | 3.5 |
Investments held for deferred compensation plans | 46 | 35.3 |
Derivatives | 0 | 0 |
Total assets | 190.9 | 48.5 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 46.7 | 35.5 |
Contingent consideration obligation | 0 | 0 |
Total liabilities | 46.7 | 35.5 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 8.5 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 35.2 | 23.3 |
Total assets | 535.4 | 384.8 |
Liabilities | ||
Derivatives | 3.3 | 4.2 |
Deferred compensation plans | 0 | 0 |
Contingent consideration obligation | 0 | 0 |
Total liabilities | 3.3 | 4.2 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 0 | 0 |
Contingent consideration obligation | 31.6 | 30.5 |
Total liabilities | 31.6 | 30.5 |
Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 332.5 | 228.7 |
Corporate debt securities | Level 1 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Corporate debt securities | Level 2 | ||
Assets | ||
Available-for-sale investments | 332.5 | 228.7 |
Corporate debt securities | Level 3 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 85.8 | 62.6 |
Asset-backed securities | Level 1 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Asset-backed securities | Level 2 | ||
Assets | ||
Available-for-sale investments | 85.8 | 62.6 |
Asset-backed securities | Level 3 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 142.7 | 38.5 |
U.S. government and agency securities | Level 1 | ||
Assets | ||
Available-for-sale investments | 100.7 | 9.6 |
U.S. government and agency securities | Level 2 | ||
Assets | ||
Available-for-sale investments | 42 | 28.9 |
U.S. government and agency securities | Level 3 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Commercial paper | ||
Assets | ||
Available-for-sale investments | 35.4 | 28.1 |
Commercial paper | Level 1 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Commercial paper | Level 2 | ||
Assets | ||
Available-for-sale investments | 35.4 | 28.1 |
Commercial paper | Level 3 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Municipal securities | ||
Assets | ||
Available-for-sale investments | 4.5 | 4.7 |
Municipal securities | Level 1 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Municipal securities | Level 2 | ||
Assets | ||
Available-for-sale investments | 4.5 | 4.7 |
Municipal securities | Level 3 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Equity investments in unconsolidated affiliates | ||
Assets | ||
Available-for-sale investments | 0.1 | 0.1 |
Equity investments in unconsolidated affiliates | Level 1 | ||
Assets | ||
Available-for-sale investments | 0.1 | 0.1 |
Equity investments in unconsolidated affiliates | Level 2 | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Equity investments in unconsolidated affiliates | Level 3 | ||
Assets | ||
Available-for-sale investments | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Sum80
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Contingent Consideration Obligation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | |
Beginning balance | $ 30.5 |
Additions | 0 |
Changes in fair value (recorded in Research and Development Expenses) | 1.1 |
Ending balance | $ 31.6 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Level 3 $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Obligations | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Discount rate used to present value of projected cash flows | 1.90% |
Probability of milestone achievement (as a percent) | 65.00% |
Carrying value | CardiAQ | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Contingent consideration obligation related to acquisition | $ 50 |
DERIVATIVE INSTRUMENTS AND HE82
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Derivative Financial Instruments Used to Manage Currency Exchange and Interest Rate Risk (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Foreign currency forward exchange contracts | ||
Derivative [Line Items] | ||
Notional Amount | $ 949.7 | $ 1,061.6 |
Interest rate swap agreements | ||
Derivative [Line Items] | ||
Notional Amount | $ 300 | $ 300 |
DERIVATIVE INSTRUMENTS AND HE83
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Location and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Foreign currency contracts | ||
Assets | ||
Fair Value | $ 34.8 | $ 21.7 |
Liabilities | ||
Fair Value | 3.3 | 4.2 |
Interest rate swap agreements | ||
Assets | ||
Fair Value | 0.4 | 1.6 |
Derivatives designated as hedging instruments | Foreign currency contracts | Other current assets | ||
Assets | ||
Fair Value | 28.6 | 15 |
Derivatives designated as hedging instruments | Foreign currency contracts | Accrued and other liabilities | ||
Liabilities | ||
Fair Value | 3.3 | 4.2 |
Derivatives designated as hedging instruments | Interest rate swap agreements | Other assets | ||
Assets | ||
Fair Value | 0.4 | 1.6 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other current assets | ||
Assets | ||
Fair Value | 6.2 | 0 |
Derivatives not designated as hedging instruments | Foreign currency contracts | Other assets | ||
Assets | ||
Fair Value | $ 0 | $ 6.7 |
DERIVATIVE INSTRUMENTS AND HE84
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Master-Netting Agreements and Rights of Offset (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Foreign currency contracts | ||
Derivative Assets | ||
Gross Amounts | $ 34.8 | $ 21.7 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 34.8 | 21.7 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (3.3) | (4) |
Cash Collateral Received | 0 | 0 |
Net Amount | 31.5 | 17.7 |
Derivative Liabilities | ||
Gross Amounts | 3.3 | 4.2 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 3.3 | 4.2 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (3.3) | (4) |
Cash Collateral Received | 0 | 0 |
Net Amount | 0 | 0.2 |
Interest rate swap agreements | ||
Derivative Assets | ||
Gross Amounts | 0.4 | 1.6 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 0.4 | 1.6 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 0.4 | $ 1.6 |
DERIVATIVE INSTRUMENTS AND HE85
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) | |||
Expected reclassification of gain recorded in accumulated other comprehensive loss into earnings during next twelve months | $ 2.6 | ||
Foreign currency contracts | Other expense, net | Derivatives not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Recognized in Income on Derivative | 8.6 | $ 6.6 | $ 13.7 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 16.1 | 35.3 | |
Cash flow hedges | Foreign currency contracts | Cost of sales | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | 8.4 | 67.1 | |
Cash flow hedges | Foreign currency contracts | Selling, general, and administrative expenses | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | (0.4) | 0.9 | |
Net investment hedges | Foreign currency contracts | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (4.1) | 2.9 | |
Net investment hedges | Foreign currency contracts | Other expense, net | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | 0 | 0 | |
Fair value hedges | Interest rate swap agreements | Interest expense | Derivatives designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) | |||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (1.2) | $ 1.2 | $ 4.4 |
EMPLOYEE BENEFIT PLANS - Schedu
EMPLOYEE BENEFIT PLANS - Schedule of Information Regarding Defined Benefit Pension Plans (Details) - Defined benefit pension plans - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in projected benefit obligation: | |||||
Beginning of year | $ 118.1 | $ 123.1 | |||
Service cost | 6.8 | 7 | $ 6.3 | ||
Interest cost | 1.2 | 1.5 | 2.2 | ||
Participant contributions | 1.9 | 1.8 | |||
Actuarial loss (gain) | 6.5 | (1.4) | |||
Benefits paid | (3.7) | (1.3) | |||
Plan amendment | 1.9 | (2.9) | |||
Settlements | 0 | (4.1) | |||
Currency exchange rate changes and other | (4) | (5.6) | |||
End of year | 128.7 | 118.1 | 123.1 | ||
Change in fair value of plan assets: | |||||
Beginning of year | 75.1 | 73.8 | |||
Actual return on plan assets | 1.4 | 1.3 | |||
Employer contributions | 6.3 | 6.1 | |||
Participant contributions | 1.9 | 1.8 | |||
Settlements | 0 | (4.1) | |||
Benefits paid | (3.7) | (1.3) | |||
Currency exchange rate changes and other | (2.4) | (2.5) | |||
End of year | 78.6 | 75.1 | 73.8 | ||
Funded Status | |||||
Projected benefit obligation | (118.1) | (123.1) | (123.1) | $ (128.7) | $ (118.1) |
Plan assets at fair value | $ 75.1 | $ 73.8 | $ 73.8 | 78.6 | 75.1 |
Underfunded status | (50.1) | (43) | |||
Accumulated other comprehensive loss, net of tax: | |||||
Net actuarial loss | (18) | (20) | |||
Net prior service (cost) credit | (4.6) | 5.1 | |||
Deferred income tax benefit | 5 | 3.5 | |||
Total | (17.6) | (11.4) | |||
Other long-term liabilities | |||||
Net amounts recognized on the consolidated balance sheet: | |||||
Other long-term liabilities | $ 50.1 | $ 43 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Expected employer contributions | $ 6.1 | |
Defined benefit pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation | 116.9 | $ 103.7 |
Net actuarial loss that will be amortized | 0.7 | |
Prior service cost that will be amortized | $ 0.3 |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of Net Periodic Benefit Cost (Details) - Defined benefit pension plans - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost, net | $ 6.8 | $ 7 | $ 6.3 |
Interest cost | 1.2 | 1.5 | 2.2 |
Expected return on plan assets | (1.3) | (1.5) | (1.6) |
Settlement | 0 | 0.6 | 0 |
Amortization of actuarial loss | 0.7 | 1 | 0.5 |
Amortization of prior service credit | (0.7) | (0.4) | (0.3) |
Net periodic pension benefit cost | $ 6.7 | $ 8.2 | $ 7.1 |
EMPLOYEE BENEFIT PLANS - Sche89
EMPLOYEE BENEFIT PLANS - Schedule of Weighted-Average Assumptions Used to Determine Benefit Obligations (Details) - Defined benefit pension plans | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average assumptions used to determine the benefit obligations | |||
Discount rate | 0.70% | 1.00% | |
Rate of compensation increase | 2.50% | 2.70% | |
Social securities increase | 1.40% | 1.60% | |
Pension increase | 1.80% | 2.00% | |
Weighted-average assumptions used to determine the net periodic benefit cost | |||
Discount rate | 1.00% | 1.40% | 2.20% |
Expected return on plan assets | 1.60% | 1.90% | 2.60% |
Rate of compensation increase | 2.70% | 3.00% | 3.10% |
Social securities increase | 1.60% | 1.60% | 1.80% |
Pension increase | 2.00% | 2.00% | 2.00% |
EMPLOYEE BENEFIT PLANS - Sche90
EMPLOYEE BENEFIT PLANS - Schedule of Target Weighted-Average Asset Allocations and Fair Value (Details) - Defined benefit pension plans - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations (as a percent) | 100.00% | ||
Fair value of defined benefit plan assets | $ 78.6 | $ 75.1 | $ 73.8 |
Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 20.1 | 18.3 | |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 58.5 | 56.8 | |
Cash | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 4.3 | 2.7 | |
Cash | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 4.3 | 2.7 | |
Cash | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
Cash | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 0 | 0 | |
Insurance contracts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations (as a percent) | 77.90% | ||
Fair value of defined benefit plan assets | $ 58.5 | 56.8 | |
Insurance contracts | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
Insurance contracts | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
Insurance contracts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 58.5 | 56.8 | $ 58.4 |
Equity securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations (as a percent) | 10.90% | ||
United States equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 3.5 | 3.5 | |
United States equities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 3.5 | 3.5 | |
United States equities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
United States equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
International equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 6.9 | 7.3 | |
International equities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 6.9 | 7.3 | |
International equities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
International equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 0 | 0 | |
Debt securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target asset allocations (as a percent) | 11.20% | ||
United States government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 0.9 | 0.7 | |
United States government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0.9 | 0.7 | |
United States government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
United States government bonds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
International government bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 4.5 | 4.1 | |
International government bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 4.5 | 4.1 | |
International government bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | 0 | 0 | |
International government bonds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of defined benefit plan assets | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Summar
EMPLOYEE BENEFIT PLANS - Summary of Changes in Fair Value of Defined Benefit Plan Assets Classified as Level 3 (Details) - Defined benefit pension plans - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Change in fair value of plan assets: | ||
Beginning of year | $ 75.1 | $ 73.8 |
Actual return on plan assets: | ||
Currency exchange rate impact | (2.4) | (2.5) |
End of year | 78.6 | 75.1 |
Insurance Contracts | ||
Change in fair value of plan assets: | ||
Beginning of year | 56.8 | |
Actual return on plan assets: | ||
End of year | 58.5 | 56.8 |
Level 3 | ||
Change in fair value of plan assets: | ||
Beginning of year | 56.8 | |
Actual return on plan assets: | ||
End of year | 58.5 | 56.8 |
Level 3 | Insurance Contracts | ||
Change in fair value of plan assets: | ||
Beginning of year | 56.8 | 58.4 |
Actual return on plan assets: | ||
Relating to assets still held at year end | 1.7 | (0.3) |
Purchases, sales and settlements | 1.8 | 0.7 |
Currency exchange rate impact | (1.8) | (2) |
End of year | $ 58.5 | $ 56.8 |
EMPLOYEE BENEFIT PLANS - Sche92
EMPLOYEE BENEFIT PLANS - Schedule of Benefit Payments Which Reflect Expected Future Service (Details) $ in Millions | Dec. 31, 2016USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
2,017 | $ 4.5 |
2,018 | 4 |
2,019 | 4 |
2,020 | 4.6 |
2,021 | 4.5 |
2021-2025 | $ 44.6 |
EMPLOYEE BENEFIT PLANS - Defi93
EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Plans | |||
Matching contributions relating to entity's employees | $ 17.3 | $ 15.3 | $ 12.8 |
United States defined contribution plan | |||
Defined Contribution Plans | |||
Maximum contributions of a participant's eligible compensation (as a percent) | 25.00% | ||
Dollar-for-dollar match of employee's annual eligible compensation (as a percent) | 3.00% | ||
Company match of eligible compensation after dollar-for-dollar basis (as a percent) | 2.00% | ||
Company match, second level (as a percent) | 50.00% | ||
Puerto Rico defined contribution plan | |||
Defined Contribution Plans | |||
Maximum contributions of a participant's eligible compensation (as a percent) | 25.00% | ||
Dollar-for-dollar match of employee's annual eligible compensation (as a percent) | 4.00% | ||
Company match, first level (as a percent) | 50.00% | ||
Profit sharing contribution calculated on eligible earnings (as a percent) | 2.00% | ||
Nonqualified deferred compensation plans | |||
Defined Contribution Plans | |||
Amount accrued under nonqualified plans | $ 46.7 | $ 35.5 |
COMMON STOCK - Treasury Stock (
COMMON STOCK - Treasury Stock (Narrative) (Details) - USD ($) shares in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2016 | Jul. 31, 2014 | |
Treasury Stock | |||||
Aggregate cost of stock repurchases | $ 662,300,000 | $ 280,100,000 | $ 300,900,000 | ||
Treasury Stock | |||||
Treasury Stock | |||||
Shares repurchased (in shares) | 7.3 | 2.6 | 4.4 | ||
Aggregate cost of stock repurchases | $ 662,300,000 | $ 280,100,000 | $ 300,900,000 | ||
July 2,014 | |||||
Treasury Stock | |||||
Authorized amount for share repurchase | $ 750,000,000 | ||||
November 2,016 | |||||
Treasury Stock | |||||
Authorized amount for share repurchase | $ 1,000,000,000 |
COMMON STOCK - Accelerated Shar
COMMON STOCK - Accelerated Share Repurchase (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | ||
Oct. 31, 2016 | Apr. 30, 2016 | Feb. 29, 2016 | |
Entered into February 2016 | |||
Accelerated Share Repurchase | |||
Authorized amount for share repurchase | $ 325,000,000 | ||
Shares repurchased (in shares) | 3,200 | ||
Initial delivery, price per share (in dollars per share) | $ 83.60 | ||
Value of shares as a percent of total contract value | 82.00% | ||
Ending April 2016 | |||
Accelerated Share Repurchase | |||
Shares repurchased (in shares) | 300 | ||
Discount per share price (in dollars per share) | $ 84.39 | ||
Ending October 2016 | |||
Accelerated Share Repurchase | |||
Shares repurchased (in shares) | 44 | ||
Discount per share price (in dollars per share) | $ 101.82 |
COMMON STOCK - Employee and Dir
COMMON STOCK - Employee and Director Stock Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | May 12, 2016 | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated annual forfeiture rate | 6.00% | |
The Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 107,800,000 | |
The Program | Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration date | 7 years | |
The Program | Option Awards | Low | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
The Program | Option Awards | High | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
The Program | Restricted stock units | Low | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
The Program | Restricted stock units | High | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 5 years | |
The Program | MRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
The Program | Restricted stock or restricted stock units | High | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 11,200,000 | |
Nonemployee Directors Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 2,800,000 | |
Nonemployee Directors Program | Annual award to nonemployee director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Limit on total value of the award | $ 0.2 | |
Nonemployee Directors Program | Option Awards | Award upon director's initial election to Board | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Limit on total value of the award | $ 0.2 | |
Limit on initial grant of stock options or restricted stock units (in shares) | 20,000 | |
Nonemployee Directors Program | Option Awards | Awards granted in 2012 and later | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Nonemployee Directors Program | Option Awards | High | Annual award to nonemployee director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 40,000 | |
Nonemployee Directors Program | Restricted stock units | Awards granted in 2012 and later | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Nonemployee Directors Program | Restricted stock units | High | Annual award to nonemployee director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 16,000 | |
ESPP | ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock available for issuance (in shares) | 13,800,000 | |
Percentage of lower of fair market value of common stock on effective date of subscription or date of purchase | 85.00% | |
Maximum percentage of compensation employees can authorize to be withheld for common stock purchases | 12.00% |
COMMON STOCK - Schedule of Weig
COMMON STOCK - Schedule of Weighted-Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average risk-free interest rate | 1.10% | 1.40% | 1.50% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 33.00% | 30.00% | 31.00% |
Expected life | 4 years 6 months | 4 years 7 months 6 days | 4 years 7 months 6 days |
Fair value, per share (in dollars per share) | $ 31 | $ 18.13 | $ 11.75 |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average risk-free interest rate | 0.30% | 0.20% | 0.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 29.00% | 28.00% | 30.00% |
Expected life | 7 months 6 days | 7 months 6 days | 7 months 6 days |
Fair value, per share (in dollars per share) | $ 22.09 | $ 15.59 | $ 8.59 |
COMMON STOCK - Schedule of Stoc
COMMON STOCK - Schedule of Stock Option and Restricted Stock Unit Activity (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Stock option activity | |
Shares | |
Beginning balance (in shares) | 11,600,000 |
Options granted (in shares) | 1,000,000 |
Options exercised (in shares) | (2,400,000) |
Options forfeited (in shares) | (200,000) |
Ending balance (in shares) | 10,000,000 |
Exercisable as of period end (in shares) | 6,500,000 |
Vested and expected to vest as of period end (in shares) | 9,600,000 |
Weighted- Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 41.14 |
Options granted (in dollars per share) | $ / shares | 105.30 |
Options exercised (in dollars per share) | $ / shares | 30.49 |
Options forfeited (in dollars per share) | $ / shares | 54.95 |
Ending balance (in dollars per share) | $ / shares | 49.85 |
Exercisable as of period end (in dollars per share) | $ / shares | 40.99 |
Vested and expected to vest as of period end (in dollars per share) | $ / shares | $ 49.08 |
Weighted- Average Remaining Contractual Term | |
Outstanding as of period end | 3 years 7 months 6 days |
Exercisable as of period end | 2 years 9 months 18 days |
Vested and expected to vest as of period end | 3 years 6 months |
Aggregate Intrinsic Value | |
Outstanding as of period end | $ | $ 450.4 |
Exercisable as of period end | $ | 345.3 |
Vested and expected to vest as of period end | $ | $ 437.1 |
Nonvested restricted stock unit activity | |
Shares | |
Beginning balance (in shares) | 1,600,000 |
Granted (in shares) | 400,000 |
Vested (in shares) | (500,000) |
Forfeited (in shares) | (100,000) |
Ending balance (in shares) | 1,400,000 |
Weighted- Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 47.99 |
Granted (in dollars per share) | $ / shares | 84.67 |
Vested (in dollars per share) | $ / shares | 35.06 |
Forfeited (in dollars per share) | $ / shares | 51.97 |
Ending balance (in dollars per share) | $ / shares | $ 63.59 |
MRSUs | |
Weighted- Average Grant-Date Fair Value | |
Shares related to previous year's grant (in shares) | 107,755 |
MRSUs | Target | |
Shares | |
Granted (in shares) | 46,200 |
COMMON STOCK - Additional Infor
COMMON STOCK - Additional Information (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of stock options exercised and restricted stock units vested | $ 237.6 | $ 164.4 | $ 158.8 |
Cash from exercises of stock options | 73.1 | 63.6 | 93.2 |
Realized tax benefits from exercises of stock options and vesting of restricted stock units | 78.5 | 53.7 | 51.9 |
Total grant date fair value of stock options vested | 24.1 | $ 23.1 | $ 22.6 |
Employee stock purchase subscriptions | $ 96.8 | ||
Weighted-average remaining requisite service period | 30 months | ||
MRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.00% | 1.00% | 0.90% |
Expected volatility rate | 30.00% | 31.00% | 31.70% |
ACCUMULATED OTHER COMPREHENS100
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Activity for Each Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | $ 2,503.1 | $ 2,191.4 | $ 1,544.4 |
Ending balance | 2,619 | 2,503.1 | 2,191.4 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | (181.5) | (116.4) | (20.2) |
Other comprehensive (loss) income before reclassifications | (17.6) | (64) | (96.2) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Deferred income tax (expense) benefit | 1.5 | (1.1) | 0 |
Ending balance | (197.6) | (181.5) | (116.4) |
Unrealized Gain on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | 11.8 | 32.3 | 3.5 |
Other comprehensive (loss) income before reclassifications | 16.1 | 35.3 | 54.3 |
Amounts reclassified from accumulated other comprehensive loss | (8) | (68) | (7.6) |
Deferred income tax (expense) benefit | (3.2) | 12.2 | (17.9) |
Ending balance | 16.7 | 11.8 | 32.3 |
Unrealized Gain (Loss) on Available-for-sale Investments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | (1.5) | 0 | 0.3 |
Other comprehensive (loss) income before reclassifications | 0.7 | (2.6) | (0.8) |
Amounts reclassified from accumulated other comprehensive loss | 1.1 | 1.1 | 0.4 |
Deferred income tax (expense) benefit | (0.2) | 0 | 0.1 |
Ending balance | 0.1 | (1.5) | 0 |
Unrealized Pension Costs | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | (11.4) | (16.8) | (11.2) |
Other comprehensive (loss) income before reclassifications | (7.7) | 5.4 | (7.1) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 1.2 | 0.2 |
Deferred income tax (expense) benefit | 1.5 | (1.2) | 1.3 |
Ending balance | (17.6) | (11.4) | (16.8) |
Total Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||
Beginning balance | (182.6) | (100.9) | (27.6) |
Other comprehensive (loss) income before reclassifications | (8.5) | (25.9) | (49.8) |
Amounts reclassified from accumulated other comprehensive loss | (6.9) | (65.7) | (7) |
Deferred income tax (expense) benefit | (0.4) | 9.9 | (16.5) |
Ending balance | $ (198.4) | $ (182.6) | $ (100.9) |
ACCUMULATED OTHER COMPREHENS101
ACCUMULATED OTHER COMPREHENSIVE LOSS - Change in Unrealized Pension Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Prior Service Credit | |||
Pre-Tax Amount | |||
Prior service credit/cost arising during period | $ (9) | $ 2.9 | $ 0.8 |
Amounts reclassified from accumulated other comprehensive loss | (0.7) | (0.4) | (0.3) |
Other comprehensive income (loss) | (9.7) | 2.5 | 0.5 |
Tax Benefit (Expense) | |||
Prior service credit/cost arising during period | 1 | (0.3) | 0 |
Amortization of prior service credit | 0 | 0.1 | 0 |
Other comprehensive income (loss) | 1 | (0.2) | 0 |
Net of Tax Amount | |||
Prior service credit/cost arising during period | (8) | 2.6 | 0.8 |
Net of tax amortization | (0.7) | (0.3) | (0.3) |
Other comprehensive income (loss) | (8.7) | 2.3 | 0.5 |
Net actuarial gain (loss) arising during period | |||
Pre-Tax Amount | |||
Other comprehensive income (loss) | 2 | 4.1 | (7.4) |
Tax Benefit (Expense) | |||
Other comprehensive income (loss) | 0.5 | (1) | 1.3 |
Net of Tax Amount | |||
Other comprehensive income (loss) | 2.5 | 3.1 | (6.1) |
Unrealized pension credits (cost), net | |||
Pre-Tax Amount | |||
Prior service credit/cost arising during period | (7.7) | 5.4 | (7.1) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 1.2 | 0.2 |
Other comprehensive income (loss) | (7.7) | 6.6 | (6.9) |
Tax Benefit (Expense) | |||
Other comprehensive income (loss) | 1.5 | (1.2) | 1.3 |
Net of Tax Amount | |||
Other comprehensive income (loss) | $ (6.2) | $ 5.4 | $ (5.6) |
ACCUMULATED OTHER COMPREHENS102
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Information About Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Cost of sales | $ (797.4) | $ (617.2) | $ (625.6) |
Other expense, net | (4.9) | (4) | (7.7) |
Provision for income taxes | (168.4) | (127.5) | (332.9) |
Unrealized Gain on Cash Flow Hedges | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Amortization of pension adjustments | (8) | (68) | (7.6) |
Gain (loss) on available-for-sale investments | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Amortization of pension adjustments | 1.1 | 1.1 | 0.4 |
Amortization of pension adjustments | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Amortization of pension adjustments | 0 | 1.2 | $ 0.2 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Unrealized Gain on Cash Flow Hedges | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Cost of sales | 8 | 68 | |
Provision for income taxes | (3.4) | (25) | |
Net of tax | 4.6 | 43 | |
Amount Reclassified from Accumulated Other Comprehensive Loss | Gain (loss) on available-for-sale investments | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Other expense, net | (1.1) | (1.1) | |
Provision for income taxes | 0 | 0 | |
Net of tax | (1.1) | (1.1) | |
Amount Reclassified from Accumulated Other Comprehensive Loss | Amortization of pension adjustments | |||
Amounts reclassified from accumulated other comprehensive loss to affected line on Consolidated Statements of Operations | |||
Amortization of pension adjustments | 0 | (1.2) | |
Provision for income taxes | 0 | 0.2 | |
Net of tax amortization | $ 0 | $ (1) |
OTHER EXPENSE, NET (Details)
OTHER EXPENSE, NET (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |||
Charitable foundation contribution | $ 5 | $ 0 | $ 0 |
Foreign exchange losses, net | 0.5 | 4.8 | 2 |
(Gain) loss on investments | (0.2) | (0.1) | 4.5 |
Promissory note impairment | 0 | 0 | 4 |
Insurance settlement gain | 0 | 0 | (3.7) |
Lease contract termination costs | 0 | 0 | 1 |
Other | (0.4) | (0.7) | (0.1) |
Total other expense, net | $ 4.9 | $ 4 | $ 7.7 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Before Provisions for Income Taxes and Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 378.2 | $ 182.8 | $ 791.1 |
International, including Puerto Rico | 359.7 | 439.6 | 352.9 |
Income before provision for income taxes | 737.9 | 622.4 | 1,144 |
United States: | |||
Federal | 153.4 | 102.4 | 341.5 |
State and local | 12.1 | 7.4 | 23.3 |
International, including Puerto Rico | 27.4 | 33.5 | 34.8 |
Current income tax expense | 192.9 | 143.3 | 399.6 |
United States: | |||
Federal | (19.6) | (12.5) | (46.4) |
State and local | (4.3) | (2.6) | (8.1) |
International, including Puerto Rico | (0.6) | (0.7) | (12.2) |
Deferred income tax benefit | (24.5) | (15.8) | (66.7) |
Total income tax provision | $ 168.4 | $ 127.5 | $ 332.9 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Compensation and benefits | $ 100.8 | $ 94 |
Benefits from uncertain tax positions | 56.7 | 50 |
Net tax credit carryforwards | 45.6 | 39.3 |
Net operating loss carryforwards | 30.2 | 27 |
Accrued liabilities | 29.4 | 24.2 |
Inventories | 11.5 | 11.9 |
State income taxes | 2.4 | 0.5 |
Investments | 2.6 | 2.6 |
Other intangible assets | 4.2 | 3.8 |
Other | 3.1 | 4.5 |
Total deferred tax assets | 286.5 | 257.8 |
Deferred tax liabilities | ||
Property, plant, and equipment | (28.2) | (25.1) |
Cash flow hedges | (1.2) | (0.4) |
Deferred tax on foreign earnings | (6) | (10.9) |
Inventories | (4.1) | (0.9) |
Other intangible assets | (4.2) | (4.1) |
Other | (0.2) | (0.5) |
Total deferred tax liabilities | (43.9) | (41.9) |
Valuation allowance | (47.7) | (45.2) |
Net deferred tax assets | $ 194.9 | $ 170.7 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||
Net deferred tax assets increase | $ 24.2 | ||||
Valuation allowance that reduces certain deferred tax assets | 47.7 | $ 45.2 | |||
Valuation allowance provided for other-than-temporary impairments and unrealized losses | 2.6 | ||||
Operating Loss Carryforwards [Line Items] | |||||
California research expenditure tax credits | 91 | ||||
Undistributed earnings of certain foreign subsidiaries | 2,187.1 | ||||
Tax expense associated with litigation | $ 262.1 | ||||
Litigation settlement received | $ 750 | ||||
Tax benefits from remeasurement of uncertain tax positions | 4.8 | ||||
Gross uncertain tax positions | 245.5 | 216.1 | 192.3 | $ 127.7 | |
Reduction in liabilities from offsetting tax benefits | 44.9 | 40.6 | |||
Net amounts that would favorably affect effective tax rate | 200.6 | 175.5 | |||
Accrued interest related to unrecognized tax benefits, net of tax benefit | 14.7 | 10.7 | |||
Tax benefit of accrued interest | 10.8 | 7.6 | |||
Interest expense, net of tax benefit | 4 | 3.9 | 2.3 | ||
Non-U.S. | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax reductions compared to local statutory rates | $ 77.4 | $ 59.1 | $ 68.3 | ||
Tax reductions compared to local statutory rates per diluted share (in dollars per share) | $ 0.32 | $ 0.25 | $ 0.31 | ||
United States | State and local jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforwards | $ 6 | ||||
Net benefit recorded to Additional Paid-in Capital | 0.3 | ||||
Research expenditure tax credits | California | State and local jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforwards attributable to windfall stock option deductions | 9 | ||||
Research expenditure tax credits | Carryforward period indefinite | California | State and local jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
California research expenditure tax credits | $ 76.6 |
INCOME TAXES - Summary of Net O
INCOME TAXES - Summary of Net Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2016USD ($) |
Operating Loss Carryforwards [Line Items] | |
Carryforward Amount | $ 114.2 |
Tax Benefit Amount | 30.5 |
Valuation Allowance | (29.8) |
Net Tax Benefit | 0.7 |
United States state net operating losses | United States | Carryforward Period Ends 2017-2034 | |
Operating Loss Carryforwards [Line Items] | |
Carryforward Amount | 10.6 |
Tax Benefit Amount | 0.6 |
Valuation Allowance | (0.3) |
Net Tax Benefit | 0.3 |
Non-United States net operating losses | Non-United States | Carryforward Period Ends 2017-2025 | |
Operating Loss Carryforwards [Line Items] | |
Carryforward Amount | 57.2 |
Tax Benefit Amount | 14.3 |
Valuation Allowance | (13.9) |
Net Tax Benefit | 0.4 |
Non-United States net operating losses | Non-United States | Carryforward Period Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Carryforward Amount | 46.4 |
Tax Benefit Amount | 15.6 |
Valuation Allowance | (15.6) |
Net Tax Benefit | $ 0 |
INCOME TAXES - Summary of Tax C
INCOME TAXES - Summary of Tax Credit Carryforwards (Details) $ in Millions | Dec. 31, 2016USD ($) |
Tax credit carryforwards and the related carryforward periods | |
Carryforward Amount | $ 91 |
Valuation Allowance | (14.4) |
Net Tax Benefit | 76.6 |
California research expenditure tax credits | California | Research expenditure tax credits | Carryforward Period Indefinite | |
Tax credit carryforwards and the related carryforward periods | |
Carryforward Amount | 76.6 |
Valuation Allowance | 0 |
Net Tax Benefit | 76.6 |
Puerto Rico purchases credit | Puerto Rico | Purchases credit | Carryforward Period Indefinite | |
Tax credit carryforwards and the related carryforward periods | |
Carryforward Amount | 14.4 |
Valuation Allowance | (14.4) |
Net Tax Benefit | $ 0 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense at U.S. federal statutory rate | $ 258.3 | $ 217.8 | $ 400.4 |
Foreign income taxed at different rates | (88.6) | (105.8) | (67.1) |
State and local taxes, net of federal tax benefit | 9.7 | 3.1 | 19.3 |
Tax credits, federal and state | (21.3) | (15.7) | (13.5) |
Build (release) of reserve for uncertain tax positions for prior years | 4.6 | 3.3 | (4.8) |
U.S. tax on foreign earnings, net of credits | 5.1 | 20.5 | (3.1) |
Nondeductible stock-based compensation | 3.6 | 2.3 | 2.1 |
Other | (3) | 2 | (0.4) |
Total income tax provision | $ 168.4 | $ 127.5 | $ 332.9 |
INCOME TAXES - Reconciliatio110
INCOME TAXES - Reconciliation of Beginning and Ending Amount of Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Uncertain gross tax positions, beginning balance | $ 216.1 | $ 192.3 | $ 127.7 |
Current year tax positions | 29 | 29.6 | 75.9 |
Increase prior year tax positions | 2.7 | 2.2 | 0.6 |
Decrease prior year tax positions | (0.9) | (7.4) | (10.5) |
Settlements | (0.3) | (0.4) | (1) |
Lapse of statutes of limitations | (1.1) | (0.2) | (0.4) |
Uncertain gross tax positions, ending balance | $ 245.5 | $ 216.1 | $ 192.3 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) | Apr. 19, 2016patent | Dec. 31, 2016lawsuit | Nov. 02, 2015subsidiary |
Loss Contingencies [Line Items] | |||
Number of lawsuits that if settled could have a material adverse impact on net income or cash flows | lawsuit | 1 | ||
Boston Scientific | Edwards Lifesciences vs Boston Scientific Patent Lawsuits | |||
Loss Contingencies [Line Items] | |||
Number of subsidiaries in litigation | 2 | ||
Number of patents allegedly infringed | patent | 8 | ||
Boston Scientific | Europe | Edwards Lifesciences vs Boston Scientific Patent Lawsuits | |||
Loss Contingencies [Line Items] | |||
Number of subsidiaries in litigation | 3 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Information About Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | $ 767.7 | $ 739.4 | $ 759.3 | $ 697.3 | $ 671.1 | $ 615.5 | $ 616.8 | $ 590.3 | $ 2,963.7 | $ 2,493.7 | $ 2,322.9 |
Segment Pre-tax Income | 737.9 | 622.4 | 1,144 | ||||||||
Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 2,944.8 | 2,718 | 2,344.6 | ||||||||
Segment Pre-tax Income | 1,623.7 | 1,378.5 | 1,137.5 | ||||||||
Operating segments | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 1,615.7 | 1,262.8 | 1,047.3 | ||||||||
Segment Pre-tax Income | 1,050.2 | 747.8 | 605.6 | ||||||||
Operating segments | Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 745.9 | 842.9 | 741.4 | ||||||||
Segment Pre-tax Income | 360.9 | 409.1 | 328.1 | ||||||||
Operating segments | Japan | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 279.6 | 297.2 | 270.8 | ||||||||
Segment Pre-tax Income | 139.6 | 139.4 | 125.2 | ||||||||
Operating segments | Rest of World | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 303.6 | 315.1 | 285.1 | ||||||||
Segment Pre-tax Income | $ 73 | $ 82.2 | $ 78.6 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Segment Net Sales and Pre-Tax Income to Consolidated Net Sales and Pre-Tax Income (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | $ 767.7 | $ 739.4 | $ 759.3 | $ 697.3 | $ 671.1 | $ 615.5 | $ 616.8 | $ 590.3 | $ 2,963.7 | $ 2,493.7 | $ 2,322.9 |
Segment Pre-tax Income | 737.9 | 622.4 | 1,144 | ||||||||
Unallocated amounts: | |||||||||||
Special charges | (34.5) | 0 | (70.7) | ||||||||
Foreign currency | (0.5) | (4.8) | (2) | ||||||||
Consolidated pre-tax income | 737.9 | 622.4 | 1,144 | ||||||||
Operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 2,944.8 | 2,718 | 2,344.6 | ||||||||
Segment Pre-tax Income | 1,623.7 | 1,378.5 | 1,137.5 | ||||||||
Unallocated amounts: | |||||||||||
Consolidated pre-tax income | 1,623.7 | 1,378.5 | 1,137.5 | ||||||||
Segment reconciling items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment Net Sales | 18.9 | (224.3) | (21.7) | ||||||||
Unallocated amounts: | |||||||||||
Intellectual property (expenses) income, net | (32.6) | (7) | 740.4 | ||||||||
Interest expense, net | (8.4) | (9.3) | (10.8) | ||||||||
Foreign currency | 15.8 | (28.5) | 6.8 | ||||||||
Corporate items | |||||||||||
Unallocated amounts: | |||||||||||
Corporate items | $ (826.1) | $ (711.3) | $ (659.2) |
SEGMENT INFORMATION - Schedu114
SEGMENT INFORMATION - Schedule of Enterprise-Wide Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | $ 767.7 | $ 739.4 | $ 759.3 | $ 697.3 | $ 671.1 | $ 615.5 | $ 616.8 | $ 590.3 | $ 2,963.7 | $ 2,493.7 | $ 2,322.9 |
Long-lived Tangible Assets by Geographic Area | |||||||||||
Long-lived tangible assets | 700 | 613.7 | 700 | 613.7 | 492.1 | ||||||
Transcatheter Heart Valve Therapy | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 1,628.5 | 1,180.3 | 943.6 | ||||||||
Surgical Heart Valve Therapy | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 774.9 | 785 | 826.1 | ||||||||
Critical Care | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 560.3 | 528.4 | 553.2 | ||||||||
United States | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 1,615.7 | 1,262.9 | 1,047.3 | ||||||||
Long-lived Tangible Assets by Geographic Area | |||||||||||
Long-lived tangible assets | 555.5 | 473.6 | 555.5 | 473.6 | 347.6 | ||||||
Europe | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 749 | 717.3 | 744.5 | ||||||||
Long-lived Tangible Assets by Geographic Area | |||||||||||
Long-lived tangible assets | 27.9 | 36 | 27.9 | 36 | 42.1 | ||||||
Japan | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 309.3 | 246.2 | 257.9 | ||||||||
Long-lived Tangible Assets by Geographic Area | |||||||||||
Long-lived tangible assets | 8 | 8.1 | 8 | 8.1 | 8.5 | ||||||
Rest of World | |||||||||||
Net Sales by Geographic Area and by Major Product and Service Area | |||||||||||
Net sales | 289.7 | 267.3 | 273.2 | ||||||||
Long-lived Tangible Assets by Geographic Area | |||||||||||
Long-lived tangible assets | $ 108.6 | $ 96 | $ 108.6 | $ 96 | $ 93.9 |
QUARTERLY FINANCIAL RESULTS 115
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 767.7 | $ 739.4 | $ 759.3 | $ 697.3 | $ 671.1 | $ 615.5 | $ 616.8 | $ 590.3 | $ 2,963.7 | $ 2,493.7 | $ 2,322.9 |
Gross profit | 554.5 | 538 | 556.8 | 517 | 495.2 | 468.8 | 458.2 | 454.3 | 2,166.3 | 1,876.5 | 1,697.3 |
Net income | $ 158.5 | $ 141.4 | $ 126.6 | $ 143 | $ 140.7 | $ 118.1 | $ 112.7 | $ 123.4 | $ 569.5 | $ 494.9 | $ 811.1 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 0.74 | $ 0.66 | $ 0.60 | $ 0.67 | $ 0.65 | $ 0.55 | $ 0.52 | $ 0.57 | $ 2.67 | $ 2.30 | $ 3.81 |
Diluted (in dollars per share) | 0.73 | 0.65 | 0.58 | 0.66 | 0.64 | 0.54 | 0.51 | 0.56 | 2.61 | 2.25 | $ 3.74 |
High | |||||||||||
Class of Stock [Line Items] | |||||||||||
Market price (in dollars per share) | 121.75 | 121.73 | 112 | 89.93 | 83.43 | 79.50 | 73.65 | 75.21 | 121.75 | 83.43 | |
Low | |||||||||||
Class of Stock [Line Items] | |||||||||||
Market price (in dollars per share) | $ 81.12 | $ 98.02 | $ 86.73 | $ 72.20 | $ 70.32 | $ 62.53 | $ 61.38 | $ 61.99 | $ 72.20 | $ 61.38 |
VALUATION AND QUALIFYING ACC116
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | $ 13.1 | $ 11.3 | $ 12.2 |
Charged to Costs and Expenses | 1.5 | 3.8 | 0.8 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions From Reserves | (1.8) | (2) | (1.7) |
Balance at End of Period | 12.8 | 13.1 | 11.3 |
Tax valuation allowance | |||
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | 45.2 | 47.7 | 46.4 |
Charged to Costs and Expenses | 1.2 | 4.8 | 2 |
Charged to Other Accounts | 1.3 | 0 | 0 |
Deductions From Reserves | 0 | (7.3) | (0.7) |
Balance at End of Period | $ 47.7 | $ 45.2 | $ 47.7 |