Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 23, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Edwards Lifesciences Corp | |
Entity Central Index Key | 1,099,800 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 210,779,115 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 1,227 | $ 818.3 |
Short-term investments (Note 5) | 272.3 | 519.2 |
Accounts receivable, net of allowances of $9.0 and $8.5, respectively | 406.6 | 421.6 |
Other receivables | 40.2 | 40.6 |
Inventories (Note 2) | 573.9 | 554.9 |
Prepaid expenses | 78 | 60.6 |
Other current assets | 118.9 | 116.9 |
Total current assets | 2,716.9 | 2,532.1 |
Long-term investments (Note 5) | 532.1 | 567 |
Property, plant, and equipment, net | 711.6 | 679.7 |
Goodwill | 1,144.8 | 1,126.5 |
Other intangible assets, net | 480.5 | 468 |
Deferred income taxes | 181.4 | 167.1 |
Other assets | 57.8 | 108.9 |
Total assets | 5,825.1 | 5,649.3 |
Current liabilities | ||
Accounts payable and accrued liabilities (Note 2) | 674.1 | 753.2 |
Short-term debt | 598.6 | 598 |
Contingent consideration liabilities (Note 6) | 41.8 | 51.7 |
Total current liabilities | 1,314.5 | 1,402.9 |
Long-term debt | 456 | 438.4 |
Contingent consideration liabilities (Note 6) | 196.3 | 192.6 |
Taxes payable | 290.8 | 347.5 |
Other long-term liabilities | 321.8 | 311.7 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock, $.01 par value, authorized 50.0 shares, no shares outstanding | 0 | 0 |
Common stock, $1.00 par value, 350.0 shares authorized, 213.0 and 212.0 shares issued, and 210.7 and 209.7 shares outstanding, respectively | 213 | 212 |
Additional paid-in capital | 1,229.1 | 1,166.9 |
Retained earnings | 2,179.1 | 1,962.1 |
Accumulated other comprehensive loss | (121.3) | (132.7) |
Treasury stock, at cost, 2.3 and 2.3 shares, respectively | (254.2) | (252.1) |
Total stockholders' equity | 3,245.7 | 2,956.2 |
Total liabilities and stockholders' equity | $ 5,825.1 | $ 5,649.3 |
CONSOLIDATED CONDENSED BALANCE3
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9 | $ 8.5 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (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) | 213,000,000 | 212,000,000 |
Common stock, shares outstanding (in shares) | 210,700,000 | 209,700,000 |
Treasury stock (in shares) | 2,300,000 | 2,300,000 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 894.8 | $ 883.5 |
Cost of sales | 233.6 | 215.6 |
Gross profit | 661.2 | 667.9 |
Selling, general, and administrative expenses | 256 | 229.6 |
Research and development expenses | 143.2 | 128.7 |
Intellectual property litigation expenses | 5.7 | 10.2 |
Change in fair value of contingent consideration liabilities, net (Note 6) | 3.8 | 1.1 |
Operating income | 252.5 | 298.3 |
Interest (income) expense, net | (0.8) | 2.4 |
Special gains | (7.1) | 0 |
Other (income) expense, net | (3.1) | 2.3 |
Income before provision for income taxes | 263.5 | 293.6 |
Provision for income taxes | 56.9 | 63.4 |
Net income | $ 206.6 | $ 230.2 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.98 | $ 1.09 |
Diluted (in dollars per share) | $ 0.96 | $ 1.06 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 210.2 | 211.2 |
Diluted (in shares) | 215.1 | 216.4 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 206.6 | $ 230.2 |
Other comprehensive income, net of tax (Note 10): | ||
Foreign currency translation adjustments | 28.4 | 23.7 |
Unrealized loss on cash flow hedges | (12.6) | (6.3) |
Defined benefit pension plans | 0.3 | 0 |
Unrealized loss on available-for-sale investments | (6.1) | (1) |
Reclassification of net realized investment loss to earnings | 1.4 | 0.5 |
Other comprehensive income | 11.4 | 16.9 |
Comprehensive income | $ 218 | $ 247.1 |
CONSOLIDATED CONDENSED STATEME6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net income | $ 206.6 | $ 230.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 19.1 | 21.1 |
Stock-based compensation (Note 8) | 18.4 | 15.2 |
Change in fair value of contingent consideration liabilities, net (Note 6) | 3.8 | 1.1 |
Deferred income taxes | 31.1 | 36.6 |
Purchased in-process research and development | 0 | 5.6 |
Other | 1 | (0.6) |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | 29.9 | (81.5) |
Inventories | (3.3) | (24.3) |
Accounts payable and accrued liabilities | (118) | (94.2) |
Income taxes | (6.7) | 19 |
Prepaid expenses and other current assets | (26.4) | (3.6) |
Other | (4.2) | 3.7 |
Net cash provided by operating activities | 151.3 | 128.3 |
Cash flows from investing activities | ||
Capital expenditures | (43.2) | (15.9) |
Proceeds from held-to-maturity investments (Note 5) | 238.5 | 229.5 |
Purchases of available-for sale investments (Note 5) | 0 | (167.4) |
Proceeds from available-for-sale investments (Note 5) | 42.3 | 193.3 |
Investments in intangible assets and in-process research and development | (3) | (2.7) |
Investments in trading securities, net | (3.1) | (4.4) |
Investments in unconsolidated affiliates, net (Note 5) | (1.8) | 0.2 |
Payment of contingent consideration | (10) | 0 |
Acquisition of business, net of cash acquired | 0 | (82) |
Other | 0.6 | 0.6 |
Net cash used in investing activities | 220.3 | 151.2 |
Cash flows from financing activities | ||
Proceeds from issuance of debt | 5.1 | 377.4 |
Payments on debt and capital lease obligations | (5.1) | (353.4) |
Purchases of treasury stock | (2.2) | (437.4) |
Proceeds from stock plans | 44.7 | 23.1 |
Other | (1.6) | (1) |
Net cash provided by (used in) financing activities | 40.9 | (391.3) |
Effect of currency exchange rate changes on cash and cash equivalents | (3.8) | 1 |
Net increase (decrease) in cash and cash equivalents | 408.7 | (110.8) |
Cash and cash equivalents at beginning of period | 818.3 | 930.1 |
Cash and cash equivalents at end of period | 1,227 | 819.3 |
Non-cash investing and financing transactions: | ||
Fair value of shares issued in connection with business combinations | 0 | 266.5 |
Capital expenditures accruals | $ 15.8 | $ 12.8 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences Corporation's Annual Report on Form 10-K for the year ended December 31, 2017 . Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments considered necessary for a fair statement of the interim periods. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board ("FASB") issued an amendment to the guidance on comprehensive income. The amendment permits a company to reclassify the income tax effects of the Tax Cuts and Jobs Act (the "2017 Act") on items within accumulated other comprehensive income to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company early adopted this guidance as of January 1, 2018, and elected to reclassify the income tax effects of the 2017 Act from accumulated other comprehensive loss to retained earnings. Accordingly, during the quarter ended March 31, 2018, the Company reclassified $7.8 million of tax benefits associated with its hedging activities from accumulated other comprehensive loss to retained earnings. Tax effects unrelated to the 2017 Act are released from accumulated other comprehensive loss using either the specific identification approach or the portfolio approach based on the nature of the underlying item. In August 2017, the FASB issued an amendment to the guidance on derivatives and hedging. The amendment expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for periods beginning after December 15, 2018, including interim periods within those annual periods. The Company early adopted this guidance as of January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Certain provisions of the guidance required modifications to existing disclosure requirements on a prospective basis. See Note 7 for disclosures relating to the Company's derivative instruments and hedging activities. In March 2017, the FASB issued an amendment on the guidance on retirement benefits. The amendment requires that employers report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees. The other components of net benefit cost are required to be presented in the consolidated statements of operations separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component of net benefit cost is eligible for capitalization. The guidance was effective for periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted the guidance related to the presentation of the service cost component and the other components of net benefit cost in the income statement retrospectively, and the guidance related to the capitalization of the service cost component of net benefit cost was adopted prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements for the quarter ended March 31, 2018 and 2017. The Company elected to apply the practical expedient that permits the use of previously disclosed service cost and other costs from the prior year’s employee benefit plan footnote as appropriate estimates when retrospectively changing the presentation of these costs in the consolidated statements of operations. 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 was effective for annual periods beginning after December 15, 2017, including interim periods within those periods. In October 2016, the FASB issued an amendment to the guidance on income taxes. The amendment eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity transfer of an asset other than inventory and associated changes to deferred taxes will be recognized when the transfer occurs. The guidance was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The Company adopted this new standard using the modified retrospective method. Upon adoption, the Company recorded a $2.6 million increase to retained earnings, a $50.3 million decrease to other assets, and a $52.9 million decrease to long-term taxes payable. In addition, the Company reclassified $46.5 million from long-term taxes payable to deferred income taxes, and also made this reclassification in the prior year's consolidated condensed balance sheet to conform to the current year presentation. 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 was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance impacts 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. Contingent consideration payments made soon after the acquisition date will continue to be classified as an investing activity. The Company did not make any contingent consideration payments in the quarter ended March 31, 2017; therefore, no retrospective adjustments were required. The adoption of the other provisions of this guidance did not have a material impact on the Company's 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 (retrospective method), or retrospectively with the cumulative effect of the change recognized at the date of the initial application (modified retrospective method). The Company adopted the new guidance on January 1, 2018 using the modified retrospective method to contracts that were not completed as of January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. |
COMPOSITION OF CERTAIN FINANCIA
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 3 Months Ended |
Mar. 31, 2018 | |
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 condensed balance sheets consisted of the following (in millions): March 31, 2018 December 31, 2017 Inventories Raw materials $ 108.0 $ 101.4 Work in process 131.7 121.1 Finished products 334.2 332.4 $ 573.9 $ 554.9 At March 31, 2018 and December 31, 2017 , $94.4 million and $88.4 million , respectively, of the Company's finished products inventories were held on consignment. March 31, 2018 December 31, 2017 Accounts payable and accrued liabilities Accounts payable $ 121.2 $ 116.6 Employee compensation and withholdings 140.2 249.4 Taxes payable (Note 12) 125.1 97.8 Property, payroll, and other taxes 46.5 41.9 Research and development accruals 46.0 39.2 Accrued rebates 49.4 53.9 Fair value of derivatives 25.9 24.8 Accrued marketing expenses 18.2 14.9 Litigation and insurance reserves 16.6 15.0 Accrued relocation costs 10.6 8.7 Accrued professional services 6.3 8.5 Accrued realignment reserves 1.5 8.2 Other accrued liabilities 66.6 74.3 $ 674.1 $ 753.2 |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services. The Company generates nearly all of its revenue from direct product sales and sales of products under consignment arrangements. Revenue from direct product sales is recognized at a point in time upon delivery of the product. Revenue from sales of consigned inventory is recognized at a point in time when the Company is notified by the customer that the product has been used. Notification is usually through the replenishing of the inventory, and the Company periodically reviews consignment inventories to confirm the accuracy of customer reporting. The Company also generates a small portion of its revenue from service contracts, and recognizes revenue from service contracts ratably over the term of the contracts. Sales taxes and other similar taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company does not have any significant unusual payment terms in its contracts with customers. In addition, the Company receives royalty payments for the licensing of certain intellectual property and recognizes the royalty when the subsequent sale of product using the intellectual property occurs. The amount of consideration the Company ultimately receives varies depending upon the return terms, sales rebates, discounts, and other incentives that the Company may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely upon an assessment of historical payment experience, historical relationship to revenues, estimated customer inventory levels, and current contract sales terms with direct and indirect customers. 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 and the negotiated price to be paid by the end-customer. This distributor rebate is recorded as a reduction to sales and a reduction to the distributor's accounts receivable at the time of sale to a distributor. 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. Volume rebates offered to GPOs are recorded as a reduction to sales and an obligation to the GPOs, as the Company expects to pay in cash. Volume rebates offered to customers 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, projected sales levels, 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. Product returns are typically not significant because returns are generally not allowed unless the product is damaged at time of receipt. In limited circumstances, the Company may allow customers to return previously purchased products, such as 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. Contracts with Multiple Performance Obligations A limited number of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the transaction price is allocated to each performance obligation based on its relative standalone selling price charged to other customers. Deferred Revenue The Company sells separately priced service contracts, which range from 12 months to 36 months, to owners of its hemodynamic monitors. The Company invoices the customer the total amount of consideration at the inception of the contract and recognizes revenue ratably over the term of the contract. As of March 31, 2018 and December 31, 2017 , $5.3 million and $4.2 million , respectively, of deferred revenue associated with outstanding service contracts was recorded in “ Accounts Payable and Accrued Liabilities ” and " Other Long-term Liabilities. " During the three months ended March 31, 2018 , the Company recognized as revenue $0.6 million that was included in the balance of deferred revenue as of December 31, 2017 . The Company applies the optional exemption of not disclosing the amount of the transaction price allocated to unsatisfied performance obligations for contracts with an original expected duration of one year or less. |
SPECIAL GAINS
SPECIAL GAINS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SPECIAL GAINS | SPECIAL GAINS In September 2017, the Company recorded a $10.2 million charge related primarily to severance expenses (impacting 232 employees) and other costs associated with the planned closure of its manufacturing plant in Switzerland. As of March 31, 2018 , the Company's remaining severance obligations of $1.8 million are expected to be substantially paid by September 30, 2018. In March 2018, the Company recorded a $7.1 million gain related to the curtailment of its defined benefit plan in Switzerland resulting from the plant closure. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, 2018 December 31, 2017 Held-to-maturity Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 146.1 $ — $ — $ 146.1 $ 382.9 $ — $ — $ 382.9 Commercial paper 0.2 — — 0.2 1.4 — — 1.4 U.S. government and agency securities 3.4 — — 3.4 3.9 — — 3.9 Total $ 149.7 $ — $ — $ 149.7 $ 388.2 $ — $ — $ 388.2 Available-for-sale Bank time deposits $ 0.5 $ — $ — $ 0.5 $ 0.5 $ — $ — $ 0.5 Commercial paper 30.0 — — 30.0 40.3 — — 40.3 U.S. government and agency securities 69.5 — (1.0 ) 68.5 69.4 — (0.7 ) 68.7 Foreign government bonds 3.0 — — 3.0 3.0 — — 3.0 Asset-backed securities 112.3 0.1 (1.0 ) 111.4 121.2 — (0.4 ) 120.8 Corporate debt securities 422.7 0.7 (4.3 ) 419.1 446.5 0.8 (1.8 ) 445.5 Municipal securities 4.4 — — 4.4 4.4 — — 4.4 Total $ 642.4 $ 0.8 $ (6.3 ) $ 636.9 $ 685.3 $ 0.8 $ (2.9 ) $ 683.2 The cost and fair value of investments in debt securities, by contractual maturity, as of March 31, 2018 were as follows: Held-to-Maturity Available-for-Sale Cost Fair Value Cost Fair Value (in millions) Due in 1 year or less $ 146.4 $ 146.4 $ 126.3 $ 125.9 Due after 1 year through 5 years — — 410.0 405.8 Instruments not due at a single maturity date 3.3 3.3 106.1 105.2 $ 149.7 $ 149.7 $ 642.4 $ 636.9 Actual maturities may differ from the contractual maturities due to call or prepayment rights. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2018 and December 31, 2017 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 9.6 $ — $ — $ — $ 9.6 $ — U.S. government and agency securities 34.7 (0.4 ) 37.0 (0.5 ) 71.7 (0.9 ) Foreign government bonds 3.0 — — — 3.0 — Asset-backed securities 83.8 (0.8 ) 21.4 (0.2 ) 105.2 (1.0 ) Corporate debt securities 235.2 (3.4 ) 56.2 (1.0 ) 291.4 (4.4 ) Municipal securities 4.3 — — — 4.3 — $ 370.6 $ (4.6 ) $ 114.6 $ (1.7 ) $ 485.2 $ (6.3 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 2.4 $ — $ — $ — $ 2.4 $ — U.S. government and agency securities 31.5 (0.2 ) 37.1 (0.5 ) 68.6 (0.7 ) Foreign government bonds 3.0 — — — 3.0 — Asset-backed securities 90.8 (0.3 ) 23.2 (0.1 ) 114.0 (0.4 ) Corporate debt securities 253.3 (1.2 ) 59.2 (0.6 ) 312.5 (1.8 ) Municipal securities 4.3 — — — 4.3 — $ 385.3 $ (1.7 ) $ 119.5 $ (1.2 ) $ 504.8 $ (2.9 ) Investments in Unconsolidated Affiliates The Company has a number of equity investments in privately and publicly held companies. Investments in these unconsolidated affiliates are recorded in " Long-term Investments " on the consolidated condensed balance sheets, and are as follows: March 31, December 31, (in millions) Equity method investments Cost 9.2 9.2 Equity in losses (4.9 ) (5.1 ) Carrying value of equity method investments 4.3 4.1 Cost method investments Carrying value of cost method investments 13.5 10.7 Total investments in unconsolidated affiliates $ 17.8 $ 14.8 During the three months ended March 31, 2018 , the gross realized gains or losses from sales of available-for-sale investments were not material. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, accounts and other receivables, investments, accounts payable, certain accrued liabilities, and borrowings under a revolving credit agreement. These financial instruments are held at cost, which generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. As of March 31, 2018 , the fair value of the notes payable, based on Level 2 inputs, was $601.8 million , versus a carrying value of $598.6 million . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company prioritizes the inputs used to determine fair values in one of the following three categories: Level 1—Quoted market prices in active markets for identical assets or liabilities. Level 2—Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3—Unobservable inputs that are not corroborated by market data. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis (in millions): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 50.9 $ 60.5 $ — $ 111.4 Available-for-sale investments: Bank time deposits — 0.5 — 0.5 Corporate debt securities — 419.1 — 419.1 Asset-backed securities — 111.4 — 111.4 U.S. government and agency securities 20.6 47.9 — 68.5 Foreign government bonds — 3.0 — 3.0 Commercial paper — 30.0 — 30.0 Municipal securities — 4.4 — 4.4 Investments held for deferred compensation plans 66.9 — — 66.9 Derivatives — 3.7 — 3.7 $ 138.4 $ 680.5 $ — $ 818.9 Liabilities Derivatives $ — $ 25.9 $ — $ 25.9 Deferred compensation plans 67.0 — — 67.0 Contingent consideration liabilities — — 238.1 238.1 $ 67.0 $ 25.9 $ 238.1 $ 331.0 December 31, 2017 Assets Cash equivalents $ 52.2 $ 22.8 $ — $ 75.0 Available-for-sale investments: Bank time deposits — 0.5 — 0.5 Corporate debt securities — 445.5 — 445.5 Asset-backed securities — 120.8 — 120.8 U.S. government and agency securities 20.6 48.1 — 68.7 Foreign government bonds — 3.0 — 3.0 Commercial paper — 40.3 — 40.3 Municipal securities — 4.4 — 4.4 Investments held for deferred compensation plans 63.7 — — 63.7 Derivatives — 4.9 — 4.9 $ 136.5 $ 690.3 $ — $ 826.8 Liabilities Derivatives $ — $ 24.8 $ — $ 24.8 Deferred compensation plans 64.1 — — 64.1 Contingent consideration liabilities — 244.3 244.3 $ 64.1 $ 24.8 $ 244.3 $ 333.2 The following table summarizes the changes in fair value of the contingent consideration liabilities for the three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ 244.3 Additions — Payments (10.0 ) Changes in fair value 3.8 Balance at March 31, 2018 $ 238.1 In January 2018, contingent consideration of $10.0 million was paid to the former shareholders of Harpoon Medical, Inc. upon achievement of a regulatory milestone. 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 time deposits, commercial paper, U.S. and foreign government and agency securities, municipal 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. Deferred Compensation Plans The Company holds investments in trading securities related to its deferred compensation plans. The investments are in a variety of stock and bond mutual funds. The fair values of these investments and the corresponding liabilities are based on quoted market prices. Derivative Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts to manage foreign currency 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. 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 Liabilities Certain of the Company's acquisitions involve contingent consideration arrangements. Payment of additional consideration is contingent upon the acquired company reaching certain performance milestones, such as attaining specified revenue levels, achieving product development targets, or obtaining regulatory approvals. These contingent consideration liabilities are measured at estimated fair value using either a probability weighted discounted cash flow analysis or a Monte Carlo simulation model, both of which consider significant unobservable inputs. These inputs include (1) the discount rate used to present value the projected cash flows (ranging from 1.6% to 3.8% ), (2) the probability of milestone achievement (ranging from 25.0% to 98.5% ), (3) the projected payment dates (ranging from 2018 to 2025), and (4) the volatility of future revenue ( 45.0% ). The use of different assumptions could have a material effect on the estimated fair value amounts. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2018 | |
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 interest rate and foreign currency risks, as summarized below. It is the Company's policy not to enter into derivative financial instruments for speculative purposes. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. Notional Amount March 31, 2018 December 31, 2017 (in millions) Foreign currency forward exchange contracts $ 1,188.1 $ 979.8 Derivative financial instruments involve credit risk in the event the counterparty should default. It is the Company's policy to execute such instruments with global financial institutions that the Company believes to be creditworthy. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. The master-netting agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements. The Company previously used interest rate swaps to convert a portion of its fixed-rate debt into variable-rate debt. These interest rate swaps were designated as fair value hedges and met the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps were considered to exactly offset changes in the fair value of the underlying long-term debt. In December 2017, these interest rate swaps were settled. The Company uses foreign currency forward exchange contracts to manage foreign currency risks. The contracts are denominated in currencies of major industrial countries, principally the Euro and the Japanese yen. 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. The Company also uses foreign currency forward exchange contracts and foreign currency denominated debt to offset changes in the value of its net investment in certain foreign subsidiaries resulting from changes in foreign currency exchange rates. The foreign currency forward exchange contracts and the foreign currency denominated debt are designated as net investment 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 that are not designated as hedging instruments to offset the transaction gains and losses associated with certain of these assets and liabilities. All derivative financial instruments are recognized at fair value in the consolidated condensed balance sheets. For each derivative instrument that is designated 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 the interest rate swaps (designated as fair value hedges) is classified in net interest expense, as they hedged the interest rate risk associated with the Company's fixed-rate debt. The Company reports in " Accumulated Other Comprehensive Loss " 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. 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 gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated condensed statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated condensed statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities. The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): Fair Value Derivatives designated as hedging instruments Balance Sheet Location March 31, 2018 December 31, 2017 Assets Foreign currency contracts Other current assets $ 3.7 $ 4.9 Liabilities Foreign currency contracts Accrued and other liabilities $ 25.9 $ 24.8 The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet March 31, 2018 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative assets Foreign currency contracts $ 3.7 $ — $ 3.7 $ (2.3 ) $ — $ 1.4 Derivative liabilities Foreign currency contracts $ 25.9 $ — $ 25.9 $ (2.3 ) $ — $ 23.6 December 31, 2017 Derivative assets Foreign currency contracts $ 4.9 $ — $ 4.9 $ (3.7 ) $ — $ 1.2 Derivative liabilities Foreign currency contracts $ 24.8 $ — $ 24.8 $ (3.7 ) $ — $ 21.1 The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (in millions): Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended 2018 2017 2018 2017 Cash flow hedges Foreign currency contracts $ (15.4 ) $ (8.5 ) Cost of sales $ (1.5 ) $ 2.5 Selling, general, and administrative expenses $ (1.1 ) $ 0.1 Net investment hedges Foreign currency denominated debt $ (20.2 ) $ — As of March 31, 2018 , the Company had €370.0 million of outstanding long-term debt designated as a net investment hedge. Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Location of Gain or (Loss) Recognized in Income on Derivative Fair value hedges 2018 2017 Interest rate swap agreements Interest (income) expense, net $ — $ 0.1 In December 2017, the interest rate swap agreements were settled at a loss of $0.7 million , which is being amortized to interest expense over the remaining life of the debt. Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Location of Gain or (Loss) Recognized in Income on Derivative Derivatives not designated as hedging instruments 2018 2017 Foreign currency contracts Other (income) expense, net $ (8.9 ) $ (5.5 ) The following table presents the effect of cash flow hedge accounting on the consolidated condensed statements of operations: Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships Three Months Ended March 31, 2018 Selling, general, and administrative expenses Cost of sales Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of cash flow hedges are recorded $ (233.6 ) $ (256.0 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ (1.5 ) $ (1.1 ) The Company expects that during the next twelve months it will reclassify to earnings a $13.0 million loss currently recorded in " Accumulated Other Comprehensive Loss ." |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three months ended March 31, 2018 and 2017 was as follows (in millions): Three Months Ended 2018 2017 Cost of sales $ 3.0 $ 2.3 Selling, general, and administrative expenses 11.8 10.2 Research and development expenses 3.6 2.7 Total stock-based compensation expense $ 18.4 $ 15.2 At March 31, 2018 , the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $96.5 million , which will be amortized on a straight-line basis over the weighted-average remaining requisite service period of 26 months . Fair Value Disclosures The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: Option Awards Three Months Ended 2018 2017 Average risk-free interest rate 2.6 % 1.8 % Expected dividend yield None None Expected volatility 33.2 % 33.2 % Expected term (years) 4.7 4.7 Fair value, per option $ 43.45 $ 29.66 The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: ESPP Three Months Ended 2018 2017 Average risk-free interest rate 0.8 % 0.4 % Expected dividend yield None None Expected volatility 32.6 % 33.2 % Expected term (years) 0.6 0.6 Fair value, per share $ 35.07 $ 23.26 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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. The French suit has been stayed pending the outcome of validity proceedings on the '766 and '254 patents. On March 9, 2017, the German district court ruled that the SAPIEN 3 heart valve infringes the '254 and '766 patents, and that Boston Scientific is entitled to enforce an injunction against SAPIEN 3 sales in Germany upon payment of a €90.0 million bond for each patent, but has not yet elected to do so. Edwards Lifesciences has appealed this infringement decision. In addition, Edwards Lifesciences filed oppositions at the European Patent Office ("EPO") challenging the validity of the '254 and '766 patents. On October 19, 2017, the EPO required Boston Scientific to amend the '254 patent. 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 U.K. 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. On March 3, 2017, the U.K. Patents Court ruled that Boston Scientific's '254 patent is invalid, and that its '766 patent is valid and infringed. The court also ruled that Boston Scientific is entitled to an injunction against SAPIEN 3 sales in the United Kingdom, but stayed the injunction pending appeal. Both sides appealed this decision and on March 25, 2018, the U.K. Court of Appeal affirmed the lower court's decision. The Court of Appeal has remanded the case to the U.K. Patents Court for further proceedings on damages and injunction issues. On June 16, 2017, Edwards Lifesciences filed a lawsuit against Boston Scientific Scimed, Inc. in Germany in the district court in Munich, seeking a court order that Edwards Lifesciences is a co-owner of the '254 patent based on rights it has acquired. On July 31, 2017, Edwards Lifesciences filed a similar lawsuit with regard to the '766 patent. Proceedings are ongoing. 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 its 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 (the "'672 patent") and 2 255 753 B1 (the "'753 patent") related to prosthetic valve and delivery system technology. Edwards Lifesciences later added its German national patent EP 2 399 550 (the "'550 patent") to this suit. The complaint sought unspecified monetary damages and injunctive relief. On March 9, 2016, the German district court ruled that the Lotus heart valve infringes the '550 patent, but does not infringe the '672 patent. The court also ruled that Edwards Lifesciences is entitled to enforce an injunction against the sales of the Lotus valve in Germany upon the payment of a €10.0 million bond, but has not yet elected to do so. Both sides have appealed this decision. The court did not rule on the '753 patent due to a March 28, 2017 EPO initial decision to revoke the '753 patent. Edwards Lifesciences has appealed the EPO's initial decision. Also, on April 13, 2018, the EPO rendered an initial decision revoking the '550 patent. Edwards Lifesciences will appeal this decision. O n April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences Corporation 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 (the "USPTO") challenging the validity of Boston Scientific's '608 patent. On March 23, 2018, the USPTO decided in Edwards Lifesciences' favor, and invalidated the '608 patent claims asserted by Boston Scientific. Also on April 19, 2016, Boston Scientific filed a lawsuit against Edwards Lifesciences Corporation 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. The Company intends to defend itself vigorously in these matters and has filed IPRs challenging the validity of the Boston Scientific patents in the suit. The lawsuit has been stayed pending the outcome of these IPR proceedings. The USPTO has instituted three of the requested IPRs. On October 23, 2016, Edwards Lifesciences PVT, Inc. and Edwards Lifesciences (Canada) Inc., a Canadian subsidiary of Edwards Lifesciences, filed a lawsuit against Boston Scientific and its Canadian subsidiary, Boston Scientific Ltd., as well as LivaNova PLC and LivaNova Canada Corp., its contract manufacturers, in the Federal Court in Toronto, Canada, alleging that Boston Scientific's manufacture of the Lotus valve through its contract manufacturers infringes two of Edwards Lifesciences' patents covering transcatheter heart valve technology. On February 17, 2017, Edwards added Neovasc, Inc. and Neovasc Medical Inc., additional contract manufacturers of Boston Scientific, to this lawsuit. On January 11, 2017, Edwards Lifesciences PVT, Inc. and Edwards Lifesciences SA(AG), a Swiss subsidiary of Edwards Lifesciences, filed a lawsuit against Boston Scientific Ltd and Boston Scientific Group PLC, two Irish subsidiaries of Boston Scientific, in the High Court in Dublin, Ireland alleging that Boston Scientific's manufacture of the Lotus and Lotus Edge valves infringes the '550 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. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table is a summary of activity for each component of " Accumulated Other Comprehensive Loss " for the three months ended March 31, 2018 (in millions): Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Cash Flow Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Pension Costs Total Accumulated Other Comprehensive Loss December 31, 2017 $ (100.1 ) $ (13.9 ) $ (4.6 ) $ (14.1 ) $ (132.7 ) Other comprehensive gain (loss) before reclassifications 28.4 (15.4 ) (6.2 ) (0.2 ) 6.6 Amounts reclassified from accumulated other comprehensive loss — 2.6 1.4 0.6 4.6 Deferred income tax benefit — 0.2 0.1 (0.1 ) 0.2 March 31, 2018 $ (71.7 ) $ (26.5 ) $ (9.3 ) $ (13.8 ) $ (121.3 ) The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Statements of Operations Details about Accumulated Other Comprehensive Loss Components 2018 2017 Gain (loss) on cash flow hedges $ (1.5 ) $ 2.5 Cost of sales (1.1 ) 0.1 Selling, general, and administrative expenses (2.6 ) 2.6 Total before tax 0.7 (1.0 ) Provision for income taxes $ (1.9 ) $ 1.6 Net of tax Gain (loss) on available-for-sale investments $ (1.4 ) $ (0.5 ) Other (income) expense, net 0.1 — Provision for income taxes $ (1.3 ) $ (0.5 ) Net of tax Unrealized pension costs $ (0.6 ) $ — Other (income) expense, net 0.1 — Provision for income taxes $ (0.5 ) $ — |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
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. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Dilutive potential common shares include employee equity share options, nonvested shares, and similar equity instruments granted by the Company. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. The table below presents the computation of basic and diluted earnings per share (in millions, except for per share information): Three Months Ended 2018 2017 Basic: Net income $ 206.6 $ 230.2 Weighted-average shares outstanding 210.2 211.2 Basic earnings per share $ 0.98 $ 1.09 Diluted: Net income $ 206.6 $ 230.2 Weighted-average shares outstanding 210.2 211.2 Dilutive effect of stock plans 4.9 5.2 Dilutive weighted-average shares outstanding 215.1 216.4 Diluted earnings per share $ 0.96 $ 1.06 Stock options, restricted stock units, and market-based restricted stock units to purchase 1.2 million and 1.1 million shares for the three months ended March 31, 2018 and 2017 , respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act ("the 2017 Act") was signed into law. The 2017 Act reduces the U.S. federal corporate tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017, requires companies to pay a one-time mandatory deemed repatriation tax on the cumulative earnings of certain foreign subsidiaries that were previously tax deferred, accelerates federal tax depreciation and creates new taxes on certain foreign earnings in future years. On December 22, 2017, SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), was issued to address the application of generally accepted accounting principles in the United States of America in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Act. In accordance with SAB 118, as of December 31, 2017, the Company had estimated provisional amounts for $3.3 million of tax benefits in connection with the remeasurement of certain tax assets and liabilities, $327.4 million of current tax expense recorded in connection with the one-time mandatory deemed repatriation tax on cumulative earnings of certain foreign subsidiaries, and $32.3 million of tax benefits associated with a tax reform related restructuring. As a result of new Internal Revenue Service ("IRS") guidance, these benefits, net of a reduction of $8.3 million in the repatriation tax, were reversed in the three months ended March 31, 2018. The changes included in the 2017 Act are broad and complex. The final transition impacts of the 2017 Act may differ from the above estimate, possibly materially, due to, among other things, changes in interpretations of the 2017 Act, any further legislative or regulatory actions that arise because of the 2017 Act, any changes in accounting standards for income taxes or related interpretations in response to the 2017 Act, or any updates or changes to the estimates the Company has utilized to calculate the transition impacts. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. The Company's effective income tax rates was 21.6% for both the three months ended March 31, 2018 and 2017 . The effective rate for March 31, 2018 includes the benefit from the reduction in the U.S. federal corporate rate from 35% to 21% for tax years beginning after December 31, 2017, offset by additional expense of $24.0 million related to the adjustment of the estimated provisional amounts recorded at December 31, 2017 in accordance with SAB 118 as a result of new IRS guidance issued during the three months ended March 31, 2018. Prior to the 2017 Act, the Company asserted that accumulated earnings of most of its foreign subsidiaries would be indefinitely reinvested. However, as a result of the 2017 Act, all of the accumulated earnings of its foreign subsidiaries were subjected to United States federal income tax. In light of the 2017 Act, the Company's analysis is ongoing at this time with respect to its investment intentions for its accumulated foreign earnings. During the period prescribed by SAB 118, the Company will evaluate, among other factors, the profitability of its United States and foreign operations and the need for cash within and outside the United States, legal entity capitalization requirements, cash controls imposed in foreign jurisdictions, withholding taxes and the availability to offset with foreign tax credits, cash requirements for capital improvements, acquisitions, market expansion, and stock repurchase programs in determining its investment assertion on its accumulated foreign earnings. The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for matters it believes are more likely than not to require settlement, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the consolidated condensed financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues, and issuance of new legislation, regulations, or case law. At March 31, 2018 , all material state, local, and foreign income tax matters have been concluded for years through 2008. The IRS has substantially completed its fieldwork for the 2009 through 2012 tax years. However, the audits have been in suspense pending a final determination with respect to the application for an Advanced Pricing Agreement. As a result of the partial agreement discussed below, the IRS will now be able to finalize their audits of the 2009 through 2011 years. The IRS began its examination of the 2014 tax year during the fourth quarter of 2016. As of March 31, 2018 and December 31, 2017 , the liability for income taxes associated with uncertain tax positions was $229.3 million and $225.6 million , respectively. The Company estimates that these liabilities would be reduced by $96.1 million and $94.0 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 $133.2 million and $131.6 million , respectively, if not required, would favorably affect the Company's effective tax rate. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2018 | |
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 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2017 . Segment net sales and segment pre-tax income are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent. Net sales by geographic area are based on the location of the customer. Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest expense, global marketing expenses, corporate research and development expenses, manufacturing variances, corporate headquarters costs, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs, and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment pre-tax income, due to the Company's methodology for cost build-up, it is impractical to determine the amount of depreciation expense included in each segment, and, therefore, a portion is maintained at the corporate level. The Company neither discretely allocates assets to its operating segments, nor evaluates the operating segments using discrete asset information. The table below presents information about Edwards Lifesciences' reportable segments (in millions): Three Months Ended 2018 2017 Segment Net Sales United States $ 479.5 $ 464.6 Europe 205.3 265.3 Japan 91.1 81.8 Rest of World 91.7 81.8 Total segment net sales $ 867.6 $ 893.5 Segment Operating Income United States $ 313.8 $ 303.5 Europe 103.0 152.1 Japan 54.8 46.0 Rest of World 29.0 25.4 Total segment operating income $ 500.6 $ 527.0 The table below presents reconciliations of segment net sales to consolidated net sales and segment operating income to consolidated pre-tax income (in millions): Three Months Ended 2018 2017 Net Sales Reconciliation Segment net sales $ 867.6 $ 893.5 Foreign currency 27.2 (10.0 ) Consolidated net sales $ 894.8 $ 883.5 Pre-tax Income Reconciliation Segment operating income $ 500.6 $ 527.0 Unallocated amounts: Corporate items (248.1 ) (218.6 ) Intellectual property litigation expenses (5.7 ) (10.2 ) Foreign currency 5.7 0.1 Consolidated operating income 252.5 298.3 Non-operating income (expense) 11.0 (4.7 ) Consolidated pre-tax income $ 263.5 $ 293.6 Enterprise-wide Information Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2018 2017 Net Sales by Geographic Area United States $ 479.5 $ 464.6 Europe 230.0 261.0 Japan 92.7 79.3 Rest of World 92.6 78.6 $ 894.8 $ 883.5 Net Sales by Major Product and Service Area Transcatheter Heart Valve Therapy $ 551.6 $ 539.2 Surgical Heart Valve Therapy 179.5 199.5 Critical Care 163.7 144.8 $ 894.8 $ 883.5 March 31, 2018 December 31, 2017 (in millions) Long-lived Tangible Assets by Geographic Area United States $ 567.0 $ 608.7 Europe 29.5 28.4 Japan 7.8 7.6 Rest of World 160.7 139.7 $ 765.0 $ 784.4 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards and New Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board ("FASB") issued an amendment to the guidance on comprehensive income. The amendment permits a company to reclassify the income tax effects of the Tax Cuts and Jobs Act (the "2017 Act") on items within accumulated other comprehensive income to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company early adopted this guidance as of January 1, 2018, and elected to reclassify the income tax effects of the 2017 Act from accumulated other comprehensive loss to retained earnings. Accordingly, during the quarter ended March 31, 2018, the Company reclassified $7.8 million of tax benefits associated with its hedging activities from accumulated other comprehensive loss to retained earnings. Tax effects unrelated to the 2017 Act are released from accumulated other comprehensive loss using either the specific identification approach or the portfolio approach based on the nature of the underlying item. In August 2017, the FASB issued an amendment to the guidance on derivatives and hedging. The amendment expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for periods beginning after December 15, 2018, including interim periods within those annual periods. The Company early adopted this guidance as of January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. Certain provisions of the guidance required modifications to existing disclosure requirements on a prospective basis. See Note 7 for disclosures relating to the Company's derivative instruments and hedging activities. In March 2017, the FASB issued an amendment on the guidance on retirement benefits. The amendment requires that employers report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees. The other components of net benefit cost are required to be presented in the consolidated statements of operations separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component of net benefit cost is eligible for capitalization. The guidance was effective for periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted the guidance related to the presentation of the service cost component and the other components of net benefit cost in the income statement retrospectively, and the guidance related to the capitalization of the service cost component of net benefit cost was adopted prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements for the quarter ended March 31, 2018 and 2017. The Company elected to apply the practical expedient that permits the use of previously disclosed service cost and other costs from the prior year’s employee benefit plan footnote as appropriate estimates when retrospectively changing the presentation of these costs in the consolidated statements of operations. 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 was effective for annual periods beginning after December 15, 2017, including interim periods within those periods. In October 2016, the FASB issued an amendment to the guidance on income taxes. The amendment eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity transfer of an asset other than inventory and associated changes to deferred taxes will be recognized when the transfer occurs. The guidance was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The Company adopted this new standard using the modified retrospective method. Upon adoption, the Company recorded a $2.6 million increase to retained earnings, a $50.3 million decrease to other assets, and a $52.9 million decrease to long-term taxes payable. In addition, the Company reclassified $46.5 million from long-term taxes payable to deferred income taxes, and also made this reclassification in the prior year's consolidated condensed balance sheet to conform to the current year presentation. 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 was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This guidance impacts 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. Contingent consideration payments made soon after the acquisition date will continue to be classified as an investing activity. The Company did not make any contingent consideration payments in the quarter ended March 31, 2017; therefore, no retrospective adjustments were required. The adoption of the other provisions of this guidance did not have a material impact on the Company's 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 (retrospective method), or retrospectively with the cumulative effect of the change recognized at the date of the initial application (modified retrospective method). The Company adopted the new guidance on January 1, 2018 using the modified retrospective method to contracts that were not completed as of January 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. |
COMPOSITION OF CERTAIN FINANC21
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Selected Captions in the Consolidated Condensed Balance Sheets | Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions): March 31, 2018 December 31, 2017 Inventories Raw materials $ 108.0 $ 101.4 Work in process 131.7 121.1 Finished products 334.2 332.4 $ 573.9 $ 554.9 |
Schedule of Accounts Payable and Accrued Liabilities | March 31, 2018 December 31, 2017 Accounts payable and accrued liabilities Accounts payable $ 121.2 $ 116.6 Employee compensation and withholdings 140.2 249.4 Taxes payable (Note 12) 125.1 97.8 Property, payroll, and other taxes 46.5 41.9 Research and development accruals 46.0 39.2 Accrued rebates 49.4 53.9 Fair value of derivatives 25.9 24.8 Accrued marketing expenses 18.2 14.9 Litigation and insurance reserves 16.6 15.0 Accrued relocation costs 10.6 8.7 Accrued professional services 6.3 8.5 Accrued realignment reserves 1.5 8.2 Other accrued liabilities 66.6 74.3 $ 674.1 $ 753.2 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, 2018 December 31, 2017 Held-to-maturity Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 146.1 $ — $ — $ 146.1 $ 382.9 $ — $ — $ 382.9 Commercial paper 0.2 — — 0.2 1.4 — — 1.4 U.S. government and agency securities 3.4 — — 3.4 3.9 — — 3.9 Total $ 149.7 $ — $ — $ 149.7 $ 388.2 $ — $ — $ 388.2 Available-for-sale Bank time deposits $ 0.5 $ — $ — $ 0.5 $ 0.5 $ — $ — $ 0.5 Commercial paper 30.0 — — 30.0 40.3 — — 40.3 U.S. government and agency securities 69.5 — (1.0 ) 68.5 69.4 — (0.7 ) 68.7 Foreign government bonds 3.0 — — 3.0 3.0 — — 3.0 Asset-backed securities 112.3 0.1 (1.0 ) 111.4 121.2 — (0.4 ) 120.8 Corporate debt securities 422.7 0.7 (4.3 ) 419.1 446.5 0.8 (1.8 ) 445.5 Municipal securities 4.4 — — 4.4 4.4 — — 4.4 Total $ 642.4 $ 0.8 $ (6.3 ) $ 636.9 $ 685.3 $ 0.8 $ (2.9 ) $ 683.2 |
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 March 31, 2018 were as follows: Held-to-Maturity Available-for-Sale Cost Fair Value Cost Fair Value (in millions) Due in 1 year or less $ 146.4 $ 146.4 $ 126.3 $ 125.9 Due after 1 year through 5 years — — 410.0 405.8 Instruments not due at a single maturity date 3.3 3.3 106.1 105.2 $ 149.7 $ 149.7 $ 642.4 $ 636.9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2018 and December 31, 2017 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 9.6 $ — $ — $ — $ 9.6 $ — U.S. government and agency securities 34.7 (0.4 ) 37.0 (0.5 ) 71.7 (0.9 ) Foreign government bonds 3.0 — — — 3.0 — Asset-backed securities 83.8 (0.8 ) 21.4 (0.2 ) 105.2 (1.0 ) Corporate debt securities 235.2 (3.4 ) 56.2 (1.0 ) 291.4 (4.4 ) Municipal securities 4.3 — — — 4.3 — $ 370.6 $ (4.6 ) $ 114.6 $ (1.7 ) $ 485.2 $ (6.3 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 2.4 $ — $ — $ — $ 2.4 $ — U.S. government and agency securities 31.5 (0.2 ) 37.1 (0.5 ) 68.6 (0.7 ) Foreign government bonds 3.0 — — — 3.0 — Asset-backed securities 90.8 (0.3 ) 23.2 (0.1 ) 114.0 (0.4 ) Corporate debt securities 253.3 (1.2 ) 59.2 (0.6 ) 312.5 (1.8 ) Municipal securities 4.3 — — — 4.3 — $ 385.3 $ (1.7 ) $ 119.5 $ (1.2 ) $ 504.8 $ (2.9 ) |
Schedule of Investments in Unconsolidated Affiliates | Investments in these unconsolidated affiliates are recorded in " Long-term Investments " on the consolidated condensed balance sheets, and are as follows: March 31, December 31, (in millions) Equity method investments Cost 9.2 9.2 Equity in losses (4.9 ) (5.1 ) Carrying value of equity method investments 4.3 4.1 Cost method investments Carrying value of cost method investments 13.5 10.7 Total investments in unconsolidated affiliates $ 17.8 $ 14.8 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 (in millions): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 50.9 $ 60.5 $ — $ 111.4 Available-for-sale investments: Bank time deposits — 0.5 — 0.5 Corporate debt securities — 419.1 — 419.1 Asset-backed securities — 111.4 — 111.4 U.S. government and agency securities 20.6 47.9 — 68.5 Foreign government bonds — 3.0 — 3.0 Commercial paper — 30.0 — 30.0 Municipal securities — 4.4 — 4.4 Investments held for deferred compensation plans 66.9 — — 66.9 Derivatives — 3.7 — 3.7 $ 138.4 $ 680.5 $ — $ 818.9 Liabilities Derivatives $ — $ 25.9 $ — $ 25.9 Deferred compensation plans 67.0 — — 67.0 Contingent consideration liabilities — — 238.1 238.1 $ 67.0 $ 25.9 $ 238.1 $ 331.0 December 31, 2017 Assets Cash equivalents $ 52.2 $ 22.8 $ — $ 75.0 Available-for-sale investments: Bank time deposits — 0.5 — 0.5 Corporate debt securities — 445.5 — 445.5 Asset-backed securities — 120.8 — 120.8 U.S. government and agency securities 20.6 48.1 — 68.7 Foreign government bonds — 3.0 — 3.0 Commercial paper — 40.3 — 40.3 Municipal securities — 4.4 — 4.4 Investments held for deferred compensation plans 63.7 — — 63.7 Derivatives — 4.9 — 4.9 $ 136.5 $ 690.3 $ — $ 826.8 Liabilities Derivatives $ — $ 24.8 $ — $ 24.8 Deferred compensation plans 64.1 — — 64.1 Contingent consideration liabilities — 244.3 244.3 $ 64.1 $ 24.8 $ 244.3 $ 333.2 |
Summary of Changes in Fair Value of Contingent Consideration Obligation | The following table summarizes the changes in fair value of the contingent consideration liabilities for the three months ended March 31, 2018 (in millions): Balance at December 31, 2017 $ 244.3 Additions — Payments (10.0 ) Changes in fair value 3.8 Balance at March 31, 2018 $ 238.1 |
DERIVATIVE INSTRUMENTS AND HE24
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk | Notional Amount March 31, 2018 December 31, 2017 (in millions) Foreign currency forward exchange contracts $ 1,188.1 $ 979.8 |
Schedule of Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets | The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions): Fair Value Derivatives designated as hedging instruments Balance Sheet Location March 31, 2018 December 31, 2017 Assets Foreign currency contracts Other current assets $ 3.7 $ 4.9 Liabilities Foreign currency contracts Accrued and other liabilities $ 25.9 $ 24.8 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets | The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet March 31, 2018 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative assets Foreign currency contracts $ 3.7 $ — $ 3.7 $ (2.3 ) $ — $ 1.4 Derivative liabilities Foreign currency contracts $ 25.9 $ — $ 25.9 $ (2.3 ) $ — $ 23.6 December 31, 2017 Derivative assets Foreign currency contracts $ 4.9 $ — $ 4.9 $ (3.7 ) $ — $ 1.2 Derivative liabilities Foreign currency contracts $ 24.8 $ — $ 24.8 $ (3.7 ) $ — $ 21.1 |
Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Liabilities | The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet March 31, 2018 Gross Amounts Financial Instruments Cash Collateral Received Net Amount Derivative assets Foreign currency contracts $ 3.7 $ — $ 3.7 $ (2.3 ) $ — $ 1.4 Derivative liabilities Foreign currency contracts $ 25.9 $ — $ 25.9 $ (2.3 ) $ — $ 23.6 December 31, 2017 Derivative assets Foreign currency contracts $ 4.9 $ — $ 4.9 $ (3.7 ) $ — $ 1.2 Derivative liabilities Foreign currency contracts $ 24.8 $ — $ 24.8 $ (3.7 ) $ — $ 21.1 |
Schedule of Effect of Derivative Instruments on Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income | The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (in millions): Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Three Months Ended 2018 2017 2018 2017 Cash flow hedges Foreign currency contracts $ (15.4 ) $ (8.5 ) Cost of sales $ (1.5 ) $ 2.5 Selling, general, and administrative expenses $ (1.1 ) $ 0.1 Net investment hedges Foreign currency denominated debt $ (20.2 ) $ — As of March 31, 2018 , the Company had €370.0 million of outstanding long-term debt designated as a net investment hedge. Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Location of Gain or (Loss) Recognized in Income on Derivative Fair value hedges 2018 2017 Interest rate swap agreements Interest (income) expense, net $ — $ 0.1 In December 2017, the interest rate swap agreements were settled at a loss of $0.7 million , which is being amortized to interest expense over the remaining life of the debt. Amount of Gain or (Loss) Recognized in Income on Derivative Three Months Ended Location of Gain or (Loss) Recognized in Income on Derivative Derivatives not designated as hedging instruments 2018 2017 Foreign currency contracts Other (income) expense, net $ (8.9 ) $ (5.5 ) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table presents the effect of cash flow hedge accounting on the consolidated condensed statements of operations: Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships Three Months Ended March 31, 2018 Selling, general, and administrative expenses Cost of sales Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of cash flow hedges are recorded $ (233.6 ) $ (256.0 ) The effects of cash flow hedging: Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ (1.5 ) $ (1.1 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three months ended March 31, 2018 and 2017 was as follows (in millions): Three Months Ended 2018 2017 Cost of sales $ 3.0 $ 2.3 Selling, general, and administrative expenses 11.8 10.2 Research and development expenses 3.6 2.7 Total stock-based compensation expense $ 18.4 $ 15.2 |
Schedule of Weighted-Average Assumptions for Options Granted | The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: Option Awards Three Months Ended 2018 2017 Average risk-free interest rate 2.6 % 1.8 % Expected dividend yield None None Expected volatility 33.2 % 33.2 % Expected term (years) 4.7 4.7 Fair value, per option $ 43.45 $ 29.66 |
Schedule of Weighted-Average Assumptions for ESPP Subscriptions Granted | The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model: ESPP Three Months Ended 2018 2017 Average risk-free interest rate 0.8 % 0.4 % Expected dividend yield None None Expected volatility 32.6 % 33.2 % Expected term (years) 0.6 0.6 Fair value, per share $ 35.07 $ 23.26 |
ACCUMULATED OTHER COMPREHENSI26
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Activity for Each Component of Accumulated Other Comprehensive Loss | The following table is a summary of activity for each component of " Accumulated Other Comprehensive Loss " for the three months ended March 31, 2018 (in millions): Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Cash Flow Hedges Unrealized Gain (Loss) on Available-for-sale Investments Unrealized Pension Costs Total Accumulated Other Comprehensive Loss December 31, 2017 $ (100.1 ) $ (13.9 ) $ (4.6 ) $ (14.1 ) $ (132.7 ) Other comprehensive gain (loss) before reclassifications 28.4 (15.4 ) (6.2 ) (0.2 ) 6.6 Amounts reclassified from accumulated other comprehensive loss — 2.6 1.4 0.6 4.6 Deferred income tax benefit — 0.2 0.1 (0.1 ) 0.2 March 31, 2018 $ (71.7 ) $ (26.5 ) $ (9.3 ) $ (13.8 ) $ (121.3 ) |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss | The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Statements of Operations Details about Accumulated Other Comprehensive Loss Components 2018 2017 Gain (loss) on cash flow hedges $ (1.5 ) $ 2.5 Cost of sales (1.1 ) 0.1 Selling, general, and administrative expenses (2.6 ) 2.6 Total before tax 0.7 (1.0 ) Provision for income taxes $ (1.9 ) $ 1.6 Net of tax Gain (loss) on available-for-sale investments $ (1.4 ) $ (0.5 ) Other (income) expense, net 0.1 — Provision for income taxes $ (1.3 ) $ (0.5 ) Net of tax Unrealized pension costs $ (0.6 ) $ — Other (income) expense, net 0.1 — Provision for income taxes $ (0.5 ) $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [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): Three Months Ended 2018 2017 Basic: Net income $ 206.6 $ 230.2 Weighted-average shares outstanding 210.2 211.2 Basic earnings per share $ 0.98 $ 1.09 Diluted: Net income $ 206.6 $ 230.2 Weighted-average shares outstanding 210.2 211.2 Dilutive effect of stock plans 4.9 5.2 Dilutive weighted-average shares outstanding 215.1 216.4 Diluted earnings per share $ 0.96 $ 1.06 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Information About Reportable Segments and Reconciliation of Segment Net Sales to Consolidated Net Sales and Segment Pre-Tax Income to Consolidated Pre-Tax Income | The table below presents information about Edwards Lifesciences' reportable segments (in millions): Three Months Ended 2018 2017 Segment Net Sales United States $ 479.5 $ 464.6 Europe 205.3 265.3 Japan 91.1 81.8 Rest of World 91.7 81.8 Total segment net sales $ 867.6 $ 893.5 Segment Operating Income United States $ 313.8 $ 303.5 Europe 103.0 152.1 Japan 54.8 46.0 Rest of World 29.0 25.4 Total segment operating income $ 500.6 $ 527.0 The table below presents reconciliations of segment net sales to consolidated net sales and segment operating income to consolidated pre-tax income (in millions): Three Months Ended 2018 2017 Net Sales Reconciliation Segment net sales $ 867.6 $ 893.5 Foreign currency 27.2 (10.0 ) Consolidated net sales $ 894.8 $ 883.5 Pre-tax Income Reconciliation Segment operating income $ 500.6 $ 527.0 Unallocated amounts: Corporate items (248.1 ) (218.6 ) Intellectual property litigation expenses (5.7 ) (10.2 ) Foreign currency 5.7 0.1 Consolidated operating income 252.5 298.3 Non-operating income (expense) 11.0 (4.7 ) Consolidated pre-tax income $ 263.5 $ 293.6 |
Enterprise-Wide Information | Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2018 2017 Net Sales by Geographic Area United States $ 479.5 $ 464.6 Europe 230.0 261.0 Japan 92.7 79.3 Rest of World 92.6 78.6 $ 894.8 $ 883.5 Net Sales by Major Product and Service Area Transcatheter Heart Valve Therapy $ 551.6 $ 539.2 Surgical Heart Valve Therapy 179.5 199.5 Critical Care 163.7 144.8 $ 894.8 $ 883.5 March 31, 2018 December 31, 2017 (in millions) Long-lived Tangible Assets by Geographic Area United States $ 567.0 $ 608.7 Europe 29.5 28.4 Japan 7.8 7.6 Rest of World 160.7 139.7 $ 765.0 $ 784.4 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accumulated other comprehensive loss | $ 121.3 | $ 132.7 |
Retained earnings | 2,179.1 | 1,962.1 |
Other assets | (57.8) | (108.9) |
Other long-term liabilities | (321.8) | (311.7) |
Deferred income taxes | (181.4) | $ (167.1) |
Accounting Standards Update 2017-12 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accumulated other comprehensive loss | 7.8 | |
Retained earnings | 7.8 | |
Accounting Standards Update 2016-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Retained earnings | 2.6 | |
Other assets | 50.3 | |
Other long-term liabilities | 52.9 | |
Deferred income taxes | $ 46.5 |
COMPOSITION OF CERTAIN FINANC30
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS - Components of Selected Captions in the Consolidated Condensed Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Raw materials | $ 108 | $ 101.4 |
Work in process | 131.7 | 121.1 |
Finished products | 334.2 | 332.4 |
Total inventories | 573.9 | 554.9 |
Finished products inventories held on consignment | $ 94.4 | $ 88.4 |
COMPOSITION OF CERTAIN FINANC31
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts payable and accrued liabilities | ||
Accounts payable | $ 121.2 | $ 116.6 |
Employee compensation and withholdings | 140.2 | 249.4 |
Taxes payable (Note 12) | 125.1 | 97.8 |
Property, payroll, and other taxes | 46.5 | 41.9 |
Research and development accruals | 46 | 39.2 |
Accrued rebates | 49.4 | 53.9 |
Fair value of derivatives | 25.9 | 24.8 |
Accrued marketing expenses | 18.2 | 14.9 |
Litigation and insurance reserves | 16.6 | 15 |
Accrued relocation costs | 10.6 | 8.7 |
Accrued professional services | 6.3 | 8.5 |
Accrued realignment reserves | 1.5 | 8.2 |
Other accrued liabilities | 66.6 | 74.3 |
Total accounts payable and accrued liabilities | $ 674.1 | $ 753.2 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 5.3 | $ 4.2 |
Revenue recognized that was previously deferred | $ 0.6 | |
Hemodynamic Monitors | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Service contract period | 12 months | |
Hemodynamic Monitors | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Service contract period | 36 months |
SPECIAL GAINS Narrative (Detail
SPECIAL GAINS Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($)employee | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Accrued realignment reserves | $ 1.5 | $ 1.5 | $ 8.2 | ||
Gain due to settlement | 7.1 | $ 0 | |||
Facility Closing | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | $ 10.2 | ||||
Number of employees impacted | employee | 232 | ||||
Accrued realignment reserves | 1.8 | $ 1.8 | |||
Pension Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Gain due to settlement | $ 7.1 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Debt Securities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Held-to-maturity | ||
Cost | $ 149.7 | $ 388.2 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | |
Fair Value | 149.7 | 388.2 |
Available-for-sale | ||
Cost | 642.4 | 685.3 |
Gross Unrealized Gains | 0.8 | 0.8 |
Gross Unrealized Losses | (6.3) | (2.9) |
Fair Value | 636.9 | 683.2 |
Bank time deposits | ||
Held-to-maturity | ||
Cost | 146.1 | 382.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 146.1 | 382.9 |
Available-for-sale | ||
Cost | 0.5 | 0.5 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 0.5 | 0.5 |
Commercial paper | ||
Held-to-maturity | ||
Cost | 0.2 | 1.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 0.2 | 1.4 |
Available-for-sale | ||
Cost | 30 | 40.3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 30 | 40.3 |
U.S. government and agency securities | ||
Held-to-maturity | ||
Cost | 3.4 | 3.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3.4 | 3.9 |
Available-for-sale | ||
Cost | 69.5 | 69.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (0.7) |
Fair Value | 68.5 | 68.7 |
Foreign government bonds | ||
Available-for-sale | ||
Cost | 3 | 3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3 | 3 |
Asset-backed securities | ||
Available-for-sale | ||
Cost | 112.3 | 121.2 |
Gross Unrealized Gains | 0.1 | 0 |
Gross Unrealized Losses | (1) | (0.4) |
Fair Value | 111.4 | 120.8 |
Corporate debt securities | ||
Available-for-sale | ||
Cost | 422.7 | 446.5 |
Gross Unrealized Gains | 0.7 | 0.8 |
Gross Unrealized Losses | (4.3) | (1.8) |
Fair Value | 419.1 | 445.5 |
Municipal securities | ||
Available-for-sale | ||
Cost | 4.4 | 4.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 4.4 | $ 4.4 |
INVESTMENTS - Schedule of Cost
INVESTMENTS - Schedule of Cost and Fair Value of Investments in Debt Securities, By Contractual Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Cost | ||
Due in 1 year or less | $ 146.4 | |
Due after 1 year through 5 years | 0 | |
Instruments not due at a single maturity date | 3.3 | |
Cost | 149.7 | $ 388.2 |
Fair Value | ||
Due in 1 year or less | 146.4 | |
Due after 1 year through 5 years | 0 | |
Instruments not due at a single maturity date | 3.3 | |
Fair Value | 149.7 | 388.2 |
Cost | ||
Due in 1 year or less | 126.3 | |
Due after 1 year through 5 years | 410 | |
Instruments not due at a single maturity date | 106.1 | |
Cost | 642.4 | 685.3 |
Fair Value | ||
Due in 1 year or less | 125.9 | |
Due after 1 year through 5 years | 405.8 | |
Instruments not due at a single maturity date | 105.2 | |
Fair Value | $ 636.9 | $ 683.2 |
INVESTMENTS - Schedule of Inv36
INVESTMENTS - Schedule of Investments in Continuous Loss Position (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | $ 370.6 | $ 385.3 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | (4.6) | (1.7) |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 114.6 | 119.5 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | (1.7) | (1.2) |
Fair value available-for-sale securities in continuous loss position | 485.2 | 504.8 |
Gross unrealized losses on available-for-sale securities in continuous loss position | (6.3) | (2.9) |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 9.6 | 2.4 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | 0 | 0 |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Fair value available-for-sale securities in continuous loss position | 9.6 | 2.4 |
Gross unrealized losses on available-for-sale securities in continuous loss position | 0 | 0 |
U.S. government and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 34.7 | 31.5 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | (0.4) | (0.2) |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 37 | 37.1 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | (0.5) | (0.5) |
Fair value available-for-sale securities in continuous loss position | 71.7 | 68.6 |
Gross unrealized losses on available-for-sale securities in continuous loss position | (0.9) | (0.7) |
Foreign government bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 3 | 3 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | 0 | 0 |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Fair value available-for-sale securities in continuous loss position | 3 | 3 |
Gross unrealized losses on available-for-sale securities in continuous loss position | 0 | 0 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 83.8 | 90.8 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | (0.8) | (0.3) |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 21.4 | 23.2 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | (0.2) | (0.1) |
Fair value available-for-sale securities in continuous loss position | 105.2 | 114 |
Gross unrealized losses on available-for-sale securities in continuous loss position | (1) | (0.4) |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 235.2 | 253.3 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | (3.4) | (1.2) |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 56.2 | 59.2 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | (1) | (0.6) |
Fair value available-for-sale securities in continuous loss position | 291.4 | 312.5 |
Gross unrealized losses on available-for-sale securities in continuous loss position | (4.4) | (1.8) |
Municipal securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair value of available-for-sale securities in continuous loss position less than twelve months | 4.3 | 4.3 |
Gross unrealized losses on available-for-sale securities in continuous loss position less than twelve months | 0 | 0 |
Fair value available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Gross unrealized losses on available-for-sale securities in continuous loss position twelve months or longer | 0 | 0 |
Fair value available-for-sale securities in continuous loss position | 4.3 | 4.3 |
Gross unrealized losses on available-for-sale securities in continuous loss position | $ 0 | $ 0 |
INVESTMENTS - Schedule of Inv37
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Equity method investments | ||
Cost | $ 9.2 | $ 9.2 |
Equity in losses | (4.9) | (5.1) |
Carrying value of equity method investments | 4.3 | 4.1 |
Cost method investments | ||
Carrying value of cost method investments | 13.5 | 10.7 |
Total investments in unconsolidated affiliates | $ 17.8 | $ 14.8 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Financial instruments | |||
Payment of contingent consideration | $ 10 | $ 0 | |
Level 3 | Obligations | |||
Financial instruments | |||
Volatility of future revenue (as a percent) | 45.00% | ||
Level 3 | Obligations | Minimum | |||
Financial instruments | |||
Discount rate | 1.60% | ||
Probability of milestone achievement (as a percent) | 25.00% | ||
Level 3 | Obligations | Maximum | |||
Financial instruments | |||
Discount rate | 3.80% | ||
Probability of milestone achievement (as a percent) | 98.50% | ||
Fair value | Level 2 | |||
Financial instruments | |||
Fair value of notes payable | $ 601.8 | ||
Carrying value | Level 2 | |||
Financial instruments | |||
Fair value of notes payable | $ 598.6 | ||
Harpoon Medical, Inc. | |||
Financial instruments | |||
Payment of contingent consideration | $ 10 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Estimate of Fair Value Measurement - Fair Value on a Recurring Basis - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash equivalents | $ 111.4 | $ 75 |
Investments held for deferred compensation plans | 66.9 | 63.7 |
Derivatives | 3.7 | 4.9 |
Assets | 818.9 | 826.8 |
Liabilities | ||
Derivatives | 25.9 | 24.8 |
Deferred compensation plans | 67 | 64.1 |
Contingent consideration liabilities | 238.1 | 244.3 |
Liabilities | 331 | 333.2 |
Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0.5 | 0.5 |
Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 419.1 | 445.5 |
Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 111.4 | 120.8 |
U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 68.5 | 68.7 |
Foreign government bonds | ||
Assets | ||
Available-for-sale investments | 3 | 3 |
Commercial paper | ||
Assets | ||
Available-for-sale investments | 30 | 40.3 |
Municipal securities | ||
Assets | ||
Available-for-sale investments | 4.4 | 4.4 |
Level 1 | ||
Assets | ||
Cash equivalents | 50.9 | 52.2 |
Investments held for deferred compensation plans | 66.9 | 63.7 |
Derivatives | 0 | 0 |
Assets | 138.4 | 136.5 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 67 | 64.1 |
Contingent consideration liabilities | 0 | |
Liabilities | 67 | 64.1 |
Level 1 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 1 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 1 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 20.6 | 20.6 |
Level 1 | Foreign government bonds | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 1 | Commercial paper | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 1 | Municipal securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 2 | ||
Assets | ||
Cash equivalents | 60.5 | 22.8 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 3.7 | 4.9 |
Assets | 680.5 | 690.3 |
Liabilities | ||
Derivatives | 25.9 | 24.8 |
Deferred compensation plans | 0 | 0 |
Contingent consideration liabilities | 0 | 0 |
Liabilities | 25.9 | 24.8 |
Level 2 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0.5 | 0.5 |
Level 2 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 419.1 | 445.5 |
Level 2 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 111.4 | 120.8 |
Level 2 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 47.9 | 48.1 |
Level 2 | Foreign government bonds | ||
Assets | ||
Available-for-sale investments | 3 | 3 |
Level 2 | Commercial paper | ||
Assets | ||
Available-for-sale investments | 30 | 40.3 |
Level 2 | Municipal securities | ||
Assets | ||
Available-for-sale investments | 4.4 | 4.4 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 0 | 0 |
Assets | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Deferred compensation plans | 0 | 0 |
Contingent consideration liabilities | 238.1 | 244.3 |
Liabilities | 238.1 | 244.3 |
Level 3 | Bank time deposits | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | U.S. government and agency securities | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | Foreign government bonds | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | Commercial paper | ||
Assets | ||
Available-for-sale investments | 0 | 0 |
Level 3 | Municipal securities | ||
Assets | ||
Available-for-sale investments | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Sum40
FAIR VALUE MEASUREMENTS - Summary of Changes in Fair Value of Contingent Consideration Obligation (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | |
Beginning balance | $ 244.3 |
Additions | 0 |
Payments | (10) |
Changes in fair value | 3.8 |
Ending balance | $ 238.1 |
DERIVATIVE INSTRUMENTS AND HE41
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives designated as hedging instruments | Foreign currency forward exchange contracts | ||
Derivative Financial Instruments | ||
Notional Amount | $ 1,188.1 | $ 979.8 |
DERIVATIVE INSTRUMENTS AND HE42
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Changes due to currency rate movements and expenses expected to occur, maximum term | 13 months | ||
Gain expected to be reclassified as earnings | $ 13 | ||
Net investment hedges | Derivatives designated as hedging instruments | Foreign currency denominated debt | |||
Derivative Financial Instruments | |||
Derivative liability, fair value | € | € 370 | ||
Fair value hedges | Derivatives designated as hedging instruments | Interest rate swap agreements | |||
Derivative Financial Instruments | |||
Loss on discontinuation of interest rate swap agreements | $ 0.7 |
DERIVATIVE INSTRUMENTS AND HE43
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets (Details) - Foreign currency contracts - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Fair value of derivative assets | $ 3.7 | $ 4.9 |
Liabilities | ||
Fair value of derivative liabilities | 25.9 | 24.8 |
Derivatives designated as hedging instruments | Other current assets | ||
Assets | ||
Fair value of derivative assets | 3.7 | 4.9 |
Derivatives designated as hedging instruments | Accrued and other liabilities | ||
Liabilities | ||
Fair value of derivative liabilities | $ 25.9 | $ 24.8 |
DERIVATIVE INSTRUMENTS AND HE44
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets and Liabilities (Details) - Foreign currency contracts - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative assets | ||
Gross Amounts | $ 3.7 | $ 4.9 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 3.7 | 4.9 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (2.3) | (3.7) |
Cash Collateral Received | 0 | 0 |
Net Amount | 1.4 | 1.2 |
Derivative liabilities | ||
Gross Amounts | 25.9 | 24.8 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 25.9 | 24.8 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (2.3) | (3.7) |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 23.6 | $ 21.1 |
DERIVATIVE INSTRUMENTS AND HE45
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Effect of Derivative Instruments on Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign currency contracts | Derivatives not designated as hedging instruments | Other (income) expense, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (8.9) | $ (5.5) |
Cash flow hedges | Foreign currency contracts | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (15.4) | (8.5) |
Cash flow hedges | Foreign currency contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | (1.5) | 2.5 |
Cash flow hedges | Foreign currency contracts | Selling, general, and administrative expenses | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | (1.1) | 0.1 |
Net investment hedges | Foreign currency denominated debt | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (20.2) | 0 |
Fair value hedges | Interest rate swap agreements | Derivatives designated as hedging instruments | Interest expense, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 0 | $ 0.1 |
DERIVATIVE INSTRUMENTS AND HE46
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Cash Flow Hedge Effects on Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) | ||
Cost of sales | $ (233.6) | $ (215.6) |
Selling, general, and administrative expenses | (256) | $ (229.6) |
Foreign currency forward exchange contracts | Cost of sales | Derivatives designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | (1.5) | |
Foreign currency forward exchange 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 | $ (1.1) |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 18.4 | $ 15.2 |
Cost of sales | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 3 | 2.3 |
Selling, general, and administrative expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 11.8 | 10.2 |
Research and development expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 3.6 | $ 2.7 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total remaining unrecognized compensation cost | $ 96.5 |
Unrecognized compensation cost, recognition period | 26 months |
STOCK-BASED COMPENSATION - Sc49
STOCK-BASED COMPENSATION - Schedule of Weighted-Average Assumptions for Options and ESPP Subscriptions Granted Granted (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free interest rate | 2.60% | 1.80% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility (as a percent) | 33.20% | 33.20% |
Expected term | 4 years 8 months 12 days | 4 years 8 months 12 days |
Fair value, per option (in dollars per share) | $ 43.45 | $ 29.66 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Average risk-free interest rate | 0.80% | 0.40% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility (as a percent) | 32.60% | 33.20% |
Expected term | 7 months 6 days | 7 months 6 days |
Fair value, per option (in dollars per share) | $ 35.07 | $ 23.26 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 09, 2017EUR (€) | Oct. 23, 2016patent | Apr. 19, 2016patentproductinter_partes_review | Mar. 09, 2016EUR (€) | Mar. 31, 2018lawsuit | Jan. 11, 2017subsidiary | 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 | ||||||
Edwards Lifesciences vs Boston Scientific Patent Lawsuits | |||||||
Loss Contingencies [Line Items] | |||||||
Number of products involved in patent infringement | product | 5 | ||||||
Inter partes review requests | inter_partes_review | 3 | ||||||
Edwards Lifesciences vs Boston Scientific Patent Lawsuits | Boston Scientific | |||||||
Loss Contingencies [Line Items] | |||||||
Payment of bond for each patent to enforce an injunction against sales in Germany (in euros) | € | € 90,000,000 | ||||||
Number of subsidiaries in litigation | subsidiary | 2 | 2 | |||||
Number of patents allegedly infringed | patent | 8 | ||||||
Edwards Lifesciences vs Boston Scientific Patent Lawsuits | Boston Scientific | Europe | |||||||
Loss Contingencies [Line Items] | |||||||
Number of subsidiaries in litigation | subsidiary | 3 | ||||||
Edwards Lifesciences vs Boston Scientific Patent Lawsuits | Edwards Lifesciences | |||||||
Loss Contingencies [Line Items] | |||||||
Payment of bond for each patent to enforce an injunction against sales in Germany (in euros) | € | € 10,000,000 | ||||||
Edwards Lifesciences vs Boston Scientific Patent Lawsuits | Edwards Lifesciences PVT, Inc. and Edwards Lifesciences Inc. | |||||||
Loss Contingencies [Line Items] | |||||||
Number of patents allegedly infringed | patent | 2 |
ACCUMULATED OTHER COMPREHENSI51
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Activity for Each Component of Accumulated Other Comprehensive Loss (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | $ 2,956.2 |
Other comprehensive gain (loss) before reclassifications | 6.6 |
Amounts reclassified from accumulated other comprehensive loss | 4.6 |
Deferred income tax benefit | 0.2 |
Balance at the end of the period | 3,245.7 |
Foreign Currency Translation Adjustments | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | (100.1) |
Other comprehensive gain (loss) before reclassifications | 28.4 |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Deferred income tax benefit | 0 |
Balance at the end of the period | (71.7) |
Unrealized Gain (Loss) on Cash Flow Hedges | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | (13.9) |
Other comprehensive gain (loss) before reclassifications | (15.4) |
Amounts reclassified from accumulated other comprehensive loss | 2.6 |
Deferred income tax benefit | 0.2 |
Balance at the end of the period | (26.5) |
Unrealized Gain (Loss) on Available-for-sale Investments | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | (4.6) |
Other comprehensive gain (loss) before reclassifications | (6.2) |
Amounts reclassified from accumulated other comprehensive loss | 1.4 |
Deferred income tax benefit | 0.1 |
Balance at the end of the period | (9.3) |
Unrealized Pension Costs | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | (14.1) |
Other comprehensive gain (loss) before reclassifications | (0.2) |
Amounts reclassified from accumulated other comprehensive loss | 0.6 |
Deferred income tax benefit | (0.1) |
Balance at the end of the period | (13.8) |
Total Accumulated Other Comprehensive Loss | |
AOCI Attributable to Parent, Net of Tax | |
Balance at the beginning of the period | (132.7) |
Balance at the end of the period | $ (121.3) |
ACCUMULATED OTHER COMPREHENSI52
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Affected Line on Consolidated Condensed Statements of Operations | ||
Cost of sales | $ (233.6) | $ (215.6) |
Selling, general, and administrative expenses | (256) | (229.6) |
Income before provision for income taxes | 263.5 | 293.6 |
Provision for income taxes | (56.9) | (63.4) |
Other (income) expense, net | 3.1 | (2.3) |
Net income | 206.6 | 230.2 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Gain (loss) on cash flow hedges | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Cost of sales | (1.5) | 2.5 |
Selling, general, and administrative expenses | (1.1) | 0.1 |
Income before provision for income taxes | (2.6) | 2.6 |
Provision for income taxes | 0.7 | (1) |
Net income | (1.9) | 1.6 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Gain (loss) on available-for-sale investments | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Provision for income taxes | 0.1 | 0 |
Other (income) expense, net | (1.4) | (0.5) |
Net income | (1.3) | (0.5) |
Amount Reclassified from Accumulated Other Comprehensive Loss | Unrealized Pension Costs | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Provision for income taxes | 0.1 | 0 |
Other (income) expense, net | (0.6) | 0 |
Net income | $ (0.5) | $ 0 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic: | ||
Net income | $ 206.6 | $ 230.2 |
Weighted-average shares outstanding (in shares) | 210.2 | 211.2 |
Basic earnings per share (in dollars per share) | $ 0.98 | $ 1.09 |
Diluted: | ||
Net income | $ 206.6 | $ 230.2 |
Weighted-average shares outstanding (in shares) | 210.2 | 211.2 |
Dilutive effect of stock plans (in shares) | 4.9 | 5.2 |
Dilutive weighted-average shares outstanding | 215.1 | 216.4 |
Diluted earnings per share (in dollars per share) | $ 0.96 | $ 1.06 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock compensation plan | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | 1.2 | 1.1 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Change in tax rate effect on deferred tax asset expense (benefit) | $ (3.3) | ||
Provisional transition tax | 327.4 | ||
Foreign tax credits provisional expense (benefit) | (32.3) | ||
Reduction in transition tax | $ 8.3 | ||
Effective income tax rate | 21.60% | 21.60% | |
Transition tax | $ 24 | ||
Liability for income taxes associated with uncertain tax positions | 229.3 | 225.6 | |
Decrease in unrecognized tax benefits is reasonably possible | 96.1 | 94 | |
Net amounts that would favorably affect effective tax rate | $ 133.2 | $ 131.6 |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information About Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Net Sales | ||
Net sales | $ 894.8 | $ 883.5 |
Segment Operating Income | ||
Pre-tax income | 263.5 | 293.6 |
Operating segments | ||
Segment Net Sales | ||
Net sales | 867.6 | 893.5 |
Segment Operating Income | ||
Pre-tax income | 500.6 | 527 |
Operating segments | United States | ||
Segment Net Sales | ||
Net sales | 479.5 | 464.6 |
Segment Operating Income | ||
Pre-tax income | 313.8 | 303.5 |
Operating segments | Europe | ||
Segment Net Sales | ||
Net sales | 205.3 | 265.3 |
Segment Operating Income | ||
Pre-tax income | 103 | 152.1 |
Operating segments | Japan | ||
Segment Net Sales | ||
Net sales | 91.1 | 81.8 |
Segment Operating Income | ||
Pre-tax income | 54.8 | 46 |
Operating segments | Rest of World | ||
Segment Net Sales | ||
Net sales | 91.7 | 81.8 |
Segment Operating Income | ||
Pre-tax income | $ 29 | $ 25.4 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliations of Segment Net Sales to Consolidated Net Sales and Segment Pre-Tax Income to Consolidated Pre-Tax Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Sales Reconciliation | ||
Consolidated net sales | $ 894.8 | $ 883.5 |
Pre-tax Income Reconciliation | ||
Operating income | 252.5 | 298.3 |
Unallocated amounts: | ||
Pre-tax income | 263.5 | 293.6 |
Operating segments | ||
Net Sales Reconciliation | ||
Consolidated net sales | 867.6 | 893.5 |
Pre-tax Income Reconciliation | ||
Operating income | 500.6 | 527 |
Unallocated amounts: | ||
Pre-tax income | 500.6 | 527 |
Corporate items | ||
Unallocated amounts: | ||
Corporate items | (248.1) | (218.6) |
Reconciling items | ||
Net Sales Reconciliation | ||
Consolidated net sales | 27.2 | (10) |
Unallocated amounts: | ||
Intellectual property litigation expenses | (5.7) | (10.2) |
Foreign currency | 5.7 | 0.1 |
Non-operating income (expense) | $ 11 | $ (4.7) |
SEGMENT INFORMATION - Enterpris
SEGMENT INFORMATION - Enterprise-Wide Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Enterprise-Wide Information | |||
Net sales | $ 894.8 | $ 883.5 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 765 | $ 784.4 | |
Transcatheter Heart Valve Therapy | |||
Enterprise-Wide Information | |||
Net sales | 551.6 | 539.2 | |
Surgical Heart Valve Therapy | |||
Enterprise-Wide Information | |||
Net sales | 179.5 | 199.5 | |
Critical Care | |||
Enterprise-Wide Information | |||
Net sales | 163.7 | 144.8 | |
United States | |||
Enterprise-Wide Information | |||
Net sales | 479.5 | 464.6 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 567 | 608.7 | |
Europe | |||
Enterprise-Wide Information | |||
Net sales | 230 | 261 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 29.5 | 28.4 | |
Japan | |||
Enterprise-Wide Information | |||
Net sales | 92.7 | 79.3 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | 7.8 | 7.6 | |
Rest of World | |||
Enterprise-Wide Information | |||
Net sales | 92.6 | $ 78.6 | |
Long-lived Tangible Assets by Geographic Area | |||
Long-lived tangible assets | $ 160.7 | $ 139.7 |