COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-15525 | |
Entity Registrant Name | EDWARDS LIFESCIENCES CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4316614 | |
Entity Address, Address Line One | One Edwards Way | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Zip Code | 92614 | |
City Area Code | 949 | |
Local Phone Number | 250-2500 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | EW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 606,218,215 | |
Entity Central Index Key | 0001099800 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 872.5 | $ 769 |
Short-term investments (Note 4) | 381.7 | 446.3 |
Accounts receivable, net of allowances of $7.6 and $7.9, respectively | 717.7 | 643 |
Other receivables | 61.6 | 56.1 |
Inventories (Note 2) | 914.3 | 875.5 |
Prepaid expenses | 119.1 | 110 |
Other current assets | 190.3 | 195.9 |
Total current assets | 3,257.2 | 3,095.8 |
Long-term investments (Note 4) | 1,066.7 | 1,239 |
Property, plant, and equipment, net | 1,646 | 1,632.8 |
Operating lease right-of-use assets | 88.5 | 92.3 |
Goodwill | 1,308.4 | 1,164.3 |
Other intangible assets, net (Note 6) | 446.8 | 285.2 |
Deferred income taxes | 544 | 484 |
Other assets (Note 5) | 293.6 | 299.1 |
Total assets | 8,651.2 | 8,292.5 |
Current liabilities | ||
Accounts payable | 180.8 | 201.9 |
Accrued and other liabilities (Note 2) | 876.1 | 795 |
Operating lease liabilities | 25.1 | 25.5 |
Total current liabilities | 1,082 | 1,022.4 |
Long-term debt | 596.5 | 596.3 |
Contingent consideration liabilities (Note 7) | 26.9 | 26.2 |
Taxes payable | 143.4 | 143.4 |
Operating lease liabilities | 66.2 | 69.5 |
Uncertain tax positions | 284 | 267.5 |
Litigation agreement accrual (Note 2) | 130.1 | 143 |
Other liabilities | 260.1 | 217.5 |
Total liabilities | 2,589.2 | 2,485.8 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, authorized 50.0 shares, no shares outstanding | 0 | 0 |
Common stock, $1.00 par value, 1,050.0 shares authorized, 647.1 and 646.3 shares issued, and 606.0 and 608.3 shares outstanding, respectively | 647.1 | 646.3 |
Additional paid-in capital | 2,049.3 | 1,969.3 |
Retained earnings | 7,930.5 | 7,590 |
Accumulated other comprehensive loss (Note 12) | (255.4) | (254.9) |
Treasury stock, at cost, 41.1 and 38.0 shares, respectively | (4,393.5) | (4,144) |
Total Edwards Lifesciences, Inc. stockholders' equity | 5,978 | 5,806.7 |
Noncontrolling interest | 84 | 0 |
Total stockholders' equity | 6,062 | 5,806.7 |
Total liabilities and equity | $ 8,651.2 | $ 8,292.5 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 7.6 | $ 7.9 |
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) | 1,050,000,000 | 1,050,000,000 |
Common stock, shares issued (in shares) | 647,100,000 | 646,300,000 |
Common stock, shares outstanding (in shares) | 606,000,000 | 608,300,000 |
Treasury stock (in shares) | 41,100,000 | 38,000,000 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 1,459.6 | $ 1,341.2 |
Cost of sales | 329.5 | 299.3 |
Gross profit | 1,130.1 | 1,041.9 |
Selling, general, and administrative expenses | 436.3 | 370.3 |
Research and development expenses | 261.2 | 228.6 |
Intellectual property agreement and litigation expenses, net (Note 3) | 43.5 | 7.1 |
Change in fair value of contingent consideration liabilities, net (Note 7) | 0.7 | (2.9) |
Operating income | 388.4 | 438.8 |
Interest income, net | (8.6) | (0.6) |
Other (income) expense, net | (1.6) | 3.3 |
Income before provision for income taxes | 398.6 | 436.1 |
Provision for income taxes | 58.1 | 62.5 |
Net income | $ 340.5 | $ 373.6 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.56 | $ 0.60 |
Diluted (in dollars per share) | $ 0.56 | $ 0.59 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 607.5 | 622.1 |
Diluted (in shares) | 610.9 | 629.4 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 340.5 | $ 373.6 |
Other comprehensive loss, net of tax (Note 12): | ||
Foreign currency translation adjustments | 3.8 | (10) |
Unrealized (loss) gain on hedges | (17.2) | 13.4 |
Unrealized pension costs | (0.1) | 0 |
Unrealized gain (loss) on available-for-sale investments | 9 | (37.1) |
Reclassification of realized investment losses to earnings | 4 | 4.8 |
Other comprehensive loss | (0.5) | (28.9) |
Comprehensive income | $ 340 | $ 344.7 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 340.5 | $ 373.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 35.2 | 34.7 |
Non-cash operating lease cost | 6.8 | 7.1 |
Stock-based compensation (Note 9) | 38.9 | 32.4 |
Change in fair value of contingent consideration liabilities, net (Note 7) | 0.7 | (2.9) |
Deferred income taxes | (51.8) | (42.6) |
Other | 0.4 | 20.4 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables, net | (77.5) | (57.8) |
Inventories | (32.8) | (24) |
Accounts payable and accrued liabilities | (45.2) | (109.2) |
Income taxes | 87.2 | 82.9 |
Prepaid expenses and other current assets | (23.8) | 1.7 |
Intellectual property agreement accrual | 29.3 | (10) |
Other | 6.2 | (13) |
Net cash provided by operating activities | 314.1 | 293.3 |
Cash flows from investing activities | ||
Capital expenditures | (61.5) | (72.7) |
Purchases of held-to-maturity investments (Note 4) | (12.5) | (128) |
Proceeds from held-to-maturity investments (Note 4) | 80.5 | 130 |
Purchases of available-for-sale investments (Note 4) | (3.2) | (74.1) |
Proceeds from available-for-sale investments (Note 4) | 183.4 | 372 |
Business combination, net of cash (Note 6) | (141.2) | 0 |
Payment for acquisition options (Note 5) | (15) | 0 |
Issuances of notes receivable | (15) | (10.5) |
Collections of notes receivable | 0 | 18 |
Other | (15) | (5.2) |
Net cash provided by investing activities | 0.5 | 229.5 |
Cash flows from financing activities | ||
Purchases of treasury stock | (249.3) | (405.6) |
Proceeds from stock plans | 41.9 | 37.5 |
Other | 0.8 | 0 |
Net cash used in financing activities | (206.6) | (368.1) |
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | (4.2) | 13.2 |
Net increase in cash, cash equivalents, and restricted cash | 103.8 | 167.9 |
Cash, cash equivalents, and restricted cash at beginning of period | 772.6 | 867.4 |
Cash, cash equivalents, and restricted cash at end of period | $ 876.4 | $ 1,035.3 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Total Edwards Lifesciences, Inc. Stockholders' Equity | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest |
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 642 | |||||||
Beginning balance at Dec. 31, 2021 | $ 5,835.9 | $ 642 | $ (2,416.9) | $ 1,700.4 | $ 6,068.1 | $ (157.7) | ||
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | 17.9 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 373.6 | 373.6 | ||||||
Other comprehensive loss, net of tax | (28.9) | (28.9) | ||||||
Common stock issued under stock plans (in shares) | 0.9 | |||||||
Common stock issued under stock plans | 37.5 | $ 0.9 | 36.6 | |||||
Stock-based compensation expense | 32.4 | 32.4 | ||||||
Purchases of treasury stock (in shares) | 3.6 | |||||||
Purchases of treasury stock | (405.6) | $ (405.6) | ||||||
Common stock, ending balance (in shares) at Mar. 31, 2022 | 642.9 | |||||||
Ending balance at Mar. 31, 2022 | $ 5,844.9 | $ 642.9 | $ (2,822.5) | 1,769.4 | 6,441.7 | (186.6) | ||
Treasury stock, ending balance (in shares) at Mar. 31, 2022 | 21.5 | |||||||
Common stock, beginning balance (in shares) at Dec. 31, 2022 | 608.3 | 646.3 | ||||||
Beginning balance at Dec. 31, 2022 | $ 5,806.7 | $ 5,806.7 | $ 646.3 | $ (4,144) | 1,969.3 | 7,590 | (254.9) | $ 0 |
Treasury stock, beginning balance (in shares) at Dec. 31, 2022 | 38 | 38 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | $ 340.5 | 340.5 | 340.5 | |||||
Other comprehensive loss, net of tax | (0.5) | (0.5) | (0.5) | |||||
Common stock issued under stock plans (in shares) | 0.8 | |||||||
Common stock issued under stock plans | 41.9 | 41.9 | $ 0.8 | 41.1 | ||||
Stock-based compensation expense | 38.9 | 38.9 | 38.9 | |||||
Purchases of treasury stock (in shares) | 3.1 | |||||||
Purchases of treasury stock | (249.5) | (249.5) | $ (249.5) | |||||
Changes to noncontrolling interest | $ 84 | 84 | ||||||
Common stock, ending balance (in shares) at Mar. 31, 2023 | 606 | 647.1 | ||||||
Ending balance at Mar. 31, 2023 | $ 6,062 | $ 5,978 | $ 647.1 | $ (4,393.5) | $ 2,049.3 | $ 7,930.5 | $ (255.4) | $ 84 |
Treasury stock, ending balance (in shares) at Mar. 31, 2023 | 41.1 | 41.1 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
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' Annual Report on Form 10-K for the year ended December 31, 2022. 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. The consolidated condensed financial statements include the accounts of all wholly-owned subsidiaries and variable interest entities for which the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments, unless otherwise noted herein, 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. There have been no material changes to the Company's significant accounting policies from those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. New Accounting Standards Not Yet Adopted In March 2023, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on investments in tax credit structures to allow entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial results. |
OTHER CONSOLIDATED FINANCIAL ST
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS | OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS Composition of Certain Financial Statement Captions (in millions) Components of selected captions in the consolidated condensed balance sheets consisted of the following: March 31, 2023 December 31, 2022 Inventories Raw materials $ 164.6 $ 156.4 Work in process 206.4 177.4 Finished products 543.3 541.7 $ 914.3 $ 875.5 At March 31, 2023 and December 31, 2022, $146.1 million and $128.6 million, respectively, of the Company's finished products inventories were held on consignment. March 31, 2023 December 31, 2022 Accrued and other liabilities Employee compensation and withholdings $ 225.8 $ 268.7 Taxes payable 120.8 50.6 Property, payroll, and other taxes 53.6 45.6 Research and development accruals 67.7 66.9 Accrued rebates 112.3 116.1 Fair value of derivatives 23.4 20.7 Accrued marketing expenses 13.2 17.0 Legal and insurance 29.1 28.1 Intellectual property agreements (a) 95.4 53.3 Accrued relocation costs 26.2 25.2 Accrued professional services 10.6 6.6 Accrued realignment reserves 14.8 15.6 Other accrued liabilities 83.2 80.6 $ 876.1 $ 795.0 _______________________________________ (a) As of March 31, 2023, $95.4 million was accrued in " Accrued and other liabilities " and $130.1 million was accrued in " Litigation agreement accrual " on the consolidated condensed balance sheet related to intellectual property agreements with Abbott Laboratories and its direct and indirect subsidiaries, and Medtronic, Inc. Supplemental Cash Flow Information (in millions) Three Months Ended 2023 2022 Cash paid during the year for: Amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7.1 $ 7.6 Non-cash investing and financing transactions: Right-of-use assets obtained in exchange for new lease liabilities $ 2.2 $ 6.4 Capital expenditures accruals $ 26.5 $ 23.8 Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2023 December 31, 2022 Cash and cash equivalents $ 872.5 $ 769.0 Restricted cash included in other current assets 0.6 0.5 Restricted cash included in other assets 3.3 3.1 Total cash, cash equivalents, and restricted cash $ 876.4 $ 772.6 Amounts included in restricted cash primarily represent funds placed in escrow related to litigation. |
INTELLECTUAL PROPERTY AGREEMENT
INTELLECTUAL PROPERTY AGREEMENT AND LITIGATION EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
INTELLECTUAL PROPERTY AGREEMENT AND LITIGATION EXPENSES | INTELLECTUAL PROPERTY AGREEMENT AND LITIGATION EXPENSESOn April 12, 2023, Edwards entered into an Intellectual Property Agreement ("Agreement") with Medtronic, Inc. ("Medtronic") pursuant to which the parties agreed to a 15-year global covenant not to sue ("CNS") for infringement of certain patents in the structural heart space owned or controlled by each other. In consideration for the global CNS and related mutual access to certain intellectual property rights, Edwards will pay to Medtronic a one-time, lump sum payment of $300.0 million and annual royalty payments that are tied to net sales of certain Edwards products. Based upon the terms of the Agreement, the Company identified the relevant elements for accounting purposes and allocated the $300.0 million upfront payment based on their fair values. The Company recorded a $37.0 million pre-tax charge in March 2023 related primarily to prior commercial sales incurred through March 31, 2023. The Company recorded a prepaid royalty asset of $124.0 million in April 2023 related to future commercial sales, which will be amortized as expense during the term of the Agreement. Separately, the Company recorded a $139.0 million pre-tax charge in April 2023 related to products currently in development. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 December 31, 2022 Held-to-maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 28.0 $ — $ — $ 28.0 $ 96.0 $ — $ — $ 96.0 Available-for-sale U.S government and agency securities 108.6 — (4.9) 103.7 137.7 — (6.1) 131.6 Asset-backed securities 304.2 — (11.2) 293.0 380.6 — (14.0) 366.6 Corporate debt securities 948.8 — (38.8) 910.0 1,028.1 — (47.8) 980.3 Municipal securities 2.8 — (0.2) 2.6 2.7 — (0.2) 2.5 Total $ 1,364.4 $ — $ (55.1) $ 1,309.3 $ 1,549.1 $ — $ (68.1) $ 1,481.0 The cost and fair value of investments in debt securities, by contractual maturity, as of March 31, 2023, were as follows: Held-to-Maturity Available-for-Sale Amortized Cost Fair Value Amortized Cost Fair Value (in millions) Due in 1 year or less $ 23.5 $ 23.5 $ 366.5 $ 358.2 Due after 1 year through 5 years 4.5 4.5 647.3 614.8 Due after 5 years through 10 years — — 5.2 5.1 Instruments not due at a single maturity date (a) — — 345.4 331.2 $ 28.0 $ 28.0 $ 1,364.4 $ 1,309.3 _______________________________________ (a) Consists of mortgage- and asset-backed securities. 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, 2023 and December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2023 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 10.6 $ (0.1) $ 92.2 $ (4.8) $ 102.8 $ (4.9) Asset-backed securities 59.1 (0.8) 224.7 (10.4) 283.8 (11.2) Corporate debt securities 30.8 (0.1) 871.7 (38.7) 902.5 (38.8) Municipal securities — — 2.6 (0.2) 2.6 (0.2) $ 100.5 $ (1.0) $ 1,191.2 $ (54.1) $ 1,291.7 $ (55.1) December 31, 2022 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 61.6 $ (1.5) $ 69.5 $ (4.6) $ 131.1 $ (6.1) Asset-backed securities 103.3 (1.3) 254.6 (12.7) 357.9 (14.0) Corporate debt securities 189.0 (5.3) 784.8 (42.5) 973.8 (47.8) Municipal securities — — 2.5 (0.2) 2.5 (0.2) $ 353.9 $ (8.1) $ 1,111.4 $ (60.0) $ 1,465.3 $ (68.1) The Company reviews its investments in debt securities to determine if there has been an other-than-temporary decline in fair value. Consideration is given to 1) the length of time and the extent to which the security's fair value has been below cost, 2) the financial condition and near term prospects of the issuer, including the credit quality of the security's issuer, 3) the Company's intent to sell the security, and 4) whether it is more likely than not the Company will have to sell the security before recovery of its amortized cost. The decline in fair value of the debt securities was largely due to changes in interest rates, not credit quality, and as of March 31, 2023, the Company did not intend to sell the securities, and it was not more likely than not that it will be required to sell the securities before recovery of the unrealized losses, and, therefore, the unrealized losses are considered temporary. Investments in Unconsolidated Entities The Company has a number of equity investments in unconsolidated entities. These investments 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 Carrying value of equity method investments $ 24.2 $ 21.4 Equity securities Carrying value of non-marketable equity securities 86.9 86.9 Total investments in unconsolidated entities $ 111.1 $ 108.3 During the three months ended March 31, 2023, the Company made $1.7 million of equity investments in limited liability companies that invest in qualified community development entities ("CDEs") through the New Markets Tax Credit ("NMTC") program. The NMTC program provides federal tax incentives to investors to make investments in distressed communities and promotes economic improvements through the development of successful businesses in these communities. The NMTC is equal to 39% of the qualified investment and is taken over seven years. These limited liability companies are variable interest entities ("VIEs"). The Company determined that it is not the primary beneficiary of the VIEs because it does not have the power to direct the activities that most significantly impact the economic performance of the VIEs, and therefore the Company does not consolidate these entities. Instead, the NMTC investments are accounted for as equity method investments. Non-marketable equity securities consist of investments in privately held companies without readily determinable fair values, and are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. As of March 31, 2023, the Company had recorded cumulative upward adjustments of $8.8 million based on observable price changes, and cumulative downward adjustments of $3.1 million due to impairments and observable price changes. |
INVESTMENTS IN VARIABLE INTERES
INVESTMENTS IN VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities [Abstract] | |
INVESTMENTS IN VARIABLE INTEREST ENTITIES | INVESTMENTS IN VARIABLE INTEREST ENTITIES The Company reviews its investments in other entities to determine whether the Company is the primary beneficiary of a variable interest entity ("VIE"). The Company would be the primary beneficiary of the VIE, and would be required to consolidate the VIE, if it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant to the VIE. The Company's maximum loss exposure to variable interest entities, prior to the exercise of options to acquire the entities, is limited to its investment in the variable interest entities, which include equity investments, options to acquire, and promissory notes. Consolidated VIEs In February 2023, the Company entered into a preferred stock purchase agreement to acquire a majority equity interest in a medical technology company and an option agreement to acquire the remaining equity interest. Edwards concluded that it is the primary beneficiary and consolidated the VIE. See Note 6 for additional information. Unconsolidated VIEs Edwards has relationships with various VIEs that it does not consolidate as Edwards lacks the power to direct the activities that significantly impact the economic success of these entities. In March 2023, the Company agreed to pay a medical device company up to $45 million as consideration for an option to acquire the medical device company, of which $15.0 million has been paid as of March 31, 2023. Also, in March 2023, Edwards advanced $5 million to the medical device company under a convertible promissory note. The option and the note are included in " Other Assets " on the consolidated condensed balance sheet. In January 2023, the Company loaned a privately-held medical device company (the "Investee") $10 million under a $45 million secured promissory note agreement. Previously, in 2021, the Company invested $39.3 million, included in " Long-term Investments, " in the Investee's preferred equity securities and paid $13.1 million, included in " Other Assets, " for an option to acquire the Investee. Per the agreement, the Company may be required to invest up to an additional $6.5 million in the Investee's preferred equity securities and up to an additional $14.4 million for the option to acquire the Investee. In August 2022, the Company entered into an option agreement with a medical device company. Under the option agreement, Edwards paid $47.1 million for an option to acquire the medical device company. The $47.1 million option is included in " Other Assets " on the consolidated condensed balance sheet. In June 2022, the Company entered into a convertible promissory note and amended its existing warrant agreement with a medical device company. Under the convertible promissory note agreement, the Company agreed to loan the medical device company up to $47.5 million, of which $32.5 million has been advanced as of March 31, 2023. In addition, in 2019 the Company paid $35.0 million for an option to acquire the medical device company. The $35.0 million warrant and the $32.5 million note receivable are included in " Other Assets " on the consolidated condensed balance sheet. In May 2022, the Company entered into an option agreement with a medical technology company. Under the option agreement, Edwards paid $60.0 million for an option to acquire the medical technology company, of which $10 million was paid in 2021. The $60.0 million option is included in " Other Assets " on the consolidated condensed balance sheet. In addition, Edwards has made equity investments through the NMTC program in limited liability companies that are considered VIEs. For more information, see Note 4. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | BUSINESS COMBINATIONOn February 28, 2023, the Company acquired 61% of the then outstanding shares of a medical technology company in an all cash transaction. The Company determined it was the primary beneficiary of this VIE, and the VIE has been consolidated in the Company's consolidated condensed financial statements. In addition, the Company amended and restated its previous option agreement with the medical technology company. The option agreement gives Edwards the option to acquire the remaining equity interest in the medical technology company. The medical technology company is dedicated to developing technologies for detecting and managing patients with cardiovascular disease. The transaction was accounted for as a business combination. Tangible and intangible assets and liabilities acquired were recorded based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recorded to goodwill. The Company is in the process of finalizing its purchase price allocation. Therefore, the amounts reflected below are subject to change and will be finalized during 2023. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed (in millions): Assets $ 7.5 Goodwill 143.0 In-process research and development 150.5 Liabilities assumed (16.1) Deferred tax liabilities (25.1) Fair value of net assets acquired 259.8 Less: Noncontrolling interest (a) (84.0) Total purchase price 175.8 Less: cash acquired (6.8) Total purchase price, net of cash acquired (b) $ 169.0 _______________________________________ (a) Includes the fair value of the noncontrolling interest of $99.0 million offset by the purchase consideration allocated to the option of $15.0 million, which was ascribed to the noncontrolling interest. (b) Includes $22.5 million paid in a previous year under option agreements and $5.3 million for the settlement of a pre-existing note. Goodwill includes expected synergies and other benefits the Company believes will result from the acquisition. Goodwill was assigned to the Company’s Rest of World segment and is not deductible for tax purposes. The results of operations for the medical technology company since the date of acquisition were immaterial. Pro forma results have not been presented as the results of the medical technology company are not material in relation to the consolidated financial statements of Edwards Lifesciences. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS 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. The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, accounts and other receivables, investments, accounts payable, certain accrued liabilities, and borrowings under a revolving credit agreement. The carrying value of these financial instruments generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. As of March 31, 2023, the fair value of the notes payable, based on Level 2 inputs, was $598.5 million. 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, 2023 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 9.0 $ — $ — $ 9.0 Available-for-sale investments: Corporate debt securities — 910.0 — 910.0 Asset-backed securities — 293.0 — 293.0 United States government and agency securities 53.1 50.6 — 103.7 Municipal securities — 2.6 — 2.6 Investments held for deferred compensation plans 117.8 — — 117.8 Derivatives — 51.7 — 51.7 $ 179.9 $ 1,307.9 $ — $ 1,487.8 Liabilities Derivatives $ — $ 23.4 $ — $ 23.4 Contingent consideration liabilities — — 26.9 26.9 Other liability — — 14.0 14.0 $ — $ 23.4 $ 40.9 $ 64.3 December 31, 2022 Assets Cash equivalents $ 0.4 $ — $ — $ 0.4 Available-for-sale investments: Corporate debt securities — 980.3 — 980.3 Asset-backed securities — 366.6 — 366.6 United States government and agency securities 37.1 94.5 — 131.6 Municipal securities — 2.5 — 2.5 Investments held for deferred compensation plans 112.1 — — 112.1 Derivatives — 65.5 — 65.5 $ 149.6 $ 1,509.4 $ — $ 1,659.0 Liabilities Derivatives $ — $ 27.2 $ — $ 27.2 Contingent consideration liabilities — — 26.2 26.2 Other liability — — 14.0 14.0 $ — $ 27.2 $ 40.2 $ 67.4 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, United States 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, bond and money market mutual funds. The fair values of these investments are based on quoted market prices. Derivative Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and cross currency swap contracts to manage foreign currency exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of the derivative financial instruments was estimated based on quoted market foreign exchange rates, cross currency swap basis 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 sales levels 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 as of March 31, 2023 include (1) the discount rate used to present value the projected cash flows (ranging from 3.5% to 13.8%; weighted average of 3.7%), (2) the probability of milestone achievement (ranging from 0% to 50%; weighted average of 39.6%), and (3) the projected payment dates (2026). The weighted average of each of the above inputs was determined based on the relative fair value of each obligation. The use of different assumptions could have a material effect on the estimated fair value amounts. The following tables summarize the changes in fair value of the contingent consideration and the other liability (in millions): Contingent Consideration Other liability Total Balance at December 31, 2022 $ 26.2 $ 14.0 $ 40.2 Changes in fair value 0.7 — 0.7 Balance at March 31, 2023 $ 26.9 $ 14.0 $ 40.9 Contingent Consideration Other liability Total Balance at December 31, 2021 $ 62.0 $ 14.0 $ 76.0 Changes in fair value (2.9) — (2.9) Balance at March 31, 2022 $ 59.1 $ 14.0 $ 73.1 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes. Notional Amount March 31, 2023 December 31, 2022 (in millions) Foreign currency forward exchange contracts $ 1,712.2 $ 1,678.4 Cross currency swap contracts 300.0 300.0 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 uses foreign currency forward exchange contracts and cross currency swap contracts to manage its exposure to changes in currency exchange rates from (a) future cash flows associated with intercompany transactions and certain local currency expenses expected to occur within the next 13 months (designated as cash flow hedges), (b) its net investment in certain foreign subsidiaries (designated as net investment hedges) and (c) foreign currency denominated assets or liabilities (designated as fair value hedges). The Company also uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with revaluation of certain assets and liabilities denominated in currencies other than their functional currencies (resulting principally from intercompany and local currency transactions). 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 included in the assessment of hedge effectiveness is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. 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 line item and in the same period in which the underlying hedged transactions affect earnings. Changes in the fair value of net investment hedges are reported in " Accumulated Other Comprehensive Loss " as a part of the cumulative translation adjustment and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The portion of the change in fair value related to components excluded from the hedge effectiveness assessment are amortized into earnings over the life of the derivative. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities. 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 March 31, 2023 December 31, 2022 Assets Foreign currency contracts Other current assets $ 13.6 $ 24.9 Cross currency swap contracts Other assets $ 38.1 $ 40.6 Liabilities Foreign currency contracts Accrued and other liabilities $ 23.4 $ 20.7 Foreign currency contracts Other liabilities $ — $ 6.5 The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions): Gross Amounts Gross Amounts Net Amounts March 31, 2023 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 13.6 $ — $ 13.6 $ (6.7) $ — $ 6.9 Cross currency swap contracts $ 38.1 $ — $ 38.1 $ — $ — $ 38.1 Derivative liabilities Foreign currency contracts $ 23.4 $ — $ 23.4 $ (6.7) $ — $ 16.7 December 31, 2022 Derivative assets Foreign currency contracts $ 24.9 $ — $ 24.9 $ (12.0) $ — $ 12.9 Cross currency swap contracts $ 40.6 $ — $ 40.6 $ — $ — $ 40.6 Derivative liabilities Foreign currency contracts $ 27.2 $ — $ 27.2 $ (12.0) $ — $ 15.2 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) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2023 2022 2023 2022 Cash flow hedges Foreign currency contracts $ 3.7 $ 24.7 Cost of sales $ 29.8 $ 7.3 Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2023 2022 2023 2022 Net investment hedges Cross currency swap contracts $ (2.5) $ 3.9 Interest income, net $ 1.7 $ 1.6 The cross currency swap contracts have an expiration date of June 15, 2028. At maturity of the cross currency swap contracts, the Company will deliver the notional amount of €257.2 million and will receive $300.0 million from the counterparties. The Company will receive semi-annual interest payments from the counterparties based on a fixed interest rate until maturity of the agreements. Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2023 2022 Derivatives not designated as hedging instruments Foreign currency contracts Other (income) expense, net $ (5.4) $ 15.5 The following tables present the effect of fair value and cash flow hedge accounting on the consolidated condensed statements of operations (in millions): Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other (Income) Expense, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (329.5) $ (436.3) $ 1.6 The effects of cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ 1.2 Derivatives designated as hedging instruments $ — $ — $ (1.2) Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 1.2 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 29.8 $ — $ — Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other (Income) Expense, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (299.3) $ (370.3) $ (3.3) The effects of fair value and cash flow hedging: Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 7.3 $ — $ — The Company expects that during the next twelve months it will reclassify to earnings a $13.6 million gain currently recorded in " Accumulated Other Comprehensive Loss ." |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [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, 2023 and 2022 was as follows (in millions): Three Months Ended 2023 2022 Cost of sales $ 7.0 $ 6.2 Selling, general, and administrative expenses 22.3 18.7 Research and development expenses 9.6 7.5 Total stock-based compensation expense 38.9 32.4 Income tax benefit (4.7) (4.4) Total stock-based compensation expense, net of tax $ 34.2 $ 28.0 At March 31, 2023, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, and employee stock purchase plan ("ESPP") subscription awards amounted to $187.9 million, which will be amortized on a straight-line basis over each award's requisite service period. The weighted-average remaining requisite service period is 28 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 2023 2022 Risk-free interest rate 4.1 % 1.9 % Expected dividend yield None None Expected volatility 31.3 % 33.5 % Expected term (years) 5.3 5.3 Fair value, per option $ 27.77 $ 35.66 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 2023 2022 Risk-free interest rate 4.6 % 0.2 % Expected dividend yield None None Expected volatility 31.5 % 32.2 % Expected term (years) 0.6 0.6 Fair value, per share $ 21.10 $ 29.52 |
ACCELERATED SHARE REPURCHASE
ACCELERATED SHARE REPURCHASE | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
ACCELERATED SHARE REPURCHASE | ACCELERATED SHARE REPURCHASE During 2023 and 2022, the Company entered into accelerated share repurchase ("ASR") agreements providing for the repurchase of the Company's common stock based on the volume-weighted average price ("VWAP") of the Company's common stock during the term of the applicable agreement, less a discount. The following table summarizes the terms of the ASR agreements (dollars and shares in millions, except per share data): Initial Delivery Final Settlement Agreement Date Amount Shares Price per Value of Settlement Total Shares Average Price January 2022 $ 250.0 1.9 $ 104.87 80 % February 2022 2.3 $ 110.31 February 2023 $ 200.0 2.0 $ 80.44 80 % March 2023 2.5 $ 79.28 The ASR agreements were each accounted for as two separate transactions: (1) the value of the initial delivery of shares was recorded as shares of common stock acquired in a treasury stock transaction on the acquisition date, and (2) the remaining amount of the purchase price paid was recorded as a forward contract indexed to the Company's own common stock and was initially recorded in " Additional Paid-in Capital " and subsequently, upon settlement, was transferred to " Treasury Stock " on the consolidated condensed balance sheets. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. The Company determined that the forward contracts indexed to the Company's common stock met all the applicable criteria for equity classification and, therefore, were not accounted for as a derivative instrument. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is reviewing and investigating whether business activities in Japan and other markets violate certain provisions of the Foreign Corrupt Practices Act ("FCPA"). The Company voluntarily notified the SEC and the United States Department of Justice ("DOJ") during 2021 that it has engaged outside counsel to conduct this review and investigation. The Company has provided status updates to the SEC and DOJ since that time. Any determination that the Company’s operations or activities are not in compliance with existing laws, including the FCPA, could result in the imposition of fines, penalties, and equitable remedies. The Company cannot currently predict the outcome of the review and investigation or the potential impact on its financial statements. On September 28, 2021, Aortic Innovations LLC, a non-practicing entity, filed a lawsuit against Edwards Lifesciences Corporation and certain of its subsidiaries ("Edwards") in the United States District Court for the District of Delaware alleging that Edwards’ SAPIEN 3 Ultra product infringes certain of its patents. The Company is unable to predict the ultimate outcome of this matter or estimate a range of possible exposure; therefore, no amounts have been accrued. The Company intends to vigorously defend itself in this litigation. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables summarize the activity for each component of " Accumulated Other Comprehensive Loss " (in millions): Foreign Unrealized Gain on Hedges Unrealized Loss on Available-for-sale Investments Unrealized Total December 31, 2022 $ (218.8) $ 23.8 $ (65.6) $ 5.7 $ (254.9) Other comprehensive gain (loss) before reclassifications 4.9 6.7 9.0 (0.1) 20.5 Amounts reclassified from accumulated other comprehensive loss (1.7) (29.8) 4.0 — (27.5) Deferred income tax benefit 0.6 5.9 — — 6.5 March 31, 2023 $ (215.0) $ 6.6 $ (52.6) $ 5.6 $ (255.4) Foreign Unrealized Gain on Hedges Unrealized Loss on Available-for-sale Investments Unrealized Total December 31, 2021 $ (172.5) $ 29.7 $ (6.9) $ (8.0) $ (157.7) Other comprehensive (loss) gain before reclassifications (7.4) 24.7 (47.6) — (30.3) Amounts reclassified from accumulated other comprehensive loss (1.6) (7.3) 4.8 — (4.1) Deferred income tax (expense) benefit (1.0) (4.0) 10.5 — 5.5 March 31, 2022 $ (182.5) $ 43.1 $ (39.2) $ (8.0) $ (186.6) The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Details about Accumulated Other Comprehensive Loss Components 2023 2022 Foreign currency translation adjustments $ 1.7 $ 1.6 Other (income) expense, net (0.4) (0.4) Provision for income taxes $ 1.3 $ 1.2 Net of tax Gain on hedges $ 29.8 $ 7.3 Cost of sales (7.1) (2.1) Provision for income taxes $ 22.7 $ 5.2 Net of tax Loss on available-for-sale investments $ (4.0) $ (4.8) Other (income) expense, net 1.0 1.2 Provision for income taxes $ (3.0) $ (3.6) Net of tax |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
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 the 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 2023 2022 Basic: Net income attributable to Edwards Lifesciences, Inc. $ 340.5 $ 373.6 Weighted-average shares outstanding 607.5 622.1 Basic earnings per share $ 0.56 $ 0.60 Diluted: Net income attributable to Edwards Lifesciences, Inc. $ 340.5 $ 373.6 Weighted-average shares outstanding 607.5 622.1 Dilutive effect of stock plans 3.4 7.3 Dilutive weighted-average shares outstanding 610.9 629.4 Diluted earnings per share $ 0.56 $ 0.59 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were 14.6% and 14.3% for the three months ended March 31, 2023 and 2022, respectively. The increase in the effective rate between the three months ended March 31, 2023 and 2022 is primarily due to a reduced tax benefit from employee share-based compensation. In addition, the effective rates for the three months ended March 31, 2023 and 2022 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) Federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit from employee share- based compensation of $2.9 million and $13.4 million for the three months ended March 31, 2023 and 2022, respectively. In the normal course of business, the Internal Revenue Service (“IRS”) and other taxing authorities are in different stages of examining various years of the Company's tax filings. During these audits the Company may receive proposed audit adjustments that could be material. Therefore, there is a possibility that an adverse outcome in these audits could have a material effect on the Company's results of operations and financial condition. The Company strives to resolve open matters with each tax authority at the examination level and could reach agreement with a tax authority at any time. While the Company has accrued for matters it believes are more likely than not to require settlement, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the consolidated condensed financial statements. Furthermore, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The uncertain tax positions are reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues, and issuance of new legislation, regulations, or case law. As of March 31, 2023 and December 31, 2022, the gross liability recorded for income taxes associated with uncertain tax positions was $496.8 million and $475.3 million, respectively. The Company estimates that these liabilities would be reduced by $194.3 million and $182.1 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 $302.5 million and $293.2 million, respectively, if not required, would favorably affect the Company's effective tax rate. The Company executed an Advance Pricing Agreement ("APA") in 2018 between the United States and Switzerland governments for tax years 2009 through 2020 covering various, but not all, transfer pricing matters. The unagreed transfer pricing matters, namely Surgical Structural Heart and Transcatheter Aortic Valve Replacement (collectively “Surgical/TAVR”) intercompany royalty transactions, then reverted to IRS Examination for further consideration as part of the respective years' regular tax audits. In addition, the Company executed other bilateral APAs as follows: during 2017, an APA between the United States and Japan covering tax years 2015 through 2019; and during 2018, APAs between Japan and Singapore and between Switzerland and Japan covering tax years 2015 through 2019. The Company has filed to renew all of the APAs which cover transactions with Japan for the years 2020 and forward. An APA between Switzerland and Japan covering tax years 2020 through 2024 was executed in 2021. The execution of some or all of these APA renewals depends on many variables outside of the Company's control. The audits of the Company’s United States federal income tax returns through 2014 have been closed. The IRS audit field work for the 2015 through 2017 tax years was completed during the second quarter of 2021, except for certain transfer pricing and related matters. The IRS began its examination of the 2018 through 2020 tax years during the first quarter of 2022. The audits of the Company's material state, local, and foreign income tax matters have been concluded for years through 2015. While not material, the Company continues to address matters in India for years from 2010 and on. During 2021, the Company received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015-2017 tax years relating to transfer pricing involving certain Surgical/TAVR intercompany royalty transactions between the Company's United States and Switzerland subsidiaries. The NOPA proposes an increase to the Company's United States taxable income, which could result in additional tax expense for this period of approximately $210 million and represents a significant change to previously agreed upon transfer pricing methodologies for these types of transactions. The Company has formally disagreed with the NOPA and submitted a formal protest on the matter during the fourth quarter of 2021. During the second quarter of 2022, the Company received the IRS's rebuttal to its protest and was notified that the case had been transferred to the IRS Independent Office of Appeals ("Appeals"). The opening conference was held with Appeals during the first quarter of 2023 and discussions are ongoing. The Company continues to evaluate all possible remedies available to it. The Company believes the amounts previously accrued related to this uncertain tax position are sufficient and, accordingly, has not accrued any additional amount based on the NOPA received or as a result of the ongoing Appeals. While no payment of any amount related to the NOPA is required to be made, if at all, until all applicable proceedings have been completed, the Company made an advance payment of tax in November 2022 to prevent the further accrual of interest on that portion of any potential deficiency. Certain Surgical/TAVR intercompany royalty transactions covering tax years 2018-2022 that were not resolved under the APA program remain subject to IRS examination, and those transactions and related tax positions remain uncertain as of March 31, 2023. The Company has considered this information, as well as information regarding the NOPA, the rebuttal and ongoing Appeals described above, in its evaluation of its uncertain tax positions. The impact of these unresolved transfer pricing matters, net of any correlative repatriation tax adjustment, may be significant to the Company’s consolidated condensed financial statements. Based on the information currently available and numerous possible outcomes, the Company cannot reasonably estimate what, if any, changes in its existing uncertain tax positions may occur in the next 12 months and, therefore, has continued to record the uncertain tax positions as a long-term liability. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
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 operating income. Segment net sales and segment operating income are based on internally derived foreign exchange rates 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. There were no customers that represented 10% or more of the Company's total net sales. Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest income, 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, changes in the fair value of contingent consideration liabilities, and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment operating 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 2023 2022 Segment Net Sales United States $ 849.1 $ 749.5 Europe 335.4 300.1 Japan 104.3 140.9 Rest of World 165.6 142.3 Total segment net sales $ 1,454.4 $ 1,332.8 Segment Operating Income United States $ 563.4 $ 511.5 Europe 181.7 166.6 Japan 63.4 99.5 Rest of World 70.5 59.7 Total segment operating income $ 879.0 $ 837.3 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 2023 2022 Net Sales Reconciliation Segment net sales $ 1,454.4 $ 1,332.8 Foreign currency 5.2 8.4 Consolidated net sales $ 1,459.6 $ 1,341.2 Pre-tax Income Reconciliation Segment operating income $ 879.0 $ 837.3 Unallocated amounts: Corporate items (468.9) (419.4) Intellectual property agreement and litigation expenses, net (43.5) (7.1) Change in fair value of contingent consideration liabilities, net (0.7) 2.9 Foreign currency 22.5 25.1 Consolidated operating income 388.4 438.8 Non-operating income (expense) 10.2 (2.7) Consolidated pre-tax income $ 398.6 $ 436.1 Enterprise-wide Information (in millions) The following enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2023 2022 Net Sales by Geographic Area United States $ 849.1 $ 749.5 Europe 331.1 311.1 Japan 114.1 135.5 Rest of World 165.3 145.1 $ 1,459.6 $ 1,341.2 Net Sales by Major Product Area Transcatheter Aortic Valve Replacement $ 947.9 $ 881.3 Transcatheter Mitral and Tricuspid Therapies 41.6 27.0 Surgical Structural Heart 248.2 220.8 Critical Care 221.9 212.1 $ 1,459.6 $ 1,341.2 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
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' Annual Report on Form 10-K for the year ended December 31, 2022. 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. |
Consolidation | The consolidated condensed financial statements include the accounts of all wholly-owned subsidiaries and variable interest entities for which the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted In March 2023, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting guidance on investments in tax credit structures to allow entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial results. |
OTHER CONSOLIDATED FINANCIAL _2
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Components of selected captions in the consolidated condensed balance sheets consisted of the following: March 31, 2023 December 31, 2022 Inventories Raw materials $ 164.6 $ 156.4 Work in process 206.4 177.4 Finished products 543.3 541.7 $ 914.3 $ 875.5 |
Schedule of Accrued and Other Liabilities | March 31, 2023 December 31, 2022 Accrued and other liabilities Employee compensation and withholdings $ 225.8 $ 268.7 Taxes payable 120.8 50.6 Property, payroll, and other taxes 53.6 45.6 Research and development accruals 67.7 66.9 Accrued rebates 112.3 116.1 Fair value of derivatives 23.4 20.7 Accrued marketing expenses 13.2 17.0 Legal and insurance 29.1 28.1 Intellectual property agreements (a) 95.4 53.3 Accrued relocation costs 26.2 25.2 Accrued professional services 10.6 6.6 Accrued realignment reserves 14.8 15.6 Other accrued liabilities 83.2 80.6 $ 876.1 $ 795.0 _______________________________________ (a) As of March 31, 2023, $95.4 million was accrued in " Accrued and other liabilities " and $130.1 million was accrued in " Litigation agreement accrual " on the consolidated condensed balance sheet related to intellectual property agreements with Abbott Laboratories and its direct and indirect subsidiaries, and Medtronic, Inc. |
Schedule of Supplemental Cash Flow Information | Supplemental Cash Flow Information (in millions) Three Months Ended 2023 2022 Cash paid during the year for: Amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7.1 $ 7.6 Non-cash investing and financing transactions: Right-of-use assets obtained in exchange for new lease liabilities $ 2.2 $ 6.4 Capital expenditures accruals $ 26.5 $ 23.8 |
Schedule of Cash and Cash Equivalents | Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2023 December 31, 2022 Cash and cash equivalents $ 872.5 $ 769.0 Restricted cash included in other current assets 0.6 0.5 Restricted cash included in other assets 3.3 3.1 Total cash, cash equivalents, and restricted cash $ 876.4 $ 772.6 |
Schedule of Restricted Cash | Cash, Cash Equivalents, and Restricted Cash (in millions) March 31, 2023 December 31, 2022 Cash and cash equivalents $ 872.5 $ 769.0 Restricted cash included in other current assets 0.6 0.5 Restricted cash included in other assets 3.3 3.1 Total cash, cash equivalents, and restricted cash $ 876.4 $ 772.6 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 December 31, 2022 Held-to-maturity Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Bank time deposits $ 28.0 $ — $ — $ 28.0 $ 96.0 $ — $ — $ 96.0 Available-for-sale U.S government and agency securities 108.6 — (4.9) 103.7 137.7 — (6.1) 131.6 Asset-backed securities 304.2 — (11.2) 293.0 380.6 — (14.0) 366.6 Corporate debt securities 948.8 — (38.8) 910.0 1,028.1 — (47.8) 980.3 Municipal securities 2.8 — (0.2) 2.6 2.7 — (0.2) 2.5 Total $ 1,364.4 $ — $ (55.1) $ 1,309.3 $ 1,549.1 $ — $ (68.1) $ 1,481.0 |
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, 2023, were as follows: Held-to-Maturity Available-for-Sale Amortized Cost Fair Value Amortized Cost Fair Value (in millions) Due in 1 year or less $ 23.5 $ 23.5 $ 366.5 $ 358.2 Due after 1 year through 5 years 4.5 4.5 647.3 614.8 Due after 5 years through 10 years — — 5.2 5.1 Instruments not due at a single maturity date (a) — — 345.4 331.2 $ 28.0 $ 28.0 $ 1,364.4 $ 1,309.3 _______________________________________ (a) Consists of mortgage- and asset-backed securities. |
Schedule of Gross Unrealized Losses and Fair Values for Investments in Unrealized Loss Position | The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2023 and December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions): March 31, 2023 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 10.6 $ (0.1) $ 92.2 $ (4.8) $ 102.8 $ (4.9) Asset-backed securities 59.1 (0.8) 224.7 (10.4) 283.8 (11.2) Corporate debt securities 30.8 (0.1) 871.7 (38.7) 902.5 (38.8) Municipal securities — — 2.6 (0.2) 2.6 (0.2) $ 100.5 $ (1.0) $ 1,191.2 $ (54.1) $ 1,291.7 $ (55.1) December 31, 2022 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses U.S. government and agency securities $ 61.6 $ (1.5) $ 69.5 $ (4.6) $ 131.1 $ (6.1) Asset-backed securities 103.3 (1.3) 254.6 (12.7) 357.9 (14.0) Corporate debt securities 189.0 (5.3) 784.8 (42.5) 973.8 (47.8) Municipal securities — — 2.5 (0.2) 2.5 (0.2) $ 353.9 $ (8.1) $ 1,111.4 $ (60.0) $ 1,465.3 $ (68.1) |
Schedule of Investments in Unconsolidated Affiliates | These investments 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 Carrying value of equity method investments $ 24.2 $ 21.4 Equity securities Carrying value of non-marketable equity securities 86.9 86.9 Total investments in unconsolidated entities $ 111.1 $ 108.3 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Preliminary Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed (in millions): Assets $ 7.5 Goodwill 143.0 In-process research and development 150.5 Liabilities assumed (16.1) Deferred tax liabilities (25.1) Fair value of net assets acquired 259.8 Less: Noncontrolling interest (a) (84.0) Total purchase price 175.8 Less: cash acquired (6.8) Total purchase price, net of cash acquired (b) $ 169.0 _______________________________________ (a) Includes the fair value of the noncontrolling interest of $99.0 million offset by the purchase consideration allocated to the option of $15.0 million, which was ascribed to the noncontrolling interest. (b) Includes $22.5 million paid in a previous year under option agreements and $5.3 million for the settlement of a pre-existing note. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule 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, 2023 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 9.0 $ — $ — $ 9.0 Available-for-sale investments: Corporate debt securities — 910.0 — 910.0 Asset-backed securities — 293.0 — 293.0 United States government and agency securities 53.1 50.6 — 103.7 Municipal securities — 2.6 — 2.6 Investments held for deferred compensation plans 117.8 — — 117.8 Derivatives — 51.7 — 51.7 $ 179.9 $ 1,307.9 $ — $ 1,487.8 Liabilities Derivatives $ — $ 23.4 $ — $ 23.4 Contingent consideration liabilities — — 26.9 26.9 Other liability — — 14.0 14.0 $ — $ 23.4 $ 40.9 $ 64.3 December 31, 2022 Assets Cash equivalents $ 0.4 $ — $ — $ 0.4 Available-for-sale investments: Corporate debt securities — 980.3 — 980.3 Asset-backed securities — 366.6 — 366.6 United States government and agency securities 37.1 94.5 — 131.6 Municipal securities — 2.5 — 2.5 Investments held for deferred compensation plans 112.1 — — 112.1 Derivatives — 65.5 — 65.5 $ 149.6 $ 1,509.4 $ — $ 1,659.0 Liabilities Derivatives $ — $ 27.2 $ — $ 27.2 Contingent consideration liabilities — — 26.2 26.2 Other liability — — 14.0 14.0 $ — $ 27.2 $ 40.2 $ 67.4 |
Schedule of Changes in Fair Value of Contingent Consideration Obligation | The following tables summarize the changes in fair value of the contingent consideration and the other liability (in millions): Contingent Consideration Other liability Total Balance at December 31, 2022 $ 26.2 $ 14.0 $ 40.2 Changes in fair value 0.7 — 0.7 Balance at March 31, 2023 $ 26.9 $ 14.0 $ 40.9 Contingent Consideration Other liability Total Balance at December 31, 2021 $ 62.0 $ 14.0 $ 76.0 Changes in fair value (2.9) — (2.9) Balance at March 31, 2022 $ 59.1 $ 14.0 $ 73.1 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk | The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes. Notional Amount March 31, 2023 December 31, 2022 (in millions) Foreign currency forward exchange contracts $ 1,712.2 $ 1,678.4 Cross currency swap contracts 300.0 300.0 |
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 March 31, 2023 December 31, 2022 Assets Foreign currency contracts Other current assets $ 13.6 $ 24.9 Cross currency swap contracts Other assets $ 38.1 $ 40.6 Liabilities Foreign currency contracts Accrued and other liabilities $ 23.4 $ 20.7 Foreign currency contracts Other liabilities $ — $ 6.5 |
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 Gross Amounts Net Amounts March 31, 2023 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 13.6 $ — $ 13.6 $ (6.7) $ — $ 6.9 Cross currency swap contracts $ 38.1 $ — $ 38.1 $ — $ — $ 38.1 Derivative liabilities Foreign currency contracts $ 23.4 $ — $ 23.4 $ (6.7) $ — $ 16.7 December 31, 2022 Derivative assets Foreign currency contracts $ 24.9 $ — $ 24.9 $ (12.0) $ — $ 12.9 Cross currency swap contracts $ 40.6 $ — $ 40.6 $ — $ — $ 40.6 Derivative liabilities Foreign currency contracts $ 27.2 $ — $ 27.2 $ (12.0) $ — $ 15.2 |
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 Gross Amounts Net Amounts March 31, 2023 Gross Financial Cash Net Derivative assets Foreign currency contracts $ 13.6 $ — $ 13.6 $ (6.7) $ — $ 6.9 Cross currency swap contracts $ 38.1 $ — $ 38.1 $ — $ — $ 38.1 Derivative liabilities Foreign currency contracts $ 23.4 $ — $ 23.4 $ (6.7) $ — $ 16.7 December 31, 2022 Derivative assets Foreign currency contracts $ 24.9 $ — $ 24.9 $ (12.0) $ — $ 12.9 Cross currency swap contracts $ 40.6 $ — $ 40.6 $ — $ — $ 40.6 Derivative liabilities Foreign currency contracts $ 27.2 $ — $ 27.2 $ (12.0) $ — $ 15.2 |
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) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2023 2022 2023 2022 Cash flow hedges Foreign currency contracts $ 3.7 $ 24.7 Cost of sales $ 29.8 $ 7.3 Amount of Gain or (Loss) Amount of Gain or (Loss) Three Months Ended Location of Gain or Three Months Ended 2023 2022 2023 2022 Net investment hedges Cross currency swap contracts $ (2.5) $ 3.9 Interest income, net $ 1.7 $ 1.6 Amount of Gain or (Loss) Three Months Ended Location of Gain or (Loss) 2023 2022 Derivatives not designated as hedging instruments Foreign currency contracts Other (income) expense, net $ (5.4) $ 15.5 |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables present the effect of fair value and cash flow hedge accounting on the consolidated condensed statements of operations (in millions): Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other (Income) Expense, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (329.5) $ (436.3) $ 1.6 The effects of cash flow hedging: Gain (loss) on fair value hedging relationships: Foreign currency contracts: Hedged items $ — $ — $ 1.2 Derivatives designated as hedging instruments $ — $ — $ (1.2) Amount excluded from effectiveness testing recognized in earnings based on an amortization approach $ — $ — $ 1.2 Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 29.8 $ — $ — Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three Months Ended Cost of sales Selling, general, and administrative expenses Other (Income) Expense, net Total amounts of income and expense line items presented in the consolidated condensed statements of operations in which the effects of fair value or cash flow hedges are recorded $ (299.3) $ (370.3) $ (3.3) The effects of fair value and cash flow hedging: Gain (loss) on cash flow hedging relationships: Foreign currency contracts: Amount of gain (loss) reclassified from accumulated OCI into income $ 7.3 $ — $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [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, 2023 and 2022 was as follows (in millions): Three Months Ended 2023 2022 Cost of sales $ 7.0 $ 6.2 Selling, general, and administrative expenses 22.3 18.7 Research and development expenses 9.6 7.5 Total stock-based compensation expense 38.9 32.4 Income tax benefit (4.7) (4.4) Total stock-based compensation expense, net of tax $ 34.2 $ 28.0 |
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 2023 2022 Risk-free interest rate 4.1 % 1.9 % Expected dividend yield None None Expected volatility 31.3 % 33.5 % Expected term (years) 5.3 5.3 Fair value, per option $ 27.77 $ 35.66 |
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 2023 2022 Risk-free interest rate 4.6 % 0.2 % Expected dividend yield None None Expected volatility 31.5 % 32.2 % Expected term (years) 0.6 0.6 Fair value, per share $ 21.10 $ 29.52 |
ACCELERATED SHARE REPURCHASE (T
ACCELERATED SHARE REPURCHASE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accelerated Share Repurchases | The following table summarizes the terms of the ASR agreements (dollars and shares in millions, except per share data): Initial Delivery Final Settlement Agreement Date Amount Shares Price per Value of Settlement Total Shares Average Price January 2022 $ 250.0 1.9 $ 104.87 80 % February 2022 2.3 $ 110.31 February 2023 $ 200.0 2.0 $ 80.44 80 % March 2023 2.5 $ 79.28 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Activity for Each Component of Accumulated Other Comprehensive Loss | The following tables summarize the activity for each component of " Accumulated Other Comprehensive Loss " (in millions): Foreign Unrealized Gain on Hedges Unrealized Loss on Available-for-sale Investments Unrealized Total December 31, 2022 $ (218.8) $ 23.8 $ (65.6) $ 5.7 $ (254.9) Other comprehensive gain (loss) before reclassifications 4.9 6.7 9.0 (0.1) 20.5 Amounts reclassified from accumulated other comprehensive loss (1.7) (29.8) 4.0 — (27.5) Deferred income tax benefit 0.6 5.9 — — 6.5 March 31, 2023 $ (215.0) $ 6.6 $ (52.6) $ 5.6 $ (255.4) Foreign Unrealized Gain on Hedges Unrealized Loss on Available-for-sale Investments Unrealized Total December 31, 2021 $ (172.5) $ 29.7 $ (6.9) $ (8.0) $ (157.7) Other comprehensive (loss) gain before reclassifications (7.4) 24.7 (47.6) — (30.3) Amounts reclassified from accumulated other comprehensive loss (1.6) (7.3) 4.8 — (4.1) Deferred income tax (expense) benefit (1.0) (4.0) 10.5 — 5.5 March 31, 2022 $ (182.5) $ 43.1 $ (39.2) $ (8.0) $ (186.6) |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss | The following table provides information about amounts reclassified from " Accumulated Other Comprehensive Loss " (in millions): Three Months Ended Affected Line on Consolidated Condensed Details about Accumulated Other Comprehensive Loss Components 2023 2022 Foreign currency translation adjustments $ 1.7 $ 1.6 Other (income) expense, net (0.4) (0.4) Provision for income taxes $ 1.3 $ 1.2 Net of tax Gain on hedges $ 29.8 $ 7.3 Cost of sales (7.1) (2.1) Provision for income taxes $ 22.7 $ 5.2 Net of tax Loss on available-for-sale investments $ (4.0) $ (4.8) Other (income) expense, net 1.0 1.2 Provision for income taxes $ (3.0) $ (3.6) Net of tax |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 2023 2022 Basic: Net income attributable to Edwards Lifesciences, Inc. $ 340.5 $ 373.6 Weighted-average shares outstanding 607.5 622.1 Basic earnings per share $ 0.56 $ 0.60 Diluted: Net income attributable to Edwards Lifesciences, Inc. $ 340.5 $ 373.6 Weighted-average shares outstanding 607.5 622.1 Dilutive effect of stock plans 3.4 7.3 Dilutive weighted-average shares outstanding 610.9 629.4 Diluted earnings per share $ 0.56 $ 0.59 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Information about Reportable Segments and Reconciliation of Segment Net Sales and Pre-Tax Income | The table below presents information about Edwards Lifesciences' reportable segments (in millions): Three Months Ended 2023 2022 Segment Net Sales United States $ 849.1 $ 749.5 Europe 335.4 300.1 Japan 104.3 140.9 Rest of World 165.6 142.3 Total segment net sales $ 1,454.4 $ 1,332.8 Segment Operating Income United States $ 563.4 $ 511.5 Europe 181.7 166.6 Japan 63.4 99.5 Rest of World 70.5 59.7 Total segment operating income $ 879.0 $ 837.3 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 2023 2022 Net Sales Reconciliation Segment net sales $ 1,454.4 $ 1,332.8 Foreign currency 5.2 8.4 Consolidated net sales $ 1,459.6 $ 1,341.2 Pre-tax Income Reconciliation Segment operating income $ 879.0 $ 837.3 Unallocated amounts: Corporate items (468.9) (419.4) Intellectual property agreement and litigation expenses, net (43.5) (7.1) Change in fair value of contingent consideration liabilities, net (0.7) 2.9 Foreign currency 22.5 25.1 Consolidated operating income 388.4 438.8 Non-operating income (expense) 10.2 (2.7) Consolidated pre-tax income $ 398.6 $ 436.1 |
Schedule of Enterprise-Wide Information | The following enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements. Three Months Ended 2023 2022 Net Sales by Geographic Area United States $ 849.1 $ 749.5 Europe 331.1 311.1 Japan 114.1 135.5 Rest of World 165.3 145.1 $ 1,459.6 $ 1,341.2 Net Sales by Major Product Area Transcatheter Aortic Valve Replacement $ 947.9 $ 881.3 Transcatheter Mitral and Tricuspid Therapies 41.6 27.0 Surgical Structural Heart 248.2 220.8 Critical Care 221.9 212.1 $ 1,459.6 $ 1,341.2 |
OTHER CONSOLIDATED FINANCIAL _3
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw materials | $ 164.6 | $ 156.4 |
Work in process | 206.4 | 177.4 |
Finished products | 543.3 | 541.7 |
Total inventories | 914.3 | 875.5 |
Finished products inventories held on consignment | $ 146.1 | $ 128.6 |
OTHER CONSOLIDATED FINANCIAL _4
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Accrued Liabilities and Long Term Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Accrued and other liabilities | ||
Employee compensation and withholdings | $ 225.8 | $ 268.7 |
Taxes payable | 120.8 | 50.6 |
Property, payroll, and other taxes | 53.6 | 45.6 |
Research and development accruals | 67.7 | 66.9 |
Accrued rebates | 112.3 | 116.1 |
Fair value of derivatives | 23.4 | 20.7 |
Accrued marketing expenses | 13.2 | 17 |
Legal and insurance | 29.1 | 28.1 |
Intellectual property agreements | 95.4 | 53.3 |
Accrued relocation costs | 26.2 | 25.2 |
Accrued professional services | 10.6 | 6.6 |
Accrued realignment reserves | 14.8 | 15.6 |
Other accrued liabilities | 83.2 | 80.6 |
Total accrued and other liabilities | 876.1 | 795 |
Litigation settlement accrual, current | 95.4 | |
Litigation settlement accrual, noncurrent | $ 130.1 | $ 143 |
OTHER CONSOLIDATED FINANCIAL _5
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 7.1 | $ 7.6 |
Non-cash investing and financing transactions: | ||
Right-of-use assets obtained in exchange for new lease liabilities | 2.2 | 6.4 |
Capital expenditures accruals | $ 26.5 | $ 23.8 |
OTHER CONSOLIDATED FINANCIAL _6
OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 872.5 | $ 769 | ||
Restricted cash included in other current assets | 0.6 | 0.5 | ||
Restricted cash included in other assets | 3.3 | 3.1 | ||
Total cash, cash equivalents, and restricted cash | $ 876.4 | $ 772.6 | $ 1,035.3 | $ 867.4 |
INTELLECTUAL PROPERTY AGREEME_2
INTELLECTUAL PROPERTY AGREEMENT AND LITIGATION EXPENSES - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Apr. 12, 2023 | Apr. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Loss Contingencies [Line Items] | |||||
Intellectual property litigation expense | $ 43.5 | $ 7.1 | |||
Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Intellectual property agreement term | 15 years | ||||
Medtronic Inc | |||||
Loss Contingencies [Line Items] | |||||
Intellectual property litigation expense | $ 37 | ||||
Medtronic Inc | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Payments for legal settlements | $ 300 | ||||
Intellectual property litigation expense | $ 139 | ||||
Prepaid royalty asset | $ 124 |
INVESTMENTS - Investments in De
INVESTMENTS - Investments in Debt Securities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Held-to-maturity | ||
Fair Value | $ 28 | |
Available-for-sale | ||
Amortized Cost | 1,364.4 | $ 1,549.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (55.1) | (68.1) |
Fair Value | 1,309.3 | 1,481 |
Bank time deposits | ||
Held-to-maturity | ||
Amortized Cost | 28 | 96 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 28 | 96 |
U.S government and agency securities | ||
Available-for-sale | ||
Amortized Cost | 108.6 | 137.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (4.9) | (6.1) |
Fair Value | 103.7 | 131.6 |
Asset-backed securities | ||
Available-for-sale | ||
Amortized Cost | 304.2 | 380.6 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (11.2) | (14) |
Fair Value | 293 | 366.6 |
Corporate debt securities | ||
Available-for-sale | ||
Amortized Cost | 948.8 | 1,028.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (38.8) | (47.8) |
Fair Value | 910 | 980.3 |
Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 2.8 | 2.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.2) | (0.2) |
Fair Value | $ 2.6 | $ 2.5 |
INVESTMENTS - Cost and Fair Val
INVESTMENTS - Cost and Fair Value of Investments in Debt Securities, by Contractual Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in 1 year or less | $ 23.5 | |
Due after 1 year through 5 years | 4.5 | |
Due after 5 years through 10 years | 0 | |
Instruments not due at a single maturity date | 0 | |
Amortized Cost | 28 | |
Fair Value | ||
Due in 1 year or less | 23.5 | |
Due after 1 year through 5 years | 4.5 | |
Due after 5 years through 10 years | 0 | |
Instruments not due at a single maturity date | 0 | |
Fair Value | 28 | |
Amortized Cost | ||
Due in 1 year or less | 366.5 | |
Due after 1 year through 5 years | 647.3 | |
Due after 5 years through 10 years | 5.2 | |
Instruments not due at a single maturity date | 345.4 | |
Amortized Cost | 1,364.4 | $ 1,549.1 |
Fair Value | ||
Due in 1 year or less | 358.2 | |
Due after 1 year through 5 years | 614.8 | |
Due after 5 years through 10 years | 5.1 | |
Instruments not due at a single maturity date | 331.2 | |
Fair Value | $ 1,309.3 | $ 1,481 |
INVESTMENTS - Investments in Co
INVESTMENTS - Investments in Continuous Loss Position (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Fair value, less than twelve months | $ 100.5 | $ 353.9 |
Gross unrealized losses, less than twelve months | (1) | (8.1) |
Fair value, twelve months or greater | 1,191.2 | 1,111.4 |
Gross unrealized losses, twelve months or greater | (54.1) | (60) |
Fair value, total | 1,291.7 | 1,465.3 |
Gross unrealized losses, total | (55.1) | (68.1) |
U.S. government and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value, less than twelve months | 10.6 | 61.6 |
Gross unrealized losses, less than twelve months | (0.1) | (1.5) |
Fair value, twelve months or greater | 92.2 | 69.5 |
Gross unrealized losses, twelve months or greater | (4.8) | (4.6) |
Fair value, total | 102.8 | 131.1 |
Gross unrealized losses, total | (4.9) | (6.1) |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value, less than twelve months | 59.1 | 103.3 |
Gross unrealized losses, less than twelve months | (0.8) | (1.3) |
Fair value, twelve months or greater | 224.7 | 254.6 |
Gross unrealized losses, twelve months or greater | (10.4) | (12.7) |
Fair value, total | 283.8 | 357.9 |
Gross unrealized losses, total | (11.2) | (14) |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value, less than twelve months | 30.8 | 189 |
Gross unrealized losses, less than twelve months | (0.1) | (5.3) |
Fair value, twelve months or greater | 871.7 | 784.8 |
Gross unrealized losses, twelve months or greater | (38.7) | (42.5) |
Fair value, total | 902.5 | 973.8 |
Gross unrealized losses, total | (38.8) | (47.8) |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair value, less than twelve months | 0 | 0 |
Gross unrealized losses, less than twelve months | 0 | 0 |
Fair value, twelve months or greater | 2.6 | 2.5 |
Gross unrealized losses, twelve months or greater | (0.2) | (0.2) |
Fair value, total | 2.6 | 2.5 |
Gross unrealized losses, total | $ (0.2) | $ (0.2) |
INVESTMENTS - Investments in Un
INVESTMENTS - Investments in Unconsolidated Entities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Equity method investments | ||
Carrying value of equity method investments | $ 24.2 | $ 21.4 |
Equity securities | ||
Carrying value of non-marketable equity securities | 86.9 | 86.9 |
Total investments in unconsolidated entities | $ 111.1 | $ 108.3 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Carrying value of equity method investments | $ 24.2 | $ 21.4 |
Other (income) expense, net | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Increase in non-marketable equity securities due to observable price changes | 8.8 | |
Decrease in non-marketable equity securities due to observable price changes | $ 3.1 | |
Limited Liability Company | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Investments taken period | 7 years | |
Limited Liability Company | New Markets Tax Credit | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Carrying value of equity method investments | $ 1.7 | |
Investment percentage (in percent) | 39% |
INVESTMENTS IN VARIABLE INTER_2
INVESTMENTS IN VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 | Mar. 31, 2023 | Aug. 31, 2022 | Jun. 30, 2022 | May 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Jan. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||||||||||
Payment for option to acquire company | $ 15 | $ 0 | |||||||||
Carrying value of non-marketable equity securities | $ 86.9 | $ 86.9 | 86.9 | $ 86.9 | |||||||
Investee | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Secured promissory note | $ 10 | ||||||||||
Maximum secured promissory note | $ 45 | ||||||||||
Carrying value of non-marketable equity securities | $ 39.3 | ||||||||||
Investment option to acquire | 13.1 | ||||||||||
Maximum additional option to acquire investment | 14.4 | ||||||||||
Investee | Equity Securities | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Maximum additional required investment | 6.5 | ||||||||||
Investee | Variable Interest Entity, Not Primary Beneficiary | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Loans receivables, maximum lending amount | 45 | $ 47.5 | |||||||||
Payment for option to acquire company | 15 | $ 47.1 | $ 35 | ||||||||
Financing receivable | 32.5 | 32.5 | 32.5 | ||||||||
Option to acquire investment amount | 35 | 35 | $ 47.1 | 35 | |||||||
Investee | Variable Interest Entity, Not Primary Beneficiary | Convertible Promissory Note | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Financing receivable | $ 5 | $ 5 | $ 5 | ||||||||
Medical Technology Company | Variable Interest Entity, Not Primary Beneficiary | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Payment for option to acquire company | $ 60 | $ 10 | |||||||||
Option to acquire investment amount | $ 60 |
ACQUISITION - Narrative (Detail
ACQUISITION - Narrative (Details) | Feb. 28, 2023 |
Medical Technology Company | Variable Interest Entity, Primary Beneficiary | |
Business Acquisition [Line Items] | |
Percentage of interest acquired | 61% |
ACQUISITION - Summary of Prelim
ACQUISITION - Summary of Preliminary Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Feb. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,308.4 | $ 1,164.3 | ||
Payment for option to acquire company | $ 15 | $ 0 | ||
Medical Technology Company | Variable Interest Entity, Primary Beneficiary | ||||
Business Acquisition [Line Items] | ||||
Assets | $ 7.5 | |||
Goodwill | 143 | |||
In-process research and development | 150.5 | |||
Liabilities assumed | (16.1) | |||
Deferred tax liabilities | (25.1) | |||
Fair value of net assets acquired | 259.8 | |||
Less: Noncontrolling interest (a) | (84) | |||
Total purchase price | 175.8 | |||
Less: cash acquired | (6.8) | |||
Total purchase price, net of cash acquired | 169 | |||
Noncontrolling interest, gross | 99 | |||
Noncontrolling interest, option adjustment | 15 | |||
Payment for option to acquire company | 22.5 | |||
Repayments of pre-existing notes | $ 5.3 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Level 2 | |
Financial instruments | |
Notes payable fair value disclosure | $ 598.5 |
Level 3 | Discount Rate | Minimum | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0.035 |
Level 3 | Discount Rate | Maximum | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0.138 |
Level 3 | Discount Rate | Weighted Average | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0.037 |
Level 3 | Probability of Milestone Achievement | Minimum | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0 |
Level 3 | Probability of Milestone Achievement | Maximum | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0.50 |
Level 3 | Probability of Milestone Achievement | Weighted Average | Contingent Consideration | |
Financial instruments | |
Contingent consideration liability measurement input | 0.396 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Available-for-sale investments: | $ 1,309.3 | $ 1,481 |
Corporate debt securities | ||
Assets | ||
Available-for-sale investments: | 910 | 980.3 |
Asset-backed securities | ||
Assets | ||
Available-for-sale investments: | 293 | 366.6 |
United States government and agency securities | ||
Assets | ||
Available-for-sale investments: | 103.7 | 131.6 |
Municipal securities | ||
Assets | ||
Available-for-sale investments: | 2.6 | 2.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | ||
Assets | ||
Cash equivalents | 9 | 0.4 |
Investments held for deferred compensation plans | 117.8 | 112.1 |
Derivatives | 51.7 | 65.5 |
Assets | 1,487.8 | 1,659 |
Liabilities | ||
Derivatives | 23.4 | 27.2 |
Contingent consideration liabilities | 26.9 | 26.2 |
Other liability | 14 | 14 |
Liabilities | 64.3 | 67.4 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Corporate debt securities | ||
Assets | ||
Available-for-sale investments: | 910 | 980.3 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Asset-backed securities | ||
Assets | ||
Available-for-sale investments: | 293 | 366.6 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | United States government and agency securities | ||
Assets | ||
Available-for-sale investments: | 103.7 | 131.6 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Municipal securities | ||
Assets | ||
Available-for-sale investments: | 2.6 | 2.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | ||
Assets | ||
Cash equivalents | 9 | 0.4 |
Investments held for deferred compensation plans | 117.8 | 112.1 |
Derivatives | 0 | 0 |
Assets | 179.9 | 149.6 |
Liabilities | ||
Derivatives | 0 | 0 |
Contingent consideration liabilities | 0 | 0 |
Other liability | 0 | 0 |
Liabilities | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | United States government and agency securities | ||
Assets | ||
Available-for-sale investments: | 53.1 | 37.1 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 1 | Municipal securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Investments held for deferred compensation plans | 0 | 0 |
Derivatives | 51.7 | 65.5 |
Assets | 1,307.9 | 1,509.4 |
Liabilities | ||
Derivatives | 23.4 | 27.2 |
Contingent consideration liabilities | 0 | 0 |
Other liability | 0 | 0 |
Liabilities | 23.4 | 27.2 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments: | 910 | 980.3 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments: | 293 | 366.6 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | United States government and agency securities | ||
Assets | ||
Available-for-sale investments: | 50.6 | 94.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 2 | Municipal securities | ||
Assets | ||
Available-for-sale investments: | 2.6 | 2.5 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | 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 |
Contingent consideration liabilities | 26.9 | 26.2 |
Other liability | 14 | 14 |
Liabilities | 40.9 | 40.2 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Corporate debt securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Asset-backed securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | United States government and agency securities | ||
Assets | ||
Available-for-sale investments: | 0 | 0 |
Estimate of Fair Value Measurement | Fair Value on a Recurring Basis | Level 3 | Municipal securities | ||
Assets | ||
Available-for-sale investments: | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Fair Value of Contingent Consideration Obligation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 40.2 | $ 76 |
Changes in fair value | 0.7 | (2.9) |
Ending balance | 40.9 | 73.1 |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 26.2 | 62 |
Changes in fair value | 0.7 | (2.9) |
Ending balance | 26.9 | 59.1 |
Other liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 14 | 14 |
Changes in fair value | 0 | 0 |
Ending balance | $ 14 | $ 14 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Foreign currency forward exchange contracts | ||
Derivative Financial Instruments | ||
Derivative notional amount | $ 1,712.2 | $ 1,678.4 |
Cross currency swap contracts | ||
Derivative Financial Instruments | ||
Derivative notional amount | $ 300 | $ 300 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 USD ($) | Mar. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | |
Derivative Financial Instruments | |||
Changes due to currency rate movements and expenses expected to occur, maximum term | 13 months | ||
Cash flow gain to be reclassified in the next twelve months | $ 13.6 | ||
Derivatives designated as hedging instruments | Cross currency swap contracts | |||
Derivative Financial Instruments | |||
Derivative liability, fair value | 300 | $ 300 | |
Net investment hedges | Derivatives designated as hedging instruments | Cross currency swap contracts | |||
Derivative Financial Instruments | |||
Derivative liability, fair value | $ 300 | € 257.2 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets, Other assets (Note 5) | Other current assets, Other assets (Note 5) |
Liabilities | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities, Accrued and other liabilities (Note 2) | Other liabilities, Accrued and other liabilities (Note 2) |
Foreign currency contracts | ||
Assets | ||
Fair value of derivative assets | $ 13.6 | $ 24.9 |
Liabilities | ||
Fair value of derivative liabilities | 23.4 | 27.2 |
Cross currency swap contracts | ||
Assets | ||
Fair value of derivative assets | 38.1 | 40.6 |
Derivatives designated as hedging instruments | Foreign currency contracts | ||
Assets | ||
Fair value of derivative assets | 13.6 | 24.9 |
Derivatives designated as hedging instruments | Foreign currency contracts | Accrued and other liabilities | ||
Liabilities | ||
Fair value of derivative liabilities | 23.4 | 20.7 |
Derivatives designated as hedging instruments | Foreign currency contracts | Other liabilities | ||
Liabilities | ||
Fair value of derivative liabilities | 0 | 6.5 |
Derivatives designated as hedging instruments | Cross currency swap contracts | ||
Assets | ||
Fair value of derivative assets | $ 38.1 | $ 40.6 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Foreign currency contracts | ||
Derivative assets | ||
Gross Amounts | $ 13.6 | $ 24.9 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 13.6 | 24.9 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | (6.7) | (12) |
Cash Collateral Received | 0 | 0 |
Net Amount | 6.9 | 12.9 |
Derivative liabilities | ||
Gross Amounts | 23.4 | 27.2 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 23.4 | 27.2 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Gross Amounts Not Offset in the Consolidated Balance Sheet | (6.7) | (12) |
Cash Collateral Received | 0 | 0 |
Net Amount | 16.7 | 15.2 |
Cross currency swap contracts | ||
Derivative assets | ||
Gross Amounts | 38.1 | 40.6 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheet | 38.1 | 40.6 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 38.1 | $ 40.6 |
DERIVATIVE INSTRUMENTS AND HE_7
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - 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, 2023 | Mar. 31, 2022 | |
Foreign currency contracts | Derivatives not designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (5.4) | $ 15.5 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 3.7 | 24.7 |
Cash flow hedges | Foreign currency contracts | Derivatives designated as hedging instruments | Cost of sales | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 29.8 | 7.3 |
Net investment hedges | Cross currency swap contracts | Derivatives designated as hedging instruments | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | (2.5) | 3.9 |
Net investment hedges | Cross currency swap contracts | Derivatives designated as hedging instruments | Interest income, net | ||
Derivative Instruments, Gain (Loss) | ||
Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | $ 1.7 | $ 1.6 |
DERIVATIVE INSTRUMENTS AND HE_8
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Cash Flow Hedge Effects on Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments, Gain (Loss) | ||
Cost of sales | $ (329.5) | $ (299.3) |
Selling, general, and administrative expenses | (436.3) | (370.3) |
Other (income) expense, net | 1.6 | (3.3) |
Foreign currency contracts | Cost of sales | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | 0 | |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 0 | |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | 29.8 | 7.3 |
Foreign currency contracts | Cost of sales | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | 0 | |
Foreign currency contracts | Selling, general, and administrative expenses | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | 0 | |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 0 | |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | 0 | 0 |
Foreign currency contracts | Selling, general, and administrative expenses | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | 0 | |
Foreign currency contracts | Other (Income) Expense, net | ||
Gain (loss) on fair value hedging relationships: | ||
Hedged items | 1.2 | |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 1.2 | |
Gain (loss) on cash flow hedging relationships: | ||
Amount of gain (loss) reclassified from accumulated OCI into income | 0 | $ 0 |
Foreign currency contracts | Other (Income) Expense, net | Derivatives designated as hedging instruments | ||
Gain (loss) on fair value hedging relationships: | ||
Derivatives designated as hedging instruments | $ (1.2) |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 38.9 | $ 32.4 |
Income tax benefit | (4.7) | (4.4) |
Total stock-based compensation expense, net of tax | 34.2 | 28 |
Cost of sales | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 7 | 6.2 |
Selling, general, and administrative expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | 22.3 | 18.7 |
Research and development expenses | ||
Allocation of stock-based compensation expense | ||
Total stock-based compensation expense | $ 9.6 | $ 7.5 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Total remaining unrecognized compensation cost | $ 187.9 |
Unrecognized compensation cost, recognition period | 28 months |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted-Average Assumptions for Options and ESPP Subscriptions Granted (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Option Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 4.10% | 1.90% |
Expected dividend yield | 0% | 0% |
Expected volatility | 31.30% | 33.50% |
Expected term (years) | 5 years 3 months 18 days | 5 years 3 months 18 days |
Fair value, per option (in dollars per share) | $ 27.77 | $ 35.66 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 4.60% | 0.20% |
Expected dividend yield | 0% | 0% |
Expected volatility | 31.50% | 32.20% |
Expected term (years) | 7 months 6 days | 7 months 6 days |
Fair value, per option (in dollars per share) | $ 21.10 | $ 29.52 |
ACCELERATED SHARE REPURCHASE (D
ACCELERATED SHARE REPURCHASE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | |||
Mar. 31, 2023 | Feb. 28, 2023 | Feb. 28, 2022 | Jan. 31, 2022 | |
Initial Delivery of Shares Settled January 2022 | ||||
Class of Stock [Line Items] | ||||
Amount Paid | $ 250 | |||
Shares Received (in shares) | 1.9 | |||
Initial delivery, price per share (in dollars per share) | $ 104.87 | |||
Value of Shares as % of Contract Value | 80% | |||
Initial Delivery of Shares Settled February2023 | ||||
Class of Stock [Line Items] | ||||
Amount Paid | $ 200 | |||
Shares Received (in shares) | 2 | |||
Initial delivery, price per share (in dollars per share) | $ 80.44 | |||
Value of Shares as % of Contract Value | 80% | |||
January 2023 Stock Repurchase Program Shares Sold in February 2023 | ||||
Class of Stock [Line Items] | ||||
Shares Received (in shares) | 2.3 | |||
Final settlement per share price (in dollars per share) | $ 110.31 | |||
February 2021 Stock Repurchase Program Shares Sold in March 2021 | ||||
Class of Stock [Line Items] | ||||
Shares Received (in shares) | 2.5 | |||
Final settlement per share price (in dollars per share) | $ 79.28 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended |
Mar. 31, 2023 lawsuit | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of lawsuits that if settled could have a material adverse impact on net income or cash flows | 1 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Activity for Each Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | $ 5,806.7 | |
Other comprehensive gain (loss) before reclassifications | 20.5 | $ (30.3) |
Amounts reclassified from accumulated other comprehensive loss | (27.5) | (4.1) |
Deferred income tax benefit | 6.5 | 5.5 |
Ending balance | 5,978 | |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (254.9) | (157.7) |
Ending balance | (255.4) | (186.6) |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (218.8) | (172.5) |
Other comprehensive gain (loss) before reclassifications | 4.9 | (7.4) |
Amounts reclassified from accumulated other comprehensive loss | (1.7) | (1.6) |
Deferred income tax benefit | 0.6 | (1) |
Ending balance | (215) | (182.5) |
Unrealized Gain on Hedges | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | 23.8 | 29.7 |
Other comprehensive gain (loss) before reclassifications | 6.7 | 24.7 |
Amounts reclassified from accumulated other comprehensive loss | (29.8) | (7.3) |
Deferred income tax benefit | 5.9 | (4) |
Ending balance | 6.6 | 43.1 |
Unrealized Loss on Available-for-sale Investments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | (65.6) | (6.9) |
Other comprehensive gain (loss) before reclassifications | 9 | (47.6) |
Amounts reclassified from accumulated other comprehensive loss | 4 | 4.8 |
Deferred income tax benefit | 0 | 10.5 |
Ending balance | (52.6) | (39.2) |
Unrealized Pension Credits | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance | 5.7 | (8) |
Other comprehensive gain (loss) before reclassifications | (0.1) | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Deferred income tax benefit | 0 | 0 |
Ending balance | $ 5.6 | $ (8) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Amounts Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Affected Line on Consolidated Condensed Statements of Operations | ||
Other (income) expense, net | $ 1.6 | $ (3.3) |
Provision for income taxes | (58.1) | (62.5) |
Net of tax | 340.5 | 373.6 |
Cost of sales | (329.5) | (299.3) |
Amount Reclassified from Accumulated Other Comprehensive Loss | Foreign currency translation adjustments | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Other (income) expense, net | 1.7 | 1.6 |
Provision for income taxes | (0.4) | (0.4) |
Net of tax | 1.3 | 1.2 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Gain on hedges | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Provision for income taxes | (7.1) | (2.1) |
Net of tax | 22.7 | 5.2 |
Cost of sales | 29.8 | 7.3 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Loss on available-for-sale investments | ||
Affected Line on Consolidated Condensed Statements of Operations | ||
Other (income) expense, net | (4) | (4.8) |
Provision for income taxes | 1 | 1.2 |
Net of tax | $ (3) | $ (3.6) |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic: | ||
Net income attributable to Edwards Lifesciences, Inc. | $ 340.5 | $ 373.6 |
Weighted-average shares outstanding (in shares) | 607.5 | 622.1 |
Basic earnings per share (in dollars per share) | $ 0.56 | $ 0.60 |
Diluted: | ||
Net income attributable to Edwards Lifesciences, Inc. | $ 340.5 | $ 373.6 |
Weighted-average shares outstanding (in shares) | 607.5 | 622.1 |
Dilutive effect of stock plans (in shares) | 3.4 | 7.3 |
Dilutive weighted-average shares outstanding (in shares) | 610.9 | 629.4 |
Diluted earnings per share (in dollars per share) | $ 0.56 | $ 0.59 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock compensation plan | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the computation of earnings per share (in shares) | 5.2 | 1.7 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 14.60% | 14.30% | ||
Tax benefit from employee share-based compensation | $ 2.9 | $ 13.4 | ||
Liability for income taxes associated with uncertain tax positions | 496.8 | $ 475.3 | ||
Decrease in unrecognized tax benefits is reasonably possible | 194.3 | 182.1 | ||
Net amounts that would favorably affect effective tax rate | $ 302.5 | $ 293.2 | ||
Additional federal tax | $ 210 |
SEGMENT INFORMATION - Informati
SEGMENT INFORMATION - Information about Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Net Sales | ||
Net sales | $ 1,459.6 | $ 1,341.2 |
Operating segments | ||
Segment Net Sales | ||
Net sales | 1,454.4 | 1,332.8 |
Segment Operating Income | ||
Segment operating income | 879 | 837.3 |
United States | Operating segments | ||
Segment Net Sales | ||
Net sales | 849.1 | 749.5 |
Segment Operating Income | ||
Segment operating income | 563.4 | 511.5 |
Europe | Operating segments | ||
Segment Net Sales | ||
Net sales | 335.4 | 300.1 |
Segment Operating Income | ||
Segment operating income | 181.7 | 166.6 |
Japan | Operating segments | ||
Segment Net Sales | ||
Net sales | 104.3 | 140.9 |
Segment Operating Income | ||
Segment operating income | 63.4 | 99.5 |
Rest of World | Operating segments | ||
Segment Net Sales | ||
Net sales | 165.6 | 142.3 |
Segment Operating Income | ||
Segment operating income | $ 70.5 | $ 59.7 |
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, 2023 | Mar. 31, 2022 | |
Net Sales Reconciliation | ||
Net sales | $ 1,459.6 | $ 1,341.2 |
Pre-tax Income Reconciliation | ||
Consolidated operating income | 388.4 | 438.8 |
Unallocated amounts: | ||
Change in fair value of contingent consideration liabilities, net | (0.7) | 2.9 |
Income before provision for income taxes | 398.6 | 436.1 |
Operating segments | ||
Net Sales Reconciliation | ||
Net sales | 1,454.4 | 1,332.8 |
Pre-tax Income Reconciliation | ||
Consolidated operating income | 879 | 837.3 |
Corporate items | ||
Unallocated amounts: | ||
Corporate items | (468.9) | (419.4) |
Reconciling items | ||
Net Sales Reconciliation | ||
Net sales | 5.2 | 8.4 |
Unallocated amounts: | ||
Intellectual property agreement and litigation expenses, net | (43.5) | (7.1) |
Foreign currency | 22.5 | 25.1 |
Non-operating income (expense) | $ 10.2 | $ (2.7) |
SEGMENT INFORMATION - Enterpris
SEGMENT INFORMATION - Enterprise-Wide Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Enterprise-Wide Information | ||
Net sales | $ 1,459.6 | $ 1,341.2 |
Transcatheter Aortic Valve Replacement | ||
Enterprise-Wide Information | ||
Net sales | 947.9 | 881.3 |
Transcatheter Mitral and Tricuspid Therapies | ||
Enterprise-Wide Information | ||
Net sales | 41.6 | 27 |
Surgical Structural Heart | ||
Enterprise-Wide Information | ||
Net sales | 248.2 | 220.8 |
Critical Care | ||
Enterprise-Wide Information | ||
Net sales | 221.9 | 212.1 |
United States | ||
Enterprise-Wide Information | ||
Net sales | 849.1 | 749.5 |
Europe | ||
Enterprise-Wide Information | ||
Net sales | 331.1 | 311.1 |
Japan | ||
Enterprise-Wide Information | ||
Net sales | 114.1 | 135.5 |
Rest of World | ||
Enterprise-Wide Information | ||
Net sales | $ 165.3 | $ 145.1 |