Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ZIMMER BIOMET HOLDINGS, INC. | |
Entity Central Index Key | 0001136869 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 206,802,113 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-16407 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-4151777 | |
Entity Address, Address Line One | 345 East Main Street | |
Entity Address, City or Town | Warsaw | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46580 | |
City Area Code | 574 | |
Local Phone Number | 267-6131 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | ZBH | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
1.414% Notes due 2022 [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | ZBH 22A | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | 1.414% Notes due 2022 | |
2.425% Notes due 2026 [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | ZBH 26 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | 2.425% Notes due 2026 | |
1.164% Notes due 2027 [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | ZBH 27 | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | 1.164% Notes due 2027 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net Sales | $ 1,783.8 | $ 1,975.5 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of products sold, excluding intangible asset amortization | $ 487.1 | $ 553.4 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember |
Intangible asset amortization | $ 147.6 | $ 143.4 |
Research and development | 98.4 | 101.7 |
Selling, general and administrative | 828.9 | 796.4 |
Goodwill impairment | 612 | |
Restructuring and other cost reduction initiatives | 45 | 4.7 |
Quality remediation | 16.4 | 19.7 |
Acquisition, integration and related | 4.4 | 6 |
Operating expenses | 2,239.8 | 1,625.3 |
Operating (Loss) Profit | (456) | 350.2 |
Other income (expense), net | 3 | (0.5) |
Interest expense, net | (50.9) | (58) |
(Loss) earnings before income taxes | (503.9) | 291.7 |
Provision for income taxes | 5.2 | 45.5 |
Net (Loss) Earnings | (509.1) | 246.2 |
Less: Net (loss) earnings attributable to noncontrolling interest | (0.6) | 0.1 |
Net (Loss) Earnings of Zimmer Biomet Holdings, Inc. | $ (508.5) | $ 246.1 |
(Loss) Earnings Per Common Share | ||
Basic | $ (2.46) | $ 1.20 |
Diluted | $ (2.46) | $ 1.20 |
Weighted Average Common Shares Outstanding | ||
Basic | 206.5 | 204.4 |
Diluted | 206.5 | 205.8 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net (Loss) Earnings | $ (509.1) | $ 246.2 |
Other Comprehensive (Loss) Income: | ||
Foreign currency cumulative translation adjustments, net of tax | (54.2) | (4.4) |
Unrealized cash flow hedge gains, net of tax | 54.8 | 14.5 |
Reclassification adjustments on hedges, net of tax | (13.5) | (8.2) |
Adjustments to prior service cost and unrecognized actuarial assumptions, net of tax | (0.3) | 2 |
Total Other Comprehensive (Loss) Income | (13.2) | 3.9 |
Comprehensive (Loss) Income | (522.3) | 250.1 |
Comprehensive (loss) income attributable to the noncontrolling interest | (0.6) | 0.1 |
Comprehensive (Loss) Income Attributable to Zimmer Biomet Holdings, Inc. | $ (521.7) | $ 250 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 2,433.6 | $ 617.9 |
Accounts receivable, less allowance for doubtful accounts | 1,039.1 | 1,363.9 |
Inventories | 2,463.2 | 2,385 |
Prepaid expenses and other current assets | 435 | 357.1 |
Total Current Assets | 6,370.9 | 4,723.9 |
Property, plant and equipment, net | 2,065.5 | 2,077.4 |
Goodwill | 8,951.2 | 9,599.7 |
Intangible assets, net | 7,077.7 | 7,257.6 |
Other assets | 1,047.6 | 980.1 |
Total Assets | 25,512.9 | 24,638.7 |
Current Liabilities: | ||
Accounts payable | 404.9 | 400.9 |
Income taxes payable | 92.9 | 126.7 |
Salaries, wages and benefits | 181.9 | 314.1 |
Other current liabilities | 1,149.9 | 1,099.8 |
Current portion of long-term debt | 1,950 | 1,500 |
Total Current Liabilities | 3,779.6 | 3,441.5 |
Deferred income taxes, net | 857.6 | 840.1 |
Long-term income tax payable | 688.7 | 685.1 |
Other long-term liabilities | 580.1 | 557.8 |
Long-term debt | 7,724.2 | 6,721.4 |
Total Liabilities | 13,630.2 | 12,245.9 |
Commitments and Contingencies (Note 16) | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, one billion shares authorized, 310.6 million shares in 2020 (309.9 million in 2019) issued | 3.1 | 3.1 |
Paid-in capital | 8,984.3 | 8,920.1 |
Retained earnings | 9,866.2 | 10,427.3 |
Accumulated other comprehensive loss | (255.1) | (241.9) |
Treasury stock, 103.8 million shares in 2020 (103.9 million shares in 2019) | (6,719.9) | (6,720.5) |
Total Zimmer Biomet Holdings, Inc. stockholders' equity | 11,878.6 | 12,388.1 |
Noncontrolling interest | 4.1 | 4.7 |
Total Stockholders' Equity | 11,882.7 | 12,392.8 |
Total Liabilities and Stockholders' Equity | $ 25,512.9 | $ 24,638.7 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 310,600,000 | 309,900,000 |
Treasury stock, shares | 103,800,000 | 103,900,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Shares [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2018 | $ 11,276.1 | $ 3.1 | $ 8,686.1 | $ 9,491.2 | $ (187.4) | $ (6,721.7) | $ 4.8 |
Balance, shares at Dec. 31, 2018 | 307.9 | (103.9) | |||||
Net (loss) earnings | 246.2 | 246.1 | 0.1 | ||||
Other comprehensive income (loss) | 3.9 | 3.9 | |||||
Cash dividends declared | (49.2) | (49.2) | |||||
Stock compensation plans | 62.3 | 62 | $ 0.3 | ||||
Stock compensation plans, shares | 0.8 | ||||||
Balance at Mar. 31, 2019 | 11,539.3 | $ 3.1 | 8,748.1 | 9,688.1 | (183.5) | $ (6,721.4) | 4.9 |
Balance, shares at Mar. 31, 2019 | 308.7 | (103.9) | |||||
Balance at Dec. 31, 2019 | 12,392.8 | $ 3.1 | 8,920.1 | 10,427.3 | (241.9) | $ (6,720.5) | 4.7 |
Balance, shares at Dec. 31, 2019 | 309.9 | (103.9) | |||||
Net (loss) earnings | (509.1) | (508.5) | (0.6) | ||||
Other comprehensive income (loss) | (13.2) | (13.2) | |||||
Cash dividends declared | (49.6) | (49.6) | |||||
Adoption of new accounting standard | (3.1) | (3.1) | |||||
Stock compensation plans | 64.9 | 64.2 | 0.1 | $ 0.6 | |||
Stock compensation plans, shares | 0.7 | 0.1 | |||||
Balance at Mar. 31, 2020 | $ 11,882.7 | $ 3.1 | $ 8,984.3 | $ 9,866.2 | $ (255.1) | $ (6,719.9) | $ 4.1 |
Balance, shares at Mar. 31, 2020 | 310.6 | (103.8) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (unaudited) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Stockholders Equity [Abstract] | ||
Cash dividend declared per share | $ 0.24 | $ 0.24 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows provided by (used in) operating activities: | ||
Net (loss) earnings | $ (509.1) | $ 246.2 |
Adjustments to reconcile net (loss) earnings to cash provided by operating activities: | ||
Depreciation and amortization | 253 | 247.7 |
Share-based compensation | 16.5 | 20.3 |
Goodwill impairment | 612 | |
Changes in operating assets and liabilities, net of acquired assets and liabilities | ||
Income taxes | (45.4) | 24.5 |
Receivables | 289.7 | 50.7 |
Inventories | (96) | (50.7) |
Accounts payable and accrued liabilities | (95.8) | (231.4) |
Other assets and liabilities | 26 | (23.7) |
Net cash provided by operating activities | 450.9 | 283.6 |
Cash flows provided by (used in) investing activities: | ||
Additions to instruments | (85.7) | (63.7) |
Additions to other property, plant and equipment | (40.2) | (37.8) |
Net investment hedge settlements | 16.3 | 10.5 |
Investments in other assets | (11.6) | (14.5) |
Net cash used in investing activities | (121.2) | (105.5) |
Cash flows provided by (used in) financing activities: | ||
Proceeds from senior notes | 1,497.1 | |
Proceeds from term loans | 200 | |
Payments on term loans | (310) | |
Dividends paid to stockholders | (49.5) | (49) |
Proceeds from employee stock compensation plans | 54.5 | 44.4 |
Net cash flows from unremitted collections from factoring programs | 12.4 | (16.4) |
Business combination contingent consideration payments | (3.5) | |
Debt issuance costs | (12.2) | |
Other financing activities | (6) | (4.2) |
Net cash provided by (used in) financing activities | 1,492.8 | (135.2) |
Effect of exchange rates on cash and cash equivalents | (6.8) | 1.1 |
Increase in cash and cash equivalents | 1,815.7 | 44 |
Cash and cash equivalents, beginning of year | 617.9 | 542.8 |
Cash and cash equivalents, end of period | $ 2,433.6 | $ 586.8 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The financial data presented herein is unaudited and should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. In our opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. The December 31, 2019 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Results for interim periods should not be considered indicative of results for the full year. Risks and Uncertainties - Our results have been and are expected to continue to be significantly impacted by the COVID-19 global pandemic. The vast majority of our net sales are derived from products used in elective surgical procedures which are being deferred due to lockdowns and stay-at-home measures. The consequences of COVID-19 continue to be extremely fluid and there are many market dynamics and impacts that we are unable to quantify at this time. The COVID-19 pandemic is expected to have a significant unfavorable effect on our financial position, results of operations and cash flows in the near term. The words “we,” “us,” “our” and similar words and “Zimmer Biomet” refer to Zimmer Biomet Holdings, Inc. and its subsidiaries. “Zimmer Biomet Holdings” refers to the parent company only. We reclassified certain prior period amounts to conform to the current period presentation. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Use of Estimates - The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have made our best estimates, as appropriate under US GAAP, in the recognition of our assets and liabilities. These estimates have considered the impact the COVID-19 pandemic may have on our financial position, results of operations and cash flows. Such estimates included, but were not limited to, variable consideration to our customers, our allowance for doubtful accounts for expected credit losses, the net realizable value of our inventory, the fair value of our goodwill and the recoverability of other long-lived assets. Actual results could differ materially from these estimates. Accounting Pronouncements Recently Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326). The new guidance describes the current expected credit loss (“CECL”) model which requires an estimate of expected impairment on financial instruments over the lifetime of the assets at each reporting date. Financial instruments in scope of the guidance include financial assets measured at amortized cost. Previous accounting guidance required recognition of impairment when it was probable the loss has been incurred. Under the CECL model, lifetime expected credit losses are measured and recognized at each reporting date based on historical experience, current conditions and forecasted information. We adopted this standard as of January 1, 2020. Adoption of this standard required the modified retrospective transition method, which resulted in a cumulative-effect adjustment to retained earnings of $3.1 million. The adoption primarily impacted our trade receivables. Our concentrations of credit risks are limited due to the large number of customers and their dispersion across a number of geographic areas. Substantially all of our trade receivables are concentrated in the public and private hospital and healthcare industry in the U.S. and internationally or with distributors or dealers who operate in international markets. Our historical credit losses have not been significant due to this dispersion and the financial stability of our customers. We consider credit losses immaterial to our business and, therefore, have not provided all the disclosures otherwise required by the standard. We have updated our accounting policy disclosure for accounts receivable as follows: Accounts receivable consists of trade and other miscellaneous receivables. We grant credit to customers in the normal course of business and maintain an allowance for doubtful accounts for expected credit losses. Our concentrations of credit risks are limited due to the large number of customers and their dispersion across a number of geographic areas. We determine the allowance for doubtful accounts by geographic market and take into consideration historical credit experience, creditworthiness of the customer and other pertinent information. We make concerted efforts to collect all accounts receivable, but sometimes we have to write-off the account against the allowance when we determine the account is uncollectible. The allowance for doubtful accounts was $ 66.3 million and $ 65.0 million as of March 31, 2020 and December 31, 2019, respectively. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Our policy for capitalizing implementation costs in a hosting arrangement was already aligned with the new guidance. ASU 2018-15 also provides guidance on how these implementation costs are to be recorded in the statement of earnings, balance sheet and statement of cash flows. We adopted this standard on a prospective basis as of January 1, 2020. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Revenue | 3. Revenue Net sales by geography are as follows (in millions): Three Months Ended March 31, 2020 2019 Americas $ 1,101.3 $ 1,194.1 EMEA 398.1 463.9 Asia Pacific 284.4 317.5 Total $ 1,783.8 $ 1,975.5 Net sales by product category are as follows (in millions): Three Months Ended March 31, 2020 2019 Knees $ 629.8 $ 694.1 Hips 432.6 483.4 S.E.T. 333.6 356.8 Dental, Spine & CMFT 251.7 287.3 Other 136.1 153.9 Total $ 1,783.8 $ 1,975.5 Starting in the first quarter of 2020, we have updated our product category revenue reporting format. These changes are designed to further align with our recent reorganization. Product category sales include the following changes: • Surgical products, previously reported in the S.E.T. (Sports Medicine, Extremities and Trauma) product category, are included in the Other product category; • Dental products are combined with Spine and CMF (Craniomaxillofacial) products into one product category; • The CMF product category name has been changed to CMFT (Craniomaxillofacial and Thoracic), to reflect the Thoracic business, which is included in that category; and • Other immaterial adjustments related to brand alignment within product categories in the Asia Pacific region have been made. Prior period product category sales have been reclassified to conform to the current presentation. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 4. Restructuring In December 2019, our Board of Directors approved, and we initiated, a new global restructuring program (the “2019 Restructuring Plan”) with an objective of reducing costs to allow us to further invest in higher priority growth opportunities. The 2019 Restructuring Plan is expected to result in total pre-tax restructuring charges of approximately $350 million to $400 million and reduce gross annual pre-tax operating expenses by approximately $200 million to $300 million by the end of 2023 as program benefits are realized. The pre-tax restructuring charges will consist of employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as consulting fees, project management and relocation costs. The restructuring charges incurred in the first quarter of 2020 primarily related to employee termination benefits, distributor contract terminations, consulting and project management. The following table summarizes the liabilities recognized related to the 2019 Restructuring Plan (in millions): Employee Termination Contract Benefits Terminations Other Total Balance, December 31, 2019 $ 23.2 $ - $ 4.1 $ 27.3 Additional expense 30.2 4.9 7.6 42.7 Cash payments (16.4 ) (0.7 ) (5.2 ) (22.3 ) Balance, March 31, 2020 $ 37.0 $ 4.2 $ 6.5 $ 47.7 Expense incurred since the start of the 2019 Restructuring Plan $ 53.4 $ 4.9 $ 20.7 $ 79.0 Expense estimated to be recognized for the 2019 Restructuring Plan $ 170.0 $ 40.0 $ 165.0 $ 375.0 For the expense estimated to be recognized for the 2019 Restructuring Plan, we have disclosed the midpoint in our estimated range of expenses. We do not include restructuring charges in the operating profit of our reportable segments. In our consolidated statement of earnings, we report restructuring charges in our “Restructuring and other cost reduction initiatives” financial statement line item. We report the expenses for other cost reduction initiatives with restructuring expenses because these activities also have the goal of reducing costs across the organization. However, since the cost reduction initiative expenses are not considered restructuring, they have been excluded from the amounts presented in this note. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. March 31, December 31, 2020 2019 (in millions) Finished goods $ 1,943.1 $ 1,875.4 Work in progress 239.8 231.0 Raw materials 280.3 278.6 Inventories $ 2,463.2 $ 2,385.0 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property, Plant and Equipment March 31, December 31, 2020 2019 (in millions) Land $ 27.5 $ 27.6 Buildings and equipment 2,044.9 2,007.0 Capitalized software costs 486.5 482.4 Instruments 3,311.8 3,250.5 Construction in progress 141.6 149.3 6,012.3 5,916.8 Accumulated depreciation (3,946.8 ) (3,839.4 ) Property, plant and equipment, net $ 2,065.5 $ 2,077.4 We had $39.8 million of property, plant and equipment included in accounts payable as of each of March 31, 2020 and December 31, 2019. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following table summarizes the changes in the carrying amount of goodwill by reportable segment, including the effects of changes to our reportable segments (in millions): Americas and Global Businesses EMEA Asia Pacific Immaterial Product Category Operating Segments Total Balance at December 31, 2019 Goodwill $ 7,699.8 $ 1,316.8 $ 507.4 $ 1,729.3 $ 11,253.3 Accumulated impairment losses - (567.0 ) - (1,086.6 ) (1,653.6 ) $ 7,699.8 $ 749.8 $ 507.4 $ 642.7 $ 9,599.7 Goodwill reportable segment change 1,661.3 17.0 51.0 (1,729.3 ) - Accumulated impairment losses reportable segment change (1,086.6 ) - - 1,086.6 - Purchase accounting adjustments 0.3 - - - 0.3 Impairment (142.0 ) (470.0 ) - - (612.0 ) Currency translation (22.8 ) (8.4 ) (5.6 ) - (36.8 ) Balance at March 31, 2020 Goodwill $ 9,338.6 $ 1,325.4 $ 552.8 $ - $ 11,216.8 Accumulated impairment losses (1,228.6 ) (1,037.0 ) - - (2,265.6 ) $ 8,110.0 $ 288.4 $ 552.8 $ - $ 8,951.2 As discussed further in Note 15, in connection with the 2019 Restructuring Plan, our operating segments and reportable segments have changed. Goodwill has been reallocated from our previous reportable segments to reflect the new structure. We now have five reporting units with goodwill assigned to them. As of March 31, 2020, we tested three of our reporting units for impairment due to: i) the significant adverse effect the COVID-19 pandemic is expected to have on our operating results, and ii) the change in reportable segments, which changed the cash flows and asset compositions of certain reporting units. This resulted in goodwill impairment charges of $470.0 million and $142.0 million recognized for our reporting unit and Dental reporting unit, respectively. The remaining two reporting units with goodwill assigned to them were not tested for impairment as we concluded it is more likely than not the fair value of these reporting units exceeds their carrying value. The impairment charge of $470.0 million in our EMEA reporting unit was due to the COVID-19 pandemic and reportable segment change. The COVID-19 pandemic has had a significant adverse effect on both the operational and non-operational assumptions used to estimate the fair value of our EMEA reporting unit. The significant decline in our share price and that of most other publicly-traded companies resulted in us utilizing a higher risk-adjusted discount rate compared to the rate used in our last annual goodwill impairment test to discount our future estimated cash flows to present value. On an operational basis, due to the deferral of elective surgical procedures our estimated cash flows in 2020 will be significantly lower than previously estimated in our last annual goodwill impairment test. As discussed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this report, we expect that our second quarter of 2020 will experience the most significant negative impact, followed by sequential improvement in the rate of deferred procedures. The change in reportable segments resulted in additional impairment due to additional assets being allocated to the EMEA reporting unit. After the goodwill impairment charge, $ 288.4 million of goodwill remains in the EMEA reporting unit as of March 31, 2020. The impairment charge of $142.0 million in our Dental reporting unit was driven by the COVID-19 pandemic. Similar to our EMEA reporting unit, changes in the market have caused an increase to the risk-adjusted discount rates utilized to discount our future estimated cash flows to present value, and we expect that the deferral of elective dental procedures will have a significant adverse effect to our cash flows. We estimate the cash flows from our Dental reporting unit may recover more slowly than our other reporting units because many dental procedures are not covered by insurance. Therefore, economic uncertainty will likely result in patients deferring dental procedures for a longer period of time than procedures involving our other products. After the goodwill impairment charge, $253.5 million of goodwill remains in the Dental reporting unit as of March 31, 2020. The third reporting unit we tested for impairment, Americas CMFT, had an estimated fair value that exceeded its carrying value by less than 5 percent. The Americas CMFT reporting unit’s estimated fair value has also been adversely impacted by the COVID-19 pandemic similar to our EMEA and Dental reporting units. We estimated the fair value of the EMEA, Dental and Americas CMFT reporting units based on income and market approaches. Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit. Fair value under the market approach utilized the guideline public company methodology, which uses valuation indicators from publicly-traded companies that are similar to our EMEA, Dental and Americas CMFT reporting units and considers differences between our reporting unit and the comparable companies. In estimating the future cash flows of the reporting units, we utilized a combination of market and company-specific inputs that a market participant would use in assessing the fair value of the reporting units. The primary market input was revenue growth rates. These rates were based upon historical trends and estimated future growth drivers such as an aging global population, obesity and more active lifestyles. In the near term, the COVID-19 pandemic is expected to result in a decline to our revenue when compared to the same prior year periods. Significant company specific inputs included assumptions regarding how the reporting units could leverage operating expenses as revenue grows and the impact any of our differentiated products or new products will have on revenues. Under the guideline public company methodology, we took into consideration specific risk differences between our reporting unit and the comparable companies, such as recent financial performance, size risks and product portfolios, among other considerations. We will continue to monitor the fair value of our EMEA, Dental and Americas CMFT reporting units as well as our other two reporting units in our interim and annual reporting periods. If our estimated cash flows for these reporting units decrease, we may have to record further impairment charges in the future. Factors that could result in our cash flows being lower than our current estimates include: 1) the COVID-19 pandemic causes elective surgical procedures to be deferred longer than our estimates, 2) decreased revenues caused by unforeseen changes in the healthcare market, or our inability to generate new product revenue from our research and development activities, and 3) our inability to achieve the estimated operating margins in our forecasts due to unforeseen factors. Additionally, changes in the broader economic environment could cause changes to our estimated discount rates and comparable company valuation indicators, which may impact our estimated fair values. |
Transfers of Financial Assets
Transfers of Financial Assets | 3 Months Ended |
Mar. 31, 2020 | |
Transfers And Servicing [Abstract] | |
Transfers of Financial Assets | 8. Transfers of Financial Assets We have receivables purchase arrangements with unrelated third parties to liquidate portions of our trade accounts receivable balance. The receivables relate to products sold to customers and are short-term in nature. The factorings are treated as sales of our accounts receivable. Proceeds from the transfers reflect either the face value of the accounts receivable or the face value less factoring fees. In the U.S. and Japan, our programs are executed on a revolving basis with a maximum funding limit as of March 31, 2020 of $450.0 million combined. We act as the collection agent on behalf of the third party, but have no significant retained interests or servicing liabilities related to the accounts receivable sold. In order to mitigate credit risk, we purchased credit insurance for the factored accounts receivable. As a result, our risk of loss is limited to the factored accounts receivable not covered by the insurance. Additionally, we have provided guarantees for the factored accounts receivable. The maximum exposures to loss associated with these arrangements were $21.1 million and $21.8 million as of March 31, 2020 and December 31, 2019, respectively. In Europe, we sell to a third party and have no continuing involvement or significant risk with the factored accounts receivable. Funds received from the transfers are recorded as an increase to cash and a reduction to accounts receivable outstanding in the condensed consolidated balance sheets. We report the cash flows attributable to the sale of receivables to third parties in cash flows from operating activities in our condensed consolidated statements of cash flows. Net expenses resulting from the sales of receivables are recognized in selling, general and administrative expense. Net expenses include any resulting gains or losses from the sales of receivables, credit insurance and factoring fees. In the three-month periods ended March 31, 2020 and 2019, we sold receivables having an aggregate face value of $560.5 million and $799.4 million to third parties in exchange for cash proceeds of $560.1 million and $798.7 million, respectively. Expenses recognized on these sales during the three-month periods ended March 31, 2020 and 2019 were not significant. In the three-month periods ended March 31, 2020 and 2019, under the U.S. and Japan programs, we collected $335.3 million and $698.4 million, respectively, from our customers and remitted that amount to the third party, and we effectively repurchased $39.3 million and $34.7 million, respectively, of previously sold accounts receivable from the third party, due to the programs’ revolving nature. At March 31, 2020 and December 31, 2019, we had collected $67.0 million and $54.6 million, respectively, of funds that were unremitted to the third party, which are reflected in our condensed consolidated balance sheets under other current liabilities. The initial collection of cash from customers and its remittance to the third party is reflected in net cash provided by/(used in) financing activities in our condensed consolidated statements of cash flows. At March 31, 2020 and December 31, 2019, the outstanding principal amount of receivables that has been derecognized under the U.S. and Japan revolving arrangements amounted to $421.8 million and $270.2 million, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt Our debt consisted of the following (in millions): March 31, December 31, 2020 2019 Current portion of long-term debt 2.700% Senior Notes due 2020 $ 1,500.0 $ 1,500.0 Floating Rate Notes due 2021 450.0 - Total current portion of long-term debt $ 1,950.0 $ 1,500.0 Long-term debt Floating Rate Notes due 2021 $ - $ 450.0 3.375% Senior Notes due 2021 300.0 300.0 3.150% Senior Notes due 2022 750.0 750.0 3.700% Senior Notes due 2023 300.0 300.0 3.550% Senior Notes due 2025 2,000.0 2,000.0 3.050% Senior Notes due 2026 600.0 - 3.550% Senior Notes due 2030 900.0 - 4.250% Senior Notes due 2035 253.4 253.4 5.750% Senior Notes due 2039 317.8 317.8 4.450% Senior Notes due 2045 395.4 395.4 1.414% Euro Notes due 2022 548.6 561.3 2.425% Euro Notes due 2026 548.6 561.3 1.164% Euro Notes due 2027 548.6 561.3 Japan Term Loan A 108.5 106.9 Japan Term Loan B 197.6 194.7 Debt discount and issuance costs (49.8 ) (37.1 ) Adjustment related to interest rate swaps 5.5 6.4 Total long-term debt $ 7,724.2 $ 6,721.4 At March 31, 2020, our total current and non-current debt of $9.7 billion consisted of On March 20, 2020, we completed the offering of $600.0 million aggregate principal amount of our 3.050% senior notes due on January 15, 2026 and $900.0 million aggregate principal amount of our 3.550% senior notes due on March 20, 2030. Interest payable on the 3.050% senior notes is payable semi-annually, commencing on July 15, 2020 until maturity. Interest payable on the 3.550% senior notes is payable semi-annually, commencing on September 20, 2020 until maturity. The proceeds from the offering, together with cash on hand, were used to repay at maturity the $1.5 billion principal amount of 2.700% senior notes due on April 1, 2020. On November 1, 2019, we entered into a revolving credit agreement (the “2019 Credit Agreement”), which contains a five-year Borrowings under the 2019 Credit Agreement generally bear interest at floating rates. We pay a facility fee on the aggregate amount of the 2019 Multicurrency Revolving Facility. The 2019 Credit Agreement contains customary affirmative and negative covenants and events of default for unsecured financing arrangements, including, among other things, limitations on consolidations, mergers, and sales of assets. We were in compliance with all covenants under the 2019 Credit Agreement as of March 31, 2020. On April 23, 2020 we entered into an amendment to the 2019 Credit Agreement to temporarily increase the maximum permitted consolidated indebtedness to consolidated EBITDA ratio (“Consolidated Leverage Ratio”), temporarily increase the interest rate margin applicable to revolving loans and the facility fee, and make other administrative changes. Pursuant to the amendment, the maximum permitted Consolidated Leverage Ratio as of the last day of any period of four consecutive fiscal quarters under the 2019 Credit Agreement will be (i) 5.75 to 1.00 for periods ending between April 1, 2020 and including December 31, 2020, (ii) 5.00 to 1.00 for the period ending March 31, 2021, and (iii) 4.50 to 1.00 for periods ending after April 1, 2021 (with such maximum permitted Consolidated Leverage Ratio subject to increase to 5.00 to 1.00 for a period of time in connection with a qualified material acquisition on or after July 1, 2021). The amendment also increases the interest rate margin applicable to revolving loans and the facility fee, each of which are determined by reference to our senior unsecured long-term debt credit rating, through March 31, 2021. On April 23, 2020, we entered into a revolving credit agreement (the “2020 Credit Agreement”) which is an unsecured revolving credit facility of $1.0 billion (the “2020 Revolving Facility”). The 2020 Credit Agreement matures on December 31, 2020. Borrowings under the 2020 Credit Agreement will generally bear interest at floating rates. We will pay a facility fee on the aggregate amount of the 2020 Revolving Facility. The 2020 Credit Agreement contains customary affirmative and negative covenants and events of default for unsecured financing arrangement including, among other things, limitations on consolidations, mergers, and sales of assets. The 2020 Credit Agreement requires us to maintain a Consolidated Leverage Ratio as of the last day of any period of four consecutive fiscal quarters of no greater than 5.75 to 1.00. The 2020 Revolving Facility is also subject to certain mandatory prepayment requirements and corresponding commitment reductions upon the issuance of indebtedness above $25.0 million, subject to specified carve-outs. The estimated fair value of our senior notes as of March 31, 2020, based on quoted prices for the specific securities from transactions in over-the-counter markets (Level 2), was $9,371.1 million. The estimated fair value of Japan Term Loan A and Japan Term Loan B, in the aggregate, as of March 31, 2020, based upon publicly available market yield curves and the terms of the debt (Level 2), was $304.1 million. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | 10. Accumulated Other Comprehensive Income Accumulated other comprehensive income (loss) (“AOCI”) refers to certain gains and losses that under GAAP are included in comprehensive income but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Amounts in AOCI may be reclassified to net earnings upon the occurrence of certain events. Our AOCI is comprised of foreign currency translation adjustments, unrealized gains and losses on cash flow hedges and amortization of prior service costs and unrecognized gains and losses in actuarial assumptions related to our defined benefit plans. Foreign currency translation adjustments are reclassified to net earnings upon sale or upon a complete or substantially complete liquidation of an investment in a foreign entity. Unrealized gains and losses on cash flow hedges are reclassified to net earnings when the hedged item affects net earnings. Amounts related to defined benefit plans that are in AOCI are reclassified over the service periods of employees in the plan. The following table shows the changes in the components of AOCI, net of tax (in millions): Foreign Cash Defined Currency Flow Benefit Total Translation Hedges Plan Items AOCI Balance at December 31, 2019 $ (32.8 ) $ 16.4 $ (225.5 ) $ (241.9 ) AOCI before reclassifications (54.2 ) 54.8 - 0.6 Reclassifications to statements of earnings - (13.5 ) (0.3 ) (13.8 ) Balance at March 31, 2020 $ (87.0 ) $ 57.7 $ (225.8 ) $ (255.1 ) The following table shows the reclassification adjustments from AOCI (in millions): Amount of Gain (Loss) Reclassified from AOCI Three Months Ended March 31, Location on Component of AOCI 2020 2019 Statements of Earnings Cash flow hedges Foreign exchange forward contracts $ 15.6 $ 7.2 Cost of products sold Interest rate swaps - 2.8 Interest expense, net Forward starting interest rate swaps (0.2 ) (0.1 ) Interest expense, net 15.4 9.9 Total before tax 1.9 1.7 Provision for income taxes $ 13.5 $ 8.2 Net of tax Defined benefit plans Prior service cost $ 1.0 $ 1.8 Other expense, net Unrecognized actuarial loss (2.7 ) (5.3 ) Other expense, net (1.7 ) (3.5 ) Total before tax (2.0 ) (1.5 ) Provision for income taxes $ 0.3 $ (2.0 ) Net of tax Total reclassifications $ 13.8 $ 6.2 Net of tax The following table shows the tax effects on each component of AOCI recognized in our condensed consolidated statements of comprehensive income (loss) (in millions): Three Months Ended March 31, 2020 Before Tax Tax Net of Tax Foreign currency cumulative translation adjustments $ (29.2 ) $ 25.0 $ (54.2 ) Unrealized cash flow hedge gains 65.7 10.9 54.8 Reclassification adjustments on cash flow hedges (15.4 ) (1.9 ) (13.5 ) Adjustments to prior service cost and unrecognized actuarial assumptions 1.7 2.0 (0.3 ) Total Other Comprehensive Income (Loss) $ 22.8 $ 36.0 $ (13.2 ) Three Months Ended March 31, 2019 Before Tax Tax Net of Tax Foreign currency cumulative translation adjustments $ 7.9 $ 12.3 $ (4.4 ) Unrealized cash flow hedge gains 16.7 2.2 14.5 Reclassification adjustments on cash flow hedges (9.9 ) (1.7 ) (8.2 ) Adjustments to prior service cost and unrecognized actuarial assumptions 3.5 1.5 2.0 Total Other Comprehensive Income $ 18.2 $ 14.3 $ 3.9 |
Fair Value Measurement of Asset
Fair Value Measurement of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | 11. Fair Value Measurement of Assets and Liabilities The following financial assets and liabilities are recorded at fair value on a recurring basis (in millions): As of March 31, 2020 Fair Value Measurements at Reporting Date Using: Description Recorded Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Derivatives, current and long-term Foreign currency forward contracts $ 86.5 $ - $ 86.5 $ - Cross-currency interest rate swaps 130.2 - 130.2 - Total Assets $ 216.7 $ - $ 216.7 $ - Liabilities Derivatives, current and long-term Foreign currency forward contracts $ 0.1 $ - $ 0.1 $ - Total Liabilities $ 0.1 $ - $ 0.1 $ - As of December 31, 2019 Fair Value Measurements at Reporting Date Using: Description Recorded Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Derivatives, current and long-term Foreign currency forward contracts $ 39.1 $ - $ 39.1 $ - Cross-currency interest rate swaps 60.5 - 60.5 - Total Assets $ 99.6 $ - $ 99.6 $ - Liabilities Derivatives, current and long-term Foreign currency forward contracts $ 0.6 $ - $ 0.6 $ - Total Liabilities $ 0.6 $ - $ 0.6 $ - We value our foreign currency forward contracts using a market approach based on foreign currency exchange rates obtained from active markets, and we perform ongoing assessments of counterparty credit risk. We value our cross-currency interest rate swaps using a market approach based on publicly available market yield curves, foreign currency exchange rates and the terms of our swaps, and we perform ongoing assessments of counterparty credit risk. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 12. Derivative Instruments and Hedging Activities We are exposed to certain market risks relating to our ongoing business operations, including foreign currency exchange rate risk, commodity price risk, interest rate risk and credit risk. We manage our exposure to these and other market risks through regular operating and financing activities. Currently, the only risks that we manage through the use of derivative instruments are interest rate risk and foreign currency exchange rate risk. Interest Rate Risk Derivatives Designated as Fair Value Hedges In prior years, we entered into various fixed-to-variable interest rate swap agreements that were accounted for as fair value hedges of a portion of our 4.625% Senior Notes due 2019 and all of our 3.375% Senior Notes due 2021. In August 2016, we received cash for these interest rate swap assets by terminating the hedging instruments with the counterparties. The 4.625% Senior Notes were repaid at maturity in 2019. The remaining unamortized balance related to the 3.375% Senior Notes as of March 31, 2020 related to these discontinued hedges was $5.5 million, which will be recognized using the effective interest rate method over the remaining maturity period of the hedged notes. As of March 31, 2020 and December 31, 2019, the following amounts were recorded on our condensed consolidated balance sheets related to cumulative basis adjustments for fair value hedges (in millions): Carrying Amount of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities Balance Sheet Line Item March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Long-term debt $ 305.4 $ 306.2 $ 5.5 $ 6.4 Derivatives Designated as Cash Flow Hedges In 2014, we entered into forward starting interest rate swaps that were designated as cash flow hedges of our thirty-year In September 2016, we entered into various variable-to-fixed interest rate swap agreements with a notional amount of $375.0 million that were accounted for as cash flow hedges of U.S. Term Loan B. The interest rate swaps minimized the exposure to changes in the LIBOR interest rates while the variable-rate debt was outstanding. In the first quarter of 2019, we terminated these interest rate swaps concurrently with the repayment of the remaining balance of U.S. Term Loan B, and we recognized proceeds and interest income of $2.8 million related to the termination. Foreign Currency Exchange Rate Risk We operate on a global basis and are exposed to the risk that our financial condition, results of operations and cash flows could be adversely affected by changes in foreign currency exchange rates. To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions. We also designated our Euro Notes as net investment hedges of investments in foreign subsidiaries. We are primarily exposed to foreign currency exchange rate risk with respect to transactions and net assets denominated in Euros, Swiss Francs, Japanese Yen, British Pounds, Canadian Dollars, Australian Dollars, Korean Won, Swedish Krona, Czech Koruna, Thai Baht, Taiwan Dollars, South African Rand, Russian Rubles, Indian Rupees, Turkish Lira, Polish Zloty, Danish Krone, and Norwegian Krone. We do not use derivative financial instruments for trading or speculative purposes. Derivatives Designated as Net Investment Hedges We are exposed to the impact of foreign exchange rate fluctuations in the investments in our wholly-owned foreign subsidiaries that are denominated in currencies other than the U.S. Dollar. In order to mitigate the volatility in foreign exchange rates, we issued Euro Notes in December 2016 and November 2019 and designated 100 percent of the Euro Notes to hedge our net investment in certain wholly-owned foreign subsidiaries that have a functional currency of the Euro. All changes in the fair value of a hedging instrument designated as a net investment hedge are recorded as a component of AOCI in the condensed consolidated balance sheets. At March 31, 2020, we had receive-fixed-rate, pay-fixed-rate cross-currency interest swaps with notional amounts outstanding of Euro 1,450 million, Japanese Yen 7 billion and Swiss Franc 50 million. These transactions further hedge our net investment in certain wholly-owned foreign subsidiaries that have a functional currency of Euro, Japanese Yen and Swiss Franc. All changes in the fair value of a derivative instrument designated as a net investment hedge are recorded as a component of AOCI in the condensed consolidated balance sheets. The portion of this change related to the excluded component will be amortized into earnings over the life of the derivative while the remainder will be recorded in AOCI until the hedged net investment is sold or substantially liquidated. We recognize the excluded component in interest expense, net on our condensed consolidated statements of earnings. The net cash received related to the receive-fixed-rate, pay-fixed-rate component of the cross-currency interest rate swaps is reflected in investing cash flows in our condensed consolidated statements of cash flows. Derivatives Designated as Cash Flow Hedges Our revenues are generated in various currencies throughout the world. However, a significant amount of our inventory is produced in U.S. Dollars. Therefore, movements in foreign currency exchange rates may have different proportional effects on our revenues compared to our cost of products sold. To minimize the effects of foreign currency exchange rate movements on cash flows, we hedge intercompany sales of inventory expected to occur within the next 30 months with foreign currency exchange forward contracts. We designate these derivative instruments as cash flow hedges. We perform quarterly assessments of hedge effectiveness by verifying and documenting the critical terms of the hedge instrument and confirming that forecasted transactions have not changed significantly. We also assess on a quarterly basis whether there have been adverse developments regarding the risk of a counterparty default. For derivatives which qualify as hedges of future cash flows, the gains and losses are temporarily recorded in AOCI and then recognized in cost of products sold when the hedged item affects net earnings. On our condensed consolidated statements of cash flows, the settlements of these cash flow hedges are recognized in operating cash flows. For foreign currency exchange forward contracts and options outstanding at March 31, 2020, we had obligations to purchase U.S. Dollars and sell Euros, Japanese Yen, British Pounds, Canadian Dollars, Australian Dollars, Korean Won, Swedish Krona, Czech Koruna, Thai Baht, Taiwan Dollars, South African Rand, Russian Rubles, Indian Rupees, Polish Zloty, Danish Krone, and Norwegian Krone and obligations to purchase Swiss Francs and sell U.S. Dollars. These derivatives mature at dates ranging from April 2020 through August 2022. As of March 31, 2020, the notional amounts of outstanding forward contracts and options entered into with third parties to purchase U.S. Dollars were $1,416.8 million. As of March 31, 2020, the notional amounts of outstanding forward contracts and options entered into with third parties to purchase Swiss Francs were $266.2 million. Derivatives Not Designated as Hedging Instruments We enter into foreign currency forward exchange contracts with terms of one month to manage currency exposures for monetary assets and liabilities denominated in a currency other than an entity’s functional currency. As a result, any foreign currency re-measurement gains/losses recognized in earnings are generally offset with gains/losses on the foreign currency forward exchange contracts in the same reporting period. The net amount of these offsetting gains/losses is recorded in other expense, net. These contracts are settled on the last day of each reporting period. Therefore, there is no outstanding balance related to these contracts recorded on the balance sheet as of the end of the reporting period. The notional amounts of these contracts are typically in a range of $1.5 billion to $2.0 billion per quarter. Income Statement Presentation Derivatives Designated as Cash Flow Hedges Derivative instruments designated as cash flow hedges had the following effects, before taxes, on AOCI and net earnings on our condensed consolidated statements of earnings, condensed consolidated statements of comprehensive income (loss) and condensed consolidated balance sheets (in millions): Amount of Gain Amount of Gain (Loss) Recognized in AOCI Reclassified from AOCI Three Months Ended Three Months Ended March 31, Location on March 31, Derivative Instrument 2020 2019 Statements of Earnings 2020 2019 Foreign exchange forward contracts $ 65.7 $ 16.7 Cost of products sold $ 15.6 $ 7.2 Interest rate swaps - - Interest expense, net - 2.8 Forward starting interest rate swaps - - Interest expense, net (0.2 ) (0.1 ) $ 65.7 $ 16.7 $ 15.4 $ 9.9 The fair value of outstanding derivative instruments designated as cash flow hedges and recorded on our condensed consolidated balance sheet at March 31, 2020, together with settled derivatives where the hedged item has not yet affected earnings, was a net unrealized gain of $67.7 million, or $57.7 million after taxes, which is deferred in AOCI. A gain of $54.1 million, or $46.3 million after taxes, is expected to be reclassified to earnings in cost of products sold and a loss of $0.6 million, or $0.5 million after taxes, is expected to be reclassified to earnings in interest expense, net over the next twelve months. The following table presents the effect of fair value, cash flow and net investment hedge accounting on our condensed consolidated statements of earnings (in millions): Location and Amount of Gain/(Loss) Recognized in Income on Fair Value, Cash Flow and Net Investment Hedging Relationships for the Period Ended: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Cost of Interest Cost of Interest Products Expense, Products Expense, Sold Net Sold Net Total amounts of income and expense line items presented in the statements of earnings in which the effects of fair value, cash flow and net investment hedges are recorded $ 487.1 $ (50.9 ) $ 553.4 $ (58.0 ) The effects of fair value, cash flow and net investment hedging: Gain on fair value hedging relationships Discontinued interest rate swaps - 0.9 - 2.1 Gain (loss) on cash flow hedging relationships Foreign exchange forward contracts 15.6 - 7.2 - Interest rate swaps - - - 2.8 Forward starting interest rate swaps - (0.2 ) - (0.1 ) Gain on net investment hedging relationships Cross-currency interest rate swaps - 13.4 - 12.0 Derivatives Not Designated as Hedging Instruments The following gains / (losses) from these derivative instruments were recognized on our condensed consolidated statements of earnings (in millions): Three Months Ended Location on March 31, Derivative Instrument Statements of Earnings 2020 2019 Foreign exchange forward contracts Other expense, net $ 23.1 $ (2.6 ) These gains/(losses) do not reflect losses of $23.5 million in the three-month period ended March 31, 2020 and gains of $0.6 million in the three-month period ended March 31, 2019, recognized in other expense, net as a result of foreign currency re-measurement of monetary assets and liabilities denominated in a currency other than an entity’s functional currency. Balance Sheet Presentation As of March 31, 2020 and December 31, 2019, all derivatives designated as fair value hedges, cash flow hedges and net investment hedges are recorded at fair value on our condensed consolidated balance sheets. On our condensed consolidated balance sheets, we recognize individual forward contracts with the same counterparty on a net asset/liability basis if we have a master netting agreement with the counterparty. Under these master netting agreements, we are able to settle derivative instrument assets and liabilities with the same counterparty in a single transaction, instead of settling each derivative instrument separately. We have master netting agreements with all of our counterparties. The fair value of derivative instruments on a gross basis is as follows (in millions): As of March 31, 2020 As of December 31, 2019 Balance Balance Sheet Fair Sheet Fair Location Value Location Value Asset Derivatives Foreign exchange forward contracts Other current assets $ 64.0 Other current assets $ 41.8 Cross-currency interest rate swaps Other current assets 15.2 Other current assets - Foreign exchange forward contracts Other assets 27.1 Other assets 9.8 Cross-currency interest rate swaps Other assets 115.0 Other assets 60.5 Total asset derivatives $ 221.3 $ 112.1 Liability Derivatives Foreign exchange forward contracts Other current liabilities $ 3.6 Other current liabilities $ 7.9 Foreign exchange forward contracts Other long-term liabilities 1.1 Other long-term liabilities 5.2 Total liability derivatives $ 4.7 $ 13.1 The table below presents the effects of our master netting agreements on our condensed consolidated balance sheets (in millions): As of March 31, 2020 As of December 31, 2019 Description Location Gross Amount Offset Net Amount in Balance Sheet Gross Amount Offset Net Amount in Balance Sheet Asset Derivatives Cash flow hedges Other current assets $ 64.0 $ 3.6 $ 60.4 $ 41.8 $ 7.9 $ 33.9 Cash flow hedges Other assets 27.1 1.0 26.1 9.8 4.6 5.2 Liability Derivatives Cash flow hedges Other current liabilities 3.6 3.6 - 7.9 7.9 - Cash flow hedges Other long-term liabilities 1.1 1.0 0.1 5.2 4.6 0.6 The following net investment hedge gains were recognized on our condensed consolidated statements of comprehensive income (loss) (in millions): Amount of Gain Recognized in AOCI Three Months Ended March 31, Derivative Instrument 2020 2019 Euro Notes $ 38.1 $ 20.4 Cross-currency interest rate swaps 69.7 34.2 $ 107.8 $ 54.6 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. We are currently evaluating the impact of the CARES Act, but at present do not expect the provisions of the CARES Act to have a material impact on our tax provision. We operate on a global basis and are subject to numerous and complex tax laws and regulations. Additionally, tax laws continue to undergo rapid changes in both application and interpretation by various countries, including state aid interpretations and initiatives led by the Organization for Economic Cooperation and Development. Our income tax filings are subject to examinations by taxing authorities throughout the world. Income tax audits may require an extended period of time to reach resolution and may result in significant income tax adjustments when interpretation of tax laws or allocation of company profits is disputed. Although ultimate timing is uncertain, the net amount of tax liability for unrecognized tax benefits may change within the next twelve months due to changes in audit status, expiration of statutes of limitations, settlements of tax assessments and other events. Management’s best estimate of such change is within the range of a $280 million decrease to a $30 million increase. Our U.S. Federal income tax returns have been audited through 2012 and are currently under audit for years 2013-2015. The IRS has proposed adjustments for years 2005-2012, primarily related to reallocating profits between certain of our U.S. and foreign subsidiaries. We have disputed these adjustments and intend to continue to vigorously defend our positions as we pursue resolution through petitions with the U.S. Tax Court for years 2005-2009 and the administrative process with the IRS Independent Office of Appeals for years 2010-2012. A public referendum held in Switzerland passed the Federal Act on Tax Reform and AHV Financing (“TRAF”), effective January 1, 2020, and includes the abolishment of various favorable federal and cantonal tax regimes. The TRAF provides transitional relief measures for companies that are losing the tax benefit of a ruling, including a "step-up" for amortizable goodwill, equal to the amount of future tax benefit they would have received under their existing ruling, subject to certain limitations. Certain provisions of the TRAF were enacted in the third quarter of 2019, resulting in us recognizing a provisional net tax benefit of $263.8 million. In the fourth quarter of 2019, we recognized an additional $51.2 million related to TRAF as well as the tax impact of certain restructuring transactions in Switzerland. We anticipate that TRAF will have a minimal impact to our ongoing consolidated effective tax rate. In the three-month periods ended March 31, 2020 and 2019, our effective tax rate (“ETR”) was negative 1.0 percent and positive 15.6 percent, respectively. The negative tax rate in the 2020 period was primarily due to the $612.0 million goodwill impairment charge, which resulted in a loss before taxes, but has no corresponding tax benefit. Absent discrete tax events, we expect our future ETR will be lower than the U.S. corporate income tax rate of 21.0 percent due to our mix of earnings between U.S. and foreign locations, which have lower corporate income tax rates. Our ETR in future periods could also potentially be impacted by: changes in our mix of pre-tax earnings; changes in tax rates, tax laws or their interpretation, including the European Union rules on state aid; the outcome of various federal, state and foreign audits; and the expiration of certain statutes of limitations. Currently, we cannot reasonably estimate the impact of these items on our financial results. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. Earnings Per Share The following is a reconciliation of weighted average shares for the basic and diluted shares computations (in millions): Three Months Ended March 31, 2020 2019 Weighted average shares outstanding for basic net (loss) earnings per share 206.5 204.4 Effect of dilutive stock options and other equity awards - 1.4 Weighted average shares outstanding for diluted net (loss) earnings per share 206.5 205.8 Since we incurred a net loss in the three-month period ended March 31, 2020, no dilutive stock options or other equity awards were included as diluted shares. During the three-month period ended March 31, 2019, an average of 1.3 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; spine, craniomaxillofacial and thoracic products (“CMFT”); office based technologies; dental implants; and related surgical products. Due to the 2019 Restructuring Plan that was initiated in late 2019, our operating segments have changed beginning in the first quarter of 2020. Our chief operating decision maker (“CODM”) now allocates resources to achieve our operating profit goals through three operating segments. These operating segments, which also constitute our reportable segments, are Americas and Global Businesses; EMEA; and Asia Pacific. Previously, we had seven operating segments, which resulted in three reportable segments and four individually insignificant operating segments that were aggregated together and not considered a reportable segment. Our CODM evaluates performance based upon segment operating profit exclusive of operating expenses pertaining to inventory and manufacturing-related charges, intangible asset amortization, goodwill impairment, restructuring and other cost reduction initiatives, quality remediation, acquisition, integration and related, litigation, litigation settlement gain, certain European Union Medical Device Regulation expenses, other charges and corporate functions. Corporate functions include corporate legal, finance, information technology, human resources and other corporate departments. Intercompany transactions have been eliminated from segment operating profit. Our Americas and Global Businesses operating segment is comprised principally of the U.S. and includes other North, Central and South American markets for all of our product categories as well as the global results for our Dental product category. This segment also includes our global manufacturing operations for all product categories and research, development engineering, medical education, and brand management for our global product category headquarter locations. Our EMEA operating segment is comprised principally of Europe and includes the Middle East and African markets for all product categories except Dental. Our Asia Pacific operating segment is comprised principally of Japan, China and Australia and includes other Asian and Pacific markets for all product categories except Dental. The EMEA and Asia Pacific operating segments include the commercial operations as well as regional headquarter expenses to operate in those markets. Since the Americas and Global Businesses includes additional costs related to global manufacturing operations and other centralized global product category headquarter expenses, profitability metrics in this operating segment are not comparable to the EMEA and Asia Pacific operating segments. Our CODM does not review asset information by operating segment. Instead, our CODM reviews cash flow and other financial ratios by operating segment. Prior period reportable segment financial information has been reclassified to conform to our new reportable segments. Net sales and operating profit by segment are as follows (in millions): Net Sales Operating (Loss) Profit Three Months Ended Three Months Ended March 31, March 31, 2020 2019 2020 2019 Americas and Global Businesses $ 1,136.6 $ 1,235.6 $ 368.8 $ 390.0 EMEA 371.3 428.9 108.8 139.2 Asia Pacific 275.9 311.0 92.6 113.5 Corporate Functions - - (104.0 ) (117.7 ) Total $ 1,783.8 $ 1,975.5 Inventory and manufacturing-related charges (0.6 ) (2.0 ) Intangible asset amortization (147.6 ) (143.4 ) Goodwill impairment (612.0 ) - Restructuring and other cost reduction initiatives (45.0 ) (4.7 ) Quality remediation (15.9 ) (19.7 ) Acquisition, integration and related (4.4 ) (6.0 ) Litigation (79.8 ) 1.8 Litigation settlement gain - 23.5 European Union Medical Device Regulation (11.0 ) (1.6 ) Other charges (5.9 ) (22.7 ) Operating (loss) profit $ (456.0 ) $ 350.2 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies On a quarterly and annual basis, we review relevant information with respect to loss contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. We establish liabilities for loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. Litigation Durom Cup-related claims : On July 22, 2008, we temporarily suspended marketing and distribution of the Durom Cup in the U.S. Subsequently, a number of product liability lawsuits were filed against us in various U.S. and foreign jurisdictions. The plaintiffs seek damages for personal injury, and they generally allege that the Durom Cup contains defects that result in complications and premature revision of the device. We have settled the majority of these claims and others are still pending. The majority of the pending U.S. lawsuits are currently in a federal Multidistrict Litigation (“MDL”) in the District of New Jersey ( In Re: Zimmer Durom Hip Cup Products Liability Litigation ). Litigation activity in the MDL is stayed pending finalization of the U.S. Durom Cup Settlement Program, an extrajudicial program created to resolve actions and claims of eligible U.S. plaintiffs and claimants. Other lawsuits are pending in various domestic and foreign jurisdictions, and additional claims may be asserted in the future. The majority of claims outside the U.S. are pending in Germany, Netherlands and Italy. Since 2008, we have recognized net expense of $443.0 million for Durom Cup-related claims. We did not record any gain or expense for Durom Cup-related claims in the three-month period ended March 31, 2020. In the three-month period ended March 31, 2019, we lowered our estimate of the number of Durom Cup-related claims we expect to settle and, as a result, we recognized gains of $2.5 million in selling, general and administrative expense. Our estimate as of March 31, 2020 of the remaining liability for all Durom Cup-related claims, including estimated legal fees, is $57.2 million. We expect to pay the majority of the Durom Cup-related claims within the next few years. Our understanding of clinical outcomes with the Durom Cup and other large diameter hip cups continues to evolve. We rely on significant estimates in determining the provisions for Durom Cup-related claims, including our estimate of the number of claims that we will receive and the average amount we will pay per claim. The actual number of claims and the actual amount we pay per claim may differ from our estimates. Among other factors, since our understanding of the clinical outcomes is still evolving, we cannot reasonably estimate the possible loss or range of loss that may result from Durom Cup-related claims in excess of the losses we have accrued. Although we are vigorously defending these lawsuits, their ultimate resolution is uncertain. Zimmer M/L Taper, M/L Taper with Kinectiv Technology, and Versys Femoral Head-related claims (“Metal Reaction” claims) : We are a defendant in a number of product liability lawsuits relating to our M/L Taper and M/L Taper with Kinectiv Technology hip stems, and Versys Femoral Head implants. The plaintiffs seek damages for personal injury, alleging that defects in the products lead to corrosion at the head/stem junction resulting in, among other things, pain, inflammation and revision surgery. The majority of the cases are consolidated in an MDL that was created on October 3, 2018 in the U.S. District Court for the Southern District of New York ( In Re: Zimmer M/L Taper Hip Prosthesis or M/L Taper Hip Prosthesis with Kinectiv Technology and Versys Femoral Head Products Liability Litigation Our estimate as of March 31, 2020 of the remaining liability for all Metal Reaction-related claims, including our estimated legal fees, is $68.0 million. Although we are vigorously defending these lawsuits, their ultimate resolution is uncertain. Biomet metal-on-metal hip implant claims : Biomet is a defendant in a number of product liability lawsuits relating to metal-on-metal hip implants, most of which involve the M2a-Magnum hip system. Cases are currently consolidated in an MDL in the U.S. District Court for the Northern District of Indiana (In Re: Biomet M2a Magnum Hip Implant Product Liability Litigation) and in various state, federal and foreign courts, with the majority of domestic state court cases pending in Indiana and Florida. On February 3, 2014, Biomet announced the settlement of the MDL. Lawsuits filed in the MDL by April 15, 2014 were eligible to participate in the settlement. Those claims that did not settle via the MDL settlement program have re-commenced litigation in the MDL under a new case management plan, or are in the process of being remanded to their originating jurisdictions. The settlement does not affect certain other claims relating to Biomet’s metal-on-metal hip products that are pending in various state and foreign courts, or other claims that may be filed in the future. We continue to refine our estimates of the potential liability to settle the remaining claims and have recognized additional litigation-related expense in the three-month period ended March 31, 2020. Our estimate as of March 31, 2020 of the remaining liability for all Biomet metal-on-metal hip implant claims, including estimated legal fees, Although we are vigorously defending these lawsuits, their ultimate resolution is uncertain. Heraeus trade secret misappropriation lawsuits: In December 2008, Heraeus Kulzer GmbH (together with its affiliates, “Heraeus”) initiated legal proceedings in Germany against Biomet, Inc., Biomet Europe BV, certain other entities and certain employees alleging that the defendants misappropriated Heraeus trade secrets when developing Biomet Europe’s Refobacin and Biomet Bone Cement line of cements (“European Cements”). The lawsuit sought to preclude the defendants from producing, marketing and offering for sale their then-current line of European Cements and to compensate Heraeus for any damages incurred. Germany: On June 5, 2014, the German appeals court in Frankfurt (i) enjoined Biomet, Inc., Biomet Europe BV and Biomet Deutschland GmbH from manufacturing, selling or offering the European Cements to the extent they contain certain raw materials in particular specifications; (ii) held the defendants jointly and severally liable to Heraeus for any damages from the sale of European Cements since 2005; and (iii) ruled that no further review may be sought (the “Frankfurt Decision”). The Heraeus and Biomet parties both sought appeal against the Frankfurt Decision. In a decision dated June 16, 2016, the German Supreme Court dismissed the parties’ appeals without reaching the merits, rendering that decision final. In December 2016, Heraeus filed papers to restart proceedings against Biomet Orthopaedics Switzerland GmbH, seeking to require that entity to relinquish its CE certificates for the European Cements. In January 2017, Heraeus notified Biomet it had filed a claim for damages in the amount of for sales in Germany, which it first increased to 125.9 . In a recent filing to the court, Heraeus indicated that it might further increase its claims in the course of the proceedings. As of March 31, 2020, these two proceedings remained pending in front of the Darmstadt court. In September 2017, Heraeus filed an enforcement action in the Darmstadt court against Biomet Europe, requesting that a fine be imposed against Biomet Europe for failure to disclose the amount of the European Cements which Biomet Orthopaedics Switzerland had ordered to be manufactured in Germany (e.g., for the Chinese market). In June 2018, the Darmstadt court dismissed Heraeus’ request. Heraeus appealed the decision. Also in September 2017, Heraeus filed suit against Zimmer Biomet Deutschland in the court of first instance in Freiburg concerning the sale of the European Cements with certain changed raw materials. Heraeus seeks an injunction on the basis that the continued use of the product names for the European Cements is misleading for customers and thus an act of unfair competition. On June 29, 2018, the court in Freiburg, Germany dismissed Heraeus’ request for an injunction prohibiting the marketing of the European Cements under their current names on the grounds that the same request had already been decided upon by the Frankfurt Decision which became final and binding. Heraeus has appealed this decision to the Court of Appeals in Karlsruhe, Germany. The appeals hearing occurred in December 2019. United States: On September 8, 2014, Heraeus filed a complaint against a Biomet supplier, Esschem, Inc. (“Esschem”), in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit contained allegations that focused on two copolymer compounds that Esschem sold to Biomet, which Biomet incorporated into certain bone cement products that compete with Heraeus’ bone cement products. The complaint alleged that Biomet helped Esschem to develop these copolymers, using Heraeus trade secrets that Biomet allegedly misappropriated. The complaint asserted a claim under the Pennsylvania Uniform Trade Secrets Act, as well as other various common law tort claims, all based upon the same trade secret misappropriation theory. Heraeus sought to enjoin Esschem from supplying the copolymers to any third party and actual damages. The complaint also sought punitive damages, costs and attorneys’ fees. Although Biomet was not a party to this lawsuit, Biomet agreed, at Esschem’s request and subject to certain limitations, to indemnify Esschem for any liability, damages and legal costs related to this matter. On November 3, 2014, the court entered an order denying Heraeus’ motion for a temporary restraining order. On June 30, 2016, the court entered an order denying Heraeus’ request to give preclusive effect to the factual findings in the en banc On December 7, 2017, Heraeus filed a complaint against Zimmer Biomet Holdings, Inc. and Biomet, Inc. in the U.S. District Court for the Eastern District of Pennsylvania alleging a single claim of trade secret misappropriation under the Pennsylvania Uniform Trade Secrets Act based on the same factual allegations as the Esschem litigation. On March 5, 2018, Heraeus filed an amended complaint adding a second claim of trade secret misappropriation under Pennsylvania common law. Heraeus seeks to enjoin the Zimmer Biomet parties from future use of the allegedly misappropriated trade secrets and recovery of unspecified damages for alleged past use. On April 18, 2018, the Zimmer Biomet parties filed a motion to dismiss both claims. On March 8, 2019, the court stayed the case pending the Third Circuit’s decision in the Esschem case described above. In September 2019, the Zimmer Biomet parties filed a motion to stay the proceedings pending (1) the court’s decision on Esschem’s motion for summary judgment in the Esschem case described above and (2) the outcome of the U.S. International Trade Commission complaint filed by Heraeus asserting similar claims, described below under “Regulatory Matters, Government Investigations and Other Matters.” The Zimmer Biomet parties’ motion remained pending as of March 31, 2020. Other European Countries: Heraeus continues to pursue other related legal proceedings in Europe seeking various forms of relief, including injunctive relief and damages, against Biomet-related entities relating to the European Cements. On October 2, 2018, the Belgian Court of Appeal of Mons issued a judgment in favor of Heraeus relating to its request for past damages caused by the alleged misappropriation of its trade secrets, and an injunction preventing future sales of certain European Cements in Belgium (the “Belgian Decision”). We appealed this judgment to the Belgian Supreme Court. The Belgian Supreme Court dismissed our appeal in October 2019 and this decision is final. Heraeus filed a suit in Belgium concerning the continued sale of the European Cements with certain changed materials. Like its suit in Germany, Heraeus seeks an injunction on the basis that the continued use of the product names for the European Cements is misleading for customers and thus an act of unfair competition. On May 7, 2019, the Liège Commercial Court issued a judgment that Zimmer Biomet failed to inform its hospital and surgeon customers of the changes made to the composition of the cement with certain changed materials and ordered, as a sole remedy, that Zimmer Biomet send letters to those customers, which we have done. We and Heraeus have each filed an appeal to the judgment. On February 13, 2019, a Norwegian court of first instance issued a judgment in favor of Heraeus on its claim for misappropriation of trade secrets. The court awarded damages of 19,500,000 NOK, or approximately $2.3 million, plus attorneys’ fees, and issued an injunction, which is not final and thus not currently being enforced, preventing Zimmer Biomet Norway from marketing in Norway bone cements identified with the current product names and bone cements making use of the trade secrets which were acknowledged in the Frankfurt Decision. We have appealed the Norwegian judgment to the court of second instance. On October 29, 2019, an Italian court of first instance issued a judgment in favor of Heraeus on its claim of misappropriation of trade secrets, but did not yet order an award of damages. We intend to appeal the decision. On January 23, 2020, a Finnish Market Court issued a judgment partly in favor of Heraeus on its claim of misappropriation of certain trade secrets. Damage claims were not raised in the proceedings. We appealed the decision to the Finnish Supreme Court. Heraeus is pursuing damages and injunctive relief in France in an effort to prevent us from manufacturing, marketing and selling the European Cements (the “France Litigation”). The European Cements are manufactured at our facility in Valence, France. On December 11, 2018, a hearing was held in the France Litigation before the commercial court in Romans-sur-Isère. On May 23, 2019, the commercial court ruled in our favor. On July 12, 2019, Heraeus filed an appeal to the court of second instance in Grenoble, France. Although we are vigorously defending the France Litigation, the ultimate outcome is uncertain. An adverse ruling in the France Litigation could have a material adverse effect on our business, financial condition and results of operations. We have accrued an estimated loss relating to the collective trade secret litigation, including estimated legal costs to defend. Damages relating to the Frankfurt Decision are subject to separate proceedings, and the Belgian court appointed an expert to determine the amount of damages related to the Belgian Decision. Thus, it is reasonably possible that our estimate of the loss we may incur may change in the future. Although we are vigorously defending these lawsuits, their ultimate resolution is uncertain. Putative Securities Class Action: On December 2, 2016, a complaint was filed in the U.S. District Court for the Northern District of Indiana ( Shah v. Zimmer Biomet Holdings, Inc. et al.) , naming us, one of our officers and two of our now former officers as defendants. On June 28, 2017, the plaintiffs filed a corrected amended complaint, naming as defendants, in addition to those previously named, current and former members of our Board of Directors, one additional officer, and the underwriters in connection with secondary offerings of our common stock by certain selling stockholders in 2016. On October 6, 2017, the plaintiffs voluntarily dismissed the underwriters without prejudice. On October 8, 2017, the plaintiffs filed a second amended complaint, naming as defendants, in addition to those current and former officers and Board members previously named, certain former stockholders of ours who sold shares of our common stock in secondary public offerings in 2016. We and our current and former officers and Board members named as defendants are sometimes hereinafter referred to as the “Zimmer Biomet Defendant group”. The former stockholders of ours who sold shares of our common stock in secondary public offerings in 2016 are sometimes hereinafter referred to as the “Private Equity Fund Defendant group”. The second amended complaint relates to a putative class action on behalf of persons who purchased our common stock between June 7, 2016 and November 7, 2016. The second amended complaint generally alleges that the defendants violated federal securities laws by making materially false and/or misleading statements and/or omissions about our compliance with U.S. Food and Drug Administration (“ FDA”) regulations and our ability to continue to accelerate our organic revenue growth rate in the second half of 2016. The defendants filed their respective motions to dismiss on December 20, 2017, plaintiffs filed their omnibus response to the motions to dismiss on March 13, 2018 and the defendants filed their respective reply briefs on May 18, 2018. On September 27, 2018, the court denied the Zimmer Biomet Defendant group’s motion to dismiss in its entirety. The court granted the Private Equity Fund Defendant group’s motion to dismiss, without prejudice. On October 9, 2018, the Zimmer Biomet Defendant group filed a motion (i) to amend the court’s order on the motion to certify two issues for interlocutory appeal, and (ii) to stay proceedings pending appeal. On February 21, 2019, that motion was denied. On April 11, 2019, the plaintiffs moved for class certification. On June 20, 2019, the Zimmer Biomet Defendant group filed its response. The plaintiffs’ motion remained pending as of March 31, 2020. The plaintiffs seek unspecified damages and interest, attorneys’ fees, costs, and other relief. Although we believe this lawsuit is without merit, during a mediation in December 2019, plaintiffs and defendants, along with Zimmer Biomet’s insurers, reached a settlement in principle to resolve the claims. We have made an accrual for the proposed settlement that we expect to be fully covered by our insurers. Shareholder Derivative Actions : On June 14, 2019 and July 29, 2019, two shareholder derivative actions, Green v. Begley et al. and Detectives Endowment Association Annuity Fund v. Begley et al. , were filed in the Court of Chancery in the State of Delaware. On October 2, 2019 and October 11, 2019, two additional shareholder derivative actions, Karp v. Begley et al. and DiGaudio v. Begley et al. , were filed in the U.S. District Court for the District of Delaware. The plaintiff in each action seeks to maintain the action purportedly on our behalf against certain of our current and former directors and officers (the “individual defendants”) and certain former stockholders of ours who sold shares of our common stock in various secondary public offerings in 2016 (the “private equity fund defendants”) . The plaintiff in each action alleges, among other things, breaches of fiduciary duties against the individual defendants and insider trading against two individual defendants and the private equity fund defendants, based on substantially the same factual allegations as the putative federal securities class action referenced above ( Shah v. Zimmer Biomet Holdings, Inc. et al.) . The plaintiffs do not seek damages from us, but instead request damages on our behalf from the defendants of an unspecified amount. The plaintiffs also seek attorneys’ fees, costs and other relief. Regulatory Matters, Government Investigations and Other Matters U.S. International Trade Commission Investigation : On March 5, 2019, Heraeus filed a complaint with the U.S. International Trade Commission (“ITC”) against us and certain of our subsidiaries. The complaint alleges that Biomet misappropriated Heraeus’ trade secrets in the formulation and manufacture of two bone cement products now sold by Zimmer Biomet, both of which are imported from our Valence, France facility. Heraeus requested that the ITC institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders. On April 5, 2019, the ITC ordered an investigation be instituted into whether we have committed an “unfair act” in the importation, sale for importation, or sale after importation of certain bone cement products. An evidentiary hearing in front of an administrative law judge at the ITC was held in January 2020 and an Initial Determination was issued on May 6, 2020. In the Initial Determination, the administrative law judge held that we did not commit an “unfair act” in the importation, sale for importation, or sale after importation of the two challenged bone cement products, and thus we are not restricted from continuing to manufacture and sell the two challenged bone cement products in the United States. The Initial Determination is now subject to review by the ITC for a Final Determination, and thereafter, the Final Determination is subject to review on appeal to the United States Court of Appeals for the Federal Circuit by either or both of Heraeus and us. We cannot currently predict the ultimate outcome of this investigation after review by the ITC and any appeals, but an adverse outcome in this ITC proceeding could have a material adverse effect on our business, financial condition and results of operations. FDA warning letters : In August 2018, we received a warning letter from the FDA related to observed non-conformities with current good manufacturing practice requirements of the FDA’s Quality System Regulation (21 CFR Part 820) (“QSR”) at our legacy Biomet manufacturing facility in Warsaw, Indiana (this facility is sometimes referred to in this report as the “Warsaw North Campus”). In September 2012, we received a warning letter from the FDA citing concerns relating to certain processes pertaining to products manufactured at our Ponce, Puerto Rico manufacturing facility. We have provided detailed responses to the FDA as to our corrective actions and will continue to work expeditiously to address the issues identified by the FDA during inspections in Warsaw and Ponce. As of March 31, 2020, the Warsaw and Ponce warning letters remained pending. Until the violations cited in the pending warning letters are corrected, we may be subject to additional regulatory action by the FDA, as described more fully below. Additionally, requests for Certificates to Foreign Governments related to products manufactured at certain of our facilities may not be granted and premarket approval applications for Class III devices to which the QSR deviations at these facilities are reasonably related will not be approved until the violations have been corrected. In addition to responding to the warning letters described above, we are in the process of addressing various FDA Form 483 inspectional observations at certain of our manufacturing facilities, including new observations issued by the FDA following an inspection of the Warsaw North Campus in January 2020. The ultimate outcome of these matters is presently uncertain. Among other available regulatory actions, the FDA may impose operating restrictions, including a ceasing of operations, at one or more facilities, enjoining and restraining certain violations of applicable law pertaining to products, seizure of products and assessing civil or criminal penalties against our officers, employees or us. The FDA could also issue a corporate warning letter or a recidivist warning letter or negotiate the entry of a consent decree of permanent injunction with us. The FDA may also recommend prosecution by the U.S. Department of Justice (“DOJ”). Any adverse regulatory action, depending on its magnitude, may restrict us from effectively manufacturing, marketing and selling our products and could have a material adverse effect on our business, financial condition and results of operations. Deferred Prosecution Agreement (“DPA”) relating to U.S. Foreign Corrupt Practices Act (“FCPA”) matters: On January 12, 2017, we resolved previously-disclosed FCPA matters involving Biomet and certain of its subsidiaries. As part of the settlement, (i) Biomet resolved matters with the U.S. Securities and Exchange Commission (the “SEC”) through an administrative cease-and-desist order (the “Order”); (ii) we entered into a DPA with the DOJ; and (iii) JERDS Luxembourg Holding S.à r.l. (“JERDS”), the direct parent company of Biomet 3i Mexico SA de CV and an indirect, wholly-owned subsidiary of Biomet, entered into a plea agreement (the “Plea Agreement”) with the DOJ. The conduct underlying these resolutions occurred prior to our acquisition of Biomet. Pursuant to the terms of the Order, Biomet resolved claims with the SEC related to violations of the books and records, internal controls and anti-bribery provisions of the FCPA by disgorging profits to the U.S. government in an aggregate amount of approximately $6.5 million, inclusive of pre-judgment interest, and paying a civil penalty in the amount of $6.5 million (collectively, the “Civil Settlement Payments”). We also agreed to pay a criminal penalty of approximately $17.5 million (together with the Civil Settlement Payments, the “Settlement Payments”) to the U.S. government pursuant to the terms of the DPA. We made the Settlement Payments in January 2017 and, as previously disclosed, had accrued, as of June 24, 2015, the closing date of the Biomet merger, an amount sufficient to cover this matter. Under the DPA, which has a term of three years, the DOJ agreed to defer criminal prosecution of us in connection with the charged violation of the internal controls provision of the FCPA as long as we comply with the terms of the DPA. In addition, we are subject to oversight by an independent compliance monitor, who was appointed effective as of August 7, 2017. The monitorship may remain in place until August 7, 2020. If we remain in compliance with the DPA during its term, the charges against us will be dismissed with prejudice. The term of the DPA and monitorship may be extended for up to one additional year at the DOJ’s discretion. In addition, under its Plea Agreement with the DOJ, JERDS pleaded guilty on January 13, 2017 to aiding and abetting a violation of the books and records provision of the FCPA. In light of the DPA we entered into, JERDS paid only a nominal assessment and no criminal penalty. If we do not comply with the terms of the DPA, we could be subject to prosecution for violating the internal controls provisions of the FCPA and the conduct of Biomet and its subsidiaries described in the DPA, which conduct pre-dated our acquisition of Biomet, as well as any new or continuing violations. We could also be subject to exclusion by the Office of Inspector General of the Department of Health and Human Services from |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates - The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have made our best estimates, as appropriate under US GAAP, in the recognition of our assets and liabilities. These estimates have considered the impact the COVID-19 pandemic may have on our financial position, results of operations and cash flows. Such estimates included, but were not limited to, variable consideration to our customers, our allowance for doubtful accounts for expected credit losses, the net realizable value of our inventory, the fair value of our goodwill and the recoverability of other long-lived assets. Actual results could differ materially from these estimates. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326). The new guidance describes the current expected credit loss (“CECL”) model which requires an estimate of expected impairment on financial instruments over the lifetime of the assets at each reporting date. Financial instruments in scope of the guidance include financial assets measured at amortized cost. Previous accounting guidance required recognition of impairment when it was probable the loss has been incurred. Under the CECL model, lifetime expected credit losses are measured and recognized at each reporting date based on historical experience, current conditions and forecasted information. We adopted this standard as of January 1, 2020. Adoption of this standard required the modified retrospective transition method, which resulted in a cumulative-effect adjustment to retained earnings of $3.1 million. The adoption primarily impacted our trade receivables. Our concentrations of credit risks are limited due to the large number of customers and their dispersion across a number of geographic areas. Substantially all of our trade receivables are concentrated in the public and private hospital and healthcare industry in the U.S. and internationally or with distributors or dealers who operate in international markets. Our historical credit losses have not been significant due to this dispersion and the financial stability of our customers. We consider credit losses immaterial to our business and, therefore, have not provided all the disclosures otherwise required by the standard. We have updated our accounting policy disclosure for accounts receivable as follows: Accounts receivable consists of trade and other miscellaneous receivables. We grant credit to customers in the normal course of business and maintain an allowance for doubtful accounts for expected credit losses. Our concentrations of credit risks are limited due to the large number of customers and their dispersion across a number of geographic areas. We determine the allowance for doubtful accounts by geographic market and take into consideration historical credit experience, creditworthiness of the customer and other pertinent information. We make concerted efforts to collect all accounts receivable, but sometimes we have to write-off the account against the allowance when we determine the account is uncollectible. The allowance for doubtful accounts was $ 66.3 million and $ 65.0 million as of March 31, 2020 and December 31, 2019, respectively. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Our policy for capitalizing implementation costs in a hosting arrangement was already aligned with the new guidance. ASU 2018-15 also provides guidance on how these implementation costs are to be recorded in the statement of earnings, balance sheet and statement of cash flows. We adopted this standard on a prospective basis as of January 1, 2020. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows. There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Schedule of Net Sales by Geography | Net sales by geography are as follows (in millions): Three Months Ended March 31, 2020 2019 Americas $ 1,101.3 $ 1,194.1 EMEA 398.1 463.9 Asia Pacific 284.4 317.5 Total $ 1,783.8 $ 1,975.5 |
Schedule of Net Sales by Product Category | Net sales by product category are as follows (in millions): Three Months Ended March 31, 2020 2019 Knees $ 629.8 $ 694.1 Hips 432.6 483.4 S.E.T. 333.6 356.8 Dental, Spine & CMFT 251.7 287.3 Other 136.1 153.9 Total $ 1,783.8 $ 1,975.5 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Summary of Liabilities Recognized Related to Restructuring Plan | The following table summarizes the liabilities recognized related to the 2019 Restructuring Plan (in millions): Employee Termination Contract Benefits Terminations Other Total Balance, December 31, 2019 $ 23.2 $ - $ 4.1 $ 27.3 Additional expense 30.2 4.9 7.6 42.7 Cash payments (16.4 ) (0.7 ) (5.2 ) (22.3 ) Balance, March 31, 2020 $ 37.0 $ 4.2 $ 6.5 $ 47.7 Expense incurred since the start of the 2019 Restructuring Plan $ 53.4 $ 4.9 $ 20.7 $ 79.0 Expense estimated to be recognized for the 2019 Restructuring Plan $ 170.0 $ 40.0 $ 165.0 $ 375.0 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | March 31, December 31, 2020 2019 (in millions) Finished goods $ 1,943.1 $ 1,875.4 Work in progress 239.8 231.0 Raw materials 280.3 278.6 Inventories $ 2,463.2 $ 2,385.0 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property, Plant and Equipment | March 31, December 31, 2020 2019 (in millions) Land $ 27.5 $ 27.6 Buildings and equipment 2,044.9 2,007.0 Capitalized software costs 486.5 482.4 Instruments 3,311.8 3,250.5 Construction in progress 141.6 149.3 6,012.3 5,916.8 Accumulated depreciation (3,946.8 ) (3,839.4 ) Property, plant and equipment, net $ 2,065.5 $ 2,077.4 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill by reportable segment, including the effects of changes to our reportable segments (in millions): Americas and Global Businesses EMEA Asia Pacific Immaterial Product Category Operating Segments Total Balance at December 31, 2019 Goodwill $ 7,699.8 $ 1,316.8 $ 507.4 $ 1,729.3 $ 11,253.3 Accumulated impairment losses - (567.0 ) - (1,086.6 ) (1,653.6 ) $ 7,699.8 $ 749.8 $ 507.4 $ 642.7 $ 9,599.7 Goodwill reportable segment change 1,661.3 17.0 51.0 (1,729.3 ) - Accumulated impairment losses reportable segment change (1,086.6 ) - - 1,086.6 - Purchase accounting adjustments 0.3 - - - 0.3 Impairment (142.0 ) (470.0 ) - - (612.0 ) Currency translation (22.8 ) (8.4 ) (5.6 ) - (36.8 ) Balance at March 31, 2020 Goodwill $ 9,338.6 $ 1,325.4 $ 552.8 $ - $ 11,216.8 Accumulated impairment losses (1,228.6 ) (1,037.0 ) - - (2,265.6 ) $ 8,110.0 $ 288.4 $ 552.8 $ - $ 8,951.2 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Debt Instruments | Our debt consisted of the following (in millions): March 31, December 31, 2020 2019 Current portion of long-term debt 2.700% Senior Notes due 2020 $ 1,500.0 $ 1,500.0 Floating Rate Notes due 2021 450.0 - Total current portion of long-term debt $ 1,950.0 $ 1,500.0 Long-term debt Floating Rate Notes due 2021 $ - $ 450.0 3.375% Senior Notes due 2021 300.0 300.0 3.150% Senior Notes due 2022 750.0 750.0 3.700% Senior Notes due 2023 300.0 300.0 3.550% Senior Notes due 2025 2,000.0 2,000.0 3.050% Senior Notes due 2026 600.0 - 3.550% Senior Notes due 2030 900.0 - 4.250% Senior Notes due 2035 253.4 253.4 5.750% Senior Notes due 2039 317.8 317.8 4.450% Senior Notes due 2045 395.4 395.4 1.414% Euro Notes due 2022 548.6 561.3 2.425% Euro Notes due 2026 548.6 561.3 1.164% Euro Notes due 2027 548.6 561.3 Japan Term Loan A 108.5 106.9 Japan Term Loan B 197.6 194.7 Debt discount and issuance costs (49.8 ) (37.1 ) Adjustment related to interest rate swaps 5.5 6.4 Total long-term debt $ 7,724.2 $ 6,721.4 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Changes in Components of Accumulated Other Comprehensive Income, Net of Tax | The following table shows the changes in the components of AOCI, net of tax (in millions): Foreign Cash Defined Currency Flow Benefit Total Translation Hedges Plan Items AOCI Balance at December 31, 2019 $ (32.8 ) $ 16.4 $ (225.5 ) $ (241.9 ) AOCI before reclassifications (54.2 ) 54.8 - 0.6 Reclassifications to statements of earnings - (13.5 ) (0.3 ) (13.8 ) Balance at March 31, 2020 $ (87.0 ) $ 57.7 $ (225.8 ) $ (255.1 ) |
Reclassification Adjustments from Accumulated Other Comprehensive Income | The following table shows the reclassification adjustments from AOCI (in millions): Amount of Gain (Loss) Reclassified from AOCI Three Months Ended March 31, Location on Component of AOCI 2020 2019 Statements of Earnings Cash flow hedges Foreign exchange forward contracts $ 15.6 $ 7.2 Cost of products sold Interest rate swaps - 2.8 Interest expense, net Forward starting interest rate swaps (0.2 ) (0.1 ) Interest expense, net 15.4 9.9 Total before tax 1.9 1.7 Provision for income taxes $ 13.5 $ 8.2 Net of tax Defined benefit plans Prior service cost $ 1.0 $ 1.8 Other expense, net Unrecognized actuarial loss (2.7 ) (5.3 ) Other expense, net (1.7 ) (3.5 ) Total before tax (2.0 ) (1.5 ) Provision for income taxes $ 0.3 $ (2.0 ) Net of tax Total reclassifications $ 13.8 $ 6.2 Net of tax |
Tax Effects on Each Component of Accumulated Other Comprehensive Income Recognized in Statements of Comprehensive Income | The following table shows the tax effects on each component of AOCI recognized in our condensed consolidated statements of comprehensive income (loss) (in millions): Three Months Ended March 31, 2020 Before Tax Tax Net of Tax Foreign currency cumulative translation adjustments $ (29.2 ) $ 25.0 $ (54.2 ) Unrealized cash flow hedge gains 65.7 10.9 54.8 Reclassification adjustments on cash flow hedges (15.4 ) (1.9 ) (13.5 ) Adjustments to prior service cost and unrecognized actuarial assumptions 1.7 2.0 (0.3 ) Total Other Comprehensive Income (Loss) $ 22.8 $ 36.0 $ (13.2 ) Three Months Ended March 31, 2019 Before Tax Tax Net of Tax Foreign currency cumulative translation adjustments $ 7.9 $ 12.3 $ (4.4 ) Unrealized cash flow hedge gains 16.7 2.2 14.5 Reclassification adjustments on cash flow hedges (9.9 ) (1.7 ) (8.2 ) Adjustments to prior service cost and unrecognized actuarial assumptions 3.5 1.5 2.0 Total Other Comprehensive Income $ 18.2 $ 14.3 $ 3.9 |
Fair Value Measurement of Ass_2
Fair Value Measurement of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Assets and Liabilities | The following financial assets and liabilities are recorded at fair value on a recurring basis (in millions): As of March 31, 2020 Fair Value Measurements at Reporting Date Using: Description Recorded Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Derivatives, current and long-term Foreign currency forward contracts $ 86.5 $ - $ 86.5 $ - Cross-currency interest rate swaps 130.2 - 130.2 - Total Assets $ 216.7 $ - $ 216.7 $ - Liabilities Derivatives, current and long-term Foreign currency forward contracts $ 0.1 $ - $ 0.1 $ - Total Liabilities $ 0.1 $ - $ 0.1 $ - As of December 31, 2019 Fair Value Measurements at Reporting Date Using: Description Recorded Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Derivatives, current and long-term Foreign currency forward contracts $ 39.1 $ - $ 39.1 $ - Cross-currency interest rate swaps 60.5 - 60.5 - Total Assets $ 99.6 $ - $ 99.6 $ - Liabilities Derivatives, current and long-term Foreign currency forward contracts $ 0.6 $ - $ 0.6 $ - Total Liabilities $ 0.6 $ - $ 0.6 $ - |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Amounts Recorded On Balance Sheet Related To Cumulative Basis Adjustments For Fair Value Hedges | As of March 31, 2020 and December 31, 2019, the following amounts were recorded on our condensed consolidated balance sheets related to cumulative basis adjustments for fair value hedges (in millions): Carrying Amount of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities Balance Sheet Line Item March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Long-term debt $ 305.4 $ 306.2 $ 5.5 $ 6.4 |
Gross Unrealized Losses from Derivative Instruments | Derivative instruments designated as cash flow hedges had the following effects, before taxes, on AOCI and net earnings on our condensed consolidated statements of earnings, condensed consolidated statements of comprehensive income (loss) and condensed consolidated balance sheets (in millions): Amount of Gain Amount of Gain (Loss) Recognized in AOCI Reclassified from AOCI Three Months Ended Three Months Ended March 31, Location on March 31, Derivative Instrument 2020 2019 Statements of Earnings 2020 2019 Foreign exchange forward contracts $ 65.7 $ 16.7 Cost of products sold $ 15.6 $ 7.2 Interest rate swaps - - Interest expense, net - 2.8 Forward starting interest rate swaps - - Interest expense, net (0.2 ) (0.1 ) $ 65.7 $ 16.7 $ 15.4 $ 9.9 |
Effects of Fair Value, Cash Flow and Net Investment Hedge Accounting on Consolidated Statements of Earnings | The following table presents the effect of fair value, cash flow and net investment hedge accounting on our condensed consolidated statements of earnings (in millions): Location and Amount of Gain/(Loss) Recognized in Income on Fair Value, Cash Flow and Net Investment Hedging Relationships for the Period Ended: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Cost of Interest Cost of Interest Products Expense, Products Expense, Sold Net Sold Net Total amounts of income and expense line items presented in the statements of earnings in which the effects of fair value, cash flow and net investment hedges are recorded $ 487.1 $ (50.9 ) $ 553.4 $ (58.0 ) The effects of fair value, cash flow and net investment hedging: Gain on fair value hedging relationships Discontinued interest rate swaps - 0.9 - 2.1 Gain (loss) on cash flow hedging relationships Foreign exchange forward contracts 15.6 - 7.2 - Interest rate swaps - - - 2.8 Forward starting interest rate swaps - (0.2 ) - (0.1 ) Gain on net investment hedging relationships Cross-currency interest rate swaps - 13.4 - 12.0 |
Derivative Instruments Not Designated as Hedging Instruments | The following gains / (losses) from these derivative instruments were recognized on our condensed consolidated statements of earnings (in millions): Three Months Ended Location on March 31, Derivative Instrument Statements of Earnings 2020 2019 Foreign exchange forward contracts Other expense, net $ 23.1 $ (2.6 ) |
Fair Value of Derivative Instruments on Gross Basis | The fair value of derivative instruments on a gross basis is as follows (in millions): As of March 31, 2020 As of December 31, 2019 Balance Balance Sheet Fair Sheet Fair Location Value Location Value Asset Derivatives Foreign exchange forward contracts Other current assets $ 64.0 Other current assets $ 41.8 Cross-currency interest rate swaps Other current assets 15.2 Other current assets - Foreign exchange forward contracts Other assets 27.1 Other assets 9.8 Cross-currency interest rate swaps Other assets 115.0 Other assets 60.5 Total asset derivatives $ 221.3 $ 112.1 Liability Derivatives Foreign exchange forward contracts Other current liabilities $ 3.6 Other current liabilities $ 7.9 Foreign exchange forward contracts Other long-term liabilities 1.1 Other long-term liabilities 5.2 Total liability derivatives $ 4.7 $ 13.1 |
Schedule of Effects of Master Netting Agreements on Condensed Consolidated Balance Sheets | The table below presents the effects of our master netting agreements on our condensed consolidated balance sheets (in millions): As of March 31, 2020 As of December 31, 2019 Description Location Gross Amount Offset Net Amount in Balance Sheet Gross Amount Offset Net Amount in Balance Sheet Asset Derivatives Cash flow hedges Other current assets $ 64.0 $ 3.6 $ 60.4 $ 41.8 $ 7.9 $ 33.9 Cash flow hedges Other assets 27.1 1.0 26.1 9.8 4.6 5.2 Liability Derivatives Cash flow hedges Other current liabilities 3.6 3.6 - 7.9 7.9 - Cash flow hedges Other long-term liabilities 1.1 1.0 0.1 5.2 4.6 0.6 |
Net Investment Hedge Gains Recognized on Condensed Consolidated Statements of Comprehensive Income (loss) | The following net investment hedge gains were recognized on our condensed consolidated statements of comprehensive income (loss) (in millions): Amount of Gain Recognized in AOCI Three Months Ended March 31, Derivative Instrument 2020 2019 Euro Notes $ 38.1 $ 20.4 Cross-currency interest rate swaps 69.7 34.2 $ 107.8 $ 54.6 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Shares for Basic and Diluted Shares Computations | The following is a reconciliation of weighted average shares for the basic and diluted shares computations (in millions): Three Months Ended March 31, 2020 2019 Weighted average shares outstanding for basic net (loss) earnings per share 206.5 204.4 Effect of dilutive stock options and other equity awards - 1.4 Weighted average shares outstanding for diluted net (loss) earnings per share 206.5 205.8 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Net sales and Operating Profit by Segment | Net sales and operating profit by segment are as follows (in millions): Net Sales Operating (Loss) Profit Three Months Ended Three Months Ended March 31, March 31, 2020 2019 2020 2019 Americas and Global Businesses $ 1,136.6 $ 1,235.6 $ 368.8 $ 390.0 EMEA 371.3 428.9 108.8 139.2 Asia Pacific 275.9 311.0 92.6 113.5 Corporate Functions - - (104.0 ) (117.7 ) Total $ 1,783.8 $ 1,975.5 Inventory and manufacturing-related charges (0.6 ) (2.0 ) Intangible asset amortization (147.6 ) (143.4 ) Goodwill impairment (612.0 ) - Restructuring and other cost reduction initiatives (45.0 ) (4.7 ) Quality remediation (15.9 ) (19.7 ) Acquisition, integration and related (4.4 ) (6.0 ) Litigation (79.8 ) 1.8 Litigation settlement gain - 23.5 European Union Medical Device Regulation (11.0 ) (1.6 ) Other charges (5.9 ) (22.7 ) Operating (loss) profit $ (456.0 ) $ 350.2 |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Adoption of new accounting standard | $ (3.1) | |
Allowance for doubtful accounts | $ 66.3 | $ 65 |
Revenue - Schedule of Net Sales
Revenue - Schedule of Net Sales by Geography (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales Information [Line Items] | ||
Net Sales | $ 1,783.8 | $ 1,975.5 |
Americas [Member] | ||
Sales Information [Line Items] | ||
Net Sales | 1,101.3 | 1,194.1 |
EMEA [Member] | ||
Sales Information [Line Items] | ||
Net Sales | 398.1 | 463.9 |
Asia Pacific [Member] | ||
Sales Information [Line Items] | ||
Net Sales | $ 284.4 | $ 317.5 |
Revenue - Schedule of Net Sal_2
Revenue - Schedule of Net Sales by Product Category (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | $ 1,783.8 | $ 1,975.5 |
Knees [Member] | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | 629.8 | 694.1 |
Hips [Member] | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | 432.6 | 483.4 |
S.E.T [Member] | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | 333.6 | 356.8 |
Dental, Spine & CMFT [Member] | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | 251.7 | 287.3 |
Other [Member] | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Net Sales | $ 136.1 | $ 153.9 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) - 2019 Restructuring Plan [Member] - USD ($) $ in Millions | 1 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Pre-tax restructuring charges | $ 375 | |
Minimum [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Pre-tax restructuring charges | $ 350 | |
Reduction in annual pre-tax operating expenses | $ 200 | |
Restructuring program benefits realized period | 2023 | |
Maximum [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Pre-tax restructuring charges | $ 400 | |
Reduction in annual pre-tax operating expenses | $ 300 |
Restructuring - Summary of Liab
Restructuring - Summary of Liabilities Recognized Related to Restructuring Plan (Detail) - 2019 Restructuring Plan [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Beginning Balance | $ 27.3 |
Additional expense | 42.7 |
Cash payments | (22.3) |
Ending Balance | 47.7 |
Expense incurred since the start of the 2019 Restructuring Plan | 79 |
Expense estimated to be recognized for the 2019 Restructuring Plan | 375 |
Employee Termination Benefits [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Beginning Balance | 23.2 |
Additional expense | 30.2 |
Cash payments | (16.4) |
Ending Balance | 37 |
Expense incurred since the start of the 2019 Restructuring Plan | 53.4 |
Expense estimated to be recognized for the 2019 Restructuring Plan | 170 |
Contract Termination [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Additional expense | 4.9 |
Cash payments | (0.7) |
Ending Balance | 4.2 |
Expense incurred since the start of the 2019 Restructuring Plan | 4.9 |
Expense estimated to be recognized for the 2019 Restructuring Plan | 40 |
Other Restructuring [Member] | |
Restructuring Cost And Reserve [Line Items] | |
Beginning Balance | 4.1 |
Additional expense | 7.6 |
Cash payments | (5.2) |
Ending Balance | 6.5 |
Expense incurred since the start of the 2019 Restructuring Plan | 20.7 |
Expense estimated to be recognized for the 2019 Restructuring Plan | $ 165 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,943.1 | $ 1,875.4 |
Work in progress | 239.8 | 231 |
Raw materials | 280.3 | 278.6 |
Inventories | $ 2,463.2 | $ 2,385 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 6,012.3 | $ 5,916.8 |
Accumulated depreciation | (3,946.8) | (3,839.4) |
Property, plant and equipment, net | 2,065.5 | 2,077.4 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 27.5 | 27.6 |
Buildings And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 2,044.9 | 2,007 |
Capitalized Software Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 486.5 | 482.4 |
Instruments [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 3,311.8 | 3,250.5 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 141.6 | $ 149.3 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | ||
Property plant and equipment included in accounts payable | $ 39.8 | $ 39.8 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Amount of Goodwill (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 11,253.3 |
Accumulated impairment losses, Beginning Balance | (1,653.6) |
Goodwill, net of accumulated impairment losses, Beginning Balance | 9,599.7 |
Purchase accounting adjustments | 0.3 |
Impairment | (612) |
Currency translation | (36.8) |
Goodwill, Ending Balance | 11,216.8 |
Accumulated impairment losses, Ending Balance | (2,265.6) |
Goodwill, net of accumulated impairment losses, Ending Balance | 8,951.2 |
Americas [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 7,699.8 |
Goodwill, net of accumulated impairment losses, Beginning Balance | 7,699.8 |
Goodwill reportable segment change | 1,661.3 |
Accumulated impairment losses reportable segment change | (1,086.6) |
Purchase accounting adjustments | 0.3 |
Impairment | (142) |
Currency translation | (22.8) |
Goodwill, Ending Balance | 9,338.6 |
Accumulated impairment losses, Ending Balance | (1,228.6) |
Goodwill, net of accumulated impairment losses, Ending Balance | 8,110 |
EMEA [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 1,316.8 |
Accumulated impairment losses, Beginning Balance | (567) |
Goodwill, net of accumulated impairment losses, Beginning Balance | 749.8 |
Goodwill reportable segment change | 17 |
Impairment | (470) |
Currency translation | (8.4) |
Goodwill, Ending Balance | 1,325.4 |
Accumulated impairment losses, Ending Balance | (1,037) |
Goodwill, net of accumulated impairment losses, Ending Balance | 288.4 |
Asia Pacific [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 507.4 |
Goodwill, net of accumulated impairment losses, Beginning Balance | 507.4 |
Goodwill reportable segment change | 51 |
Currency translation | (5.6) |
Goodwill, Ending Balance | 552.8 |
Goodwill, net of accumulated impairment losses, Ending Balance | 552.8 |
Immaterial Product Category Operating Segments [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 1,729.3 |
Accumulated impairment losses, Beginning Balance | (1,086.6) |
Goodwill, net of accumulated impairment losses, Beginning Balance | 642.7 |
Goodwill reportable segment change | (1,729.3) |
Accumulated impairment losses reportable segment change | $ 1,086.6 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Reporting units with goodwill assigned to them | 3 | |
Goodwill impairment | $ 612 | |
Goodwill | 8,951.2 | $ 9,599.7 |
Dental [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Goodwill impairment | 142 | |
Goodwill | 253.5 | |
EMEA [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Goodwill impairment | 470 | |
Goodwill | 288.4 | $ 749.8 |
EMEA [Member] | Reportable Segment Change [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Goodwill impairment | $ 470 | |
America CMFT [Member] | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Reporting units with goodwill assigned to them | 2 | |
Percentage of fair value in excess of carrying amount | 5.00% |
Transfers of Financial Assets -
Transfers of Financial Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Aggregate face value of receivables sold | $ 560.5 | $ 799.4 | |
Cash proceeds from receivables | 560.1 | 798.7 | |
Proceeds from customers | 335.3 | 698.4 | |
Repurchase of accounts receivables sold | 39.3 | $ 34.7 | |
Proceeds from other current liabilities | 67 | $ 54.6 | |
Revolving Credit Facility [Member] | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Current maximum funding limit | 450 | ||
U.S and Japan Revolving Arrangements [Member] | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Maximum exposures to loss associated | 21.1 | 21.8 | |
Derecognized net receivables outstanding amount | $ 421.8 | $ 270.2 |
Debt - Summary of Debt Instrume
Debt - Summary of Debt Instruments (Detail) $ in Millions, ¥ in Billions | Mar. 31, 2020USD ($) | Mar. 31, 2020JPY (¥) | Mar. 20, 2020USD ($) | Dec. 31, 2019USD ($) |
Current portion of long-term debt | ||||
Total current portion of long-term debt | $ 1,950 | $ 1,500 | ||
Long-term debt | ||||
Senior Notes due | 9,400 | |||
Debt discount and issuance costs | (49.8) | (37.1) | ||
Adjustment related to interest rate swaps | 5.5 | 6.4 | ||
Total long-term debt | 7,724.2 | 6,721.4 | ||
Senior Notes [Member] | 2.700% [Member] | Due in 2020 [Member] | ||||
Current portion of long-term debt | ||||
Total current portion of long-term debt | 1,500 | 1,500 | ||
Senior Notes [Member] | 3.375% [Member] | Due in 2021 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 300 | 300 | ||
Senior Notes [Member] | 3.150% [Member] | Due in 2022 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 750 | 750 | ||
Senior Notes [Member] | 3.700% [Member] | Due in 2023 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 300 | 300 | ||
Senior Notes [Member] | 3.550% [Member] | Due in 2025 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 2,000 | 2,000 | ||
Senior Notes [Member] | 3.550% [Member] | Due in 2030 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 900 | $ 900 | ||
Senior Notes [Member] | 3.050% [Member] | Due in 2026 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 600 | $ 600 | ||
Senior Notes [Member] | 4.250% [Member] | Due in 2035 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 253.4 | 253.4 | ||
Senior Notes [Member] | 5.750% [Member] | Due in 2039 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 317.8 | 317.8 | ||
Senior Notes [Member] | 4.450% [Member] | Due in 2045 [Member] | ||||
Long-term debt | ||||
Senior Notes due | 395.4 | 395.4 | ||
Floating Rate Notes [Member] | Due in 2021 [Member] | ||||
Current portion of long-term debt | ||||
Total current portion of long-term debt | 450 | |||
Long-term debt | ||||
Senior Notes due | 450 | |||
Euro Notes [Member] | ||||
Long-term debt | ||||
Term loan | 1,600 | |||
Euro Notes [Member] | 1.414% [Member] | Due in 2022 [Member] | ||||
Long-term debt | ||||
Term loan | 548.6 | 561.3 | ||
Euro Notes [Member] | 1.164% [Member] | Due in 2027 [Member] | ||||
Long-term debt | ||||
Term loan | 548.6 | 561.3 | ||
Euro Notes [Member] | 2.425% [Member] | Due in 2026 [Member] | ||||
Long-term debt | ||||
Term loan | 548.6 | 561.3 | ||
Japan Term Loan A [Member] | ||||
Long-term debt | ||||
Term loan | 108.5 | ¥ 11.7 | 106.9 | |
Japan Term Loan B [Member] | ||||
Long-term debt | ||||
Term loan | $ 197.6 | ¥ 21.3 | $ 194.7 |
Debt - Summary of Debt Instru_2
Debt - Summary of Debt Instruments (Parenthetical) (Detail) | Apr. 01, 2020 | Mar. 31, 2020 | Mar. 20, 2020 | Dec. 31, 2019 |
2.700% [Member] | Due in 2020 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.70% | 2.70% | 2.70% | |
3.375% [Member] | Due in 2021 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.375% | 3.375% | ||
3.150% [Member] | Due in 2022 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.15% | 3.15% | ||
3.700% [Member] | Due in 2023 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.70% | 3.70% | ||
3.050% [Member] | Due in 2026 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.05% | 3.05% | ||
3.550% [Member] | Due in 2025 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.55% | 3.55% | ||
3.550% [Member] | Due in 2030 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.55% | 3.55% | ||
4.250% [Member] | Due in 2035 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.25% | 4.25% | ||
5.750% [Member] | Due in 2039 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.75% | 5.75% | ||
4.450% [Member] | Due in 2045 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.45% | 4.45% | ||
1.414% [Member] | Due in 2022 [Member] | Euro Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.414% | 1.414% | ||
2.425% [Member] | Due in 2026 [Member] | Euro Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.425% | 2.425% | ||
1.164% [Member] | Due in 2027 [Member] | Euro Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.164% | 1.164% |
Debt - Additional Information (
Debt - Additional Information (Detail) ¥ in Billions | Apr. 23, 2020USD ($) | Apr. 01, 2020USD ($) | Mar. 20, 2020USD ($) | Nov. 01, 2019USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020JPY (¥) | Dec. 31, 2019USD ($) | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Debt, long-term and short-term, combined amount | $ 9,700,000,000 | ||||||||||||
Aggregate principal amount of Senior Notes | 9,400,000,000 | ||||||||||||
Other debt and fair value adjustments, total | 5,500,000 | ||||||||||||
Debt discount and issuance costs | 49,800,000 | $ 37,100,000 | |||||||||||
Estimated fair value | 9,371,100,000 | ||||||||||||
2019 Credit Agreement [Member] | Maximum [Member] | Scenario Forecast [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consolidated leverage ratio | 5.00% | 5.75% | 5.75% | 5.75% | |||||||||
Consolidated leverage ratio thereafter | 4.50% | ||||||||||||
2019 Credit Agreement [Member] | Minimum [Member] | Scenario Forecast [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consolidated leverage ratio | 1.00% | 1.00% | 1.00% | 1.00% | |||||||||
Consolidated leverage ratio thereafter | 1.00% | ||||||||||||
2020 Credit Agreement [Member] | Subsequent Event [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date of debt instrument | Dec. 31, 2020 | ||||||||||||
Principal amount, unsecured credit facility | $ 1,000,000,000 | ||||||||||||
Debt issuance limit | $ 25,000,000 | ||||||||||||
2020 Credit Agreement [Member] | Maximum [Member] | Subsequent Event [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consolidated leverage ratio | 5.75% | ||||||||||||
2020 Credit Agreement [Member] | Minimum [Member] | Subsequent Event [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Consolidated leverage ratio | 1.00% | ||||||||||||
Euro Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan | 1,600,000,000 | ||||||||||||
Japan Term Loan A [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan | $ 108,500,000 | ¥ 11.7 | 106,900,000 | ||||||||||
Maturity date of debt instrument | Sep. 27, 2022 | ||||||||||||
Japan Term Loan B [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Term loan | $ 197,600,000 | ¥ 21.3 | $ 194,700,000 | ||||||||||
Maturity date of debt instrument | Sep. 27, 2022 | ||||||||||||
Senior Notes [Member] | 3.050% [Member] | Due in 2026 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal amount of Senior Notes | $ 600,000,000 | $ 600,000,000 | |||||||||||
Maturity date of debt instrument | Jan. 15, 2026 | ||||||||||||
Interest rate | 3.05% | 3.05% | 3.05% | ||||||||||
Senior Notes [Member] | 3.550% [Member] | Due in 2030 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal amount of Senior Notes | $ 900,000,000 | $ 900,000,000 | |||||||||||
Maturity date of debt instrument | Mar. 20, 2030 | ||||||||||||
Interest rate | 3.55% | 3.55% | 3.55% | ||||||||||
Senior Notes [Member] | 2.700% [Member] | Due in 2020 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date of debt instrument | Apr. 1, 2020 | ||||||||||||
Interest rate | 2.70% | 2.70% | 2.70% | 2.70% | |||||||||
Repayments of term loan | $ 1,500,000,000 | ||||||||||||
Multicurrency Revolving Facility [Member] | 2019 Credit Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date of debt instrument | Nov. 1, 2024 | ||||||||||||
Principal amount, unsecured credit facility | $ 1,500,000,000 | ||||||||||||
Debt instrument term | 5 years | ||||||||||||
Outstanding borrowings | $ 0 | ||||||||||||
Multicurrency Revolving Facility [Member] | 2016 Credit Agreement [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Principal amount, unsecured credit facility | $ 1,500,000,000 | ||||||||||||
Japan Term Loan A and Japan Term Loan B [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Estimated fair value | $ 304,100,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Changes in Components of Accumulated Other Comprehensive Income, Net of Tax (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Other Comprehensive Income Loss [Line Items] | |
Stockholders Equity, Beginning Balance | $ 12,388.1 |
AOCI before reclassifications | 0.6 |
Reclassifications to statements of earnings | (13.8) |
Stockholders Equity, Ending Balance | 11,878.6 |
Cash Flow Hedges [Member] | |
Other Comprehensive Income Loss [Line Items] | |
Stockholders Equity, Beginning Balance | 16.4 |
AOCI before reclassifications | 54.8 |
Reclassifications to statements of earnings | (13.5) |
Stockholders Equity, Ending Balance | 57.7 |
Foreign Currency Translation [Member] | |
Other Comprehensive Income Loss [Line Items] | |
Stockholders Equity, Beginning Balance | (32.8) |
AOCI before reclassifications | (54.2) |
Stockholders Equity, Ending Balance | (87) |
Defined Benefit Plan Items [Member] | |
Other Comprehensive Income Loss [Line Items] | |
Stockholders Equity, Beginning Balance | (225.5) |
Reclassifications to statements of earnings | (0.3) |
Stockholders Equity, Ending Balance | (225.8) |
Total AOCI [Member] | |
Other Comprehensive Income Loss [Line Items] | |
Stockholders Equity, Beginning Balance | (241.9) |
Stockholders Equity, Ending Balance | $ (255.1) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassification Adjustments from Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Comprehensive Income Loss [Line Items] | ||
Cost of products sold | $ 487.1 | $ 553.4 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember |
Interest expense, net | $ (50.9) | $ (58) |
Other income (expense), net | 3 | (0.5) |
(Loss) earnings before income taxes | (503.9) | 291.7 |
Provision for income taxes | 5.2 | 45.5 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Net of tax | 13.8 | 6.2 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
(Loss) earnings before income taxes | 15.4 | 9.9 |
Provision for income taxes | 1.9 | 1.7 |
Net of tax | 13.5 | 8.2 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Cost of products sold | $ 15.6 | $ 7.2 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Interest Rate Swaps [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Interest expense, net | $ 2.8 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Forward Starting Interest Rate Swaps [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Interest expense, net | $ (0.2) | (0.1) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Plan Items [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
(Loss) earnings before income taxes | (1.7) | (3.5) |
Provision for income taxes | (2) | (1.5) |
Net of tax | 0.3 | (2) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Plan Items [Member] | Prior Service Cost [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Other income (expense), net | 1 | 1.8 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Plan Items [Member] | Unrecognized Actuarial (Loss) [Member] | ||
Other Comprehensive Income Loss [Line Items] | ||
Other income (expense), net | $ (2.7) | $ (5.3) |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income - Tax Effects on Each Component of Accumulated Other Comprehensive Income Recognized in Statements of Comprehensive Income (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Foreign currency cumulative translation adjustments, Before Tax | $ (29.2) | $ 7.9 |
Unrealized cash flow hedge gains, Before Tax | 65.7 | 16.7 |
Reclassification adjustments on cash flow hedges, Before Tax | (15.4) | (9.9) |
Adjustments to prior service cost and unrecognized actuarial assumptions, Before Tax | 1.7 | 3.5 |
Total Other Comprehensive Income (Loss) | 22.8 | 18.2 |
Foreign currency cumulative translation adjustments, Tax | 25 | 12.3 |
Unrealized cash flow hedge gains, Tax | 10.9 | 2.2 |
Reclassification adjustments on cash flow hedges, Tax | (1.9) | (1.7) |
Adjustments to prior service cost and unrecognized actuarial assumptions, Tax | 2 | 1.5 |
Total Other Comprehensive Income (Loss) | 36 | 14.3 |
Foreign currency cumulative translation adjustments, net of tax | (54.2) | (4.4) |
Unrealized cash flow hedge gains, net of tax | 54.8 | 14.5 |
Reclassification adjustments on cash flow hedges, net of tax | (13.5) | (8.2) |
Adjustments to prior service cost and unrecognized actuarial assumptions, net of tax | (0.3) | 2 |
Total Other Comprehensive (Loss) Income | $ (13.2) | $ 3.9 |
Fair Value Measurement of Ass_3
Fair Value Measurement of Assets and Liabilities - Fair Value Measurements of Assets and Liabilities (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | $ 216.7 | $ 99.6 |
Total Liabilities | 0.1 | 0.6 |
Fair Value Measurements at Reporting Date Using: Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets | 216.7 | 99.6 |
Total Liabilities | 0.1 | 0.6 |
Foreign Exchange Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, current and long-term | 86.5 | 39.1 |
Derivatives, current and long-term | 0.1 | 0.6 |
Foreign Exchange Forward Contracts [Member] | Fair Value Measurements at Reporting Date Using: Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, current and long-term | 86.5 | 39.1 |
Derivatives, current and long-term | 0.1 | 0.6 |
Cross-currency Interest Rate Swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, current and long-term | 130.2 | 60.5 |
Cross-currency Interest Rate Swaps [Member] | Fair Value Measurements at Reporting Date Using: Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, current and long-term | $ 130.2 | $ 60.5 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) € in Millions, SFr in Millions, ¥ in Billions | 3 Months Ended | ||||||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020JPY (¥) | Mar. 31, 2020EUR (€) | Mar. 31, 2020CHF (SFr) | Dec. 31, 2019 | Sep. 30, 2016USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Unamortized balance related to discontinued hedges instruments which will be recognized under effective interest rate method | $ 5,500,000 | ||||||
Forward starting interest rate swap cash flow hedge to be amortized | $ 26,400,000 | ||||||
Percentage of debt designated as net investment hedges | 100.00% | ||||||
Expected months of hedging of inter company sales of inventory to minimize the effects of foreign exchange rate movements | 30 months | ||||||
Fair value of outstanding derivative instruments, net unrealized loss deferred in accumulated other comprehensive income | $ 67,700,000 | ||||||
Gains (losses) on derivatives | (23,500,000) | $ (600,000) | |||||
Cost of Products Sold [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Fair value of outstanding derivative instruments, loss, expected to be reclassified to earnings | 54,100,000 | ||||||
Fair value of outstanding derivative instruments, loss, net of taxes expected to be reclassified to earnings | 46,300,000 | ||||||
Interest Expense [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Fair value of outstanding derivative instruments, loss, expected to be reclassified to earnings | (600,000) | ||||||
Fair value of outstanding derivative instruments, loss, net of taxes expected to be reclassified to earnings | (500,000) | ||||||
Cash Flow Hedges [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Fair value of outstanding derivative instruments, unrealized loss net of taxes deferred in accumulated other comprehensive income | 57,700,000 | ||||||
Cross-currency Interest Rate Swaps [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | ¥ 7 | € 1,450 | SFr 50 | ||||
Foreign Exchange Contract [Member] | Minimum [Member] | Nondesignated [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | 1,500,000,000 | ||||||
Foreign Exchange Contract [Member] | Maximum [Member] | Nondesignated [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | 2,000,000,000 | ||||||
Foreign Exchange Contract [Member] | U.S. Dollars [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | 1,416,800,000 | ||||||
Foreign Exchange Contract [Member] | Swiss Francs [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | $ 266,200,000 | ||||||
U.S. Term Loan B [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Derivative notional amount, Total | $ 375,000,000 | ||||||
U.S. Term Loan B [Member] | Interest Rate Swaps [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Interest income related to termination of interest rate swaps | $ 2,800,000 | ||||||
4.625% [Member] | Senior Notes [Member] | Due in 2019 [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Interest rate | 4.625% | ||||||
3.375% [Member] | Senior Notes [Member] | Due in 2021 [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Interest rate | 3.375% | 3.375% | 3.375% | 3.375% | 3.375% | ||
4.450% [Member] | Senior Notes [Member] | Due in 2045 [Member] | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Interest rate | 4.45% | 4.45% | 4.45% | 4.45% | 4.45% | ||
Hedged senior notes maturity period | 30 years |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Amounts Recorded On Balance Sheet Related To Cumulative Basis Adjustments For Fair Value Hedges (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Amount of Hedged Liabilities [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long-term debt | $ 305.4 | $ 306.2 |
Cumulative Amount of Fair Value Hedging Adjustment Included in Carrying Amount of Hedged Liabilities [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long-term debt | $ 5.5 | $ 6.4 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Gross Unrealized Losses from Derivative Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | $ 65.7 | $ 16.7 |
Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | 65.7 | 16.7 |
Amount of Gain / (Loss) Reclassified from AOCI | 15.4 | 9.9 |
Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | 65.7 | 16.7 |
Cash Flow Hedges [Member] | Foreign Exchange Forward Contracts [Member] | Cost of Products Sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | 15.6 | 7.2 |
Cash Flow Hedges [Member] | Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | 2.8 | |
Cash Flow Hedges [Member] | Forward Starting Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | $ (0.2) | $ (0.1) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Effects of Fair Value, Cash Flow and Net Investment Hedge Accounting on Condensed Consolidated Statements of Earnings (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on net investment hedging relationships | $ 107.8 | $ 54.6 |
Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | 15.4 | 9.9 |
Cost of Products Sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts of income and expense line items presented in the statements of earnings in which the effects of fair value, cash flow and net investment hedges are recorded | 487.1 | 553.4 |
Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts of income and expense line items presented in the statements of earnings in which the effects of fair value, cash flow and net investment hedges are recorded | (50.9) | (58) |
Interest Expense [Member] | Discontinued Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on fair value hedging relationships | 0.9 | 2.1 |
Foreign Exchange Forward Contracts [Member] | Cost of Products Sold [Member] | Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | 15.6 | 7.2 |
Interest Rate Swaps [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | 2.8 | |
Forward Starting Interest Rate Swaps [Member] | Interest Expense [Member] | Cash Flow Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Reclassified from AOCI | (0.2) | (0.1) |
Cross-currency Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on net investment hedging relationships | 69.7 | 34.2 |
Cross-currency Interest Rate Swaps [Member] | Interest Expense [Member] | Net Investment Hedging [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on net investment hedging relationships | $ 13.4 | $ 12 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Derivative Instruments Not Designated as Hedging Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Nondesignated [Member] | Foreign Exchange Forward Contracts [Member] | Other Expense, Net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains/(losses) from derivative instruments not designated as hedging instruments | $ 23.1 | $ (2.6) |
Derivative Instruments and He_8
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments on Gross Basis (Detail) - Designated as Hedging Instrument [Member] - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 221.3 | $ 112.1 |
Derivative Liabilities | 4.7 | 13.1 |
Foreign Exchange Forward Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 64 | 41.8 |
Foreign Exchange Forward Contracts [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 27.1 | 9.8 |
Foreign Exchange Forward Contracts [Member] | Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 3.6 | 7.9 |
Foreign Exchange Forward Contracts [Member] | Other Long-term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 1.1 | 5.2 |
Cross-currency Interest Rate Swaps [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 15.2 | |
Cross-currency Interest Rate Swaps [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 115 | $ 60.5 |
Derivative Instruments and He_9
Derivative Instruments and Hedging Activities - Schedule of Effects of Master Netting Agreements on Condensed Consolidated Balance Sheets (Detail) - Cash Flow Hedges [Member] - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Current Assets [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amount | $ 64 | $ 41.8 |
Offset | 3.6 | 7.9 |
Net Amount in Balance Sheet | 60.4 | 33.9 |
Other Assets [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amount | 27.1 | 9.8 |
Offset | 1 | 4.6 |
Net Amount in Balance Sheet | 26.1 | 5.2 |
Other Current Liabilities [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amount | 3.6 | 7.9 |
Offset | 3.6 | 7.9 |
Other Long-term Liabilities [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amount | 1.1 | 5.2 |
Offset | 1 | 4.6 |
Net Amount in Balance Sheet | $ 0.1 | $ 0.6 |
Derivative Instruments and H_10
Derivative Instruments and Hedging Activities - Net Investment Hedge Gains (Losses) Recognized on Condensed Consolidated Statements of Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | $ 107.8 | $ 54.6 |
Euro Notes [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | 38.1 | 20.4 |
Cross-currency Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain / (Loss) Recognized in AOCI | $ 69.7 | $ 34.2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | |
Income Taxes Disclosure [Line Items] | ||||
Decrease in unrecognized tax benefits within the next twelve months | $ 280 | |||
Increase in unrecognized tax benefits within the next twelve months | 30 | |||
Provisional net tax benefit | $ (5.2) | $ (45.5) | ||
Effective tax rate | (1.00%) | 15.60% | ||
Goodwill impairment | $ 612 | |||
U.S. corporate income tax rate | 21.00% | |||
Tax Reform and AHV Financing [Member] | ||||
Income Taxes Disclosure [Line Items] | ||||
Provisional net tax benefit | $ 51.2 | $ 263.8 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Weighted Average Shares for Basic and Diluted Shares Computations (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding for basic net (loss) earnings per share | 206.5 | 204.4 |
Effect of dilutive stock options and other equity awards | 1.4 | |
Weighted average shares outstanding for diluted net (loss) earnings per share | 206.5 | 205.8 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Options to purchase shares of common stock not included in the computation of diluted earnings per share | 0 | 1.3 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment Information - Summary o
Segment Information - Summary of Net Sales and Operating Profit by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | $ 1,783.8 | $ 1,975.5 |
Operating (Loss) Profit | (456) | 350.2 |
Intangible asset amortization | (147.6) | (143.4) |
Impairment | (612) | |
Restructuring and other cost reduction initiatives | (45) | (4.7) |
Quality remediation | (16.4) | (19.7) |
Acquisition, integration and related | (4.4) | (6) |
Americas and Global Businesses [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | 1,136.6 | 1,235.6 |
Operating (Loss) Profit | 368.8 | 390 |
EMEA [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | 398.1 | 463.9 |
Impairment | (470) | |
Asia Pacific [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | 284.4 | 317.5 |
Corporate Functions [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Operating (Loss) Profit | (104) | (117.7) |
Operating Segments | EMEA [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | 371.3 | 428.9 |
Operating (Loss) Profit | 108.8 | 139.2 |
Operating Segments | Asia Pacific [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Net Sales | 275.9 | 311 |
Operating (Loss) Profit | 92.6 | 113.5 |
Segment Reconciling Items [Member] | ||
Net Sales And Operating Profit Information [Line Items] | ||
Inventory and manufacturing-related charges | (0.6) | (2) |
Intangible asset amortization | (147.6) | (143.4) |
Impairment | (612) | |
Restructuring and other cost reduction initiatives | (45) | (4.7) |
Quality remediation | (15.9) | (19.7) |
Acquisition, integration and related | (4.4) | (6) |
Litigation | (79.8) | 1.8 |
Litigation settlement gain | 23.5 | |
European Union Medical Device Regulation | (11) | (1.6) |
Other charges | $ (5.9) | $ (22.7) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Millions, $ in Millions | Feb. 13, 2019USD ($) | Feb. 13, 2019NOK (kr) | Jan. 31, 2017EUR (€) | Dec. 31, 2016EUR (€) | Mar. 31, 2020USD ($) | Jun. 30, 2019EUR (€) | Mar. 31, 2020USD ($) |
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages awarded, value | $ 2.3 | kr 19,500,000 | |||||
Deferred Prosecution Agreement [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Estimated charges | $ 6.5 | ||||||
Civil settlement payments | 6.5 | ||||||
Criminal penalty payments outstanding | $ 17.5 | ||||||
DPA term | 3 years | ||||||
Deferred Prosecution Agreement [Member] | Maximum [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
DPA extended term | 1 year | ||||||
Durom Cup Related Claims [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Certain claims | $ 2.5 | $ 443 | |||||
Estimated liability outstanding including legal fees | 57.2 | 57.2 | |||||
Metal Reaction-related claims [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Estimated liability outstanding including legal fees | 68 | 68 | |||||
Biomet Metal On Metal Hip Implant Claims [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Estimated liability classified as short-term | $ 76.9 | $ 76.9 | |||||
Heraeus Trade Secret Misappropriation Lawsuits [Member] | Germany [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Damages incurred | € | € 125.9 | € 121.9 | € 146.7 |