Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 27, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-37599 | ||
Entity Registrant Name | LivaNova PLC | ||
Entity Incorporation, State or Country Code | X0 | ||
Entity Tax Identification Number | 98-1268150 | ||
Entity Address, Address Line One | 20 Eastbourne Terrace | ||
Entity Address, City or Town | London | ||
Entity Address, Country | GB | ||
Entity Address, Postal Zip Code | W2 6LG | ||
Country Region | 44 | ||
City Area Code | 0 | ||
Local Phone Number | 203 325-0660 | ||
Title of 12(b) Security | Ordinary Shares - £1.00 par value per share | ||
Trading Symbol | LIVN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.5 | ||
Entity Common Stock, Shares Outstanding | 48,445,251 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement of LivaNova PLC for the 2020 Annual General Meeting of Shareholders , which will be filed within 120 days of December 31, 2019 , are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001639691 | ||
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 1,084,170 | $ 1,106,961 | $ 1,012,277 |
Costs and expenses: | |||
Cost of sales - exclusive of amortization | 323,635 | 361,812 | 353,192 |
Product remediation | 15,777 | 10,680 | 7,254 |
Selling, general and administrative | 506,542 | 464,967 | 380,100 |
Research and development | 149,889 | 146,024 | 109,516 |
Merger and integration expenses | 23,457 | 24,420 | 15,528 |
Restructuring expenses | 12,254 | 15,915 | 17,056 |
Impairment of goodwill | 42,417 | 0 | 0 |
Impairment of intangible assets | 139,295 | 0 | 0 |
Amortization of intangibles | 40,375 | 37,194 | 33,144 |
Litigation provision, net | (601) | 294,021 | 0 |
Operating (loss) income from continuing operations | (168,870) | (248,072) | 96,487 |
Interest income | 803 | 847 | 1,318 |
Interest expense | (15,091) | (9,825) | (7,797) |
Gain on acquisitions | 0 | 11,484 | 39,428 |
Impairment of investments | 0 | 0 | (8,565) |
Foreign exchange and other (losses) gains | (2,536) | (1,881) | 267 |
(Loss) income from continuing operations before tax | (185,694) | (247,447) | 121,138 |
Income tax (benefit) expense | (30,153) | (69,629) | 49,954 |
Losses from equity method investments | 0 | (644) | (16,719) |
Net (loss) income from continuing operations | (155,541) | (178,462) | 54,465 |
Income (loss) from discontinued operations, net of tax | 365 | (10,937) | (1,271) |
Impairment of discontinued operations, net of tax | 0 | 0 | (78,283) |
Net income (loss) from discontinued operations, net of tax | 365 | (10,937) | (79,554) |
Net loss | $ (155,176) | $ (189,399) | $ (25,089) |
Basic (loss) income per share: | |||
Continuing operations (in dollars per share) | $ (3.22) | $ (3.68) | $ 1.13 |
Discontinued operations (in dollars per share) | 0.01 | (0.23) | (1.65) |
Basic (loss) income per share (in dollars per share) | (3.21) | (3.91) | (0.52) |
Diluted (loss) income per share: | |||
Continuing operations (in dollars per share) | (3.22) | (3.68) | 1.12 |
Discontinued operations (in dollars per share) | 0.01 | (0.23) | (1.64) |
Diluted (loss) income per share (in dollars per share) | $ (3.21) | $ (3.91) | $ (0.52) |
Shares used in computing basic (loss) income per share (in shares) | 48,349 | 48,497 | 48,157 |
Shares used in computing diluted (loss) income per share (in shares) | 48,349 | 48,497 | 48,501 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (155,176) | $ (189,399) | $ (25,089) |
Other comprehensive (loss) income: | |||
Net change in unrealized gain (loss) on derivatives | 1,917 | (33) | (6,413) |
Tax effect | (460) | 8 | 1,875 |
Net of tax | 1,457 | (25) | (4,538) |
Foreign currency translation adjustment, net of tax | 3,627 | (69,764) | 118,338 |
Net current-period other comprehensive loss, net of tax | 5,084 | (69,789) | 113,800 |
Total comprehensive (loss) income | $ (150,092) | $ (259,188) | $ 88,711 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 61,137 | $ 47,204 |
Accounts receivable, net of allowance of $13,105 at December 31, 2019 and $11,598 at December 31, 2018 | 257,769 | 256,135 |
Inventories, net | 164,154 | 153,535 |
Prepaid and refundable taxes | 37,779 | 46,852 |
Prepaid expenses and other current assets | 28,604 | 29,571 |
Total Current Assets | 549,443 | 533,297 |
Property, plant and equipment, net | 181,354 | 191,400 |
Goodwill | 915,794 | 956,815 |
Intangible assets, net | 607,546 | 770,439 |
Operating lease assets (Note 13) | 54,372 | |
Investments | 27,256 | 24,823 |
Deferred tax assets | 68,676 | 68,146 |
Other assets | 7,356 | 4,781 |
Total Assets | 2,411,797 | 2,549,701 |
Current Liabilities: | ||
Current debt obligations | 77,396 | 28,794 |
Accounts payable | 85,892 | 76,735 |
Accrued liabilities and other | 120,100 | 124,285 |
Current litigation provision liability | 146,026 | 161,851 |
Taxes payable | 12,719 | 22,530 |
Accrued employee compensation and related benefits | 70,420 | 82,551 |
Total Current Liabilities | 512,553 | 496,746 |
Long-term debt obligations | 260,330 | 139,538 |
Contingent consideration | 114,396 | 161,381 |
Litigation provision liability | 24,378 | 132,210 |
Deferred tax liabilities | 32,219 | 68,189 |
Long-term operating lease liabilities (Note 13) | 46,027 | |
Long-term employee compensation and related benefits | 22,797 | 25,264 |
Other long-term liabilities | 15,380 | 22,635 |
Total Liabilities | 1,028,080 | 1,045,963 |
Commitments and contingencies (Note 14) | ||
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 49,411,016 shares issued and 48,443,830 shares outstanding at December 31, 2019; 49,323,418 shares issued and 48,205,783 shares outstanding at December 31, 2018 | 76,257 | 76,144 |
Additional paid-in capital | 1,734,870 | 1,705,111 |
Accumulated other comprehensive loss | (19,392) | (24,476) |
Accumulated deficit | (406,755) | (251,579) |
Treasury stock at cost, 967,186 and 1,117,635 shares at December 31, 2019 and 2018 | (1,263) | (1,462) |
Total Stockholders’ Equity | 1,383,717 | 1,503,738 |
Total Liabilities and Stockholders’ Equity | $ 2,411,797 | $ 2,549,701 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance of $13,105 at December 31, 2019 and $11,598 at December 31, 2018 | $ 13,105 | $ 11,598 |
Ordinary shares, par value (in pounds per share) | $ 1 | $ 1 |
Ordinary shares issued (in shares) | 49,411,016 | 49,323,418 |
Ordinary shares outstanding (in shares) | 48,443,830 | 48,205,783 |
Treasury Stock (in shares) | 967,186 | 1,117,635 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Ordinary Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 48,157,000 | |||||
Beginning balance at Dec. 31, 2016 | $ 1,706,909 | $ 74,578 | $ 1,719,893 | $ (4,500) | $ (68,487) | $ (14,575) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation plans (shares) | 133,000 | |||||
Stock-based compensation plans | 19,694 | $ 172 | 15,155 | 4,367 | ||
Net loss | (25,089) | (25,089) | ||||
Other comprehensive income (loss) | 113,800 | 113,800 | ||||
Beginning balance (in shares) at Dec. 31, 2017 | 48,290,000 | |||||
Ending balance at Dec. 31, 2017 | 1,815,314 | $ 74,750 | 1,735,048 | (133) | 45,313 | (39,664) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issuance (shares) | 1,423,000 | |||||
Share issuances | $ 0 | $ 1,887 | (1,887) | |||
Stock repurchases (shares) | (500,333) | (500,000) | ||||
Share repurchases | $ (50,000) | $ (640) | (49,360) | |||
Stock-based compensation plans (shares) | 110,000 | |||||
Stock-based compensation plans | 20,128 | $ 147 | 19,423 | 558 | ||
Net loss | (189,399) | (189,399) | ||||
Other comprehensive income (loss) | $ (69,789) | (69,789) | ||||
Beginning balance (in shares) at Dec. 31, 2018 | 49,323,418 | 49,323,000 | ||||
Ending balance at Dec. 31, 2018 | $ 1,503,738 | $ 76,144 | 1,705,111 | (1,462) | (24,476) | (251,579) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation plans (shares) | 88,000 | |||||
Stock-based compensation plans | 30,071 | $ 113 | 29,759 | 199 | ||
Net loss | (155,176) | (155,176) | ||||
Other comprehensive income (loss) | $ 5,084 | 5,084 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 49,411,016 | 49,411,000 | ||||
Ending balance at Dec. 31, 2019 | $ 1,383,717 | $ 76,257 | $ 1,734,870 | $ (1,263) | $ (19,392) | $ (406,755) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities: | |||
Net loss | $ (155,176) | $ (189,399) | $ (25,089) |
Non-cash items included in net loss: | |||
Impairment of intangible assets | 139,295 | 0 | 0 |
Impairment of goodwill | 42,417 | 0 | 0 |
Amortization | 40,375 | 37,194 | 45,881 |
Stock-based compensation | 32,553 | 26,923 | 19,062 |
Depreciation | 30,317 | 32,746 | 37,054 |
Remeasurement of contingent consideration to fair value | (29,406) | (4,311) | 56 |
Deferred tax benefit | (26,277) | (95,050) | (9,272) |
Amortization of operating lease assets | 12,297 | 0 | 0 |
Impairment of property, plant and equipment | 3,222 | 567 | 5,979 |
Amortization of income taxes payable on inter-company transfers of property | 2,575 | 13,370 | 31,784 |
Losses from equity method investments | 0 | 1,855 | 21,606 |
Gain on acquisitions | 0 | (11,484) | (39,428) |
Impairment of discontinued operations | 0 | 0 | 93,574 |
Impairment of investments | 0 | 0 | 8,565 |
Other | 5,412 | 2,791 | 5,240 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (5,321) | 21,181 | (48,934) |
Inventories, net | (10,608) | (10,647) | 7,187 |
Other current and non-current assets | (2,103) | (12,989) | (6,180) |
Accounts payable and accrued current and non-current liabilities | (31,830) | 4,526 | 7,522 |
Taxes payable | (8,442) | 2,651 | (48,711) |
Litigation provision liability, net | (123,695) | 294,061 | 0 |
Restructuring reserve | (6,747) | 6,504 | (14,557) |
Net cash (used in) provided by operating activities | (91,142) | 120,489 | 91,339 |
Investing Activities: | |||
Purchases of property, plant and equipment | (24,691) | (37,188) | (32,933) |
Acquisitions, net of cash acquired | (10,750) | (279,691) | (14,194) |
Purchases of intangible assets | (3,289) | (809) | (1,174) |
Purchases of investments | (2,500) | (3,770) | (6,255) |
Proceeds from asset sales | 1,261 | 14,220 | 5,935 |
Proceeds from the sale of CRM business franchise, net of cash disposed | 0 | 186,682 | 0 |
Proceeds from sale of investment | 0 | 0 | 3,192 |
Loans to investees | 0 | 0 | (7,426) |
Other | (1,321) | 0 | 0 |
Net cash used in investing activities | (41,290) | (120,556) | (52,855) |
Financing Activities: | |||
Proceeds from long-term debt obligations | 197,160 | 103,570 | 2,048 |
Repayment of long-term debt obligations | (24,210) | (23,827) | (22,755) |
Payment of contingent consideration | (18,955) | (651) | (1,097) |
Shares repurchased from employees for minimum tax withholding | (7,064) | (11,611) | (4,083) |
Proceeds from share issuances under ESPP | 4,468 | 0 | 0 |
Debt issuance costs | (3,795) | 0 | 0 |
Change in short-term borrowing, net | (1,188) | (30,745) | 12,396 |
Proceeds from exercise of stock options | 372 | 4,178 | 4,973 |
Proceeds from short-term borrowing (maturities greater than 90 days) | 0 | 240,000 | 20,000 |
Repayment of short-term borrowing (maturities greater than 90 days) | 0 | (260,000) | 0 |
Share repurchases under share repurchase program | 0 | (50,000) | 0 |
Payment of deferred consideration - acquisition of Caisson Interventional, LLC | 0 | (12,994) | 0 |
Other | (207) | (268) | (188) |
Net cash provided by (used in) financing activities | 146,581 | (42,348) | 11,294 |
Effect of exchange rate changes on cash and cash equivalents | (216) | (3,996) | 4,048 |
Net increase (decrease) in cash and cash equivalents | 13,933 | (46,411) | 53,826 |
Cash and cash equivalents at beginning of period | 47,204 | 93,615 | 39,789 |
Cash and cash equivalents at end of period | 61,137 | 47,204 | 93,615 |
Supplementary Disclosures of Cash Flow Information: | |||
Cash paid for interest | 15,828 | 9,278 | 7,510 |
Cash paid for income taxes | $ 2,011 | $ 26,393 | $ 38,974 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations | Note 1. Nature of Operations Description of the Business LivaNova PLC, headquartered in London, (collectively with its subsidiaries, the “Company,” “LivaNova,” “we” or “our”) is a global medical device company focused on the development and delivery of important therapeutic solutions for the benefit of patients, healthcare professionals and healthcare systems throughout the world. Working closely with medical professionals in the fields of cardiovascular disease and neuromodulation, we design, develop, manufacture and sell innovative therapeutic solutions that are consistent with our mission to improve our patients’ quality of life, increase the skills and capabilities of healthcare professionals and minimize healthcare costs. We are a public limited company organized under the laws of England and Wales, and headquartered in London, England. Business Franchises LivaNova is comprised of two |
Basis of Presentation, Use of A
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies | Note 2. Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements of LivaNova have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.” and such principles, “U.S. GAAP”) and the instructions to Form 10-K and Article 3 and Article 5 of Regulation S-X. Consolidation The accompanying consolidated financial statements for LivaNova include LivaNova’s wholly owned subsidiaries and the LivaNova PLC Employee Benefit Trust (“the Trust”). All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in such financial statements and accompanying notes. These estimates are based on management’s best knowledge of current events and actions we may undertake in the future. Estimates are used in accounting for, among other items, valuation and amortization of intangible assets, goodwill, measurement of deferred tax assets and liabilities, uncertain income tax positions, stock-based compensation, obsolete and slow-moving inventories, models, such as an impairment analysis, and in general, allocations to provisions and the fair value of assets and liabilities recorded in a business combination. Actual results could differ materially from those estimates. Reclassifications We have reclassified certain prior period amounts for comparative purposes. These reclassifications did not have a material effect on our financial condition, results of operations or cash flows. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less, consisting of demand deposit accounts and money market mutual funds, to be cash equivalents. Cash equivalents are carried on the consolidated balance sheet at cost, which approximated their fair value. Accounts Receivable Our accounts receivable consisted of trade receivables from direct customers and distributors. We maintain an allowance for doubtful accounts for potential credit losses based on our estimates of the ability of customers to make required payments, historical credit experience, existing economic conditions and expected future trends. We write off uncollectible accounts against the allowance when all reasonable collection efforts have been exhausted. Inventories We state our inventories at the lower of cost, using the first-in first-out (“FIFO”) method, or net realizable value. Our calculation of cost includes the acquisition cost of raw materials and components, direct labor and overhead, including depreciation of manufacturing related assets. We reduce the carrying value of inventories for those items that are potentially excess, obsolete or slow moving based on changes in customer demand, technology developments or other economic factors. Property, Plant and Equipment (“PP&E”) Assets held and used PP&E is carried at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred, while significant renewals and improvements are capitalized. We compute depreciation using the straight-line method over estimated useful lives. Leasehold improvements are depreciated over the shorter of the following terms: the useful life of the asset or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. Capital improvements to the building are added as building components and depreciated over the useful life of the improvement or the building, whichever is less. Assets held for sale We classify long-lived assets as held for sale in the period in which we commit to a plan to sell the asset, the asset is available for immediate sale, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale of the asset is probable within the next twelve months and when actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell and depreciation is discontinued. We recognize an impairment for any excess of carrying value over the fair value less cost to sell. Goodwill We allocate the amounts we pay for an acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including property, plant and equipment, inventories, accounts receivable, long-term debt, and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including IPR&D, on valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred and are reported in selling, general and administrative on the consolidated statements of income (loss). We recognize adjustments to the provisional amounts identified during the measurement period with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined. The effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts are recorded in the same period’s consolidated financial statements, calculated as if the accounting had been completed at the acquisition date. Intangible Assets, Other than Goodwill Intangible assets shown on the consolidated balance sheets consist of finite-lived and indefinite-lived assets expected to generate future economic benefits and are recorded at their respective fair values as of their acquisition date. Finite-lived intangible assets consist primarily of developed technology and technical capabilities, including patents, related know-how and licensed patent rights, trade names and customer relationships. Customer relationships consist of relationships with hospitals and surgeons in the countries where we operate. Indefinite-lived intangible assets other than goodwill are composed of IPR&D assets acquired in acquisitions. We estimate the useful lives of our intangible assets, which requires significant management judgment. We amortize our finite-lived intangible assets over their useful lives using the straight-line method. Amortization expense is disclosed separately on our consolidated statements of income (loss). We evaluate our intangible assets each reporting period to determine whether events and circumstances indicate either a different useful life or impairment. If we change our estimate of the useful life of an asset, we amortize the carrying amount over the revised remaining useful life. Impairments of Long-Lived Assets and Goodwill Long-lived Assets Impairment We evaluate the carrying value of our long-lived assets and investments for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Such changes in circumstance may include, among other items, (i) an expectation of a sale or disposal of a long-lived asset or asset group, (ii) adverse changes in market or competitive conditions, (iii) an adverse change in legal factors or business climate in the markets in which we operate and (iv) operating or cash flow losses. For PP&E and intangible assets used in our operations, recoverability generally is determined by comparing the carrying value of an asset, or group of assets to their expected undiscounted future cash flows. If the carrying value of an asset (asset group) is not recoverable, the amount of impairment loss is measured as the difference between the carrying value of the asset (asset group) and its estimated fair value. The asset grouping as well as the determination of expected undiscounted cash flow amounts requires significant judgments, estimates, and assumptions, including cash flows generated upon disposition. We measure fair value as the price that would be received if we were to sell the assets in an orderly transaction. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. We conduct impairment testing of our indefinite-lived intangible assets on October 1st each year. We test indefinite-lived intangible assets for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. Goodwill Impairment We conduct impairment testing of our goodwill on October 1st each year. We test goodwill for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Testing is performed at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly viewed by management. Our operating segments are deemed to be our reporting units for purposes of goodwill impairment testing. If we determine that goodwill is more-likely-than-not impaired, we perform the first step of a two-step goodwill impairment test. We first identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Fair value refers to the price that would be received if we were to sell the unit as a whole in an orderly transaction. If the carrying amount of our reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying value of the reporting unit exceeds its fair value, we perform step 2 of the goodwill impairment test. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit, up to and including the carrying amount of the goodwill. Fair value is estimated using a discounted cash flow model. Estimating fair value requires various assumptions, including revenue and gross margin growth rates and discount rates. If the aggregate fair value of our reporting units exceeds our market capitalization, we evaluate the reasonableness of the implied control premium which includes a comparison to implied control premiums from recent market transactions within our industry or other relevant benchmark data. Goodwill impairment evaluations are highly subjective. In most instances, they involve expectations of future cash flows that reflect our judgments and assumptions regarding future industry conditions and operations. The estimates, judgments and assumptions used in the application of our goodwill impairment policies reflect both historical experience and an assessment of current operational, industry, market, economic and political environments. The use of different estimates, judgments, assumptions and expectations regarding future industry and market conditions and operations would likely result in materially different asset carrying values and operating results. Quantitative factors used to determine the fair value of the reporting units reflect our best estimates, and we believe they are reasonable. Future declines in the reporting units’ operating performance or our anticipated business outlook may reduce the estimated fair value of our reporting units and result in an impairment. Factors that could have a negative impact on the fair value of the reporting units include, but are not limited to: • decreases in revenue as a result of the inability of our sales force to effectively market and promote our products; • increased competition, patent expirations or new technologies or treatments; • declines in anticipated growth rates; • the outcome of litigation, legal proceedings, investigations or other claims resulting in significant cash outflows; and • increases in the market-participant risk-adjusted Weighted Average Cost of Capital (“WACC”). Derivatives and Risk Management U.S. GAAP requires companies to recognize all derivatives as assets and liabilities on the balance sheet and to measure the instruments at fair value through earnings unless the derivative qualifies for hedge accounting. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other comprehensive income (“OCI”) until the hedged item is recognized in earnings. The changes in the fair value of the derivative are intended to offset the change in fair value of the hedged asset, liability or probable commitment. We evaluate hedge effectiveness at inception. Cash flows from derivative contracts are reported as operating activities on the consolidated statements of cash flows. We use currency exchange rate derivative contracts and interest rate derivative instruments to manage the impact of currency exchange and interest rate changes on earnings and cash flows. Forward currency exchange rate contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets and liabilities. At inception of the forward contract, the derivative is designated as either a freestanding derivative or a cash flow hedge. We do not enter into derivative contracts for speculative purposes. All derivative instruments are recorded at fair value on the consolidated balance sheets, as assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and contract maturity date. Forward contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings to offset exchange differences originated by the hedged item or the current earnings effect of the hedged item. We use freestanding derivative forward contracts to offset exposure to the variability of the value associated with assets and liabilities denominated in a foreign currency. These derivatives are not designated as hedges, and therefore changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in value of foreign currency denominated assets and liabilities. We use interest rate derivative instruments designated as cash flow hedges to manage the exposure to interest rate movements and to reduce the risk of increased borrowing costs by converting floating-rate debt into fixed-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to agreed-upon notional principal amounts. The interest rate swaps are structured to mirror the payment terms of the underlying loan. The fair value of the interest rate swaps is reported on the consolidated balance sheets as assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and the maturity of the future cash flows of each contract. The gain or loss on these derivatives is reported as a component of AOCI. Fair Value Measurements We follow the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels defined as follows: • Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities; • Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; and • Level 3 - Inputs are unobservable for the asset or liability. Financial assets and liabilities that are classified as Level 2 include derivative instruments, primarily forward and option currency contracts and interest rate swaps contracts, which are valued using standard calculations and models that use readily observable market data as their basis. Financial liabilities that are classified as Level 3 include contingent consideration arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of performance milestones and sales-based earn-outs. Contingent consideration is recognized at fair value at the date of acquisition based on the consideration expected to be transferred and estimated as the probability of future cash flows, discounted to present value in accordance with accepted valuation methodologies. The discount rate used is determined at the time of measurement. Contingent consideration is remeasured each reporting period with the change in fair value, including accretion for the passage of time, recorded in earnings. The change in fair value of contingent consideration based on the achievement of regulatory milestones is recorded as research and development expense while the change in fair value of sales-based earnout contingent consideration is recorded as cost of sales. Contingent consideration payments made soon after the acquisition date are classified as an investing activity. Contingent consideration payments that are not made soon after the acquisition date are classified as a financing activity up to the amount of the contingent consideration liability recognized at the acquisition date, with any excess classified as an operating activity. Investments in Equity Securities Our investments in equity securities, and related loans, are investments in affiliates that are in varied stages of development and not publicly traded. Our equity investments are reported in investments, and related loans in other assets, on the consolidated balance sheets. We elect to measure investments that do not have readily determinable fair values, at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. Our investments in affiliates in which we have significant influence but not control are accounted for using the equity method. Our share of net income or loss is reflected as one line item on our consolidated statements of income (loss) under losses from losses from equity-method investments and will increase or decrease, as applicable, the carrying value of our equity method investments reported under investments on the consolidated balance sheets. We regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable, and if an impairment is considered to be other-than-temporary, the loss is recognized on the consolidated statements of income (loss) in the period the determination is made and reported as losses from equity-method investments. Warranty Obligation We offer a warranty on various products. We estimate the costs that may be incurred under warranties and record a liability in the amount of such costs at the time the product is sold. The amount of the reserve recorded is equal to the net costs to repair or otherwise satisfy the claim. We include the warranty obligation in accrued liabilities and other on the consolidated balance sheets. Warranty expense is recorded to cost of goods sold on our consolidated statements of income (loss). Retirement Benefit Plan Assumptions We sponsor various retirement benefit plans, including defined benefit pension plans (pension benefits), defined contribution savings plans and termination indemnity plans, covering substantially all U.S. employees and employees outside the U.S. Pension benefit costs include assumptions for the discount rate, retirement age, compensation rate increases and the expected return on plan assets. Product Liability Accruals Accruals for product liability claims are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. Accruals for product liability claims are adjusted periodically as additional information becomes available. Revenue Recognition Refer to “ Note 3. Revenue Recognition .” Research and Development All R&D costs are expensed as incurred. R&D includes costs of basic research activities as well as engineering and technical effort required to develop a new product or make significant improvements to an existing product or manufacturing process. R&D costs also include regulatory and clinical study expenses, including post-market clinical studies. Leases On January 1, 2019, we adopted ASC Update (“ASU”) No 2016-02, Leases , including subsequent related accounting updates (collectively referred to as “Topic 842”), which supersedes the previous accounting model for leases. We adopted the standard using the modified retrospective approach with an effective date as of January 1, 2019. Prior year financial statements were not recast under the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward our historical assessment of whether contracts are or contain leases and lease classification. We also elected the practical expedient to account for lease and non-lease components together as a single combined lease component, which is applicable to all asset classes. We did not, however, elect the practical expedient related to using hindsight in determining the lease term as this was not relevant following our election of the modified retrospective approach. In addition, we elect certain practical expedients on an ongoing basis, including the practical expedient for short-term leases pursuant to which a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a lease liability and operating lease asset for leases with a term of 12 months or less and that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. We have applied this accounting policy to all asset classes in our portfolio and will recognize the lease payments for such short-term leases within profit and loss on a straight-line basis over the lease term. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices meet the criteria of being a lease in accordance with the new standard. While the amount of revenue and expenses recognized over the contract term will not be impacted, the timing of revenue and expense recognition will be impacted depending upon lease classification. We enacted appropriate changes to our business processes, systems and internal controls to support identification, recognition and disclosure of leases under the new standard. We determine if an arrangement is or contains a lease at inception. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the latter of our lease standard effective date for adoption or the lease commencement date. Variable lease payments, such as common area rent maintenance charges and rent escalations not known upon lease commencement, are not included in determination of the minimum lease payments and will be expensed in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. We used the incremental borrowing rate available nearest to our adoption date for leases that commenced prior to that date. The operating lease asset also includes any lease payments made in advance and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For additional information refer to “ Note 13. Leases .” Prior to the adoption of ASU No. 2016-02, Leases (Topic 842) and subsequent amendments on January 1, 2019, we accounted for leases that transfer substantially all benefits and risks incidental to the ownership of property as an acquisition of an asset and the incurrence of an obligation, and we accounted for all other leases as operating leases. Certain of our leases provide for tenant improvement allowances that were recorded as deferred rent and amortized using the straight-line method over the life of the lease as a reduction to rent expense. In addition, scheduled rent increases and rent holidays were recognized on a straight-line basis over the term of the lease. Stock-Based Compensation Stock-Based Incentive Awards We may grant stock-based incentive awards to directors, officers, key employees and consultants. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award. We recognize equity-based compensation expense ratably over the period that an employee is required to provide service in exchange for the entire award (all vesting periods). We issue new shares upon stock option exercises, otherwise issuance of stock for vesting of restricted stock units or exercises of stock appreciation rights are issued from treasury shares. We have the right to elect to pay the cash value of vested restricted stock units in lieu of the issuance of new shares. Stock Appreciation Rights (“SARs”) A SAR confers upon an employee the contractual right to receive an amount of cash, stock, or a combination of both that equals the appreciation in the company’s stock from an award’s grant date to the exercise date. SARs may be exercised at the employee’s discretion during the exercise period and do not give the employee an ownership right in the underlying stock. SARs do not involve payment of an exercise price. We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of SARs and compensation is expensed ratably over the service period. We determine the expected volatility of the awards based on historical volatility. Calculation of compensation for stock awards requires estimation of volatility, employee turnover and forfeiture rates. Restricted Stock Units (“RSUs”) We may grant RSUs at no purchase cost to the grantee. The grantees of unvested RSUs have no voting rights or rights to dividends. Sale or transfer of the stock and stock units is restricted until they are vested. The fair market value of service-based RSUs is determined using the market closing price on the grant date, and compensation is expensed ratably over the service period. Calculation of compensation for stock awards requires estimation of employee turnover and forfeiture rates. Income Taxes We are a UK corporation, and we operate through our various subsidiaries in a number of countries throughout the world. Our provision for income taxes is based on the tax laws and rates applicable in the jurisdictions in which we operate and earn income. We use significant judgment and estimates in accounting for our income taxes. We recognize deferred tax assets and liabilities for the anticipated future tax effects of temporary differences between the financial statements basis and the tax basis of our assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We periodically assess the recoverability of our deferred tax assets by considering whether it is more-likely-than-not that some or all of the actual benefit of those assets will be realized. To the extent that realization does not meet the “more-likely-than-not” criterion, we establish a valuation allowance. We periodically review the adequacy and necessity of the valuation allowance by considering significant positive and negative evidence relative to our ability to recover deferred tax assets and to determine the timing and amount of valuation allowance that should be released. This evidence includes: profitability in the most recent quarters; internal forecasts for the current and next two future years; size of deferred tax asset relative to estimated profitability; the potential effects on future profitability from increasing competition, healthcare reforms and overall economic conditions; limitations and potential limitations on the use of our net operating losses due to ownership changes, pursuant to IRC Section 382; and the implementation of prudent and feasible tax planning strategies, if any. We file federal and local tax returns in many jurisdictions throughout the world and are subject to income tax examinations for our fiscal year 2001 and subsequent years, with certain exceptions. While we believe that our tax return positions are fully supported, tax authorities may disagree with certain positions we have taken and assess additional taxes and as a result, we may establish reserves for uncertain tax positions, which require a significant degree of management judgment. We regularly assess the likely outcomes of our tax positions in order to determine the appropriateness of our reserves; however, the actual outcome of an audit can be significantly different than our expectations, which could have a material impact on our tax provision. Our tax positions are evaluated for recognition using a more-likely-than-not threshold. Uncertain tax positions requiring recognition are measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. Some of the reasons a reserve for an uncertain tax benefit may be reversed are: completion of a tax audit; a change in applicable tax law including a tax case or legislative guidance; or an expiration of the statute of limitations. W |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Note 3. Revenue Recognition We generate our revenue through contracts with customers that primarily consist of hospitals, healthcare institutions, distributors and other organizations. Revenue is measured based on consideration specified in a contract with a customer, and excludes amounts collected on behalf of third parties. We measure the consideration based upon the estimated amount to be received. The amount of consideration we ultimately receive varies depending upon the return terms, sales rebates, discounts, and other incentives that we may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. We have historically experienced a low rate of product returns, and the total dollar value of product returns has not been significant to our consolidated financial statements. We recognize revenue when a performance obligation is satisfied by transferring the control of a product or providing service to a customer. Some of our contracts include the purchase of multiple products and/or services. In such cases, we allocate the transaction price based upon the relative estimated stand-alone price of each product and/or service sold. We record state and local sales taxes net; that is, we exclude sales tax from revenue. Typically, our contracts do not have a significant financing component. We incur incremental commission fees paid to the sales force associated with the sale of products. We apply the practical expedient within ASC 606-10-50-22 and have elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset the entity would otherwise recognize is one year or less. As a result, no commissions have been capitalized as contract costs since adoption of ASC 606. The following is a description of the principal activities (separated by reportable segments) from which we generate our revenue. For more detailed information about our reportable segments including disaggregated revenue results by major product line and primary geographic markets, see “ Note 20. Geographic and Segment Information .” Cardiovascular Products and Services Our Cardiovascular segment has three primary product lines: cardiopulmonary products, heart valves and advanced circulatory support. Cardiopulmonary products include oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae and other related accessories. Heart valves include mechanical heart valves, tissue heart valves, related repair products and minimally invasive surgical instruments. Advanced circulatory support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. Cardiopulmonary products may include performance obligations associated with assembly and installation of equipment. Accordingly, we allocate a portion of the sales prices to installation obligations and recognize that revenue when the service is provided. We recognize revenue for equipment and accessory product sales when control of the equipment or product passes to the customer. Technical services include installation, repair and maintenance of cardiopulmonary equipment under service contracts or upon customer request. Technical service agreements generally provide for upfront payments in advance of rendering services or periodic billing over the contract term. Amounts billed in advance are deferred and recognized as revenue when the performance obligation is satisfied. Technical services are not a significant component of Cardiovascular revenue and have been presented with the related equipment and accessories revenue. Heart valve revenue is recognized when control passes to the customer, usually at the point of surgery. Advanced circulatory support revenue is recognized when control passes to the customer, usually at the point of shipment. Neuromodulation Products Neuromodulation segment products are comprised of Neuromodulation therapy systems for the treatment of drug-resistant epilepsy, DTD and obstructive sleep apnea. Our Neuromodulation product line includes the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories. Our Neuromodulation product line also includes an implantable device for the treatment of obstructive sleep apnea that stimulates multiple tongue muscles via the hypoglossal nerve, which opens the airway while a patient is sleeping. We recognize revenue for Neuromodulation product sales when control passes to the customer. Contract Balances Due to the nature of our products and services, revenue producing activities may result in contract assets and contract liabilities which are insignificant to our financial position and results of operations. These activities relate primarily to Cardiovascular technical services contracts for short-term and multi-year service agreements. Contract assets are primarily comprised of unbilled revenues, which occur when a performance obligation has been completed, but not billed to the customer. Contract liabilities are made up of deferred revenue, which occurs when a customer pays for a service, before a performance obligation has been completed. Contract assets are included within prepaid expenses and other current assets on the consolidated balance sheets and were insignificant at December 31, 2019 and 2018 . As of December 31, 2019 and December 31, 2018 , contract liabilities of $8.6 million and $4.8 million , respectively, were included within accrued liabilities and other and other long-term liabilities on the consolidated balance sheets. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Note 4. Business Combinations ImThera ImThera manufactures an implantable device for the treatment of obstructive sleep apnea that stimulates multiple tongue muscles via the hypoglossal nerve, which opens the airway while a patient is sleeping. ImThera has a commercial presence in the European market, and an FDA pivotal study is ongoing in the U.S. On January 16, 2018, we acquired the remaining 86% outstanding interest in ImThera for cash consideration of up to $225 million . Cash in the amount of $78.3 million was paid at closing with the balance to be paid based on achievement of a certain regulatory milestone and a sales-based earnout. The following table presents the acquisition date fair value of the consideration transferred and the fair value of our interest in ImThera prior to the acquisition (in thousands): Cash $ 78,332 Contingent consideration 112,744 Fair value of our interest in ImThera prior to the acquisition (1) 25,580 Fair value of consideration transferred $ 216,656 (1) The fair value of our previously held interest in ImThera was determined based on the fair value of total consideration transferred and application of a discount for lack of control. As a result, we recognized a gain of $11.5 million for the fair value in excess of our carrying value of $14.1 million . The gain is included in Gain on acquisitions on our consolidated statement of income (loss) for the year ended December 31, 2018. The following table presents the purchase price allocation at fair value for the ImThera acquisition including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (2) $ 151,605 $ 10,677 $ 162,282 Developed technology 5,661 (5,661 ) — Goodwill 87,063 (4,467 ) 82,596 Deferred income tax liabilities, net (3) 27,980 1,278 29,258 Other assets and liabilities, net 836 200 1,036 Net assets acquired $ 217,185 $ (529 ) $ 216,656 (1) During the second quarter of 2018, measurement period adjustments were recorded based upon new information obtained about facts and circumstances that existed as of the acquisition date. (2) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. The IPR&D amount is included in intangible assets, net on the consolidated balance sheets as of December 31, 2019 and 2018 . (3) The amounts are presented net of deferred tax assets acquired. Goodwill arising from the ImThera acquisition, which is not deductible for tax purposes, primarily represents the synergies anticipated between ImThera and our existing Neuromodulation business. The assets acquired, including goodwill, are recognized in our Neuromodulation segment. The results of the ImThera acquisition added $0.3 million in revenue and $8.8 million in operating losses during the year ended December 31, 2018. Additionally, we recognized ImThera acquisition-related expenses of approximately $0.7 million for legal and valuation expenses during the year ended December 31, 2018. These expenses are included within “Selling, general and administrative” expenses on our consolidated statement of income (loss). Pro forma financial information, assuming the ImThera acquisition had occurred as of the beginning of the calendar year prior to the year of acquisition, was not material for disclosure purposes. The ImThera business combination involved contingent consideration arrangements composed of potential cash payments upon the achievement of a certain regulatory milestone and a sales-based earnout associated with sales of products covered by the purchase agreement. The sales-based earnout was valued using projected sales from our internal strategic plan. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs (in thousands): ImThera Acquisition Fair value at January 16, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment $ 50,429 Discounted cash flow Discount rate 4.3% - 4.7% Probability of payment 85% - 95% Projected payment years 2020 - 2021 Sales-based earnout 62,315 Monte Carlo simulation Risk-adjusted discount rate 11.5% Credit risk discount rate 4.7% - 5.8% Revenue volatility 29.3% Probability of payment 85% - 95% Projected years of earnout 2020 - 2025 $ 112,744 For a reconciliation of the beginning and ending balance of contingent consideration liabilities refer to “ Note 10. Fair Value Measurements .” TandemLife TandemLife is focused on the delivery of leading-edge temporary life support systems, including cardiopulmonary and respiratory support solutions. TandemLife complements our Cardiovascular segment portfolio and expands our existing product line of cardiopulmonary products. On April 4, 2018, we acquired CardiacAssist, Inc., doing business as TandemLife for cash consideration of up to $254 million . Cash of $204 million was paid at closing with up to $50 million in contingent consideration based on the achievement of regulatory milestones. The following table presents the acquisition date fair value of the consideration transferred (in thousands): Cash $ 203,671 Contingent consideration 40,190 Fair value of consideration transferred $ 243,861 The following table presents the purchase price allocation at fair value for the TandemLife acquisition including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (2) (3) $ 110,977 $ (3,474 ) $ 107,503 Trade names (2) 11,539 — 11,539 Developed technology (2) 6,387 — 6,387 Goodwill 118,917 (797 ) 118,120 Inventory 10,296 (140 ) 10,156 Other assets and liabilities, net 3,632 242 3,874 Deferred income tax liabilities, net (4) (17,887 ) 4,169 (13,718 ) Net assets acquired $ 243,861 $ — $ 243,861 (1) During the third quarter of 2018, measurement period adjustments were recorded based upon new information regarding future estimates of R&D expenses that existed as of the acquisition date. In addition, during the first quarter of 2019, measurement period adjustments related to finalizing our tax attributes were recorded, which resulted in an increase of $3.3 million in deferred tax assets and a commensurate decrease to goodwill. (2) The amounts are included in intangible assets, net on the consolidated balance sheets as of December 31, 2019 and 2018 . Trade names and developed technology are amortized over remaining useful lives of 15 and 2 years, respectively. (3) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. (4) The amounts are presented net of deferred tax assets and include deferred tax assets acquired. Goodwill arising from the TandemLife acquisition, which is not deductible for tax purposes, primarily represents the synergies anticipated between TandemLife and our existing Cardiovascular business. The assets acquired, including goodwill, are recognized in our Cardiovascular segment. The results of the TandemLife acquisition added $19.5 million in revenue and $14.0 million in operating losses during the year ended December 31, 2018. Additionally, we recognized TandemLife acquisition-related expenses of approximately $2.1 million for legal and valuation expenses during the year ended December 31, 2018. These expenses are included within selling, general and administrative expenses on our consolidated statement of income (loss). Pro forma financial information, assuming the TandemLife acquisition had occurred as of the beginning of the calendar year prior to the year of acquisition, was not material for disclosure purposes. The TandemLife business combination involved a contingent consideration arrangement composed of potential cash payments upon the achievement of certain regulatory milestones. The arrangement is a Level 3 fair value measurement and includes the following significant unobservable inputs (in thousands): TandemLife Acquisition Fair value at April 4, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 40,190 Discounted cash flow Discount rate 4.2% - 4.8% Probability of payments 75% - 95% Projected payment years 2019 - 2020 For a reconciliation of the beginning and ending balance of contingent consideration liabilities refer to “ Note 10. Fair Value Measurements .” Miami Instruments On June 12, 2019, we acquired the minimally invasive cardiac surgery instruments business from Miami Instruments, LLC (“Miami Instruments”) for cash consideration of up to $17.0 million . The related operations have been integrated into our Cardiovascular business franchise as part of our Heart Valves portfolio. Cash of $10.8 million was paid at closing with up to $6.0 million in contingent consideration based on achieving certain milestones. In connection with this acquisition, we recognized $14.7 million in developed technology and IPR&D intangible assets and $1.5 million in goodwill. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 5. Discontinued Operations In November 2017, we concluded that the sale of CRM represented a strategic shift in our business that would have a major effect on future operations and financial results. Accordingly, the operating results of CRM are classified as discontinued operations on our consolidated statements of income (loss) for all the periods presented in this Annual Report on Form 10-K. We completed the CRM Sale on April 30, 2018 to MicroPort Cardiac Rhythm B.V. and MicroPort Scientific Corporation for total cash proceeds of $195.9 million , less cash transferred of $9.2 million , subject to a closing working capital adjustment that could result in a negative adjustment of up to $10.0 million in addition to $14.9 million recorded within accrued liabilities and other at December 31, 2019. In conjunction with the sale, we entered into transition services agreements to provide certain support services generally for up to twelve months from the closing date of the sale. The services include, among others, accounting, information technology, human resources, quality assurance, regulatory affairs, supply chain, clinical affairs and customer support. During the year ended December 31, 2019 and December 31, 2018 we recognized income of $0.9 million and $2.8 million , respectively, for providing these services. Income recognized related to the transition services agreements is recorded as a reduction to the related expenses in the associated expense line items on our consolidated statements of income (loss). The following table represents the financial results of CRM presented as net income (loss) from discontinued operations, net of tax on our consolidated statements of income (loss) (in thousands): Year Ended December 31, 2019 2018 2017 Revenues $ — $ 77,366 $ 245,171 Costs and expenses: Cost of sales (43 ) 28,028 92,609 Selling, general and administrative expenses (161 ) 43,382 105,831 Research and development (161 ) 16,592 37,936 Merger and integration expenses — — 22 Restructuring expenses — 651 (1,617 ) Amortization of intangibles — — 12,737 Impairment of tangible and intangible assets — — 93,574 Revaluation gain on assets and liabilities held for sale — (1,213 ) — Loss on sale of CRM — 214 — Operating income (loss) from discontinued operations 365 (10,288 ) (95,921 ) Foreign exchange and other gains (losses) — 102 (381 ) Income (loss) from discontinued operations, before tax 365 (10,186 ) (96,302 ) Income tax benefit — (460 ) (21,635 ) Losses from equity method investments — (1,211 ) (4,887 ) Net income (loss) from discontinued operations $ 365 $ (10,937 ) $ (79,554 ) Cash flows attributable to our discontinued operations are included on our consolidated statements of cash flows. For the years ended December 31, 2018 and December 31, 2017 , CRM’s capital expenditures were $1.0 million and $6.1 million , respectively, and stock-based compensation expense was $2.0 million and $1.4 million , respectively. For the year ended December 31, 2017 , CRM’s depreciation and amortization was $18.3 million . Income tax benefit for the year ended December 31, 2017 includes a $15.3 million tax benefit recognized on the impairment of CRM. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 6. Restructuring We initiate restructuring plans to leverage economies of scale, streamline distribution and logistics and strengthen operational and administrative effectiveness in order to reduce overall costs. Costs associated with these plans were reported as restructuring expenses in the operating results of our consolidated statements of income (loss). Our 2015 and 2016 Reorganization Plans (the “Prior Plans”) were initiated October 2015 and March 2016, respectively, in conjunction with the completion of the merger of Cyberonics, Inc. and Sorin S.p.A. in October 2015. The Prior Plans include the closure of the R&D facility in Meylan, France and consolidation of its R&D capabilities into the Clamart, France facility. In addition, during the year ended December 31, 2016 , we initiated a plan to exit the Costa Rica manufacturing operation and transfer its operations to Houston, Texas. We completed the exit of the Costa Rica manufacturing operation in the first half of 2017 and substantially completed the Prior Plans during 2018. Included in Prior Plans was our commitment to sell our Suzhou Industrial Park facility in Shanghai, China, which we announced in March 2017. As a result of this exit plan we recorded an impairment of the building and equipment of $5.4 million and accrued $0.5 million of additional costs, primarily related to employee severance, during the year ended December 31, 2017 . We completed the sale of the Suzhou facility in April 2018 and received cash proceeds from the sale of $13.3 million . In December 2018, we initiated a reorganization plan (the “2018 Plan”) in order to reduce manufacturing and operational costs associated with our Cardiovascular facilities in Saluggia and Mirandola, Italy and Arvada, Colorado. The 2018 Plan resulted in a net reduction of approximately 75 personnel and was completed prior to the end of 2019. In November 2019, we initiated a reorganization plan (the “2019 Plan”) to streamline our organizational structure in order to address new regulatory requirements, create efficiencies, improve profitability and ensure business continuity. As a result, we incurred restructuring expenses of $4.4 million during the year ended December 31, 2019 , primarily associated with severance costs for approximately 35 impacted employees. Additionally, we ended our Caisson TMVR program effective December 31, 2019 after determining that it was no longer viable to continue to invest in the program. As a result, we recognized restructuring expenses of $3.5 million during the year ended December 31, 2019 , primarily associated with severance costs for approximately 50 impacted employees. We expect our restructuring actions will result in an incremental benefit to operating (loss) income from continuing operations, primarily through reductions to cost of sales - exclusive of amortization, selling, general and administrative and research and development from the 2019 Plan and to research and development from the Caisson TMVR restructuring plan. The following table presents the accruals, inventory obsolescence and other reserves, recorded in connection with our reorganization plans including the balances and activity related to the CRM business franchise (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2016 $ 21,092 $ 3,056 $ 24,148 Charges 10,076 5,363 15,439 Cash payments / write-downs (27,279 ) (5,794 ) (33,073 ) Balance at December 31, 2017 3,889 2,625 6,514 Charges 15,641 925 16,566 Cash payments (9,335 ) (481 ) (9,816 ) Balance at December 31, 2018 10,195 3,069 13,264 Charges 11,472 782 12,254 Cash payments (17,570 ) (2,451 ) (20,021 ) Balance at December 31, 2019 (1) $ 4,097 $ 1,400 $ 5,497 (1) Cumulatively, we have recognized a total of $111.5 million in restructuring expense, inclusive of discontinued operations. The following table presents restructuring expense by reportable segment (in thousands): Year Ended December 31, 2019 2018 2017 Cardiovascular (1) $ 3,592 $ 11,497 $ 8,819 Neuromodulation 1,082 1,595 561 Other (2) 7,580 2,823 7,676 Restructuring expense from continuing operations 12,254 15,915 17,056 Discontinued operations — 651 (1,617 ) Total $ 12,254 $ 16,566 $ 15,439 (1) Cardiovascular restructuring expense for the year ended December 31, 2018 included $6.5 million of 2018 Plan expenses. Cardiovascular restructuring expense for the year ended December 31, 2017 included building and equipment impairment of $5.4 million related to the Suzhou, China facility exit plan. (2) Other restructuring expense for the year ended December 31, 2019 included $3.5 million of Caisson restructuring expenses. |
Product Remediation Liability
Product Remediation Liability | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingency [Abstract] | |
Product Remediation Liability | Note 7. Product Remediation Liability On December 29, 2015, we received an FDA Warning Letter (the “Warning Letter”) alleging certain violations of FDA regulations applicable to medical device manufacturing at our Munich, Germany and Arvada, Colorado facilities. On October 13, 2016, the CDC and FDA separately released safety notifications regarding 3T Heater-Cooler devices in response to which we issued a Field Safety Notice Update for U.S. users of our 3T Heater-Cooler devices to proactively and voluntarily contact facilities to facilitate implementation of the CDC and FDA recommendations. At December 31, 2016, we recognized a liability for a product remediation plan related to our 3T Heater-Cooler device (“3T device”). The remediation plan we developed consists primarily of a modification of the 3T device design to include internal sealing and the addition of a vacuum system to new and existing devices. These changes are intended to address regulatory actions and to reduce further the risk of possible dispersion of aerosols from 3T devices in the operating room. We concluded that it was probable that a liability had been incurred upon management’s approval of the plan and the commitments made by management to various regulatory authorities globally in November and December 2016, and furthermore, the cost associated with the plan was reasonably estimable. The deployment of this solution for commercially distributed devices has been dependent upon final validation and verification of the design changes and approval or clearance by regulatory authorities worldwide, including FDA clearance in the U.S. It is reasonably possible that our estimate of the remediation liability could materially change in future periods due to the various significant assumptions involved such as customer behavior, market reaction and the timing of approvals or clearance by regulatory authorities worldwide. In April 2017, we obtained CE Mark in Europe for the design change of the 3T device, and in May 2017 we completed our first vacuum canister and internal sealing upgrade on a customer-owned device. We are currently implementing the vacuum canister and internal sealing upgrade program in as many countries as possible until all devices are upgraded. In October 2018, after review of information provided by us, the FDA concluded that we could commence the vacuum canister and internal sealing upgrade program in the U.S., and on February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. Concurrent with this clearance, (1) 3T devices manufactured in accordance with K191402 will not be subjected to the import alert and (2) LivaNova initiated a correction to distribute the updated Operating Instructions cleared under K191402. As a second part of the remediation plan, we continue to offer a no-charge deep disinfection service (deep cleaning service) for 3T device users as we receive the required regulatory approvals. The deep disinfection service was rolled out in Europe in the second half of 2015, and in April 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S., thereby adding to the growing list of countries around the world in which we offer this service. Finally, we are continuing to offer the loaner program for 3T devices, initiated in the fourth quarter of 2016, to provide existing 3T device users with a new loaner 3T device at no charge pending regulatory approval and implementation of the vacuum system addition and deep disinfection service worldwide. This loaner program, which began in the U.S., was rolled out in Europe shortly thereafter, and is being made available progressively on a global basis, prioritizing and allocating devices to 3T device users based on pre-established criteria. Changes in the carrying amount of the product remediation liability are as follows (in thousands): Balance at December 31, 2016 $ 33,487 Adjustments 2,452 Remediation activity (11,283 ) Effect of changes in foreign currency exchange rates 2,890 Balance at December 31, 2017 27,546 Adjustments (200 ) Remediation activity (12,212 ) Effect of changes in foreign currency exchange rates (389 ) Balance at December 31, 2018 14,745 Adjustments 3,663 Remediation activity (14,909 ) Effect of changes in foreign currency exchange rates (248 ) Balance at December 31, 2019 $ 3,251 We recognized product remediation expenses during the years ended December 31, 2019 , 2018 and 2017 of $15.8 million , $10.7 million and $7.3 million , respectively. Product remediation expenses include internal labor costs, costs to remediate certain inspectional observations made by the FDA at our Munich facility and costs associated with the incorporation of the modification of the 3T device design into the next generation 3T device. These costs and related legal costs are expensed as incurred and are not included within the product remediation liability presented above. During the fourth quarter of 2018, we recognized a $294.1 million liability related to the litigation involving the 3T device. As of December 31, 2019 , the liability was $170.4 million . Our related legal costs are expensed as incurred. For further information, please refer to “ Note 14. Commitments and Contingencies |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 8. Goodwill and Intangible Assets Our finite-lived and indefinite-lived intangible assets as of December 31, 2019 and 2018 consisted of the following (in thousands): 2019 2018 Finite-lived intangible assets: Customer relationships $ 320,023 $ 317,292 Developed technology 293,785 176,476 Trade names 25,004 25,260 Other intangible assets 975 897 Total gross finite-lived intangible assets 639,787 519,925 Accumulated amortization - Customer relationships 75,156 57,350 Accumulated amortization - Developed technology 57,362 39,144 Accumulated amortization - Trade names 14,811 11,440 Accumulated amortization - Other intangible assets 712 337 Total accumulated amortization 148,041 108,271 Net finite-lived intangible assets $ 491,746 $ 411,654 Indefinite-lived intangible assets: IPR&D $ 115,800 $ 358,785 Goodwill 915,794 956,815 Total indefinite-lived intangible assets $ 1,031,594 $ 1,315,600 During the year ended December 31, 2019 , we recognized $14.7 million of developed technology and in-process R&D and $1.5 million in goodwill related to the acquisition of Miami Instruments. The amortization periods for our finite-lived intangible assets as of December 31, 2019 , are as follows: Minimum Life in years Maximum Life in years Customer relationships 15 18 Developed technology 2 19 Trade names 15 15 Other intangible assets 5 10 The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2019 , is as follows (in thousands): 2020 $ 39,901 2021 39,102 2022 39,102 2023 39,102 2024 39,102 Thereafter 295,437 Total $ 491,746 Intangible Asset Impairments In November 2019, we announced that we would be ending our Caisson TMVR program. The announcement triggered an evaluation of finite and indefinite lived assets for impairment. As a result, we fully impaired the IPR&D asset and goodwill of $89.0 million and $42.4 million , respectively. During the second quarter of 2019, we determined that there would be a delay in the estimated commercialization date of our obstructive sleep apnea product currently under development, which was acquired in the ImThera acquisition. This delay constituted a triggering event that required an evaluation of the IPR&D asset arising from the ImThera acquisition for impairment. Based on the assessment performed, we determined that the IPR&D asset was impaired and as a result, recorded an impairment of $50.3 million , which is included in our Neuromodulation segment. The carrying value of the IPR&D asset as of December 31, 2019 is $112.0 million . The estimated fair value of IPR&D was determined using the income approach. Estimating the fair value of the IPR&D asset requires various assumptions, including revenue growth rates, timing and probability of commercialization and the discount rate. Future delays in commercialization or changes in management estimates could result in further impairment. Refer to “ Note 4. Business Combinations .” Intangible Asset Reclassification During the third quarter of 2019, upon receiving FDA approval of the LifeSPARC system, we reclassified the IPR&D asset of $107.5 million from the acquisition of TandemLife to finite-lived developed technology intangible assets and began amortizing the intangible asset over a useful life of 15 years . Goodwill The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Cardiovascular Neuromodulation Other Total December 31, 2017 $ 425,882 $ 315,943 $ 42,417 $ 784,242 Goodwill as a result of acquisitions (1) 121,446 82,596 — 204,042 Foreign currency adjustments (31,469 ) — — (31,469 ) December 31, 2018 515,859 398,539 42,417 956,815 Goodwill as a result of acquisitions (1) 1,550 — — 1,550 Measurement period adjustments (2) (3,326 ) — — (3,326 ) Impairment — — (42,417 ) (42,417 ) Foreign currency adjustments 2,957 215 — 3,172 December 31, 2019 $ 517,040 $ 398,754 $ — $ 915,794 (1) Goodwill recognized during the year ended December 31, 2019 was the result of the Miami Instruments acquisition. Goodwill recognized during the year ended December 31, 2018 was the result of the ImThera and TandemLife acquisitions. Refer to “ Note 4. Business Combinations .” (2) Refer to “ Note 4. Business Combinations .” We performed a quantitative assessment for our Cardiovascular and Neuromodulation reporting units as of October 1, 2019. The quantitative impairment assessment was performed using management’s current estimate of future cash flows. We concluded that the fair value of our Cardiovascular and Neuromodulation segments exceeded the carrying value of the respective reporting units by 24% and 584% , respectively, as evidenced by the estimated fair value of our Cardiovascular and Neuromodulation reporting units calculated for the purpose of reconciling the fair value of our reporting units to our market capitalization. Therefore, we concluded that our Cardiovascular and Neuromodulation reporting units’ goodwill was not impaired. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Investments | Note 9. Investments The following table details the carrying value of our investments in equity securities of non-consolidated affiliates without readily determinable fair values for which we do not exert significant influence over the investee. These equity investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. These below equity investments are included in investments on the consolidated balance sheets as of December 31, 2019 and 2018 (in thousands): 2019 2018 Respicardia Inc. (1) $ 17,706 $ 17,706 Ceribell, Inc. (2) 3,000 3,000 ShiraTronics, Inc. (3) 2,045 — Rainbow Medical Ltd. (4) 1,099 1,119 MD Start II (5) 1,121 1,144 Highlife S.A.S. (6) 1,064 1,084 Other 770 770 26,805 24,823 Equity method investments (7) 451 — $ 27,256 $ 24,823 (1) Respicardia Inc. (“Respicardia”) is a privately funded U.S. company developing an implantable device designed to restore a more natural breathing pattern during sleep in patients with central sleep apnea by transvenously stimulating the phrenic nerve. We have a loan outstanding to Respicardia with a carrying amount of $0.6 million and $0.6 million as of December 31, 2019 and December 31, 2018 , respectively, which is included in prepaid expenses and other current assets on the consolidated balance sheet. Refer to the paragraph below for further details regarding this investment. (2) On September 7, 2018, we acquired 1,007,319 shares of Series B Preferred Stock of Ceribell, Inc. (“Ceribell”). Ceribell is focused on utilizing electroencephalography to improve the diagnosis and treatment of patients at risk for seizures. (3) ShiraTronics, Inc. (“ShiraTronics”) is a privately held early-stage medical device company located in the U.S. and Ireland and is focused on developing neuromodulation technologies for the treatment of debilitating migraine headaches. We are required to invest up to a total of $5 million dependent upon ShiraTronics achieving certain milestones. (4) Rainbow Medical Ltd. (“Rainbow Medical”) is a private Israeli venture capital company that seeds and grows companies developing medical devices in a diverse range of medical fields. Refer to the paragraph below for further details. (5) MD Start II is a private venture capital collaboration for the development of medical device technology in Europe. (6) Highlife S.A.S. (“Highlife”) is a privately held clinical-stage medical device company located in France and is focused on the development of a unique TMRV replacement system to treat patients with MR. Refer to the paragraph below for further details. Due to an additional investment by a third party during the year ended December 31, 2018, our equity interest in Highlife decreased to 7.8% from 24.6% . We determined that we no longer had significant influence over Highlife and, as a result, we no longer accounted for Highlife under the equity method. (7) During 2019 we invested $0.5 million in equity securities that we account for under the equity method of accounting. We are required to fund up to a total of approximately €5.0 million (approximately $5.6 million as of December 31, 2019 ) based on cash calls. Respicardia Impairment We recognized an impairment of our investment in Respicardia during the year ended December 31, 2017 based on the terms of an additional round of financing with a new strategic investor that indicated the carrying value of our aggregate investment might not be recoverable and that the decrease in value of our aggregate investment was other than temporary. The estimated fair value using the income approach was below the carrying value by $5.5 million . The impairment was included in impairment of investments on our consolidated statement of income (loss). Rainbow Medical Impairment We recognized an impairment of our investment in Rainbow Medical during the year ended December 31, 2017 . An additional round of financing, which included a new investor, indicated that the carrying value of our investment might not be recoverable and that the decrease in value of our investment was other than temporary. We, therefore, estimated the fair value of our investment using the income approach. The estimated fair value of our investment was below our carrying value by $3.0 million . This impairment was included in impairment of investments on our consolidated statement of income (loss). Highlife Impairment We recognized an impairment of our investment in, and notes receivable from, Highlife, during the year ended December 31, 2017 . Certain factors, including a revision in our investment strategy and a new strategic investor, indicated that the carrying value of our aggregate investment might not be recoverable and that the decrease in value of our aggregate investment was other than temporary. We, therefore, estimated the fair value of our investment and notes receivable using the market approach. The estimated fair value of our aggregate investment was below our carrying value by $13.0 million . This aggregate impairment was included in losses from equity method investments on our consolidated statement of income (loss). Istituto Europeo di Oncologia S.R.L Sale During the year ended December 31, 2017 , we sold our investment in Istituto Europeo di Oncologia S.R.L, for a gain of $3.2 million . This gain is included in foreign exchange and other (losses) gains on our consolidated statement of income (loss). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10. Fair Value Measurements We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2019 , 2018 or 2017 . Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value as of December 31, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (foreign currency exchange rate "FX") $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — Total assets $ 561 $ — $ 561 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 169 $ — $ 169 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 374 — 374 — Derivative liabilities - freestanding instruments (FX) 3,137 — 3,137 — Contingent consideration (1) 137,349 — — 137,349 Total liabilities $ 141,029 $ — $ 3,680 $ 137,349 Fair Value as of December 31, 2018 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate "FX") $ 236 $ — $ 236 $ — Total assets $ 236 $ — $ 236 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 1,354 $ — $ 1,354 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 865 — 865 — Derivative liabilities - freestanding instruments (FX) 3,173 — 3,173 — Contingent consideration 179,911 — — 179,911 Total liabilities $ 185,303 $ — $ 5,392 $ 179,911 (1) The contingent consideration liability at December 31, 2019 represents contingent payments related to four completed acquisitions, including: Inversiones Drilltex SAS (“Drilltex”), ImThera, TandemLife and Miami Instruments. See the table below for additional information. Our recurring fair value measurements, using significant unobservable inputs (Level 3), relate solely to our contingent consideration liability. The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability (in thousands): Balance at December 31, 2017 $ 33,973 Purchase price - ImThera contingent consideration (1) 112,744 Purchase price - TandemLife contingent consideration (1) 40,190 Payments (2) (2,661 ) Changes in fair value (3) (4,311 ) Effect of changes in foreign currency exchange rates (24 ) Balance at December 31, 2018 179,911 Additions (1) 7,184 Payments (2) (20,204 ) Changes in fair value (3) (4) (5) (29,406 ) Effect of changes in foreign currency exchange rates (136 ) Balance at December 31, 2019 137,349 Less current portion of contingent consideration liability at December 31, 2019 22,953 Long-term portion of contingent consideration liability at December 31, 2019 $ 114,396 (1) See “ Note 4. Business Combinations ” for additional discussion. (2) Payments during the year ended December 31, 2018 are for sales-based earnouts for Cellplex and for Drilltex. In July 2019, we achieved a regulatory milestone upon receiving FDA approval of the LifeSPARC system, triggering the payment of $19.0 million during the third quarter of 2019 to settle the related contingent consideration liability in connection with our TandemLife acquisition. (3) During the year ended December 31, 2019 , the change in fair value resulted in a decrease of $13.2 million and $16.2 million recorded to cost of sales - exclusive of amortization and research and development, respectively. During the year ended December 31, 2018 , the change in fair value resulted in a decrease of $3.6 million and $0.7 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) In November 2019, we announced that we would be ending our Caisson TMVR program effective December 31, 2019. As such, we released the contingent consideration provision associated with the acquisition of Caisson. At December 31, 2018, the fair value of the Caisson contingent consideration provision was $27.9 million . (5) The change in fair value during the year 2019 reflects a delay in the timing of anticipated regulatory approval and commercialization for ImThera. While the probability of payment remains unchanged from the time of acquisition, the projected years of payment for the regulatory milestone-based payment and the sales-based earnout have been updated to occur between 2023-2024 and 2024-2028, respectively. See “ Note 8. Goodwill and Intangible Assets ” for additional discussion. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Our investments in equity securities of non-consolidated affiliates without readily determinable fair values are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Our investments in non-financial assets such as, goodwill, intangible assets, and PP&E, are measured at fair value if there is an indication of impairment and recorded at fair value only when an impairment is recognized. We classify the measurement input for these assets as Level 3 inputs within the fair value hierarchy. Other The carrying values of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these items. The carrying value of our long-term debt including the current portion, as of December 31, 2019 , was $333.5 million , which we believe approximates fair value. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 11. Financing Arrangements The outstanding principal amount of our long-term debt as of December 31, 2019 and 2018 , was as follows (in thousands, except interest rates): 2019 2018 Maturity Interest Rate 2019 Debt Facility (1) $ 184,275 $ — March 2022 1.40% - 3.56% 2017 European Investment Bank (2) 103,570 103,570 June 2026 3.31% - 3.37% 2014 European Investment Bank (3) 28,053 47,606 June 2021 1.01% Mediocredito Italiano 6,222 7,623 December 2023 0.50% - 2.93% Bank of America Merrill Lynch Banco Múltiplo S.A. 8,422 — July 2021 8.08% Bank of America, U.S. 2,004 — January 2021 3.76% Banca del Mezzogiorno — 2,718 — — Other 965 1,324 — — Total long-term facilities 333,511 162,841 Less current portion of long-term debt 73,181 23,303 Total long-term debt $ 260,330 $ 139,538 (1) The facility agreement with Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas (London Branch) and Intesa Sanpaolo S.P.A. provides a multi-currency term loan facility in an aggregate amount of $350 million and terminates on March 26, 2022 (the “2019 Debt Facility”). Principal repayments of 20% of the outstanding borrowings under the 2019 Debt Facility are due in September 2020, March 2021 and September 2021, with the remainder of the outstanding borrowings due in March 2022. (2) The 2017 European Investment Bank (“2017 EIB”) loan was obtained to support certain product development projects. The interest rate for the 2017 EIB loan is reset by the lender each quarter based on LIBOR. Interest payments are paid quarterly and principal payments are paid semi-annually. (3) The 2014 European Investment Bank (“2014 EIB”) loan was obtained in July 2014 to support product development projects. The interest rate for the EIB loan is reset by the lender each quarter based on the Euribor. Interest payments are paid quarterly and principal payments are paid semi-annually. Contractual annual principal maturities of our long-term debt facilities as of December 31, 2019 , are as follows (in thousands): 2020 $ 73,497 2021 111,370 2022 91,930 2023 17,614 2024 15,996 Thereafter 24,261 Total payments 334,668 Less: Debt issuance costs 1,157 Total long-term facilities $ 333,511 In connection with the CRM sale, on May 1, 2018, the borrowing capacity of the 2017 EIB loan decreased from €100.0 million (approximately $114.3 million as of December 31, 2018 ) to €90.0 million (approximately $103 million as of December 31, 2018 ). On March 26, 2019, we entered into the 2019 Debt Facility. Borrowings under the facility bear interest at a rate of LIBOR plus 1.6% for borrowings in U.S. dollars and EURIBOR plus 1.4% for Euro-denominated borrowings. Proceeds from the facility are used for general corporate and working capital purposes, excluding acquisitions, dividends and share buybacks. Available borrowings under the 2019 Debt Facility commenced on March 26, 2019 and extend through March 26, 2020. Principal repayments of 20% of the outstanding borrowings under the 2019 Debt Facility are due in September 2020, March 2021 and September 2021, with the remainder of the outstanding borrowings due in March 2022. The 2019 Debt Facility contains financial covenants that require LivaNova to maintain a maximum consolidated net debt to EBITDA ratio, a minimum interest coverage ratio and a maximum consolidated net debt to net worth ratio. LivaNova must also maintain a minimum amount of consolidated net worth. The 2019 Debt Facility also contains customary representations and warranties, covenants, and events of default. At December 31, 2019 , LivaNova was in compliance with all covenants. Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $4.2 million and $5.5 million at December 31, 2019 and December 31, 2018 , respectively, with interest rates ranging from 2.72% to 8.29% and loan terms ranging from 10 days to 220 days . On April 10, 2018, we entered into an amendment and restatement agreement with Barclays Bank PLC amending the revolving facility agreement originally dated October 21, 2016 (the “Amendment”). The Amendment increased our borrowing capacity under the facility from $40.0 million to $70.0 million and extended the term of the facility one year . The facility terminated on October 20, 2019. On July 25, 2019, we entered into a €40.0 million (approximately $44.9 million as of December 31, 2019 ) credit facility agreement with Banca Nazionale del Lavoro SpA (“2019 Revolving Credit Facility”) for working capital needs. The 2019 Revolving Credit Facility has a term of 2 years and borrowings bear interest at Euribor plus 0.8% . There were no borrowings under the 2019 Revolving Credit Facility during 2019 . Bridge Facility Agreement In connection with the April 2018 acquisition of TandemLife, we entered into a bridge facility agreement (the “Bridge Facility Agreement”) providing a term loan facility with the aggregate principal amount of $190.0 million . On April 3, 2018, we borrowed $190.0 million under the Bridge Facility Agreement to facilitate the initial payment for our acquisition of TandemLife. We used the proceeds from the sale of the CRM business franchise to repay the borrowings under the Bridge Facility Agreement in full during 2018. |
Derivatives and Risk Management
Derivatives and Risk Management | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Note 12. Derivatives and Risk Management Due to the global nature of our operations, we are exposed to foreign currency exchange rate fluctuations. In addition, due to certain loans with floating interest rates, we are also subject to the impact of changes in interest rates on our interest payments. We enter into foreign currency exchange rate (“FX”) derivative contracts and interest rate swap contracts to reduce the impact of foreign currency exchange rate and interest rate fluctuations on earnings and cash flow. We measure all outstanding derivatives each period end at fair value and report the fair value as either financial assets or liabilities on the consolidated balance sheets. We do not enter into derivative contracts for speculative purposes. At inception of the contract, the derivative is designated as either a freestanding derivative or a hedge. Derivatives that are not designated as hedging instruments are referred to as freestanding derivatives with changes in fair value included in earnings. If the derivative qualifies for hedge accounting, changes in the fair value of the derivative will be recorded in accumulated other comprehensive income (“AOCI”) until the hedged item is recognized in earnings upon settlement/termination. FX derivative gains and losses in AOCI are reclassified to our consolidated statements of income (loss) as shown in the tables below and interest rate swap gains and losses in AOCI are reclassified to interest expense on our consolidated statements of income (loss). We evaluate hedge effectiveness at inception. Cash flows from derivative contracts are reported as operating activities on our consolidated statements of cash flows. Freestanding FX Derivative Contracts The gross notional amount of FX derivative contracts, not designated as hedging instruments, outstanding at December 31, 2019 and December 31, 2018 was $ 338.0 million and $320.2 million , respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans, our 2014 EIB loan, the Euro-denominated borrowings under the 2019 Debt Facility and trade receivables. We recorded net gains (losses) for these freestanding derivatives of $ 3.1 million , $(11.2) million and $(11.7) million for the years ended December 31, 2019 , 2018 and 2017 , respectively. These gains and (losses) are included in foreign exchange and other gains (losses) on our consolidated statements of income (loss). Cash Flow Hedges Foreign Currency Risk We utilize FX derivative contracts, designed as cash flow hedges, to hedge the variability of cash flows associated with our 12 months U.S. dollar forecasts of revenues and costs denominated in British Pound, Japanese Yen, Canadian Dollars and the Euro. We transfer to earnings from AOCI, the gain or loss realized on the FX derivative contracts at the time of invoicing. Interest Rate Risk The 2014 EIB loan agreement matures in June 2021 . The variable interest rate for the 2014 EIB loan is reset by the lender each quarter based on the Euribor. To minimize the impact of changes in interest rates we entered into interest rate swap agreement programs to swap the 2014 EIB loan’s floating-rate interest payments for fixed-rate interest payments. The interest rate swap contracts qualify for, and are designated as, cash flow hedges. The notional amounts of open derivative contracts designated as cash flow hedges as of December 31, 2019 and 2018 , were as follows (in thousands): Description of Derivative Contract 2019 2018 FX derivative contracts to be exchanged for British Pounds $ 10,128 $ 9,629 FX derivative contracts to be exchanged for Japanese Yen 25,342 23,985 FX derivative contracts to be exchanged for Canadian Dollars — 7,637 FX derivative contracts to be exchanged for Euros 48,838 29,768 Interest rate swap contracts 22,442 38,115 $ 106,750 $ 109,134 After-tax net gain (loss) associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months are as follows (in thousands): Description of Derivative Contract After-tax net gain (loss) in AOCI as of December 31, 2019 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 600 $ 600 Interest rate swap contracts (86 ) (57 ) $ 514 $ 543 Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in other comprehensive income (loss) (“OCI”) and the amount reclassified to earnings from AOCI were as follows (in thousands): Year Ended December 31, 2019 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ 2,757 $ 3,003 FX derivative contracts SG&A — (2,071 ) Interest rate swap contracts Interest expense — (92 ) $ 2,757 $ 840 Year Ended December 31, 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ 44 $ 2,697 FX derivative contracts SG&A — (2,554 ) Interest rate swap contracts Interest expense — (66 ) $ 44 $ 77 Year Ended December 31, 2017 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ (9,861 ) $ (6,471 ) FX derivative contracts SG&A — 2,084 Interest rate swap contracts Interest expense — 939 $ (9,861 ) $ (3,448 ) We offset fair value amounts associated with our derivative instruments on our consolidated balance sheets that are executed with the same counterparty under master netting arrangements. Our netting arrangements include a right to set off or net together purchases and sales of similar products in the settlement process. The following tables present the fair value and the location of derivative contracts reported on the consolidated balance sheets (in thousands): December 31, 2019 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Accrued liabilities $ 313 Interest rate swap contracts Other long-term liabilities 61 FX derivative contracts Prepaid expenses and other current assets $ 148 Accrued liabilities 169 FX derivative contracts Accrued liabilities 387 Total derivatives designated as hedging instruments 535 543 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities 26 Accrued liabilities 3,104 FX derivative contracts Prepaid expenses and other current assets 33 Total derivatives not designated as hedging instruments 26 3,137 Total derivatives $ 561 $ 3,680 December 31, 2018 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Accrued liabilities $ 536 Interest rate swap contracts Other long-term liabilities 329 FX derivative contracts Accrued liabilities 1,354 Total derivatives designated as hedging instruments 2,219 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets $ 236 Accrued liabilities 3,173 Total derivatives not designated as hedging instruments 236 3,173 Total derivatives $ 236 $ 5,392 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “ Note 10. Fair Value Measurements .” |
Leases Leases
Leases Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 13. Leases We have operating leases primarily for (i) office space, (ii) manufacturing, warehouse and research and development facilities and (iii) vehicles. Our leases have remaining lease terms up to 12 years , some of which include options to extend the leases, and some of which include options to terminate the leases at our sole discretion. The components of operating lease assets, liabilities and costs are as follows (in thousands): Operating Lease Assets and Liabilities December 31, 2019 Assets Operating lease right-of-use assets $ 54,372 Liabilities Accrued liabilities and other $ 11,110 Long-term operating lease liabilities 46,027 Total lease liabilities $ 57,137 Operating Lease Cost Year Ended Operating lease cost $ 14,002 Variable lease cost 873 Short-term lease cost 788 Total lease cost $ 15,663 Contractual maturities of our lease liabilities as of December 31, 2019 , are as follows (in thousands): 2020 $ 12,399 2021 10,402 2022 9,224 2023 7,524 2024 5,975 Thereafter 16,907 Total lease payments 62,431 Less: Amount representing interest 5,294 Present value of lease liabilities $ 57,137 Lease Term and Discount Rate December 31, 2019 Weighted Average Remaining Lease Term 7.0 years Weighted Average Discount Rate 2.4 % Other information (in thousands) Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 13,522 Operating lease assets obtained in exchange for lease liabilities $ 8,712 Disclosures Related to Periods Prior to Adoption of Topic 842 On January 1, 2019, we adopted Topic 842 using the modified retrospective adoption approach, as noted in “ Note 2. Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies .” As required and as previously disclosed in our 2018 Form 10-K, the following table summarizes our future minimum operating lease payments as of December 31, 2018 (in thousands): Less than one year $ 11,986 One to three years 21,031 Three to five years 14,998 Thereafter 20,943 Total $ 68,958 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies FDA Warning Letter On December 29, 2015, the FDA issued a Warning Letter alleging certain violations of FDA regulations applicable to medical device manufacturers at our Munich, Germany and Arvada, Colorado facilities. The FDA inspected the Munich facility from August 24, 2015 to August 27, 2015 and the Arvada facility from August 24, 2015 to September 1, 2015. On August 27, 2015, the FDA issued a Form 483 identifying two observed non-conformities with certain regulatory requirements at the Munich facility. We did not receive a Form 483 in connection with the FDA’s inspection of the Arvada facility. Following the receipt of the Form 483, we provided written responses to the FDA describing corrective and preventive actions that were underway or to be taken to address the FDA’s observations at the Munich facility. The Warning Letter responded in part to our responses and identified other alleged violations related to the manufacture of our 3T Heater-Cooler device that were not previously included in the Form 483. The Warning Letter further stated that our 3T devices and other devices we manufactured at our Munich facility were subject to refusal of admission into the U.S. until resolution of the issues set forth by the FDA in the Warning Letter. The FDA had informed us that the import alert was limited to the 3T devices, but that the agency reserved the right to expand the scope of the import alert if future circumstances warranted such action. The Warning Letter did not request that existing users cease using the 3T device, and manufacturing and shipment of all of our products other than the 3T device were unaffected by the import limitation. To help clarify these issues for current customers, we issued an informational Customer Letter in January 2016 and that same month agreed with the FDA on a process for shipping 3T devices to existing U.S. users pursuant to a certificate of medical necessity program. Finally, the Warning Letter stated that premarket approval applications for Class III devices to which certain Quality System regulation deviations identified in the Warning Letter were reasonably related would not be approved until the violations had been corrected; however, this restriction applied only to the Munich and Arvada facilities, which do not manufacture or design devices subject to Class III premarket approval. On February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. Concurrent with this clearance, (1) 3T devices manufactured in accordance with K191402 will not be subjected to the import alert and (2) LivaNova initiated a correction to distribute the updated Operating Instructions cleared under K191402. We continue to work diligently to remediate the FDA’s inspectional observations for the Munich facility, as well as the additional issues identified in the Warning Letter. We take these matters seriously and intend to respond timely and fully to the FDA’s requests. CDC and FDA Safety Communications and Company Field Safety Notice On October 13, 2016, the CDC and the FDA separately released safety notifications regarding the 3T devices. The CDC’s Morbidity and Mortality Weekly Report (“MMWR”) and Health Advisory Notice (“HAN”) reported that tests conducted by CDC and its affiliates indicate that there appears to be genetic similarity between both patient and 3T device strains of the non-tuberculous mycobacterium (“NTM”) bacteria M. chimaera isolated in hospitals in Iowa and Pennsylvania. Citing the geographic separation between the two hospitals referenced in the investigation, the report asserts that 3T devices manufactured prior to August 18, 2014 could have been contaminated during the manufacturing process. The CDC’s HAN and FDA’s Safety Communication, issued contemporaneously with the MMWR report, each assess certain risks associated with 3T devices and provide guidance for providers and patients. The CDC notification states that the decision to use the 3T device during a surgical operation is to be taken by the surgeon based on a risk approach and on patient need. Both the CDC’s and FDA’s communications confirm that 3T devices are critical medical devices and enable doctors to perform life-saving cardiac surgery procedures. Also on October 13, 2016, concurrent with the CDC’s HAN and FDA’s Safety Communication, we issued a Field Safety Notice Update for U.S. users of 3T devices to proactively and voluntarily contact facilities to aid in implementation of the CDC and FDA recommendations. In the fourth quarter of 2016, we initiated a program to provide existing 3T device users with a new loaner 3T device at no charge pending regulatory approval and implementation of additional risk mitigation strategies worldwide, including a vacuum canister and internal sealing upgrade program and a deep disinfection service. This loaner program began in the U.S. and was rolled out in Europe shortly thereafter. It is being made available progressively on a global basis, prioritizing and allocating devices to 3T device users based on pre-established criteria. We anticipate that this program will continue until we are able to address customer needs through a broader solution that includes implementation of the risk mitigation strategies described above. We are currently implementing the vacuum and sealing upgrade program in as many countries as possible until all devices are upgraded. On October 11, 2018, after review of information provided by us, the FDA concluded that we could commence the vacuum and scaling upgrade program in the U.S., and on February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. Furthermore, we continue to offer a no-charge deep disinfection service (deep cleaning service) for 3T device users as we receive the required regulatory approvals. The deep disinfection service was rolled out in Europe in the second half of 2015, and on April 12, 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S., thereby adding to the growing list of countries around the world in which we offer this service. On December 31, 2016, we recognized a liability for our product remediation plan related to our 3T device. We concluded that it was probable that a liability had been incurred upon management’s approval of the plan and the commitments made by management to various regulatory authorities globally in November and December 2016, and furthermore, the cost associated with the plan was reasonably estimable. At December 31, 2019 , the product remediation liability was $3.3 million . Refer to “ Note 7. Product Remediation Liability ” for additional information. Litigation Product Liability The Company is currently involved in litigation involving our 3T device. The litigation includes a class action complaint in the U.S. District Court for the Middle District of Pennsylvania, federal multi-district litigation in the U.S. District Court for the Middle District of Pennsylvania, various U.S. state court cases and cases in jurisdictions outside the U.S. The class action, filed in February 2016, consists of all Pennsylvania residents who underwent open heart surgery at WellSpan York Hospital and Penn State Milton S. Hershey Medical Center between 2011 and 2015 and who currently are asymptomatic for NTM infection. Members of the class seek declaratory relief that the 3T devices are defective and unsafe for intended uses, medical monitoring, damages, and attorneys’ fees. On March 29, 2019, we announced a settlement framework that provides for a comprehensive resolution of the personal injury cases pending in the multi-district litigation in U.S. federal court, the related class action pending in federal court, as well as certain cases in state courts across the United States. The agreement, which makes no admission of liability, is subject to certain conditions, including acceptance of the settlement by individual claimants and provides for a total payment of up to $225 million to resolve the claims covered by the settlement. Per the agreed-upon terms, the first payment of $135 million was paid into a qualified settlement fund in July 2019 and the second payment of $90 million was paid in January 2020. Cases covered by the settlement are being dismissed as amounts are disbursed to individual plaintiffs from the qualified settlement fund. Cases in state courts in the U.S. and in jurisdictions outside the U.S. continue to progress. As of March 2, 2020 , including the cases encompassed in the settlement framework described above that have not yet been dismissed, we are aware of approximately 95 filed and unfiled claims worldwide, with the majority of the claims in various federal or state courts throughout the United States. This number includes cases that have settled but have not yet been dismissed. The complaints generally seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and negligent misrepresentation or concealment, unjust enrichment, and violations of various state consumer protection statutes. In the fourth quarter of 2018, we recognized a $294.1 million provision for these matters. In the fourth quarter of 2019, we recorded an additional liability of $33.2 million due to additional information obtained, including but not limited to: the nature and quantity of filed and unfiled claims; certain settlement discussions with plaintiffs’ counsel; and the current stage of litigation in our remaining filed and unfiled claims. At December 31, 2019 , the provision was $170.4 million . While the amount accrued represents our best estimate, the actual liability for resolution of these matters may vary from our estimate. The changes in the litigation provision liability for the year ended December 31, 2019 , are as follows (in thousands): Total litigation provision liability at December 31, 2018 $ 294,061 Payments (156,928 ) Adjustments 33,233 FX and other 38 Total litigation provision liability at December 31, 2019 170,404 Less current portion of litigation provision liability at December 31, 2019 146,026 Long-term portion of litigation provision liability at December 31, 2019 $ 24,378 In July 2019, we entered into agreements with our insurance carriers to recover $33.8 million under our product liability insurance policies related to the litigation involving our 3T device. The insurance recovery was received and recorded in litigation provision, net on the consolidated statements of income (loss) during the third quarter of the current fiscal year. Environmental Liability Our subsidiary, Sorin S.p.A. (“Sorin”) was created as a result of a spin-off (the “Sorin spin-off”) from SNIA S.p.A. (“SNIA”) in January 2004. SNIA subsequently became insolvent and the Italian Ministry of the Environment and the Protection of Land and Sea (the “Italian Ministry of the Environment”), sought compensation from SNIA in an aggregate amount of approximately $4 billion for remediation costs relating to the environmental damage at chemical sites previously operated by SNIA’s other subsidiaries. In September 2011 and July 2014, the Bankruptcy Court of Udine and the Bankruptcy Court of Milan held (in proceedings to which we are not parties) that the Italian Ministry of the Environment and other Italian government agencies (the “Public Administrations”) were not creditors of either SNIA or its subsidiaries in connection with their claims in the Italian insolvency proceedings. The Public Administrations appealed and in January 2016, the Court of Udine rejected the appeal. The Public Administrations have also appealed that decision to the Supreme Court. In addition, the Bankruptcy Court of Milan’s decision has been appealed. In January 2012, SNIA filed a civil action against Sorin in the Civil Court of Milan asserting joint liability of a parent and a spun-off company. On April 1, 2016, the Court of Milan dismissed all legal actions of SNIA and of the Public Administrations further requiring the Public Administrations to pay Sorin approximately €292,000 (approximately $328,000 as of December 31, 2019 ) for legal fees. The Public Administrations appealed the 2016 Decision to the Court of Appeal of Milan. On March 5, 2019, the Court of Appeal issued a partial decision on the merits declaring Sorin/LivaNova jointly liable with SNIA for SNIA’s environmental liabilities in an amount up to the fair value of the net worth received by Sorin because of the Sorin spin-off. Additionally the Court issued a separate order, staying the proceeding until a Panel of three experts can assess the environmental damages, the costs of clean-up, and the costs that the Public Administrations has already borne for the clean-up of the sites to allow the Court to decide on the second claim of the Public Administrations against LivaNova, (i.e., to refund the Public Administration for the SNIA environmental liabilities). In the interim, we are appealing the decision to the Italian Supreme Court (Corte di Cassazione). We have not recognized an expense in connection with this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Opposition to Merger Proceedings On July 28, 2015, the Public Administrations filed an opposition proceeding before the Commercial Division of the Court of Milan to the merger of Sorin and Cyberonics, Inc., the predecessor companies to LivaNova. The Court authorized the merger, and the Public Administrations did not appeal that decision. The proceeding then continued as a civil case, with the Public Administrations seeking damages. The Commercial Court of Milan delivered a decision in October 2016, fully rejecting the Public Administrations’ request and awarding us approximately €400,000 (approximately $449,000 as of December 31, 2019 ) in damages for frivolous litigation and legal fees. The Public Administrations appealed to the Court of Appeal of Milan. On May 15, 2018, the Court of Appeal of Milan confirmed the decision authorizing the merger but annulled the penalty for frivolous litigation and reduced the overall contribution of legal fees to €84,000 (approximately $94,000 as of December 31, 2019 ). On February 28, 2020, the Supreme Court confirmed the decision, authorizing the merger and increasing the overall contribution of legal fees to LivaNova to €98,000 (approximately $110,000 as of December 31, 2019). There is no further avenue of appeal in this matter, and the matter is now concluded. Patent Litigation On May 11, 2018, Neuro and Cardiac Technologies LLC (“NCT”), a non-practicing entity, filed a complaint in the United States District Court for the Southern District of Texas asserting that the VNS Therapy System, when used with the SenTiva Model 1000 generator, infringes the claims of U.S. Patent No. 7,076,307 owned by NCT. The complaint requests damages that include a royalty, costs, interest, and attorneys’ fees. On September 13, 2018, we petitioned the Patent Trial and Appeal Board of the U. S. Patent and Trademark Office (the “Patent Office”) for an inter partes review (“IPR”) of the validity of the ‘307 patent. The Patent Office instituted an IPR of all the challenged claims. The Court has stayed the litigation pending the outcome of the IPR proceeding. We have not recognized an expense in connection with this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Contract Litigation On November 25, 2019, LivaNova received notice of a lawsuit initiated by former members of Caisson Interventional, LLC (“Caisson”), a subsidiary of the Company acquired in 2017. The lawsuit, Todd J. Mortier, as Member Representative of the former Members of Caisson Interventional, LLC v. LivaNova USA, Inc., is currently pending in the United States District Court for the District of Minnesota. The complaint alleges (i) breach of contract, (ii) breach of the covenant of good faith and fair dealing and (iii) unjust enrichment in connection with the Company’s operation of Caisson’s Transcatheter Mitral Valve Replacement (“TMVR”) program and the Company’s November 20, 2019 announcement that it was ending the TMVR program at the end of 2019. The lawsuit seeks damages arising out of the 2017 acquisition agreement, including various regulatory milestone payments. We intend to vigorously defend this claim. The Company has not recognized an expense related to this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Tax Litigation In a tax audit report received on October 30, 2009, the Regional Internal Revenue Office of Lombardy (the “Internal Revenue Office”) informed Sorin Group Italia S.r.l. that, among several issues, it was disallowing in part (for a total of €102.6 million (approximately $115.1 million as of December 31, 2019 ), related to tax years 2002 through 2006) a tax-deductible write down of the investment in the U.S. company, Cobe Cardiovascular Inc., which Sorin Group Italia S.r.l. recognized in 2002 and deducted in five equal installments, beginning in 2002. In December 2009, the Internal Revenue Office issued notices of assessment for 2004. In December 2010 and October 2011, the Internal Revenue Office issued notices of assessment for 2005 and 2006, respectively. We challenged all three notices of assessment (for 2004, 2005 and 2006) before the relevant Provincial Tax Courts. The preliminary challenges filed for 2004, 2005 and 2006 were denied at the first jurisdictional level. We appealed these decisions. The appeal submitted against the first-level decision for 2004 was successful. The Internal Revenue Office appealed this second-level decision to the Italian Supreme Court (Corte di Cassazione) on February 3, 2017. The Italian Supreme Court’s decision is pending. The appeals submitted against the first-level decisions for 2005 and 2006 were rejected. We appealed these adverse decisions to the Italian Supreme Court. On November 16, 2018, the Supreme Court returned the decisions for years 2005 and 2006 to the previous-level Court (Regional Tax Court) due to lack of substance of the motivation given in the 2 nd level judgments that were appealed. In November 2012, the Internal Revenue Office served a notice of assessment for 2007, and in July 2013, served a notice of assessment for 2008. In these matters the Internal Revenue Office claims an increase in taxable income due to a reduction (similar to the previous notices of assessment for 2004, 2005 and 2006) of the losses reported by Sorin Group Italia S.r.l. for the 2002, 2003 and 2004 tax periods, and subsequently utilized in 2007 and 2008. We challenged both notices of assessment. The Provincial Tax Court of Milan has stayed its decision for years 2007 and 2008 pending resolution of the litigation regarding years 2004, 2005, and 2006. The total amount of losses in dispute is €62.6 million (approximately $70.2 million as of December 31, 2019 ). We have continuously reassessed our potential exposure in these matters, taking into account the recent, and generally adverse, trend to Italian taxpayers in this type of litigation. Although we believe that our defensive arguments are strong, noting the adverse trend in some of the court decisions, we have recognized a reserve for an uncertain tax position for the full amount of the potential liability. On May 31, 2019, we filed an application to settle the litigation according to law N. 136/2018 and paid the required settlement balance of €1.9 million . As per law N. 136/2018, the Italian Revenue Agency will review the settlement and decide to accept or reject the application by July 31, 2020. Until the settlement is accepted by the Italian Revenue Agency, we will continue to reserve for the full amount of the potential liability, by recognizing a €15.5 million reserve for uncertain tax position (approximately $17.4 million , as of December 31, 2019 ), net of the settlement payment. Other Matters Additionally, we are the subject of various pending or threatened legal actions and proceedings that arise in the ordinary course of our business. These matters are subject to many uncertainties and outcomes that are not predictable and that may not be known for extended periods of time. Since the outcome of these matters cannot be predicted with certainty, the costs associated with them could have a material adverse effect on our consolidated net income, financial position or liquidity. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 15. Stockholders’ Equity Share repurchase plans On August 1, 2016, the Board of Directors of LivaNova approved the authorization of a share repurchase plan (the "Share Repurchase Program") pursuant to an authority granted by shareholders at the 2016 annual general meeting held on June 15, 2016. The authority granted by the shareholders has a five-year expiration. The Share Repurchase Program was structured to enable us to buy back up to $150.0 million of our shares on NASDAQ between September 1, 2016 through December 31, 2016. On November 15, 2016, the Board of Directors approved an amendment (the "Amended Share Repurchase Program") to the Share Repurchase Program authorizing the Company to repurchase up to $150.0 million of our shares between September 1, 2016 and December 31, 2018. For the year ended December 31, 2018 , we repurchased and canceled 500,333 shares under this plan at a cost of $50.0 million and an average price per share of $99.91 . We did not purchase any shares during the years ended December 31, 2017 and December 31, 2019 . Treasury Stock For the year ended December 31, 2018 , we issued 1.4 million shares to our Employee Benefit Trust (“EBT”). Shares held by the EBT are issued to employees and directors at exercise of stock-based compensation grants. The balance of shares in the EBT are reported as treasury shares. We did not issue any additional shares to our EBT during the year ended December 31, 2019. Accumulated other comprehensive (loss) income The table below presents the change in each component of AOCI, net of tax and the reclassifications out of AOCI into net income for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total As of December 31, 2016 $ 3,619 $ (72,106 ) $ (68,487 ) Other comprehensive (loss) income before reclassifications, before tax (9,861 ) 118,338 108,477 Tax benefit 2,653 — 2,653 Other comprehensive (loss) income before reclassifications, net of tax (7,208 ) 118,338 111,130 Reclassification of loss from accumulated other comprehensive income (loss), before tax 3,448 — 3,448 Reclassification of tax benefit (778 ) — (778 ) Reclassification of gain from accumulated other comprehensive income (loss), after tax 2,670 — 2,670 Net current-period other comprehensive (loss) income, net of tax (4,538 ) 118,338 113,800 As of December 31, 2017 (919 ) 46,232 45,313 Other comprehensive income (loss) before reclassifications, before tax 44 (69,764 ) (69,720 ) Tax expense (11 ) — (11 ) Other comprehensive income (loss) before reclassifications, net of tax 33 (69,764 ) (69,731 ) Reclassification of gain from accumulated other comprehensive income (loss), before tax (77 ) — (77 ) Reclassification of tax expense 19 — 19 Reclassification of gain from accumulated other comprehensive income (loss), after tax (58 ) — (58 ) Net current-period other comprehensive loss, net of tax (25 ) (69,764 ) (69,789 ) As of December 31, 2018 (944 ) (23,532 ) (24,476 ) Other comprehensive income (loss) before reclassifications, before tax 2,757 3,627 6,384 Tax expense (661 ) — (661 ) Other comprehensive income (loss) before reclassifications, net of tax 2,096 3,627 5,723 Reclassification of gain from accumulated other comprehensive income (loss), before tax (840 ) — (840 ) Reclassification of tax expense 201 — 201 Reclassification of gain from accumulated other comprehensive income (loss), after tax (639 ) — (639 ) Net current-period other comprehensive loss, net of tax 1,457 3,627 5,084 As of December 31, 2019 $ 513 $ (19,905 ) $ (19,392 ) (1) |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Plans | Note 16. Stock-Based Incentive Plans Stock-Based Incentive Plans Stock-based awards may be granted under the 2015 Incentive Award Plan (the “2015 Plan”) in the form of stock options, SARs, RSUs and other stock-based and cash-based awards. As of December 31, 2019 , there were approximately 4,904,000 shares available for future grants under the 2015 Plan. During the year ended December 31, 2019 , we awarded SARs and RSUs with service conditions that generally vest ratably over 4 years , subject to forfeiture unless service conditions are met. In addition, during the year ended December 31, 2019 , we awarded market performance-based awards that cliff vest after three years , subject to the rank of our total shareholder return for the three -year period ending December 31, 2021, relative to the total shareholder returns for a peer group of companies, and we issued operating performance-based awards that cliff vest after three years subject to the achievement of certain thresholds of cumulative adjusted free cash flow for the three -year period ending December 31, 2021. On January 1, 2019, we initiated the LivaNova Global Employee Share Purchase Plan (“ESPP”). Compensation expense related to the ESPP for the year ended December 31, 2019 was $1.3 million . The stock-based compensation tables below include expense and share activity related to discontinued operations. Stock-Based Compensation Amounts of stock-based compensation recognized on our consolidated statements of income (loss), by expense category, are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Cost of goods sold $ 1,343 $ 1,060 $ 450 Selling, general and administrative 25,588 19,393 16,118 Research and development 5,622 4,510 1,119 Stock-based compensation from continuing operations 32,553 24,963 17,687 Stock-based compensation from discontinued operations — 1,960 1,375 Total stock-based compensation expense 32,553 26,923 19,062 Income tax benefit 6,590 6,443 4,236 Total expense, net of income tax benefit $ 25,963 $ 20,480 $ 14,826 Amounts of stock-based compensation expense recognized on our consolidated statements of income (loss), by type of arrangement, are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Service-based stock appreciation rights $ 10,349 $ 8,282 $ 6,916 Service-based restricted stock units 14,113 10,622 8,223 Market performance-based restricted stock units 2,900 2,357 732 Operating performance-based restricted stock units 3,918 3,702 1,816 Employee stock purchase plan 1,273 — — Total stock-based compensation expense from continuing operations $ 32,553 $ 24,963 $ 17,687 Unrecognized Stock-Based Compensation Amounts of stock-based compensation cost not yet recognized related to non-vested awards, including awards assumed or issued, as of December 31, 2019 , are as follows (in thousands): Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 25,508 2.67 Service-based restricted stock unit awards 33,456 2.73 Performance-based restricted stock unit awards 10,587 1.65 Total stock-based compensation cost unrecognized $ 69,551 2.35 Stock Appreciation Rights and Stock Options We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of SARs. The following table lists the assumptions we utilized as inputs to the Black-Scholes model: Year Ended December 31, 2019 2018 2017 Dividend yield (1) — — — Risk-free interest rate (2) 1.4% - 2.2% 2.5% - 2.9% 1.7% - 2.2% Expected option term - in years (3) 5.0 - 5.1 5.0 - 5.1 4.6 - 5.2 Expected volatility at grant date (4) 32.2% - 35.7% 29.2% - 29.9% 29.6% - 30.4% (1) We have not paid dividends and no future dividends have been approved. (2) We use yield rates on U.S. Treasury securities for a period that approximates the expected term of the awards granted to estimate the risk-free interest rate. (3) We estimated the expected term of the awards granted using historic data of actual time elapsed between the date of grant and the exercise or forfeiture of options or SARs for employees. (4) We determine the expected volatility of the awards based on historical volatility. The following tables detail the activity for service-based SARs and stock option awards: SARs and Stock Options Number of Optioned Shares Wtd. Avg. Exercise Price per Share Wtd. Avg. Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) (1) Outstanding — at December 31, 2018 1,941,587 $ 67.33 Granted 591,845 96.60 Exercised (121,534 ) 61.50 Forfeited (171,282 ) 83.44 Expired (25,560 ) 72.60 Outstanding — at December 31, 2019 2,215,056 74.41 7.0 $ 22,195 Fully vested and exercisable — end of year 951,797 61.45 5.2 $ 15,495 Fully vested and expected to vest — end of year (2) 2,173,525 $ 74.08 7.0 $ 22,117 (1) The aggregate intrinsic value of SARs and options is based on the difference between the fair market value of the underlying stock at December 31, 2019 , using the market closing stock price, and exercise price for in-the-money awards. (2) Includes the impact of expected future forfeitures. Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of SARs granted during the year (per share) $ 31.22 $ 28.13 $ 17.19 Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) $ 2,064 $ 27,281 $ 5,462 Restricted Stock Units Awards The following tables detail the activity for service-based RSU awards: RSUs Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2018 450,297 $ 78.70 Granted 294,460 $ 92.54 Vested (147,969 ) $ 74.53 Forfeited (72,955 ) $ 92.62 Non-vested shares at December 31, 2019 523,833 $ 84.98 Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of service-based RSUs issued during the year (per share) $ 92.54 $ 95.63 $ 61.37 Aggregate fair value of RSUs that vested during the year (in thousands) $ 12,710 $ 11,505 $ 9,966 The following tables detail the activity for performance-based and market-based RSU awards: Performance-based and market-based RSUs Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2018 295,364 $ 56.48 Granted 88,453 $ 98.50 Vested (69,646 ) $ 41.52 Forfeited (28,502 ) $ 75.97 Non-vested shares at December 31, 2019 285,669 $ 71.02 Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of performance and market-based restricted share units granted during the year (per share) $ 98.50 $ 95.62 $ 42.11 Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) $ 6,697 $ 9,409 $ 110 |
Employee Retirement Plans
Employee Retirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plans | Note 17. Employee Retirement Plans Defined Benefit Plans We sponsor several defined benefit pension plans, which include plans in the U.S., Italy, Germany, Japan and France. We maintain a frozen cash balance retirement plan in the U.S. that is a contributory, defined benefit plan designed to provide the benefit in terms of a stated account balance dependent on the employer's promised interest-crediting rate. In Italy and France, we maintain a severance pay defined benefit plan that obligates the employer to pay a severance payment in case of resignation, dismissal or retirement. In other jurisdictions, we sponsor non-contributory, defined benefit plans designated to provide a guaranteed minimum retirement benefits to eligible employees. The change in benefit obligations and funded status of our U.S. pension benefits is as follows (in thousands): U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Accumulated benefit obligations at year end $ 11,232 $ 10,591 $ 11,191 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 10,591 $ 11,001 $ 10,425 Interest cost 382 336 361 Plan settlement (366 ) (340 ) — Actuarial loss 871 8 770 Benefits paid (246 ) (414 ) (555 ) Projected benefit obligation at end of year $ 11,232 $ 10,591 $ 11,001 Change in plan assets: Fair value of plan assets at beginning of year $ 6,767 $ 6,879 $ 5,925 Actual return on plan assets 628 (405 ) 444 Employer contributions 546 1,047 870 Plan settlement (366 ) (340 ) — Benefits paid (1 ) (414 ) (360 ) Fair value of plan assets at end of year $ 7,574 $ 6,767 $ 6,879 Funded status at end of year: Fair value of plan assets $ 7,574 $ 6,767 $ 6,879 Projected Benefit obligations 11,232 10,591 11,001 Underfunded status of the plans 3,658 3,824 4,122 Recognized liability $ 3,658 $ 3,824 $ 4,122 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 3,658 $ 3,824 $ 4,122 Recognized liability $ 3,658 $ 3,824 $ 4,122 The change in benefit obligations and funded status of our non-U.S. pension benefits is as follows (in thousands): Non-U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Accumulated benefit obligations at year end $ 17,744 $ 18,676 $ 23,785 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 18,975 $ 21,548 $ 20,402 Service cost 478 478 503 Interest cost 232 289 291 Actuarial loss (gain) 1,071 (818 ) (27 ) Benefits paid (2,380 ) (1,631 ) (2,222 ) Foreign currency exchange rate changes and other (289 ) (891 ) 2,601 Projected benefit obligation at end of year $ 18,087 $ 18,975 $ 21,548 Change in plan assets: Fair value of plan assets at beginning of year $ 3,341 $ 3,075 $ 2,898 Actual return on plan assets (34 ) 51 54 Employer contributions 383 361 369 Benefits paid (332 ) (156 ) (393 ) Foreign currency exchange rate changes 65 10 147 Fair value of plan assets at end of year $ 3,423 $ 3,341 $ 3,075 Funded status at end of year: Fair value of plan assets $ 3,423 $ 3,341 $ 3,075 Projected Benefit obligations 18,087 18,975 21,548 Underfunded status of the plans (1) 14,664 15,634 18,473 Recognized liability $ 14,664 $ 15,634 $ 18,473 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 14,664 $ 15,634 $ 18,473 Recognized liability $ 14,664 $ 15,634 $ 18,473 (1) In certain non-U.S. countries, fully funding pension plans is not a common practice. Consequently, certain pension plans have been partially funded. The tables below present net periodic benefit cost of the defined benefit pension plans by component (in thousands): U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Interest cost $ 382 $ 336 $ 361 Expected return on plan assets (298 ) (318 ) (282 ) Settlement and curtailment loss — 135 — Amortization of net actuarial loss 148 571 527 Net periodic benefit cost $ 232 $ 724 $ 606 Non-U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Service cost $ 478 $ 478 $ 503 Interest cost 232 289 291 Expected return on plan assets 34 (51 ) (54 ) Amortization of net actuarial loss (gain) 1,071 (818 ) (27 ) Net periodic benefit cost $ 1,815 $ (102 ) $ 713 To determine the discount rate for our U.S. benefit plan, we used the FTSE Above Median Pension Discount Curve. For the discount rate used for the other non-U.S. benefit plans we consider local market expectations of long-term returns, primarily utilizing the Iboxx Corporate Index Bond rating AA, duration higher than 10 years. The resulting discount rates are consistent with the duration of plan liabilities. The expected long-term rate of return on plan assets assumption for our U.S. benefit plan was derived from a study conducted by our investment managers. The study includes a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the plan to determine the average rate of earnings expected on the funds invested to provide for the pension plan benefits. Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant U.S. benefit plans as of December 31, 2019 , 2018 and 2017 , are presented in the following table: U.S. Pension Benefits 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation: Discount rate 2.88% 3.97% 3.28% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 3.97% 3.28% 3.63% Expected return on plan assets 5.00% 5.00% 5.00% Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant non-U.S. benefit plans as of December 31, 2019 , 2018 and 2017 , are presented in the following table: Non-U.S. Pension Benefits 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation: Discount rate 0.20% - 0.71% 0.20% - 1.55% 0.27% - 2.73% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.00% 2.50% - 3.00% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 0.20% - 0.71% 0.27% - 1.55% 0.27% - 2.73% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.00% 2.50% - 3.00% Retirement Benefit Plan Investment Strategy In the U.S., we have an account that holds the defined benefit frozen balance pension plan assets. The Qualified Plan Committee (the “Plan Committee”) sets investment guidelines for U.S. pension plans. The plan assets in the U.S. are invested in accordance with sound investment practices that emphasize long-term fundamentals. The investment objectives for the plan assets in the U.S. are to achieve a positive rate of return that would be expected to close the current funding deficit and so enable us to terminate the frozen pension plan at a reasonable cost. The Plan Committee also oversees the investment allocation process, selects the investment managers, and monitors asset performance. The investment portfolio contains a diversified portfolio of fixed income and equity index funds. Securities are also diversified in terms of domestic and international securities, short- and long-term securities, growth and value styles, large cap and small cap stocks. Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. There is a significant variation in policy asset allocation from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The table below presents our U.S. pension plan target allocations by asset category as of December 31, 2019 : Equity securities 30% Debt securities 69% Other 1% Retirement Benefit Fair Values The following is a description of the valuation methodologies used for retirement benefit plan assets measured at fair value: Equity Mutual Funds: Valued based on the year-end net asset values of the investment vehicles. The net asset values of the investment vehicles are based on the fair values of the underlying investments of the partnerships valued at the closing price reported in the active markets in which the individual security is traded. Equity mutual funds have a daily reported net asset value. Fixed Income Mutual Funds: Valued based on the year-end net asset values of the investment vehicles. The net asset values of the investment vehicles are based on the fair values of the underlying investments of the partnerships valued based on inputs other than quoted prices that are observable. Money Markets: Valued based on quoted prices in active markets for identical assets. The following tables provide information by level for the retirement benefit plan assets that are measured at fair value, as defined by U.S. GAAP (in thousands): Fair Value as of December 31, 2019 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 2,262 $ — $ 2,262 $ — Fixed income mutual funds 5,225 — 5,225 — Money market funds 74 74 — — $ 7,561 $ 74 $ 7,487 $ — Fair Value as of December 31, 2018 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,961 $ — $ 1,961 $ — Fixed income mutual funds 4,734 — 4,734 — Money market funds 72 72 — — $ 6,767 $ 72 $ 6,695 $ — Refer to “Note 2. Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies” for discussion of the fair value measurement terms of Levels 1, 2, and 3. Defined Benefit Retirement Funding We make the minimum required contribution to fund the U.S. pension plan as determined by MAP - 21 and the Highway and Transportation Funding Act of 2014 (“HAFTA”). We contributed $0.9 million , $1.4 million and $1.2 million to the pension plans (U.S. and non-U.S.) during the years ended December 31, 2019 , 2018 and 2017 , respectively. We anticipate that we will make contributions to the U.S. pension plan of approximately $1.4 million during the year ended December 31, 2020 . Benefit payments, including amounts to be paid from our assets, and reflecting expected future service as of December 31, 2019 , are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2020 3,026 894 2021 812 723 2022 994 966 2023 612 1,066 2024 707 889 2025 - 2029 3,262 5,327 Severance Indemnity In Italy, upon termination of employment for any reason, employers are required to pay a termination indemnity ( Trattamento di fine Rapporto or “TFR”) to all employees as required by Italian Civil Code. The TFR serves as a backup in the event of redundancy or as an additional pension benefit after retirement. The TFR is considered a defined contribution plan with respect to amounts vesting as of January 1, 2007 for employees who have opted for supplementary pensions, or who have chosen to maintain the TFR at the company, for companies with more than 50 employees. We have incurred expenses related to the Italian TFR of approximately $1.0 million , $(0.2) million and $0.4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Defined Contribution Plans We sponsor defined contribution plans in the U.S. including the Cyberonics, Inc. Employee Retirement Savings Plan, which qualifies under Section 401(k) of the IRC covering U.S. employees and the Cyberonics, Inc. Non-Qualified Deferred Compensation Plan (the “Deferred Compensation”), covering certain U.S. middle and senior management. In addition, we sponsor the Belgium Defined Contribution Pension Plan for Cyberonics’ Belgium employees. We incurred expenses for our defined contribution plans of $12.4 million , $12.0 million and $13.9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 18. Income Taxes Earnings Before Income Taxes and Components of Income Tax Provision The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes and our income tax expense (benefit) from continuing operations (in thousands): Year Ended December 31, 2019 2018 2017 Income (loss) from continuing operations before income taxes: UK and Non-U.S. $ 28,788 $ 59,528 $ 71,980 U.S. (214,482 ) (306,975 ) 49,158 $ (185,694 ) $ (247,447 ) $ 121,138 Total income tax expense (benefit) from continuing operations consisted of the following: Current: UK and Non-U.S. $ 1,112 $ 9,645 $ 12,771 U.S. (4,988 ) 1,291 26,743 (3,876 ) 10,936 39,514 Deferred: UK and Non-U.S. (7,407 ) 533 (4,140 ) U.S. (18,870 ) (81,098 ) 14,580 (26,277 ) (80,565 ) 10,440 Total income tax (benefit) expense from continuing operations $ (30,153 ) $ (69,629 ) $ 49,954 Effective Income Tax Rate Reconciliation LivaNova PLC is domiciled and resident in the UK. Our subsidiaries conduct operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries, and the income tax rates imposed in the tax jurisdictions in which our subsidiaries conduct operations vary. As a result of the changes in the overall level of our income, the earnings mix in various jurisdictions and the changes in tax laws, our consolidated effective income tax rate may vary from one reporting period to another. The following table is a reconciliation of the statutory income tax rate to our effective income tax rate expressed as a percentage of income from continuing operations before income taxes: Year Ended December 31, 2019 2018 2017 Statutory tax rate at UK Rate 19.0 % 19.0 % 19.0 % Deferred tax valuation allowance (17.6 ) (0.8 ) 10.6 Foreign tax rate differential 6.7 3.0 10.7 U.S. state and local tax expense, net of federal benefit 6.1 4.3 1.2 Effect of changes in tax rate (3.1 ) 0.6 (19.9 ) Write-off/impairment of investments (2.8 ) (1.3 ) (14.8 ) Reserve for uncertain tax positions 2.5 (0.7 ) 1.2 Research and development tax credits 2.2 1.1 (1.6 ) UK CFC tax 2.1 (1.0 ) 0.2 U.S. tax on non-U.S. operations (1.6 ) (0.5 ) 1.5 Base erosion anti-abuse tax 1.5 (1.2 ) — Exempt income 1.2 6.1 (13.5 ) Transaction costs — (0.8 ) 2.0 Sale of intellectual property — — 44.3 Domestic manufacturing deduction — — (1.8 ) Other, net — 0.3 2.1 Effective tax rate 16.2 % 28.1 % 41.2 % U.S. Tax Reform On December 22, 2017, the U.S. enacted the Tax Act, which significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21%, which commenced in 2018. In addition, the Tax Act created a mandatory deemed repatriation tax (“transition tax”) on previously deferred foreign earnings of non-U.S. subsidiaries controlled by a U.S. corporation, or, in our case, a non-U.S. subsidiary controlled by one of our U.S. subsidiaries. We recorded no transition tax for the year ended December 31, 2017 as we had no previously deferred foreign earnings of U.S. controlled foreign subsidiaries as of the measurement dates. During the fourth quarter of 2018, we finalized our accounting under Staff Accounting Bulletin No. 118 for the remeasurement of the deferred tax assets and liabilities and impairment of foreign tax credits related to the Tax Act. Our accounting for the remeasurement is complete with a final non-cash net charge of $21.0 million . Deferred Income Tax Assets and Liabilities The significant components of our deferred tax assets and liabilities as of December 31, 2019 and 2018 , are as follows (in thousands): 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 125,883 $ 87,406 Tax credit carryforwards 28,272 26,152 Accruals and reserves 69,562 96,483 Deferred compensation 9,692 5,757 Inventory 9,436 3,956 Other 12,135 6,043 Gross deferred tax assets 254,980 225,797 Valuation allowance (76,317 ) (40,255 ) Net deferred tax assets 178,663 185,542 Deferred tax liabilities: Property, equipment & intangible assets (89,115 ) (122,035 ) Gain on sale of intellectual property (53,091 ) (59,249 ) Investments — (3,561 ) Other — (740 ) Gross deferred tax liabilities: (142,206 ) (185,585 ) Net deferred tax assets (liabilities) $ 36,457 $ (43 ) Reported on the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax assets $ 68,676 $ 68,146 Deferred tax liabilities (32,219 ) (68,189 ) Net deferred tax assets (liabilities) $ 36,457 $ (43 ) Tax Attributes Net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2019 , which can be used to reduce our income tax payable in future years (in thousands): Region Gross Amount Tax Benefit Amount Amount with Expiration Carryforward Period Europe NOL $ 254,869 $ 52,408 $ 49,032 $ 3,376 2022 - 2026 U.S. Federal NOL 252,283 52,979 17,872 35,107 2021 - 2036 U.S. State NOL 307,525 14,611 5,431 9,180 2020 - 2038 South America NOL 17,263 5,859 5,521 338 2028 - 2030 Far East NOL 86 26 — 26 2029 U.S. foreign tax credits — 14,832 — 14,832 2025 - 2029 U.S. research & development tax credits — 6,552 — 6,552 2020 - 2039 U.S. State research & development tax credits — 5,126 — 5,126 2022 - 2039 Other non-U.S. tax credits — 1,259 — 1,259 2020 - 2032 Other U.S. tax credits — 503 503 — $ 832,026 $ 154,155 $ 78,359 $ 75,796 As of December 31, 2019 and 2018 , we had a valuation allowance of $76.3 million and $40.3 million , respectively. These valuation allowances were primarily related to continuing operations. As of December 31, 2017 , we had a valuation allowance of $93.3 million , which includes $48.7 million related to discontinued operations and $44.6 million related to continuing operations. As a result of the business combination during the transitional period to December 31, 2015, the historic NOL’s of Sorin U.S. are limited by IRC section 382. The annual limitation is approximately $18.3 million , which is sufficient to absorb the U.S. net operating losses prior to their expiration. As a result of the April 2018 acquisition of TandemLife, there is an IRC section 382 annual limitation of approximately $17.2 million , which is sufficient to absorb the U.S. net operating losses prior to their expiration. In 2016, we consolidated certain of our intangible assets into an entity organized under the laws of England and Wales. Because the intangible assets were sold and purchased inter-company, the tax expense on the inter-company gain was deferred and amortized to current income tax expense on our consolidated statements of income (loss). With our adoption of Accounting Standards Update 2016-16, Intra-Entity Transfers of Assets Other Than Inventory on January 1, 2018, we no longer record the income tax on the deferred inter-company gain in prepaid expense and other assets on the consolidated balance sheets; rather, the income tax expense on the gain of the asset sale is recognized in the corresponding jurisdictions for the seller and buyer, refer to “ Note 23. New Accounting Pronouncements ” for further information. A significant portion of the net deferred tax liability worldwide included above relates to the tax effect of the step-up in value of the assets acquired in the combination with Sorin. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries as of December 31, 2019 because it is our intention to indefinitely reinvest undistributed earnings of our foreign subsidiaries. In the event of the distribution of those earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, we may be liable for income taxes and withholding taxes. As of December 31, 2019 , it was not practicable to determine the amount of the deferred tax liability related to those investments. Uncertain Income Tax Positions The following is a roll-forward of our total gross unrecognized tax benefit (in thousands): Year Ended December 31, 2019 2018 2017 Balance at beginning of year $ 22,883 $ 26,137 $ 22,374 Increases: Tax positions related to current year 176 671 324 Tax positions related to prior year — 3,309 1,153 Decreases: Tax positions related to prior years for settlement with tax authorities (2,104 ) (3,999 ) — Tax positions related to prior years for lapses of statute of limitations (4,632 ) (2,343 ) — Impact of foreign currency exchange rates (328 ) (892 ) 2,286 Balance at end of year $ 15,995 $ 22,883 $ 26,137 Unrecognized tax benefits of $ 11.4 million , $11.6 million and $12.2 million at December 31, 2019 , 2018 and 2017 , respectively, included in the table above are presented in the balance sheet as a reduction to the related deferred tax assets for net operating loss carryforwards. Accrued interest and penalties totaled $ 5.7 million , $6.3 million and $8.0 million as of December 31, 2019 , 2018 and 2017 , respectively, and were included in other long-term liabilities on our consolidated balance sheets. Tax authorities may disagree with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of our tax positions in order to determine the appropriateness of our reserves for uncertain tax positions. However, there can be no assurance that we will accurately predict the outcome of these audits and the actual outcome of an audit could have a material impact on our consolidated results of income, financial position or cash flows. If all of our unrecognized tax benefits as of December 31, 2019 were recognized, $ 12.9 million would impact our effective tax rate. We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $12.0 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. Refer to “ Note 14. Commitments and Contingencies ” for additional information regarding the status of current tax litigation. We record accrued interest and penalties related to unrecognized tax benefits in interest expense and foreign exchange and other (losses) gains , respectively, on our consolidated statements of income (loss). The major jurisdictions where we are subject to income tax examinations are as follows: Jurisdiction Earliest Year Open U.S. - federal and state 2001 Italy 2015 Germany 2014 England and Wales 2017 Canada 2015 Brexit On January 31, 2020, the UK departed from the EU (in a move commonly referred to as “Brexit”), and the UK will now enter a transition period that is scheduled to end on December 31, 2020, unless requested to be extended before July 1, 2020. During the transition period, the UK will cease to be an EU member, but the trading relationship will remain the same under the EU's rules. Although the long-term effects of Brexit will depend on any agreements the UK makes to retain access to the EU markets during the transition period, Brexit has created additional uncertainties that may ultimately result in new regulatory costs and challenges for medical device companies and increased restrictions on imports and exports throughout Europe. This could adversely affect our ability to conduct and expand our operations in Europe and may have an adverse effect on our business, financial condition and results of operations. The notification does not change the application of existing tax laws and does not establish a clear framework for what the ultimate outcome of the negotiations and legislative process will be. Various tax reliefs and exemptions that apply to transactions between EU Member States under existing tax laws may cease to apply to transactions between the UK and EU Member States when the transition period concludes. It is unclear at this stage if or when any new tax treaties between the UK and the EU or individual EU Member States will replace those reliefs and exemptions. It is also unclear at this stage what financial, trade and legal implications will ensue from Brexit and how Brexit may affect us, our customers, suppliers, vendors, or our industry. We and several of our wholly owned subsidiaries that are domiciled either in the UK, various EU Member States, or in the U.S., are party to intercompany transactions and agreements under which we receive various tax reliefs and exemptions in accordance with applicable international tax laws, treaties and regulations. If certain treaties applicable to our transactions and agreements are not renegotiated or replaced with new treaties containing terms, conditions and attributes similar to those of the existing treaties, Brexit may have a material adverse impact on our future financial results and results of operations. We continue to monitor and assess the potential impact of this event and explore possible tax-planning strategies that may mitigate or eliminate any such potential adverse impact. We will not account for the impact of Brexit in our income tax provisions until there are material changes in tax laws or treaties between the UK and other countries. European Union State Aid Challenge On October 26, 2017, the European Commission (“EC”) announced that an investigation would be opened with respect to the UK’s controlled foreign company (“CFC”) rules for the period January 1, 2013 through December 31, 2018. Under the CFC rules, financing profits of entities controlled by UK parent companies are taxed when the funding originates in the UK, or Significant People Functions relating to the financing are located in the UK. The provisions under investigation provide group finance exemptions related to the profits of entities involved in financing of the non-UK group activities. On April 2, 2019, the EC concluded that “when financing income from a foreign group company, channeled through an offshore subsidiary, is financed with UK connected capital and there are no UK activities involved in generating the finance profits, the group finance exemption is justified and does not constitute State aid under EU rules.” However, in relation to Significant People Functions, “when financing income from a foreign group company, channeled through an offshore subsidiary, derives from UK activities, the group finance exemption is not justified and constitutes State aid under EU rules.” Her Majesty’s Revenue and Customs (“HMRC”) has stated that they do not consider the timing and form of the UK’s exit from the EU will have a practical impact on the requirement to recover the alleged aid. On June 14, 2019, the UK filed an appeal to the Commission’s decision. On July 5, 2019, HMRC began the first step in the recovery process to identify beneficiaries and sent letters asking for information. Based upon our assessment of the technical arguments as to whether the exemption is State aid, together with no UK activities involved in our financing, no uncertain tax position reserve has been recognized related to this matter. Furthermore, in December 2019, we amended our 2017 tax return filing to avail ourselves of different rules to determine UK taxation, which are not subject to the EU decision. We filed our 2018 tax return similarly, and therefore, we do not believe that the EU state aid decision will result in a material liability. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 19. Net Income Per Share The following table sets forth the basic and diluted weighted-average shares outstanding used in the computation of basic and diluted net income per share (in thousands of shares): Year Ended December 31, 2019 2018 2017 Basic weighted average shares outstanding 48,349 48,497 48,157 Add effects of stock-based compensation instruments (1) — — 344 Diluted weighted average shares outstanding 48,349 48,497 48,501 (1) Excluded from the computation of diluted earnings per share for the years ended December 31, 2019 , 2018 and 2017 were stock options, SARs and RSUs t otaling 2.9 million , 2.7 million and 1.2 million |
Geographic and Segment Informat
Geographic and Segment Information Geographic and Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | Note 20. Geographic and Segment Information Segment Information We identify operating segments based on the way we manage, evaluate and internally report our business activities for purposes of allocating resources, developing and executing our strategy, and assessing performance. We have two reportable segments: Cardiovascular and Neuromodulation. The Cardiovascular segment generates its revenue from the development, production and sale of cardiopulmonary products, heart valves and related products and advanced circulatory support. Cardiopulmonary products include oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae and other related accessories. Heart valves include mechanical heart valves, tissue heart valves, related repair products and minimally invasive surgical instruments. Advanced circulatory support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. On June 12, 2019, we acquired the minimally invasive cardiac surgery instruments business from Miami Instruments, which are integrated into our Cardiovascular business franchise as part of our Heart Valves portfolio. Our Neuromodulation segment generates its revenue from the design, development and marketing of neuromodulation therapy systems for the treatment of drug-resistant epilepsy, DTD and obstructive sleep apnea. Neuromodulation products include the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories. “Other” includes corporate shared service expenses for finance, legal, human resources and information technology and corporate business development and New Ventures. Net sales of our reportable segments include revenues from the sale of products they each develop and manufacture or distribute. We define segment income as operating income before merger and integration, restructuring and amortization and intangibles. We operate under three geographic regions: U.S., Europe, and Rest of World. The table below presents net sales by operating segment and geographic region (in thousands): Year Ended December 31, 2019 2018 2017 Cardiopulmonary United States $ 161,471 $ 161,134 $ 152,828 Europe 135,632 141,720 133,585 Rest of World 207,613 233,554 210,911 504,716 536,408 497,324 Heart Valves United States 18,900 24,709 24,977 Europe 40,548 44,258 42,120 Rest of World 60,559 56,989 71,096 120,007 125,956 138,193 Advanced Circulatory Support United States 30,781 18,588 — Europe 741 580 — Rest of World 401 293 — 31,923 19,461 — Cardiovascular United States 211,152 204,431 177,805 Europe 176,921 186,558 175,705 Rest of World 268,573 290,836 282,007 656,646 681,825 635,517 Neuromodulation United States 335,332 348,980 316,916 Europe 46,262 42,443 34,765 Rest of World 42,953 31,567 23,295 424,547 422,990 374,976 Other 2,977 2,146 1,784 Totals United States 546,484 553,411 494,721 Europe (1) 223,183 229,001 210,470 Rest of World 314,503 324,549 307,086 Total (2) (3) $ 1,084,170 $ 1,106,961 $ 1,012,277 (1) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in Rest of World. (2) Net sales to external customers includes $37.7 million , $34.8 million and $30.8 million in the United Kingdom, our country of domicile, for the years ended December 31, 2019, 2018 and 2017, respectively. (3) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. The table below presents a reconciliation of segment (loss) income from continuing operations to consolidated (loss) income from continuing operations before tax (in thousands): Year Ended December 31, 2019 2018 2017 Cardiovascular (1) $ 28,460 $ (258,493 ) $ 81,412 Neuromodulation (2) 83,483 184,674 183,228 Other (3) (204,727 ) (96,724 ) (102,425 ) Total reportable segment (loss) income from continuing operations (92,784 ) (170,543 ) 162,215 Merger and integration expenses 23,457 24,420 15,528 Restructuring expenses 12,254 15,915 17,056 Amortization of intangibles 40,375 37,194 33,144 Operating (loss) income from continuing operations (168,870 ) (248,072 ) 96,487 Interest income 803 847 1,318 Interest expense (15,091 ) (9,825 ) (7,797 ) Gain on acquisitions — 11,484 39,428 Impairment of investments — — (8,565 ) Foreign exchange and other (losses) gains (2,536 ) (1,881 ) 267 (Loss) income from continuing operations before tax $ (185,694 ) $ (247,447 ) $ 121,138 (1) Results for the years ended December 31, 2019 and 2018 include Litigation provision, net of $(0.6) million and $294.0 million , respectively. Refer to “ Note 14. Commitments and Contingencies ” for additional information. (2) Results for the year ended December 31, 2019 include the ImThera impairment of the IPR&D asset of $50.3 million . Refer to “ Note 8. Goodwill and Intangible Assets ” for additional information. (3) Results for the year ended December 31, 2019 include the Caisson impairments of goodwill and the IPR&D asset of $42.4 million and $89.0 million , respectively. Refer to “ Note 8. Goodwill and Intangible Assets ” for additional information. Assets by reportable segment as of December 31, 2019 and 2018 , was as follows (in thousands): Assets 2019 2018 Cardiovascular $ 1,546,520 $ 1,532,825 Neuromodulation 749,069 731,840 Other 116,208 285,036 Total $ 2,411,797 $ 2,549,701 Capital expenditures by segment were as follows (in thousands): Year Ended December 31, Capital Expenditures 2019 2018 2017 Cardiovascular $ 20,779 $ 27,621 $ 18,985 Neuromodulation 3,415 1,728 2,504 Other 3,783 7,630 7,010 Discontinued operations — 1,018 5,608 Total $ 27,977 $ 37,997 $ 34,107 Geographic Information Property, plant, and equipment, net by geographic region as of December 31, 2019 and 2018 , was as follows (in thousands): PP&E 2019 2018 United States $ 61,410 $ 68,862 Europe 110,270 112,376 Rest of World 9,674 10,162 Total $ 181,354 $ 191,400 |
Supplemental Finanical Informat
Supplemental Finanical Information | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Supplemental Financial Information | Note 21. Supplemental Financial Information Inventories, net as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Raw materials $ 45,225 $ 40,387 Work-in-process 14,581 15,999 Finished goods 104,348 97,149 $ 164,154 $ 153,535 Inventories are reported net of the provision for obsolescence. The provision, which reflects normal obsolescence and includes components that are phased out or expired, totaled $12.7 million and $11.6 million at December 31, 2019 and December 31, 2018 PP&E as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Lives in Years Land $ 15,165 $ 15,866 Building and building improvements 86,814 82,035 3 to 39 Equipment, software, furniture and fixtures 205,711 195,008 2 to 16 Other 9,431 8,298 1 to 10 Capital investment in process 18,220 20,228 Total 335,341 321,435 Accumulated depreciation (153,987 ) (130,035 ) Net $ 181,354 $ 191,400 Accrued liabilities as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Contingent consideration (1) $ 22,953 $ 18,530 CRM purchase price adjustments payable to MicroPort Scientific Corporation 14,891 14,891 Operating lease liabilities (2) 11,110 — Legal and other administrative costs 11,066 9,189 Contract liabilities 6,728 3,304 Research and development costs 5,160 1,841 Restructuring related liabilities (3) 4,315 9,393 Provisions for agents, returns and other 3,922 4,934 Product remediation (4) 3,251 13,945 Derivative contract liabilities (5) 3,173 5,063 Other amounts payable to MicroPort Scientific Corporation 1,340 9,319 Other accrued expenses 32,191 33,876 $ 120,100 $ 124,285 (1) Refer to “ Note 10. Fair Value Measurements .” (2) Refer to “ Note 13. Leases .” (3) Refer to “ Note 6. Restructuring .” (4) Refer to “ Note 7. Product Remediation Liability .” (5) Refer to “ Note 12. Derivatives and Risk Management .” Note 22. Quarterly Financial Information (unaudited) The tables below present the quarterly results for the years ended December 31, 2019 and 2018 (in thousands except for share data): Year Ended December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,801 $ 277,169 $ 268,610 $ 287,590 Gross profit (1) 163,600 197,114 179,406 204,638 Operating income (loss) from continuing operations (2) (20,779 ) (29,876 ) 25,761 (143,976 ) Net (loss) income from continuing operations (2) (14,849 ) (29,393 ) 32,118 (143,417 ) Net income from discontinued operations, net of tax — 178 — 187 Net (loss) income (2) $ (14,849 ) $ (29,215 ) $ 32,118 $ (143,230 ) Diluted (loss) earnings per share: Continuing operations $ (0.31 ) $ (0.61 ) $ 0.66 $ (2.96 ) Discontinued operations — 0.01 — — $ (0.31 ) $ (0.60 ) $ 0.66 $ (2.96 ) Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,398 $ 287,498 $ 272,082 $ 296,983 Gross profit (1) 162,085 193,963 174,348 204,073 Operating income (loss) from continuing operations (3) 12,530 21,607 (5,757 ) (276,452 ) Net income (loss) from continuing operations (3) 17,822 19,528 (6,273 ) (209,539 ) Net loss from discontinued operations, net of tax (4,549 ) (4,462 ) (904 ) (1,022 ) Net income (loss) (3) $ 13,273 $ 15,066 $ (7,177 ) $ (210,561 ) Diluted earnings (loss) per share: Continuing operations $ 0.36 $ 0.40 $ (0.13 ) $ (4.32 ) Discontinued operations (0.09 ) (0.09 ) (0.02 ) (0.02 ) $ 0.27 $ 0.31 $ (0.15 ) $ (4.34 ) (1) Gross profit excludes amortization of developed technology intangible assets of approximately $3.7 million , $5.5 million and $3.6 million for the first and second quarters in 2019, the third and fourth quarters in 2019 and for each quarter in 2018, respectively. (2) The second quarter of 2019 includes a $50.3 million impairment of the ImThera IPR&D asset arising from the ImThera acquisition. The fourth quarter of 2019 includes a $42.4 million impairment of Caisson’s goodwill arising from the Caisson acquisition and a $89.0 million impairment of Caisson’s IPR&D asset arising from the Caisson acquisition. For further information, please refer to “ Note 8. Goodwill and Intangible Assets .” (3) The fourth quarter of 2018 includes a $294.1 million litigation provision associated with our 3T devices. For further information, please refer to “ Note 14. Commitments and Contingencies |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (unaudited) | Note 21. Supplemental Financial Information Inventories, net as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Raw materials $ 45,225 $ 40,387 Work-in-process 14,581 15,999 Finished goods 104,348 97,149 $ 164,154 $ 153,535 Inventories are reported net of the provision for obsolescence. The provision, which reflects normal obsolescence and includes components that are phased out or expired, totaled $12.7 million and $11.6 million at December 31, 2019 and December 31, 2018 PP&E as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Lives in Years Land $ 15,165 $ 15,866 Building and building improvements 86,814 82,035 3 to 39 Equipment, software, furniture and fixtures 205,711 195,008 2 to 16 Other 9,431 8,298 1 to 10 Capital investment in process 18,220 20,228 Total 335,341 321,435 Accumulated depreciation (153,987 ) (130,035 ) Net $ 181,354 $ 191,400 Accrued liabilities as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Contingent consideration (1) $ 22,953 $ 18,530 CRM purchase price adjustments payable to MicroPort Scientific Corporation 14,891 14,891 Operating lease liabilities (2) 11,110 — Legal and other administrative costs 11,066 9,189 Contract liabilities 6,728 3,304 Research and development costs 5,160 1,841 Restructuring related liabilities (3) 4,315 9,393 Provisions for agents, returns and other 3,922 4,934 Product remediation (4) 3,251 13,945 Derivative contract liabilities (5) 3,173 5,063 Other amounts payable to MicroPort Scientific Corporation 1,340 9,319 Other accrued expenses 32,191 33,876 $ 120,100 $ 124,285 (1) Refer to “ Note 10. Fair Value Measurements .” (2) Refer to “ Note 13. Leases .” (3) Refer to “ Note 6. Restructuring .” (4) Refer to “ Note 7. Product Remediation Liability .” (5) Refer to “ Note 12. Derivatives and Risk Management .” Note 22. Quarterly Financial Information (unaudited) The tables below present the quarterly results for the years ended December 31, 2019 and 2018 (in thousands except for share data): Year Ended December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,801 $ 277,169 $ 268,610 $ 287,590 Gross profit (1) 163,600 197,114 179,406 204,638 Operating income (loss) from continuing operations (2) (20,779 ) (29,876 ) 25,761 (143,976 ) Net (loss) income from continuing operations (2) (14,849 ) (29,393 ) 32,118 (143,417 ) Net income from discontinued operations, net of tax — 178 — 187 Net (loss) income (2) $ (14,849 ) $ (29,215 ) $ 32,118 $ (143,230 ) Diluted (loss) earnings per share: Continuing operations $ (0.31 ) $ (0.61 ) $ 0.66 $ (2.96 ) Discontinued operations — 0.01 — — $ (0.31 ) $ (0.60 ) $ 0.66 $ (2.96 ) Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,398 $ 287,498 $ 272,082 $ 296,983 Gross profit (1) 162,085 193,963 174,348 204,073 Operating income (loss) from continuing operations (3) 12,530 21,607 (5,757 ) (276,452 ) Net income (loss) from continuing operations (3) 17,822 19,528 (6,273 ) (209,539 ) Net loss from discontinued operations, net of tax (4,549 ) (4,462 ) (904 ) (1,022 ) Net income (loss) (3) $ 13,273 $ 15,066 $ (7,177 ) $ (210,561 ) Diluted earnings (loss) per share: Continuing operations $ 0.36 $ 0.40 $ (0.13 ) $ (4.32 ) Discontinued operations (0.09 ) (0.09 ) (0.02 ) (0.02 ) $ 0.27 $ 0.31 $ (0.15 ) $ (4.34 ) (1) Gross profit excludes amortization of developed technology intangible assets of approximately $3.7 million , $5.5 million and $3.6 million for the first and second quarters in 2019, the third and fourth quarters in 2019 and for each quarter in 2018, respectively. (2) The second quarter of 2019 includes a $50.3 million impairment of the ImThera IPR&D asset arising from the ImThera acquisition. The fourth quarter of 2019 includes a $42.4 million impairment of Caisson’s goodwill arising from the Caisson acquisition and a $89.0 million impairment of Caisson’s IPR&D asset arising from the Caisson acquisition. For further information, please refer to “ Note 8. Goodwill and Intangible Assets .” (3) The fourth quarter of 2018 includes a $294.1 million litigation provision associated with our 3T devices. For further information, please refer to “ Note 14. Commitments and Contingencies |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | Note 23. New Accounting Pronouncements Adoption of New Accounting Pronouncements The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our condensed financial statements: Issue Date & Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters May 2014 ASU No. 2014-09, This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most existing revenue recognition guidance. January 1, 2018 We elected the cumulative effect transition method; however, we recognized no cumulative effect to the opening balance of retained earnings because the impact on the timing of when revenue is recognized within our Cardiovascular segment, specifically related to heart-lung machines and preventative maintenance contracts on cardiopulmonary equipment was insignificant. The timing of revenue recognition for products and related revenue streams within our Neuromodulation segment and discontinued operations did not change. Upon adoption of the new standard, we implemented new internal controls related to our accounting policies and procedures, including review controls to ensure contractual terms and conditions that may require consideration under the standard are properly identified and analyzed. January 2016 ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities This update requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized in net income. However, an entity may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. January 1, 2018 There was no material impact to our consolidated financial statements as a result of adopting this ASU. February 2016 ASU No. 2016-02, Leases (Topic 842) and subsequent amendments The standard requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use (“ROU”) assets and to provide enhanced disclosures. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices met the criteria of being a lease in accordance with the new standard. January 1, 2019 Adoption of the new standard resulted in the recognition of ROU assets and lease liabilities of approximately $60 million as of January 1, 2019. Refer to “Note 13. Leases.” August 2016 Classification of Certain Cash Receipts and Cash Payments This update provides guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. January 1, 2018 There was no material impact to our consolidated financial statement of cash flows as a result of adopting this ASU. October 2016 This update simplifies the accounting for the income tax consequences of transfers of assets from one unit of a corporation to another unit or subsidiary by eliminating an accounting exception that prevents the recognition of current and deferred income tax consequences for such “intra-entity transfers” until the assets have been sold to an outside party. January 1, 2018 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2018: Prepaid expenses and other current assets decreased by $12.6 million, deferred tax assets increased by $58.3 million, other assets decreased by $68.1 million and the accumulated deficit increased by $22.5 million. January 2017 ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business This update clarifies when a set of assets and activities is a business. January 1, 2018 The ImThera, TandemLife and Miami Instruments acquisitions were considered acquisitions of a business. Refer to “Note 4. Business Combinations” for a discussion of our acquisitions. March 2017 ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost . This update requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. January 1, 2018 Our adoption resulted in an immaterial impact to our consolidated financial statements. The consolidated statements of income (loss) for the years ended December 31, 2017 and December 31, 2016 have been recast for the adoption of this update. June 2018 ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This update simplifies the accounting for non-employee share-based payment transactions. January 1, 2019 There was no material impact to our consolidated financial statements as a result of adopting this ASU. Future Adoption of New Accounting Pronouncements The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The modified-retrospective approach is generally applicable through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment This update removes step 2 of the goodwill impairment test that compares the implied fair value of goodwill with its carrying amount. Instead, an impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recorded by the amount a reporting unit’s carrying amount exceeds its fair value. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Basis of Presentation, Use of_2
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of LivaNova have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.” and such principles, “U.S. GAAP”) and the instructions to Form 10-K and Article 3 and Article 5 of Regulation S-X. |
Consolidation | Consolidation The accompanying consolidated financial statements for LivaNova include LivaNova’s wholly owned subsidiaries and the LivaNova PLC Employee Benefit Trust (“the Trust”). All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in such financial statements and accompanying notes. These estimates are based on management’s best knowledge of current events and actions we may undertake in the future. Estimates are used in accounting for, among other items, valuation and amortization of intangible assets, goodwill, measurement of deferred tax assets and liabilities, uncertain income tax positions, stock-based compensation, obsolete and slow-moving inventories, models, such as an impairment analysis, and in general, allocations to provisions and the fair value of assets and liabilities recorded in a business combination. Actual results could differ materially from those estimates. |
Reclassification | Reclassifications We have reclassified certain prior period amounts for comparative purposes. These reclassifications did not have a material effect on our financial condition, results of operations or cash flows. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories We state our inventories at the lower of cost, using the first-in first-out (“FIFO”) method, or net realizable value. Our calculation of cost includes the acquisition cost of raw materials and components, direct labor and overhead, including depreciation of manufacturing related assets. We reduce the carrying value of inventories for those items that are potentially excess, obsolete or slow moving based on changes in customer demand, technology developments or other economic factors. |
Property, Plant and Equipment (PP&E) | Property, Plant and Equipment (“PP&E”) Assets held and used PP&E is carried at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred, while significant renewals and improvements are capitalized. We compute depreciation using the straight-line method over estimated useful lives. Leasehold improvements are depreciated over the shorter of the following terms: the useful life of the asset or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. Capital improvements to the building are added as building components and depreciated over the useful life of the improvement or the building, whichever is less. Assets held for sale |
Goodwill | Goodwill We allocate the amounts we pay for an acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including property, plant and equipment, inventories, accounts receivable, long-term debt, and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including IPR&D, on valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred and are reported in selling, general and administrative on the consolidated statements of income (loss). We recognize adjustments to the provisional amounts identified during the measurement period with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined. The effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts are recorded in the same period’s consolidated financial statements, calculated as if the accounting had been completed at the acquisition date. |
Intangible Assets, Other than Goodwill | Intangible Assets, Other than Goodwill Intangible assets shown on the consolidated balance sheets consist of finite-lived and indefinite-lived assets expected to generate future economic benefits and are recorded at their respective fair values as of their acquisition date. Finite-lived intangible assets consist primarily of developed technology and technical capabilities, including patents, related know-how and licensed patent rights, trade names and customer relationships. Customer relationships consist of relationships with hospitals and surgeons in the countries where we operate. Indefinite-lived intangible assets other than goodwill are composed of IPR&D assets acquired in acquisitions. We estimate the useful lives of our intangible assets, which requires significant management judgment. We amortize our finite-lived intangible assets over their useful lives using the straight-line method. Amortization expense is disclosed separately on our consolidated statements of income (loss). We evaluate our intangible assets each reporting period to determine whether events and circumstances indicate either a different useful life or impairment. If we change our estimate of the useful life of an asset, we amortize the carrying amount over the revised remaining useful life. |
Impairments of Long-Lived Assets, Investments and Goodwill | Impairments of Long-Lived Assets and Goodwill Long-lived Assets Impairment We evaluate the carrying value of our long-lived assets and investments for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Such changes in circumstance may include, among other items, (i) an expectation of a sale or disposal of a long-lived asset or asset group, (ii) adverse changes in market or competitive conditions, (iii) an adverse change in legal factors or business climate in the markets in which we operate and (iv) operating or cash flow losses. For PP&E and intangible assets used in our operations, recoverability generally is determined by comparing the carrying value of an asset, or group of assets to their expected undiscounted future cash flows. If the carrying value of an asset (asset group) is not recoverable, the amount of impairment loss is measured as the difference between the carrying value of the asset (asset group) and its estimated fair value. The asset grouping as well as the determination of expected undiscounted cash flow amounts requires significant judgments, estimates, and assumptions, including cash flows generated upon disposition. We measure fair value as the price that would be received if we were to sell the assets in an orderly transaction. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. We conduct impairment testing of our indefinite-lived intangible assets on October 1st each year. We test indefinite-lived intangible assets for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss is recognized when the asset's carrying value exceeds its fair value. Goodwill Impairment We conduct impairment testing of our goodwill on October 1st each year. We test goodwill for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Testing is performed at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly viewed by management. Our operating segments are deemed to be our reporting units for purposes of goodwill impairment testing. If we determine that goodwill is more-likely-than-not impaired, we perform the first step of a two-step goodwill impairment test. We first identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Fair value refers to the price that would be received if we were to sell the unit as a whole in an orderly transaction. If the carrying amount of our reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying value of the reporting unit exceeds its fair value, we perform step 2 of the goodwill impairment test. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit, up to and including the carrying amount of the goodwill. Fair value is estimated using a discounted cash flow model. Estimating fair value requires various assumptions, including revenue and gross margin growth rates and discount rates. If the aggregate fair value of our reporting units exceeds our market capitalization, we evaluate the reasonableness of the implied control premium which includes a comparison to implied control premiums from recent market transactions within our industry or other relevant benchmark data. Goodwill impairment evaluations are highly subjective. In most instances, they involve expectations of future cash flows that reflect our judgments and assumptions regarding future industry conditions and operations. The estimates, judgments and assumptions used in the application of our goodwill impairment policies reflect both historical experience and an assessment of current operational, industry, market, economic and political environments. The use of different estimates, judgments, assumptions and expectations regarding future industry and market conditions and operations would likely result in materially different asset carrying values and operating results. Quantitative factors used to determine the fair value of the reporting units reflect our best estimates, and we believe they are reasonable. Future declines in the reporting units’ operating performance or our anticipated business outlook may reduce the estimated fair value of our reporting units and result in an impairment. Factors that could have a negative impact on the fair value of the reporting units include, but are not limited to: • decreases in revenue as a result of the inability of our sales force to effectively market and promote our products; • increased competition, patent expirations or new technologies or treatments; • declines in anticipated growth rates; • the outcome of litigation, legal proceedings, investigations or other claims resulting in significant cash outflows; and • increases in the market-participant risk-adjusted Weighted Average Cost of Capital (“WACC”). |
Derivatives and Risk Management | Derivatives and Risk Management U.S. GAAP requires companies to recognize all derivatives as assets and liabilities on the balance sheet and to measure the instruments at fair value through earnings unless the derivative qualifies for hedge accounting. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other comprehensive income (“OCI”) until the hedged item is recognized in earnings. The changes in the fair value of the derivative are intended to offset the change in fair value of the hedged asset, liability or probable commitment. We evaluate hedge effectiveness at inception. Cash flows from derivative contracts are reported as operating activities on the consolidated statements of cash flows. We use currency exchange rate derivative contracts and interest rate derivative instruments to manage the impact of currency exchange and interest rate changes on earnings and cash flows. Forward currency exchange rate contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets and liabilities. At inception of the forward contract, the derivative is designated as either a freestanding derivative or a cash flow hedge. We do not enter into derivative contracts for speculative purposes. All derivative instruments are recorded at fair value on the consolidated balance sheets, as assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and contract maturity date. Forward contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings to offset exchange differences originated by the hedged item or the current earnings effect of the hedged item. We use freestanding derivative forward contracts to offset exposure to the variability of the value associated with assets and liabilities denominated in a foreign currency. These derivatives are not designated as hedges, and therefore changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in value of foreign currency denominated assets and liabilities. We use interest rate derivative instruments designated as cash flow hedges to manage the exposure to interest rate movements and to reduce the risk of increased borrowing costs by converting floating-rate debt into fixed-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to agreed-upon notional principal amounts. The interest rate swaps are structured to mirror the payment terms of the underlying loan. The fair value of the interest rate swaps is reported on the consolidated balance sheets as assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and the maturity of the future cash flows of each contract. The gain or loss on these derivatives is reported as a component of AOCI. |
Fair Value Measurements | Fair Value Measurements We follow the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels defined as follows: • Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities; • Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; and • Level 3 - Inputs are unobservable for the asset or liability. Financial assets and liabilities that are classified as Level 2 include derivative instruments, primarily forward and option currency contracts and interest rate swaps contracts, which are valued using standard calculations and models that use readily observable market data as their basis. Financial liabilities that are classified as Level 3 include contingent consideration arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of performance milestones and sales-based earn-outs. Contingent consideration is recognized at fair value at the date of acquisition based on the consideration expected to be transferred and estimated as the probability of future cash flows, discounted to present value in accordance with accepted valuation methodologies. The discount rate used is determined at the time of measurement. Contingent consideration is remeasured each reporting period with the change in fair value, including accretion for the passage of time, recorded in earnings. The change in fair value of contingent consideration based on the achievement of regulatory milestones is recorded as research and development expense while the change in fair value of sales-based earnout contingent consideration is recorded as cost of sales. Contingent consideration payments made soon after the acquisition date are classified as an investing activity. Contingent consideration payments that are not made soon after the acquisition date are classified as a financing activity up to the amount of the contingent consideration liability recognized at the acquisition date, with any excess classified as an operating activity. |
Investments in Equity Securities | Investments in Equity Securities Our investments in equity securities, and related loans, are investments in affiliates that are in varied stages of development and not publicly traded. Our equity investments are reported in investments, and related loans in other assets, on the consolidated balance sheets. We elect to measure investments that do not have readily determinable fair values, at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. Our investments in affiliates in which we have significant influence but not control are accounted for using the equity method. Our share of net income or loss is reflected as one line item on our consolidated statements of income (loss) under losses from losses from equity-method investments and will increase or decrease, as applicable, the carrying value of our equity method investments reported under investments on the consolidated balance sheets. We regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable, and if an impairment is considered to be other-than-temporary, the loss is recognized on the consolidated statements of income (loss) in the period the determination is made and reported as losses from equity-method investments. |
Warranty Obligation | Warranty Obligation We offer a warranty on various products. We estimate the costs that may be incurred under warranties and record a liability in the amount of such costs at the time the product is sold. The amount of the reserve recorded is equal to the net costs to repair or otherwise satisfy the claim. We include the warranty obligation in accrued liabilities and other on the consolidated balance sheets. Warranty expense is recorded to cost of goods sold on our consolidated statements of income (loss). |
Retirement Benefit Plan Assumptions | Retirement Benefit Plan Assumptions We sponsor various retirement benefit plans, including defined benefit pension plans (pension benefits), defined contribution savings plans and termination indemnity plans, covering substantially all U.S. employees and employees outside the U.S. Pension benefit costs include assumptions for the discount rate, retirement age, compensation rate increases and the expected return on plan assets. |
Product Liability Accruals | Product Liability Accruals Accruals for product liability claims are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. Accruals for product liability claims are adjusted periodically as additional information becomes available. |
Revenue Recognition | Revenue Recognition Refer to “ Note 3. Revenue Recognition .” We generate our revenue through contracts with customers that primarily consist of hospitals, healthcare institutions, distributors and other organizations. Revenue is measured based on consideration specified in a contract with a customer, and excludes amounts collected on behalf of third parties. We measure the consideration based upon the estimated amount to be received. The amount of consideration we ultimately receive varies depending upon the return terms, sales rebates, discounts, and other incentives that we may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. We have historically experienced a low rate of product returns, and the total dollar value of product returns has not been significant to our consolidated financial statements. We recognize revenue when a performance obligation is satisfied by transferring the control of a product or providing service to a customer. Some of our contracts include the purchase of multiple products and/or services. In such cases, we allocate the transaction price based upon the relative estimated stand-alone price of each product and/or service sold. We record state and local sales taxes net; that is, we exclude sales tax from revenue. Typically, our contracts do not have a significant financing component. We incur incremental commission fees paid to the sales force associated with the sale of products. We apply the practical expedient within ASC 606-10-50-22 and have elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset the entity would otherwise recognize is one year or less. As a result, no commissions have been capitalized as contract costs since adoption of ASC 606. The following is a description of the principal activities (separated by reportable segments) from which we generate our revenue. For more detailed information about our reportable segments including disaggregated revenue results by major product line and primary geographic markets, see “ Note 20. Geographic and Segment Information .” Cardiovascular Products and Services Our Cardiovascular segment has three primary product lines: cardiopulmonary products, heart valves and advanced circulatory support. Cardiopulmonary products include oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae and other related accessories. Heart valves include mechanical heart valves, tissue heart valves, related repair products and minimally invasive surgical instruments. Advanced circulatory support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. Cardiopulmonary products may include performance obligations associated with assembly and installation of equipment. Accordingly, we allocate a portion of the sales prices to installation obligations and recognize that revenue when the service is provided. We recognize revenue for equipment and accessory product sales when control of the equipment or product passes to the customer. Technical services include installation, repair and maintenance of cardiopulmonary equipment under service contracts or upon customer request. Technical service agreements generally provide for upfront payments in advance of rendering services or periodic billing over the contract term. Amounts billed in advance are deferred and recognized as revenue when the performance obligation is satisfied. Technical services are not a significant component of Cardiovascular revenue and have been presented with the related equipment and accessories revenue. Heart valve revenue is recognized when control passes to the customer, usually at the point of surgery. Advanced circulatory support revenue is recognized when control passes to the customer, usually at the point of shipment. Neuromodulation Products Neuromodulation segment products are comprised of Neuromodulation therapy systems for the treatment of drug-resistant epilepsy, DTD and obstructive sleep apnea. Our Neuromodulation product line includes the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories. Our Neuromodulation product line also includes an implantable device for the treatment of obstructive sleep apnea that stimulates multiple tongue muscles via the hypoglossal nerve, which opens the airway while a patient is sleeping. We recognize revenue for Neuromodulation product sales when control passes to the customer. Contract Balances Due to the nature of our products and services, revenue producing activities may result in contract assets and contract liabilities which are insignificant to our financial position and results of operations. These activities relate primarily to Cardiovascular technical services contracts for short-term and multi-year service agreements. Contract assets are primarily |
Research and Development | Research and Development All R&D costs are expensed as incurred. R&D includes costs of basic research activities as well as engineering and technical effort required to develop a new product or make significant improvements to an existing product or manufacturing process. R&D costs also include regulatory and clinical study expenses, including post-market clinical studies. |
Leases | Leases On January 1, 2019, we adopted ASC Update (“ASU”) No 2016-02, Leases , including subsequent related accounting updates (collectively referred to as “Topic 842”), which supersedes the previous accounting model for leases. We adopted the standard using the modified retrospective approach with an effective date as of January 1, 2019. Prior year financial statements were not recast under the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward our historical assessment of whether contracts are or contain leases and lease classification. We also elected the practical expedient to account for lease and non-lease components together as a single combined lease component, which is applicable to all asset classes. We did not, however, elect the practical expedient related to using hindsight in determining the lease term as this was not relevant following our election of the modified retrospective approach. In addition, we elect certain practical expedients on an ongoing basis, including the practical expedient for short-term leases pursuant to which a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a lease liability and operating lease asset for leases with a term of 12 months or less and that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. We have applied this accounting policy to all asset classes in our portfolio and will recognize the lease payments for such short-term leases within profit and loss on a straight-line basis over the lease term. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices meet the criteria of being a lease in accordance with the new standard. While the amount of revenue and expenses recognized over the contract term will not be impacted, the timing of revenue and expense recognition will be impacted depending upon lease classification. We enacted appropriate changes to our business processes, systems and internal controls to support identification, recognition and disclosure of leases under the new standard. |
Stock-Based Compensation | Stock-Based Compensation Stock-Based Incentive Awards We may grant stock-based incentive awards to directors, officers, key employees and consultants. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award. We recognize equity-based compensation expense ratably over the period that an employee is required to provide service in exchange for the entire award (all vesting periods). We issue new shares upon stock option exercises, otherwise issuance of stock for vesting of restricted stock units or exercises of stock appreciation rights are issued from treasury shares. We have the right to elect to pay the cash value of vested restricted stock units in lieu of the issuance of new shares. Stock Appreciation Rights (“SARs”) A SAR confers upon an employee the contractual right to receive an amount of cash, stock, or a combination of both that equals the appreciation in the company’s stock from an award’s grant date to the exercise date. SARs may be exercised at the employee’s discretion during the exercise period and do not give the employee an ownership right in the underlying stock. SARs do not involve payment of an exercise price. We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of SARs and compensation is expensed ratably over the service period. We determine the expected volatility of the awards based on historical volatility. Calculation of compensation for stock awards requires estimation of volatility, employee turnover and forfeiture rates. Restricted Stock Units (“RSUs”) We may grant RSUs at no purchase cost to the grantee. The grantees of unvested RSUs have no voting rights or rights to dividends. Sale or transfer of the stock and stock units is restricted until they are vested. The fair market value of service-based RSUs is determined using the market closing price on the grant date, and compensation is expensed ratably over the service period. Calculation of compensation for stock awards requires estimation of employee turnover and forfeiture rates. |
Income Taxes | Income Taxes We are a UK corporation, and we operate through our various subsidiaries in a number of countries throughout the world. Our provision for income taxes is based on the tax laws and rates applicable in the jurisdictions in which we operate and earn income. We use significant judgment and estimates in accounting for our income taxes. We recognize deferred tax assets and liabilities for the anticipated future tax effects of temporary differences between the financial statements basis and the tax basis of our assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We periodically assess the recoverability of our deferred tax assets by considering whether it is more-likely-than-not that some or all of the actual benefit of those assets will be realized. To the extent that realization does not meet the “more-likely-than-not” criterion, we establish a valuation allowance. We periodically review the adequacy and necessity of the valuation allowance by considering significant positive and negative evidence relative to our ability to recover deferred tax assets and to determine the timing and amount of valuation allowance that should be released. This evidence includes: profitability in the most recent quarters; internal forecasts for the current and next two future years; size of deferred tax asset relative to estimated profitability; the potential effects on future profitability from increasing competition, healthcare reforms and overall economic conditions; limitations and potential limitations on the use of our net operating losses due to ownership changes, pursuant to IRC Section 382; and the implementation of prudent and feasible tax planning strategies, if any. We file federal and local tax returns in many jurisdictions throughout the world and are subject to income tax examinations for our fiscal year 2001 and subsequent years, with certain exceptions. While we believe that our tax return positions are fully supported, tax authorities may disagree with certain positions we have taken and assess additional taxes and as a result, we may establish reserves for uncertain tax positions, which require a significant degree of management judgment. We regularly assess the likely outcomes of our tax positions in order to determine the appropriateness of our reserves; however, the actual outcome of an audit can be significantly different than our expectations, which could have a material impact on our tax provision. Our tax positions are evaluated for recognition using a more-likely-than-not threshold. Uncertain tax positions requiring recognition are measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. Some of the reasons a reserve for an uncertain tax benefit may be reversed are: completion of a tax audit; a change in applicable tax law including a tax case or legislative guidance; or an expiration of the statute of limitations. We recognize interest and penalties associated with unrecognized tax benefits and record interest in interest expense, and penalties in selling, general and administrative expense, on our consolidated statements of income (loss). |
Foreign Currency | Foreign Currency Our functional currency is the U.S. dollar; however, a portion of the revenues earned and expenses incurred by certain of our subsidiaries are denominated in currencies other than the U.S. dollar. We determine the functional currency of our subsidiaries that exist and operate in different economic and currency environments based on the primary economic environment in which the subsidiary operates, that is, the currency of the environment in which an entity primarily generates and expends cash. Our significant foreign subsidiaries are located in Europe and the U.S. The functional currency of our significant European subsidiaries is the Euro, and the functional currency of our significant U.S. subsidiaries is the U.S. dollar. Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars based on a combination of both current and historical exchange rates, while their revenues earned and expenses incurred are translated into U.S. dollars at average period exchange rates. Translation adjustments are included as AOCI on the consolidated balance sheets. Gains and losses arising from transactions denominated in a currency different from an entity’s functional currency are included in foreign exchange and other (losses) gains on our consolidated statements of income (loss). Taxes are not provided on cumulative translation adjustments, as substantially all translation adjustments are related to earnings which are intended to be indefinitely reinvested in the countries where earned. |
Restructuring | We initiate restructuring plans to leverage economies of scale, streamline distribution and logistics and strengthen operational and administrative effectiveness in order to reduce overall costs. Costs associated with these plans were reported as restructuring expenses in the operating results of our consolidated statements of income (loss). |
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our condensed financial statements: Issue Date & Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters May 2014 ASU No. 2014-09, This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most existing revenue recognition guidance. January 1, 2018 We elected the cumulative effect transition method; however, we recognized no cumulative effect to the opening balance of retained earnings because the impact on the timing of when revenue is recognized within our Cardiovascular segment, specifically related to heart-lung machines and preventative maintenance contracts on cardiopulmonary equipment was insignificant. The timing of revenue recognition for products and related revenue streams within our Neuromodulation segment and discontinued operations did not change. Upon adoption of the new standard, we implemented new internal controls related to our accounting policies and procedures, including review controls to ensure contractual terms and conditions that may require consideration under the standard are properly identified and analyzed. January 2016 ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities This update requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized in net income. However, an entity may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. January 1, 2018 There was no material impact to our consolidated financial statements as a result of adopting this ASU. February 2016 ASU No. 2016-02, Leases (Topic 842) and subsequent amendments The standard requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use (“ROU”) assets and to provide enhanced disclosures. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices met the criteria of being a lease in accordance with the new standard. January 1, 2019 Adoption of the new standard resulted in the recognition of ROU assets and lease liabilities of approximately $60 million as of January 1, 2019. Refer to “Note 13. Leases.” August 2016 Classification of Certain Cash Receipts and Cash Payments This update provides guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. January 1, 2018 There was no material impact to our consolidated financial statement of cash flows as a result of adopting this ASU. October 2016 This update simplifies the accounting for the income tax consequences of transfers of assets from one unit of a corporation to another unit or subsidiary by eliminating an accounting exception that prevents the recognition of current and deferred income tax consequences for such “intra-entity transfers” until the assets have been sold to an outside party. January 1, 2018 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2018: Prepaid expenses and other current assets decreased by $12.6 million, deferred tax assets increased by $58.3 million, other assets decreased by $68.1 million and the accumulated deficit increased by $22.5 million. January 2017 ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business This update clarifies when a set of assets and activities is a business. January 1, 2018 The ImThera, TandemLife and Miami Instruments acquisitions were considered acquisitions of a business. Refer to “Note 4. Business Combinations” for a discussion of our acquisitions. March 2017 ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost . This update requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. January 1, 2018 Our adoption resulted in an immaterial impact to our consolidated financial statements. The consolidated statements of income (loss) for the years ended December 31, 2017 and December 31, 2016 have been recast for the adoption of this update. June 2018 ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This update simplifies the accounting for non-employee share-based payment transactions. January 1, 2019 There was no material impact to our consolidated financial statements as a result of adopting this ASU. Future Adoption of New Accounting Pronouncements The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The modified-retrospective approach is generally applicable through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment This update removes step 2 of the goodwill impairment test that compares the implied fair value of goodwill with its carrying amount. Instead, an impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recorded by the amount a reporting unit’s carrying amount exceeds its fair value. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Contingencies | Contingencies We are subject to product liability claims, government investigations and other legal proceedings in the ordinary course of business. Legal fees and other expenses related to litigation are expensed as incurred and included in selling, general and administrative expenses on our consolidated statements of income (loss). Contingent liabilities are recorded when we determine that a loss is both probable and reasonably estimable. Due to the fact that legal proceedings and other contingencies are inherently unpredictable, our assessments involve significant judgment regarding future events. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the acquisition date fair value of the consideration transferred (in thousands): Cash $ 203,671 Contingent consideration 40,190 Fair value of consideration transferred $ 243,861 The following table presents the acquisition date fair value of the consideration transferred and the fair value of our interest in ImThera prior to the acquisition (in thousands): Cash $ 78,332 Contingent consideration 112,744 Fair value of our interest in ImThera prior to the acquisition (1) 25,580 Fair value of consideration transferred $ 216,656 (1) The fair value of our previously held interest in ImThera was determined based on the fair value of total consideration transferred and application of a discount for lack of control. As a result, we recognized a gain of $11.5 million for the fair value in excess of our carrying value of $14.1 million . The gain is included in Gain on acquisitions on our consolidated statement of income (loss) for the year ended December 31, 2018. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the purchase price allocation at fair value for the TandemLife acquisition including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (2) (3) $ 110,977 $ (3,474 ) $ 107,503 Trade names (2) 11,539 — 11,539 Developed technology (2) 6,387 — 6,387 Goodwill 118,917 (797 ) 118,120 Inventory 10,296 (140 ) 10,156 Other assets and liabilities, net 3,632 242 3,874 Deferred income tax liabilities, net (4) (17,887 ) 4,169 (13,718 ) Net assets acquired $ 243,861 $ — $ 243,861 (1) During the third quarter of 2018, measurement period adjustments were recorded based upon new information regarding future estimates of R&D expenses that existed as of the acquisition date. In addition, during the first quarter of 2019, measurement period adjustments related to finalizing our tax attributes were recorded, which resulted in an increase of $3.3 million in deferred tax assets and a commensurate decrease to goodwill. (2) The amounts are included in intangible assets, net on the consolidated balance sheets as of December 31, 2019 and 2018 . Trade names and developed technology are amortized over remaining useful lives of 15 and 2 years, respectively. (3) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. (4) The amounts are presented net of deferred tax assets and include deferred tax assets acquired. The following table presents the purchase price allocation at fair value for the ImThera acquisition including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (2) $ 151,605 $ 10,677 $ 162,282 Developed technology 5,661 (5,661 ) — Goodwill 87,063 (4,467 ) 82,596 Deferred income tax liabilities, net (3) 27,980 1,278 29,258 Other assets and liabilities, net 836 200 1,036 Net assets acquired $ 217,185 $ (529 ) $ 216,656 (1) During the second quarter of 2018, measurement period adjustments were recorded based upon new information obtained about facts and circumstances that existed as of the acquisition date. (2) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. The IPR&D amount is included in intangible assets, net on the consolidated balance sheets as of December 31, 2019 and 2018 . (3) The amounts are presented net of deferred tax assets acquired. |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The ImThera business combination involved contingent consideration arrangements composed of potential cash payments upon the achievement of a certain regulatory milestone and a sales-based earnout associated with sales of products covered by the purchase agreement. The sales-based earnout was valued using projected sales from our internal strategic plan. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs (in thousands): ImThera Acquisition Fair value at January 16, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment $ 50,429 Discounted cash flow Discount rate 4.3% - 4.7% Probability of payment 85% - 95% Projected payment years 2020 - 2021 Sales-based earnout 62,315 Monte Carlo simulation Risk-adjusted discount rate 11.5% Credit risk discount rate 4.7% - 5.8% Revenue volatility 29.3% Probability of payment 85% - 95% Projected years of earnout 2020 - 2025 $ 112,744 TandemLife Acquisition Fair value at April 4, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 40,190 Discounted cash flow Discount rate 4.2% - 4.8% Probability of payments 75% - 95% Projected payment years 2019 - 2020 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The following table represents the financial results of CRM presented as net income (loss) from discontinued operations, net of tax on our consolidated statements of income (loss) (in thousands): Year Ended December 31, 2019 2018 2017 Revenues $ — $ 77,366 $ 245,171 Costs and expenses: Cost of sales (43 ) 28,028 92,609 Selling, general and administrative expenses (161 ) 43,382 105,831 Research and development (161 ) 16,592 37,936 Merger and integration expenses — — 22 Restructuring expenses — 651 (1,617 ) Amortization of intangibles — — 12,737 Impairment of tangible and intangible assets — — 93,574 Revaluation gain on assets and liabilities held for sale — (1,213 ) — Loss on sale of CRM — 214 — Operating income (loss) from discontinued operations 365 (10,288 ) (95,921 ) Foreign exchange and other gains (losses) — 102 (381 ) Income (loss) from discontinued operations, before tax 365 (10,186 ) (96,302 ) Income tax benefit — (460 ) (21,635 ) Losses from equity method investments — (1,211 ) (4,887 ) Net income (loss) from discontinued operations $ 365 $ (10,937 ) $ (79,554 ) |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents the accruals, inventory obsolescence and other reserves, recorded in connection with our reorganization plans including the balances and activity related to the CRM business franchise (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2016 $ 21,092 $ 3,056 $ 24,148 Charges 10,076 5,363 15,439 Cash payments / write-downs (27,279 ) (5,794 ) (33,073 ) Balance at December 31, 2017 3,889 2,625 6,514 Charges 15,641 925 16,566 Cash payments (9,335 ) (481 ) (9,816 ) Balance at December 31, 2018 10,195 3,069 13,264 Charges 11,472 782 12,254 Cash payments (17,570 ) (2,451 ) (20,021 ) Balance at December 31, 2019 (1) $ 4,097 $ 1,400 $ 5,497 (1) Cumulatively, we have recognized a total of $111.5 million in restructuring expense, inclusive of discontinued operations. |
Schedule of Restructuring Reserve by Type of Cost | The following table presents restructuring expense by reportable segment (in thousands): Year Ended December 31, 2019 2018 2017 Cardiovascular (1) $ 3,592 $ 11,497 $ 8,819 Neuromodulation 1,082 1,595 561 Other (2) 7,580 2,823 7,676 Restructuring expense from continuing operations 12,254 15,915 17,056 Discontinued operations — 651 (1,617 ) Total $ 12,254 $ 16,566 $ 15,439 (1) Cardiovascular restructuring expense for the year ended December 31, 2018 included $6.5 million of 2018 Plan expenses. Cardiovascular restructuring expense for the year ended December 31, 2017 included building and equipment impairment of $5.4 million related to the Suzhou, China facility exit plan. (2) Other restructuring expense for the year ended December 31, 2019 included $3.5 million of Caisson restructuring expenses. |
Product Remediation Liability (
Product Remediation Liability (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingency [Abstract] | |
Schedule of Product Remediation | Changes in the carrying amount of the product remediation liability are as follows (in thousands): Balance at December 31, 2016 $ 33,487 Adjustments 2,452 Remediation activity (11,283 ) Effect of changes in foreign currency exchange rates 2,890 Balance at December 31, 2017 27,546 Adjustments (200 ) Remediation activity (12,212 ) Effect of changes in foreign currency exchange rates (389 ) Balance at December 31, 2018 14,745 Adjustments 3,663 Remediation activity (14,909 ) Effect of changes in foreign currency exchange rates (248 ) Balance at December 31, 2019 $ 3,251 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Our finite-lived and indefinite-lived intangible assets as of December 31, 2019 and 2018 consisted of the following (in thousands): 2019 2018 Finite-lived intangible assets: Customer relationships $ 320,023 $ 317,292 Developed technology 293,785 176,476 Trade names 25,004 25,260 Other intangible assets 975 897 Total gross finite-lived intangible assets 639,787 519,925 Accumulated amortization - Customer relationships 75,156 57,350 Accumulated amortization - Developed technology 57,362 39,144 Accumulated amortization - Trade names 14,811 11,440 Accumulated amortization - Other intangible assets 712 337 Total accumulated amortization 148,041 108,271 Net finite-lived intangible assets $ 491,746 $ 411,654 Indefinite-lived intangible assets: IPR&D $ 115,800 $ 358,785 Goodwill 915,794 956,815 Total indefinite-lived intangible assets $ 1,031,594 $ 1,315,600 |
Schedule of Weighted Average Amortization Period | The amortization periods for our finite-lived intangible assets as of December 31, 2019 , are as follows: Minimum Life in years Maximum Life in years Customer relationships 15 18 Developed technology 2 19 Trade names 15 15 Other intangible assets 5 10 |
Schedule of Finite-lived Intangible Assets Amortization Expense | The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2019 , is as follows (in thousands): 2020 $ 39,901 2021 39,102 2022 39,102 2023 39,102 2024 39,102 Thereafter 295,437 Total $ 491,746 |
Schedule of Goodwill | The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Cardiovascular Neuromodulation Other Total December 31, 2017 $ 425,882 $ 315,943 $ 42,417 $ 784,242 Goodwill as a result of acquisitions (1) 121,446 82,596 — 204,042 Foreign currency adjustments (31,469 ) — — (31,469 ) December 31, 2018 515,859 398,539 42,417 956,815 Goodwill as a result of acquisitions (1) 1,550 — — 1,550 Measurement period adjustments (2) (3,326 ) — — (3,326 ) Impairment — — (42,417 ) (42,417 ) Foreign currency adjustments 2,957 215 — 3,172 December 31, 2019 $ 517,040 $ 398,754 $ — $ 915,794 (1) Goodwill recognized during the year ended December 31, 2019 was the result of the Miami Instruments acquisition. Goodwill recognized during the year ended December 31, 2018 was the result of the ImThera and TandemLife acquisitions. Refer to “ Note 4. Business Combinations .” (2) Refer to “ Note 4. Business Combinations .” |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Schedule of Long-Term Investments | These below equity investments are included in investments on the consolidated balance sheets as of December 31, 2019 and 2018 (in thousands): 2019 2018 Respicardia Inc. (1) $ 17,706 $ 17,706 Ceribell, Inc. (2) 3,000 3,000 ShiraTronics, Inc. (3) 2,045 — Rainbow Medical Ltd. (4) 1,099 1,119 MD Start II (5) 1,121 1,144 Highlife S.A.S. (6) 1,064 1,084 Other 770 770 26,805 24,823 Equity method investments (7) 451 — $ 27,256 $ 24,823 (1) Respicardia Inc. (“Respicardia”) is a privately funded U.S. company developing an implantable device designed to restore a more natural breathing pattern during sleep in patients with central sleep apnea by transvenously stimulating the phrenic nerve. We have a loan outstanding to Respicardia with a carrying amount of $0.6 million and $0.6 million as of December 31, 2019 and December 31, 2018 , respectively, which is included in prepaid expenses and other current assets on the consolidated balance sheet. Refer to the paragraph below for further details regarding this investment. (2) On September 7, 2018, we acquired 1,007,319 shares of Series B Preferred Stock of Ceribell, Inc. (“Ceribell”). Ceribell is focused on utilizing electroencephalography to improve the diagnosis and treatment of patients at risk for seizures. (3) ShiraTronics, Inc. (“ShiraTronics”) is a privately held early-stage medical device company located in the U.S. and Ireland and is focused on developing neuromodulation technologies for the treatment of debilitating migraine headaches. We are required to invest up to a total of $5 million dependent upon ShiraTronics achieving certain milestones. (4) Rainbow Medical Ltd. (“Rainbow Medical”) is a private Israeli venture capital company that seeds and grows companies developing medical devices in a diverse range of medical fields. Refer to the paragraph below for further details. (5) MD Start II is a private venture capital collaboration for the development of medical device technology in Europe. (6) Highlife S.A.S. (“Highlife”) is a privately held clinical-stage medical device company located in France and is focused on the development of a unique TMRV replacement system to treat patients with MR. Refer to the paragraph below for further details. Due to an additional investment by a third party during the year ended December 31, 2018, our equity interest in Highlife decreased to 7.8% from 24.6% . We determined that we no longer had significant influence over Highlife and, as a result, we no longer accounted for Highlife under the equity method. (7) During 2019 we invested $0.5 million in equity securities that we account for under the equity method of accounting. We are required to fund up to a total of approximately €5.0 million (approximately $5.6 million as of December 31, 2019 ) based on cash calls. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements on a Recurring Basis | The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value as of December 31, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (foreign currency exchange rate "FX") $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — Total assets $ 561 $ — $ 561 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 169 $ — $ 169 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 374 — 374 — Derivative liabilities - freestanding instruments (FX) 3,137 — 3,137 — Contingent consideration (1) 137,349 — — 137,349 Total liabilities $ 141,029 $ — $ 3,680 $ 137,349 Fair Value as of December 31, 2018 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate "FX") $ 236 $ — $ 236 $ — Total assets $ 236 $ — $ 236 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 1,354 $ — $ 1,354 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 865 — 865 — Derivative liabilities - freestanding instruments (FX) 3,173 — 3,173 — Contingent consideration 179,911 — — 179,911 Total liabilities $ 185,303 $ — $ 5,392 $ 179,911 (1) The contingent consideration liability at December 31, 2019 represents contingent payments related to four completed acquisitions, including: Inversiones Drilltex SAS (“Drilltex”), ImThera, TandemLife and Miami Instruments. See the table below for additional information. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Our recurring fair value measurements, using significant unobservable inputs (Level 3), relate solely to our contingent consideration liability. The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability (in thousands): Balance at December 31, 2017 $ 33,973 Purchase price - ImThera contingent consideration (1) 112,744 Purchase price - TandemLife contingent consideration (1) 40,190 Payments (2) (2,661 ) Changes in fair value (3) (4,311 ) Effect of changes in foreign currency exchange rates (24 ) Balance at December 31, 2018 179,911 Additions (1) 7,184 Payments (2) (20,204 ) Changes in fair value (3) (4) (5) (29,406 ) Effect of changes in foreign currency exchange rates (136 ) Balance at December 31, 2019 137,349 Less current portion of contingent consideration liability at December 31, 2019 22,953 Long-term portion of contingent consideration liability at December 31, 2019 $ 114,396 (1) See “ Note 4. Business Combinations ” for additional discussion. (2) Payments during the year ended December 31, 2018 are for sales-based earnouts for Cellplex and for Drilltex. In July 2019, we achieved a regulatory milestone upon receiving FDA approval of the LifeSPARC system, triggering the payment of $19.0 million during the third quarter of 2019 to settle the related contingent consideration liability in connection with our TandemLife acquisition. (3) During the year ended December 31, 2019 , the change in fair value resulted in a decrease of $13.2 million and $16.2 million recorded to cost of sales - exclusive of amortization and research and development, respectively. During the year ended December 31, 2018 , the change in fair value resulted in a decrease of $3.6 million and $0.7 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) In November 2019, we announced that we would be ending our Caisson TMVR program effective December 31, 2019. As such, we released the contingent consideration provision associated with the acquisition of Caisson. At December 31, 2018, the fair value of the Caisson contingent consideration provision was $27.9 million . (5) The change in fair value during the year 2019 reflects a delay in the timing of anticipated regulatory approval and commercialization for ImThera. While the probability of payment remains unchanged from the time of acquisition, the projected years of payment for the regulatory milestone-based payment and the sales-based earnout have been updated to occur between 2023-2024 and 2024-2028, respectively. See “ Note 8. Goodwill and Intangible Assets ” for additional discussion. |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The outstanding principal amount of our long-term debt as of December 31, 2019 and 2018 , was as follows (in thousands, except interest rates): 2019 2018 Maturity Interest Rate 2019 Debt Facility (1) $ 184,275 $ — March 2022 1.40% - 3.56% 2017 European Investment Bank (2) 103,570 103,570 June 2026 3.31% - 3.37% 2014 European Investment Bank (3) 28,053 47,606 June 2021 1.01% Mediocredito Italiano 6,222 7,623 December 2023 0.50% - 2.93% Bank of America Merrill Lynch Banco Múltiplo S.A. 8,422 — July 2021 8.08% Bank of America, U.S. 2,004 — January 2021 3.76% Banca del Mezzogiorno — 2,718 — — Other 965 1,324 — — Total long-term facilities 333,511 162,841 Less current portion of long-term debt 73,181 23,303 Total long-term debt $ 260,330 $ 139,538 (1) The facility agreement with Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas (London Branch) and Intesa Sanpaolo S.P.A. provides a multi-currency term loan facility in an aggregate amount of $350 million and terminates on March 26, 2022 (the “2019 Debt Facility”). Principal repayments of 20% of the outstanding borrowings under the 2019 Debt Facility are due in September 2020, March 2021 and September 2021, with the remainder of the outstanding borrowings due in March 2022. (2) The 2017 European Investment Bank (“2017 EIB”) loan was obtained to support certain product development projects. The interest rate for the 2017 EIB loan is reset by the lender each quarter based on LIBOR. Interest payments are paid quarterly and principal payments are paid semi-annually. (3) The 2014 European Investment Bank (“2014 EIB”) loan was obtained in July 2014 to support product development projects. The interest rate for the EIB loan is reset by the lender each quarter based on the Euribor. Interest payments are paid quarterly and principal payments are paid semi-annually. |
Schedule of Maturities of Long-term Debt | Contractual annual principal maturities of our long-term debt facilities as of December 31, 2019 , are as follows (in thousands): 2020 $ 73,497 2021 111,370 2022 91,930 2023 17,614 2024 15,996 Thereafter 24,261 Total payments 334,668 Less: Debt issuance costs 1,157 Total long-term facilities $ 333,511 |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts of open derivative contracts designated as cash flow hedges as of December 31, 2019 and 2018 , were as follows (in thousands): Description of Derivative Contract 2019 2018 FX derivative contracts to be exchanged for British Pounds $ 10,128 $ 9,629 FX derivative contracts to be exchanged for Japanese Yen 25,342 23,985 FX derivative contracts to be exchanged for Canadian Dollars — 7,637 FX derivative contracts to be exchanged for Euros 48,838 29,768 Interest rate swap contracts 22,442 38,115 $ 106,750 $ 109,134 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | After-tax net gain (loss) associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months are as follows (in thousands): Description of Derivative Contract After-tax net gain (loss) in AOCI as of December 31, 2019 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 600 $ 600 Interest rate swap contracts (86 ) (57 ) $ 514 $ 543 |
Schedule of Cash Flow Hedges Included in AOCI | Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in other comprehensive income (loss) (“OCI”) and the amount reclassified to earnings from AOCI were as follows (in thousands): Year Ended December 31, 2019 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ 2,757 $ 3,003 FX derivative contracts SG&A — (2,071 ) Interest rate swap contracts Interest expense — (92 ) $ 2,757 $ 840 Year Ended December 31, 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ 44 $ 2,697 FX derivative contracts SG&A — (2,554 ) Interest rate swap contracts Interest expense — (66 ) $ 44 $ 77 Year Ended December 31, 2017 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other (losses) gains $ (9,861 ) $ (6,471 ) FX derivative contracts SG&A — 2,084 Interest rate swap contracts Interest expense — 939 $ (9,861 ) $ (3,448 ) |
Schedule of Fair Value of Derivative Instruments in Statement of Financial Position | The following tables present the fair value and the location of derivative contracts reported on the consolidated balance sheets (in thousands): December 31, 2019 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Accrued liabilities $ 313 Interest rate swap contracts Other long-term liabilities 61 FX derivative contracts Prepaid expenses and other current assets $ 148 Accrued liabilities 169 FX derivative contracts Accrued liabilities 387 Total derivatives designated as hedging instruments 535 543 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities 26 Accrued liabilities 3,104 FX derivative contracts Prepaid expenses and other current assets 33 Total derivatives not designated as hedging instruments 26 3,137 Total derivatives $ 561 $ 3,680 December 31, 2018 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Accrued liabilities $ 536 Interest rate swap contracts Other long-term liabilities 329 FX derivative contracts Accrued liabilities 1,354 Total derivatives designated as hedging instruments 2,219 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets $ 236 Accrued liabilities 3,173 Total derivatives not designated as hedging instruments 236 3,173 Total derivatives $ 236 $ 5,392 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “ Note 10. Fair Value Measurements .” |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Assets and Liabilities | The components of operating lease assets, liabilities and costs are as follows (in thousands): Operating Lease Assets and Liabilities December 31, 2019 Assets Operating lease right-of-use assets $ 54,372 Liabilities Accrued liabilities and other $ 11,110 Long-term operating lease liabilities 46,027 Total lease liabilities $ 57,137 |
Lease, Cost | Lease Term and Discount Rate December 31, 2019 Weighted Average Remaining Lease Term 7.0 years Weighted Average Discount Rate 2.4 % Other information (in thousands) Year Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 13,522 Operating lease assets obtained in exchange for lease liabilities $ 8,712 Operating Lease Cost Year Ended Operating lease cost $ 14,002 Variable lease cost 873 Short-term lease cost 788 Total lease cost $ 15,663 |
Operating Lease, Liability | Contractual maturities of our lease liabilities as of December 31, 2019 , are as follows (in thousands): 2020 $ 12,399 2021 10,402 2022 9,224 2023 7,524 2024 5,975 Thereafter 16,907 Total lease payments 62,431 Less: Amount representing interest 5,294 Present value of lease liabilities $ 57,137 |
Schedule of Future Minimum Rental Payments for Operating Leases | As required and as previously disclosed in our 2018 Form 10-K, the following table summarizes our future minimum operating lease payments as of December 31, 2018 (in thousands): Less than one year $ 11,986 One to three years 21,031 Three to five years 14,998 Thereafter 20,943 Total $ 68,958 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loss Contingencies by Contingency | The changes in the litigation provision liability for the year ended December 31, 2019 , are as follows (in thousands): Total litigation provision liability at December 31, 2018 $ 294,061 Payments (156,928 ) Adjustments 33,233 FX and other 38 Total litigation provision liability at December 31, 2019 170,404 Less current portion of litigation provision liability at December 31, 2019 146,026 Long-term portion of litigation provision liability at December 31, 2019 $ 24,378 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents the change in each component of AOCI, net of tax and the reclassifications out of AOCI into net income for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total As of December 31, 2016 $ 3,619 $ (72,106 ) $ (68,487 ) Other comprehensive (loss) income before reclassifications, before tax (9,861 ) 118,338 108,477 Tax benefit 2,653 — 2,653 Other comprehensive (loss) income before reclassifications, net of tax (7,208 ) 118,338 111,130 Reclassification of loss from accumulated other comprehensive income (loss), before tax 3,448 — 3,448 Reclassification of tax benefit (778 ) — (778 ) Reclassification of gain from accumulated other comprehensive income (loss), after tax 2,670 — 2,670 Net current-period other comprehensive (loss) income, net of tax (4,538 ) 118,338 113,800 As of December 31, 2017 (919 ) 46,232 45,313 Other comprehensive income (loss) before reclassifications, before tax 44 (69,764 ) (69,720 ) Tax expense (11 ) — (11 ) Other comprehensive income (loss) before reclassifications, net of tax 33 (69,764 ) (69,731 ) Reclassification of gain from accumulated other comprehensive income (loss), before tax (77 ) — (77 ) Reclassification of tax expense 19 — 19 Reclassification of gain from accumulated other comprehensive income (loss), after tax (58 ) — (58 ) Net current-period other comprehensive loss, net of tax (25 ) (69,764 ) (69,789 ) As of December 31, 2018 (944 ) (23,532 ) (24,476 ) Other comprehensive income (loss) before reclassifications, before tax 2,757 3,627 6,384 Tax expense (661 ) — (661 ) Other comprehensive income (loss) before reclassifications, net of tax 2,096 3,627 5,723 Reclassification of gain from accumulated other comprehensive income (loss), before tax (840 ) — (840 ) Reclassification of tax expense 201 — 201 Reclassification of gain from accumulated other comprehensive income (loss), after tax (639 ) — (639 ) Net current-period other comprehensive loss, net of tax 1,457 3,627 5,084 As of December 31, 2019 $ 513 $ (19,905 ) $ (19,392 ) (1) |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Allocation of Share Based Compensation Costs by Expense Category | Amounts of stock-based compensation recognized on our consolidated statements of income (loss), by expense category, are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Cost of goods sold $ 1,343 $ 1,060 $ 450 Selling, general and administrative 25,588 19,393 16,118 Research and development 5,622 4,510 1,119 Stock-based compensation from continuing operations 32,553 24,963 17,687 Stock-based compensation from discontinued operations — 1,960 1,375 Total stock-based compensation expense 32,553 26,923 19,062 Income tax benefit 6,590 6,443 4,236 Total expense, net of income tax benefit $ 25,963 $ 20,480 $ 14,826 |
Schedule of Allocation of Share-Based Compensation Costs by Type of Arrangement | Amounts of stock-based compensation expense recognized on our consolidated statements of income (loss), by type of arrangement, are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Service-based stock appreciation rights $ 10,349 $ 8,282 $ 6,916 Service-based restricted stock units 14,113 10,622 8,223 Market performance-based restricted stock units 2,900 2,357 732 Operating performance-based restricted stock units 3,918 3,702 1,816 Employee stock purchase plan 1,273 — — Total stock-based compensation expense from continuing operations $ 32,553 $ 24,963 $ 17,687 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | Amounts of stock-based compensation cost not yet recognized related to non-vested awards, including awards assumed or issued, as of December 31, 2019 , are as follows (in thousands): Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 25,508 2.67 Service-based restricted stock unit awards 33,456 2.73 Performance-based restricted stock unit awards 10,587 1.65 Total stock-based compensation cost unrecognized $ 69,551 2.35 |
Schedule of Stock Options Valuation Assumptions | The following table lists the assumptions we utilized as inputs to the Black-Scholes model: Year Ended December 31, 2019 2018 2017 Dividend yield (1) — — — Risk-free interest rate (2) 1.4% - 2.2% 2.5% - 2.9% 1.7% - 2.2% Expected option term - in years (3) 5.0 - 5.1 5.0 - 5.1 4.6 - 5.2 Expected volatility at grant date (4) 32.2% - 35.7% 29.2% - 29.9% 29.6% - 30.4% (1) We have not paid dividends and no future dividends have been approved. (2) We use yield rates on U.S. Treasury securities for a period that approximates the expected term of the awards granted to estimate the risk-free interest rate. (3) We estimated the expected term of the awards granted using historic data of actual time elapsed between the date of grant and the exercise or forfeiture of options or SARs for employees. (4) We determine the expected volatility of the awards based on historical volatility. |
Schedule of Stock Option Activity | The following tables detail the activity for service-based SARs and stock option awards: SARs and Stock Options Number of Optioned Shares Wtd. Avg. Exercise Price per Share Wtd. Avg. Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) (1) Outstanding — at December 31, 2018 1,941,587 $ 67.33 Granted 591,845 96.60 Exercised (121,534 ) 61.50 Forfeited (171,282 ) 83.44 Expired (25,560 ) 72.60 Outstanding — at December 31, 2019 2,215,056 74.41 7.0 $ 22,195 Fully vested and exercisable — end of year 951,797 61.45 5.2 $ 15,495 Fully vested and expected to vest — end of year (2) 2,173,525 $ 74.08 7.0 $ 22,117 (1) The aggregate intrinsic value of SARs and options is based on the difference between the fair market value of the underlying stock at December 31, 2019 , using the market closing stock price, and exercise price for in-the-money awards. (2) Includes the impact of expected future forfeitures. Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of SARs granted during the year (per share) $ 31.22 $ 28.13 $ 17.19 Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) $ 2,064 $ 27,281 $ 5,462 |
Summary of Restricted Stock Service-Based Activity | The following tables detail the activity for service-based RSU awards: RSUs Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2018 450,297 $ 78.70 Granted 294,460 $ 92.54 Vested (147,969 ) $ 74.53 Forfeited (72,955 ) $ 92.62 Non-vested shares at December 31, 2019 523,833 $ 84.98 Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of service-based RSUs issued during the year (per share) $ 92.54 $ 95.63 $ 61.37 Aggregate fair value of RSUs that vested during the year (in thousands) $ 12,710 $ 11,505 $ 9,966 |
Summary of Performance-Based Restricted Stock and Restricted Stock Unit Activity | The following tables detail the activity for performance-based and market-based RSU awards: Performance-based and market-based RSUs Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2018 295,364 $ 56.48 Granted 88,453 $ 98.50 Vested (69,646 ) $ 41.52 Forfeited (28,502 ) $ 75.97 Non-vested shares at December 31, 2019 285,669 $ 71.02 Year Ended December 31, 2019 2018 2017 Weighted average grant date fair value of performance and market-based restricted share units granted during the year (per share) $ 98.50 $ 95.62 $ 42.11 Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) $ 6,697 $ 9,409 $ 110 |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The change in benefit obligations and funded status of our U.S. pension benefits is as follows (in thousands): U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Accumulated benefit obligations at year end $ 11,232 $ 10,591 $ 11,191 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 10,591 $ 11,001 $ 10,425 Interest cost 382 336 361 Plan settlement (366 ) (340 ) — Actuarial loss 871 8 770 Benefits paid (246 ) (414 ) (555 ) Projected benefit obligation at end of year $ 11,232 $ 10,591 $ 11,001 Change in plan assets: Fair value of plan assets at beginning of year $ 6,767 $ 6,879 $ 5,925 Actual return on plan assets 628 (405 ) 444 Employer contributions 546 1,047 870 Plan settlement (366 ) (340 ) — Benefits paid (1 ) (414 ) (360 ) Fair value of plan assets at end of year $ 7,574 $ 6,767 $ 6,879 Funded status at end of year: Fair value of plan assets $ 7,574 $ 6,767 $ 6,879 Projected Benefit obligations 11,232 10,591 11,001 Underfunded status of the plans 3,658 3,824 4,122 Recognized liability $ 3,658 $ 3,824 $ 4,122 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 3,658 $ 3,824 $ 4,122 Recognized liability $ 3,658 $ 3,824 $ 4,122 The change in benefit obligations and funded status of our non-U.S. pension benefits is as follows (in thousands): Non-U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Accumulated benefit obligations at year end $ 17,744 $ 18,676 $ 23,785 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 18,975 $ 21,548 $ 20,402 Service cost 478 478 503 Interest cost 232 289 291 Actuarial loss (gain) 1,071 (818 ) (27 ) Benefits paid (2,380 ) (1,631 ) (2,222 ) Foreign currency exchange rate changes and other (289 ) (891 ) 2,601 Projected benefit obligation at end of year $ 18,087 $ 18,975 $ 21,548 Change in plan assets: Fair value of plan assets at beginning of year $ 3,341 $ 3,075 $ 2,898 Actual return on plan assets (34 ) 51 54 Employer contributions 383 361 369 Benefits paid (332 ) (156 ) (393 ) Foreign currency exchange rate changes 65 10 147 Fair value of plan assets at end of year $ 3,423 $ 3,341 $ 3,075 Funded status at end of year: Fair value of plan assets $ 3,423 $ 3,341 $ 3,075 Projected Benefit obligations 18,087 18,975 21,548 Underfunded status of the plans (1) 14,664 15,634 18,473 Recognized liability $ 14,664 $ 15,634 $ 18,473 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 14,664 $ 15,634 $ 18,473 Recognized liability $ 14,664 $ 15,634 $ 18,473 (1) In certain non-U.S. countries, fully funding pension plans is not a common practice. Consequently, certain pension plans have been partially funded. |
Schedule of Net Benefit Costs | The tables below present net periodic benefit cost of the defined benefit pension plans by component (in thousands): U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Interest cost $ 382 $ 336 $ 361 Expected return on plan assets (298 ) (318 ) (282 ) Settlement and curtailment loss — 135 — Amortization of net actuarial loss 148 571 527 Net periodic benefit cost $ 232 $ 724 $ 606 Non-U.S. Pension Benefits Year Ended December 31, 2019 2018 2017 Service cost $ 478 $ 478 $ 503 Interest cost 232 289 291 Expected return on plan assets 34 (51 ) (54 ) Amortization of net actuarial loss (gain) 1,071 (818 ) (27 ) Net periodic benefit cost $ 1,815 $ (102 ) $ 713 |
Schedule of Assumptions Used | Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant U.S. benefit plans as of December 31, 2019 , 2018 and 2017 , are presented in the following table: U.S. Pension Benefits 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation: Discount rate 2.88% 3.97% 3.28% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 3.97% 3.28% 3.63% Expected return on plan assets 5.00% 5.00% 5.00% Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant non-U.S. benefit plans as of December 31, 2019 , 2018 and 2017 , are presented in the following table: Non-U.S. Pension Benefits 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation: Discount rate 0.20% - 0.71% 0.20% - 1.55% 0.27% - 2.73% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.00% 2.50% - 3.00% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 0.20% - 0.71% 0.27% - 1.55% 0.27% - 2.73% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.00% 2.50% - 3.00% |
Schedule of Allocation of Plan Assets | The table below presents our U.S. pension plan target allocations by asset category as of December 31, 2019 : Equity securities 30% Debt securities 69% Other 1% |
Schedule of Fair Value of Plan Assets | The following tables provide information by level for the retirement benefit plan assets that are measured at fair value, as defined by U.S. GAAP (in thousands): Fair Value as of December 31, 2019 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 2,262 $ — $ 2,262 $ — Fixed income mutual funds 5,225 — 5,225 — Money market funds 74 74 — — $ 7,561 $ 74 $ 7,487 $ — Fair Value as of December 31, 2018 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,961 $ — $ 1,961 $ — Fixed income mutual funds 4,734 — 4,734 — Money market funds 72 72 — — $ 6,767 $ 72 $ 6,695 $ — |
Schedule of Expected Benefit Payments | Benefit payments, including amounts to be paid from our assets, and reflecting expected future service as of December 31, 2019 , are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2020 3,026 894 2021 812 723 2022 994 966 2023 612 1,066 2024 707 889 2025 - 2029 3,262 5,327 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes and our income tax expense (benefit) from continuing operations (in thousands): Year Ended December 31, 2019 2018 2017 Income (loss) from continuing operations before income taxes: UK and Non-U.S. $ 28,788 $ 59,528 $ 71,980 U.S. (214,482 ) (306,975 ) 49,158 $ (185,694 ) $ (247,447 ) $ 121,138 Total income tax expense (benefit) from continuing operations consisted of the following: Current: UK and Non-U.S. $ 1,112 $ 9,645 $ 12,771 U.S. (4,988 ) 1,291 26,743 (3,876 ) 10,936 39,514 Deferred: UK and Non-U.S. (7,407 ) 533 (4,140 ) U.S. (18,870 ) (81,098 ) 14,580 (26,277 ) (80,565 ) 10,440 Total income tax (benefit) expense from continuing operations $ (30,153 ) $ (69,629 ) $ 49,954 |
Schedule of Effective Income Tax Rate Reconciliation | The following table is a reconciliation of the statutory income tax rate to our effective income tax rate expressed as a percentage of income from continuing operations before income taxes: Year Ended December 31, 2019 2018 2017 Statutory tax rate at UK Rate 19.0 % 19.0 % 19.0 % Deferred tax valuation allowance (17.6 ) (0.8 ) 10.6 Foreign tax rate differential 6.7 3.0 10.7 U.S. state and local tax expense, net of federal benefit 6.1 4.3 1.2 Effect of changes in tax rate (3.1 ) 0.6 (19.9 ) Write-off/impairment of investments (2.8 ) (1.3 ) (14.8 ) Reserve for uncertain tax positions 2.5 (0.7 ) 1.2 Research and development tax credits 2.2 1.1 (1.6 ) UK CFC tax 2.1 (1.0 ) 0.2 U.S. tax on non-U.S. operations (1.6 ) (0.5 ) 1.5 Base erosion anti-abuse tax 1.5 (1.2 ) — Exempt income 1.2 6.1 (13.5 ) Transaction costs — (0.8 ) 2.0 Sale of intellectual property — — 44.3 Domestic manufacturing deduction — — (1.8 ) Other, net — 0.3 2.1 Effective tax rate 16.2 % 28.1 % 41.2 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities as of December 31, 2019 and 2018 , are as follows (in thousands): 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 125,883 $ 87,406 Tax credit carryforwards 28,272 26,152 Accruals and reserves 69,562 96,483 Deferred compensation 9,692 5,757 Inventory 9,436 3,956 Other 12,135 6,043 Gross deferred tax assets 254,980 225,797 Valuation allowance (76,317 ) (40,255 ) Net deferred tax assets 178,663 185,542 Deferred tax liabilities: Property, equipment & intangible assets (89,115 ) (122,035 ) Gain on sale of intellectual property (53,091 ) (59,249 ) Investments — (3,561 ) Other — (740 ) Gross deferred tax liabilities: (142,206 ) (185,585 ) Net deferred tax assets (liabilities) $ 36,457 $ (43 ) Reported on the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax assets $ 68,676 $ 68,146 Deferred tax liabilities (32,219 ) (68,189 ) Net deferred tax assets (liabilities) $ 36,457 $ (43 ) |
Summary of Operating Loss Carryforwards | Net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2019 , which can be used to reduce our income tax payable in future years (in thousands): Region Gross Amount Tax Benefit Amount Amount with Expiration Carryforward Period Europe NOL $ 254,869 $ 52,408 $ 49,032 $ 3,376 2022 - 2026 U.S. Federal NOL 252,283 52,979 17,872 35,107 2021 - 2036 U.S. State NOL 307,525 14,611 5,431 9,180 2020 - 2038 South America NOL 17,263 5,859 5,521 338 2028 - 2030 Far East NOL 86 26 — 26 2029 U.S. foreign tax credits — 14,832 — 14,832 2025 - 2029 U.S. research & development tax credits — 6,552 — 6,552 2020 - 2039 U.S. State research & development tax credits — 5,126 — 5,126 2022 - 2039 Other non-U.S. tax credits — 1,259 — 1,259 2020 - 2032 Other U.S. tax credits — 503 503 — $ 832,026 $ 154,155 $ 78,359 $ 75,796 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following is a roll-forward of our total gross unrecognized tax benefit (in thousands): Year Ended December 31, 2019 2018 2017 Balance at beginning of year $ 22,883 $ 26,137 $ 22,374 Increases: Tax positions related to current year 176 671 324 Tax positions related to prior year — 3,309 1,153 Decreases: Tax positions related to prior years for settlement with tax authorities (2,104 ) (3,999 ) — Tax positions related to prior years for lapses of statute of limitations (4,632 ) (2,343 ) — Impact of foreign currency exchange rates (328 ) (892 ) 2,286 Balance at end of year $ 15,995 $ 22,883 $ 26,137 |
Schedule of Income Tax Examinations of Major Jurisdictions | The major jurisdictions where we are subject to income tax examinations are as follows: Jurisdiction Earliest Year Open U.S. - federal and state 2001 Italy 2015 Germany 2014 England and Wales 2017 Canada 2015 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the basic and diluted weighted-average shares outstanding used in the computation of basic and diluted net income per share (in thousands of shares): Year Ended December 31, 2019 2018 2017 Basic weighted average shares outstanding 48,349 48,497 48,157 Add effects of stock-based compensation instruments (1) — — 344 Diluted weighted average shares outstanding 48,349 48,497 48,501 (1) Excluded from the computation of diluted earnings per share for the years ended December 31, 2019 , 2018 and 2017 were stock options, SARs and RSUs t otaling 2.9 million , 2.7 million and 1.2 million |
Geographic and Segment Inform_2
Geographic and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | We operate under three geographic regions: U.S., Europe, and Rest of World. The table below presents net sales by operating segment and geographic region (in thousands): Year Ended December 31, 2019 2018 2017 Cardiopulmonary United States $ 161,471 $ 161,134 $ 152,828 Europe 135,632 141,720 133,585 Rest of World 207,613 233,554 210,911 504,716 536,408 497,324 Heart Valves United States 18,900 24,709 24,977 Europe 40,548 44,258 42,120 Rest of World 60,559 56,989 71,096 120,007 125,956 138,193 Advanced Circulatory Support United States 30,781 18,588 — Europe 741 580 — Rest of World 401 293 — 31,923 19,461 — Cardiovascular United States 211,152 204,431 177,805 Europe 176,921 186,558 175,705 Rest of World 268,573 290,836 282,007 656,646 681,825 635,517 Neuromodulation United States 335,332 348,980 316,916 Europe 46,262 42,443 34,765 Rest of World 42,953 31,567 23,295 424,547 422,990 374,976 Other 2,977 2,146 1,784 Totals United States 546,484 553,411 494,721 Europe (1) 223,183 229,001 210,470 Rest of World 314,503 324,549 307,086 Total (2) (3) $ 1,084,170 $ 1,106,961 $ 1,012,277 (1) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in Rest of World. (2) Net sales to external customers includes $37.7 million , $34.8 million and $30.8 million in the United Kingdom, our country of domicile, for the years ended December 31, 2019, 2018 and 2017, respectively. (3) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. The table below presents a reconciliation of segment (loss) income from continuing operations to consolidated (loss) income from continuing operations before tax (in thousands): Year Ended December 31, 2019 2018 2017 Cardiovascular (1) $ 28,460 $ (258,493 ) $ 81,412 Neuromodulation (2) 83,483 184,674 183,228 Other (3) (204,727 ) (96,724 ) (102,425 ) Total reportable segment (loss) income from continuing operations (92,784 ) (170,543 ) 162,215 Merger and integration expenses 23,457 24,420 15,528 Restructuring expenses 12,254 15,915 17,056 Amortization of intangibles 40,375 37,194 33,144 Operating (loss) income from continuing operations (168,870 ) (248,072 ) 96,487 Interest income 803 847 1,318 Interest expense (15,091 ) (9,825 ) (7,797 ) Gain on acquisitions — 11,484 39,428 Impairment of investments — — (8,565 ) Foreign exchange and other (losses) gains (2,536 ) (1,881 ) 267 (Loss) income from continuing operations before tax $ (185,694 ) $ (247,447 ) $ 121,138 (1) Results for the years ended December 31, 2019 and 2018 include Litigation provision, net of $(0.6) million and $294.0 million , respectively. Refer to “ Note 14. Commitments and Contingencies ” for additional information. (2) Results for the year ended December 31, 2019 include the ImThera impairment of the IPR&D asset of $50.3 million . Refer to “ Note 8. Goodwill and Intangible Assets ” for additional information. (3) Results for the year ended December 31, 2019 include the Caisson impairments of goodwill and the IPR&D asset of $42.4 million and $89.0 million , respectively. Refer to “ Note 8. Goodwill and Intangible Assets ” for additional information. Assets by reportable segment as of December 31, 2019 and 2018 , was as follows (in thousands): Assets 2019 2018 Cardiovascular $ 1,546,520 $ 1,532,825 Neuromodulation 749,069 731,840 Other 116,208 285,036 Total $ 2,411,797 $ 2,549,701 Capital expenditures by segment were as follows (in thousands): Year Ended December 31, Capital Expenditures 2019 2018 2017 Cardiovascular $ 20,779 $ 27,621 $ 18,985 Neuromodulation 3,415 1,728 2,504 Other 3,783 7,630 7,010 Discontinued operations — 1,018 5,608 Total $ 27,977 $ 37,997 $ 34,107 |
Long-lived Assets by Geographic Areas | Property, plant, and equipment, net by geographic region as of December 31, 2019 and 2018 , was as follows (in thousands): PP&E 2019 2018 United States $ 61,410 $ 68,862 Europe 110,270 112,376 Rest of World 9,674 10,162 Total $ 181,354 $ 191,400 |
Supplemental Financial Informat
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Inventories | Inventories, net as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Raw materials $ 45,225 $ 40,387 Work-in-process 14,581 15,999 Finished goods 104,348 97,149 $ 164,154 $ 153,535 |
Schedule of Property, Plant and Equipment | PP&E as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Lives in Years Land $ 15,165 $ 15,866 Building and building improvements 86,814 82,035 3 to 39 Equipment, software, furniture and fixtures 205,711 195,008 2 to 16 Other 9,431 8,298 1 to 10 Capital investment in process 18,220 20,228 Total 335,341 321,435 Accumulated depreciation (153,987 ) (130,035 ) Net $ 181,354 $ 191,400 |
Schedule of Accrued Liabilities | Accrued liabilities as of December 31, 2019 and 2018 , consisted of the following (in thousands): 2019 2018 Contingent consideration (1) $ 22,953 $ 18,530 CRM purchase price adjustments payable to MicroPort Scientific Corporation 14,891 14,891 Operating lease liabilities (2) 11,110 — Legal and other administrative costs 11,066 9,189 Contract liabilities 6,728 3,304 Research and development costs 5,160 1,841 Restructuring related liabilities (3) 4,315 9,393 Provisions for agents, returns and other 3,922 4,934 Product remediation (4) 3,251 13,945 Derivative contract liabilities (5) 3,173 5,063 Other amounts payable to MicroPort Scientific Corporation 1,340 9,319 Other accrued expenses 32,191 33,876 $ 120,100 $ 124,285 (1) Refer to “ Note 10. Fair Value Measurements .” (2) Refer to “ Note 13. Leases .” (3) Refer to “ Note 6. Restructuring .” (4) Refer to “ Note 7. Product Remediation Liability .” (5) Refer to “ Note 12. Derivatives and Risk Management .” |
Quarterly Financial Informati_2
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The tables below present the quarterly results for the years ended December 31, 2019 and 2018 (in thousands except for share data): Year Ended December 31, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,801 $ 277,169 $ 268,610 $ 287,590 Gross profit (1) 163,600 197,114 179,406 204,638 Operating income (loss) from continuing operations (2) (20,779 ) (29,876 ) 25,761 (143,976 ) Net (loss) income from continuing operations (2) (14,849 ) (29,393 ) 32,118 (143,417 ) Net income from discontinued operations, net of tax — 178 — 187 Net (loss) income (2) $ (14,849 ) $ (29,215 ) $ 32,118 $ (143,230 ) Diluted (loss) earnings per share: Continuing operations $ (0.31 ) $ (0.61 ) $ 0.66 $ (2.96 ) Discontinued operations — 0.01 — — $ (0.31 ) $ (0.60 ) $ 0.66 $ (2.96 ) Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 250,398 $ 287,498 $ 272,082 $ 296,983 Gross profit (1) 162,085 193,963 174,348 204,073 Operating income (loss) from continuing operations (3) 12,530 21,607 (5,757 ) (276,452 ) Net income (loss) from continuing operations (3) 17,822 19,528 (6,273 ) (209,539 ) Net loss from discontinued operations, net of tax (4,549 ) (4,462 ) (904 ) (1,022 ) Net income (loss) (3) $ 13,273 $ 15,066 $ (7,177 ) $ (210,561 ) Diluted earnings (loss) per share: Continuing operations $ 0.36 $ 0.40 $ (0.13 ) $ (4.32 ) Discontinued operations (0.09 ) (0.09 ) (0.02 ) (0.02 ) $ 0.27 $ 0.31 $ (0.15 ) $ (4.34 ) (1) Gross profit excludes amortization of developed technology intangible assets of approximately $3.7 million , $5.5 million and $3.6 million for the first and second quarters in 2019, the third and fourth quarters in 2019 and for each quarter in 2018, respectively. (2) The second quarter of 2019 includes a $50.3 million impairment of the ImThera IPR&D asset arising from the ImThera acquisition. The fourth quarter of 2019 includes a $42.4 million impairment of Caisson’s goodwill arising from the Caisson acquisition and a $89.0 million impairment of Caisson’s IPR&D asset arising from the Caisson acquisition. For further information, please refer to “ Note 8. Goodwill and Intangible Assets .” (3) The fourth quarter of 2018 includes a $294.1 million litigation provision associated with our 3T devices. For further information, please refer to “ Note 14. Commitments and Contingencies |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our condensed financial statements: Issue Date & Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters May 2014 ASU No. 2014-09, This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most existing revenue recognition guidance. January 1, 2018 We elected the cumulative effect transition method; however, we recognized no cumulative effect to the opening balance of retained earnings because the impact on the timing of when revenue is recognized within our Cardiovascular segment, specifically related to heart-lung machines and preventative maintenance contracts on cardiopulmonary equipment was insignificant. The timing of revenue recognition for products and related revenue streams within our Neuromodulation segment and discontinued operations did not change. Upon adoption of the new standard, we implemented new internal controls related to our accounting policies and procedures, including review controls to ensure contractual terms and conditions that may require consideration under the standard are properly identified and analyzed. January 2016 ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities This update requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized in net income. However, an entity may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. January 1, 2018 There was no material impact to our consolidated financial statements as a result of adopting this ASU. February 2016 ASU No. 2016-02, Leases (Topic 842) and subsequent amendments The standard requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use (“ROU”) assets and to provide enhanced disclosures. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices met the criteria of being a lease in accordance with the new standard. January 1, 2019 Adoption of the new standard resulted in the recognition of ROU assets and lease liabilities of approximately $60 million as of January 1, 2019. Refer to “Note 13. Leases.” August 2016 Classification of Certain Cash Receipts and Cash Payments This update provides guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. January 1, 2018 There was no material impact to our consolidated financial statement of cash flows as a result of adopting this ASU. October 2016 This update simplifies the accounting for the income tax consequences of transfers of assets from one unit of a corporation to another unit or subsidiary by eliminating an accounting exception that prevents the recognition of current and deferred income tax consequences for such “intra-entity transfers” until the assets have been sold to an outside party. January 1, 2018 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2018: Prepaid expenses and other current assets decreased by $12.6 million, deferred tax assets increased by $58.3 million, other assets decreased by $68.1 million and the accumulated deficit increased by $22.5 million. January 2017 ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business This update clarifies when a set of assets and activities is a business. January 1, 2018 The ImThera, TandemLife and Miami Instruments acquisitions were considered acquisitions of a business. Refer to “Note 4. Business Combinations” for a discussion of our acquisitions. March 2017 ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost . This update requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. January 1, 2018 Our adoption resulted in an immaterial impact to our consolidated financial statements. The consolidated statements of income (loss) for the years ended December 31, 2017 and December 31, 2016 have been recast for the adoption of this update. June 2018 ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This update simplifies the accounting for non-employee share-based payment transactions. January 1, 2019 There was no material impact to our consolidated financial statements as a result of adopting this ASU. Future Adoption of New Accounting Pronouncements The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The modified-retrospective approach is generally applicable through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment This update removes step 2 of the goodwill impairment test that compares the implied fair value of goodwill with its carrying amount. Instead, an impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recorded by the amount a reporting unit’s carrying amount exceeds its fair value. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Nature of Operations Textual (D
Nature of Operations Textual (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Accounting Policies [Abstract] | |
Number of principal business franchises | 2 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)product_line | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ | $ 8.6 | $ 4.8 |
Cardiovascular | ||
Disaggregation of Revenue [Line Items] | ||
Number of product lines | product_line | 3 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) $ in Thousands | Jun. 12, 2019 | Apr. 04, 2018 | Jan. 16, 2018 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||||
Merger and integration expenses | $ 23,457 | $ 24,420 | $ 15,528 | |||||
Increase (decrease) in deferred tax assets | $ 3,300 | |||||||
Intangible assets acquired | $ 107,500 | |||||||
Goodwill as a result of acquisitions | $ 1,550 | 204,042 | ||||||
ImThera Medical, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of voting interests acquired (percent) | 86.00% | |||||||
Consideration transferred | $ 216,656 | |||||||
Cash | 78,332 | |||||||
Gain from acquisition | 11,500 | |||||||
Fair value in excess of carrying value adjustment | 14,100 | |||||||
Business combination, actual revenue since acquisition date | 300 | |||||||
Business combination, actual income (loss) since acquisition date | (8,800) | |||||||
Merger and integration expenses | 700 | |||||||
ImThera Medical, Inc. | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 225,000 | |||||||
TandemLife | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 243,861 | |||||||
Cash | 203,671 | |||||||
Business combination, actual revenue since acquisition date | 19,500 | |||||||
Business combination, actual income (loss) since acquisition date | (14,000) | |||||||
Merger and integration expenses | $ 2,100 | |||||||
Useful life | 2 years | |||||||
Cash | 204,000 | |||||||
Contingent consideration (up to) | 50,000 | |||||||
TandemLife | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 254,000 | |||||||
Miami Instruments, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 17,000 | |||||||
Cash | 10,800 | |||||||
Contingent consideration (up to) | 6,000 | |||||||
Goodwill as a result of acquisitions | 1,500 | |||||||
Trade names | Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 15 years | |||||||
Trade names | TandemLife | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 15 years | |||||||
Developed Technology Rights and In Process Research and Development | Miami Instruments, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets acquired | $ 14,700 |
Business Combinations (Purchase
Business Combinations (Purchase Price Composition) (Details) - USD ($) $ in Thousands | Apr. 04, 2018 | Jan. 16, 2018 | Dec. 31, 2018 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 18,530 | $ 22,953 | ||
ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 78,332 | |||
Contingent consideration | 112,744 | |||
Fair value of our interest in ImThera prior to the acquisition | 25,580 | |||
Fair value of consideration transferred | $ 216,656 | |||
Gain from acquisition | 11,500 | |||
Fair value in excess of carrying value adjustment | $ 14,100 | |||
TandemLife | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 203,671 | |||
Contingent consideration | 40,190 | |||
Fair value of consideration transferred | $ 243,861 |
Business Combinations (Prelimin
Business Combinations (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 04, 2018 | Jan. 16, 2018 | Dec. 31, 2017 | |
Initial Purchase Price Allocation | |||||||
Goodwill | $ 915,794 | $ 956,815 | $ 784,242 | ||||
Measurement Period Adjustments | |||||||
Goodwill | $ (3,326) | ||||||
TandemLife | |||||||
Initial Purchase Price Allocation | |||||||
Goodwill | $ 118,120 | ||||||
Inventory | 10,156 | ||||||
Other assets and liabilities, net | 3,874 | ||||||
Deferred income tax liabilities, net | (13,718) | ||||||
Net assets acquired | 243,861 | ||||||
Measurement Period Adjustments | |||||||
Goodwill | $ (797) | ||||||
Inventory | (140) | ||||||
Other assets and liabilities, net | 242 | ||||||
Deferred tax liabilities, net | 4,169 | ||||||
Net assets acquired | 0 | ||||||
TandemLife | In-process research and development | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 107,503 | ||||||
Measurement Period Adjustments | |||||||
Intangibles | (3,474) | ||||||
TandemLife | Developed technology | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 6,387 | ||||||
Measurement Period Adjustments | |||||||
Intangibles | 0 | ||||||
TandemLife | Trade names | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 11,539 | ||||||
Measurement Period Adjustments | |||||||
Intangibles | $ 0 | ||||||
ImThera Medical, Inc. | |||||||
Initial Purchase Price Allocation | |||||||
Goodwill | $ 82,596 | ||||||
Other assets and liabilities, net | 1,036 | ||||||
Deferred income tax liabilities, net | (29,258) | ||||||
Net assets acquired | 216,656 | ||||||
Measurement Period Adjustments | |||||||
Goodwill | $ (4,467) | ||||||
Other assets and liabilities, net | 200 | ||||||
Deferred tax liabilities, net | (1,278) | ||||||
Net assets acquired | (529) | ||||||
ImThera Medical, Inc. | Developed technology | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 0 | ||||||
Measurement Period Adjustments | |||||||
Intangibles | (5,661) | ||||||
Previously Reported | TandemLife | |||||||
Initial Purchase Price Allocation | |||||||
Goodwill | 118,917 | ||||||
Inventory | 10,296 | ||||||
Other assets and liabilities, net | 3,632 | ||||||
Deferred income tax liabilities, net | (17,887) | ||||||
Net assets acquired | 243,861 | ||||||
Previously Reported | TandemLife | In-process research and development | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 110,977 | ||||||
Previously Reported | TandemLife | Developed technology | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 6,387 | ||||||
Previously Reported | TandemLife | Trade names | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | $ 11,539 | ||||||
Previously Reported | ImThera Medical, Inc. | |||||||
Initial Purchase Price Allocation | |||||||
Goodwill | 87,063 | ||||||
Other assets and liabilities, net | 836 | ||||||
Deferred income tax liabilities, net | (27,980) | ||||||
Net assets acquired | 217,185 | ||||||
Previously Reported | ImThera Medical, Inc. | Developed technology | |||||||
Initial Purchase Price Allocation | |||||||
Intangibles | 5,661 | ||||||
In-process research and development | ImThera Medical, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 162,282 | ||||||
Measurement Period Adjustments | |||||||
Intangibles | $ 10,677 | ||||||
In-process research and development | Previously Reported | ImThera Medical, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | $ 151,605 |
Business Combinations (Continge
Business Combinations (Contingent Consideration) (Details) - USD ($) $ in Thousands | Apr. 04, 2018 | Jan. 16, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 114,396 | $ 161,381 | ||
ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Regulatory milestone-based payments | $ 50,429 | |||
Sales-based earnout | 62,315 | |||
Contingent consideration | $ 112,744 | |||
TandemLife | ||||
Business Acquisition [Line Items] | ||||
Regulatory milestone-based payments | $ 40,190 | |||
Minimum | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 85.00% | |||
Maximum | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 95.00% | |||
Discount rate | Minimum | Discounted cash flow | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 4.30% | |||
Discount rate | Minimum | Discounted cash flow | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 4.20% | |||
Discount rate | Maximum | Discounted cash flow | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 4.70% | |||
Discount rate | Maximum | Discounted cash flow | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 4.80% | |||
Probability of payment | Minimum | Discounted cash flow | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 85.00% | |||
Probability of payment | Minimum | Discounted cash flow | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 75.00% | |||
Probability of payment | Maximum | Discounted cash flow | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 95.00% | |||
Probability of payment | Maximum | Discounted cash flow | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 95.00% | |||
Risk-adjusted discount rate | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 11.50% | |||
Credit risk discount rate | Minimum | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 4.70% | |||
Credit risk discount rate | Maximum | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 5.80% | |||
Revenue volatility | Monte Carlo simulation | ImThera Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement inputs | 29.30% |
Discontinued Operations (Textua
Discontinued Operations (Textual) (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accrued liabilities | $ 14,900 | |||
Business acquisitions, purchase price allocation | 14,891 | $ 14,891 | ||
CRM Business Franchise | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration transferred | $ 195,900 | |||
Consideration transferred, cash transferred | 9,200 | |||
Potential working capital adjustment | $ 10,000 | |||
Business combination, transition services, revenue | $ 900 | 2,800 | ||
Capital expenditure, discontinued operations | 1,000 | $ 6,100 | ||
Stock-based compensation, discontinued operations | $ 2,000 | 1,400 | ||
Depreciation and amortization, discontinued operations | 18,300 | |||
Discontinued Operations, Held-for-sale | CRM Business Franchise | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment of discontinued operations, tax benefit | $ 15,300 |
Discontinued Operations (Operat
Discontinued Operations (Operating Gains and Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Costs and expenses: | |||
Impairment of tangible and intangible assets | $ 0 | $ 0 | $ 93,574 |
Net income (loss) from discontinued operations | 365 | (10,937) | (1,271) |
CRM Business Franchise | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues | 0 | 77,366 | 245,171 |
Costs and expenses: | |||
Cost of sales | (43) | 28,028 | 92,609 |
Selling, general and administrative expenses | (161) | 43,382 | 105,831 |
Research and development | (161) | 16,592 | 37,936 |
Merger and integration expenses | 0 | 0 | 22 |
Restructuring expenses | 0 | 651 | (1,617) |
Amortization of intangibles | 0 | 0 | 12,737 |
Impairment of tangible and intangible assets | 0 | 0 | 93,574 |
Revaluation gain on assets and liabilities held for sale | 0 | (1,213) | 0 |
Loss on sale of CRM | 0 | 214 | 0 |
Operating income (loss) from discontinued operations | 365 | (10,288) | (95,921) |
Foreign exchange and other gains (losses) | 0 | 102 | (381) |
Income (loss) from discontinued operations, before tax | 365 | (10,186) | (96,302) |
Income tax benefit | 0 | (460) | (21,635) |
Losses from equity method investments | 0 | (1,211) | (4,887) |
Net income (loss) from discontinued operations | $ 365 | $ (10,937) | $ (79,554) |
Restructuring (Narrative) (Deta
Restructuring (Narrative) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($)employee | Apr. 30, 2018USD ($) | Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | $ 13,264 | $ 6,514 | $ 24,148 | ||
Charges | 12,254 | 15,915 | 17,056 | ||
Cash payments / write-downs | (20,021) | (9,816) | (33,073) | ||
Ending liability balance | $ 13,264 | 5,497 | 13,264 | 6,514 | |
Restructuring charges incurred to date | 111,500 | ||||
Employee Severance and Other Termination Costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | 10,195 | 3,889 | 21,092 | ||
Charges | 11,472 | 15,641 | 10,076 | ||
Cash payments / write-downs | (17,570) | (9,335) | (27,279) | ||
Ending liability balance | 10,195 | 4,097 | 10,195 | 3,889 | |
Other | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | 3,069 | 2,625 | 3,056 | ||
Charges | 782 | 925 | 5,363 | ||
Cash payments / write-downs | (2,451) | (481) | (5,794) | ||
Ending liability balance | $ 3,069 | $ 1,400 | 3,069 | 2,625 | |
Suzhou Industrial Park Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | 500 | ||||
Proceeds from the sale of CRM business franchise, net of cash disposed | $ 13,300 | ||||
China | Building and Equipment | Suzhou Industrial Park Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Impairment of building and equipment | 5,400 | ||||
Cardiovascular | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, expected number of positions eliminated | employee | 75 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 6,500 | ||||
2019 Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, severance costs, number of employees | employee | 35 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 4,400 | ||||
Caisson TMVR Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, severance costs, number of employees | employee | 50 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 3,500 | ||||
Continuing And Discontinued Operations | |||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 12,254 | $ 16,566 | $ 15,439 |
Restructuring (Restructuring Ex
Restructuring (Restructuring Expense by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 12,254 | $ 15,915 | $ 17,056 |
Building and Equipment | Suzhou Industrial Park Facility | China | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of building and equipment | 5,400 | ||
Cardiovascular | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 6,500 | ||
Cardiovascular | Building and Equipment | Facility Closing | China | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of building and equipment | 5,400 | ||
Operating Segments | Cardiovascular | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 3,592 | 11,497 | 8,819 |
Operating Segments | Neuromodulation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 1,082 | 1,595 | 561 |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 7,580 | 2,823 | 7,676 |
Continuing And Discontinued Operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 12,254 | 16,566 | 15,439 |
Discontinued operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 0 | $ 651 | $ (1,617) |
Caisson TMVR Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 3,500 |
Product Remediation Liability_2
Product Remediation Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss Contingency Accrual [Roll Forward] | |||
Balance at beginning of period | $ 14,745 | $ 27,546 | $ 33,487 |
Adjustments | 3,663 | (200) | 2,452 |
Remediation activity | (14,909) | (12,212) | (11,283) |
Effect of changes in foreign currency exchange rates | (248) | (389) | 2,890 |
Balance at end of period | 3,251 | 14,745 | 27,546 |
Product remediation | 15,777 | 10,680 | $ 7,254 |
Litigation provision liability, net | 294,100 | ||
Product Liability | |||
Loss Contingency Accrual [Roll Forward] | |||
Loss contingency accrual | $ 170,404 | $ 294,061 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets Additional information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 01, 2019 | |
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Impairment of intangible assets | $ 89,000 | $ 89,000 | $ 139,295 | $ 0 | $ 0 | |||
Impairment of goodwill | $ 42,400 | 42,400 | 42,417 | 0 | $ 0 | |||
Finite-lived intangible assets | $ 107,500 | |||||||
Useful life | 15 years | |||||||
In-process research and development | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Impairment of intangible assets | $ 50,300 | 50,300 | ||||||
IPR&D | 115,800 | 115,800 | $ 358,785 | |||||
Neuromodulation | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Reporting unit, percentage of fair value in excess of carrying amount | 584.00% | |||||||
Neuromodulation | In-process research and development | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Impairment of intangible assets | $ 50,300 | |||||||
IPR&D | $ 112,000 | $ 112,000 | ||||||
Cardiovascular | ||||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||||
Reporting unit, percentage of fair value in excess of carrying amount | 24.00% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Finite-Lived and Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 639,787 | $ 519,925 | |
Accumulated amortization | 148,041 | 108,271 | |
Net finite-lived intangible assets | 491,746 | 411,654 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | 915,794 | 956,815 | $ 784,242 |
Total indefinite-lived intangible assets | 1,031,594 | 1,315,600 | |
Goodwill as a result of acquisitions | 1,550 | 204,042 | |
In-process research and development | |||
Indefinite-lived Intangible Assets [Line Items] | |||
IPR&D | 115,800 | 358,785 | |
Purchased intangible assets | 14,700 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 320,023 | 317,292 | |
Accumulated amortization | 75,156 | 57,350 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 293,785 | 176,476 | |
Accumulated amortization | 57,362 | 39,144 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 25,004 | 25,260 | |
Accumulated amortization | 14,811 | 11,440 | |
Other intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 975 | 897 | |
Accumulated amortization | $ 712 | $ 337 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Amortization Periods for Finite-lived Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 18 years |
Developed technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 2 years |
Developed technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 19 years |
Trade names | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Trade names | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Other intangible assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 5 years |
Other intangible assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 39,901 | |
2021 | 39,102 | |
2022 | 39,102 | |
2023 | 39,102 | |
2024 | 39,102 | |
Thereafter | 295,437 | |
Net finite-lived intangible assets | $ 491,746 | $ 411,654 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets (Goodwill Carrying Amounts) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | $ 956,815 | $ 784,242 | |||
Goodwill as a result of acquisitions | 1,550 | 204,042 | |||
Foreign currency adjustments | 3,172 | (31,469) | |||
Measurement period adjustments | (3,326) | ||||
Impairment | $ (42,400) | $ (42,400) | (42,417) | 0 | $ 0 |
Goodwill, ending balance | 915,794 | 915,794 | 956,815 | 784,242 | |
Operating Segments | Cardiovascular | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 515,859 | 425,882 | |||
Goodwill as a result of acquisitions | 1,550 | 121,446 | |||
Foreign currency adjustments | 2,957 | (31,469) | |||
Measurement period adjustments | (3,326) | ||||
Impairment | 0 | ||||
Goodwill, ending balance | 517,040 | 517,040 | 515,859 | 425,882 | |
Operating Segments | Neuromodulation | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 398,539 | 315,943 | |||
Goodwill as a result of acquisitions | 0 | 82,596 | |||
Foreign currency adjustments | 215 | 0 | |||
Measurement period adjustments | 0 | ||||
Impairment | 0 | ||||
Goodwill, ending balance | 398,754 | 398,754 | 398,539 | 315,943 | |
Other | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 42,417 | 42,417 | |||
Goodwill as a result of acquisitions | 0 | 0 | |||
Foreign currency adjustments | 0 | 0 | |||
Measurement period adjustments | 0 | ||||
Impairment | (42,417) | ||||
Goodwill, ending balance | $ 0 | $ 0 | $ 42,417 | $ 42,417 |
Investments (Schedule of Long-t
Investments (Schedule of Long-term Investments) (Details) $ in Thousands, € in Millions | Sep. 07, 2018shares | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017 |
Schedule of Investments [Line Items] | ||||||
Carrying value | $ 26,805 | $ 24,823 | ||||
Equity method investments | 451 | 0 | ||||
Total investments | 27,256 | 24,823 | ||||
Payments to acquire equity method investments | $ 500 | |||||
Equity method investments, required funding | 5,600 | € 5 | ||||
Investments Required Funding | 5,000 | |||||
Respicardia Inc. | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 17,706 | 17,706 | ||||
Respicardia Inc. | Investee | ||||||
Schedule of Investments [Line Items] | ||||||
Outstanding loans | 600 | 600 | ||||
Ceribell, Inc. | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 3,000 | 3,000 | ||||
Ceribell, Inc. | Series B Preferred Stock | ||||||
Schedule of Investments [Line Items] | ||||||
Shares acquired (in shares) | shares | 1,007,319 | |||||
ShiraTronics,Inc | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 2,045 | 0 | ||||
Rainbow Medical Ltd | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,099 | 1,119 | ||||
MD Start II | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,121 | 1,144 | ||||
Highlife S.A.S. | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,064 | $ 1,084 | ||||
Equity method investment, ownership percentage | 7.80% | 24.60% | ||||
Other | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | $ 770 | $ 770 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Impairment of investments | $ 0 | $ 0 | $ 8,565 |
Foreign exchange and other (losses) gains | $ (2,536) | $ (1,881) | 267 |
Respicardia | |||
Schedule of Equity Method Investments [Line Items] | |||
Impairment of investments | 5,500 | ||
Rainbow Medical Ltd | |||
Schedule of Equity Method Investments [Line Items] | |||
Impairment of investments | 3,000 | ||
Highlife S.A.S. | |||
Schedule of Equity Method Investments [Line Items] | |||
Impairment of investments | 13,000 | ||
Istituto Europeo di Oncologia S.R.L. | |||
Schedule of Equity Method Investments [Line Items] | |||
Foreign exchange and other (losses) gains | $ 3,200 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Assets and liabilities Measured on a Recurring Basis) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)acquisition | Dec. 31, 2018USD ($) | |
Liabilities: | ||
Number of businesses acquired | acquisition | 4 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | $ (29,406) | $ (4,311) |
Recurring | ||
Assets: | ||
Total assets | 561 | 236 |
Liabilities: | ||
Contingent consideration | 137,349 | 179,911 |
Total liabilities | 141,029 | 185,303 |
Recurring | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 535 | |
Liabilities: | ||
Derivative liability | 169 | 1,354 |
Recurring | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 374 | 865 |
Recurring | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 236 | |
Recurring | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 26 | |
Liabilities: | ||
Derivative liability | 3,137 | 3,173 |
Recurring | Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring | Level 1 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | 0 |
Recurring | Level 1 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Recurring | Level 1 | Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Recurring | Level 1 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Recurring | Level 1 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Total assets | 561 | 236 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 3,680 | 5,392 |
Recurring | Level 2 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 535 | |
Liabilities: | ||
Derivative liability | 169 | 1,354 |
Recurring | Level 2 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 374 | 865 |
Recurring | Level 2 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 236 | |
Recurring | Level 2 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 26 | |
Liabilities: | ||
Derivative liability | 3,137 | 3,173 |
Recurring | Level 3 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 137,349 | 179,911 |
Total liabilities | 137,349 | 179,911 |
Recurring | Level 3 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | 0 |
Recurring | Level 3 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Recurring | Level 3 | Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Recurring | Level 3 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Recurring | Level 3 | Not Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | $ 0 | |
Recurring | Level 3 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Liabilities: | ||
Derivative liability | $ 0 |
Fair Value Measurements (Contin
Fair Value Measurements (Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 16, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Payments | $ 18,955 | $ 651 | $ 1,097 | ||||
Contingent consideration | 114,396 | 161,381 | |||||
Level 3 | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Contingent consideration, beginning | $ 179,911 | $ 33,973 | 179,911 | 33,973 | |||
Additions | 7,184 | ||||||
Payments | (20,204) | (2,661) | |||||
Changes in fair value | 29,406 | 4,311 | |||||
Effect of changes in foreign currency exchange rates | (136) | (24) | |||||
Contingent consideration, ending | 137,349 | 179,911 | $ 33,973 | ||||
Less current portion of contingent consideration liability at December 31, 2019 | 22,953 | ||||||
Long-term portion of contingent consideration liability at December 31, 2019 | $ 114,396 | ||||||
Caisson Interventional LLC | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Contingent consideration | 27,900 | ||||||
ImThera Medical, Inc. | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Contingent consideration | $ 112,744 | ||||||
ImThera Medical, Inc. | Level 3 | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Purchase price | 112,744 | ||||||
TandemLife | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Payments | $ 19,000 | ||||||
TandemLife | Level 3 | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Purchase price | $ 40,190 | ||||||
Cost of goods sold | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Changes in fair value | 13,200 | 3,600 | |||||
Research and development | |||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||
Changes in fair value | $ 16,200 | $ 700 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
Long-term debt | $ 333.5 |
Financing Arrangements (Long-Te
Financing Arrangements (Long-Term Debt Outstanding) (Details) - USD ($) | Dec. 31, 2019 | Mar. 26, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 333,511,000 | $ 162,841,000 | |
Less current portion of long-term debt | 73,181,000 | 23,303,000 | |
Long-term debt obligations | 260,330,000 | 139,538,000 | |
2019 Debt Facility | |||
Debt Instrument [Line Items] | |||
Semi-annual periodic payment, percentage of principal | 20.00% | ||
2019 Debt Facility | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 184,275,000 | 0 | |
Semi-annual periodic payment, percentage of principal | 20.00% | ||
2019 Debt Facility | Loans Payable | Minimum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 1.40% | ||
2019 Debt Facility | Loans Payable | Maximum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.56% | ||
European Investment Bank | European Investment Bank, 2017 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 103,570,000 | 103,570,000 | |
European Investment Bank | European Investment Bank, 2017 | Loans Payable | Minimum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.31% | ||
European Investment Bank | European Investment Bank, 2017 | Loans Payable | Maximum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.37% | ||
European Investment Bank | European Investment Bank, 2014 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 28,053,000 | 47,606,000 | |
Effective interest rate (percent) | 1.01% | ||
Mediocredito Italiano | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 6,222,000 | 7,623,000 | |
Mediocredito Italiano | Loans Payable | Minimum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 0.50% | ||
Mediocredito Italiano | Loans Payable | Maximum | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 2.93% | ||
Bank of America Merrill Lynch Banco Múltiplo S.A. | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||
Bank of America Merrill Lynch Banco Múltiplo S.A. | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 8,422,000 | 0 | |
Effective interest rate (percent) | 8.08% | ||
Bank of America, U.S. | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 2,004,000 | 0 | |
Effective interest rate (percent) | 3.76% | ||
Banca del Mezzogiorno | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 0 | 2,718,000 | |
Effective interest rate (percent) | 0.00% | ||
Other | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 965,000 | $ 1,324,000 | |
Effective interest rate (percent) | 0.00% |
Financing Arrangements - Maturi
Financing Arrangements - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 73,497 | |
2021 | 111,370 | |
2022 | 91,930 | |
2023 | 17,614 | |
Thereafter | 15,996 | |
Long-term Debt, Maturities, Repayments of Principal in Rolling after Year Five | 24,261 | |
Total payments | 334,668 | |
Less: Debt issuance costs | 1,157 | |
Total long-term facilities | $ 333,511 | $ 162,841 |
Financing Arrangements - Revolv
Financing Arrangements - Revolving Credit (Details) | Jul. 25, 2019USD ($) | Mar. 26, 2019 | Apr. 10, 2018USD ($) | Apr. 03, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Apr. 09, 2018USD ($) |
Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | $ 44,900,000 | |||||||
Debt instrument, term | 2 years | ||||||||
Line of credit outstanding | 0 | ||||||||
Short-term debt | $ 4,200,000 | $ 5,500,000 | |||||||
Debt instrument, extended term | 1 year | ||||||||
2019 Debt Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Semi-annual periodic payment, percentage of principal | 20.00% | ||||||||
London Interbank Offered Rate (LIBOR) | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 1.60% | ||||||||
London Interbank Offered Rate (LIBOR) | Barclays Bank | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 70,000,000 | $ 40,000,000 | |||||||
Euribor | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 0.80% | ||||||||
Minimum | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, term | 10 days | ||||||||
Effective interest rate (percent) | 2.72% | 2.72% | |||||||
Maximum | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, term | 220 days | ||||||||
Effective interest rate (percent) | 8.29% | 8.29% | |||||||
CRM Business Franchise | European Investment Bank | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 103,000,000 | $ 114,300,000 | € 90,000,000 | € 100,000,000 | |||||
Bridge Loan | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 190,000,000 | ||||||||
Proceeds from lines of credit | $ 190,000,000 | ||||||||
Euro Denominated Borrowings | London Interbank Offered Rate (LIBOR) | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, basis spread on variable rate | 1.40% |
Derivatives and Risk Manageme_3
Derivatives and Risk Management (Narrative) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign Exchange Forward | |||
Derivative [Line Items] | |||
Notional amount | $ 320.2 | $ 338 | |
Foreign Exchange Contract | Foreign Exchange and Other | |||
Derivative [Line Items] | |||
Gain (loss) on derivative | $ (11.2) | $ (11.7) | $ 3.1 |
Derivatives and Risk Manageme_4
Derivatives and Risk Management (Derivative Notional Amounts) (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Notional amount | $ 106,750 | $ 109,134 |
After-tax net gain (loss) in AOCI as of December 31, 2019 | 514 | |
Amount Expected to be Reclassified to Earnings in Next 12 Months | 543 | |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
After-tax net gain (loss) in AOCI as of December 31, 2019 | 600 | |
Amount Expected to be Reclassified to Earnings in Next 12 Months | 600 | |
Foreign Exchange Contract | British, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 10,128 | 9,629 |
Foreign Exchange Contract | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 25,342 | 23,985 |
Foreign Exchange Contract | Canada, Dollars | ||
Derivative [Line Items] | ||
Notional amount | 0 | 7,637 |
Foreign Exchange Contract | Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Notional amount | 48,838 | 29,768 |
Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Notional amount | 22,442 | $ 38,115 |
After-tax net gain (loss) in AOCI as of December 31, 2019 | (86) | |
Amount Expected to be Reclassified to Earnings in Next 12 Months | $ (57) |
Derivatives and Risk Manageme_5
Derivatives and Risk Management (Amount of Loss Recognized in OCI and Income Statement) (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | $ 2,757 | ||
Gains (Losses) Reclassified from AOCI to Earnings: | 840 | ||
Gains (Losses) Recognized in OCI | $ 44 | $ (9,861) | |
(Losses) Gains Reclassified from AOCI to Earnings: | 77 | (3,448) | |
Foreign Exchange Contract | Foreign Exchange and Other | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 2,757 | ||
Gains (Losses) Reclassified from AOCI to Earnings: | 3,003 | ||
Gains (Losses) Recognized in OCI | 44 | (9,861) | |
(Losses) Gains Reclassified from AOCI to Earnings: | 2,697 | (6,471) | |
Foreign Exchange Contract | Selling, general and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 0 | ||
Gains (Losses) Reclassified from AOCI to Earnings: | (2,071) | ||
Gains (Losses) Recognized in OCI | 0 | 0 | |
(Losses) Gains Reclassified from AOCI to Earnings: | (2,554) | 2,084 | |
Interest Rate Swap Contracts | Interest Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 0 | ||
Gains (Losses) Reclassified from AOCI to Earnings: | $ (92) | ||
Gains (Losses) Recognized in OCI | 0 | 0 | |
(Losses) Gains Reclassified from AOCI to Earnings: | $ (66) | $ 939 |
Derivatives and Risk Manageme_6
Derivatives and Risk Management (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 561 | $ 236 |
Total liability derivatives | 3,680 | 5,392 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 543 | 2,219 |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 535 | |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 148 | |
Designated as Hedging Instrument | Accrued Liabilities [Member] | Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 313 | 536 |
Designated as Hedging Instrument | Accrued Liabilities [Member] | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 387 | |
Total liability derivatives | 169 | 1,354 |
Designated as Hedging Instrument | Other Noncurrent Liabilities [Member] | Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 61 | 329 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 26 | 236 |
Total liability derivatives | 3,137 | 3,173 |
Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 33 | |
Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 236 | |
Not Designated as Hedging Instrument | Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | $ 3,104 | |
Not Designated as Hedging Instrument | Accrued Liabilities [Member] | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | $ 3,173 |
Leases (Components of Operating
Leases (Components of Operating Lease Assets and Liabilities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease, renewal term | 12 years |
Assets | |
Operating lease right-of-use assets | $ 54,372 |
Liabilities | |
Accrued liabilities and other | 11,110 |
Long-term operating lease liabilities | 46,027 |
Present value of lease liabilities | $ 57,137 |
Leases (Costs) (Details)
Leases (Costs) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 14,002 |
Variable lease cost | 873 |
Short-term lease cost | 788 |
Total lease cost | $ 15,663 |
Leases (Contractual Maturities)
Leases (Contractual Maturities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 12,399 |
2021 | 10,402 |
2022 | 9,224 |
2023 | 7,524 |
2024 | 5,975 |
Thereafter | 16,907 |
Total lease payments | 62,431 |
Less: Amount representing interest | 5,294 |
Present value of lease liabilities | $ 57,137 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted Average Remaining Lease Term | 7 years |
Weighted Average Discount Rate | 2.40% |
Leases (Cash Flow) (Details)
Leases (Cash Flow) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ 13,522 |
Operating lease assets obtained in exchange for lease liabilities | $ 8,712 |
Leases (Future Minimum Operatin
Leases (Future Minimum Operating Lease Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Less than one year | $ 11,986 |
One to three years | 21,031 |
Three to five years | 14,998 |
Thereafter | 20,943 |
Total | $ 68,958 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) € in Thousands, $ in Thousands | Feb. 28, 2020USD ($) | Feb. 28, 2020EUR (€) | May 31, 2019EUR (€) | Mar. 29, 2019USD ($) | May 15, 2018USD ($) | May 15, 2018EUR (€) | Apr. 01, 2016USD ($) | Apr. 01, 2016EUR (€) | Jul. 31, 2019USD ($) | Oct. 31, 2016EUR (€) | Dec. 31, 2019USD ($)installmentnotice | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)installmentnotice | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 02, 2020claim | Dec. 31, 2019EUR (€)installmentnotice | Aug. 27, 2015non-conformity | Oct. 30, 2009EUR (€) |
Other Commitments [Line Items] | ||||||||||||||||||||
Product Remediation Liability, Net | $ 3,300 | $ 3,300 | ||||||||||||||||||
Payments for legal settlements | € | € 1,900 | |||||||||||||||||||
Litigation provision, net | 33,200 | $ 294,100 | (601) | $ 294,021 | $ 0 | |||||||||||||||
Estimate of possible loss | 17,400 | € 15,500 | ||||||||||||||||||
Settled Litigation | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Reimbursed legal fees | $ 328 | € 292 | ||||||||||||||||||
Amount awarded from other party | € 400 | 449 | ||||||||||||||||||
Legal fees | $ 94 | € 84 | ||||||||||||||||||
Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Write-down under dispute | $ 70,200 | $ 70,200 | € 62,600 | |||||||||||||||||
Number of installments | installment | 5 | 5 | 5 | |||||||||||||||||
Number of notice of assessments | notice | 3 | 3 | 3 | |||||||||||||||||
FDA Warning Letter | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Number of observed non-conformities | non-conformity | 2 | |||||||||||||||||||
Product Liability | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Litigation settlement, amount awarded to other party | $ 225,000 | |||||||||||||||||||
Loss contingency accrual | $ 170,404 | $ 294,061 | $ 170,404 | $ 294,061 | ||||||||||||||||
Insurance recoveries | $ 33,800 | |||||||||||||||||||
SNIA | SNIA s.p.a | Pending Litigation | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Compensation sought | 4,000,000 | |||||||||||||||||||
First Payment | Product Liability | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Payments for legal settlements | 135,000 | |||||||||||||||||||
Second Payment | Product Liability | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Payments for legal settlements | $ 90,000 | |||||||||||||||||||
Tax Years 2002 - 2006 | Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Write-down under dispute | $ 115,100 | $ 115,100 | € 102,600 | |||||||||||||||||
Subsequent Event | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Number of claims | claim | 95 | |||||||||||||||||||
Subsequent Event | Settled Litigation | ||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||
Legal fees | $ 110 | € 98 |
Commitments and Contingencies S
Commitments and Contingencies Schedule of Product Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Loss Contingency Accrual [Roll Forward] | |
Adjustments | $ 33,233 |
Less current portion of litigation provision liability at December 31, 2019 | 146,026 |
Long-term portion of litigation provision liability at December 31, 2019 | 24,378 |
Product Liability | |
Loss Contingency Accrual [Roll Forward] | |
Beginning liability | 294,061 |
Payments | (156,928) |
FX and other | 38 |
Ending liability | $ 170,404 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Nov. 15, 2016 | |
Class of Stock [Line Items] | |||
Repurchase program period | 5 years | ||
Stock repurchased during period (in shares) | 500,333 | ||
Treasury stock acquired | $ 50,000,000 | ||
Treasury stock acquired, average cost per share (in dollars per share) | $ 99.91 | ||
Stock issued during period, shares, employee benefit trust (in shares) | 1,400,000 | ||
Ordinary Stock | |||
Class of Stock [Line Items] | |||
Amount authorized to repurchase | $ 150,000,000 |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | $ 1,503,738 | $ 1,815,314 | $ 1,706,909 |
Other comprehensive (loss) income before reclassifications, before tax | 6,384 | (69,720) | 108,477 |
Tax benefit | (661) | (11) | 2,653 |
Other comprehensive (loss) income before reclassifications, net of tax | 5,723 | (69,731) | 111,130 |
Reclassification of gain from accumulated other comprehensive income (loss), before tax | (840) | (77) | 3,448 |
Reclassification of tax expense | 201 | 19 | (778) |
Reclassification of gain from accumulated other comprehensive income (loss), after tax | (639) | (58) | 2,670 |
Net current-period other comprehensive loss, net of tax | 5,084 | (69,789) | 113,800 |
Ending balance | 1,383,717 | 1,503,738 | 1,815,314 |
Total | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (24,476) | 45,313 | (68,487) |
Net current-period other comprehensive loss, net of tax | 5,084 | (69,789) | 113,800 |
Ending balance | (19,392) | (24,476) | 45,313 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (23,532) | 46,232 | (72,106) |
Other comprehensive (loss) income before reclassifications, before tax | 3,627 | (69,764) | 118,338 |
Tax benefit | 0 | 0 | 0 |
Other comprehensive (loss) income before reclassifications, net of tax | 3,627 | (69,764) | 118,338 |
Reclassification of gain from accumulated other comprehensive income (loss), before tax | 0 | 0 | 0 |
Reclassification of tax expense | 0 | 0 | 0 |
Reclassification of gain from accumulated other comprehensive income (loss), after tax | 0 | 0 | 0 |
Net current-period other comprehensive loss, net of tax | 3,627 | (69,764) | 118,338 |
Ending balance | (19,905) | (23,532) | 46,232 |
Change in Unrealized Gain (Loss) on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (944) | (919) | 3,619 |
Other comprehensive (loss) income before reclassifications, before tax | 44 | (9,861) | |
Tax benefit | (11) | 2,653 | |
Other comprehensive (loss) income before reclassifications, net of tax | 33 | (7,208) | |
Reclassification of gain from accumulated other comprehensive income (loss), before tax | (77) | 3,448 | |
Reclassification of tax expense | 19 | (778) | |
Reclassification of gain from accumulated other comprehensive income (loss), after tax | (58) | 2,670 | |
Net current-period other comprehensive loss, net of tax | (25) | (4,538) | |
Ending balance | $ (944) | $ (919) | |
Change in Unrealized Gain (Loss) on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Other comprehensive (loss) income before reclassifications, before tax | 2,757 | ||
Tax benefit | (661) | ||
Other comprehensive (loss) income before reclassifications, net of tax | 2,096 | ||
Reclassification of gain from accumulated other comprehensive income (loss), before tax | (840) | ||
Reclassification of tax expense | 201 | ||
Reclassification of gain from accumulated other comprehensive income (loss), after tax | (639) | ||
Net current-period other comprehensive loss, net of tax | 1,457 | ||
Ending balance | $ 513 |
Stock-Based Incentive Plans (Na
Stock-Based Incentive Plans (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 4,904 | ||
Award vesting period | 4 years | ||
Stock-based compensation expense | $ 32,553 | $ 26,923 | $ 19,062 |
Market-based Performance Restricted Stock Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Operating Performance-based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1,300 |
Stock-Based Incentive Plans (Al
Stock-Based Incentive Plans (Allocation of Share Based Compensation Costs by Expense Category) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 32,553 | $ 26,923 | $ 19,062 |
Income tax benefit | 6,590 | 6,443 | 4,236 |
Total expense, net of income tax benefit | 25,963 | 20,480 | 14,826 |
Continuing Operations | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 32,553 | 24,963 | 17,687 |
Continuing Operations | Cost of goods sold | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 1,343 | 1,060 | 450 |
Continuing Operations | Selling, general and administrative | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 25,588 | 19,393 | 16,118 |
Continuing Operations | Research and development | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 5,622 | 4,510 | 1,119 |
Discontinued operations | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 0 | $ 1,960 | $ 1,375 |
Stock-Based Incentive Plans (_2
Stock-Based Incentive Plans (Allocation of Share-Based Compensation Costs by Type of Arrangement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | $ 32,553 | $ 26,923 | $ 19,062 |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 1,300 | ||
Continuing Operations | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 32,553 | 24,963 | 17,687 |
Continuing Operations | Service-based stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 10,349 | 8,282 | 6,916 |
Continuing Operations | Service-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 14,113 | 10,622 | 8,223 |
Continuing Operations | Market performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 2,900 | 2,357 | 732 |
Continuing Operations | Operating performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 3,918 | 3,702 | 1,816 |
Continuing Operations | Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | $ 1,273 | $ 0 | $ 0 |
Stock-Based Incentive Plans (Sc
Stock-Based Incentive Plans (Schedule of Stock-Based Compensation Cost Unrecognized) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 69,551 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 4 months 6 days |
Service-based stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 25,508 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 8 months 1 day |
Service-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 33,456 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 8 months 23 days |
Operating performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 10,587 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 7 months 24 days |
Stock-Based Incentive Plans (_3
Stock-Based Incentive Plans (Schedule of Share-Option Valuation Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend rate | 0.00% | 0.00% | 0.00% |
Risk free interest rate, minimum | 1.40% | 2.50% | 1.70% |
Risk free interest rate, maximum | 2.20% | 2.90% | 2.20% |
Expected volatility rate, minimum | 32.20% | 29.20% | 29.60% |
Expected volatility rate, maximum | 35.70% | 29.90% | 30.40% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years | 5 years | 4 years 7 months |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 1 month 15 days | 5 years 1 month 15 days | 5 years 2 months |
Stock-Based Incentive Plans (_4
Stock-Based Incentive Plans (Schedule of Share-Based Compensation, Stock Options, Rollforward) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of Optioned Shares | |
Outstanding - beginning of period, shares (in shares) | shares | 1,941,587 |
Granted, shares (in shares) | shares | 591,845 |
Exercised, shares (in shares) | shares | (121,534) |
Forfeited, shares (in shares) | shares | (171,282) |
Expired, shares (in shares) | shares | (25,560) |
Outstanding - end of period, shares (in shares) | shares | 2,215,056 |
Fully vested and exercisable - end of year (shares) | shares | 951,797 |
Fully vested and expected to vest - end of period (shares) | shares | 2,173,525 |
Wtd. Avg. Exercise Price | |
Beginning of period (in dollars per share) | $ / shares | $ 67.33 |
Granted (in dollars per share) | $ / shares | 96.60 |
Exercised (in dollars per share) | $ / shares | 61.50 |
Forfeited (in dollars per share) | $ / shares | 83.44 |
Expired (in dollars per share) | $ / shares | 72.60 |
End of period (in dollars per share) | $ / shares | 74.41 |
Fully vested and exercisable - end of year (in dollars per share) | $ / shares | 61.45 |
Fully vested and expected to vest - end of year(in dollars per share) | $ / shares | $ 74.08 |
Wtd. Avg. Remaining Contractual Term (years) | |
Outstanding — at December 31, 2019 | 7 years |
Fully vested and exercisable — end of year | 5 years 2 months 12 days |
Fully vested and expected to vest - end of year | 7 years |
Aggregate Intrinsic Value (in thousands) | |
Outstanding — at December 31, 2019 | $ | $ 22,195 |
Fully vested and exercisable — end of year | $ | 15,495 |
Fully vested and expected to vest — end of year | $ | $ 22,117 |
Stock-Based Incentive Plans (Su
Stock-Based Incentive Plans (Summary of Share-Based Compensation, Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant date fair value of SARs granted during the year (in dollars per share) | $ 31.22 | $ 28.13 | $ 17.19 |
Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) | $ 2,064 | $ 27,281 | $ 5,462 |
Stock-Based Incentive Plans (_5
Stock-Based Incentive Plans (Schedule of Restricted Stock Service-Based Rollforward) (Details) - Service-based restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Non-vested shares, beginning of year (in shares) | 450,297 | ||
Granted (in shares) | 294,460 | ||
Vested, shares (in shares) | (147,969) | ||
Forfeited, shares (in shares) | (72,955) | ||
Non-vested shares, end of year (in shares) | 523,833 | 450,297 | |
Wtd. Avg. Grant Date Fair Value | |||
Balance beginning of year (in dollars per share) | $ 78.70 | ||
Granted (in dollars per share) | 92.54 | $ 95.63 | $ 61.37 |
Vested (in dollars per share) | 74.53 | ||
Forfeited (in dollars per share) | 92.62 | ||
Balance end of year (in dollars per share) | $ 84.98 | $ 78.70 |
Stock-Based Incentive Plans (_6
Stock-Based Incentive Plans (Summary of Restricted Stock Service-Based Activity) (Details) - Service-based restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value of performance and market-based restricted share units granted during the year (in dollars per share) | $ 92.54 | $ 95.63 | $ 61.37 |
Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) | $ 12,710 | $ 11,505 | $ 9,966 |
Stock-Based Incentive Plans (_7
Stock-Based Incentive Plans (Schedule of Performance-Based Restricted Stock and Restricted Stock Units Rollforward) (Details) - Operating performance-based restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Non-vested shares, beginning of year (in shares) | 295,364 | ||
Granted (in shares) | 88,453 | ||
Vested, shares (in shares) | (69,646) | ||
Forfeited, shares (in shares) | (28,502) | ||
Non-vested shares, end of year (in shares) | 285,669 | 295,364 | |
Wtd. Avg. Grant Date Fair Value | |||
Balance beginning of year (in dollars per share) | $ 56.48 | ||
Granted (in dollars per share) | 98.50 | $ 95.62 | $ 42.11 |
Vested (in dollars per share) | 41.52 | ||
Forfeited (in dollars per share) | 75.97 | ||
Balance end of year (in dollars per share) | $ 71.02 | $ 56.48 |
Stock-Based Incentive Plans (_8
Stock-Based Incentive Plans (Summary of Performance-Based Restricted Stock and Restricted Stock Unit Activity) (Details) - Operating performance-based restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value of performance and market-based restricted share units granted during the year (in dollars per share) | $ 98.50 | $ 95.62 | $ 42.11 |
Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) | $ 6,697 | $ 9,409 | $ 110 |
Employee Retirement Plans (Narr
Employee Retirement Plans (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 900,000 | $ 1,400,000 | $ 1,200,000 |
Number of employees | employee | 50 | ||
Severance indemnity expense | $ 1,000,000 | (200,000) | 400,000 |
Defined contribution plan expense | 12,400,000 | 12,000,000 | 13,900,000 |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 546,000 | $ 1,047,000 | $ 870,000 |
Estimated future contributions in 2019 | $ 1,400,000 |
Employee Retirement Plans (Chan
Employee Retirement Plans (Change in Benefit Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | $ 6,767 | ||
Employer contributions | 900 | $ 1,400 | $ 1,200 |
Fair value of plan assets at end of year | 7,561 | 6,767 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations at year end: | 11,232 | 10,591 | 11,191 |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 10,591 | 11,001 | 10,425 |
Interest cost | 382 | 336 | 361 |
Plan settlement | (366) | (340) | 0 |
Actuarial loss (gain) | 871 | 8 | 770 |
Benefits paid | (246) | (414) | (555) |
Projected benefit obligation at end of year | 11,232 | 10,591 | 11,001 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 6,767 | 6,879 | 5,925 |
Actual return on plan assets | 628 | (405) | 444 |
Employer contributions | 546 | 1,047 | 870 |
Plan settlements | (366) | (340) | 0 |
Benefits paid | (1) | (414) | (360) |
Fair value of plan assets at end of year | 7,574 | 6,767 | 6,879 |
Funded status at end of year: | |||
Underfunded status of the plans | 3,658 | 3,824 | 4,122 |
Amounts recognized on the consolidated balance sheets consist of: | |||
Non-current liabilities | 3,658 | 3,824 | 4,122 |
Recognized liability | 3,658 | 3,824 | 4,122 |
Non-U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations at year end: | 17,744 | 18,676 | 23,785 |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 18,975 | 21,548 | 20,402 |
Service cost | 478 | 478 | 503 |
Interest cost | 232 | 289 | 291 |
Actuarial loss (gain) | 1,071 | (818) | (27) |
Benefits paid | (2,380) | (1,631) | (2,222) |
Foreign currency exchange rate changes and other | (289) | (891) | 2,601 |
Projected benefit obligation at end of year | 18,087 | 18,975 | 21,548 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,341 | 3,075 | 2,898 |
Actual return on plan assets | (34) | 51 | 54 |
Employer contributions | 383 | 361 | 369 |
Benefits paid | (332) | (156) | (393) |
Foreign currency exchange rate changes | 65 | 10 | 147 |
Fair value of plan assets at end of year | 3,423 | 3,341 | 3,075 |
Funded status at end of year: | |||
Underfunded status of the plans | 14,664 | 15,634 | 18,473 |
Amounts recognized on the consolidated balance sheets consist of: | |||
Non-current liabilities | 14,664 | 15,634 | 18,473 |
Recognized liability | $ 14,664 | $ 15,634 | $ 18,473 |
Employee Retirement Plans (Net
Employee Retirement Plans (Net Periodic Benefit Cost of the Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 382 | $ 336 | $ 361 |
Expected return on plan assets | (298) | (318) | (282) |
Settlement and curtailment loss | 0 | 135 | 0 |
Amortization of net actuarial loss | 148 | 571 | 527 |
Net periodic benefit cost | 232 | 724 | 606 |
Non-U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 232 | 289 | 291 |
Service cost | 478 | 478 | 503 |
Expected return on plan assets | 34 | (51) | (54) |
Amortization of net actuarial loss | 1,071 | (818) | (27) |
Net periodic benefit cost | $ 1,815 | $ (102) | $ 713 |
Employee Retirement Plans (Assu
Employee Retirement Plans (Assumptions Used) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. | |||
Weighted-average assumptions used to determine benefit obligation: | |||
Discount rate | 2.88% | 3.97% | 3.28% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.97% | 3.28% | 3.63% |
Expected return on plan assets | 5.00% | 5.00% | 5.00% |
Non-U.S. | Minimum | |||
Weighted-average assumptions used to determine benefit obligation: | |||
Discount rate | 0.20% | 0.20% | 0.27% |
Rate of compensation increase | 2.50% | 2.50% | 2.50% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 0.20% | 0.27% | 0.27% |
Rate of compensation increase | 2.50% | 2.50% | 2.50% |
Non-U.S. | Maximum | |||
Weighted-average assumptions used to determine benefit obligation: | |||
Discount rate | 0.71% | 1.55% | 2.73% |
Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 0.71% | 1.55% | 2.73% |
Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Employee Retirement Plans (Targ
Employee Retirement Plans (Target Asset Allocation) (Details) - U.S. | Dec. 31, 2019 |
Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 30.00% |
Debt securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 69.00% |
Other | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 1.00% |
Employee Retirement Plans (Fair
Employee Retirement Plans (Fair Value of Retirement Benefit Plan Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 7,561 | $ 6,767 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 74 | 72 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 7,487 | 6,695 | ||
Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Equity mutual funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 2,262 | 1,961 | ||
Equity mutual funds | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Equity mutual funds | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 2,262 | 1,961 | ||
Equity mutual funds | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Fixed income mutual funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 5,225 | 4,734 | ||
Fixed income mutual funds | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Fixed income mutual funds | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 5,225 | 4,734 | ||
Fixed income mutual funds | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Money market funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 74 | 72 | ||
Money market funds | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 74 | 72 | ||
Money market funds | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Money market funds | Level 3 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 7,574 | $ 6,767 | $ 6,879 | $ 5,925 |
Employee Retirement Plans (Expe
Employee Retirement Plans (Expected Benefit Payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 3,026 |
2021 | 812 |
2022 | 994 |
2023 | 612 |
2024 | 707 |
Thereafter | 3,262 |
Non-U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 894 |
2021 | 723 |
2022 | 966 |
2023 | 1,066 |
2024 | 889 |
Thereafter | $ 5,327 |
Income Taxes (Components and Pr
Income Taxes (Components and Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Provision for deferred income tax expense (benefit): | |||
Deferred Income Tax Expense | $ (26,277) | $ (95,050) | $ (9,272) |
Total provision for income tax expense (benefit) | (30,153) | (69,629) | 49,954 |
Continuing Operations | |||
Income before income taxes: | |||
UK and Non-U.S. | 28,788 | 59,528 | 71,980 |
U.S. | (214,482) | (306,975) | 49,158 |
(Loss) income from continuing operations before tax | (185,694) | (247,447) | 121,138 |
Provision for current income tax expense (benefit): | |||
UK and Non-U.S. | 1,112 | 9,645 | 12,771 |
U.S. | (4,988) | 1,291 | 26,743 |
Current income tax expense | (3,876) | 10,936 | 39,514 |
Provision for deferred income tax expense (benefit): | |||
UK and Non-U.S. | (7,407) | 533 | (4,140) |
U.S. | (18,870) | (81,098) | 14,580 |
Deferred Income Tax Expense | (26,277) | (80,565) | 10,440 |
Total provision for income tax expense (benefit) | $ (30,153) | $ (69,629) | $ 49,954 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate at U.K. Rate | 19.00% | 19.00% | 19.00% |
Deferred tax valuation allowance | (17.60%) | (0.80%) | 10.60% |
Foreign tax rate differential | 6.70% | 3.00% | 10.70% |
U.S. state and local tax expense, net of federal benefit | 6.10% | 4.30% | 1.20% |
Effect of changes in tax rate | (3.10%) | 0.60% | (19.90%) |
Write-off/impairment of investments | (2.80%) | (1.30%) | (14.80%) |
Reserve for uncertain tax positions | 2.50% | (0.70%) | 1.20% |
Research and development tax credits | 2.20% | 1.10% | (1.60%) |
UK CFC tax | 2.10% | (1.00%) | 0.20% |
U.S. tax on non-U.S. operations | (1.60%) | (0.50%) | 1.50% |
Base erosion anti-abuse tax | 0.015 | (0.012) | 0 |
Notional interest deduction | 1.20% | 6.10% | (13.50%) |
Transaction costs | 0.00% | (0.80%) | 2.00% |
Sale of intellectual property | 0.00% | 0.00% | 44.30% |
Domestic manufacturing deduction | 0.00% | 0.00% | (1.80%) |
Other, net | 0.00% | 0.30% | 2.10% |
Effective tax rate | 16.20% | 28.10% | 41.20% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2018 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||||
Income tax expense, net | $ 21,000 | ||||
Valuation Allowance | 76,300 | $ 40,300 | $ 93,300 | ||
Annual limitation on NOL | $ 17,200 | $ 18,300 | |||
Decrease resulting from deferred tax assets | 11,400 | 11,600 | 12,200 | ||
Income tax penalties and interest accrued | 5,700 | 6,300 | 8,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 12,900 | ||||
Amount of possible decrease in unrecognized tax benefits in the next 12 months | 12,000 | ||||
Discontinued operations | |||||
Operating Loss Carryforwards [Line Items] | |||||
Valuation Allowance | 48,700 | ||||
Continuing Operations | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforwards | 28,272 | 26,152 | |||
Valuation allowance | $ 76,317 | $ 40,255 | |||
Valuation Allowance | $ 44,600 |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax liabilities: | ||
Net deferred tax assets (liabilities) | $ 68,676 | $ 68,146 |
Net deferred tax assets (liabilities) | (32,219) | (68,189) |
Continuing Operations | ||
Deferred tax assets: | ||
Net operating loss carryforwards | 125,883 | 87,406 |
Tax credit carryforwards | 28,272 | 26,152 |
Accruals and reserves | 69,562 | 96,483 |
Deferred compensation | 9,692 | 5,757 |
Inventory | 9,436 | 3,956 |
Other | 12,135 | 6,043 |
Gross deferred tax assets | 254,980 | 225,797 |
Valuation allowance | (76,317) | (40,255) |
Total deferred tax assets | 178,663 | 185,542 |
Deferred tax liabilities: | ||
Property, equipment & intangible assets | (89,115) | (122,035) |
Gain on sale of intellectual property | (53,091) | (59,249) |
Investments | 0 | (3,561) |
Other | 0 | (740) |
Gross deferred tax liabilities: | (142,206) | (185,585) |
Net deferred tax assets (liabilities) | $ 36,457 | |
Net deferred tax assets (liabilities) | $ (43) |
Income Taxes (Operating Loss an
Income Taxes (Operating Loss and Tax Credit Carryforwards) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | $ 832,026 |
Tax Benefit | 154,155 |
Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 78,359 |
Various Tax Expiration Years | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 75,796 |
Europe | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 254,869 |
Tax Benefit | 52,408 |
Europe | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 49,032 |
Europe | 2022 - 2026 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 3,376 |
South America | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 17,263 |
Tax Benefit | 5,859 |
South America | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,521 |
South America | 2028 - 2030 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 338 |
Far East | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 86 |
Tax Benefit | 26 |
Far East | 2029 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 26 |
Non-U.S. | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 1,259 |
Non-U.S. | 2020 - 2032 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 1,259 |
U.S. Federal | United States | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 252,283 |
Tax Benefit | 52,979 |
U.S. Federal | United States | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 17,872 |
U.S. Federal | United States | 2021 - 2036 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 35,107 |
U.S. State | United States | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 307,525 |
Tax Benefit | 14,611 |
U.S. State | United States | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,431 |
U.S. State | United States | 2020 - 2038 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 9,180 |
U.S. Federal | United States | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 14,832 |
Tax Benefit | 503 |
U.S. Federal | United States | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 503 |
U.S. Federal | United States | 2025 - 2029 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 14,832 |
Research Tax Credit Carryforward | U.S. State | United States | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,126 |
Research Tax Credit Carryforward | U.S. State | United States | 2022 - 2039 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,126 |
Research Tax Credit Carryforward | U.S. Federal | United States | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 6,552 |
Research Tax Credit Carryforward | U.S. Federal | United States | 2020 - 2039 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | $ 6,552 |
Income Taxes (Schedule of Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits Roll-Forward) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, balance at beginning of year | $ 22,883 | $ 26,137 | $ 22,374 |
Tax positions related to current year | 176 | 671 | 324 |
Tax positions related to prior year | 0 | 3,309 | 1,153 |
Tax positions related to prior years for settlement with tax authorities | (2,104) | (3,999) | 0 |
Tax positions related to prior years for lapses of statute of limitations | (4,632) | (2,343) | 0 |
Impact of foreign currency exchange rates | (328) | (892) | |
Impact of foreign currency exchange rates | 2,286 | ||
Unrecognized tax benefits, balance at end of year | $ 15,995 | $ 22,883 | $ 26,137 |
Net Income Per Share (Schedule
Net Income Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Basic weighted average shares outstanding (in shares) | 48,349 | 48,497 | 48,157 |
Add effects of stock-based compensation instruments (in shares) | 0 | 0 | 344 |
Diluted weighted average shares outstanding (in shares) | 48,349 | 48,497 | 48,501 |
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 2,900 | 2,700 | 1,200 |
Geographic and Segment Inform_3
Geographic and Segment Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2019USD ($) | Dec. 31, 2019USD ($)geographic_region | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segmentgeographic_region | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||||||||||
Number of reportable segments | segment | 2 | |||||||||||
Number of geographic regions in which entity operates | geographic_region | 3 | 3 | ||||||||||
Net sales | $ 287,590 | $ 268,610 | $ 277,169 | $ 250,801 | $ 296,983 | $ 272,082 | $ 287,498 | $ 250,398 | $ 1,084,170 | $ 1,106,961 | $ 1,012,277 | |
Reportable segments income before income taxes | (92,784) | (170,543) | 162,215 | |||||||||
Merger and integration expenses | 23,457 | 24,420 | 15,528 | |||||||||
Restructuring expenses | 12,254 | 15,915 | 17,056 | |||||||||
Amortization of intangibles | 40,375 | 37,194 | 33,144 | |||||||||
Operating (loss) income from continuing operations | (143,976) | $ 25,761 | (29,876) | $ (20,779) | (276,452) | $ (5,757) | $ 21,607 | $ 12,530 | (168,870) | (248,072) | 96,487 | |
Interest income | 803 | 847 | 1,318 | |||||||||
Interest expense | (15,091) | (9,825) | (7,797) | |||||||||
Gain on acquisitions | 0 | 11,484 | 39,428 | |||||||||
Impairment of investments | 0 | 0 | (8,565) | |||||||||
Foreign exchange and other (losses) gains | 2,536 | 1,881 | (267) | |||||||||
(Loss) income from continuing operations before tax | (185,694) | (247,447) | 121,138 | |||||||||
Litigation provision, net | (33,200) | (294,100) | 601 | (294,021) | 0 | |||||||
Impairment of intangible assets | $ 89,000 | 89,000 | 139,295 | 0 | 0 | |||||||
Impairment of goodwill | $ 42,400 | 42,400 | 42,417 | 0 | 0 | |||||||
Assets | 2,411,797 | 2,549,701 | 2,411,797 | 2,549,701 | ||||||||
Capital expenditures | 27,977 | 37,997 | 34,107 | |||||||||
Caisson Interventional LLC | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Impairment of intangible assets | 89,000 | |||||||||||
Impairment of goodwill | 42,400 | |||||||||||
United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 546,484 | 553,411 | 494,721 | |||||||||
Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 223,183 | 229,001 | 210,470 | |||||||||
Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 314,503 | 324,549 | 307,086 | |||||||||
United Kingdom | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 37,700 | 34,800 | 30,800 | |||||||||
Cardiovascular | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Restructuring expenses | 6,500 | |||||||||||
Discontinued operations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Restructuring expenses | 0 | 651 | (1,617) | |||||||||
Capital expenditures | 0 | 1,018 | 5,608 | |||||||||
Operating Segments | Cardiopulmonary | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 504,716 | 536,408 | 497,324 | |||||||||
Operating Segments | Cardiopulmonary | United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 161,471 | 161,134 | 152,828 | |||||||||
Operating Segments | Cardiopulmonary | Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 135,632 | 141,720 | 133,585 | |||||||||
Operating Segments | Cardiopulmonary | Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 207,613 | 233,554 | 210,911 | |||||||||
Operating Segments | Heart Valves | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 120,007 | 125,956 | 138,193 | |||||||||
Operating Segments | Heart Valves | United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 18,900 | 24,709 | 24,977 | |||||||||
Operating Segments | Heart Valves | Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 40,548 | 44,258 | 42,120 | |||||||||
Operating Segments | Heart Valves | Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 60,559 | 56,989 | 71,096 | |||||||||
Operating Segments | Advanced Circulatory Support | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 31,923 | 19,461 | 0 | |||||||||
Operating Segments | Advanced Circulatory Support | United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 30,781 | 18,588 | 0 | |||||||||
Operating Segments | Advanced Circulatory Support | Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 741 | 580 | 0 | |||||||||
Operating Segments | Advanced Circulatory Support | Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 401 | 293 | 0 | |||||||||
Operating Segments | Cardiovascular | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 656,646 | 681,825 | 635,517 | |||||||||
Restructuring expenses | 3,592 | 11,497 | 8,819 | |||||||||
Impairment of goodwill | 0 | |||||||||||
Operating Segments | Cardiovascular | United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 211,152 | 204,431 | 177,805 | |||||||||
Operating Segments | Cardiovascular | Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 176,921 | 186,558 | 175,705 | |||||||||
Operating Segments | Cardiovascular | Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 268,573 | 290,836 | 282,007 | |||||||||
Operating Segments | Neuromodulation | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 424,547 | 422,990 | 374,976 | |||||||||
Restructuring expenses | 1,082 | 1,595 | 561 | |||||||||
Impairment of goodwill | 0 | |||||||||||
Operating Segments | Neuromodulation | United States | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 335,332 | 348,980 | 316,916 | |||||||||
Operating Segments | Neuromodulation | Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 46,262 | 42,443 | 34,765 | |||||||||
Operating Segments | Neuromodulation | Rest of World | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 42,953 | 31,567 | 23,295 | |||||||||
Operating Segments | Continuing Operations | Cardiovascular | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Reportable segments income before income taxes | 28,460 | (258,493) | 81,412 | |||||||||
Assets | 1,546,520 | 1,532,825 | 1,546,520 | 1,532,825 | ||||||||
Capital expenditures | 20,779 | 27,621 | 18,985 | |||||||||
Operating Segments | Continuing Operations | Neuromodulation | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Reportable segments income before income taxes | 83,483 | 184,674 | 183,228 | |||||||||
Assets | 749,069 | 731,840 | 749,069 | 731,840 | ||||||||
Capital expenditures | 3,415 | 1,728 | 2,504 | |||||||||
Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 2,977 | 2,146 | 1,784 | |||||||||
Reportable segments income before income taxes | (204,727) | (96,724) | (102,425) | |||||||||
Restructuring expenses | 7,580 | 2,823 | 7,676 | |||||||||
Impairment of goodwill | 42,417 | |||||||||||
Other | Continuing Operations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Assets | $ 116,208 | $ 285,036 | 116,208 | 285,036 | ||||||||
Capital expenditures | 3,783 | $ 7,630 | $ 7,010 | |||||||||
In-process research and development | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Impairment of intangible assets | 50,300 | $ 50,300 | ||||||||||
In-process research and development | Neuromodulation | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Impairment of intangible assets | $ 50,300 |
Geographic and Segment Inform_4
Geographic and Segment Information (Geographic and Areas) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 181,354 | $ 191,400 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 61,410 | 68,862 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 110,270 | 112,376 |
Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 9,674 | $ 10,162 |
Supplemental Financial Inform_2
Supplemental Financial Information (Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Raw materials | $ 45,225 | $ 40,387 |
Work-in process | 14,581 | 15,999 |
Finished goods | 104,348 | 97,149 |
Inventories | 164,154 | 153,535 |
Provision for obsolescence | $ 12,700 | $ 11,600 |
Supplemental Financial Inform_3
Supplemental Financial Information (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 335,341 | $ 321,435 |
Accumulated depreciation | (153,987) | (130,035) |
Net | 181,354 | 191,400 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total | 15,165 | 15,866 |
Building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 86,814 | 82,035 |
Building and building improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 3 years | |
Building and building improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 39 years | |
Equipment, software, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 205,711 | 195,008 |
Equipment, software, furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 2 years | |
Equipment, software, furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 16 years | |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 9,431 | 8,298 |
Other | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 1 year | |
Other | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Lives in Years | 10 years | |
Capital investment in process | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 18,220 | $ 20,228 |
Supplemental Financial Inform_4
Supplemental Financial Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Contingent consideration | $ 22,953 | $ 18,530 |
CRM purchase price adjustments payable to MicroPort Scientific Corporation | 14,891 | 14,891 |
Operating lease liabilities | 11,110 | |
Legal and other administrative costs | 11,066 | 9,189 |
Contract liabilities | 6,728 | 3,304 |
Research and Development costs | 5,160 | 1,841 |
Restructuring related liabilities | 4,315 | 9,393 |
Provisions for agents, returns and other | 3,922 | 4,934 |
Product remediation | 3,251 | 13,945 |
Derivative contract liabilities | 3,173 | 5,063 |
Other amounts payable to MicroPort Scientific Corporation | 1,340 | 9,319 |
Other accrued expenses | 32,191 | 33,876 |
Accrued liabilities, current, total | $ 120,100 | $ 124,285 |
Quarterly Financial Informati_3
Quarterly Financial Information (unaudited) (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Net sales | $ 287,590 | $ 268,610 | $ 277,169 | $ 250,801 | $ 296,983 | $ 272,082 | $ 287,498 | $ 250,398 | $ 1,084,170 | $ 1,106,961 | $ 1,012,277 | |
Gross profit | 204,638 | 179,406 | 197,114 | 163,600 | 204,073 | 174,348 | 193,963 | 162,085 | ||||
Operating income (loss) from continuing operations | (143,976) | 25,761 | (29,876) | (20,779) | (276,452) | (5,757) | 21,607 | 12,530 | (168,870) | (248,072) | 96,487 | |
Net income (loss) from continuing operations | (143,417) | 32,118 | (29,393) | (14,849) | (209,539) | (6,273) | 19,528 | 17,822 | (155,541) | (178,462) | 54,465 | |
Net income (loss) from discontinued operations, net of tax | 187 | 0 | 178 | 0 | (1,022) | (904) | (4,462) | (4,549) | 365 | (10,937) | (79,554) | |
Net loss | $ (143,230) | $ 32,118 | $ (29,215) | $ (14,849) | $ (210,561) | $ (7,177) | $ 15,066 | $ 13,273 | $ (155,176) | $ (189,399) | $ (25,089) | |
Continuing operations (in dollars per share) | $ (2.96) | $ 0.66 | $ (0.61) | $ (0.31) | $ (4.32) | $ (0.13) | $ 0.40 | $ 0.36 | $ (3.22) | $ (3.68) | $ 1.12 | |
Discontinued operations (in dollars per share) | 0 | 0 | 0.01 | 0 | (0.02) | (0.02) | (0.09) | (0.09) | 0.01 | (0.23) | (1.64) | |
Diluted (loss) income per share (in dollars per share) | $ (2.96) | $ 0.66 | $ (0.60) | $ (0.31) | $ (4.34) | $ (0.15) | $ 0.31 | $ 0.27 | $ (3.21) | $ (3.91) | $ (0.52) | |
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Amortization of intangibles | $ 40,375 | $ 37,194 | $ 33,144 | |||||||||
Impairment of intangible assets | $ 89,000 | $ 89,000 | 139,295 | 0 | 0 | |||||||
Impairment of goodwill | $ 42,400 | 42,400 | 42,417 | 0 | 0 | |||||||
Litigation provision, net | 33,200 | $ 294,100 | (601) | $ 294,021 | $ 0 | |||||||
In-process research and development | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Impairment of intangible assets | $ 50,300 | $ 50,300 | ||||||||||
Developed technology | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Amortization of intangibles | $ 5,500 | $ 5,500 | $ 3,700 | $ 3,700 | $ 3,600 | $ 3,600 | $ 3,600 | $ 3,600 |
New Accounting Pronouncements_2
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 54,372 | |||
Operating lease, liability | 57,137 | |||
Prepaid expenses and other current assets | 28,604 | $ 29,571 | ||
Deferred tax assets | 68,676 | 68,146 | ||
Other assets | 7,356 | 4,781 | ||
Accumulated deficit | $ (406,755) | $ (251,579) | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 60,000 | |||
Operating lease, liability | $ 60,000 | |||
Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other current assets | $ (12,600) | |||
Deferred tax assets | 58,300 | |||
Other assets | (68,100) | |||
Accumulated deficit | $ (22,500) |
Uncategorized Items - livn-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,516,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (22,516,000) |