Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 25, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 2.3 | ||
Entity Common Stock, Shares Outstanding (in shares) | 48,663,429 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement of LivaNova PLC for the 2021 Annual General Meeting of Shareholders, which will be filed within 120 days of December 31, 2020, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001639691 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 934,241 | $ 1,084,170 | $ 1,106,961 |
Costs and expenses: | |||
Cost of sales - exclusive of amortization | 308,062 | 323,517 | 361,321 |
Product remediation | 7,860 | 15,777 | 10,680 |
Selling, general and administrative | 427,770 | 506,478 | 464,967 |
Research and development | 152,902 | 146,849 | 145,948 |
Merger and integration expenses | 7,333 | 23,457 | 24,420 |
Restructuring expenses | 7,571 | 12,254 | 15,915 |
Impairment of disposal group | 180,160 | 0 | 0 |
Impairment of goodwill | 21,269 | 42,417 | 0 |
Impairment of long-lived assets | 6,762 | 142,517 | 567 |
Amortization of intangibles | 38,312 | 40,375 | 37,194 |
Decommissioning provision | 42,198 | 0 | 0 |
Litigation provision, net | 3,906 | (601) | 294,021 |
Operating loss from continuing operations | (269,864) | (168,870) | (248,072) |
Interest income | 131 | 803 | 847 |
Interest expense | (40,837) | (15,091) | (9,825) |
Gain on acquisition | 0 | 0 | 11,484 |
Foreign exchange and other losses | (33,417) | (2,536) | (1,881) |
Loss from continuing operations before tax | (343,987) | (185,694) | (247,447) |
Income tax benefit | (736) | (30,153) | (69,629) |
Losses from equity method investments | (264) | 0 | (644) |
Net loss from continuing operations | (343,515) | (155,541) | (178,462) |
Net (loss) income from discontinued operations, net of tax | (1,493) | 365 | (10,937) |
Net loss | $ (345,008) | $ (155,176) | $ (189,399) |
Basic (loss) income per share: | |||
Continuing operations (in dollars per share) | $ (7.07) | $ (3.22) | $ (3.68) |
Discontinued operations (in dollars per share) | (0.03) | 0.01 | (0.23) |
Basic (loss) income per share (in dollars per share) | (7.10) | (3.21) | (3.91) |
Diluted (loss) income per share: | |||
Continuing operations (in dollars per share) | (7.07) | (3.22) | (3.68) |
Discontinued operations (in dollars per share) | (0.03) | 0.01 | (0.23) |
Diluted (loss) income per share (in dollars per share) | $ (7.10) | $ (3.21) | $ (3.91) |
Shares used in computing basic (loss) income per share (in shares) | 48,592 | 48,349 | 48,497 |
Shares used in computing diluted (loss) income per share (in shares) | 48,592 | 48,349 | 48,497 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (345,008) | $ (155,176) | $ (189,399) |
Other comprehensive income (loss): | |||
Net change in unrealized gain (loss) on derivatives | 2,379 | 1,917 | (33) |
Tax effect | (573) | (460) | 8 |
Net of tax | 1,806 | 1,457 | (25) |
Foreign currency translation adjustment, net of tax | 45,395 | 3,627 | (69,764) |
Total other comprehensive income (loss) | 47,201 | 5,084 | (69,789) |
Total comprehensive loss | $ (297,807) | $ (150,092) | $ (259,188) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 252,832 | $ 61,137 |
Accounts receivable, net of allowance of $10,310 at December 31, 2020 and $13,105 at December 31, 2019 | 184,356 | 257,769 |
Inventories | 126,675 | 164,154 |
Prepaid and refundable taxes | 60,240 | 37,779 |
Assets held for sale | 70,539 | 0 |
Prepaid expenses and other current assets | 24,792 | 28,604 |
Total Current Assets | 719,434 | 549,443 |
Property, plant and equipment, net | 163,805 | 181,354 |
Goodwill | 922,318 | 915,794 |
Intangible assets, net | 437,636 | 607,546 |
Operating lease assets (Note 14) | 50,525 | 54,372 |
Investments | 31,094 | 27,256 |
Deferred tax assets | 2,990 | 68,676 |
Long-term derivative assets | 72,302 | 0 |
Other assets | 11,247 | 7,356 |
Total Assets | 2,411,351 | 2,411,797 |
Current Liabilities: | ||
Current debt obligations | 13,343 | 77,396 |
Accounts payable | 73,668 | 85,892 |
Accrued liabilities and other | 95,408 | 120,100 |
Current litigation provision liability | 28,612 | 146,026 |
Taxes payable | 16,463 | 12,719 |
Accrued employee compensation and related benefits | 51,879 | 70,420 |
Liabilities held for sale | 29,679 | 0 |
Total Current Liabilities | 309,052 | 512,553 |
Long-term debt obligations | 642,298 | 260,330 |
Contingent consideration | 89,850 | 114,396 |
Litigation provision liability | 7,878 | 24,378 |
Deferred tax liabilities | 8,915 | 32,219 |
Long-term operating lease liabilities (Note 14) | 42,221 | 46,027 |
Long-term employee compensation and related benefits | 20,628 | 22,797 |
Long-term derivative liabilities | 121,940 | 61 |
Other long-term liabilities | 49,740 | 15,319 |
Total Liabilities | 1,292,522 | 1,028,080 |
Commitments and contingencies (Note 15) | ||
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 49,447,473 shares issued and 48,655,863 shares outstanding at December 31, 2020; 49,411,016 shares issued and 48,443,830 shares outstanding at December 31, 2019 | 76,300 | 76,257 |
Additional paid-in capital | 1,768,156 | 1,734,870 |
Accumulated other comprehensive income (loss) | 27,809 | (19,392) |
Accumulated deficit | (752,402) | (406,755) |
Treasury stock at cost, 791,610 ordinary shares at December 31, 2020, 967,186 ordinary shares at December 31, 2019 | (1,034) | (1,263) |
Total Stockholders’ Equity | 1,118,829 | 1,383,717 |
Total Liabilities and Stockholders’ Equity | $ 2,411,351 | $ 2,411,797 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)shares | Dec. 31, 2020£ / shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019£ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 10,310 | $ 13,105 | ||
Ordinary shares, par value (in pounds per share) | £ / shares | £ 1 | £ 1 | ||
Ordinary shares issued (in shares) | 49,447,473 | 49,411,016 | ||
Ordinary shares outstanding (in shares) | 48,655,863 | 48,443,830 | ||
Treasury Stock (in shares) | 791,610 | 967,186 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Ordinary Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | ||
Beginning balance (in shares) at Dec. 31, 2017 | 48,290,000 | |||||||||
Beginning balance at Dec. 31, 2017 | $ 1,815,314 | $ (22,516) | $ 74,750 | $ 1,735,048 | $ (133) | $ 45,313 | $ (39,664) | $ (22,516) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Shares issuance (in shares) | 1,423,000 | |||||||||
Share issuances | $ 0 | $ 1,887 | (1,887) | |||||||
Share repurchases (in shares) | (500,333) | (500,000) | ||||||||
Share repurchases | $ (50,000) | $ (640) | (49,360) | |||||||
Stock-based compensation plans (in 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) | ||||||||
Ending balance (in shares) at Dec. 31, 2018 | 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] | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201617Member | |||||||||
Stock-based compensation plans (in 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 | ||||||||
Ending balance (in shares) at Dec. 31, 2019 | 49,411,016 | 49,411,000 | ||||||||
Ending balance at Dec. 31, 2019 | $ 1,383,717 | $ (639) | [1] | $ 76,257 | 1,734,870 | (1,263) | (19,392) | (406,755) | $ (639) | [1] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation plans (in shares) | 109,000 | |||||||||
Stock-based compensation plans | 33,558 | $ 140 | 33,189 | 229 | ||||||
Cancellation of shares (in shares) | (73,000) | |||||||||
Cancellation of shares | 0 | $ (97) | 97 | |||||||
Net loss | (345,008) | (345,008) | ||||||||
Other comprehensive income (loss) | $ 47,201 | 47,201 | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | 49,447,473 | 49,447,473 | ||||||||
Ending balance at Dec. 31, 2020 | $ 1,118,829 | $ 76,300 | $ 1,768,156 | $ (1,034) | $ 27,809 | $ (752,402) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||
[1] | Refer to “Note 23. New Accounting Pronouncements” |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | 63 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Operating Activities: | ||||
Net loss | $ (345,008) | $ (155,176) | $ (189,399) | |
Non-cash items included in net loss: | ||||
Impairment of disposal group | 180,160 | 0 | 0 | |
Amortization | 38,312 | 40,375 | 37,194 | |
Deferred tax expense (benefit) | 37,292 | (26,277) | (95,050) | |
Stock-based compensation | 35,089 | 32,553 | 26,923 | |
Depreciation | 29,031 | 30,317 | 32,746 | |
Remeasurement of derivative instruments | 22,085 | (26) | (3,668) | |
Impairment of goodwill | 21,269 | 42,417 | 0 | $ 63,700 |
Remeasurement of contingent consideration to fair value | (20,463) | (29,406) | (4,311) | |
Amortization of operating lease assets | 13,977 | 12,297 | 0 | |
Amortization of debt issuance costs | 9,710 | 2,204 | 222 | |
Impairment of long-lived assets | 6,762 | 142,517 | 567 | |
Amortization of income taxes payable on inter-company transfers of property | 2,171 | 2,575 | 13,370 | |
Gain on acquisition | 0 | 0 | (11,484) | |
Other | 1,236 | 3,208 | 4,424 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | 58,796 | (5,321) | 21,181 | |
Inventories | 1,403 | (10,608) | (10,647) | |
Other current and non-current assets | (39,645) | (2,077) | (9,321) | |
Accounts payable and accrued current and non-current liabilities | (923) | (38,577) | 11,030 | |
Taxes payable | 3,596 | (8,442) | 2,651 | |
Litigation provision liability, net | (134,272) | (123,695) | 294,061 | |
Net cash (used in) provided by operating activities | (79,422) | (91,142) | 120,489 | |
Investing Activities: | ||||
Purchases of property, plant and equipment | (35,024) | (24,691) | (37,188) | |
Purchases of investments | (3,184) | (2,500) | (3,770) | |
Loans to investees | (2,691) | 0 | 0 | |
Acquisitions, net of cash acquired | (1,719) | (10,750) | (279,691) | |
Purchases of intangible assets | 0 | (3,289) | (809) | |
Proceeds from asset sales | 1,433 | 1,261 | 14,220 | |
Proceeds from the sale of CRM business, net of cash disposed | 0 | 0 | 186,682 | |
Other | (659) | (1,321) | 0 | |
Net cash used in investing activities | (41,844) | (41,290) | (120,556) | |
Financing Activities: | ||||
Proceeds from long-term debt obligations | 886,899 | 197,160 | 103,570 | |
Repayment of long-term debt obligations | (482,065) | (24,210) | (23,827) | |
Proceeds from short-term borrowing (maturities greater than 90 days) | 47,053 | 0 | 240,000 | |
Repayment of short-term borrowing (maturities greater than 90 days) | (44,838) | 0 | (260,000) | |
Purchase of capped call | (43,096) | 0 | 0 | |
Debt issuance costs | (23,736) | (3,795) | 0 | |
Closing adjustment payment for sale of CRM business | (14,891) | 0 | 0 | |
Payment of contingent consideration | (12,018) | (18,955) | (651) | |
Shares repurchased from employees for minimum tax withholding | (5,601) | (7,064) | (11,611) | |
Proceeds from share issuances under ESPP | 3,744 | 4,468 | 0 | |
Change in short-term borrowing, net | (872) | (1,188) | (30,745) | |
Share repurchases under share repurchase program | 0 | 0 | (50,000) | |
Payment of deferred consideration - acquisition of Caisson Interventional, LLC | 0 | 0 | (12,994) | |
Other | 177 | 165 | 3,910 | |
Net cash provided by (used in) financing activities | 310,756 | 146,581 | (42,348) | |
Effect of exchange rate changes on cash and cash equivalents | 2,205 | (216) | (3,996) | |
Net increase (decrease) in cash and cash equivalents | 191,695 | 13,933 | (46,411) | |
Cash and cash equivalents at beginning of period | 61,137 | 47,204 | 93,615 | |
Cash and cash equivalents at end of period | 252,832 | 61,137 | 47,204 | $ 252,832 |
Supplementary Disclosures of Cash Flow Information: | ||||
Cash paid for interest | 28,573 | 15,828 | 9,278 | |
Cash paid for income taxes | $ 7,493 | $ 2,011 | $ 26,393 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2020 | |
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 Segments LivaNova is comprised of two reportable segments: Cardiovascular and Neuromodulation, corresponding to our primary therapeutic areas. Other corporate activities include corporate shared service expenses for finance, legal, human resources, information technology and corporate business development. Recent Developments Regarding COVID-19 Our business, operations and financial condition and results have been and may continue to be impacted by the COVID-19 pandemic. We have experienced significant and unpredictable reductions in the demand for our products due to healthcare customers diverting medical resources and priorities towards the treatment of COVID-19. In addition, public health organizations have regularly delayed or suspended elective procedures during the COVID-19 pandemic, which has negatively impacted the usage of our products, including the number of Neuromodulation procedures. Further, there has been a decline in treatment for non-COVID-19 emergency procedures, which has also negatively impacted the demand for our products. While the ultimate health and economic impact of the COVID-19 pandemic is highly uncertain, our sales and operating results for 2020 were materially adversely impacted. We are seeing signs of stabilization in certain geographies as elective surgeries resume and expect this trend to continue on a global basis through fiscal year 2021. We expect elective procedure recovery rates to vary by country, and to be impacted by COVID-19 case volumes, hospital occupancy and staffing levels, patient’s willingness to re-book previously deferred procedures, travel restrictions, transportation limitations, quarantine restrictions, economic uncertainty and potential COVID-19 resurgence. Further cancellations or delays could materially adversely impact our business, results of operations and overall financial performance. |
Basis of Presentation, Use of A
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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”). 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 approximates 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”) 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. 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 Assets Held and Used 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. 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. When an impairment of a disposal group is deemed necessary and the amount of the impairment exceeds the carrying value of the long-lived assets, we record the impairment to the disposal group rather than long-lived assets. We also allocate goodwill of the associated reporting unit to the disposal group based upon the relative fair value of the businesses within the reporting unit. The goodwill allocated to the disposal group is then tested for impairment. Goodwill Impairment We conduct impairment testing of our goodwill on October 1st each year. 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. 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. If we determine that goodwill is more-likely-than-not impaired, we compare 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. Fair value is estimated using a discounted cash flow model and requires various assumptions, including revenue growth rates, forecasted selling, general and administrative expenses and discount rates. 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. If the carrying value of the reporting unit, which includes goodwill, exceeds its fair value an impairment loss is recognized. 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. 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. Our financial assets and liabilities 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. Our financial assets and liabilities classified as Level 3 include contingent consideration liability arrangements, derivative and embedded derivative instruments and convertible notes receivable. Contingent consideration liabilities are from 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. For further information on our Level 3 contingent consideration liability arrangements, please refer to “Note 11. Fair Value Measurements.” For further information on our Level 3 derivative and embedded derivative instruments, please refer to “Note 12. Financing Arrangements and Note 11. Fair Value Measurements.” For further information on our Level 3 convertible notes receivable, please refer to “Note 10. Investments.” 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 14. 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. Market Performance-Based RSU’s We may grant market performance-based RSUs at no purchase cost to the grantee. The grantees of the units have no voting rights or rights to dividends. Sale or transfer of the units is restricted until they are vested. The number of shares that are ultimately transferred to the grantee is dependent upon the Company’s percentile rank of total shareholder return relative to a peer group. The fair market value of market performance-based RSUs is determined utilizing a Monte Carlo simulation on the grant date and compensation is expensed ratably over the service period. Calculation of compensation for market performance-based stock awards requires estimation of employee turnover, historical volatility and forfeiture rates. Operating Performance-Based Awards RSU’s We may grant operating performance-based RSUs at no purchase cost to the grantee. The grantees of the units have no voting rights or rights to dividends. Sale or transfer of the units is restricted until they are vested. The number of shares that are ultimately transferred to the grantee is dependent upon the Company’s achievement of certain thresholds for cumulative adjusted free cash flow. The fair market value of operating performance-based RSUs is determined using the market closing price on the grant date. Compensation is expensed ratably over the service period and adjusted based upon the percent achievement of cumulative adjusted free cash flow. Calculation of compensation for operating performance-based stock awards requires estimation of employee turnover, adjusted free cash flow 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 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
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 21. 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. 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, 2020 and 2019. As of December 31, 2020 and December 31, 2019, contract liabilities of $8.6 million and $8.6 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, 2020 | |
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 acquisition on our consolidated statement of income (loss) for the year ended December 31, 2018. 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. 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 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 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. 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 segment as part of our Heart Valves business. Cash of $10.8 million was paid at closing with up to $6.0 million in contingent consideration based on achieving certain milestones. The purchase price allocation for the Miami Instruments acquisition was finalized during the second quarter of 2020 and resulted in no measurement period adjustment. In connection with this acquisition, we recognized $14.7 million in developed technology and IPR&D intangible assets and $1.5 million in goodwill. |
Assets and Liabilities Held For
Assets and Liabilities Held For Sale | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held For Sale | Note 5. Assets and Liabilities Held For Sale Heart Valves On December 2, 2020, LivaNova entered into a Share and Asset Purchase Agreement (“Purchase Agreement”) with Mitral Holdco S.à r.l. (“Mitral”), a company incorporated under the laws of Luxembourg and wholly owned and controlled by funds advised by Gyrus Capital S.A., a Swiss private equity firm. The Purchase Agreement provides for the divestiture of certain of LivaNova’s subsidiaries as well as certain other assets and liabilities relating to the Company’s Heart Valve business (other than the Company’s Heart Valve business in France) and site management operations conducted by the Company’s subsidiary LivaNova Site Management (“LSM”) at the Company’s Saluggia campus. The purchase price of €60.0 million (approximately $73.6 million as of December 31, 2020) will be payable in two tranches: €50.0 million (approximately $61.3 million as of December 31, 2020) payable at closing, subject to customary trade working capital and net indebtedness adjustments, as set forth in the Purchase Agreement, and an additional €10.0 million (approximately $12.3 million as of December 31, 2020) payable on December 30, 2022. In addition, pursuant to the Purchase Agreement, Purchaser has made a binding offer to purchase the Company’s French Heart Valve business for no additional consideration. LivaNova and Mitral are currently discussing amending the purchase agreement to address possible impediments to transferring LSM as contemplated by the Purchase Agreement. If such an amendment can be agreed, it might include delaying such transfer, or separating it from the scope of the Purchase Agreement. The Purchase Agreement includes customary warranties and limitations on the Company’s liability and customary covenants. Pursuant to the Purchase Agreement, from and after the closing of the sale of LSM, the Company has agreed for a period of seven years following closing to reimburse the Purchaser for certain expenses and liabilities incurred in connection with the removal, maintenance or remediation of certain hazardous substances relating to former operations at the Company’s Saluggia campus, to the extent such removal, maintenance or remediation is required by applicable law. The Company’s reimbursement obligations relating to these hazardous substances are capped at €37.5 million (approximately $46.0 million as of December 31, 2020). In the event that the sale of LSM is not consummated, the Company will retain ownership of LSM with any such liability. In addition, the Company’s liability for breach of warranty (other than fundamental warranties) is limited to €8.0 million (approximately $9.8 million as of December 31, 2020) and the Company’s liability for all matters under the Purchase Agreement (including pre-closing taxes, breach of warranties and breach of covenant) is generally limited to the purchase price. As a result of entering into the Purchase Agreement, the Company concluded that the assets and liabilities of the Heart Valve business being sold meet the criteria to be classified as held for sale. As a result, we recognized an impairment of $180.2 million to record the Heart Valves disposal group at fair value less estimated cost to sell. Additionally we recorded a $21.3 million impairment to the goodwill allocated to the Heart Valves disposal group based upon the relative fair values of the businesses within the Cardiovascular reporting unit. The major classes of assets and liabilities held for sale on the consolidated balance sheet as of December 31, 2020 were as follows (in thousands): December 31, 2020 Accounts receivable, net $ 20,059 Inventories 45,081 Prepaid and refundable taxes 2,751 Prepaid expenses and other current assets 2,436 Property, plant and equipment, net 25,042 Intangible assets, net 153,632 Operating lease assets 1,698 Impairment charge of disposal group (180,160) Total assets held for sale $ 70,539 Accounts payable $ 9,518 Accrued liabilities and other 4,205 Taxes payable 363 Accrued employee compensation and related benefits 8,781 Deferred tax liabilities 671 Long-term employee compensation and related benefits 4,994 Long-term operating lease liabilities 841 Other long-term liabilities 306 Total liabilities held for sale $ 29,679 Note 6. 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. In March 2020, we finalized the working capital adjustment and, as a result, made a $16.4 million payment to MicroPort during the first quarter of 2020. 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) for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Net sales $ — $ — $ 77,366 Costs and expenses: Cost of sales — (43) 28,028 Selling, general and administrative expenses — (161) 43,382 Research and development — (161) 16,592 Restructuring expenses — — 651 Revaluation gain on assets and liabilities held for sale — — (1,213) Loss on sale of CRM 1,578 — 214 Operating (loss) income from discontinued operations (1,578) 365 (10,288) Foreign exchange and other gains — — 102 (Loss) income from discontinued operations, before tax (1,578) 365 (10,186) Income tax benefit (85) — (460) Losses from equity method investments — — (1,211) Net (loss) income from discontinued operations $ (1,493) $ 365 $ (10,937) |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 5. Assets and Liabilities Held For Sale Heart Valves On December 2, 2020, LivaNova entered into a Share and Asset Purchase Agreement (“Purchase Agreement”) with Mitral Holdco S.à r.l. (“Mitral”), a company incorporated under the laws of Luxembourg and wholly owned and controlled by funds advised by Gyrus Capital S.A., a Swiss private equity firm. The Purchase Agreement provides for the divestiture of certain of LivaNova’s subsidiaries as well as certain other assets and liabilities relating to the Company’s Heart Valve business (other than the Company’s Heart Valve business in France) and site management operations conducted by the Company’s subsidiary LivaNova Site Management (“LSM”) at the Company’s Saluggia campus. The purchase price of €60.0 million (approximately $73.6 million as of December 31, 2020) will be payable in two tranches: €50.0 million (approximately $61.3 million as of December 31, 2020) payable at closing, subject to customary trade working capital and net indebtedness adjustments, as set forth in the Purchase Agreement, and an additional €10.0 million (approximately $12.3 million as of December 31, 2020) payable on December 30, 2022. In addition, pursuant to the Purchase Agreement, Purchaser has made a binding offer to purchase the Company’s French Heart Valve business for no additional consideration. LivaNova and Mitral are currently discussing amending the purchase agreement to address possible impediments to transferring LSM as contemplated by the Purchase Agreement. If such an amendment can be agreed, it might include delaying such transfer, or separating it from the scope of the Purchase Agreement. The Purchase Agreement includes customary warranties and limitations on the Company’s liability and customary covenants. Pursuant to the Purchase Agreement, from and after the closing of the sale of LSM, the Company has agreed for a period of seven years following closing to reimburse the Purchaser for certain expenses and liabilities incurred in connection with the removal, maintenance or remediation of certain hazardous substances relating to former operations at the Company’s Saluggia campus, to the extent such removal, maintenance or remediation is required by applicable law. The Company’s reimbursement obligations relating to these hazardous substances are capped at €37.5 million (approximately $46.0 million as of December 31, 2020). In the event that the sale of LSM is not consummated, the Company will retain ownership of LSM with any such liability. In addition, the Company’s liability for breach of warranty (other than fundamental warranties) is limited to €8.0 million (approximately $9.8 million as of December 31, 2020) and the Company’s liability for all matters under the Purchase Agreement (including pre-closing taxes, breach of warranties and breach of covenant) is generally limited to the purchase price. As a result of entering into the Purchase Agreement, the Company concluded that the assets and liabilities of the Heart Valve business being sold meet the criteria to be classified as held for sale. As a result, we recognized an impairment of $180.2 million to record the Heart Valves disposal group at fair value less estimated cost to sell. Additionally we recorded a $21.3 million impairment to the goodwill allocated to the Heart Valves disposal group based upon the relative fair values of the businesses within the Cardiovascular reporting unit. The major classes of assets and liabilities held for sale on the consolidated balance sheet as of December 31, 2020 were as follows (in thousands): December 31, 2020 Accounts receivable, net $ 20,059 Inventories 45,081 Prepaid and refundable taxes 2,751 Prepaid expenses and other current assets 2,436 Property, plant and equipment, net 25,042 Intangible assets, net 153,632 Operating lease assets 1,698 Impairment charge of disposal group (180,160) Total assets held for sale $ 70,539 Accounts payable $ 9,518 Accrued liabilities and other 4,205 Taxes payable 363 Accrued employee compensation and related benefits 8,781 Deferred tax liabilities 671 Long-term employee compensation and related benefits 4,994 Long-term operating lease liabilities 841 Other long-term liabilities 306 Total liabilities held for sale $ 29,679 Note 6. 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. In March 2020, we finalized the working capital adjustment and, as a result, made a $16.4 million payment to MicroPort during the first quarter of 2020. 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) for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Net sales $ — $ — $ 77,366 Costs and expenses: Cost of sales — (43) 28,028 Selling, general and administrative expenses — (161) 43,382 Research and development — (161) 16,592 Restructuring expenses — — 651 Revaluation gain on assets and liabilities held for sale — — (1,213) Loss on sale of CRM 1,578 — 214 Operating (loss) income from discontinued operations (1,578) 365 (10,288) Foreign exchange and other gains — — 102 (Loss) income from discontinued operations, before tax (1,578) 365 (10,186) Income tax benefit (85) — (460) Losses from equity method investments — — (1,211) Net (loss) income from discontinued operations $ (1,493) $ 365 $ (10,937) |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 7. 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. Also included in Prior Plans was our commitment to sell our Suzhou Industrial Park facility in Shanghai, China, which we announced in March 2017. We completed the sale of the Suzhou facility in April 2018 and received cash proceeds from the sale of $13.3 million. The Prior Plans were completed during 2018. 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 during 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 and $1.9 million during the year ended December 31, 2020, primarily associated with severance costs for approximately 35 impacted employees. The 2019 Plan was completed during 2020. 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 and $0.3 million during the year ended December 31, 2020, primarily associated with severance costs for approximately 50 impacted employees. The Caisson TMVR restructuring plan was completed during 2020. During the fourth quarter of 2020, we initiated a reorganization plan (the “2020 Plan”) to reduce our cost structure. As a result, we incurred restructuring expenses of $5.3 million during the year ended December 31, 2020, primarily associated with severance costs for approximately 54 employees. The following table provides a reconciliation of the beginning and ending balance of the accruals and other reserves recorded in connection with our restructuring plans included within accrued liabilities and other and other long-term liabilities on the consolidated balance sheet (in thousands): Employee Severance and Other Termination Costs Other Total 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 4,097 1,400 5,497 Charges 7,571 — 7,571 Cash payments (5,919) (854) (6,773) Balance at December 31, 2020 (1) $ 5,749 $ 546 $ 6,295 (1) Cumulatively, we have recognized a total of $119.1 million in restructuring expense, inclusive of discontinued operations. The following table presents restructuring expense by reportable segment (in thousands): Year Ended December 31, 2020 2019 2018 Cardiovascular (1) $ 1,570 $ 3,592 $ 11,497 Neuromodulation 3,223 1,082 1,595 Other (2) 2,778 7,580 2,823 Restructuring expense from continuing operations 7,571 12,254 15,915 Discontinued operations — — 651 Total $ 7,571 $ 12,254 $ 16,566 (1) Cardiovascular restructuring expense for the year ended December 31, 2018 included $6.5 million of 2018 Plan expenses. (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, 2020 | |
Loss Contingency [Abstract] | |
Product Remediation Liability | Note 8. 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. On December 31, 2016, we recognized a liability for a product remediation plan related to our 3T Heater-Cooler device (“3T device”). The remediation plan consisted 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 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. In April 2017, we obtained CE Mark in Europe for the design change of the 3T device, and in October 2018, the FDA concluded that we could commence the vacuum canister and internal sealing upgrade program in the U.S. 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 are in the process of completing and closing out all recall activities with the FDA. While our vacuum canister and internal sealing upgrade program and deep cleaning service in the U.S. are substantially complete, these services will continue as a servicing option outside of the U.S. Changes in the carrying amount of the product remediation liability are as follows (in thousands): 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 Adjustments 3,199 Remediation activity (5,743) Effect of changes in foreign currency exchange rates 349 Balance at December 31, 2020 $ 1,056 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 9. Goodwill and Intangible Assets The following table represents our finite-lived and indefinite-lived intangible assets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Finite-lived intangible assets: Customer relationships $ 202,546 $ 320,023 Developed technology 227,247 293,785 Trade names 26,261 25,004 Other intangible assets 1,035 975 Total gross finite-lived intangible assets 457,089 639,787 Accumulated amortization - Customer relationships 56,787 75,156 Accumulated amortization - Developed technology 56,933 57,362 Accumulated amortization - Trade names 16,837 14,811 Accumulated amortization - Other intangible assets 902 712 Total accumulated amortization 131,459 148,041 Net finite-lived intangible assets $ 325,630 $ 491,746 Indefinite-lived intangible assets: IPR&D $ 112,006 $ 115,800 Goodwill 922,318 915,794 Total indefinite-lived intangible assets $ 1,034,324 $ 1,031,594 The amortization periods for our finite-lived intangible assets as of December 31, 2020, are as follows: Minimum Life in years Maximum Life in years Customer relationships 10 18 Developed technology 14 17 Trade names 15 15 Other intangible assets 7 8 The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2020, is as follows (in thousands): 2021 $ 26,724 2022 26,724 2023 26,724 2024 26,724 2025 26,724 Thereafter 192,010 Total $ 325,630 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 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. 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 following table represents the changes in the carrying amount of goodwill by reportable segment (in thousands): Cardiovascular Neuromodulation Other Total 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 (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 Impairment (2) (21,269) — — (21,269) Foreign currency adjustments 27,793 — — 27,793 December 31, 2020 $ 523,564 $ 398,754 $ — $ 922,318 (1) Goodwill recognized during the year ended December 31, 2019 was the result of the Miami Instruments acquisition. Refer to “Note 4. Business Combinations.” (2) During the year ended December 31, 2020, the Company recognized a $21.3 million impairment of goodwill allocated to Heart Valves. Refer to “Note 5. Assets and Liabilities Held For Sale” for additional information. We performed a quantitative assessment for our Cardiovascular and Neuromodulation reporting units as of October 1, 2020. 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 14% and 517%, 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 on the October 1, 2020 test date. On December 2, 2020, LivaNova entered into a Purchase Agreement for the divestiture of certain of LivaNova’s subsidiaries as well as certain other assets and liabilities relating to the Company’s Heart Valve business. We performed a quantitative assessment as of December 2, 2020 of the goodwill associated with the Cardiovascular reporting unit and concluded that the goodwill was not impaired. We then allocated $21.3 million of Cardiovascular goodwill to the Heart Valves disposal group based on the relative fair values of the businesses within the Cardiovascular reporting unit and recognized a $21.3 million impairment to the allocated goodwill. For additional information refer to “Note 5. Assets and Liabilities Held For Sale.” Cumulative goodwill impairments from continuing operations since the merger of Cyberonics, Inc. and Sorin S.p.A. in October 2015 total $63.7 million. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Investments | Note 10. 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, 2020 and 2019 (in thousands): 2020 2019 Respicardia Inc. (1) $ 17,706 $ 17,706 ALung Technologies, Inc. (2) 3,000 — Ceribell, Inc. (3) 3,000 3,000 ShiraTronics, Inc. (4) 2,045 2,045 MD Start II (5) 1,227 1,121 Rainbow Medical Ltd. (6) 1,201 1,099 Highlife S.A.S. (7) 1,163 1,064 Other 1,359 770 30,701 26,805 Equity method investments (8) 393 451 $ 31,094 $ 27,256 (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 $0.8 million and $0.6 million as of December 31, 2020 and December 31, 2019, respectively, which is included in prepaid expenses and other current assets on the consolidated balance sheet. (2) During the first quarter of 2020, we invested in ALung Technologies, Inc. (“ALung”). ALung is a privately held medical device company focused on creating advanced medical devices for treating respiratory failure. ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation which removes carbon dioxide directly from the blood in patients with acute respiratory failure. As of December 31, 2020, we have a convertible note receivable due from ALung of $2.5 million, which is included in prepaid expenses and other current assets on the consolidated balance sheet. (3) 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. (4) 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. (5) MD Start II is a private venture capital collaboration for the development of medical device technology in Europe. (6) 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. (7) 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 TMVR replacement system to treat patients with MR. 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 account for Highlife under the equity method. (8) 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 $6.1 million as of December 31, 2020) based on cash calls. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 11. 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, 2020, 2019 or 2018. 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, 2020 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 ” ) $ 2,893 $ — $ 2,893 $ — Derivative assets - freestanding instruments (FX) 55 — 55 — Derivative assets - capped call derivatives 72,302 — — 72,302 Convertible notes receivable 2,775 — — 2,775 $ 78,025 $ — $ 2,948 $ 75,077 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 14 $ — $ 14 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 74 — 74 — Derivative liabilities - freestanding instruments (FX) 4,073 — 4,073 — Derivative liabilities - embedded exchange feature 121,756 — — 121,756 Derivative liabilities - other 4,290 — — 4,290 Contingent consideration arrangements 103,818 — — 103,818 $ 234,025 $ — $ 4,161 $ 229,864 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 (FX) $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — $ 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 arrangements 137,349 — — 137,349 $ 141,029 $ — $ 3,680 $ 137,349 The following table provides a reconciliation of the beginning and ending balances of our recurring fair value measurements, using significant unobservable inputs (Level 3) (in thousands): Capped Call Derivative Asset Convertible Notes Receivable Embedded Exchange Feature Derivative Liability Other Derivative Liabilities Contingent Consideration Liability Arrangements 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 FX — — — — (136) December 31, 2019 — — — — 137,349 Additions 43,096 2,691 74,951 — — Payments (2) — — — — (12,868) Changes in fair value (3) (5) (6) 29,206 84 46,805 4,290 (20,463) Effect of changes in FX — — — — (200) December 31, 2020 72,302 2,775 121,756 4,290 103,818 Less current portion at December 31, 2020 — 2,515 — 4,106 13,968 Long-term portion at December 31, 2020 $ 72,302 $ 260 $ 121,756 $ 184 $ 89,850 (1) See “Note 4. Business Combinations” for additional discussion. (2) 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. During the year ended December 31, 2020, we also paid $11.8 million under the contingent consideration arrangement for the acquisition of TandemLife. Additionally, we made final payments under contingent consideration arrangements resulting from the acquisitions of two distributors. (3) During the year ended December 31, 2020, the contingent consideration change in fair value resulted in a decrease of $13.0 million and $7.5 million recorded to cost of sales - exclusive of amortization and research and development, respectively. 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. (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 contingent consideration change in fair value during the year ended December 31, 2020 is primarily due to a one-year delay in the projected achievement of a certain regulatory milestone and timing of sales-based earnout payments for ImThera, and the impact of an increase in discount rates utilized in the valuation of contingent consideration. Refer to the tables below for further information regarding the fair value measurements of contingent consideration. The contingent consideration change in fair value during the year ended December 31, 2019 reflects a delay in the timing of anticipated regulatory approval and commercialization for ImThera. See “Note 9. Goodwill and Intangible Assets” for additional discussion. (6) Changes in the fair value of the embedded exchange feature derivative, capped call derivatives and other derivative liabilities are recognized in foreign exchange and other losses in the consolidated statements of income (loss). Embedded Exchange Feature and Capped Call Derivatives In June 2020, the Company issued $287.5 million in cash exchangeable senior notes and entered into related capped call transactions. The cash exchangeable senior notes include an embedded exchange feature that is bifurcated from the cash exchangeable senior notes. Please refer to “Note 12. Financing Arrangements” for further details. The embedded exchange feature derivative is measured at fair value using a binomial lattice model and discounted cash flows that utilize observable and unobservable market data. The capped call derivative is measured at fair value using the Black-Scholes model utilizing observable and unobservable market data, including stock price, remaining contractual term, expected volatility, risk-free interest rate and expected dividend yield, as applicable. The embedded exchange feature and capped call derivatives are classified as Level 3 as the Company uses historical volatility and implied volatility from options traded to determine expected stock price volatility which is an unobservable input that is significant to the valuation. In general, an increase in our stock price or stock price volatility would increase the fair value of the embedded exchange feature and capped call derivatives which would result in an increase in expense. As time to the expiration of the derivatives decreases with passage of time, the fair value of the derivatives would decrease. The future impact on net income depends on how significant inputs such as stock price, stock price volatility and time to the expiration of the derivatives change in relation to other inputs. The stock price volatility as of December 31, 2020 was 34%. As of December 31, 2020, a 10% lower volatility, holding other inputs constant, would result in approximate fair value for the embedded exchange feature derivative of $103.1 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $141.1 million. As of December 31, 2020, a 10% lower volatility, holding other inputs constant would result in approximate fair value for the capped call derivatives of $70.0 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $69.3 million. Contingent Consideration Arrangements The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands): December 31, 2020 2019 ImThera $ 89,436 $ 113,503 TandemLife 8,809 17,311 Miami Instruments 5,573 5,338 Drilltex — 294 Other — 903 $ 103,818 $ 137,349 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. The sales-based earnout is valued using projected sales from our internal strategic plan. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs as of December 31, 2020: ImThera Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 6.3% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 11.7% - 12.1% Credit risk discount rate 6.6% - 7.3% Revenue volatility 32.5% Probability of payment 85% Projected years of earnout 2025 - 2028 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 as of December 31, 2020: TandemLife Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 5.4% Probability of payments 70% Projected payment years 2021 The Miami Instruments 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 as of December 31, 2020: Miami Instruments Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 5.3% - 5.7% Probability of payment 90% - 100% Projected payment year 2021 - 2022 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, 2020, was $650.7 million, which we believe approximates fair value. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 12. Financing Arrangements The outstanding principal amount of our long-term debt as of December 31, 2020 and 2019, was as follows (in thousands, except interest rates): 2020 2019 Maturity Interest Rate 2020 Senior Secured Term Loan $ 424,002 $ — June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 212,073 — December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 6,515 8,422 July 2021 4.81% Mediocredito Italiano 5,406 6,222 December 2023 0.50 % - 2.94% Bank of America, U.S. 2,019 2,004 January 2023 2.08% 2019 Debt Facility — 184,275 2017 European Investment Bank — 103,570 2014 European Investment Bank — 28,053 Other 660 965 Total long-term facilities 650,675 333,511 Less current portion of long-term debt 8,377 73,181 Total long-term debt $ 642,298 $ 260,330 Contractual annual principal maturities of our long-term debt facilities as of December 31, 2020, are as follows (in thousands): 2021 $ 8,377 2022 1,913 2023 3,941 2024 60 2025 737,560 Thereafter 360 Total payments 752,211 Less: Debt issuance costs 101,536 Total long-term facilities $ 650,675 Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $5.0 million and $4.2 million at December 31, 2020 and December 31, 2019, respectively, with interest rates ranging from 3.06% to 7.65% and loan terms ranging from overnight to 364 days. On December 30, 2020, we entered into the $50.0 million 2020 Revolving Credit Facility for working capital needs. The 2020 Revolving Credit Facility has a maturity of June 30, 2024 and borrowings bear interest at either LIBOR (subject to a 1% floor) plus 5.0% or ABR (subject to a 2% floor) plus 4.0%. There were no borrowings under the 2020 Revolving Credit Facility during 2020. The 2020 Revolving Credit Facility has financial covenants consistent with those of the Term Loan described below. 2020 Senior Secured Term Loan On June 10, 2020, we entered into a $450.0 million five-year Term Loan through our wholly owned subsidiary LivaNova USA Inc., with funds managed by affiliates of Ares Management Corporation, as administrative agent and collateral agent, resulting in cash proceeds of approximately $421.5 million, net of discounts and issuance costs. The obligations under the Term Loan are guaranteed by LivaNova and its existing and future wholly owned material subsidiaries, and are secured by a perfected security interest in substantially all tangible and intangible assets of LivaNova and certain U.S. and UK subsidiaries of LivaNova, subject in each case to certain exceptions contained in the Term Loan. Borrowings under the Term Loan bear interest at a variable annual rate equal to the three-month LIBOR rate (subject to a 1% floor), plus an applicable margin of 6.5% per annum. The effective interest rate of the Term Loan at December 31, 2020 was 9.0%. The Term Loan will mature on June 30, 2025 and includes certain affirmative, negative and financial covenants. The financial covenants under the Term Loan state (i) the net revenue of LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be lower than $700 million for each trailing 12 month period, such threshold to decrease pro rata (not below $550 million) upon prepayments of the Term Loan made by LivaNova USA, Inc. out of the proceeds of certain asset sales, and (ii) the total secured leverage ratio (as defined in the debt agreement) for LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be greater than the applicable ratio set forth below: Test Period Total Secured Leverage Ratio (1) 4 Quarters ending June 30, 2020 through each fiscal quarter thereafter until (and including) the fiscal quarter ending June 30, 2021 5.625 : 1.00 4 Quarters ending September 30, 2021 and ending each fiscal quarter thereafter 4.5 : 1.00 (1) On February 24, 2021 the Company entered into Amendments to the Term Loan and the 2020 Revolving Credit Facility. Pursuant to the Amendments, the definition of “Consolidated EBITDA” for purposes of calculating the total secured leverage ratio was amended to add back an accrual in an amount not to exceed $43.0 million as a loss contingency liability as required under GAAP in connection with the clean-up of a hazardous waste storage site and contaminated areas located in Saluggia, Italy, solely in the case of the periods ending December 31, 2020, March 31, 2021, June 30, 2021 and September 30, 2021. The Company was in compliance with all financial covenants as of December 31, 2020, as amended. Debt discounts and issuance costs related to the Term Loan were approximately $28.5 million and included various legal, bank and accounting fees. Amortization of debt discount and issuance costs was $2.5 million for the year ended December 31, 2020 and was included in interest expense on the consolidated statement of income (loss). The unamortized discount related to the Term Loan as of December 31, 2020 was $26.0 million. 2020 Cash Exchangeable Senior Notes On June 17, 2020, our wholly-owned subsidiary, LivaNova USA, Inc., issued $287.5 million aggregate principal amount of 3.00% Notes by private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The sale of the Notes resulted in approximately $278.0 million in net proceeds to the Company after deducting issuance costs. Interest is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The effective interest rate of the Notes at December 31, 2020 was 9.9%. The Notes mature on December 15, 2025 unless earlier exchanged, repurchased, or redeemed. Debt discounts and issuance costs related to the Notes were approximately $82.0 million and included $75.0 million of discount attributable to the embedded exchange feature, discussed below, and $7.0 million of allocated issuance costs to the Notes related to legal, bank and accounting fees. Amortization of debt discount and issuance costs was $6.6 million for the year ended December 31, 2020 and is included in interest expense on the consolidated statement of income (loss). The unamortized discount related to the Notes as of December 31, 2020 was $75.4 million. Holders of the Notes are entitled to exchange the Notes at any time during specified periods, at their option, and are entitled to exchange the Notes during any calendar quarter, if the last reported sale price of LivaNova’s ordinary shares, with a nominal value of £1.00 per share for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price, or $79.27 per share, on each applicable trading day. The Notes are exchangeable solely into cash and are not exchangeable into ordinary shares of LivaNova or any other security under any circumstances. The initial exchange rate for the Notes is 16.3980 ordinary shares per $1,000 principal amount of Notes (equivalent to an initial exchange price of approximately $60.98 per share). The exchange rate is subject to adjustment in certain circumstances, as set forth in the indenture governing the Notes. The Company may redeem the Notes at its option, on or after June 20, 2023 and prior to the 51 st scheduled trading day immediately preceding the maturity date, in whole or in part, if the last reported sale price per ordinary share has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Additionally, the Company may redeem the Notes at its option, prior to their stated maturity, in whole but not in part, in connection with certain tax-related events. Embedded Exchange Feature The embedded exchange feature of the Notes requires bifurcation from the Notes and is accounted for as a derivative liability. The fair value of the Notes’ embedded exchange feature derivative at the time of issuance was $75.0 million and was recorded as debt discount on the Notes. This discount is amortized as interest expense using the effective interest method over the term of the Notes. The Notes’ embedded exchange feature derivative is carried on the consolidated balance sheets at its estimated fair value and is adjusted at the end of each reporting period, with unrealized gain or loss reflected in the consolidated statements of income (loss). The fair value of the embedded exchange feature derivative liability was $121.8 million as of December 31, 2020. Capped Call Transactions In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers of the Notes or their respective affiliates. The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of LivaNova’s ordinary shares underlying the Notes and are expected generally to offset any cash payments the Company is required to make upon exchange of the Notes in excess of the principal amount thereof in the event that the market value per ordinary share, as measured under the capped call transactions, is greater than the strike price of the capped call transactions, with such offset being subject to an initial cap price of $100.00 per share. The aggregate cost of the capped calls derivative assets was $43.1 million. The capped call transactions expire on December 15, 2025 and must be settled in cash. The capped calls are carried on the consolidated balance sheets as a derivative asset at their estimated fair value and are adjusted at the end of each reporting period, with unrealized gain or loss reflected in the consolidated statement of income (loss). The fair value of capped call derivative assets was $72.3 million as of December 31, 2020. The current and non-current classification is evaluated at each balance sheet date and may change depending on whether any exchange conditions are met. As of December 31, 2020, no exchange conditions have been met and the Notes, embedded exchange feature derivative liability, and the capped call derivative assets are classified as non-current. Please refer to “Note 11. Fair Value Measurements” for details on the valuation of the embedded exchange feature derivative liability and capped call derivative assets. Extinguishment of Debt The Company used the net proceeds from the Term Loan, together with a portion of the net proceeds of the Notes, after fees, discounts, commissions and other expenses, to repay outstanding indebtedness under the Company’s 2017 European Investment Bank loan, 2014 European Investment Bank loan, Banca Nazionale del Lavoro S.p.A loan, and 2019 Debt Facility and related expenses. The Company repaid approximately $528.0 million in aggregate outstanding principal, accrued interest and associated fees, including breakage fees and legal fees. The Company recognized a loss on debt extinguishment of $1.4 million during the year ended December 31, 2020. The loss on debt extinguishment was recognized in foreign exchange and other losses in the consolidated statements of income (loss). The remainder of the proceeds from the concurrent financing transactions were used to pay the cost of capped call transactions and for general corporate purposes. |
Derivatives and Risk Management
Derivatives and Risk Management | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Note 13. Derivatives and Risk Management Due to the global nature of our operations, we are exposed to foreign currency exchange rate fluctuations. We enter into FX derivative contracts to reduce the impact of foreign currency exchange rate fluctuations on earnings and cash flow. We are also exposed to equity price risk in connection with our Notes, including exchange and settlement provisions based on the price of our ordinary shares at exchange or maturity of the Notes. In addition, the capped call transactions associated with the Notes also include settlement provisions that are based on the price of our ordinary shares, subject to a capped price per share. 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 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. 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, 2020 and December 31, 2019 was $352.6 million and $338.0 million, respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans and trade receivables. We recorded net (losses) gains for these freestanding derivatives of $(16.6) million, $3.1 million and $(11.2) million for the years ended December 31, 2020, 2019 and 2018, respectively. These (losses) and gains are included in foreign exchange and other losses on our consolidated statements of income (loss). Counterparty Credit Risk We are exposed to credit risk in the event of non-performance by the counterparties to our derivatives. The two counterparties to the capped call transactions are financial institutions. To limit our credit risk, we selected financial institutions with a minimum long-term investment grade credit rating. Our exposure to the credit risk of the counterparties is not secured by any collateral. If a counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under the capped call transactions with that counterparty. To manage credit risk with respect to our other derivatives, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect to each counterparty, and monitors the market positions. However, if one or more of these counterparties were in a liability position to the Company and were unable to meet their obligations, any transactions with the counterparty could be subject to early termination, which could result in substantial losses for the Company. Cash Flow Hedges 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 and the Euro. We transfer to earnings from AOCI the gain or loss realized on the FX derivative contracts at the time of invoicing. The gross notional amounts of open derivative contracts designated as cash flow hedges as of December 31, 2020 and 2019, were as follows (in thousands): Description of Derivative Contract 2020 2019 FX derivative contracts to be exchanged for British Pounds $ 9,545 $ 10,128 FX derivative contracts to be exchanged for Japanese Yen 18,637 25,342 FX derivative contracts to be exchanged for Euros 47,444 48,838 Interest rate swap contracts — 22,442 $ 75,626 $ 106,750 After-tax net gain 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 in AOCI as of December 31, 2020 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 2,319 $ 2,319 Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in OCI and the amount reclassified to earnings from AOCI were as follows (in thousands): Year Ended December 31, 2020 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other losses $ 1,724 $ (1,522) FX derivative contracts SG&A — 980 Interest rate swap contracts Interest expense — (113) $ 1,724 $ (655) 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 $ 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 $ 44 $ 2,697 FX derivative contracts SG&A — (2,554) Interest rate swap contracts Interest expense — (66) $ 44 $ 77 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, 2020 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) FX derivative contracts Prepaid expenses and other current assets $ 1,998 Accrued liabilities $ 14 FX derivative contracts Accrued liabilities 895 Total derivatives designated as hedging instruments 2,893 14 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 74 FX derivative contracts Prepaid expenses and other current assets 55 Accrued liabilities 4,073 Capped call derivatives Long-term derivative assets 72,302 Embedded exchange feature Long-term derivative liability 121,756 Other derivatives Accrued liabilities 4,106 Other derivatives Long-term derivative liability 184 Total derivatives not designated as hedging instruments 72,357 130,193 Total derivatives $ 75,250 $ 130,207 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 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 11. Fair Value Measurements.” |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 14. 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 11 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): December 31, Operating Lease Assets and Liabilities 2020 2019 Assets Operating lease right-of-use assets $ 50,525 $ 54,372 Liabilities Accrued liabilities and other $ 11,276 $ 11,110 Long-term operating lease liabilities 42,221 46,027 Total lease liabilities $ 53,497 $ 57,137 Year Ended December 31, Operating Lease Cost 2020 2019 Operating lease cost $ 14,156 $ 14,002 Variable lease cost 1,097 873 Short-term lease cost 415 788 Total lease cost $ 15,668 $ 15,663 Contractual maturities of our lease liabilities, including lease liabilities held for sale, as of December 31, 2020, are as follows (in thousands): 2021 $ 13,414 2022 12,051 2023 8,901 2024 6,920 2025 4,343 Thereafter 14,038 Total lease payments 59,667 Less: Amount representing interest 4,351 Present value of lease liabilities $ 55,316 Lease Term and Discount Rate December 31, 2020 Weighted Average Remaining Lease Term 6.3 years Weighted Average Discount Rate 2.4 % Other information (in thousands) Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,601 $ 13,522 Operating lease assets obtained in exchange for lease liabilities $ 8,547 $ 8,712 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15. 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. With this 510(k) clearance, all actions to remediate the FDA’s inspectional observations in the Warning Letter are complete, and at this time, LivaNova is awaiting the FDA’s close-out inspection. 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. In April 2017, we obtained CE Mark in Europe for the design change of the 3T device, and in October 2018, the FDA concluded that we could commence the vacuum canister and internal sealing upgrade program in the U.S. 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 are in the process of completing and closing out all recall activities with the FDA. While our vacuum canister and internal sealing upgrade program and deep cleaning service in the U.S. are substantially complete, these services will continue as a servicing option outside of the U.S. 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, 2020, the product remediation liability was $1.1 million. Refer to “Note 8. Product Remediation Liability” for additional information. Saluggia Site Hazardous Substances LivaNova Site Management S.r.l. (“LSM”), formerly a subsidiary of Sorin, one of the companies that merged into LivaNova PLC in 2015, manages site services for the campus in Saluggia, Italy. In addition to a LivaNova manufacturing facility, the Saluggia campus is also the location of manufacturing facilities of third parties, a cafeteria for workers, and storage facilities for hazardous substances and equipment previously used in a nuclear research center, later turned nuclear medicine business, between the 1960s and the late 1990s. Pursuant to authorization from the Italian government, LSM has, and continues to, perform ordinary maintenance, secure the facilities, monitor air and water quality and file applicable reports with the competent environmental authorities. During 2020, LSM received correspondence from ISIN (a sub-body of the Italian Ministry of Economic Development) requesting that within five years, LSM demonstrate the financial capacity to meet its obligations under Italian law to clean and dismantle any contaminated buildings and equipment as well as to deliver hazardous substances to a national repository. This repository will be built by the Italian government at a location and time yet to be determined. ISIN subsequently published Technical Guide n. 30, which identifies the technical criteria, and general safety and protection requirements for the design, construction, operation and dismantling of temporary storage facilities for the hazardous substances. Most recently, in January 2021, a list of 67 potential sites for the national repository was published. There is no legal obligation to begin any work or deliver the hazardous substances, as the performance of these obligations is contingent on the construction of the as-yet unbuilt national repository. However, as a result of the above correspondence and publication from ISIN and the publication of potential sites for the national repository, some of the substantial uncertainties regarding the obligation became more certain. In connection with developing the plan required by ISIN, we retained a third party specialist to assist in the estimation of the potential costs. Based on the aforementioned factors, the Company concluded its obligation to clean, dismantle, and deliver any hazardous substances to a national repository, is probable and reasonably estimable as of December 31, 2020. Accordingly, in the fourth quarter of 2020, we recognized a $42.2 million provision for this matter. The liability as of December 31, 2020 is $43.0 million which represents the low end of the estimated range of loss of $43.0 million to $55.0 million. 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 1, 2021, including the cases encompassed in the settlement framework described above that have not yet been dismissed, we are aware of approximately 85 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, 2020, the provision was $36.5 million. While the amount accrued represents our best estimate for those filed and unfiled claims that are both probable and estimable, the actual liability for resolution of these matters may vary from our estimate. Changes in the carrying amount of the litigation provision liability 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 Payments (138,178) Adjustments 3,906 FX and other 358 Total litigation provision liability at December 31, 2020 36,490 Less current portion of litigation provision liability at December 31, 2020 28,612 Long-term portion of litigation provision liability at December 31, 2020 $ 7,878 In 2019, we recovered $33.8 million from our insurance carriers under our product liability insurance policies related to the litigation involving our 3T device. The insurance recovery was recorded in litigation provision, net on the consolidated statements of income (loss) during 2019. Environmental Liability Sorin was created as a result of a spin-off (the “Sorin spin-off”) from SNIA in January 2004, and in October 2015, Sorin was merged into LivaNova. 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 $358,000 as of December 31, 2020) 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, an estimated €572.1 million (approximately $701.9 million as of December 31, 2020). 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). In 2011, Caffaro, a SNIA subsidiary, sold its Brescia chemical business to Caffaro Brescia, a third party belonging to the Todisco group, and as part of the acquisition, Caffaro Brescia agreed to secure hydraulic barriers at the site and maintain existing environmental security measures. In September 2020, Caffaro Brescia declared it was withdrawing from its agreement to maintain the environmental measures. In January 2021, we (in addition to Caffaro Brescia, and other non-LivaNova entities) received an administrative order (“Order”) from the Italian Ministry of the Environment requiring us to ensure the maintenance of the environmental measures and to guarantee that such works remain fully operational, the annual management and maintenance for which is estimated at approximately €1 million per year. LivaNova’s receipt of the Order appears to be based on the aforementioned Court of Appeals decision regarding our alleged joint liability with SNIA for SNIA’s environmental liabilities. Our response, dated February 16, 2021, disputes the grounds upon which the Order is based. We have not recognized an expense in connection with these related matters matter because any potential loss is not currently probable or reasonably estimable. 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, and on May 18, 2020, the Patent Office issued a Final Written Decision determining that all challenged claims are unpatentable. NCT is appealing the Final Written Decision. On March 24, 2020 we were granted our request for an ex parte reexamination of the ‘307 patent, and in December, the Patent Office issued a Non-Final Rejection of all the ‘307 claims. NCT is appealing. The Court has stayed the litigation pending the outcome of the IPR appeal proceeding. We have not recognized an expense in connection with this matter because any potential loss is not currently probable or reasonably estimable. 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. 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, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 16. 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, 2019 or December 31, 2020. 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 years ended December 31, 2019 or December 31, 2020. 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, 2020, 2019 and 2018 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total 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 before reclassifications, before tax 2,757 3,627 6,384 Tax expense (661) — (661) Other comprehensive income 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 income, net of tax 1,457 3,627 5,084 As of December 31, 2019 513 (19,905) (19,392) Other comprehensive income before reclassifications, before tax 1,724 45,395 47,119 Tax expense (415) — (415) Other comprehensive income before reclassifications, net of tax 1,309 45,395 46,704 Reclassification of loss from accumulated other comprehensive income (loss), before tax 655 — 655 Reclassification of tax benefit (158) — (158) Reclassification of loss from accumulated other comprehensive income (loss), after tax 497 — 497 Net current-period other comprehensive income, net of tax 1,806 45,395 47,201 As of December 31, 2020 $ 2,319 $ 25,490 $ 27,809 |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Plans | Note 17. 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, 2020, there were approximately 3,575,752 shares available for future grants under the 2015 Plan. During the year ended December 31, 2020, we issued stock-based compensatory awards with terms approved by the Compensation Committee of our Board of Directors. The awards with service conditions generally vest ratably over four years, subject to forfeiture unless service conditions are met. Market performance-based awards cliff vest after three years, subject to the rank of our total shareholder return for the three-year period ending December 31, 2022 relative to the total shareholder returns for a peer group of companies. Operating performance-based awards 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, 2022. On January 1, 2019, we initiated the LivaNova Global Employee Share Purchase Plan (“ESPP”). Compensation expense related to the ESPP for the years ended December 31, 2020 and December 31, 2019 was $1.2 million and $1.3 million, respectively. 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, 2020 2019 2018 Cost of goods sold $ 1,898 $ 1,343 $ 1,060 Selling, general and administrative 29,661 25,588 19,393 Research and development 3,530 5,622 4,510 Stock-based compensation from continuing operations 35,089 32,553 24,963 Stock-based compensation from discontinued operations — — 1,960 Total stock-based compensation expense 35,089 32,553 26,923 Income tax benefit 992 6,590 6,443 Total expense, net of income tax benefit $ 34,097 $ 25,963 $ 20,480 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, 2020 2019 2018 Service-based restricted stock units $ 18,320 $ 14,113 $ 10,622 Service-based stock appreciation rights 12,715 10,349 8,282 Market performance-based restricted stock units 3,200 2,900 2,357 Operating performance-based restricted stock units (370) 3,918 3,702 Employee stock purchase plan 1,224 1,273 — Total stock-based compensation expense from continuing operations $ 35,089 $ 32,553 $ 24,963 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, 2020, are as follows (in thousands): Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 25,678 2.64 Service-based restricted stock unit awards 36,086 2.83 Performance-based restricted stock unit awards 7,051 1.19 Total stock-based compensation cost unrecognized $ 68,815 2.22 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, 2020 2019 2018 Dividend yield (1) — — — Risk-free interest rate (2) 0.4% 1.4 % - 2.2 % 2.5 % - 2.9 % Expected option term - in years (3) 5.4 5.0 - 5.1 5.0 - 5.1 Expected volatility at grant date (4) 39.5% 32.2 % - 35.7 % 29.2 % - 29.9 % (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, 2019 2,215,056 $ 74.41 Granted 1,132,742 $ 43.63 Exercised (58,768) $ 48.65 Forfeited (173,923) $ 73.05 Expired (231,087) $ 70.99 Outstanding — at December 31, 2020 2,884,020 $ 63.20 7.5 $ 34,829 Fully vested and exercisable — end of year 1,131,868 $ 66.28 5.6 $ 9,563 Fully vested and expected to vest — end of year (2) 2,815,269 $ 63.39 7.4 $ 33,633 (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, 2020, 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, 2020 2019 2018 Weighted average grant date fair value of SARs granted during the year (per share) $ 15.73 $ 31.22 $ 28.13 Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) $ 773 $ 2,064 $ 27,281 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, 2019 523,833 $ 84.98 Granted 609,076 $ 44.28 Vested (221,314) $ 75.51 Forfeited (63,136) $ 75.46 Non-vested shares at December 31, 2020 848,459 $ 58.00 Year Ended December 31, 2020 2019 2018 Weighted average grant date fair value of service-based RSUs issued during the year (per share) $ 44.28 $ 92.54 $ 95.63 Aggregate fair value of RSUs that vested during the year (in thousands) $ 13,674 $ 12,710 $ 11,505 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, 2019 285,669 $ 71.02 Granted 185,940 $ 41.70 Vested (63,305) $ 41.79 Forfeited (27,505) $ 64.35 Non-vested shares at December 31, 2020 380,799 $ 56.55 Year Ended December 31, 2020 2019 2018 Weighted average grant date fair value of performance and market-based restricted share units granted during the year (per share) $ 41.70 $ 98.50 $ 95.62 Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) $ 4,106 $ 6,697 $ 9,409 |
Employee Retirement Plans
Employee Retirement Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plans | Note 18. 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, 2020 2019 2018 Accumulated benefit obligations at year end $ 13,085 $ 11,232 $ 10,591 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 11,232 $ 10,591 $ 11,001 Interest cost 290 382 336 Plan settlement (384) (366) (340) Actuarial loss 2,225 871 8 Benefits paid (278) (246) (414) Projected benefit obligation at end of year $ 13,085 $ 11,232 $ 10,591 Change in plan assets: Fair value of plan assets at beginning of year $ 7,574 $ 6,767 $ 6,879 Actual return on plan assets 646 628 (405) Employer contributions 1,130 546 1,047 Plan settlement (384) (366) (340) Benefits paid (278) (1) (414) Fair value of plan assets at end of year $ 8,688 $ 7,574 $ 6,767 Funded status at end of year: Fair value of plan assets $ 8,688 $ 7,574 $ 6,767 Projected benefit obligations 13,085 11,232 10,591 Underfunded status of the plans 4,397 3,658 3,824 Recognized liability $ 4,397 $ 3,658 $ 3,824 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 4,397 $ 3,658 $ 3,824 Recognized liability $ 4,397 $ 3,658 $ 3,824 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, 2020 2019 2018 Accumulated benefit obligations at year end $ 12,091 $ 17,744 $ 18,676 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 18,087 $ 18,975 $ 21,548 Service cost 691 478 478 Interest cost 121 232 289 Actuarial loss (gain) (208) 1,071 (818) Benefits paid (1,245) (2,380) (1,631) Reclassified to liabilities held for sale (1) (6,012) — — Foreign currency exchange rate changes and other 1,605 (289) (891) Projected benefit obligation at end of year $ 13,039 $ 18,087 $ 18,975 Change in plan assets: Fair value of plan assets at beginning of year $ 3,423 $ 3,341 $ 3,075 Actual return on plan assets 52 (34) 51 Employer contributions 454 383 361 Benefits paid (290) (332) (156) Reclassified to liabilities held for sale (1) (1,018) — — Foreign currency exchange rate changes 195 65 10 Fair value of plan assets at end of year $ 2,816 $ 3,423 $ 3,341 Funded status at end of year: Fair value of plan assets $ 2,816 $ 3,423 $ 3,341 Projected benefit obligations 13,039 18,087 18,975 Underfunded status of the plans (2) 10,223 14,664 15,634 Recognized liability $ 10,223 $ 14,664 $ 15,634 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 10,223 $ 14,664 $ 15,634 Recognized liability $ 10,223 $ 14,664 $ 15,634 (1) Refer to “Note 5. Assets and Liabilities Held For Sale.” (2) 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, 2020 2019 2018 Interest cost $ 290 $ 382 $ 336 Expected return on plan assets (318) (298) (318) Settlement and curtailment loss 180 — 135 Amortization of net actuarial loss 182 148 571 Net periodic benefit cost $ 334 $ 232 $ 724 Non-U.S. Pension Benefits Year Ended December 31, 2020 2019 2018 Service cost $ 691 $ 478 $ 478 Interest cost 121 232 289 Expected return on plan assets (52) 34 (51) Amortization of net actuarial loss (gain) (208) 1,071 (818) Net periodic benefit cost $ 552 $ 1,815 $ (102) 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, 2020, 2019 and 2018, are presented in the following table: U.S. Pension Benefits 2020 2019 2018 Weighted-average assumptions used to determine benefit obligation: Discount rate 1.91% 2.88% 3.97% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 2.88% 3.97% 3.28% 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, 2020, 2019 and 2018, are presented in the following table: Non-U.S. Pension Benefits 2020 2019 2018 Weighted-average assumptions used to determine benefit obligation: Discount rate 0.23% - 0.35% 0.20% - 0.71% 0.20% - 1.55% 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 0.23% - 0.35% 0.20% - 0.71% 0.27% - 1.55% 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, 2020: Equity securities 29% Debt securities 70% 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, 2020 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 2,405 $ — $ 2,405 $ — Fixed income mutual funds 5,788 — 5,788 — Money market funds and cash 94 94 — — $ 8,287 $ 94 $ 8,193 $ — 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 $ — 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 $1.6 million, $0.9 million and $1.4 million to the pension plans (U.S. and non-U.S.) during the years ended December 31, 2020, 2019 and 2018, respectively. We anticipate that we will make contributions to the U.S. pension plan of approximately $0.9 million during the year ended December 31, 2021. Benefit payments, including amounts to be paid from our assets, and reflecting expected future service as of December 31, 2020, are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2021 4,003 600 2022 1,175 881 2023 680 1,129 2024 774 837 2025 940 898 2026 - 2030 3,159 6,205 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 $11.8 million, $12.4 million and $12.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 19. Income Taxes Earnings Before Income Taxes and Components of Income Tax Provision The U.S. and non-U.S. components of (loss) income from continuing operations before income taxes and our income tax expense (benefit) from continuing operations (in thousands): Year Ended December 31, 2020 2019 2018 (Loss) income from continuing operations before income taxes: UK and Non-U.S. $ (258,466) $ 28,788 $ 59,528 U.S. (85,521) (214,482) (306,975) $ (343,987) $ (185,694) $ (247,447) Total income tax expense (benefit) from continuing operations consisted of the following: Current: UK and Non-U.S. $ 2,899 $ 1,112 $ 9,645 U.S. (41,010) (4,988) 1,291 (38,111) (3,876) 10,936 Deferred: UK and Non-U.S. 37,375 (7,407) 533 U.S. — (18,870) (81,098) 37,375 (26,277) (80,565) Total income tax (benefit) expense from continuing operations $ (736) $ (30,153) $ (69,629) Effective Income Tax Rate Reconciliation LivaNova PLC is resident in the UK for tax purposes. 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, 2020 2019 2018 Statutory tax rate at UK Rate 19.0 % 19.0 % 19.0 % Deferred tax valuation allowance (35.4) (17.6) (0.8) Foreign tax rate differential 6.9 6.7 3.0 U.S. state and local tax expense, net of federal benefit 1.5 6.1 4.3 Effect of changes in tax rate 2.2 (3.1) 0.6 Write-off/impairment of investments 1.8 (2.8) (1.3) Reserve for uncertain tax positions 0.8 2.5 (0.7) Research and development tax credits 0.9 2.2 1.1 UK CFC tax — 2.1 (1.0) U.S. tax on non-U.S. operations — (1.6) (0.5) Base erosion anti-abuse tax (0.7) 1.5 (1.2) Exempt income — 1.2 6.1 Foreign tax withholding and credits (0.2) — (0.4) CARES Act rate differential 2.8 — — Other, net 0.6 — (0.1) Effective tax rate 0.2 % 16.2 % 28.1 % CARES Act On March 27, 2020, the U.S. enacted the CARES Act, which contains numerous income tax provisions and other stimulus measures. Of the tax measures that impact our income tax provision, the ability to carry back, U.S. tax net operating losses (“NOL”) generated in 2018, 2019, or 2020 to tax years with a higher statutory tax rate has the most significant impact. Based on our analysis as of December 31, 2020, we recorded an overall tax benefit of approximately $43.3 million with a permanent benefit of $9.6 million. This tax benefit reflects the carryback of all or a portion of the 2019 and 2020 U.S. tax losses, inclusive of release of valuation allowance previously recorded on these losses. UK Tax Increase Due to the change in law effective April 1, 2020, which received royal assent in July 2020, and provided for the UK tax rate to remain at 19% and reversed the prior decrease to 17%, there was a revaluation to increase deferred taxes. Similarly, the UK valuation allowance was also increased by the revaluation. Deferred Income Tax Assets and Liabilities The significant components of our deferred tax assets and liabilities as of December 31, 2020 and 2019, are as follows (in thousands): 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 133,504 $ 125,883 Tax credit carryforwards 37,629 28,272 Accruals and reserves 68,744 69,562 Deferred compensation 11,868 9,692 Inventory 8,317 9,436 Other 17,522 12,135 Gross deferred tax assets 277,584 254,980 Valuation allowance (188,114) (76,317) Net deferred tax assets 89,470 178,663 Deferred tax liabilities: Property, equipment & intangible assets (54,326) (89,115) Gain on sale of intellectual property (41,069) (53,091) Investments — — Other — — Gross deferred tax liabilities: (95,395) (142,206) Net deferred tax (liabilities) assets $ (5,925) $ 36,457 Reported on the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax assets $ 2,990 $ 68,676 Net deferred tax liabilities (8,915) (32,219) Net deferred tax (liabilities) assets $ (5,925) $ 36,457 Net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2020, 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 $ 329,587 $ 69,574 $ 69,477 $ 97 2026 - 2036 U.S. Federal NOL 191,447 40,204 5,096 35,108 2021 - 2036 U.S. State NOL 325,979 17,827 2,944 14,883 2021 - 2040 South America NOL 15,909 5,402 5,327 75 2030 Far East NOL 2,021 497 — 497 2025 - 2030 U.S. foreign tax credits — 15,802 — 15,802 2025 - 2029 U.S. research & development tax credits — 14,404 — 14,404 2021 - 2040 U.S. State research & development tax credits — 5,553 — 5,553 2030 - 2040 Other non-U.S. tax credits — 1,870 — 1,870 2021 - 2032 $ 864,943 $ 171,133 $ 82,844 $ 88,289 We review the realizability of our deferred tax assets by jurisdiction regularly. As of December 31, 2020 and 2019, we had valuation allowances of $188.1 million and $76.3 million, respectively. These valuation allowances were primarily related to continuing operations and are a result of significant negative evidence in the form of cumulative losses in certain jurisdictions, including the extended impact of COVID-19 globally. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries as of December 31, 2020 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, 2020, it was not practicable to determine the exact 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, 2020 2019 2018 Balance at beginning of year $ 15,995 $ 22,883 $ 26,137 Increases: Tax positions related to current year — 176 671 Tax positions related to prior year — — 3,309 Decreases: Tax positions related to prior years for settlement with tax authorities (13,989) (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 1,427 (328) (892) Balance at end of year $ 3,433 $ 15,995 $ 22,883 The $14.0 million decrease in tax positions related to prior years for settlements with tax authorities reflects a decrease of $13.3 million due to the settlement of the outstanding Cobe tax litigation in Italy. Unrecognized tax benefits of $11.4 million and $11.6 million at December 31, 2019 and 2018, 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 $0.4 million, $5.7 million and $6.3 million as of December 31, 2020, 2019 and 2018, respectively, and were included in other long-term liabilities on our consolidated balance sheets. We operate in multiple jurisdictions with complex legal and tax regulatory environments and our tax returns are periodically audited or subjected to review by tax authorities. We monitor tax law changes and the potential impact to our results of operations. 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, 2020 were recognized, $3.4 million would impact our effective tax rate. We believe our gross unrecognized tax benefits will not be reduced over the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. We record accrued interest and penalties related to unrecognized tax benefits in interest expense and foreign exchange and other losses, 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 2017 Italy 2015 Germany 2014 England and Wales 2017 Canada 2016 Brexit On January 31, 2020, the UK departed from the EU (in a move commonly referred to as “Brexit”), and the UK entered a transition period that ended on December 31, 2020. During the transition period, the UK ceased being an EU member but the trading relationship remained the same under the EU's rules. Various tax reliefs and exemptions that apply to transactions between EU Member States under existing tax laws ceased to apply to transactions between the UK and EU Member States at the end of the transition period. 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. We and several of our wholly owned subsidiaries that are resident for tax purposes 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. As it is our intention to indefinitely reinvest undistributed earnings of our foreign subsidiaries, there is no immediate tax 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 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 20. Earnings 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, 2020 2019 2018 Basic and diluted weighted average shares outstanding (1) 48,592 48,349 48,497 (1) Excluded from the computation of diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 were stock options, SARs and RSUs t otaling 4.1 million, 2.9 million and 2.7 million because to include them would have been anti-dilutive under the treasury stock method. |
Geographic and Segment Informat
Geographic and Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | Note 21. 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. Advanced circulatory support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. Heart valves include mechanical heart valves, tissue heart valves, related repair products and minimally invasive surgical instruments. On June 12, 2019, we acquired the minimally invasive cardiac surgery instruments business from Miami Instruments, which are integrated into our Cardiovascular segment 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, information technology and corporate business development. 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, 2020 2019 2018 Cardiopulmonary United States $ 132,543 $ 161,471 $ 161,134 Europe 122,062 135,632 141,720 Rest of World 192,127 207,613 233,554 446,732 504,716 536,408 Heart Valves United States 12,488 18,900 24,709 Europe 31,259 40,548 44,258 Rest of World 44,283 60,559 56,989 88,030 120,007 125,956 Advanced Circulatory Support United States 41,094 30,781 18,588 Europe 1,027 741 580 Rest of World 200 401 293 42,321 31,923 19,461 Cardiovascular United States 186,125 211,152 204,431 Europe 154,348 176,921 186,558 Rest of World 236,610 268,573 290,836 577,083 656,646 681,825 Neuromodulation United States 282,509 335,332 348,980 Europe 39,019 46,262 42,443 Rest of World 32,916 42,953 31,567 354,444 424,547 422,990 Other 2,714 2,977 2,146 Totals United States 468,634 546,484 553,411 Europe (1) 193,367 223,183 229,001 Rest of World 272,240 314,503 324,549 Total (2) (3) $ 934,241 $ 1,084,170 $ 1,106,961 (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 $29.7 million, $37.7 million and $34.8 million in the United Kingdom, our country of domicile, for the years ended December 31, 2020, 2019 and 2018, 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 from continuing operations to consolidated loss from continuing operations before tax (in thousands): Year Ended December 31, 2020 2019 2018 Cardiovascular (1) (2) $ (194,278) $ 28,460 $ (258,493) Neuromodulation (3) 109,296 83,483 184,674 Other (4) (131,666) (204,727) (96,724) Total reportable segment loss from continuing operations (216,648) (92,784) (170,543) Merger and integration expenses 7,333 23,457 24,420 Restructuring expenses 7,571 12,254 15,915 Amortization of intangibles 38,312 40,375 37,194 Operating loss from continuing operations (269,864) (168,870) (248,072) Interest income 131 803 847 Interest expense (40,837) (15,091) (9,825) Gain on acquisition — — 11,484 Foreign exchange and other losses (33,417) (2,536) (1,881) Loss from continuing operations before tax $ (343,987) $ (185,694) $ (247,447) (1) Results for the year ended December 31, 2020 include $180.2 million and $21.3 million in impairments of the Heart Valves disposal group and allocated goodwill, respectively. Refer to “Note 5. Assets and Liabilities Held For Sale” for additional information. (2) Results for the years ended December 31, 2020, 2019 and 2018 include a Litigation provision, net of $3.9 million, $(0.6) million and $294.0 million, respectively. Refer to “Note 15. Commitments and Contingencies” for additional information. (3) Results for the year ended December 31, 2019 include the ImThera impairment of the IPR&D asset of $50.3 million. Refer to “Note 9. Goodwill and Intangible Assets” for additional information. (4) Results for the year ended December 31, 2020 include a $42.2 million decommissioning provision at our Saluggia site. Refer to “Note 15. Commitments and Contingencies” for additional information. 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 9. Goodwill and Intangible Assets” for additional information. Assets by reportable segment as of December 31, 2020 and 2019, was as follows (in thousands): Assets 2020 2019 Cardiovascular $ 1,361,669 $ 1,546,520 Neuromodulation 673,586 749,069 Other 376,096 116,208 Total $ 2,411,351 $ 2,411,797 Capital expenditures by segment were as follows (in thousands): Year Ended December 31, Capital Expenditures 2020 2019 2018 Cardiovascular $ 24,892 $ 20,779 $ 27,621 Neuromodulation 7,318 3,415 1,728 Other 3,706 3,783 7,630 Discontinued operations — — 1,018 Total $ 35,916 $ 27,977 $ 37,997 Geographic Information Property, plant, and equipment, net by geographic region as of December 31, 2020 and 2019, was as follows (in thousands): PP&E 2020 2019 United States $ 64,553 $ 61,410 Europe 93,821 110,270 Rest of World 5,431 9,674 Total $ 163,805 $ 181,354 |
Supplemental Finanical Informat
Supplemental Finanical Information | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Supplemental Financial Information | Note 22. Supplemental Financial Information Inventories as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Raw materials $ 43,257 $ 45,225 Work-in-process 8,055 14,581 Finished goods 75,363 104,348 $ 126,675 $ 164,154 Inventories included adjustments totaling $6.6 million and $12.7 million at December 31, 2020 and 2019, respectively, to record balances at lower of cost or net realizable value. PP&E as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Lives in Years Land $ 15,750 $ 15,165 Building and building improvements 77,061 86,814 3 to 39 Equipment, software, furniture and fixtures 200,696 205,711 3 to 20 Other 9,390 9,431 3 to 10 Capital investment in process 19,531 18,220 Total 322,428 335,341 Accumulated depreciation (158,623) (153,987) Net $ 163,805 $ 181,354 Accrued liabilities as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Legal and other administrative costs $ 15,820 $ 11,066 Contingent consideration (1) 13,968 22,953 Operating lease liabilities (2) 11,276 11,110 Derivative contract liabilities (3) 7,372 3,173 Contract liabilities 6,929 6,728 Restructuring related liabilities (4) 6,258 4,315 Research and development costs 4,257 5,160 Provisions for agents, returns and other 3,063 3,922 Product remediation (5) 1,056 3,251 CRM purchase price adjustments payable to MicroPort Scientific Corporation — 14,891 Other amounts payable to MicroPort Scientific Corporation — 1,340 Other accrued expenses 25,409 32,191 $ 95,408 $ 120,100 (1) Refer to “Note 11. Fair Value Measurements.” (2) Refer to “Note 14. Leases.” (3) Refer to “Note 13. Derivatives and Risk Management.” (4) Refer to “Note 7. Restructuring.” (5) Refer to “Note 8. Product Remediation Liability.” |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 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 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 consolidated financial statement disclosures. |
Basis of Presentation, Use of_2
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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”). |
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 EquivalentsWe 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 approximates their fair value. |
Accounts Receivable | Accounts ReceivableOur 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 | InventoriesWe 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”)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. |
Goodwill | GoodwillWe 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. |
Impairments of Long-Lived Assets, Investments and Goodwill | Impairments of Long-Lived Assets and Goodwill Long-lived Assets Impairment Assets Held and Used 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. 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. When an impairment of a disposal group is deemed necessary and the amount of the impairment exceeds the carrying value of the long-lived assets, we record the impairment to the disposal group rather than long-lived assets. We also allocate goodwill of the associated reporting unit to the disposal group based upon the relative fair value of the businesses within the reporting unit. The goodwill allocated to the disposal group is then tested for impairment. Goodwill Impairment We conduct impairment testing of our goodwill on October 1st each year. 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. 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. If we determine that goodwill is more-likely-than-not impaired, we compare 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. Fair value is estimated using a discounted cash flow model and requires various assumptions, including revenue growth rates, forecasted selling, general and administrative expenses and discount rates. 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. If the carrying value of the reporting unit, which includes goodwill, exceeds its fair value an impairment loss is recognized. 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. |
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. Our financial assets and liabilities 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. Our financial assets and liabilities classified as Level 3 include contingent consideration liability arrangements, derivative and embedded derivative instruments and convertible notes receivable. |
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. |
Warranty Obligation | Warranty ObligationWe 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 AccrualsAccruals 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 21. 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 |
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. 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 14. 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 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. Market Performance-Based RSU’s We may grant market performance-based RSUs at no purchase cost to the grantee. The grantees of the units have no voting rights or rights to dividends. Sale or transfer of the units is restricted until they are vested. The number of shares that are ultimately transferred to the grantee is dependent upon the Company’s percentile rank of total shareholder return relative to a peer group. The fair market value of market performance-based RSUs is determined utilizing a Monte Carlo simulation on the grant date and compensation is expensed ratably over the service period. Calculation of compensation for market performance-based stock awards requires estimation of employee turnover, historical volatility and forfeiture rates. Operating Performance-Based Awards RSU’s We may grant operating performance-based RSUs at no purchase cost to the grantee. The grantees of the units have no voting rights or rights to dividends. Sale or transfer of the units is restricted until they are vested. The number of shares that are ultimately transferred to the grantee is dependent upon the Company’s achievement of certain thresholds for cumulative adjusted free cash flow. The fair market value of operating performance-based RSUs is determined using the market closing price on the grant date. Compensation is expensed ratably over the service period and adjusted based upon the percent achievement of cumulative adjusted free cash flow. Calculation of compensation for operating performance-based stock awards requires estimation of employee turnover, adjusted free cash flow 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 |
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 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. |
Contingencies | Contingencies We are subject to product liability claims, environmental obligations, 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. |
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 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 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 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 consolidated financial statement disclosures. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | 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 acquisition on our consolidated statement of income (loss) for the year ended December 31, 2018. 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 |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The major classes of assets and liabilities held for sale on the consolidated balance sheet as of December 31, 2020 were as follows (in thousands): December 31, 2020 Accounts receivable, net $ 20,059 Inventories 45,081 Prepaid and refundable taxes 2,751 Prepaid expenses and other current assets 2,436 Property, plant and equipment, net 25,042 Intangible assets, net 153,632 Operating lease assets 1,698 Impairment charge of disposal group (180,160) Total assets held for sale $ 70,539 Accounts payable $ 9,518 Accrued liabilities and other 4,205 Taxes payable 363 Accrued employee compensation and related benefits 8,781 Deferred tax liabilities 671 Long-term employee compensation and related benefits 4,994 Long-term operating lease liabilities 841 Other long-term liabilities 306 Total liabilities held for sale $ 29,679 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) for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Net sales $ — $ — $ 77,366 Costs and expenses: Cost of sales — (43) 28,028 Selling, general and administrative expenses — (161) 43,382 Research and development — (161) 16,592 Restructuring expenses — — 651 Revaluation gain on assets and liabilities held for sale — — (1,213) Loss on sale of CRM 1,578 — 214 Operating (loss) income from discontinued operations (1,578) 365 (10,288) Foreign exchange and other gains — — 102 (Loss) income from discontinued operations, before tax (1,578) 365 (10,186) Income tax benefit (85) — (460) Losses from equity method investments — — (1,211) Net (loss) income from discontinued operations $ (1,493) $ 365 $ (10,937) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The major classes of assets and liabilities held for sale on the consolidated balance sheet as of December 31, 2020 were as follows (in thousands): December 31, 2020 Accounts receivable, net $ 20,059 Inventories 45,081 Prepaid and refundable taxes 2,751 Prepaid expenses and other current assets 2,436 Property, plant and equipment, net 25,042 Intangible assets, net 153,632 Operating lease assets 1,698 Impairment charge of disposal group (180,160) Total assets held for sale $ 70,539 Accounts payable $ 9,518 Accrued liabilities and other 4,205 Taxes payable 363 Accrued employee compensation and related benefits 8,781 Deferred tax liabilities 671 Long-term employee compensation and related benefits 4,994 Long-term operating lease liabilities 841 Other long-term liabilities 306 Total liabilities held for sale $ 29,679 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) for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Net sales $ — $ — $ 77,366 Costs and expenses: Cost of sales — (43) 28,028 Selling, general and administrative expenses — (161) 43,382 Research and development — (161) 16,592 Restructuring expenses — — 651 Revaluation gain on assets and liabilities held for sale — — (1,213) Loss on sale of CRM 1,578 — 214 Operating (loss) income from discontinued operations (1,578) 365 (10,288) Foreign exchange and other gains — — 102 (Loss) income from discontinued operations, before tax (1,578) 365 (10,186) Income tax benefit (85) — (460) Losses from equity method investments — — (1,211) Net (loss) income from discontinued operations $ (1,493) $ 365 $ (10,937) |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table provides a reconciliation of the beginning and ending balance of the accruals and other reserves recorded in connection with our restructuring plans included within accrued liabilities and other and other long-term liabilities on the consolidated balance sheet (in thousands): Employee Severance and Other Termination Costs Other Total 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 4,097 1,400 5,497 Charges 7,571 — 7,571 Cash payments (5,919) (854) (6,773) Balance at December 31, 2020 (1) $ 5,749 $ 546 $ 6,295 (1) Cumulatively, we have recognized a total of $119.1 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, 2020 2019 2018 Cardiovascular (1) $ 1,570 $ 3,592 $ 11,497 Neuromodulation 3,223 1,082 1,595 Other (2) 2,778 7,580 2,823 Restructuring expense from continuing operations 7,571 12,254 15,915 Discontinued operations — — 651 Total $ 7,571 $ 12,254 $ 16,566 (1) Cardiovascular restructuring expense for the year ended December 31, 2018 included $6.5 million of 2018 Plan expenses. (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, 2020 | |
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, 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 Adjustments 3,199 Remediation activity (5,743) Effect of changes in foreign currency exchange rates 349 Balance at December 31, 2020 $ 1,056 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following table represents our finite-lived and indefinite-lived intangible assets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Finite-lived intangible assets: Customer relationships $ 202,546 $ 320,023 Developed technology 227,247 293,785 Trade names 26,261 25,004 Other intangible assets 1,035 975 Total gross finite-lived intangible assets 457,089 639,787 Accumulated amortization - Customer relationships 56,787 75,156 Accumulated amortization - Developed technology 56,933 57,362 Accumulated amortization - Trade names 16,837 14,811 Accumulated amortization - Other intangible assets 902 712 Total accumulated amortization 131,459 148,041 Net finite-lived intangible assets $ 325,630 $ 491,746 Indefinite-lived intangible assets: IPR&D $ 112,006 $ 115,800 Goodwill 922,318 915,794 Total indefinite-lived intangible assets $ 1,034,324 $ 1,031,594 |
Schedule of Weighted Average Amortization Period | The amortization periods for our finite-lived intangible assets as of December 31, 2020, are as follows: Minimum Life in years Maximum Life in years Customer relationships 10 18 Developed technology 14 17 Trade names 15 15 Other intangible assets 7 8 |
Schedule of Finite-lived Intangible Assets Amortization Expense | The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2020, is as follows (in thousands): 2021 $ 26,724 2022 26,724 2023 26,724 2024 26,724 2025 26,724 Thereafter 192,010 Total $ 325,630 |
Schedule of Goodwill | The following table represents the changes in the carrying amount of goodwill by reportable segment (in thousands): Cardiovascular Neuromodulation Other Total 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 (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 Impairment (2) (21,269) — — (21,269) Foreign currency adjustments 27,793 — — 27,793 December 31, 2020 $ 523,564 $ 398,754 $ — $ 922,318 (1) Goodwill recognized during the year ended December 31, 2019 was the result of the Miami Instruments acquisition. Refer to “Note 4. Business Combinations.” (2) During the year ended December 31, 2020, the Company recognized a $21.3 million impairment of goodwill allocated to Heart Valves. Refer to “Note 5. Assets and Liabilities Held For Sale” for additional information. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Schedule of Long-Term Investments | These below equity investments are included in investments on the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Respicardia Inc. (1) $ 17,706 $ 17,706 ALung Technologies, Inc. (2) 3,000 — Ceribell, Inc. (3) 3,000 3,000 ShiraTronics, Inc. (4) 2,045 2,045 MD Start II (5) 1,227 1,121 Rainbow Medical Ltd. (6) 1,201 1,099 Highlife S.A.S. (7) 1,163 1,064 Other 1,359 770 30,701 26,805 Equity method investments (8) 393 451 $ 31,094 $ 27,256 (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 $0.8 million and $0.6 million as of December 31, 2020 and December 31, 2019, respectively, which is included in prepaid expenses and other current assets on the consolidated balance sheet. (2) During the first quarter of 2020, we invested in ALung Technologies, Inc. (“ALung”). ALung is a privately held medical device company focused on creating advanced medical devices for treating respiratory failure. ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation which removes carbon dioxide directly from the blood in patients with acute respiratory failure. As of December 31, 2020, we have a convertible note receivable due from ALung of $2.5 million, which is included in prepaid expenses and other current assets on the consolidated balance sheet. (3) 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. (4) 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. (5) MD Start II is a private venture capital collaboration for the development of medical device technology in Europe. (6) 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. (7) 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 TMVR replacement system to treat patients with MR. 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 account for Highlife under the equity method. (8) 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 $6.1 million as of December 31, 2020) based on cash calls. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 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 ” ) $ 2,893 $ — $ 2,893 $ — Derivative assets - freestanding instruments (FX) 55 — 55 — Derivative assets - capped call derivatives 72,302 — — 72,302 Convertible notes receivable 2,775 — — 2,775 $ 78,025 $ — $ 2,948 $ 75,077 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 14 $ — $ 14 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 74 — 74 — Derivative liabilities - freestanding instruments (FX) 4,073 — 4,073 — Derivative liabilities - embedded exchange feature 121,756 — — 121,756 Derivative liabilities - other 4,290 — — 4,290 Contingent consideration arrangements 103,818 — — 103,818 $ 234,025 $ — $ 4,161 $ 229,864 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 (FX) $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — $ 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 arrangements 137,349 — — 137,349 $ 141,029 $ — $ 3,680 $ 137,349 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balances of our recurring fair value measurements, using significant unobservable inputs (Level 3) (in thousands): Capped Call Derivative Asset Convertible Notes Receivable Embedded Exchange Feature Derivative Liability Other Derivative Liabilities Contingent Consideration Liability Arrangements 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 FX — — — — (136) December 31, 2019 — — — — 137,349 Additions 43,096 2,691 74,951 — — Payments (2) — — — — (12,868) Changes in fair value (3) (5) (6) 29,206 84 46,805 4,290 (20,463) Effect of changes in FX — — — — (200) December 31, 2020 72,302 2,775 121,756 4,290 103,818 Less current portion at December 31, 2020 — 2,515 — 4,106 13,968 Long-term portion at December 31, 2020 $ 72,302 $ 260 $ 121,756 $ 184 $ 89,850 (1) See “Note 4. Business Combinations” for additional discussion. (2) 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. During the year ended December 31, 2020, we also paid $11.8 million under the contingent consideration arrangement for the acquisition of TandemLife. Additionally, we made final payments under contingent consideration arrangements resulting from the acquisitions of two distributors. (3) During the year ended December 31, 2020, the contingent consideration change in fair value resulted in a decrease of $13.0 million and $7.5 million recorded to cost of sales - exclusive of amortization and research and development, respectively. 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. (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 contingent consideration change in fair value during the year ended December 31, 2020 is primarily due to a one-year delay in the projected achievement of a certain regulatory milestone and timing of sales-based earnout payments for ImThera, and the impact of an increase in discount rates utilized in the valuation of contingent consideration. Refer to the tables below for further information regarding the fair value measurements of contingent consideration. The contingent consideration change in fair value during the year ended December 31, 2019 reflects a delay in the timing of anticipated regulatory approval and commercialization for ImThera. See “Note 9. Goodwill and Intangible Assets” for additional discussion. (6) Changes in the fair value of the embedded exchange feature derivative, capped call derivatives and other derivative liabilities are recognized in foreign exchange and other losses in the consolidated statements of income (loss). |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands): December 31, 2020 2019 ImThera $ 89,436 $ 113,503 TandemLife 8,809 17,311 Miami Instruments 5,573 5,338 Drilltex — 294 Other — 903 $ 103,818 $ 137,349 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs as of December 31, 2020: ImThera Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 6.3% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 11.7% - 12.1% Credit risk discount rate 6.6% - 7.3% Revenue volatility 32.5% Probability of payment 85% Projected years of earnout 2025 - 2028 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 as of December 31, 2020: TandemLife Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 5.4% Probability of payments 70% Projected payment years 2021 The Miami Instruments 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 as of December 31, 2020: Miami Instruments Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 5.3% - 5.7% Probability of payment 90% - 100% Projected payment year 2021 - 2022 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The outstanding principal amount of our long-term debt as of December 31, 2020 and 2019, was as follows (in thousands, except interest rates): 2020 2019 Maturity Interest Rate 2020 Senior Secured Term Loan $ 424,002 $ — June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 212,073 — December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 6,515 8,422 July 2021 4.81% Mediocredito Italiano 5,406 6,222 December 2023 0.50 % - 2.94% Bank of America, U.S. 2,019 2,004 January 2023 2.08% 2019 Debt Facility — 184,275 2017 European Investment Bank — 103,570 2014 European Investment Bank — 28,053 Other 660 965 Total long-term facilities 650,675 333,511 Less current portion of long-term debt 8,377 73,181 Total long-term debt $ 642,298 $ 260,330 |
Schedule of Maturities of Long-term Debt | Contractual annual principal maturities of our long-term debt facilities as of December 31, 2020, are as follows (in thousands): 2021 $ 8,377 2022 1,913 2023 3,941 2024 60 2025 737,560 Thereafter 360 Total payments 752,211 Less: Debt issuance costs 101,536 Total long-term facilities $ 650,675 |
Schedule of Debt Covenants | The financial covenants under the Term Loan state (i) the net revenue of LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be lower than $700 million for each trailing 12 month period, such threshold to decrease pro rata (not below $550 million) upon prepayments of the Term Loan made by LivaNova USA, Inc. out of the proceeds of certain asset sales, and (ii) the total secured leverage ratio (as defined in the debt agreement) for LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be greater than the applicable ratio set forth below: Test Period Total Secured Leverage Ratio (1) 4 Quarters ending June 30, 2020 through each fiscal quarter thereafter until (and including) the fiscal quarter ending June 30, 2021 5.625 : 1.00 4 Quarters ending September 30, 2021 and ending each fiscal quarter thereafter 4.5 : 1.00 (1) On February 24, 2021 the Company entered into Amendments to the Term Loan and the 2020 Revolving Credit Facility. Pursuant to the Amendments, the definition of “Consolidated EBITDA” for purposes of calculating the total secured leverage ratio was amended to add back an accrual in an amount not to exceed $43.0 million as a loss contingency liability as required under GAAP in connection with the clean-up of a hazardous waste storage site and contaminated areas located in Saluggia, Italy, solely in the case of the periods ending December 31, 2020, March 31, 2021, June 30, 2021 and September 30, 2021. The Company was in compliance with all financial covenants as of December 31, 2020, as amended. |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The gross notional amounts of open derivative contracts designated as cash flow hedges as of December 31, 2020 and 2019, were as follows (in thousands): Description of Derivative Contract 2020 2019 FX derivative contracts to be exchanged for British Pounds $ 9,545 $ 10,128 FX derivative contracts to be exchanged for Japanese Yen 18,637 25,342 FX derivative contracts to be exchanged for Euros 47,444 48,838 Interest rate swap contracts — 22,442 $ 75,626 $ 106,750 |
Schedule of Cash Flow Hedges Included in AOCI | After-tax net gain 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 in AOCI as of December 31, 2020 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 2,319 $ 2,319 Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in OCI and the amount reclassified to earnings from AOCI were as follows (in thousands): Year Ended December 31, 2020 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings: FX derivative contracts Foreign exchange and other losses $ 1,724 $ (1,522) FX derivative contracts SG&A — 980 Interest rate swap contracts Interest expense — (113) $ 1,724 $ (655) 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 $ 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 $ 44 $ 2,697 FX derivative contracts SG&A — (2,554) Interest rate swap contracts Interest expense — (66) $ 44 $ 77 |
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, 2020 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) FX derivative contracts Prepaid expenses and other current assets $ 1,998 Accrued liabilities $ 14 FX derivative contracts Accrued liabilities 895 Total derivatives designated as hedging instruments 2,893 14 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 74 FX derivative contracts Prepaid expenses and other current assets 55 Accrued liabilities 4,073 Capped call derivatives Long-term derivative assets 72,302 Embedded exchange feature Long-term derivative liability 121,756 Other derivatives Accrued liabilities 4,106 Other derivatives Long-term derivative liability 184 Total derivatives not designated as hedging instruments 72,357 130,193 Total derivatives $ 75,250 $ 130,207 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 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 11. Fair Value Measurements.” |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Assets and Liabilities | The components of operating lease assets, liabilities and costs are as follows (in thousands): December 31, Operating Lease Assets and Liabilities 2020 2019 Assets Operating lease right-of-use assets $ 50,525 $ 54,372 Liabilities Accrued liabilities and other $ 11,276 $ 11,110 Long-term operating lease liabilities 42,221 46,027 Total lease liabilities $ 53,497 $ 57,137 |
Lease, Cost | Year Ended December 31, Operating Lease Cost 2020 2019 Operating lease cost $ 14,156 $ 14,002 Variable lease cost 1,097 873 Short-term lease cost 415 788 Total lease cost $ 15,668 $ 15,663 Lease Term and Discount Rate December 31, 2020 Weighted Average Remaining Lease Term 6.3 years Weighted Average Discount Rate 2.4 % Other information (in thousands) Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,601 $ 13,522 Operating lease assets obtained in exchange for lease liabilities $ 8,547 $ 8,712 |
Operating Lease, Liability | Contractual maturities of our lease liabilities, including lease liabilities held for sale, as of December 31, 2020, are as follows (in thousands): 2021 $ 13,414 2022 12,051 2023 8,901 2024 6,920 2025 4,343 Thereafter 14,038 Total lease payments 59,667 Less: Amount representing interest 4,351 Present value of lease liabilities $ 55,316 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loss Contingencies by Contingency | Changes in the carrying amount of the litigation provision liability 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 Payments (138,178) Adjustments 3,906 FX and other 358 Total litigation provision liability at December 31, 2020 36,490 Less current portion of litigation provision liability at December 31, 2020 28,612 Long-term portion of litigation provision liability at December 31, 2020 $ 7,878 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total 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 before reclassifications, before tax 2,757 3,627 6,384 Tax expense (661) — (661) Other comprehensive income 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 income, net of tax 1,457 3,627 5,084 As of December 31, 2019 513 (19,905) (19,392) Other comprehensive income before reclassifications, before tax 1,724 45,395 47,119 Tax expense (415) — (415) Other comprehensive income before reclassifications, net of tax 1,309 45,395 46,704 Reclassification of loss from accumulated other comprehensive income (loss), before tax 655 — 655 Reclassification of tax benefit (158) — (158) Reclassification of loss from accumulated other comprehensive income (loss), after tax 497 — 497 Net current-period other comprehensive income, net of tax 1,806 45,395 47,201 As of December 31, 2020 $ 2,319 $ 25,490 $ 27,809 |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Cost of goods sold $ 1,898 $ 1,343 $ 1,060 Selling, general and administrative 29,661 25,588 19,393 Research and development 3,530 5,622 4,510 Stock-based compensation from continuing operations 35,089 32,553 24,963 Stock-based compensation from discontinued operations — — 1,960 Total stock-based compensation expense 35,089 32,553 26,923 Income tax benefit 992 6,590 6,443 Total expense, net of income tax benefit $ 34,097 $ 25,963 $ 20,480 |
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, 2020 2019 2018 Service-based restricted stock units $ 18,320 $ 14,113 $ 10,622 Service-based stock appreciation rights 12,715 10,349 8,282 Market performance-based restricted stock units 3,200 2,900 2,357 Operating performance-based restricted stock units (370) 3,918 3,702 Employee stock purchase plan 1,224 1,273 — Total stock-based compensation expense from continuing operations $ 35,089 $ 32,553 $ 24,963 |
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, 2020, are as follows (in thousands): Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 25,678 2.64 Service-based restricted stock unit awards 36,086 2.83 Performance-based restricted stock unit awards 7,051 1.19 Total stock-based compensation cost unrecognized $ 68,815 2.22 |
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, 2020 2019 2018 Dividend yield (1) — — — Risk-free interest rate (2) 0.4% 1.4 % - 2.2 % 2.5 % - 2.9 % Expected option term - in years (3) 5.4 5.0 - 5.1 5.0 - 5.1 Expected volatility at grant date (4) 39.5% 32.2 % - 35.7 % 29.2 % - 29.9 % (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, 2019 2,215,056 $ 74.41 Granted 1,132,742 $ 43.63 Exercised (58,768) $ 48.65 Forfeited (173,923) $ 73.05 Expired (231,087) $ 70.99 Outstanding — at December 31, 2020 2,884,020 $ 63.20 7.5 $ 34,829 Fully vested and exercisable — end of year 1,131,868 $ 66.28 5.6 $ 9,563 Fully vested and expected to vest — end of year (2) 2,815,269 $ 63.39 7.4 $ 33,633 (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, 2020, 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, 2020 2019 2018 Weighted average grant date fair value of SARs granted during the year (per share) $ 15.73 $ 31.22 $ 28.13 Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) $ 773 $ 2,064 $ 27,281 |
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, 2019 523,833 $ 84.98 Granted 609,076 $ 44.28 Vested (221,314) $ 75.51 Forfeited (63,136) $ 75.46 Non-vested shares at December 31, 2020 848,459 $ 58.00 Year Ended December 31, 2020 2019 2018 Weighted average grant date fair value of service-based RSUs issued during the year (per share) $ 44.28 $ 92.54 $ 95.63 Aggregate fair value of RSUs that vested during the year (in thousands) $ 13,674 $ 12,710 $ 11,505 |
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, 2019 285,669 $ 71.02 Granted 185,940 $ 41.70 Vested (63,305) $ 41.79 Forfeited (27,505) $ 64.35 Non-vested shares at December 31, 2020 380,799 $ 56.55 Year Ended December 31, 2020 2019 2018 Weighted average grant date fair value of performance and market-based restricted share units granted during the year (per share) $ 41.70 $ 98.50 $ 95.62 Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) $ 4,106 $ 6,697 $ 9,409 |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Accumulated benefit obligations at year end $ 13,085 $ 11,232 $ 10,591 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 11,232 $ 10,591 $ 11,001 Interest cost 290 382 336 Plan settlement (384) (366) (340) Actuarial loss 2,225 871 8 Benefits paid (278) (246) (414) Projected benefit obligation at end of year $ 13,085 $ 11,232 $ 10,591 Change in plan assets: Fair value of plan assets at beginning of year $ 7,574 $ 6,767 $ 6,879 Actual return on plan assets 646 628 (405) Employer contributions 1,130 546 1,047 Plan settlement (384) (366) (340) Benefits paid (278) (1) (414) Fair value of plan assets at end of year $ 8,688 $ 7,574 $ 6,767 Funded status at end of year: Fair value of plan assets $ 8,688 $ 7,574 $ 6,767 Projected benefit obligations 13,085 11,232 10,591 Underfunded status of the plans 4,397 3,658 3,824 Recognized liability $ 4,397 $ 3,658 $ 3,824 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 4,397 $ 3,658 $ 3,824 Recognized liability $ 4,397 $ 3,658 $ 3,824 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, 2020 2019 2018 Accumulated benefit obligations at year end $ 12,091 $ 17,744 $ 18,676 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 18,087 $ 18,975 $ 21,548 Service cost 691 478 478 Interest cost 121 232 289 Actuarial loss (gain) (208) 1,071 (818) Benefits paid (1,245) (2,380) (1,631) Reclassified to liabilities held for sale (1) (6,012) — — Foreign currency exchange rate changes and other 1,605 (289) (891) Projected benefit obligation at end of year $ 13,039 $ 18,087 $ 18,975 Change in plan assets: Fair value of plan assets at beginning of year $ 3,423 $ 3,341 $ 3,075 Actual return on plan assets 52 (34) 51 Employer contributions 454 383 361 Benefits paid (290) (332) (156) Reclassified to liabilities held for sale (1) (1,018) — — Foreign currency exchange rate changes 195 65 10 Fair value of plan assets at end of year $ 2,816 $ 3,423 $ 3,341 Funded status at end of year: Fair value of plan assets $ 2,816 $ 3,423 $ 3,341 Projected benefit obligations 13,039 18,087 18,975 Underfunded status of the plans (2) 10,223 14,664 15,634 Recognized liability $ 10,223 $ 14,664 $ 15,634 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 10,223 $ 14,664 $ 15,634 Recognized liability $ 10,223 $ 14,664 $ 15,634 (1) Refer to “Note 5. Assets and Liabilities Held For Sale.” (2) 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, 2020 2019 2018 Interest cost $ 290 $ 382 $ 336 Expected return on plan assets (318) (298) (318) Settlement and curtailment loss 180 — 135 Amortization of net actuarial loss 182 148 571 Net periodic benefit cost $ 334 $ 232 $ 724 Non-U.S. Pension Benefits Year Ended December 31, 2020 2019 2018 Service cost $ 691 $ 478 $ 478 Interest cost 121 232 289 Expected return on plan assets (52) 34 (51) Amortization of net actuarial loss (gain) (208) 1,071 (818) Net periodic benefit cost $ 552 $ 1,815 $ (102) |
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, 2020, 2019 and 2018, are presented in the following table: U.S. Pension Benefits 2020 2019 2018 Weighted-average assumptions used to determine benefit obligation: Discount rate 1.91% 2.88% 3.97% Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 2.88% 3.97% 3.28% 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, 2020, 2019 and 2018, are presented in the following table: Non-U.S. Pension Benefits 2020 2019 2018 Weighted-average assumptions used to determine benefit obligation: Discount rate 0.23% - 0.35% 0.20% - 0.71% 0.20% - 1.55% 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 0.23% - 0.35% 0.20% - 0.71% 0.27% - 1.55% 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, 2020: Equity securities 29% Debt securities 70% 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, 2020 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 2,405 $ — $ 2,405 $ — Fixed income mutual funds 5,788 — 5,788 — Money market funds and cash 94 94 — — $ 8,287 $ 94 $ 8,193 $ — 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 $ — |
Schedule of Expected Benefit Payments | Benefit payments, including amounts to be paid from our assets, and reflecting expected future service as of December 31, 2020, are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2021 4,003 600 2022 1,175 881 2023 680 1,129 2024 774 837 2025 940 898 2026 - 2030 3,159 6,205 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The U.S. and non-U.S. components of (loss) income from continuing operations before income taxes and our income tax expense (benefit) from continuing operations (in thousands): Year Ended December 31, 2020 2019 2018 (Loss) income from continuing operations before income taxes: UK and Non-U.S. $ (258,466) $ 28,788 $ 59,528 U.S. (85,521) (214,482) (306,975) $ (343,987) $ (185,694) $ (247,447) Total income tax expense (benefit) from continuing operations consisted of the following: Current: UK and Non-U.S. $ 2,899 $ 1,112 $ 9,645 U.S. (41,010) (4,988) 1,291 (38,111) (3,876) 10,936 Deferred: UK and Non-U.S. 37,375 (7,407) 533 U.S. — (18,870) (81,098) 37,375 (26,277) (80,565) Total income tax (benefit) expense from continuing operations $ (736) $ (30,153) $ (69,629) |
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, 2020 2019 2018 Statutory tax rate at UK Rate 19.0 % 19.0 % 19.0 % Deferred tax valuation allowance (35.4) (17.6) (0.8) Foreign tax rate differential 6.9 6.7 3.0 U.S. state and local tax expense, net of federal benefit 1.5 6.1 4.3 Effect of changes in tax rate 2.2 (3.1) 0.6 Write-off/impairment of investments 1.8 (2.8) (1.3) Reserve for uncertain tax positions 0.8 2.5 (0.7) Research and development tax credits 0.9 2.2 1.1 UK CFC tax — 2.1 (1.0) U.S. tax on non-U.S. operations — (1.6) (0.5) Base erosion anti-abuse tax (0.7) 1.5 (1.2) Exempt income — 1.2 6.1 Foreign tax withholding and credits (0.2) — (0.4) CARES Act rate differential 2.8 — — Other, net 0.6 — (0.1) Effective tax rate 0.2 % 16.2 % 28.1 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities as of December 31, 2020 and 2019, are as follows (in thousands): 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 133,504 $ 125,883 Tax credit carryforwards 37,629 28,272 Accruals and reserves 68,744 69,562 Deferred compensation 11,868 9,692 Inventory 8,317 9,436 Other 17,522 12,135 Gross deferred tax assets 277,584 254,980 Valuation allowance (188,114) (76,317) Net deferred tax assets 89,470 178,663 Deferred tax liabilities: Property, equipment & intangible assets (54,326) (89,115) Gain on sale of intellectual property (41,069) (53,091) Investments — — Other — — Gross deferred tax liabilities: (95,395) (142,206) Net deferred tax (liabilities) assets $ (5,925) $ 36,457 Reported on the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax assets $ 2,990 $ 68,676 Net deferred tax liabilities (8,915) (32,219) Net deferred tax (liabilities) assets $ (5,925) $ 36,457 |
Summary of Operating Loss Carryforwards | Net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2020, 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 $ 329,587 $ 69,574 $ 69,477 $ 97 2026 - 2036 U.S. Federal NOL 191,447 40,204 5,096 35,108 2021 - 2036 U.S. State NOL 325,979 17,827 2,944 14,883 2021 - 2040 South America NOL 15,909 5,402 5,327 75 2030 Far East NOL 2,021 497 — 497 2025 - 2030 U.S. foreign tax credits — 15,802 — 15,802 2025 - 2029 U.S. research & development tax credits — 14,404 — 14,404 2021 - 2040 U.S. State research & development tax credits — 5,553 — 5,553 2030 - 2040 Other non-U.S. tax credits — 1,870 — 1,870 2021 - 2032 $ 864,943 $ 171,133 $ 82,844 $ 88,289 |
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, 2020 2019 2018 Balance at beginning of year $ 15,995 $ 22,883 $ 26,137 Increases: Tax positions related to current year — 176 671 Tax positions related to prior year — — 3,309 Decreases: Tax positions related to prior years for settlement with tax authorities (13,989) (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 1,427 (328) (892) Balance at end of year $ 3,433 $ 15,995 $ 22,883 |
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 2017 Italy 2015 Germany 2014 England and Wales 2017 Canada 2016 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Basic and diluted weighted average shares outstanding (1) 48,592 48,349 48,497 (1) Excluded from the computation of diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 were stock options, SARs and RSUs t otaling 4.1 million, 2.9 million and 2.7 million because to include them would have been anti-dilutive under the treasury stock method. |
Geographic and Segment Inform_2
Geographic and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Cardiopulmonary United States $ 132,543 $ 161,471 $ 161,134 Europe 122,062 135,632 141,720 Rest of World 192,127 207,613 233,554 446,732 504,716 536,408 Heart Valves United States 12,488 18,900 24,709 Europe 31,259 40,548 44,258 Rest of World 44,283 60,559 56,989 88,030 120,007 125,956 Advanced Circulatory Support United States 41,094 30,781 18,588 Europe 1,027 741 580 Rest of World 200 401 293 42,321 31,923 19,461 Cardiovascular United States 186,125 211,152 204,431 Europe 154,348 176,921 186,558 Rest of World 236,610 268,573 290,836 577,083 656,646 681,825 Neuromodulation United States 282,509 335,332 348,980 Europe 39,019 46,262 42,443 Rest of World 32,916 42,953 31,567 354,444 424,547 422,990 Other 2,714 2,977 2,146 Totals United States 468,634 546,484 553,411 Europe (1) 193,367 223,183 229,001 Rest of World 272,240 314,503 324,549 Total (2) (3) $ 934,241 $ 1,084,170 $ 1,106,961 (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 $29.7 million, $37.7 million and $34.8 million in the United Kingdom, our country of domicile, for the years ended December 31, 2020, 2019 and 2018, 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 from continuing operations to consolidated loss from continuing operations before tax (in thousands): Year Ended December 31, 2020 2019 2018 Cardiovascular (1) (2) $ (194,278) $ 28,460 $ (258,493) Neuromodulation (3) 109,296 83,483 184,674 Other (4) (131,666) (204,727) (96,724) Total reportable segment loss from continuing operations (216,648) (92,784) (170,543) Merger and integration expenses 7,333 23,457 24,420 Restructuring expenses 7,571 12,254 15,915 Amortization of intangibles 38,312 40,375 37,194 Operating loss from continuing operations (269,864) (168,870) (248,072) Interest income 131 803 847 Interest expense (40,837) (15,091) (9,825) Gain on acquisition — — 11,484 Foreign exchange and other losses (33,417) (2,536) (1,881) Loss from continuing operations before tax $ (343,987) $ (185,694) $ (247,447) (1) Results for the year ended December 31, 2020 include $180.2 million and $21.3 million in impairments of the Heart Valves disposal group and allocated goodwill, respectively. Refer to “Note 5. Assets and Liabilities Held For Sale” for additional information. (2) Results for the years ended December 31, 2020, 2019 and 2018 include a Litigation provision, net of $3.9 million, $(0.6) million and $294.0 million, respectively. Refer to “Note 15. Commitments and Contingencies” for additional information. (3) Results for the year ended December 31, 2019 include the ImThera impairment of the IPR&D asset of $50.3 million. Refer to “Note 9. Goodwill and Intangible Assets” for additional information. (4) Results for the year ended December 31, 2020 include a $42.2 million decommissioning provision at our Saluggia site. Refer to “Note 15. Commitments and Contingencies” for additional information. 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 9. Goodwill and Intangible Assets” for additional information. Assets by reportable segment as of December 31, 2020 and 2019, was as follows (in thousands): Assets 2020 2019 Cardiovascular $ 1,361,669 $ 1,546,520 Neuromodulation 673,586 749,069 Other 376,096 116,208 Total $ 2,411,351 $ 2,411,797 Capital expenditures by segment were as follows (in thousands): Year Ended December 31, Capital Expenditures 2020 2019 2018 Cardiovascular $ 24,892 $ 20,779 $ 27,621 Neuromodulation 7,318 3,415 1,728 Other 3,706 3,783 7,630 Discontinued operations — — 1,018 Total $ 35,916 $ 27,977 $ 37,997 |
Long-lived Assets by Geographic Areas | Property, plant, and equipment, net by geographic region as of December 31, 2020 and 2019, was as follows (in thousands): PP&E 2020 2019 United States $ 64,553 $ 61,410 Europe 93,821 110,270 Rest of World 5,431 9,674 Total $ 163,805 $ 181,354 |
Supplemental Financial Informat
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Inventories | Inventories as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Raw materials $ 43,257 $ 45,225 Work-in-process 8,055 14,581 Finished goods 75,363 104,348 $ 126,675 $ 164,154 |
Schedule of Property, Plant and Equipment | PP&E as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Lives in Years Land $ 15,750 $ 15,165 Building and building improvements 77,061 86,814 3 to 39 Equipment, software, furniture and fixtures 200,696 205,711 3 to 20 Other 9,390 9,431 3 to 10 Capital investment in process 19,531 18,220 Total 322,428 335,341 Accumulated depreciation (158,623) (153,987) Net $ 163,805 $ 181,354 |
Schedule of Accrued Liabilities | Accrued liabilities as of December 31, 2020 and 2019, consisted of the following (in thousands): 2020 2019 Legal and other administrative costs $ 15,820 $ 11,066 Contingent consideration (1) 13,968 22,953 Operating lease liabilities (2) 11,276 11,110 Derivative contract liabilities (3) 7,372 3,173 Contract liabilities 6,929 6,728 Restructuring related liabilities (4) 6,258 4,315 Research and development costs 4,257 5,160 Provisions for agents, returns and other 3,063 3,922 Product remediation (5) 1,056 3,251 CRM purchase price adjustments payable to MicroPort Scientific Corporation — 14,891 Other amounts payable to MicroPort Scientific Corporation — 1,340 Other accrued expenses 25,409 32,191 $ 95,408 $ 120,100 (1) Refer to “Note 11. Fair Value Measurements.” (2) Refer to “Note 14. Leases.” (3) Refer to “Note 13. Derivatives and Risk Management.” (4) Refer to “Note 7. Restructuring.” (5) Refer to “Note 8. Product Remediation Liability.” |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 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 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 consolidated financial statement disclosures. |
Nature of Operations Textual (D
Nature of Operations Textual (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Accounting Policies [Abstract] | |
Number of principal business franchises | 2 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)product_line | Dec. 31, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ | $ 8.6 | $ 8.6 |
Cardiovascular | ||
Disaggregation of Revenue [Line Items] | ||
Number of product lines | product_line | 3 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Jun. 12, 2019 | Apr. 04, 2018 | Jan. 16, 2018 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||
Intangible assets acquired | $ 107,500 | ||||||
Goodwill | $ 922,318 | $ 915,794 | $ 956,815 | ||||
Miami Instruments, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | $ 17,000 | ||||||
Cash | 10,800 | ||||||
Contingent consideration | 6,000 | ||||||
Goodwill | 1,500 | ||||||
Miami Instruments, LLC | Developed Technology Rights and In Process Research and Development | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets acquired | $ 14,700 | ||||||
ImThera Medical, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of voting interests acquired (percent) | 86.00% | ||||||
Fair value of consideration transferred | $ 216,656 | ||||||
Cash | 78,332 | ||||||
ImThera Medical, Inc. | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | $ 225,000 | ||||||
TandemLife | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | $ 243,861 | ||||||
Cash | 203,671 | ||||||
Cash | 204,000 | ||||||
Contingent consideration | 50,000 | ||||||
TandemLife | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | $ 254,000 |
Business Combinations - Purchas
Business Combinations - Purchase Price Composition (Details) - USD ($) $ in Thousands | Apr. 04, 2018 | Jan. 16, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 13,968 | $ 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 |
Assets and Liabilities Held F_2
Assets and Liabilities Held For Sale - Narrative (Details) € in Thousands, $ in Thousands | Dec. 30, 2022USD ($) | Dec. 30, 2022EUR (€) | Dec. 02, 2020USD ($) | Dec. 02, 2020EUR (€) | Nov. 30, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Dec. 02, 2020EUR (€) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Impairment of disposal group | $ 180,160 | $ 0 | $ 0 | ||||||||
Impairment of goodwill | $ 42,400 | $ 21,269 | $ 42,417 | $ 0 | $ 63,700 | ||||||
Heart Valves | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Consideration | $ 73,600 | € 60,000 | |||||||||
Proceeds from sales of business, affiliate and productive assets | $ 61,300 | € 50,000 | |||||||||
Heart Valves | Forecast | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Proceeds from sales of business, affiliate and productive assets | $ 12,300 | € 10,000 | |||||||||
Heart Valves | Indemnification Agreement | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Reimbursement period | 7 years | ||||||||||
Heart Valves | Indemnification Agreement | Environmental Remediation | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Guarantor obligations, maximum exposure, undiscounted | $ 46,000 | 46,000 | € 37,500 | ||||||||
Heart Valves | Indemnification Agreement | Product Warranty | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Guarantor obligations, maximum exposure, undiscounted | $ 9,800 | $ 9,800 | € 8,000 |
Assets and Liabilities Held F_3
Assets and Liabilities Held For Sale- Assets & Liabilities Held-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets [Abstract] | ||
Total assets held for sale | $ 70,539 | $ 0 |
Liabilities [Abstract] | ||
Deferred tax liabilities | 671 | |
Other long-term liabilities | 306 | |
Disposal Group, Including Discontinued Operation, Liabilities, Current, Total | 29,679 | $ 0 |
Discontinued Operations, Disposed of by Sale | ||
Assets [Abstract] | ||
Accounts receivable, net | 20,059 | |
Inventories | 45,081 | |
Prepaid and refundable taxes | 2,751 | |
Prepaid expenses and other current assets | 2,436 | |
Property, plant and equipment, net | 25,042 | |
Intangible assets, net | 153,632 | |
Operating lease assets | 1,698 | |
Impairment charge of disposal group | (180,160) | |
Liabilities [Abstract] | ||
Accounts payable | 9,518 | |
Accrued liabilities and other | 4,205 | |
Taxes payable | 363 | |
Accrued employee compensation and related benefits | 8,781 | |
Long-term employee compensation and related benefits | 4,994 | |
Long-term operating lease liabilities | $ 841 |
Discontinued Operations (Textua
Discontinued Operations (Textual) (Details) - CRM Business Franchise - USD ($) $ in Millions | Apr. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Business combination, transition services, revenue | $ 0.9 | $ 2.8 | ||
Capital expenditure, discontinued operations | 1 | |||
Stock-based compensation, discontinued operations | $ 2 | |||
Discontinued Operations, Held-for-sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Fair value of consideration transferred | $ 195.9 | |||
Consideration transferred, cash transferred | $ 9.2 | |||
Working capital adjustment | $ 16.4 |
Discontinued Operations (Operat
Discontinued Operations (Operating Gains and Losses) (Details) - CRM Business Franchise - Discontinued Operations, Held-for-sale or Disposed of by Sale - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net sales | $ 0 | $ 0 | $ 77,366 |
Costs and expenses: | |||
Cost of sales | 0 | (43) | 28,028 |
Selling, general and administrative expenses | 0 | (161) | 43,382 |
Research and development | 0 | (161) | 16,592 |
Restructuring expenses | 0 | 0 | 651 |
Revaluation gain on assets and liabilities held for sale | 0 | 0 | (1,213) |
Loss on sale of CRM | 1,578 | 0 | 214 |
Operating (loss) income from discontinued operations | (1,578) | 365 | (10,288) |
Foreign exchange and other gains | 0 | 0 | 102 |
(Loss) income from discontinued operations, before tax | (1,578) | 365 | (10,186) |
Income tax benefit | (85) | 0 | (460) |
Losses from equity method investments | 0 | 0 | (1,211) |
Net (loss) income from discontinued operations | $ (1,493) | $ 365 | $ (10,937) |
Restructuring (Narrative) (Deta
Restructuring (Narrative) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($)employee | Apr. 30, 2018USD ($) | Dec. 31, 2020USD ($)employee | Dec. 31, 2019USD ($)employee | Dec. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | $ 7,571 | $ 12,254 | $ 15,915 | ||
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | 5,497 | 13,264 | 6,514 | ||
Charges | 7,571 | 12,254 | 15,915 | ||
Cash payments | (6,773) | (20,021) | (9,816) | ||
Ending liability balance | $ 13,264 | 6,295 | 5,497 | 13,264 | |
Restructuring charges incurred to date | 119,100 | ||||
Continuing And Discontinued Operations | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | 7,571 | 12,254 | 16,566 | ||
Restructuring Reserve [Roll Forward] | |||||
Charges | 7,571 | 12,254 | 16,566 | ||
Employee Severance and Other Termination Costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | 7,571 | 11,472 | 15,641 | ||
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | 4,097 | 10,195 | 3,889 | ||
Charges | 7,571 | 11,472 | 15,641 | ||
Cash payments | (5,919) | (17,570) | (9,335) | ||
Ending liability balance | 10,195 | 5,749 | 4,097 | 10,195 | |
Other | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | 0 | 782 | 925 | ||
Restructuring Reserve [Roll Forward] | |||||
Beginning liability balance | 1,400 | 3,069 | 2,625 | ||
Charges | 0 | 782 | 925 | ||
Cash payments | (854) | (2,451) | (481) | ||
Ending liability balance | $ 3,069 | 546 | 1,400 | 3,069 | |
2019 Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | 1,900 | $ 4,400 | |||
Restructuring and related cost, severance costs, number of employees | employee | 35 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 1,900 | $ 4,400 | |||
Caisson TMVR Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | $ 300 | 3,500 | |||
Restructuring and related cost, severance costs, number of employees | employee | 50 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 300 | $ 3,500 | |||
2020 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | $ 5,300 | ||||
Restructuring and related cost, severance costs, number of employees | employee | 54 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 5,300 | ||||
Cardiovascular | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, expected number of positions eliminated | employee | 75 | ||||
Restructuring expenses | 6,500 | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 6,500 | ||||
Suzhou Industrial Park Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Proceeds from the sale of CRM business franchise, net of cash disposed | $ 13,300 |
Restructuring (Restructuring Ex
Restructuring (Restructuring Expense by Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 7,571 | $ 12,254 | $ 15,915 |
Caisson TMVR Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 300 | 3,500 | |
Cardiovascular | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 6,500 | ||
Operating Segments | Cardiovascular | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 1,570 | 3,592 | 11,497 |
Operating Segments | Neuromodulation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 3,223 | 1,082 | 1,595 |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 2,778 | 7,580 | 2,823 |
Continuing And Discontinued Operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 7,571 | 12,254 | 16,566 |
Discontinued operations | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 0 | $ 0 | $ 651 |
Product Remediation Liability_2
Product Remediation Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss Contingency Accrual [Roll Forward] | |||
Balance at beginning of period | $ 3,251 | $ 14,745 | $ 27,546 |
Adjustments | 3,199 | 3,663 | (200) |
Remediation activity | (5,743) | (14,909) | (12,212) |
Effect of changes in foreign currency exchange rates | 349 | (248) | (389) |
Balance at end of period | 3,251 | 14,745 | |
Product remediation | 7,860 | 15,777 | 10,680 |
Litigation provision liability, net | 294,100 | ||
Product Liability | |||
Loss Contingency Accrual [Roll Forward] | |||
Loss contingency accrual | $ 36,490 | $ 170,404 | $ 294,061 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Finite-Lived and Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 457,089 | $ 639,787 | |
Accumulated amortization | 131,459 | 148,041 | |
Net finite-lived intangible assets | 325,630 | 491,746 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | 922,318 | 915,794 | $ 956,815 |
Total indefinite-lived intangible assets | 1,034,324 | 1,031,594 | |
In-process research and development | |||
Indefinite-lived Intangible Assets [Line Items] | |||
IPR&D | 112,006 | 115,800 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 202,546 | 320,023 | |
Accumulated amortization | 56,787 | 75,156 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 227,247 | 293,785 | |
Accumulated amortization | 56,933 | 57,362 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 26,261 | 25,004 | |
Accumulated amortization | 16,837 | 14,811 | |
Other intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 1,035 | 975 | |
Accumulated amortization | $ 902 | $ 712 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Amortization Periods for Finite-lived Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 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 | 14 years |
Developed technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 17 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 | 7 years |
Other intangible assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 8 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 26,724 | |
2022 | 26,724 | |
2023 | 26,724 | |
2024 | 26,724 | |
2025 | 26,724 | |
Thereafter | 192,010 | |
Net finite-lived intangible assets | $ 325,630 | $ 491,746 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 63 Months Ended | |||||
Nov. 30, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 02, 2020 | Oct. 01, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | |||||||||
Impairment of long-lived assets | $ 89,000 | $ 6,762 | $ 142,517 | $ 567 | |||||
Impairment of goodwill | $ 42,400 | 21,269 | 42,417 | 0 | $ 63,700 | ||||
Finite-lived intangible assets | $ 107,500 | ||||||||
Useful life | 15 years | ||||||||
Goodwill | 922,318 | 915,794 | $ 956,815 | 922,318 | |||||
In-process research and development | |||||||||
Indefinite-lived Intangible Assets [Line Items] | |||||||||
IPR&D | $ 112,006 | $ 115,800 | $ 112,006 | ||||||
Neuromodulation | |||||||||
Indefinite-lived Intangible Assets [Line Items] | |||||||||
Reporting unit, percentage of fair value in excess of carrying amount | 517.00% | ||||||||
Neuromodulation | In-process research and development | |||||||||
Indefinite-lived Intangible Assets [Line Items] | |||||||||
Impairment of long-lived assets | $ 50,300 | ||||||||
Cardiovascular | |||||||||
Indefinite-lived Intangible Assets [Line Items] | |||||||||
Reporting unit, percentage of fair value in excess of carrying amount | 14.00% | ||||||||
Goodwill | $ 21,300 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Goodwill Carrying Amounts (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | 63 Months Ended | ||
Nov. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | $ 915,794 | $ 956,815 | |||
Goodwill as a result of acquisitions | 1,550 | ||||
Measurement period adjustments | (3,326) | ||||
Impairment | $ (42,400) | (21,269) | (42,417) | $ 0 | $ (63,700) |
Foreign currency adjustments | 27,793 | 3,172 | |||
Goodwill, ending balance | 922,318 | 915,794 | 956,815 | 922,318 | |
Operating Segments | Cardiovascular | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 517,040 | 515,859 | |||
Goodwill as a result of acquisitions | 1,550 | ||||
Measurement period adjustments | (3,326) | ||||
Impairment | (21,269) | 0 | |||
Foreign currency adjustments | 27,793 | 2,957 | |||
Goodwill, ending balance | 523,564 | 517,040 | 515,859 | 523,564 | |
Operating Segments | Neuromodulation | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 398,754 | 398,539 | |||
Goodwill as a result of acquisitions | 0 | ||||
Measurement period adjustments | 0 | ||||
Impairment | 0 | 0 | |||
Foreign currency adjustments | 0 | 215 | |||
Goodwill, ending balance | 398,754 | 398,754 | 398,539 | 398,754 | |
Other | |||||
Goodwill [Roll Forward] | |||||
Goodwill, starting balance | 0 | 42,417 | |||
Goodwill as a result of acquisitions | 0 | ||||
Measurement period adjustments | 0 | ||||
Impairment | 0 | (42,417) | |||
Foreign currency adjustments | 0 | 0 | |||
Goodwill, ending balance | $ 0 | $ 0 | $ 42,417 | $ 0 |
Investments (Schedule of Long-t
Investments (Schedule of Long-term Investments) (Details) $ in Thousands, € in Millions | Sep. 07, 2018shares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Investments [Line Items] | ||||||
Carrying value | $ 26,805 | $ 30,701 | ||||
Equity method investments | 451 | 393 | ||||
Total investments | 27,256 | 31,094 | ||||
Investments Required Funding | 5,000 | |||||
Payments to acquire equity method investments | 500 | |||||
Equity method investments, required funding | 6,100 | € 5 | ||||
Respicardia Inc. | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 17,706 | 17,706 | ||||
Respicardia Inc. | Prepaid Expenses and Other Current Assets | Investee | ||||||
Schedule of Investments [Line Items] | ||||||
Outstanding loans | 600 | 800 | ||||
A Lung Technologies Inc | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 0 | 3,000 | ||||
A Lung Technologies Inc | Convertible Notes Receivable | ||||||
Schedule of Investments [Line Items] | ||||||
Notes receivable gross | 2,500 | |||||
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 | 2,045 | ||||
MD Start II | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,121 | 1,201 | ||||
Rainbow Medical Ltd | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,099 | 1,227 | ||||
Highlife S.A.S. | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | 1,064 | 1,163 | ||||
Equity method investment, ownership percentage | 7.80% | 24.60% | ||||
Other | ||||||
Schedule of Investments [Line Items] | ||||||
Carrying value | $ 770 | $ 1,359 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Assets and liabilities Measured on a Recurring Basis) (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Convertible notes receivable | $ 2,775 | |
Total assets | 78,025 | $ 561 |
Liabilities: | ||
Contingent consideration arrangements | 103,818 | 137,349 |
Total liabilities | 234,025 | 141,029 |
Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liability | 121,756 | |
Other Contract | ||
Liabilities: | ||
Derivative liability | 4,290 | |
Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 2,893 | 535 |
Liabilities: | ||
Derivative liability | 14 | 169 |
Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 374 | |
Not Designated as Hedging Instrument | ||
Assets: | ||
Derivative asset | 72,302 | |
Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 26 | |
Not Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 74 | |
Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 55 | |
Liabilities: | ||
Derivative liability | 4,073 | 3,137 |
Level 1 | ||
Assets: | ||
Convertible notes receivable | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration arrangements | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Other Contract | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 1 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Not Designated as Hedging Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Level 1 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Level 1 | Not Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Assets: | ||
Convertible notes receivable | 0 | |
Total assets | 2,948 | 561 |
Liabilities: | ||
Contingent consideration arrangements | 0 | 0 |
Total liabilities | 4,161 | 3,680 |
Level 2 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 2 | Other Contract | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 2 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 2,893 | 535 |
Liabilities: | ||
Derivative liability | 14 | 169 |
Level 2 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 374 | |
Level 2 | Not Designated as Hedging Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Level 2 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 26 | |
Level 2 | Not Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 74 | |
Level 2 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 55 | |
Liabilities: | ||
Derivative liability | 4,073 | 3,137 |
Level 3 | ||
Assets: | ||
Convertible notes receivable | 2,775 | |
Total assets | 75,077 | 0 |
Liabilities: | ||
Contingent consideration arrangements | 103,818 | 137,349 |
Total liabilities | 229,864 | 137,349 |
Level 3 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liability | 121,756 | |
Level 3 | Other Contract | ||
Liabilities: | ||
Derivative liability | 4,290 | |
Level 3 | Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 | Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 3 | Not Designated as Hedging Instrument | ||
Assets: | ||
Derivative asset | 72,302 | |
Level 3 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | |
Level 3 | Not Designated as Hedging Instrument | Interest Rate Swap Contracts | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 3 | Not Designated as Hedging Instrument | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | $ 0 | $ 0 |
Fair Value Measurements (Contin
Fair Value Measurements (Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liabilities Measured on Recurring Basis | ||||
Payments | $ 12,018 | $ 18,955 | $ 651 | |
Contingent consideration paid | 11,800 | |||
Contingent consideration | 89,850 | 114,396 | ||
Cost of goods sold | ||||
Liabilities Measured on Recurring Basis | ||||
Changes in fair value | (13,000) | 13,200 | ||
Research and development | ||||
Liabilities Measured on Recurring Basis | ||||
Changes in fair value | (7,500) | 16,200 | ||
TandemLife | ||||
Liabilities Measured on Recurring Basis | ||||
Payments | $ 19,000 | |||
Caisson Interventional LLC | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration | 27,900 | |||
Level 3 | Recurring | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration, beginning | 137,349 | |||
Contingent consideration, ending | 103,818 | 137,349 | ||
Level 3 | Recurring | TandemLife | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration | 8,809 | 17,311 | ||
Level 3 | Recurring | Embedded Exchange Feature Liability | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration, beginning | 0 | 0 | ||
Purchase price | 74,951 | 0 | ||
Payments | 0 | 0 | ||
Changes in fair value | (46,805) | 0 | ||
Effect of changes in foreign currency exchange rates | 0 | 0 | ||
Contingent consideration, ending | 121,756 | 0 | 0 | |
Less current portion at period end | 0 | |||
Long-term portion at period end | 121,756 | |||
Level 3 | Recurring | Derivative Financial Instruments, Liabilities | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration, beginning | 0 | 0 | ||
Purchase price | 0 | 0 | ||
Payments | 0 | 0 | ||
Changes in fair value | (4,290) | 0 | ||
Effect of changes in foreign currency exchange rates | 0 | 0 | ||
Contingent consideration, ending | 4,290 | 0 | 0 | |
Less current portion at period end | 4,106 | |||
Long-term portion at period end | 184 | |||
Level 3 | Recurring | Contingent Consideration Liability | ||||
Liabilities Measured on Recurring Basis | ||||
Contingent consideration, beginning | 137,349 | 179,911 | ||
Purchase price | 0 | 7,184 | ||
Payments | (12,868) | (20,204) | ||
Changes in fair value | 20,463 | 29,406 | ||
Effect of changes in foreign currency exchange rates | (200) | (136) | ||
Contingent consideration, ending | 103,818 | 137,349 | 179,911 | |
Less current portion at period end | 13,968 | |||
Long-term portion at period end | 89,850 | |||
Level 3 | Recurring | Derivative Financial Instruments, Assets | ||||
Assets Measured on Recurring Basis | ||||
As of beginning period | 0 | 0 | ||
Additions | 43,096 | 0 | ||
Payments | 0 | 0 | ||
Changes in fair value | 29,206 | 0 | ||
Effect of changes in foreign currency exchange rates | 0 | 0 | ||
Total at period end | 72,302 | 0 | 0 | |
Less current portion at period end | 0 | |||
Long-term portion at period end | 72,302 | |||
Level 3 | Recurring | Notes Receivable | ||||
Assets Measured on Recurring Basis | ||||
As of beginning period | 0 | 0 | ||
Additions | 2,691 | 0 | ||
Payments | 0 | 0 | ||
Changes in fair value | 84 | 0 | ||
Effect of changes in foreign currency exchange rates | 0 | 0 | ||
Total at period end | 2,775 | $ 0 | $ 0 | |
Less current portion at period end | 2,515 | |||
Long-term portion at period end | $ 260 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) | Dec. 31, 2020USD ($) | Jun. 17, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Long-term debt, gross | $ 752,211,000 | ||
Total long-term facilities | 650,675,000 | $ 333,511,000 | |
Embedded Derivative Financial Instruments | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
10 percent decrease in stock price volatility, fair value | 103,100,000 | ||
10 percent decrease in stock price volatility, fair value | $ 141,100,000 | ||
Embedded Derivative Financial Instruments | Measurement Input, Stock Price Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 0.34 | ||
Capped Call | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
10 percent decrease in stock price volatility, fair value | $ 70,000,000 | ||
10 percent decrease in stock price volatility, fair value | $ 69,300,000 | ||
Capped Call | Measurement Input, Stock Price Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 0.34 | ||
Senior Notes | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Debt instrument, face amount | $ 287,500,000 | ||
Total long-term facilities | $ 212,073,000 | $ 0 | |
2020 Cash Exchangeable Senior Notes | Senior Notes | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Debt instrument, face amount | $ 287,500,000 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Value of Contingent Consideration by Acquisition) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 89,850 | $ 114,396 |
Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Fair value, measurement with unobservable inputs reconciliation, recurring basis, liability value | 103,818 | 137,349 |
ImThera Medical, Inc. | Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 89,436 | 113,503 |
TandemLife | Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 8,809 | 17,311 |
Miami Instruments, LLC | Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 5,573 | 5,338 |
Drilltex | Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 0 | 294 |
Other | Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 0 | $ 903 |
Fair Value Measurements -Level
Fair Value Measurements -Level 3 Valuations (Details) - Level 3 | Dec. 31, 2020 |
ImThera Medical, Inc. | Discount rate | Discounted cash flow | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.063 |
ImThera Medical, Inc. | Probability of payment | Discounted cash flow | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera Medical, Inc. | Probability of payment | Monte Carlo simulation | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera Medical, Inc. | Risk-adjusted discount rate | Monte Carlo simulation | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.117 |
ImThera Medical, Inc. | Risk-adjusted discount rate | Monte Carlo simulation | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.121 |
ImThera Medical, Inc. | Credit risk discount rate | Monte Carlo simulation | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.066 |
ImThera Medical, Inc. | Credit risk discount rate | Monte Carlo simulation | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.073 |
ImThera Medical, Inc. | Revenue volatility | Monte Carlo simulation | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.325 |
TandemLife | Discount rate | Discounted cash flow | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.054 |
TandemLife | Probability of payment | Discounted cash flow | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.70 |
Miami Instruments, LLC | Discount rate | Discounted cash flow | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.053 |
Miami Instruments, LLC | Discount rate | Discounted cash flow | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.057 |
Miami Instruments, LLC | Probability of payment | Discounted cash flow | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.90 |
Miami Instruments, LLC | Probability of payment | Discounted cash flow | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 1 |
Financing Arrangements - Long-T
Financing Arrangements - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 17, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 650,675 | $ 333,511 | |
Less current portion of long-term debt | 8,377 | 73,181 | |
Long-term debt obligations | 642,298 | 260,330 | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 424,002 | 0 | |
Secured Debt | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 6.50% | ||
LIBOR floor rate | 1.00% | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 212,073 | 0 | |
Interest rate, stated percentage | 3.00% | 3.00% | |
Other Debt Obligations | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 660 | 965 | |
Bank of America Merrill Lynch Banco Múltiplo S.A. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.81% | ||
Bank of America Merrill Lynch Banco Múltiplo S.A. | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 6,515 | 8,422 | |
Mediocredito Italiano | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 0.50% | ||
Mediocredito Italiano | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.94% | ||
Mediocredito Italiano | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 5,406 | 6,222 | |
Bank of America, U.S. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.08% | ||
Bank of America, U.S. | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 2,019 | 2,004 | |
2019 Debt Facility | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 0 | 184,275 | |
European Investment Bank, 2017 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 0 | 103,570 | |
European Investment Bank, 2014 | Loans Payable | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 0 | $ 28,053 |
Financing Arrangements - Maturi
Financing Arrangements - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 8,377 | |
2022 | 1,913 | |
2023 | 3,941 | |
2024 | 60 | |
2025 | 737,560 | |
Thereafter | 360 | |
Total long-term facilities | 752,211 | |
Less: Debt issuance costs | 101,536 | |
Total long-term facilities | $ 650,675 | $ 333,511 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) | Dec. 30, 2020USD ($) | Jun. 17, 2020USD ($)$ / shares | Jun. 10, 2020USD ($) | Dec. 31, 2020USD ($)claim$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020£ / shares |
Line of Credit Facility [Line Items] | |||||||
Proceeds from long-term debt obligations | $ 886,899,000 | $ 197,160,000 | $ 103,570,000 | ||||
Amortization of debt issuance costs | 9,710,000 | 2,204,000 | $ 222,000 | ||||
Repayments of debt | 528,000,000 | ||||||
Loss on debt extinguishment | $ 1,400,000 | ||||||
Capped Call | |||||||
Line of Credit Facility [Line Items] | |||||||
Derivative, cap price per share (in dollars per share) | $ / shares | $ 100 | ||||||
Derivative, cost of hedge | $ 43,100,000 | ||||||
Derivative asset | $ 72,300,000 | ||||||
Secured Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Effective interest rate (percent) | 9.00% | ||||||
Debt instrument, face amount | $ 450,000,000 | ||||||
Long-term debt, term | 5 years | ||||||
Proceeds from long-term debt obligations | $ 421,500,000 | ||||||
Minimum net revenue | $ 700,000,000 | ||||||
Minimum pro rata net revenue | 550,000,000 | ||||||
Debt discounts and issuance costs | $ 28,500,000 | ||||||
Amortization of debt issuance costs | 2,500,000 | ||||||
Unamortized discount (premium), net | $ 26,000,000 | ||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | |||||||
Line of Credit Facility [Line Items] | |||||||
LIBOR floor rate | 1.00% | ||||||
Debt instrument, basis spread on variable rate | 6.50% | ||||||
Senior Notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Effective interest rate (percent) | 9.90% | ||||||
Debt instrument, face amount | $ 287,500,000 | ||||||
Proceeds from long-term debt obligations | 278,000,000 | ||||||
Debt discounts and issuance costs | $ 82,000,000 | ||||||
Amortization of debt issuance costs | $ 6,600,000 | ||||||
Unamortized discount (premium), net | $ 75,400,000 | ||||||
Interest rate, stated percentage | 3.00% | 3.00% | |||||
Unamortized discount | $ 75,000,000 | ||||||
Debt issuance costs, net | $ 7,000,000 | ||||||
Redemption, threshold par value | £ / shares | £ 1 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 79.27 | ||||||
Option to exchange, price per share (in dollars per share) | $ / shares | $ 60.98 | ||||||
Redemption price, percentage of exchange price | 130.00% | ||||||
Redemption, threshold trading days | claim | 20 | ||||||
Redemption, threshold consecutive trading days | claim | 30 | ||||||
Redemption price, percentage | 100.00% | ||||||
Fair value of embedded derivative liability | $ 121,800,000 | ||||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Short-term debt | $ 5,000,000 | $ 4,200,000 | |||||
Revolving Credit Facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Effective interest rate (percent) | 3.06% | ||||||
Revolving Credit Facility | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Effective interest rate (percent) | 7.65% | ||||||
Debt instrument, term | 364 days | ||||||
2020 Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | ||||||
2020 Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Line of Credit Facility [Line Items] | |||||||
LIBOR floor rate | 1.00% | ||||||
Debt instrument, basis spread on variable rate | 5.00% | ||||||
2020 Revolving Credit Facility | ABR | |||||||
Line of Credit Facility [Line Items] | |||||||
LIBOR floor rate | 2.00% | ||||||
Debt instrument, basis spread on variable rate | 4.00% |
Financing Arrangements - Levera
Financing Arrangements - Leverage Ratios (Details) $ in Millions | Feb. 24, 2021USD ($) | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Secured leverage ratio, period one | 0.05625 | |
Secured leverage ratio, period two | 0.045 | |
Subsequent Event | ||
Debt Instrument [Line Items] | ||
Maximum non-cash reserve | $ 43 |
Derivatives and Risk Manageme_3
Derivatives and Risk Management (Narrative) (Details) - Foreign Exchange Contract - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Foreign Exchange and Other | |||
Derivative [Line Items] | |||
Gain (loss) on derivative | $ (16.6) | $ 3.1 | $ (11.2) |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount | $ 352.6 | $ 338 |
Derivatives and Risk Manageme_4
Derivatives and Risk Management (Derivative Notional Amounts) (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
After-Tax Net Loss in AOCI as of period end | $ 2,319 | |
Amount Expected to be Reclassified to Earnings in Next 12 Months | 2,319 | |
Cash Flow Hedging | ||
Derivative [Line Items] | ||
Notional amount | 75,626 | $ 106,750 |
Cash Flow Hedging | Foreign Exchange Contract | British, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 9,545 | 10,128 |
Cash Flow Hedging | Foreign Exchange Contract | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 18,637 | 25,342 |
Cash Flow Hedging | Foreign Exchange Contract | Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Notional amount | 47,444 | 48,838 |
Cash Flow Hedging | Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 0 | $ 22,442 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | $ 1,724 | $ 2,757 | $ 44 |
(Losses) Gains Reclassified from AOCI to Earnings: | (655) | 840 | 77 |
Foreign Exchange Contract | Foreign exchange and other losses | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 1,724 | 2,757 | 44 |
(Losses) Gains Reclassified from AOCI to Earnings: | (1,522) | 3,003 | 2,697 |
Foreign Exchange Contract | Selling, general and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 0 | 0 | 0 |
(Losses) Gains Reclassified from AOCI to Earnings: | 980 | (2,071) | (2,554) |
Interest Rate Swap Contracts | Interest expense | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains Recognized in OCI | 0 | 0 | 0 |
(Losses) Gains Reclassified from AOCI to Earnings: | $ (113) | $ (92) | $ (66) |
Derivatives and Risk Manageme_6
Derivatives and Risk Management (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 75,250 | $ 561 |
Total liability derivatives | 130,207 | 3,680 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 2,893 | 535 |
Total liability derivatives | 14 | 543 |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 1,998 | 148 |
Designated as Hedging Instrument | Accrued Liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 895 | 387 |
Total liability derivatives | 14 | 169 |
Designated as Hedging Instrument | Accrued Liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 313 | |
Designated as Hedging Instrument | Other Noncurrent Liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 61 | |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 72,357 | 26 |
Total liability derivatives | 130,193 | 3,137 |
Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 55 | |
Total liability derivatives | 33 | |
Not Designated as Hedging Instrument | Accrued Liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 26 | |
Total liability derivatives | 4,073 | $ 3,104 |
Not Designated as Hedging Instrument | Accrued Liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 74 | |
Not Designated as Hedging Instrument | Accrued Liabilities | Other Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 4,106 | |
Not Designated as Hedging Instrument | Long-term derivative liability | Embedded Derivative Financial Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 121,756 | |
Not Designated as Hedging Instrument | Long-term derivative liability | Other Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 184 | |
Not Designated as Hedging Instrument | Long-term derivative assets | Capped Call | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 72,302 |
Leases (Components of Operating
Leases (Components of Operating Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease, renewal term | 11 years | |
Assets | ||
Operating lease right-of-use assets | $ 50,525 | $ 54,372 |
Liabilities | ||
Accrued liabilities and other | 11,276 | 11,110 |
Long-term operating lease liabilities | 42,221 | 46,027 |
Present value of lease liabilities | $ 53,497 | $ 57,137 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Leases (Costs) (Details)
Leases (Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 14,156 | $ 14,002 |
Variable lease cost | 1,097 | 873 |
Short-term lease cost | 415 | 788 |
Total lease cost | $ 15,668 | $ 15,663 |
Leases (Contractual Maturities)
Leases (Contractual Maturities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 13,414 |
2022 | 12,051 |
2023 | 8,901 |
2024 | 6,920 |
2025 | 4,343 |
Thereafter | 14,038 |
Total lease payments | 59,667 |
Less: Amount representing interest | 4,351 |
Present value of lease liabilities | $ 55,316 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Dec. 31, 2020 |
Leases [Abstract] | |
Weighted Average Remaining Lease Term | 6 years 3 months 18 days |
Weighted Average Discount Rate | 2.40% |
Leases (Cash Flow) (Details)
Leases (Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 14,601 | $ 13,522 |
Operating lease assets obtained in exchange for lease liabilities | $ 8,547 | $ 8,712 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) € in Thousands, $ in Thousands | Mar. 29, 2019USD ($) | Apr. 01, 2016USD ($) | Apr. 01, 2016EUR (€) | Jan. 31, 2021EUR (€) | Jan. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Dec. 31, 2020USD ($)repository_site | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)repository_site | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 01, 2021claim | Mar. 05, 2019USD ($) | Mar. 05, 2019EUR (€) | Aug. 27, 2015non-conformity |
Other Commitments [Line Items] | ||||||||||||||||
Product remediation liability, net | $ 1,056 | $ 1,056 | ||||||||||||||
Litigation provision, net | $ 33,200 | $ 294,100 | $ 3,906 | $ (601) | $ 294,021 | |||||||||||
Reimbursed legal fees | $ 358 | € 292 | ||||||||||||||
Saluggia, Italy | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Number of national repository sites | repository_site | 67 | 67 | ||||||||||||||
Litigation provision, net | $ 42,200 | $ 43,000 | ||||||||||||||
Saluggia, Italy | Minimum | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Estimated litigation provision | 43,000 | |||||||||||||||
Saluggia, Italy | Maximum | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Estimated litigation provision | 55,000 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Number of claims | claim | 85 | |||||||||||||||
Annual environmental maintenance | € | € 1,000 | |||||||||||||||
Pending Litigation | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Estimate of possible loss | $ 701,900 | € 572,100 | ||||||||||||||
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 | $ 36,490 | $ 170,404 | $ 294,061 | 36,490 | 170,404 | $ 294,061 | ||||||||||
Insurance recoveries | $ 33,800 | |||||||||||||||
Product Liability | First Payment | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Payments for legal settlements | $ 135,000 | |||||||||||||||
Product Liability | Second Payment | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Payments for legal settlements | $ 90,000 | |||||||||||||||
SNIA | SNIA s.p.a | Pending Litigation | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Compensation sought | $ 4,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loss Contingency Accrual [Roll Forward] | ||
Adjustments | $ 3,906 | $ 33,233 |
Less current portion of litigation provision liability at December 31, 2020 | 28,612 | |
Long-term portion of litigation provision liability at December 31, 2020 | 7,878 | |
Product Liability | ||
Loss Contingency Accrual [Roll Forward] | ||
Beginning liability | 170,404 | 294,061 |
Payments | (138,178) | (156,928) |
FX and other | 358 | 38 |
Ending liability | $ 36,490 | $ 170,404 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | 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) | 0 | 0 | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | $ 1,383,717 | $ 1,503,738 | $ 1,815,314 |
Other comprehensive income (loss) before reclassifications, before tax | 47,119 | 6,384 | (69,720) |
Tax expense | (415) | (661) | (11) |
Other comprehensive income (loss) before reclassifications, net of tax | 46,704 | 5,723 | (69,731) |
Reclassification of gain from accumulated other comprehensive income (loss), before tax | 655 | (840) | (77) |
Reclassification of tax expense | (158) | 201 | 19 |
Reclassification of gain from accumulated other comprehensive income (loss), after tax | 497 | (639) | (58) |
Total other comprehensive income (loss) | 47,201 | 5,084 | (69,789) |
Ending balance | 1,118,829 | 1,383,717 | 1,503,738 |
Total | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (19,392) | (24,476) | 45,313 |
Total other comprehensive income (loss) | 47,201 | 5,084 | (69,789) |
Ending balance | 27,809 | (19,392) | (24,476) |
Change in Unrealized Gain (Loss) on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | 513 | (944) | (919) |
Other comprehensive income (loss) before reclassifications, before tax | 1,724 | 2,757 | 44 |
Tax expense | (415) | (661) | (11) |
Other comprehensive income (loss) before reclassifications, net of tax | 1,309 | 2,096 | 33 |
Reclassification of gain from accumulated other comprehensive income (loss), before tax | 655 | (840) | (77) |
Reclassification of tax expense | (158) | 201 | 19 |
Reclassification of gain from accumulated other comprehensive income (loss), after tax | 497 | (639) | (58) |
Total other comprehensive income (loss) | 1,806 | 1,457 | (25) |
Ending balance | 2,319 | 513 | (944) |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (19,905) | (23,532) | 46,232 |
Other comprehensive income (loss) before reclassifications, before tax | 45,395 | 3,627 | (69,764) |
Tax expense | 0 | 0 | 0 |
Other comprehensive income (loss) before reclassifications, net of tax | 45,395 | 3,627 | (69,764) |
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 |
Total other comprehensive income (loss) | 45,395 | 3,627 | (69,764) |
Ending balance | $ 25,490 | $ (19,905) | $ (23,532) |
Stock-Based Incentive Plans (Na
Stock-Based Incentive Plans (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 3,575,752 | ||
Award vesting period | 4 years | ||
Stock-based compensation expense | $ 35,089 | $ 32,553 | $ 26,923 |
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 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 35,089 | $ 32,553 | $ 26,923 |
Income tax benefit | 992 | 6,590 | 6,443 |
Total expense, net of income tax benefit | 34,097 | 25,963 | 20,480 |
Continuing Operations | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 35,089 | 32,553 | 24,963 |
Continuing Operations | Cost of goods sold | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 1,898 | 1,343 | 1,060 |
Continuing Operations | Selling, general and administrative | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 29,661 | 25,588 | 19,393 |
Continuing Operations | Research and development | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 3,530 | 5,622 | 4,510 |
Discontinued operations | |||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 0 | $ 0 | $ 1,960 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | $ 35,089 | $ 32,553 | $ 26,923 |
Continuing Operations | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense from continuing operations | 35,089 | 32,553 | 24,963 |
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 | 18,320 | 14,113 | 10,622 |
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 | 12,715 | 10,349 | 8,282 |
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 | 3,200 | 2,900 | 2,357 |
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 | (370) | 3,918 | 3,702 |
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 | $ 1,224 | $ 1,273 | $ 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, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 68,815 |
Weighted Average Remaining Vesting Period (in years) | 2 years 2 months 19 days |
Service-based stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 25,678 |
Weighted Average Remaining Vesting Period (in years) | 2 years 7 months 20 days |
Service-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 36,086 |
Weighted Average Remaining Vesting Period (in years) | 2 years 9 months 29 days |
Operating performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 7,051 |
Weighted Average Remaining Vesting Period (in years) | 1 year 2 months 8 days |
Stock-Based Incentive Plans (_3
Stock-Based Incentive Plans (Schedule of Share-Option Valuation Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend rate | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.40% | ||
Risk free interest rate, minimum | 1.40% | 2.50% | |
Risk free interest rate, maximum | 2.20% | 2.90% | |
Expected term | 5 years 4 months 24 days | ||
Expected volatility at grant date | 39.50% | ||
Expected volatility at grant date , minimum | 32.20% | 29.20% | |
Expected volatility at grant date, maximum | 35.70% | 29.90% | |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years | 5 years | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 1 month 6 days | 5 years 1 month 6 days |
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, 2020USD ($)$ / sharesshares | |
Number of Optioned Shares | |
Outstanding - beginning of period, shares (in shares) | shares | 2,215,056 |
Granted, shares (in shares) | shares | 1,132,742 |
Exercised, shares (in shares) | shares | (58,768) |
Forfeited, shares (in shares) | shares | (173,923) |
Expired, shares (in shares) | shares | (231,087) |
Outstanding - end of period, shares (in shares) | shares | 2,884,020 |
Fully vested and exercisable - end of year (shares) | shares | 1,131,868 |
Fully vested and expected to vest - end of period (shares) | shares | 2,815,269 |
Wtd. Avg. Exercise Price | |
Beginning of period (in dollars per share) | $ / shares | $ 74.41 |
Granted (in dollars per share) | $ / shares | 43.63 |
Exercised (in dollars per share) | $ / shares | 48.65 |
Forfeited (in dollars per share) | $ / shares | 73.05 |
Expired (in dollars per share) | $ / shares | 70.99 |
End of period (in dollars per share) | $ / shares | 63.20 |
Fully vested and exercisable - end of year (in dollars per share) | $ / shares | 66.28 |
Fully vested and expected to vest - end of year(in dollars per share) | $ / shares | $ 63.39 |
Wtd. Avg. Remaining Contractual Term (years) | |
Outstanding — at December 31, 2020 | 7 years 6 months |
Fully vested and exercisable — end of year | 5 years 7 months 6 days |
Fully vested and expected to vest - end of year | 7 years 4 months 24 days |
Aggregate Intrinsic Value (in thousands) | |
Outstanding — at December 31, 2020 | $ | $ 34,829 |
Fully vested and exercisable — end of year | $ | 9,563 |
Fully vested and expected to vest — end of year | $ | $ 33,633 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant date fair value of SARs granted during the year (in dollars per share) | $ 15.73 | $ 31.22 | $ 28.13 |
Aggregate intrinsic value of SARs and stock options exercised during the year (in thousands) | $ 773 | $ 2,064 | $ 27,281 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | |||
Non-vested shares, beginning of year (in shares) | 523,833 | ||
Granted (in shares) | 609,076 | ||
Vested, shares (in shares) | (221,314) | ||
Forfeited, shares (in shares) | (63,136) | ||
Non-vested shares, end of year (in shares) | 848,459 | 523,833 | |
Wtd. Avg. Grant Date Fair Value | |||
Balance beginning of year (in dollars per share) | $ 84.98 | ||
Granted (in dollars per share) | 44.28 | $ 92.54 | $ 95.63 |
Vested (in dollars per share) | 75.51 | ||
Forfeited (in dollars per share) | 75.46 | ||
Balance end of year (in dollars per share) | $ 58 | $ 84.98 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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) | $ 44.28 | $ 92.54 | $ 95.63 |
Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) | $ 13,674 | $ 12,710 | $ 11,505 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | |||
Non-vested shares, beginning of year (in shares) | 285,669 | ||
Granted (in shares) | 185,940 | ||
Vested, shares (in shares) | (63,305) | ||
Forfeited, shares (in shares) | (27,505) | ||
Non-vested shares, end of year (in shares) | 380,799 | 285,669 | |
Wtd. Avg. Grant Date Fair Value | |||
Balance beginning of year (in dollars per share) | $ 71.02 | ||
Granted (in dollars per share) | 41.70 | $ 98.50 | $ 95.62 |
Vested (in dollars per share) | 41.79 | ||
Forfeited (in dollars per share) | 64.35 | ||
Balance end of year (in dollars per share) | $ 56.55 | $ 71.02 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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) | $ 41.70 | $ 98.50 | $ 95.62 |
Aggregate fair value of performance and market-based restricted share units that vested during the year (in thousands) | $ 4,106 | $ 6,697 | $ 9,409 |
Employee Retirement Plans (Chan
Employee Retirement Plans (Change in Benefit Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | $ 7,561 | ||
Employer contributions | 1,600 | $ 900 | $ 1,400 |
Fair value of plan assets at end of year | 8,287 | 7,561 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations at year end | 13,085 | 11,232 | 10,591 |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 11,232 | 10,591 | 11,001 |
Interest cost | 290 | 382 | 336 |
Plan settlement | (384) | (366) | (340) |
Actuarial loss (gain) | 2,225 | 871 | 8 |
Benefits paid | (278) | (246) | (414) |
Projected benefit obligation at end of year | 13,085 | 11,232 | 10,591 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 7,574 | 6,767 | 6,879 |
Actual return on plan assets | 646 | 628 | (405) |
Employer contributions | 1,130 | 546 | 1,047 |
Plan settlement | (384) | (366) | (340) |
Benefits paid | (278) | (1) | (414) |
Fair value of plan assets at end of year | 8,688 | 7,574 | 6,767 |
Funded status at end of year: | |||
Underfunded status of the plans | 4,397 | 3,658 | 3,824 |
Amounts recognized on the consolidated balance sheets consist of: | |||
Non-current liabilities | 4,397 | 3,658 | 3,824 |
Recognized liability | 4,397 | 3,658 | 3,824 |
Non-U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligations at year end | 12,091 | 17,744 | 18,676 |
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of year | 18,087 | 18,975 | 21,548 |
Service cost | 691 | 478 | 478 |
Interest cost | 121 | 232 | 289 |
Actuarial loss (gain) | (208) | 1,071 | (818) |
Benefits paid | (1,245) | (2,380) | (1,631) |
Reclassified to liabilities held for sale | (6,012) | 0 | 0 |
Foreign currency exchange rate changes and other | 1,605 | (289) | (891) |
Projected benefit obligation at end of year | 13,039 | 18,087 | 18,975 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,423 | 3,341 | 3,075 |
Actual return on plan assets | 52 | (34) | 51 |
Employer contributions | 454 | 383 | 361 |
Benefits paid | (290) | (332) | (156) |
Reclassified to liabilities held for sale | (1,018) | 0 | 0 |
Foreign currency exchange rate changes | 195 | 65 | 10 |
Fair value of plan assets at end of year | 2,816 | 3,423 | 3,341 |
Funded status at end of year: | |||
Underfunded status of the plans | 10,223 | 14,664 | 15,634 |
Amounts recognized on the consolidated balance sheets consist of: | |||
Non-current liabilities | 10,223 | 14,664 | 15,634 |
Recognized liability | $ 10,223 | $ 14,664 | $ 15,634 |
Employee Retirement Plans (Net
Employee Retirement Plans (Net Periodic Benefit Cost of the Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 290 | $ 382 | $ 336 |
Expected return on plan assets | (318) | (298) | (318) |
Settlement and curtailment loss | 180 | 0 | 135 |
Amortization of net actuarial loss | 182 | 148 | 571 |
Net periodic benefit cost | 334 | 232 | 724 |
Non-U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 691 | 478 | 478 |
Interest cost | 121 | 232 | 289 |
Expected return on plan assets | (52) | 34 | (51) |
Amortization of net actuarial loss | (208) | 1,071 | (818) |
Net periodic benefit cost | $ 552 | $ 1,815 | $ (102) |
Employee Retirement Plans (Assu
Employee Retirement Plans (Assumptions Used) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
U.S. | |||
Weighted-average assumptions used to determine benefit obligation: | |||
Discount rate | 1.91% | 2.88% | 3.97% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 2.88% | 3.97% | 3.28% |
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 | 0.23% | 0.20% | 0.20% |
Rate of compensation increase | 2.50% | 2.50% | 2.50% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 0.23% | 0.20% | 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 | 0.35% | 0.71% | 1.55% |
Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 0.35% | 0.71% | 1.55% |
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, 2020 |
Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 29.00% |
Debt securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 70.00% |
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, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 8,287 | $ 7,561 |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 94 | 74 |
Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 8,193 | 7,487 |
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 | 2,405 | 2,262 |
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 | 2,405 | 2,262 |
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 | 5,788 | 5,225 |
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 | 5,788 | 5,225 |
Fixed income mutual funds | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Money market funds and cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 94 | 74 |
Money market funds and cash | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 94 | 74 |
Money market funds and cash | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Money market funds and cash | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 0 | $ 0 |
Employee Retirement Plans (Narr
Employee Retirement Plans (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 1,600 | $ 900 | $ 1,400 |
Estimated future contributions | 900 | ||
Defined contribution plan expense | 11,800 | 12,400 | 12,000 |
U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 1,130 | $ 546 | $ 1,047 |
Employee Retirement Plans (Expe
Employee Retirement Plans (Expected Benefit Payments) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
2021 | $ 4,003 |
2022 | 1,175 |
2023 | 680 |
2024 | 774 |
2025 | 940 |
2026 - 2030 | 3,159 |
Non-U.S. | |
Defined Benefit Plan Disclosure [Line Items] | |
2021 | 600 |
2022 | 881 |
2023 | 1,129 |
2024 | 837 |
2025 | 898 |
2026 - 2030 | $ 6,205 |
Income Taxes (Components and Pr
Income Taxes (Components and Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred: | |||
Deferred Income Tax Expense | $ 37,292 | $ (26,277) | $ (95,050) |
Total provision for income tax expense (benefit) | (736) | (30,153) | (69,629) |
Continuing Operations | |||
(Loss) income from continuing operations before income taxes: | |||
UK and Non-U.S. | (258,466) | 28,788 | 59,528 |
U.S. | (85,521) | (214,482) | (306,975) |
(Loss) income from continuing operations before tax | (343,987) | (185,694) | (247,447) |
Current: | |||
UK and Non-U.S. | 2,899 | 1,112 | 9,645 |
U.S. | (41,010) | (4,988) | 1,291 |
Current income tax expense | (38,111) | (3,876) | 10,936 |
Deferred: | |||
UK and Non-U.S. | 37,375 | (7,407) | 533 |
U.S. | 0 | (18,870) | (81,098) |
Deferred Income Tax Expense | 37,375 | (26,277) | (80,565) |
Total provision for income tax expense (benefit) | $ (736) | $ (30,153) | $ (69,629) |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate at UK Rate | 19.00% | 19.00% | 19.00% |
Deferred tax valuation allowance | (35.40%) | (17.60%) | (0.80%) |
Foreign tax rate differential | 6.90% | 6.70% | 3.00% |
U.S. state and local tax expense, net of federal benefit | 1.50% | 6.10% | 4.30% |
Effect of changes in tax rate | 2.20% | (3.10%) | 0.60% |
Write-off/impairment of investments | 1.80% | (2.80%) | (1.30%) |
Reserve for uncertain tax positions | 0.80% | 2.50% | (0.70%) |
Research and development tax credits | 0.90% | 2.20% | 1.10% |
UK CFC tax | 0.00% | 2.10% | (1.00%) |
U.S. tax on non-U.S. operations | 0.00% | (1.60%) | (0.50%) |
Base erosion anti-abuse tax | (0.007) | 0.015 | (0.012) |
Exempt income | 0.00% | 1.20% | 6.10% |
Foreign tax withholding and credits | (0.20%) | 0.00% | (0.40%) |
CARES Act rate differential | 2.80% | 0.00% | 0.00% |
Other, net | 0.60% | 0.00% | (0.10%) |
Effective tax rate | 0.20% | 16.20% | 28.10% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Jul. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | |||||
Income tax expense (benefit), CARES Act | $ 43,300 | ||||
Valuation allowance | $ (188,100) | $ (76,300) | |||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 13,989 | 2,104 | $ 3,999 | ||
Decrease resulting from deferred tax assets | 11,400 | 11,600 | |||
Income tax penalties and interest accrued | $ 400 | 5,700 | $ 6,300 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 3,400 | ||||
Income Tax Expense (Benefit), CARES Act | $ 9,600 | ||||
Italian Revenue Agency | Foreign Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 13,300 |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax liabilities: | ||
Gross deferred tax liabilities: | $ (8,915) | $ (32,219) |
Net deferred tax (liabilities) assets | 2,990 | 68,676 |
Continuing Operations | ||
Deferred tax assets: | ||
Net operating loss carryforwards | 133,504 | 125,883 |
Tax credit carryforwards | 37,629 | 28,272 |
Accruals and reserves | 68,744 | 69,562 |
Deferred compensation | 11,868 | 9,692 |
Inventory | 8,317 | 9,436 |
Other | 17,522 | 12,135 |
Gross deferred tax assets | 277,584 | 254,980 |
Valuation allowance | (188,114) | (76,317) |
Net deferred tax assets | 89,470 | 178,663 |
Deferred tax liabilities: | ||
Property, equipment & intangible assets | (54,326) | (89,115) |
Gain on sale of intellectual property | (41,069) | (53,091) |
Investments | 0 | 0 |
Other | 0 | 0 |
Gross deferred tax liabilities: | (95,395) | (142,206) |
Net deferred tax (liabilities) assets | $ 36,457 | |
Net deferred tax (liabilities) assets | $ (5,925) |
Income Taxes (Operating Loss an
Income Taxes (Operating Loss and Tax Credit Carryforwards) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | $ 864,943 |
Tax Benefit | 171,133 |
Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 82,844 |
Various Tax Expiration Years | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 88,289 |
Europe | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 329,587 |
Tax Benefit | 69,574 |
Europe | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 69,477 |
Europe | 2026 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 97 |
United States | U.S. State | Research Tax Credit Carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,553 |
United States | U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 15,802 |
United States | U.S. Federal | Research Tax Credit Carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 14,404 |
United States | U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 191,447 |
Tax Benefit | 40,204 |
United States | U.S. State | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 325,979 |
Tax Benefit | 17,827 |
United States | Indefinite | U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,096 |
United States | Indefinite | U.S. State | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 2,944 |
United States | 2021 | U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 35,108 |
United States | 2021 | U.S. State | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 14,883 |
United States | 2025 | U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 15,802 |
United States | 2021 | U.S. Federal | Research Tax Credit Carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 14,404 |
United States | 2030 | U.S. State | Research Tax Credit Carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,553 |
South America | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 15,909 |
Tax Benefit | 5,402 |
South America | Indefinite | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 5,327 |
South America | 2030 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 75 |
Far East | |
Operating Loss Carryforwards [Line Items] | |
Gross Amount | 2,021 |
Tax Benefit | 497 |
Far East | 2025 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 497 |
Non-U.S. | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | 1,870 |
Non-U.S. | 2021 | |
Operating Loss Carryforwards [Line Items] | |
Tax Benefit | $ 1,870 |
Income Taxes (Schedule of Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits Roll-Forward) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, balance at beginning of year | $ 15,995 | $ 22,883 | $ 26,137 |
Tax positions related to current year | 0 | 176 | 671 |
Tax positions related to prior year | 0 | 0 | 3,309 |
Tax positions related to prior years for settlement with tax authorities | (13,989) | (2,104) | (3,999) |
Tax positions related to prior years for lapses of statute of limitations | 0 | (4,632) | (2,343) |
Impact of foreign currency exchange rates | 1,427 | ||
Impact of foreign currency exchange rates | (328) | (892) | |
Unrecognized tax benefits, balance at end of year | $ 3,433 | $ 15,995 | $ 22,883 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Basic weighted average shares outstanding (in shares) | 48,592 | 48,349 | 48,497 |
Diluted weighted average shares outstanding (in shares) | 48,592 | 48,349 | 48,497 |
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 4,100 | 2,900 | 2,700 |
Geographic and Segment Inform_3
Geographic and Segment Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 63 Months Ended | ||||
Nov. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)segmentgeographic_region | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)geographic_region | |
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 | $ 934,241 | $ 1,084,170 | $ 1,106,961 | |||||
Reportable segments income before income taxes | (216,648) | (92,784) | (170,543) | |||||
Merger and integration expenses | 7,333 | 23,457 | 24,420 | |||||
Restructuring expenses | 7,571 | 12,254 | 15,915 | |||||
Amortization of intangibles | 38,312 | 40,375 | 37,194 | |||||
Operating loss from continuing operations | (269,864) | (168,870) | (248,072) | |||||
Interest income | 131 | 803 | 847 | |||||
Interest expense | (40,837) | (15,091) | (9,825) | |||||
Gain on acquisition | 0 | 0 | 11,484 | |||||
Foreign exchange and other losses | 33,417 | 2,536 | 1,881 | |||||
Loss from continuing operations before tax | (343,987) | (185,694) | (247,447) | |||||
Impairment of disposal group | 180,160 | 0 | 0 | |||||
Litigation provision, net | $ (33,200) | $ (294,100) | (3,906) | 601 | (294,021) | |||
Impairment of long-lived assets | $ 89,000 | 6,762 | 142,517 | 567 | ||||
Impairment of goodwill | $ 42,400 | 21,269 | 42,417 | 0 | $ 63,700 | |||
Decommissioning provision | 42,198 | 0 | 0 | |||||
Assets | 2,411,797 | 2,411,351 | 2,411,797 | 2,411,351 | ||||
Capital expenditures | 35,916 | 27,977 | 37,997 | |||||
Caisson Interventional LLC | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of long-lived assets | 89,000 | |||||||
Impairment of goodwill | 42,400 | |||||||
ImThera Medical, Inc. | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of long-lived assets | 50,300 | |||||||
Discontinued operations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Restructuring expenses | 0 | 0 | 651 | |||||
Capital expenditures | 0 | 0 | 1,018 | |||||
Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Restructuring expenses | 6,500 | |||||||
Neuromodulation | In-process research and development | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of long-lived assets | $ 50,300 | |||||||
United States | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 468,634 | 546,484 | 553,411 | |||||
Europe | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 193,367 | 223,183 | 229,001 | |||||
Rest of World | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 272,240 | 314,503 | 324,549 | |||||
United Kingdom | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 29,700 | 37,700 | 34,800 | |||||
Heart Valves | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Impairment of disposal group | 180,200 | |||||||
Impairment of goodwill | 21,300 | |||||||
Operating Segments | Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 577,083 | 656,646 | 681,825 | |||||
Restructuring expenses | 1,570 | 3,592 | 11,497 | |||||
Impairment of goodwill | 21,269 | 0 | ||||||
Operating Segments | Cardiovascular | Continuing Operations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Reportable segments income before income taxes | (194,278) | 28,460 | (258,493) | |||||
Assets | 1,546,520 | 1,361,669 | 1,546,520 | 1,361,669 | ||||
Capital expenditures | 24,892 | 20,779 | 27,621 | |||||
Operating Segments | Neuromodulation | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 354,444 | 424,547 | 422,990 | |||||
Restructuring expenses | 3,223 | 1,082 | 1,595 | |||||
Impairment of goodwill | 0 | 0 | ||||||
Operating Segments | Neuromodulation | Continuing Operations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Reportable segments income before income taxes | 109,296 | 83,483 | 184,674 | |||||
Assets | 749,069 | 673,586 | 749,069 | 673,586 | ||||
Capital expenditures | 7,318 | 3,415 | 1,728 | |||||
Operating Segments | United States | Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 186,125 | 211,152 | 204,431 | |||||
Operating Segments | United States | Neuromodulation | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 282,509 | 335,332 | 348,980 | |||||
Operating Segments | Europe | Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 154,348 | 176,921 | 186,558 | |||||
Operating Segments | Europe | Neuromodulation | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 39,019 | 46,262 | 42,443 | |||||
Operating Segments | Rest of World | Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 236,610 | 268,573 | 290,836 | |||||
Operating Segments | Rest of World | Neuromodulation | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 32,916 | 42,953 | 31,567 | |||||
Operating Segments | Cardiopulmonary | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 446,732 | 504,716 | 536,408 | |||||
Operating Segments | Cardiopulmonary | United States | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 132,543 | 161,471 | 161,134 | |||||
Operating Segments | Cardiopulmonary | Europe | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 122,062 | 135,632 | 141,720 | |||||
Operating Segments | Cardiopulmonary | Rest of World | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 192,127 | 207,613 | 233,554 | |||||
Operating Segments | Heart Valves | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 88,030 | 120,007 | 125,956 | |||||
Operating Segments | Heart Valves | United States | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 12,488 | 18,900 | 24,709 | |||||
Operating Segments | Heart Valves | Europe | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 31,259 | 40,548 | 44,258 | |||||
Operating Segments | Heart Valves | Rest of World | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 44,283 | 60,559 | 56,989 | |||||
Operating Segments | Advanced Circulatory Support | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 42,321 | 31,923 | 19,461 | |||||
Operating Segments | Advanced Circulatory Support | United States | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 41,094 | 30,781 | 18,588 | |||||
Operating Segments | Advanced Circulatory Support | Europe | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 1,027 | 741 | 580 | |||||
Operating Segments | Advanced Circulatory Support | Rest of World | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 200 | 401 | 293 | |||||
Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 2,714 | 2,977 | 2,146 | |||||
Reportable segments income before income taxes | (131,666) | (204,727) | (96,724) | |||||
Restructuring expenses | 2,778 | 7,580 | 2,823 | |||||
Impairment of goodwill | 0 | 42,417 | ||||||
Other | Continuing Operations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Assets | $ 116,208 | 376,096 | 116,208 | $ 376,096 | ||||
Capital expenditures | $ 3,706 | $ 3,783 | $ 7,630 |
Geographic and Segment Inform_4
Geographic and Segment Information (Geographic and Areas) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 163,805 | $ 181,354 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 64,553 | 61,410 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 93,821 | 110,270 |
Rest of World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 5,431 | $ 9,674 |
Supplemental Financial Inform_2
Supplemental Financial Information (Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Raw materials | $ 43,257 | $ 45,225 |
Work-in-process | 8,055 | 14,581 |
Finished goods | 75,363 | 104,348 |
Inventories | 126,675 | 164,154 |
Provision for obsolescence | $ 6,600 | $ 12,700 |
Supplemental Financial Inform_3
Supplemental Financial Information (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Total | $ 322,428 | $ 335,341 | ||
Accumulated depreciation | (158,623) | (153,987) | ||
Net | 163,805 | 181,354 | ||
Impairment of long-lived assets | $ 89,000 | 6,762 | 142,517 | $ 567 |
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | 15,750 | 15,165 | ||
Building and building improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | $ 77,061 | 86,814 | ||
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 | $ 200,696 | 205,711 | ||
Equipment, software, furniture and fixtures | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Lives in Years | 3 years | |||
Equipment, software, furniture and fixtures | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Lives in Years | 20 years | |||
Other | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | $ 9,390 | 9,431 | ||
Other | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Lives in Years | 3 years | |||
Other | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Lives in Years | 10 years | |||
Capital investment in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Total | $ 19,531 | $ 18,220 |
Supplemental Financial Inform_4
Supplemental Financial Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Legal and other administrative costs | $ 15,820 | $ 11,066 |
Contingent consideration | 13,968 | 22,953 |
Operating lease liabilities | 11,276 | 11,110 |
Derivative contract liabilities | 7,372 | 3,173 |
Contract liabilities | 6,929 | 6,728 |
Restructuring related liabilities | 6,258 | 4,315 |
Research and development costs | 4,257 | 5,160 |
Provisions for agents, returns and other | 3,063 | 3,922 |
Product remediation | 1,056 | 3,251 |
CRM purchase price adjustments payable to MicroPort Scientific Corporation | 0 | 14,891 |
Other amounts payable to MicroPort Scientific Corporation | 0 | 1,340 |
Other accrued expenses | 25,409 | 32,191 |
Accrued liabilities, current, total | $ 95,408 | $ 120,100 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
New Accounting Pronouncements_2
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Prepaid expenses and other current assets | $ 24,792 | $ 28,604 | |||
Deferred tax assets | 2,990 | 68,676 | |||
Other assets | 11,247 | 7,356 | |||
Accumulated deficit | (752,402) | (406,755) | |||
Operating lease right-of-use assets | 50,525 | 54,372 | |||
Operating lease, liability | 53,497 | 57,137 | |||
Accounts receivable, net of allowance of $10,310 at December 31, 2020 and $13,105 at December 31, 2019 | 184,356 | $ 600 | 257,769 | ||
Stockholders' Equity Attributable to Parent | 1,118,829 | 1,383,717 | $ 1,503,738 | $ 1,815,314 | |
Accumulated Deficit | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Stockholders' Equity Attributable to Parent | $ (752,402) | $ 600 | $ (406,755) | $ (251,579) | $ (39,664) |