Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2015shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | BCR |
Entity Registrant Name | BARD C R INC /NJ/ |
Entity Central Index Key | 9,892 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 73,886,090 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net sales | $ 865.7 | $ 830 | $ 2,545.2 | $ 2,456.4 |
Costs and expenses: | ||||
Cost of goods sold | 336.3 | 308.9 | 981.2 | 939.1 |
Marketing, selling and administrative expense | 247.1 | 242 | 732.8 | 724 |
Research and development expense | 65.2 | 73.1 | 189.8 | 222.8 |
Interest expense | 11.2 | 11.2 | 33.7 | 33.6 |
Other (income) expense, net | 258.3 | 14.5 | 416.3 | 265.8 |
Total costs and expenses | 918.1 | 649.7 | 2,353.8 | 2,185.3 |
(Loss) income from operations before income taxes | (52.4) | 180.3 | 191.4 | 271.1 |
Income tax provision | 33.6 | 49 | 192.3 | 110.8 |
Net (loss) income | $ (86) | $ 131.3 | $ (0.9) | $ 160.3 |
Basic (loss) earnings per share available to common shareholders | $ (1.16) | $ 1.73 | $ (0.01) | $ 2.08 |
Diluted (loss) earnings per share available to common shareholders | $ (1.16) | $ 1.69 | $ (0.01) | $ 2.04 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net (loss) income | $ (86) | $ 131.3 | $ (0.9) | $ 160.3 |
Other comprehensive income (loss): | ||||
Change in derivative instruments designated as cash flow hedges, net of tax | (15.4) | (0.4) | (11.5) | 1.3 |
Foreign currency translation adjustments | 3.2 | (18) | (61.4) | (14.6) |
Benefit plan adjustments, net of tax | 2 | 1.7 | 5.8 | 4.9 |
Other comprehensive income (loss) | (10.2) | (16.7) | (67.1) | (8.4) |
Comprehensive (loss) income | $ (96.2) | $ 114.6 | $ (68) | $ 151.9 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 1,001.7 | $ 960.1 |
Restricted cash | 63.4 | 47.5 |
Accounts receivable, less allowances of $8,000 and $10,100, respectively | 441.9 | 455.2 |
Inventories | 381.1 | 376.2 |
Short-term deferred tax assets | 137.9 | 93.3 |
Other current assets | 80.1 | 114.8 |
Total current assets | 2,106.1 | 2,047.1 |
Property, plant and equipment, at cost | 809 | 747.9 |
Less accumulated depreciation and amortization | 342.2 | 301.5 |
Net property, plant and equipment | 466.8 | 446.4 |
Goodwill | 1,124.1 | 1,091.2 |
Core and developed technologies, net | 761.3 | 749.1 |
Other intangible assets, net | 265.9 | 304.8 |
Deferred tax assets | 13.7 | 11.5 |
Other assets | 234.5 | 442.5 |
Total assets | 4,972.4 | 5,092.6 |
Current liabilities | ||
Short-term borrowings and current maturities of long-term debt | 251.4 | 78 |
Accounts payable | 73.3 | 81.9 |
Accrued expenses | 780.7 | 287.7 |
Accrued compensation and benefits | 150 | 162.6 |
Income taxes payable | 44.1 | 4.4 |
Total current liabilities | 1,299.5 | 614.6 |
Long-term debt | 1,147.7 | 1,401.9 |
Other long-term liabilities | 876.7 | 1,125.3 |
Deferred income taxes | $ 170.3 | $ 145.9 |
Commitments and contingencies | ||
Shareholders' investment: | ||
Preferred stock, $1 par value, authorized 5,000,000 shares; none issued | ||
Common stock, $0.25 par value, authorized 600,000,000 shares; issued and outstanding 73,886,090 shares at September 30, 2015 and 74,893,483 shares at December 31, 2014 | $ 18.5 | $ 18.7 |
Capital in excess of par value | 2,107.2 | 1,945.3 |
Accumulated deficit | (491.6) | (70.3) |
Accumulated other comprehensive loss | (155.9) | (88.8) |
Total shareholders' investment | 1,478.2 | 1,804.9 |
Total liabilities and shareholders' investment | $ 4,972.4 | $ 5,092.6 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts receivable, allowances | $ 8 | $ 10.1 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.25 | $ 0.25 |
Common stock, authorized | 600,000,000 | 600,000,000 |
Common stock, issued | 73,886,090 | 74,893,483 |
Common stock, outstanding | 73,886,090 | 74,893,483 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (0.9) | $ 160.3 |
Adjustments to reconcile net income to net cash provided by operating activities, net of acquired business: | ||
Depreciation and amortization | 143 | 127.7 |
Litigation charges, net | 590 | 274.5 |
Restructuring and productivity initiative costs, net of payments | 14.6 | 0.7 |
Asset impairment | 0 | 6.8 |
Gain on sale of investment | 0 | (7.1) |
Deferred income taxes | (32.8) | (29.5) |
Share-based compensation | 61.1 | 53 |
Inventory reserves and provision for doubtful accounts | 16.3 | 17.3 |
Other items | 3.9 | 2.3 |
Changes in assets and liabilities, net of acquired business: | ||
Accounts receivable | 5.1 | 39.1 |
Inventories | (38.5) | (45.9) |
Current liabilities | (133.8) | 7.8 |
Taxes | 57.2 | (68.2) |
Other, net | (3.9) | (0.4) |
Net cash provided by operating activities | 681.3 | 538.4 |
Cash flows from investing activities: | ||
Capital expenditures | (79.3) | (90) |
Change in restricted cash | (14.2) | (51.7) |
Payment made for purchase of business, net of cash acquired | (74.5) | 0 |
Payments made for intangibles | (0.7) | (10.4) |
Proceeds from sale of investment | 0 | 7.1 |
Net cash used in investing activities | (168.7) | (145) |
Cash flows from financing activities: | ||
Change in short-term borrowings, net | (78) | 0 |
Payment of long-term debt | (4) | 0 |
Proceeds from exercises under share-based compensation plans, net | 50.6 | 72.5 |
Excess tax benefit relating to share-based compensation plans | 32 | 17.4 |
Purchases of common stock | (386.3) | (526.1) |
Dividends paid | (51.6) | (49.4) |
Payments of contingent consideration | (6.9) | (0.2) |
Net cash used in financing activities | (444.2) | (485.8) |
Effect of exchange rate changes on cash and cash equivalents | (26.8) | (2.8) |
Increase (decrease) in cash and cash equivalents during the period | 41.6 | (95.2) |
Balance at January 1 | 960.1 | 1,066.9 |
Balance at September 30 | 1,001.7 | 971.7 |
Cash paid for: | ||
Interest | 37.4 | 37.3 |
Income taxes | 135.9 | 191.1 |
Non-cash transactions: | ||
Purchase of business and related costs | $ 5.7 | $ 3 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of C. R. Bard, Inc. and its subsidiaries (the “company” or “Bard”) should be read in conjunction with the audited consolidated financial statements and notes thereto included in Bard’s 2014 Annual Report on Form 10-K. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in the financial statements in Bard’s 2014 Annual Report on Form 10-K. The preparation of these financial statements requires the company to make estimates and judgments that affect reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities at the date of the financial statements. These financial statements include all normal and recurring adjustments necessary for a fair presentation. The accounts of most foreign subsidiaries are consolidated as of and for the quarters ended August 31, 2015 and August 31, 2014 and as of November 30, 2014. No events occurred related to these foreign subsidiaries during the months of September 2015, September 2014 or December 2014 that materially affected the financial position or results of operations of the company. The results for the interim periods presented are not necessarily indicative of the results expected for the year. New Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new accounting standard that provides for a comprehensive model to use in the accounting for revenue arising from contracts with customers. Under this standard, revenue will be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued an accounting standards update to defer this standard’s effective date for one year, which will now begin with Bard’s 2018 fiscal year. Early adoption is permitted as of the original effective date beginning with Bard’s 2017 fiscal year. The company continues to assess the new standard, as well as updates to the standard that have been proposed by the FASB, and has not yet determined the adoption date or the impact to the consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Acquisitions | 2. Acquisitions On September 30, 2015, the company announced that it entered into a definitive agreement to acquire Kobayashi Pharmaceutical Co., Ltd.’s (“Kobayashi”) 50% ownership share in Medicon, Inc. (“Medicon”), through a share redemption. Medicon is an equally-owned joint venture operated by the company and Kobayashi and is a distributor of Bard’s products in Japan. The total consideration, denominated in Japanese Yen, will include an upfront cash payment of approximately $25.0 million at closing and future payments totaling approximately $68.3 million as of September 30, 2015 to be paid annually over a 10 year period following the closing, subject to exchange rate fluctuations. The acquisition is expected to close in early November 2015. The acquisition has been approved by the board of directors of both companies and is subject to customary closing conditions. On July 1, 2015, the company acquired all of the outstanding shares of Vascular Pathways, Inc. (“VPI”), a privately-held developer and supplier of vascular access devices. VPI manufactures the AccuCath ® |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Common Share | 3. Earnings per Common Share Earnings per share (“EPS”) is computed under the two-class method using the following common share information: Quarter Ended September 30, Nine Months 2015 2014 2015 2014 (dollars and shares in millions) EPS Numerator: Net (loss) income $ (86.0 ) $ 131.3 $ (0.9 ) $ 160.3 Less: Income allocated to participating securities — 2.2 — 2.6 Net (loss) income available to common shareholders $ (86.0 ) $ 129.1 $ (0.9 ) $ 157.7 EPS Denominator: Weighted average common shares outstanding 74.1 74.8 74.2 75.7 Dilutive common share equivalents from share-based compensation plans — 1.5 — 1.5 Weighted average common and common equivalent shares outstanding, assuming dilution 74.1 76.3 74.2 77.2 For both the quarter and nine months ended September 30, 2015, common share equivalents of approximately 1.3 million were not included in the computation of diluted weighted average shares outstanding. Common share equivalents primarily from share-based compensation plans were not included in these periods because their effect would have been anti-dilutive. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | 4. Income Taxes The effective tax rate for the quarter and nine months ended September 30, 2015 reflected the discrete tax effects of litigation charges, primarily related to product liability claims, which were substantially incurred in a low tax jurisdiction. See Note 7 of the notes to condensed consolidated financial statements. The effective tax rate for the nine months ended September 30, 2015 also reflected the discrete tax effects of the gain related to the proceeds received from W. L. Gore & Associates, Inc. (“Gore”), which was incurred in a high tax jurisdiction. The effective tax rate for both the quarter and nine months ended September 30, 2014 reflected the discrete tax effects of litigation charges, primarily related to product liability claims, which were substantially incurred in a low tax jurisdiction. The effective tax rate for the nine months ended September 30, 2014 also reflected a tax benefit of $10.9 million as a result of the completion of U.S. Internal Revenue Service examinations for the tax years 2008 through 2010. At September 30, 2015, the total amount of liability for unrecognized tax benefits related to federal, state and foreign taxes was $30.3 million (of which $27.3 million would impact the effective tax rate, if recognized) plus $2.9 million of accrued interest. At December 31, 2014, the liability for unrecognized tax benefits was $36.1 million plus $2.9 million of accrued interest. Depending upon the result of open tax examinations and/or the expiration of applicable statutes of limitation, the company believes it is reasonably possible that the total amount of unrecognized tax benefits may decrease by up to $8.5 million within the next 12 months. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Financial Instruments | 5. Financial Instruments For further discussion regarding the company’s use of derivative instruments, see Note 1 of the notes to consolidated financial statements in Bard’s 2014 Annual Report on Form 10-K. Foreign Exchange Derivative Instruments The company enters into readily marketable forward and option contracts with financial institutions to help reduce its exposure to foreign currency exchange rate fluctuations. These contracts limit volatility because gains and losses associated with foreign currency exchange rate movements are generally offset by movements in the underlying hedged item. The notional value of the company’s forward currency and option currency contracts was $232.2 million and $191.1 million at September 30, 2015 and December 31, 2014, respectively. Interest Rate Derivative Instruments The company’s outstanding interest rate swap contract effectively converts its 2.875% fixed-rate notes due 2016 to a floating-rate instrument. The notional value of the company’s interest rate swap contract is $250 million. The company’s outstanding forward starting interest rate swap contract manages its exposure to interest rate volatility in anticipation of issuing fixed-rate debt. The forward swap contract has a notional value of $250 million and a mandatory termination date of May 2016. The location and fair value of derivative instruments that are designated as hedging instruments recognized in the condensed consolidated balance sheets are as follows: Balance Sheet Location Fair Value Derivatives Designated as Hedging Instruments September 30, 2015 December 31, (dollars in millions) Forward currency contracts Other current assets $ 2.7 $ 1.9 Option currency contracts Other current assets 6.2 9.3 Interest rate swap contract Other current assets 1.4 — Forward currency contracts Other assets 0.6 — Option currency contracts Other assets 0.7 — Interest rate swap contracts Other assets — 4.9 $ 11.6 $ 16.1 Forward currency contracts Accrued expenses $ 7.3 $ 6.6 Interest rate swap contract Accrued expenses 10.5 — Forward currency contracts Other long-term liabilities 1.4 — $ 19.2 $ 6.6 The location and amounts of gains and losses on derivative instruments designated as cash flow hedges and the impact on shareholders’ investment are as follows: Gain/(Loss) Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Gain/(Loss) Reclassified Quarter Ended Quarter Ended 2015 2014 2015 2014 (dollars in millions) Forward currency contracts $ (3.6 ) $ (1.7 ) Cost of goods sold $ (1.6 ) $ 0.1 Option currency contracts (2.4 ) 1.9 Cost of goods sold 4.5 (0.6 ) Interest rate swap contract (12.9 ) — Interest expense — — $ (18.9 ) $ 0.2 $ 2.9 $ (0.5 ) Gain/(Loss) Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Gain/(Loss) Reclassified Nine Months Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Forward currency contracts $ (5.4 ) $ (0.8 ) Cost of goods sold $ (1.0 ) $ 0.9 Option currency contracts 8.0 1.9 Cost of goods sold 9.0 (1.6 ) Interest rate swap contract (10.7 ) — Interest expense — — $ (8.1 ) $ 1.1 $ 8.0 $ (0.7 ) The location and amounts of gains and losses on the derivative instrument designated as a fair value hedge are as follows: Location in (Loss) Recognized on Swap Gain Recognized on Debt Quarter Ended September 30, Nine Months Ended September 30, Quarter Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 2015 2014 2015 2014 (dollars in millions) Interest rate swap contract Interest expense $ (1.2 ) $ (1.3 ) $ (3.3 ) $ (3.2 ) $ 1.2 $ 1.3 $ 3.3 $ 3.2 Financial Instruments Measured at Fair Value on a Recurring Basis Fair value is defined as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that is determined using assumptions that market participants would use in pricing an asset or liability. The fair value guidance establishes a three-level hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs used in measuring fair value. The levels within the hierarchy range from Level 1 having observable inputs to Level 3 having unobservable inputs. The following table summarizes certain financial instrument assets and (liabilities) measured at fair value on a recurring basis: September 30, December 31, (dollars in millions) Forward currency contracts $ (5.4 ) $ (4.7 ) Option currency contracts 6.9 9.3 Interest rate swap contracts (9.1 ) 4.9 The fair values were measured using significant other observable inputs and valued by reference to similar financial instruments, adjusted for restrictions and other terms specific to each instrument. These financial instruments are categorized as Level 2 under the fair value hierarchy. The fair value of the liability for contingent consideration related to acquisitions was $11.2 million and $23.1 million at September 30, 2015 and December 31, 2014, respectively. The decrease in the fair value of the liability for contingent consideration was primarily due to a reduction in the probability of the achievement of a certain revenue-based milestone and payment in respect of the achievement of unrelated milestones. This decrease was partially offset by the addition of contingent consideration due to the acquisition of VPI. See Note 2 of the notes to condensed consolidated financial statements. The fair value was measured using significant unobservable inputs and is categorized as Level 3 under the fair value hierarchy. Financial Instruments Not Measured at Fair Value The company maintains a $750 million five-year committed syndicated bank credit facility that expires in November 2019. The credit facility supports the company’s commercial paper program and can be used for general corporate purposes. The facility includes pricing based on the company’s long-term credit ratings and includes a financial covenant that limits the amount of total debt to total capitalization. At September 30, 2015 the company was in compliance with this covenant. There were no commercial paper borrowings outstanding at September 30, 2015. The fair value of commercial paper borrowings outstanding of $78.0 million at December 31, 2014 approximated the carrying value. The estimated fair value of long-term debt including current maturities and the effect of the related interest rate swap contract was approximately $1,465.7 million and $1,481.7 million at September 30, 2015 and December 31, 2014, respectively. The fair value was estimated using dealer quotes for similarly-rated debt instruments over the remaining contractual term of the company’s obligation and is categorized as Level 2 under the fair value hierarchy. Concentration Risk Accounts receivable balances include sales to government-supported healthcare systems outside the United States. The company monitors economic conditions and evaluates accounts receivable in certain countries for potential collection risks. Economic conditions and other factors in certain countries, particularly in Spain, Italy, Greece and Portugal, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect these accounts receivable and may require the company to re-evaluate the collectability of these receivables in future periods. At September 30, 2015, the company’s accounts receivable, net of allowances, from the national healthcare systems and private sector customers in these four countries was $54.0 million, of which $7.9 million was greater than 365 days past due. The company is closely monitoring recent economic developments in Greece, including its financial stability and creditworthiness. At September 30, 2015, total accounts receivable, net of allowances, from both the national healthcare system and private sector customers in Greece was $13.0 million, of which $6.5 million was greater than 365 days past due. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | 6. Inventories Inventories consisted of: September 30, December 31, (dollars in millions) Finished goods $ 210.2 $ 225.4 Work in process 28.8 23.5 Raw materials 142.1 127.3 $ 381.1 $ 376.2 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Contingencies | 7. Contingencies In the ordinary course of business, the company is subject to various legal proceedings, investigations and claims, including, for example, environmental matters, employment disputes, disputes on agreements and other commercial disputes. In addition, the company operates in an industry susceptible to significant product liability and patent legal claims. The company accounts for estimated losses with respect to legal proceedings and claims when such losses are probable and reasonably estimable. If the estimate of a probable loss is a range and no amount within the range is more likely, the company accrues the minimum amount of the range. Legal costs associated with these matters are expensed as incurred. At any given time, in the ordinary course of business, the company is involved as either a plaintiff or defendant in a number of patent infringement actions. If a third party’s patent infringement claim were to be determined against the company, the company might be required to make significant royalty or other payments or might be subject to an injunction or other limitation on its ability to manufacture or distribute one or more products. If a patent owned by or licensed to the company is found to be invalid or unenforceable, the company might be required to reduce the value of certain intangible assets on the company’s balance sheet and to record a corresponding charge, which could be significant in amount. Many of the company’s legal proceedings and claims could have a material adverse effect on its business, results of operations, financial condition and/or liquidity. Product Liability Matters Hernia Product Claims As of October 1, 2015, approximately 35 federal and 55 state lawsuits involving individual claims by approximately 90 plaintiffs, as well as one putative class action in the United States, are currently pending against the company with respect to its Composix ® ® ® ® In June 2007, the Composix ® ® In June 2011, the company announced that it had reached agreements in principle with various plaintiffs’ law firms to settle the majority of its existing Hernia Product Claims. Each agreement was subject to certain conditions, including requirements for participation in the proposed settlements by a certain minimum number of plaintiffs. In addition, the company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Hernia Product Claims, and intends to vigorously defend Hernia Product Claims that do not settle, including through litigation. There are two trials currently scheduled for the first quarter of 2016. The company cannot give any assurances that the resolution of the Hernia Product Claims that have not settled, including asserted and unasserted claims and the putative class action lawsuit, will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. Women’s Health Product Claims As of October 1, 2015, product liability lawsuits involving individual claims by approximately 12,850 plaintiffs are currently pending against the company in various federal and state jurisdictions alleging personal injuries associated with the use of certain of the company’s surgical continence products for women. The company also has limited information regarding the nature and quantity of unfiled or unknown claims. In addition, five putative class actions in the United States and five putative class actions in Canada have been filed against the company, and a limited number of other claims have been filed or asserted in various non-U.S. jurisdictions. The foregoing lawsuits, unfiled or unknown claims, putative class actions and other claims, together with claims that have settled or are the subject of agreements or agreements in principle to settle, are referred to collectively as the “Women’s Health Product Claims”. The Women’s Health Product Claims generally seek damages for personal injury resulting from use of the products. The putative class actions, none of which has been certified, seek: (i) medical monitoring; (ii) compensatory damages; (iii) punitive damages; (iv) a judicial finding of defect and causation; and/or (v) attorneys’ fees. In April 2015, the Ontario Superior Court of Justice dismissed the plaintiffs’ motion for class certification in one Canadian putative class action. These plaintiffs may appeal this decision or may file an alternatives motion with the Ontario Superior Court to redefine the class. With respect to certain Women’s Health Product Claims, the company believes that two subsidiaries of Medtronic plc (as successor in interest to Covidien plc) (“Medtronic”), each a supplier of the company, have an obligation to defend and indemnify the company with respect to any product defect liability. As described below, in July 2015 the company reached an agreement with Medtronic regarding certain aspects of Medtronic’s indemnification obligation. In October 2010, the Women’s Health Product Claims involving solely Avaulta ® As of September 30, 2015, the company has reached agreements or agreements in principle with various plaintiffs’ law firms to settle their respective inventories of cases totaling approximately 6,470 Women’s Health Product Claims, including approximately: 560 during 2014; 2,880 in respect of the second quarter of 2015; and 3,030 in respect of the third quarter of 2015. The company believes that these Women’s Health Product Claims are not the subject of Medtronic’s indemnification obligation. These settlement agreements and agreements in principle include unfiled and previously unknown claims held by various plaintiffs’ law firms, which have not been included in the approximate number of Women’s Health Product Claims set forth in the first paragraph of this section. Each agreement is subject to certain conditions, including requirements for participation in the proposed settlements by a certain minimum number of plaintiffs. In addition, the company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Women’s Health Product Claims, which may include additional inventory settlements. Notwithstanding these settlement efforts, the company anticipates that additional trials, including one or more possible consolidated trials, may occur in the future. In July 2015, as part of the agreement noted above, Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by the company under supply agreements with Medtronic and the company agreed to pay Medtronic $121 million towards these potential settlements. The company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. The agreement does not resolve the dispute between the company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any. As part of the agreement, Medtronic and the company agreed to dismiss without prejudice their previously filed litigation with respect to Medtronic’s obligation to defend and indemnify the company. The approximate number of lawsuits set forth in the first paragraph of this section does not include approximately 705 generic complaints involving women’s health products where the company cannot, based on the allegations in the complaints, determine whether any of those cases involve the company’s women’s health products. In addition, the approximate number of lawsuits set forth in the first paragraph of this section does not include approximately 1,160 claims that have been threatened against the company but for which complaints have not yet been filed. In addition, the company has limited information regarding the nature and quantity of these and other unfiled or unknown claims. During the course of engaging in settlement discussions with plaintiffs’ law firms, the company has learned, and may in future periods learn, additional information regarding these and other unfiled or unknown claims which could materially impact the company’s estimate of the number of claims against the company. While the company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Women’s Health Product Claims and intends to vigorously defend the Women’s Health Product Claims that do not settle, including through litigation, it cannot give any assurances that the resolution of these claims will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. Filter Product Claims As of October 1, 2015, product liability lawsuits involving individual claims by approximately 65 plaintiffs are currently pending against the company in federal and state jurisdictions alleging personal injuries associated with the use of the company’s vena cava filter products (all lawsuits, collectively, the “Filter Product Claims”). In August 2015, the Judicial Panel for Multi-District Litigation (“JPML”) ordered the creation of a Multi-District Litigation for all federal Filter Product Claims (the “IVC Filter MDL”) in the District of Arizona. There are approximately 50 cases that have been, or shortly will be, transferred to the IVC Filter MDL. The remaining approximately 15 cases are pending in various state courts across the country. The first Filter Product Claim trial was completed in June 2012 and resulted in a judgment for the company. During the second quarter of 2013, the company finalized settlement agreements with respect to more than 30 Filter Product Claims and made payments with respect to such claims within the amounts previously recorded by the company. The case numbers set forth above do not include approximately 130 claims that have been threatened against the company but for which complaints have not yet been filed. The company expects additional trials of Filter Product Claims to take place over the next 12 months. While the company intends to vigorously defend Filter Product Claims that do not settle, including through litigation, it cannot give any assurances that the resolution of these claims will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. General In most product liability litigations (like those described above), plaintiffs allege a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. In many of these cases, the company has not yet received and reviewed complete information regarding the plaintiffs and their medical conditions and, consequently, is unable to fully evaluate the claims. The company expects that it will receive and review additional information regarding any remaining unsettled product liability matters. The company believes that some settlements and judgments, as well as some legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers, or, in some circumstances, indemnification obligations to the company from other parties. In certain circumstances, insurance carriers reserve their rights with respect to coverage, or contest or deny coverage, as has occurred with respect to certain claims. In addition, other parties may dispute their indemnification obligations to the company, as has occurred with respect to certain claims. When either of these occur, the company intends to vigorously contest disputes with respect to its insurance coverage or indemnification and to enforce its rights, and accordingly, will record expected recoveries with respect to amounts due under these policies or arrangements, when recovery is probable. Amounts recovered under the company’s product liability insurance policies or indemnification arrangements may be less than the stated coverage limits or less than otherwise expected and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers or other parties will pay claims or that coverage or indemnity will be otherwise available. The company’s insurance coverage with respect to the Hernia Product Claims has been exhausted. The company continues to evaluate its available insurance coverage as it relates to Women’s Health Product Claims and Filter Product Claims. Other Legal Matters Since early 2013, the company has received subpoenas or Civil Investigative Demands from a number of State Attorneys General seeking information related to the sales and marketing of certain of the company’s products that are the subject of the Hernia Product Claims and the Women’s Health Product Claims. The company is cooperating with these requests. Since it is not feasible to predict the outcome of these proceedings, the company cannot give any assurances that the resolution of these proceedings will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. In December 2007, a U.S. District Court (the “AZ District Court”) jury in Arizona found that certain of Gore’s ePTFE vascular grafts and stent-grafts infringe the company’s patent number 6,436,135 (the “135 patent”). The jury upheld the validity of the company’s patent and awarded the company $185 million in past damages. The jury also found that Gore willfully infringed the patent. In a second phase of the trial, the AZ District Court ruled that Gore failed to prove that the patent is unenforceable due to inequitable conduct. In March 2009, the AZ District Court doubled the jury award to approximately $371 million for damages through June 2007. The AZ District Court also awarded the company attorneys’ fees of $19 million and prejudgment interest of approximately $20 million. In addition, the AZ District Court denied Gore’s remaining motions, including its motions for a new trial and to set aside the jury’s verdict. In July 2010, the AZ District Court awarded the company approximately $109 million in additional damages for the period from July 2007 through March 2009. The AZ District Court also assessed a royalty rate of between 12.5% and 20%, depending on the product, that is being used to calculate damages for Gore’s infringing sales from April 2009 through the expiration of the patent. Gore appealed this matter to the Court of Appeals for the Federal Circuit (the “Court of Appeals”), which on February 10, 2012 affirmed the decision of the AZ District Court. Gore filed a petition with the Court of Appeals for a rehearing of its appeal. On June 14, 2012, the Court of Appeals reaffirmed its February 10, 2012 decision, including the ongoing royalty rates as set by the AZ District Court, with the exception of the issue of willfulness with respect to Gore’s infringement of the 135 patent, which was remanded to the AZ District Court for further consideration. On October 12, 2012, Gore filed a petition for a writ of certiorari to the U.S. Supreme Court requesting a review of the portion of the decision that the Court of Appeals reaffirmed. The U.S. Supreme Court denied Gore’s petition on January 14, 2013. On January 28, 2013, Gore filed with the AZ District Court a Request for Judicial Notice that the U.S. Patent and Trademark Office (“USPTO”) granted Gore’s previously filed request for a re-examination of the 135 patent. On April 1, 2013, the USPTO issued a First Office Action initially rejecting all of the claims of the 135 patent that are the subject of the re-examination. On July 10, 2013, the USPTO issued a Notice of Intent to Issue an Ex Parte Reexamination Certificate upholding the patentability of all re-examined claims of the 135 patent. This action terminated the re-examination proceeding and upheld the claims involved in the re-examination. On remand of the action from the Court of Appeals, the AZ District Court heard oral argument on June 5, 2013 on three motions pending before it – Gore’s motion requesting a determination that Gore’s infringement was not willful, Gore’s motion for a new trial, and the company’s motion to execute on the judgment with respect to all amounts other than enhanced damages due to willfulness. On October 16, 2013, the AZ District Court denied Gore’s motion for entry of a judgment holding that Gore’s infringement was not willful and Gore’s motion for a new trial. The AZ District Court granted the company’s motion to execute on the judgment, holding that all aspects of the judgment relating to infringement were “final and non-appealable.” The AZ District Court continued its stay on the execution of the judgment with respect to willfulness and the related enhanced damages. On November 1, 2013, Gore paid to the company $894.3 million in cash, the total amount of the compensatory damages for infringement, including pre- and post-judgment interest, and the royalties accrued through September 30, 2013. Gore expressly reserved its right to appeal from the AZ District Court’s rulings and notified the company that, if successful on appeal, it would seek to recover the amounts paid to the company. On December 5, 2013, Gore filed an appeal in the Court of Appeals on all of the AZ District Court’s rulings, including the order denying Gore’s motion for a new trial. On August 8, 2014, the Court of Appeals heard oral argument on Gore’s appeal of the AZ District Court’s rulings. On January 13, 2015, the Court of Appeals affirmed the decision of the AZ District Court regarding its determination that the company established standing and that the 135 patent was willfully infringed. On February 12, 2015, Gore filed a petition for rehearing en banc at the Court of Appeals on the issue of willfulness. On April 8, 2015, the Court of Appeals denied Gore’s petition for rehearing en banc on the issue of willfulness. The company filed a motion to execute on the judgment on the issue of willfulness, which was granted by the AZ District Court on April 23, 2015. On May 1, 2015, Gore paid to the company $210.5 million in cash, representing the total amount of the enhanced damages awarded by the AZ District Court due to Gore’s willfulness and an audit adjustment related to the payment of royalties through September 30, 2013. Amounts received from Gore in May 2015 and previously in November 2013 are referred to as the “Gore Proceeds”. On July 7, 2015, Gore filed a petition for a writ of certiorari to the U.S. Supreme Court requesting a review of the decision that the 135 patent was infringed. On October 5, 2015, the U.S. Supreme Court denied Gore’s petition. As of the third quarter of 2013, the company considered both the compensatory damages and the enhanced damages and the royalty awards to be contingent gains. In the fourth quarter of 2013, the company recorded a gain of $894.3 million ($557.4 million after tax) to other (income) expense, net, based on the AZ District Court’s October 2013 rulings and the company’s receipt of the 2013 portion of the Gore Proceeds. In the second quarter of 2015, the company recorded a gain of $210.5 million ($131.7 million after tax) to other (income) expense, net, based on the AZ District Court’s April 2015 ruling and the company’s receipt of the 2015 portion of the Gore Proceeds and an audit adjustment related to the payment of royalties through September 30, 2013. In July 2015, the company received $38.4 million of royalty payments from Gore representing Gore’s calculation of royalties for its infringing sales for the quarter ended June 30, 2015. This royalty payment was recorded to revenue in the third quarter of 2015. Royalty payments of $113.7 million were recorded to revenue for the nine months ended September 30, 2015. The company has received cumulative proceeds from Gore of $1,370.3 million. The company has concluded that the chance of Gore establishing its right to recover any portion of the cumulative proceeds is remote. The company cannot give any assurances that royalties for Gore’s future infringing sales will remain at or near historical levels. In an unrelated matter, Gore filed suit in June 2011 in the U.S. District Court in Delaware alleging the company had infringed on several of Gore’s patents. Fact and expert discovery have been completed and in the fourth quarter of 2014, the parties both filed a number of motions, including motions for summary judgment. Oral arguments on the motions occurred on January 30, 2015. In June 2015, the Magistrate Judge of the Delaware District Court issued a preliminary ruling on three of these motions, granting the company’s motion for summary judgment on non-infringement of one of Gore’s patents and denying the company’s motions for summary judgment for patent invalidity due to the patents being indefinite and to exclude expert testimony of Gore’s technical expert. In the third quarter of 2015 the Delaware District Court affirmed the Magistrate’s rulings and the parties are awaiting rulings on the remainder of the motions. Trial on this matter is scheduled for the fourth quarter of 2015. The company intends to vigorously defend the allegations asserted by Gore. The company cannot give any assurances that an adverse resolution of this matter will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. The company is subject to numerous federal, state, local and foreign environmental protection laws governing, among other things, the generation, storage, use and transportation of hazardous materials and emissions or discharges into the ground, air or water. The company is or may become a party to proceedings brought under various federal laws including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly known as Superfund, the Resource Conservation and Recovery Act, the Clean Water Act, the Clean Air Act and similar state or foreign laws. These proceedings seek to require the owners or operators of contaminated sites, transporters of hazardous materials to the sites and generators of hazardous materials disposed of at the sites to clean up the sites or to reimburse the government for cleanup costs. In most cases, there are other potentially responsible parties that may be liable for remediation costs. In these cases, the government alleges that the defendants are jointly and severally liable for the cleanup costs; however, these proceedings are frequently resolved so that the allocation of cleanup costs among the parties more closely reflects the relative contributions of the parties to the site contamination. The company’s potential liability varies greatly from site to site. For some sites, the potential liability is de minimis and for others the costs of cleanup have not yet been determined. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study and are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. The company believes that the proceedings and claims described above will likely be resolved over an extended period of time. While it is not feasible to predict the outcome of these proceedings, based upon the company’s experience, current information and applicable law, the company does not expect these proceedings to have a material adverse effect on its financial condition and/or liquidity. However, one or more of the proceedings could be material to the company’s business and/or results of operations. Litigation Reserves The company regularly monitors and evaluates the status of product liability and other legal matters, and may, from time-to-time, engage in settlement and mediation discussions taking into consideration developments in the matters and the risks and uncertainties surrounding litigation. These discussions could result in settlements of one or more of these claims at any time. In the second quarter of 2013, the company recorded a charge, net of estimated recoveries to other (income) expense, net, of approximately $293.0 million ($276.0 million after tax) related to certain of the product liability matters discussed above under the heading “Product Liability Matters”. The company recorded this charge after evaluating these matters based on information then currently available, including but not limited to: the allegations and documentation supporting or refuting such allegations; publicly available information regarding similar medical device mass tort settlements; historical information regarding other product liability settlements involving the company; and the procedural posture and stage of litigation. In the fourth quarter of 2013, based on information then available regarding these and other factors, including but not limited to: the increase in the number of claims; the estimate of Women’s Health Product Claims; the settlement of claims both by the company and by other manufacturers subject to product liability claims with respect to similar products; and settlements subject to negotiation during the quarter, the company recorded an additional charge, net of estimated recoveries, of approximately $108.0 million ($92.0 million after tax). In the second quarter of 2014, the company recorded an additional charge related to these matters, net of estimated recoveries to other (income) expense, net, of approximately $259.0 million ($238.0 million after tax). The company recorded this charge based on additional information obtained during the quarter, including with respect to the factors noted above. Specifically, the company considered its discussions with plaintiffs’ counsel, the increase in the rate of claims being filed (which led the company to increase its estimate of Women’s Health Product Claims), and the value, number of cases and nature of the inventory of cases with respect to the recent settlements of claims by the company and other manufacturers. In the second quarter of 2015, the company recorded an additional charge related to these matters, net of estimated recoveries to other (income) expense, net, of approximately $337.0 million ($325.0 million after tax). The company recorded this charge based on additional information obtained during the quarter, including with respect to the factors noted above. Specifically the company considered the agreement and the agreement in principle by the company to settle approximately 2,880 Women’s Health Product Claims, the involvement of the Special Master in settlement resolution, additional settlements by other manufacturers subject to product liability claims with respect to similar products, and the continued rate of claims being filed (which led the company to increase its estimate of Women’s Health Product Claims). In the third quarter of 2015, the company recorded an additional charge related to these matters to other (income) expense, net, of approximately $241.0 million ($228.0 million after tax). The company recorded this charge based on additional information obtained with respect to the quarter, including with respect to the factors noted above. Specifically, the company considered the agreements and the agreement in principle by the company to settle approximately 3,030 Women’s Health Product Claims, discussions with plaintiffs’ counsel, additional information learned regarding the nature and quantity of unfiled and unknown claims (which led the company to increase its estimate of Women’s Health Product Claims), a reconciliation of claims in connection with settlements, additional settlements by other manufacturers subject to product liability claims with respect to similar products, the rate of claims being filed, and the creation of the IVC Filter MDL. These charges recognized the estimated costs for the product liability matters discussed above, including (with respect to such matters) filed and an estimate of unfiled and unknown claims, and costs to administer the settlements related to such matters. These charges exclude any costs associated with the putative class action lawsuits in the United States. The company cannot give any assurances that the actual costs incurred with respect to these product liability matters will not exceed the related amounts accrued. With respect to product liability claims that are not resolved through settlement, the company intends to vigorously defend against such claims, including through litigation. The company cannot give any assurances that the resolution of any of its product liability matters, including filed, unfiled and unknown claims and the putative class action lawsuits, will not have a material adverse effect on the company’s business, results of operations, financial condition and/or liquidity. Accruals for product liability and other legal matters amounted to $1,309.6 million, of which $619.8 million was recorded to accrued expenses, and $1,041.5 million, of which $101.7 million was recorded to accrued expenses, at September 30, 2015 and December 31, 2014, respectively. The company has made total payments of $297.4 million to qualified settlement funds (“QSFs”), subject to certain settlement conditions, for certain product liability matters, of which $47.9 million were made to QSFs during the nine months ended September 30, 2015. Payments to QSFs are recorded as a component of restricted cash. Total payments of $235.9 million from these QSFs have been made to qualified claimants, of which $33.9 million were made during the nine months ended September 30, 2015. In addition, other payments of $58.3 million have been made to qualified claimants, of which $17.6 million were made during the nine months ended September 30, 2015. The company recorded expected recoveries related to product liability matters amounting to $150.2 million, of which $145.6 million was recorded to other assets, and $379.3 million, of which $358.9 million was recorded to other assets, at September 30, 2015 and December 31, 2014, respectively. A substantial amount of these recoveries at December 31, 2014 were the subject of a dispute with Medtronic, which had contested, at least in part, its obligation to defend and indemnify the company. The decrease in expected recoveries is primarily due to the agreement with Medtronic entered into in July 2015 regarding certain aspects of Medtronic’s indemnification obligation. The terms of the company’s agreement with Medtronic are substantially consistent with the assumptions underlying, and the manner in which, the company has recorded expected recoveries related to the indemnification obligation. The expected recoveries at September 30, 2015 related to the indemnification obligation are not in dispute with respect to claims that Medtronic settles pursuant to the agreement. As described above, the agreement does not resolve the dispute between the company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any, and the company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. The company is unable to estimate the reasonably possible losses or range of losses, if any, arising from certain existing product liability matters and other legal matters. Under U.S. generally accepted accounting principles, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight”. With respect to putative class action lawsuits in the United States relating to product liability matters, the company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; (ii) the company has not received and reviewed complete information regarding all or certain of the plaintiffs and their medical conditions; and/or (iii) there are significant factual issues to be resolved. In addition, there is uncertainty as to the likelihood of a class being certified or the ultimate size of the class. In addition, with respect to the Civil Investigative Demands from a number of State Attorneys General, the |
Share-Based Compensation Plans
Share-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation Plans | 8. Share-Based Compensation Plans The company may grant a variety of share-based payments under the 2012 Long Term Incentive Plan of C. R. Bard, Inc., as amended and restated (the “LTIP”) and the 2005 Directors’ Stock Award Plan of C. R. Bard, Inc., as amended and restated (the “Directors’ Plan”) to certain directors, officers and employees. At the company’s Annual Meeting of Shareholders on April 15, 2015, the shareholders authorized an additional 1,500,000 shares for issuance under the LTIP. The total number of remaining shares at September 30, 2015 that may be issued under the LTIP was 6,377,456 and under the Directors’ Plan was 31,462. Awards under the LTIP may be in the form of stock options, stock appreciation rights, limited stock appreciation rights, restricted stock, unrestricted stock and other stock-based awards. Awards under the Directors’ Plan may be in the form of stock awards, stock options or stock appreciation rights. The company also has two employee stock purchase programs. For the quarters ended September 30, 2015 and 2014, amounts charged against income for share-based payment arrangements were $17.0 million and $16.3 million, respectively. For the nine months ended September 30, 2015 and 2014, amounts charged against income for share-based payment arrangements were $61.1 million and $53.0 million, respectively. In the first quarter of each of 2015 and 2014, the company granted performance restricted stock units to certain officers. These units have requisite service periods of three years and have no dividend rights. The actual payout of these units varies based on the company’s performance over the three-year period based on pre-established targets over the period and a market condition modifier based on total shareholder return (“TSR”) compared to an industry peer group. The actual payout under these awards may exceed an officer’s target payout; however, compensation cost initially recognized assumes that the target payout level will be achieved and may be adjusted for subsequent changes in the expected outcome of the performance-related condition. The fair values of these units are based on the market price of the company’s stock on the date of the grant and use a Monte Carlo simulation model for the TSR component. The fair values of the TSR components of the 2015 and 2014 grants were estimated based on the following assumptions: risk-free interest rate of 0.86% and 0.70%, respectively; dividend yield of 0.51% and 0.62%, respectively; and expected life of 2.78 and 2.88 years, respectively. Anticipated purchases under the Management Stock Purchase Program (the “MSPP”) are approximately 0.2 million shares for the 2015 grant. Purchases under the MSPP were approximately 0.2 million shares for the 2014 grant. The fair value of the 2015 annual MSPP purchases was $60.47 per share and was estimated in July 2015. The fair value of the 2014 annual MSPP purchases was $51.82 per share. These fair value calculations used the Black-Scholes model based on the following assumptions: risk free interest rate of 0.16% and 0.07%, respectively; expected volatility of 17% and 20%, respectively; dividend yield of 0.6% for both valuations; and expected life of 0.6 years for both valuations. As of September 30, 2015, there were $95.2 million of unrecognized compensation expenses related to share-based payment arrangements. These costs are expected to be recognized over a weighted-average period of approximately two years. The company has sufficient shares to satisfy expected share-based payment arrangements in 2015. |
Pension Plans
Pension Plans | 9 Months Ended |
Sep. 30, 2015 | |
Pension Plans | 9. Pension Plans The company has both tax-qualified and nonqualified, noncontributory defined benefit pension plans, that together cover certain domestic and foreign employees. These plans provide benefits based upon a participant’s compensation and years of service. The components of net periodic pension cost are as follows: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Service cost, net of employee contributions $ 7.1 $ 6.7 $ 22.1 $ 20.2 Interest cost 5.2 5.4 15.1 15.9 Expected return on plan assets (7.9 ) (7.2 ) (23.5 ) (20.8 ) Amortization 3.1 2.6 8.9 7.5 Net periodic pension cost $ 7.5 $ 7.5 $ 22.6 $ 22.8 |
Shareholders' Investment
Shareholders' Investment | 9 Months Ended |
Sep. 30, 2015 | |
Shareholders' Investment | 10. Shareholders’ Investment The company repurchased approximately 2.1 million shares of common stock for $386.3 million in the nine months ended September 30, 2015 under its previously announced share repurchase authorizations. Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component are as follows: Derivative Foreign Currency Benefit Total (dollars in millions) Balance at December 31, 2013 $ — $ 47.3 $ (68.2 ) $ (20.9 ) Other comprehensive income (loss) before reclassifications 1.6 (14.6 ) — (13.0 ) Tax (provision) benefit (a) (0.9 ) — — (0.9 ) Other comprehensive income (loss) before reclassifications, net of taxes 0.7 (14.6 ) — (13.9 ) Reclassifications 0.7 (b) — 7.5 (c) 8.2 Tax provision (benefit) (0.1 ) — (2.6 ) (2.7 ) Reclassifications, net of tax 0.6 — 4.9 5.5 Other comprehensive income (loss) 1.3 (14.6 ) 4.9 (8.4 ) Balance at September 30, 2014 $ 1.3 $ 32.7 $ (63.3 ) $ (29.3 ) Balance at December 31, 2014 $ 0.9 $ (3.1 ) $ (86.6 ) $ (88.8 ) Other comprehensive income (loss) before reclassifications (8.3 ) (61.4 ) — (69.7 ) Tax (provision) benefit (a) 2.4 — — 2.4 Other comprehensive income (loss) before reclassifications, net of taxes (5.9 ) (61.4 ) — (67.3 ) Reclassifications (8.0 ) (b) — 8.9 (c) 0.9 Tax provision (benefit) 2.4 — (3.1 ) (0.7 ) Reclassifications, net of tax (5.6 ) — 5.8 0.2 Other comprehensive income (loss) (11.5 ) (61.4 ) 5.8 (67.1 ) Balance at September 30, 2015 $ (10.6 ) $ (64.5 ) $ (80.8 ) $ (155.9 ) (a) Income taxes are not provided for foreign currency translation adjustment. (b) See Note 5 of the notes to condensed consolidated financial statements. (c) These components are included in the computation of net periodic pension cost. See Note 9 of the notes to condensed consolidated financial statements. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information | 11. Segment Information The company’s management considers its business to be a single segment entity – the manufacture and sale of medical devices. The company’s products generally share similar distribution channels and customers. The company designs, develops, manufactures, packages, distributes and sells medical, surgical, diagnostic and patient care devices. The company sells a broad range of products to hospitals, individual healthcare professionals, extended care health facilities and alternate site facilities on a global basis. In general, the company’s products are intended to be used once and then discarded or either temporarily or permanently implanted. The company’s chief operating decision makers evaluate their various global product portfolios on a net sales basis and generally evaluate profitability and associated investment on an enterprise-wide basis due to shared geographic infrastructures. Net sales based on the location of external customers by geographic region are: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) United States $ 606.5 $ 565.4 $ 1,772.6 $ 1,671.9 Europe 107.4 118.8 322.6 365.3 Japan 41.6 41.9 125.8 123.1 Other 110.2 103.9 324.2 296.1 $ 865.7 $ 830.0 $ 2,545.2 $ 2,456.4 Total net sales by product group category are: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Vascular $ 250.5 $ 231.5 $ 731.0 $ 683.7 Urology 212.3 209.6 627.1 618.1 Oncology 239.3 229.7 699.1 673.4 Surgical Specialties 139.8 135.6 419.5 410.1 Other 23.8 23.6 68.5 71.1 $ 865.7 $ 830.0 $ 2,545.2 $ 2,456.4 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share Computation | Earnings per share (“EPS”) is computed under the two-class method using the following common share information: Quarter Ended September 30, Nine Months 2015 2014 2015 2014 (dollars and shares in millions) EPS Numerator: Net (loss) income $ (86.0 ) $ 131.3 $ (0.9 ) $ 160.3 Less: Income allocated to participating securities — 2.2 — 2.6 Net (loss) income available to common shareholders $ (86.0 ) $ 129.1 $ (0.9 ) $ 157.7 EPS Denominator: Weighted average common shares outstanding 74.1 74.8 74.2 75.7 Dilutive common share equivalents from share-based compensation plans — 1.5 — 1.5 Weighted average common and common equivalent shares outstanding, assuming dilution 74.1 76.3 74.2 77.2 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Location and Fair Value of Derivative Instruments Designated as Hedging Instruments | The location and fair value of derivative instruments that are designated as hedging instruments recognized in the condensed consolidated balance sheets are as follows: Balance Sheet Location Fair Value Derivatives Designated as Hedging Instruments September 30, 2015 December 31, (dollars in millions) Forward currency contracts Other current assets $ 2.7 $ 1.9 Option currency contracts Other current assets 6.2 9.3 Interest rate swap contract Other current assets 1.4 — Forward currency contracts Other assets 0.6 — Option currency contracts Other assets 0.7 — Interest rate swap contracts Other assets — 4.9 $ 11.6 $ 16.1 Forward currency contracts Accrued expenses $ 7.3 $ 6.6 Interest rate swap contract Accrued expenses 10.5 — Forward currency contracts Other long-term liabilities 1.4 — $ 19.2 $ 6.6 |
Location and Amounts of Gains and Losses on Derivative Instruments Designated as Cash Flow Hedges | The location and amounts of gains and losses on derivative instruments designated as cash flow hedges and the impact on shareholders’ investment are as follows: Gain/(Loss) Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Gain/(Loss) Reclassified Quarter Ended Quarter Ended 2015 2014 2015 2014 (dollars in millions) Forward currency contracts $ (3.6 ) $ (1.7 ) Cost of goods sold $ (1.6 ) $ 0.1 Option currency contracts (2.4 ) 1.9 Cost of goods sold 4.5 (0.6 ) Interest rate swap contract (12.9 ) — Interest expense — — $ (18.9 ) $ 0.2 $ 2.9 $ (0.5 ) Gain/(Loss) Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Gain/(Loss) Reclassified Nine Months Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Forward currency contracts $ (5.4 ) $ (0.8 ) Cost of goods sold $ (1.0 ) $ 0.9 Option currency contracts 8.0 1.9 Cost of goods sold 9.0 (1.6 ) Interest rate swap contract (10.7 ) — Interest expense — — $ (8.1 ) $ 1.1 $ 8.0 $ (0.7 ) |
Location and Amounts of Gains and Losses on Derivative Instrument Designated as Fair Value Hedge | The location and amounts of gains and losses on the derivative instrument designated as a fair value hedge are as follows: Location in (Loss) Recognized on Swap Gain Recognized on Debt Quarter Ended September 30, Nine Months Ended September 30, Quarter Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 2015 2014 2015 2014 (dollars in millions) Interest rate swap contract Interest expense $ (1.2 ) $ (1.3 ) $ (3.3 ) $ (3.2 ) $ 1.2 $ 1.3 $ 3.3 $ 3.2 |
Financial Instrument Assets and (Liabilities) Measured at Fair Value on Recurring Basis | The following table summarizes certain financial instrument assets and (liabilities) measured at fair value on a recurring basis: September 30, December 31, (dollars in millions) Forward currency contracts $ (5.4 ) $ (4.7 ) Option currency contracts 6.9 9.3 Interest rate swap contracts (9.1 ) 4.9 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | Inventories consisted of: September 30, December 31, (dollars in millions) Finished goods $ 210.2 $ 225.4 Work in process 28.8 23.5 Raw materials 142.1 127.3 $ 381.1 $ 376.2 |
Pension Plans (Tables)
Pension Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Components of Net Periodic Pension Cost | The components of net periodic pension cost are as follows: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Service cost, net of employee contributions $ 7.1 $ 6.7 $ 22.1 $ 20.2 Interest cost 5.2 5.4 15.1 15.9 Expected return on plan assets (7.9 ) (7.2 ) (23.5 ) (20.8 ) Amortization 3.1 2.6 8.9 7.5 Net periodic pension cost $ 7.5 $ 7.5 $ 22.6 $ 22.8 |
Shareholders' Investment (Table
Shareholders' Investment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | The changes in accumulated other comprehensive income (loss) by component are as follows: Derivative Foreign Currency Benefit Total (dollars in millions) Balance at December 31, 2013 $ — $ 47.3 $ (68.2 ) $ (20.9 ) Other comprehensive income (loss) before reclassifications 1.6 (14.6 ) — (13.0 ) Tax (provision) benefit (a) (0.9 ) — — (0.9 ) Other comprehensive income (loss) before reclassifications, net of taxes 0.7 (14.6 ) — (13.9 ) Reclassifications 0.7 (b) — 7.5 (c) 8.2 Tax provision (benefit) (0.1 ) — (2.6 ) (2.7 ) Reclassifications, net of tax 0.6 — 4.9 5.5 Other comprehensive income (loss) 1.3 (14.6 ) 4.9 (8.4 ) Balance at September 30, 2014 $ 1.3 $ 32.7 $ (63.3 ) $ (29.3 ) Balance at December 31, 2014 $ 0.9 $ (3.1 ) $ (86.6 ) $ (88.8 ) Other comprehensive income (loss) before reclassifications (8.3 ) (61.4 ) — (69.7 ) Tax (provision) benefit (a) 2.4 — — 2.4 Other comprehensive income (loss) before reclassifications, net of taxes (5.9 ) (61.4 ) — (67.3 ) Reclassifications (8.0 ) (b) — 8.9 (c) 0.9 Tax provision (benefit) 2.4 — (3.1 ) (0.7 ) Reclassifications, net of tax (5.6 ) — 5.8 0.2 Other comprehensive income (loss) (11.5 ) (61.4 ) 5.8 (67.1 ) Balance at September 30, 2015 $ (10.6 ) $ (64.5 ) $ (80.8 ) $ (155.9 ) (a) Income taxes are not provided for foreign currency translation adjustment. (b) See Note 5 of the notes to condensed consolidated financial statements. (c) These components are included in the computation of net periodic pension cost. See Note 9 of the notes to condensed consolidated financial statements. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Sales Based on Location of External Customers by Geographic Region | Net sales based on the location of external customers by geographic region are: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) United States $ 606.5 $ 565.4 $ 1,772.6 $ 1,671.9 Europe 107.4 118.8 322.6 365.3 Japan 41.6 41.9 125.8 123.1 Other 110.2 103.9 324.2 296.1 $ 865.7 $ 830.0 $ 2,545.2 $ 2,456.4 |
Total Net Sales by Product Group Category | Total net sales by product group category are: Quarter Ended Nine Months Ended 2015 2014 2015 2014 (dollars in millions) Vascular $ 250.5 $ 231.5 $ 731.0 $ 683.7 Urology 212.3 209.6 627.1 618.1 Oncology 239.3 229.7 699.1 673.4 Surgical Specialties 139.8 135.6 419.5 410.1 Other 23.8 23.6 68.5 71.1 $ 865.7 $ 830.0 $ 2,545.2 $ 2,456.4 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Jul. 01, 2015 |
Kobayashi Pharmaceutical Co Ltd | ||
Business Acquisition [Line Items] | ||
Business acquisition, acquisition percentage | 50.00% | |
Business acquisition, purchase consideration cash payment | $ 25 | |
Non-contingent future payments for business combination | $ 68.3 | |
Business acquisition, consideration payment period | 10 years | |
Business acquisition, expected closing date | 2015-11 | |
Vascular Pathways Inc | ||
Business Acquisition [Line Items] | ||
Business acquisition, acquisition percentage | 100.00% | |
Business acquisition, purchase consideration | $ 81.5 | |
Business acquisition, maximum future contingent payments | 15 | |
Purchase price allocation at fair value, recognition of deferred tax liabilities | 24.8 | |
Purchase price allocation at fair value, recognition of deferred tax assets | 9.9 | |
Purchase price allocation at fair value, other liabilities | 11 | |
Purchase price allocation at fair value, goodwill | 42.4 | |
Acquisition related transaction costs | 2 | |
Vascular Pathways Inc | Developed technologies | ||
Business Acquisition [Line Items] | ||
Purchase price allocation at fair value, recognition of finite-lived intangible asset | $ 65 | |
Estimated useful lives, years | 12 years |
Earnings Per Share Computation
Earnings Per Share Computation (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net (loss) income | $ (86) | $ 131.3 | $ (0.9) | $ 160.3 |
Less: Income allocated to participating securities | 0 | 2.2 | 0 | 2.6 |
Net (loss) income available to common shareholders | $ (86) | $ 129.1 | $ (0.9) | $ 157.7 |
Weighted average common shares outstanding | 74.1 | 74.8 | 74.2 | 75.7 |
Dilutive common share equivalents from share-based compensation plans | 0 | 1.5 | 0 | 1.5 |
Weighted average common and common equivalent shares outstanding, assuming dilution | 74.1 | 76.3 | 74.2 | 77.2 |
Earnings per Common Share - Add
Earnings per Common Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common share equivalents not included in computation of diluted weighted average shares outstanding | 1.3 | 1.3 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Income Tax [Line Items] | |||
Income tax examination, increase (decrease) in liability from prior year | $ 10.9 | ||
Unrecognized tax benefits related to federal, state and foreign taxes | $ 30.3 | $ 36.1 | |
Unrecognized tax benefits that would impact effective tax rate | 27.3 | ||
Accrued interest | 2.9 | $ 2.9 | |
Decrease in unrecognized tax benefits within the next 12 months | $ 8.5 | ||
Number of months unrecognized tax benefits may decrease | 12 months |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2015USD ($)Country | Dec. 31, 2014USD ($) | |
Commercial Paper | ||
Derivative [Line Items] | ||
Commercial paper borrowings outstanding | $ 0 | $ 78,000,000 |
Five Year Credit Facility Expiring In November 2019 | ||
Derivative [Line Items] | ||
Line of credit facility, borrowing capacity | $ 750,000,000 | |
Line of credit facility, expiration date | 2019-11 | |
Line of credit facility, term, in years | 5 years | |
National Healthcare Systems and Private Sector Customers | ||
Derivative [Line Items] | ||
Accounts receivable, net | $ 54,000,000 | |
Accounts receivable greater than 365 days past due | $ 7,900,000 | |
The number of countries in Europe in which certain collection risks exist | Country | 4 | |
National Healthcare Systems and Private Sector Customers | Greece | ||
Derivative [Line Items] | ||
Accounts receivable, net | $ 13,000,000 | |
Accounts receivable greater than 365 days past due | 6,500,000 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||
Derivative [Line Items] | ||
Fair value of contingent consideration | 11,200,000 | 23,100,000 |
Fair Value, Inputs, Level 2 | ||
Derivative [Line Items] | ||
Fair value of long-term debt including current maturities and the effects of the related interest rate swap contract | 1,465,700,000 | 1,481,700,000 |
Interest rate swap contract | ||
Derivative [Line Items] | ||
Notional value of derivative contracts | $ 250,000,000 | |
Fixed-rate notes due date | 2,016 | |
Fixed-rate notes interest percentage | 2.875% | |
Forward Starting Interest Rate Swaps | ||
Derivative [Line Items] | ||
Notional value of derivative contracts | $ 250,000,000 | |
Derivative termination date | 2016-05 | |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
Notional value of derivative contracts | $ 232,200,000 | $ 191,100,000 |
Location and Fair Value of Deri
Location and Fair Value of Derivative Instruments Designated as Hedging Instruments (Detail) - Derivatives Designated as Hedging Instruments - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | $ 11.6 | $ 16.1 |
Fair value of derivative liability | 19.2 | 6.6 |
Forward currency contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 2.7 | 1.9 |
Forward currency contracts | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 0.6 | 0 |
Forward currency contracts | Accrued Expenses | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liability | 7.3 | 6.6 |
Forward currency contracts | Other Long-term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liability | 1.4 | 0 |
Option currency contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 6.2 | 9.3 |
Option currency contracts | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 0.7 | 0 |
Interest rate swap contract | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 1.4 | 0 |
Interest rate swap contract | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 0 | 4.9 |
Interest rate swap contract | Accrued Expenses | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liability | $ 10.5 | $ 0 |
Location and Amounts of Gains a
Location and Amounts of Gains and Losses on Derivative Instruments Designated as Cash Flow Hedges (Detail) - Cash flow hedges - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Recognized in Other Comprehensive Income (Loss) | $ (18.9) | $ 0.2 | $ (8.1) | $ 1.1 |
Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | 2.9 | (0.5) | 8 | (0.7) |
Forward currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Recognized in Other Comprehensive Income (Loss) | (3.6) | (1.7) | (5.4) | (0.8) |
Forward currency contracts | Cost of Goods Sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | (1.6) | 0.1 | (1) | 0.9 |
Option currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Recognized in Other Comprehensive Income (Loss) | (2.4) | 1.9 | 8 | 1.9 |
Option currency contracts | Cost of Goods Sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | 4.5 | (0.6) | 9 | (1.6) |
Interest rate swap contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Recognized in Other Comprehensive Income (Loss) | (12.9) | 0 | (10.7) | 0 |
Interest rate swap contract | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | $ 0 | $ 0 | $ 0 | $ 0 |
Location and Amounts of Gains31
Location and Amounts of Gains and Losses on Derivative Instrument Designated as Fair Value Hedge (Detail) - Interest rate swap contract - Interest Expense - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss Recognized on Swap | $ (1.2) | $ (1.3) | $ (3.3) | $ (3.2) |
Gain Recognized on Long-Term Debt | $ 1.2 | $ 1.3 | $ 3.3 | $ 3.2 |
Financial Instrument Assets and
Financial Instrument Assets and (Liabilities) Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - Fair Value, Inputs, Level 2 - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Forward currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instrument assets and (liabilities) measured at fair value | $ (5.4) | $ (4.7) |
Option currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instrument assets and (liabilities) measured at fair value | 6.9 | 9.3 |
Interest rate swap contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial instrument assets and (liabilities) measured at fair value | $ (9.1) | $ 4.9 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Finished goods | $ 210.2 | $ 225.4 |
Work in process | 28.8 | 23.5 |
Raw materials | 142.1 | 127.3 |
Inventory, net, total | $ 381.1 | $ 376.2 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | Oct. 23, 2015 | Oct. 01, 2015LegalMatterPlaintiffClaimSubsidiary | May. 01, 2015USD ($) | Nov. 01, 2013USD ($) | Jul. 31, 2015USD ($) | Jun. 30, 2015LegalMatterPatent | Apr. 30, 2015LegalMatter | Apr. 30, 2014LegalMatter | Jul. 31, 2013USD ($) | Jul. 31, 2012USD ($) | Jun. 30, 2007LegalMatter | Sep. 30, 2015USD ($)LegalMatter | Jun. 30, 2015USD ($)LegalMatterPatent | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) | Jun. 30, 2013USD ($)LegalMatter | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($)LegalMatter | Sep. 30, 2015USD ($)LegalMatter | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Jul. 31, 2014LegalMatter | Jan. 16, 2014LegalMatter | Jun. 05, 2013LegalMatter | Jul. 31, 2010USD ($) | Mar. 31, 2009USD ($) | Dec. 31, 2007USD ($) |
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Product claims, charges incurred after tax | $ 228 | $ 325 | $ 238 | $ 92 | $ 276 | ||||||||||||||||||||||
Accruals for product liability and other legal matters | 1,309.6 | $ 1,309.6 | $ 1,041.5 | $ 1,309.6 | $ 1,309.6 | $ 1,309.6 | |||||||||||||||||||||
Payments to qualified settlement fund | 47.9 | 297.4 | |||||||||||||||||||||||||
Payments to qualified claimants from qualified settlement funds | 33.9 | 235.9 | |||||||||||||||||||||||||
Other payments to qualified claimants from qualified settlement funds | 17.6 | 58.3 | |||||||||||||||||||||||||
Accrued Expenses | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Accruals for product liability and other legal matters, accrued expenses | 619.8 | 619.8 | 101.7 | 619.8 | 619.8 | 619.8 | |||||||||||||||||||||
Subsequent Event | Minimum | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Proceedings that could be material to the company | However, one or more of the proceedings could be material to the company's business and/or results of operations. | ||||||||||||||||||||||||||
Cases that could be settled at any time | These discussions could result in settlements of one or more of these claims at any time. | ||||||||||||||||||||||||||
Receivables Related to Product Liability Matters | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Receivables related to product liability matters | 150.2 | 150.2 | 379.3 | 150.2 | 150.2 | 150.2 | |||||||||||||||||||||
Receivables Related to Product Liability Matters | Other Assets | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Receivables related to product liability matters, noncurrent | 145.6 | 145.6 | $ 358.9 | $ 145.6 | 145.6 | $ 145.6 | |||||||||||||||||||||
W. L. Gore | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
U. S. District Court award for damages | $ 109 | $ 371 | $ 185 | ||||||||||||||||||||||||
Number of motions heard | LegalMatter | 3 | ||||||||||||||||||||||||||
Litigation judgment or settlement, amount | $ 210.5 | $ 894.3 | |||||||||||||||||||||||||
Gain (loss) related to litigation judgment or settlement, after tax | $ 131.7 | 557.4 | |||||||||||||||||||||||||
Cumulative litigation settlement amount | $ 1,370.3 | ||||||||||||||||||||||||||
Litigation related royalty revenue | $ 38.4 | $ 113.7 | |||||||||||||||||||||||||
Preliminary ruling number of motions | LegalMatter | 3 | ||||||||||||||||||||||||||
Number of patents | Patent | 1 | 1 | |||||||||||||||||||||||||
W. L. Gore | Attorney Fees | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
U. S. District Court award for damages | 19 | ||||||||||||||||||||||||||
W. L. Gore | Prejudgment Interest | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
U. S. District Court award for damages | $ 20 | ||||||||||||||||||||||||||
W. L. Gore | Minimum | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Court-assessed royalty rate | 12.50% | ||||||||||||||||||||||||||
W. L. Gore | Maximum | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Court-assessed royalty rate | 20.00% | ||||||||||||||||||||||||||
Other (income) expense, net | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Product claims, charges incurred before taxes | $ 241 | $ 337 | $ 259 | 108 | $ 293 | ||||||||||||||||||||||
Other (income) expense, net | W. L. Gore | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Gain (loss) related to litigation judgment or settlement | $ 210.5 | $ 894.3 | |||||||||||||||||||||||||
Hernia Product Claims | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of multidistrict litigations | LegalMatter | 1 | ||||||||||||||||||||||||||
Hernia Product Claims | Canada | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of putative class actions settled | LegalMatter | 3 | ||||||||||||||||||||||||||
Hernia Product Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of individual plaintiffs | Plaintiff | 90 | ||||||||||||||||||||||||||
Number of cases currently scheduled | LegalMatter | 2 | ||||||||||||||||||||||||||
Hernia Product Claims | Subsequent Event | United States | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of putative class actions | LegalMatter | 1 | ||||||||||||||||||||||||||
Hernia Product Claims | Federal Law Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of lawsuits | LegalMatter | 35 | ||||||||||||||||||||||||||
Hernia Product Claims | State Law Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of lawsuits | LegalMatter | 55 | ||||||||||||||||||||||||||
Hernia Product Claims | State Law Claims | Superior Court of State of Rhode Island | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of lawsuits | LegalMatter | 30 | ||||||||||||||||||||||||||
Number of individual plaintiffs | Plaintiff | 30 | ||||||||||||||||||||||||||
Women's Health Product Claims | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of claims in settlement agreement | LegalMatter | 3,030 | 2,880 | 560 | 6,470 | |||||||||||||||||||||||
The number of claims subject to an agreement or an agreement in principle | LegalMatter | 3,030 | 2,880 | |||||||||||||||||||||||||
Women's Health Product Claims | Medtronic | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Payment for settlement of indemnification obligation | $ 121 | ||||||||||||||||||||||||||
Women's Health Product Claims | California state case | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
U. S. District Court award for plaintiff's damages | $ 3.6 | ||||||||||||||||||||||||||
Women's Health Product Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of individual plaintiffs | Plaintiff | 12,850 | ||||||||||||||||||||||||||
Generic complaints | Claim | 705 | ||||||||||||||||||||||||||
Number of claims not yet filed | LegalMatter | 1,160 | ||||||||||||||||||||||||||
Women's Health Product Claims | Subsequent Event | Minimum | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of additional trials | The company anticipates that additional trials, including one or more possible consolidated trials, may occur in the future. | ||||||||||||||||||||||||||
Women's Health Product Claims | Subsequent Event | Medtronic | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of subsidiaries of a parent company that have an obligation to indemnify | Subsidiary | 2 | ||||||||||||||||||||||||||
Women's Health Product Claims | Subsequent Event | United States | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of putative class actions | LegalMatter | 5 | ||||||||||||||||||||||||||
Women's Health Product Claims | Subsequent Event | Canada | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of putative class actions | LegalMatter | 5 | ||||||||||||||||||||||||||
Women's Health Product Claims | Ontario Superior Court of Justice | Canada | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of putative class actions with class certifications dismissed | LegalMatter | 1 | ||||||||||||||||||||||||||
Women's Health Product Claims | Multi District Litigation | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
U. S. District Court award for plaintiff's damages | $ 2 | ||||||||||||||||||||||||||
Number of individual case for trial | LegalMatter | 300 | 200 | |||||||||||||||||||||||||
Filter Product Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of individual plaintiffs | Plaintiff | 65 | ||||||||||||||||||||||||||
Number of multidistrict litigations | LegalMatter | 50 | ||||||||||||||||||||||||||
Number of claims not yet filed | LegalMatter | 130 | ||||||||||||||||||||||||||
Filter Product Claims | State Law Claims | Minimum | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of claims in settlement agreement | LegalMatter | 30 | ||||||||||||||||||||||||||
Filter Product Claims | State Law Claims | Subsequent Event | |||||||||||||||||||||||||||
Commitments and Contingencies [Line Items] | |||||||||||||||||||||||||||
Number of lawsuits | LegalMatter | 15 | ||||||||||||||||||||||||||
Period for additional filter product claims trials | 12 months |
Share-Based Compensation Plans
Share-Based Compensation Plans - Additional Information (Detail) $ / shares in Units, $ in Millions | Apr. 15, 2015shares | Jul. 31, 2015$ / sharesshares | Jul. 31, 2014$ / sharesshares | Sep. 30, 2015USD ($)shares | Mar. 31, 2015 | Sep. 30, 2014USD ($) | Mar. 31, 2014 | Sep. 30, 2015USD ($)CompensationPlanshares | Sep. 30, 2014USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of employee stock purchase programs | CompensationPlan | 2 | ||||||||
Share-based payment arrangements | $ | $ 17 | $ 16.3 | $ 61.1 | $ 53 | |||||
Unrecognized compensation expenses related to share-based payment arrangements | $ | $ 95.2 | $ 95.2 | |||||||
Weighted-average period of recognizing unrecognized compensation expenses related to share-based compensation, in years | 2 years | ||||||||
2012 Long Term Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Additional shares authorized | 1,500,000 | ||||||||
Number of remaining shares that may be issued | 6,377,456 | 6,377,456 | |||||||
Directors Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of remaining shares that may be issued | 31,462 | 31,462 | |||||||
Management Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fair value assumptions, risk-free interest rate | 0.16% | 0.07% | |||||||
Fair value assumptions, dividend yield | 0.60% | 0.60% | |||||||
Fair value assumptions, expected life in years | 7 months 6 days | 7 months 6 days | |||||||
Expected number of shares to be purchased in the period | 200,000 | ||||||||
Number of shares purchased in period | 200,000 | ||||||||
Fair value per share of shares authorized for issuance | $ / shares | $ 60.47 | $ 51.82 | |||||||
Fair value assumptions, expected volatility | 17.00% | 20.00% | |||||||
Performance Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award requisite service periods | 3 years | 3 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | These units have requisite service periods of three years and have no dividend rights. | ||||||||
Fair value assumptions, risk-free interest rate | 0.86% | 0.70% | |||||||
Fair value assumptions, dividend yield | 0.51% | 0.62% | |||||||
Fair value assumptions, expected life in years | 2 years 9 months 11 days | 2 years 10 months 17 days |
Components of Net Periodic Pens
Components of Net Periodic Pension Cost (Detail) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost, net of employee contributions | $ 7.1 | $ 6.7 | $ 22.1 | $ 20.2 |
Interest cost | 5.2 | 5.4 | 15.1 | 15.9 |
Expected return on plan assets | (7.9) | (7.2) | (23.5) | (20.8) |
Amortization | 3.1 | 2.6 | 8.9 | 7.5 |
Net periodic pension cost | $ 7.5 | $ 7.5 | $ 22.6 | $ 22.8 |
Shareholders' Investment - Addi
Shareholders' Investment - Additional Information (Detail) shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Shareholders Equity [Line Items] | |
Number of shares of common stock purchased | shares | 2.1 |
Purchase of common stock | $ 386.3 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | $ (88.8) | $ (20.9) | |||
Other comprehensive income (loss) before reclassifications | (69.7) | (13) | |||
Tax (provision) benefit | [1] | 2.4 | (0.9) | ||
Other comprehensive income (loss) before reclassifications, net of taxes | (67.3) | (13.9) | |||
Reclassifications | 0.9 | 8.2 | |||
Tax provision (benefit) | (0.7) | (2.7) | |||
Reclassifications, net of tax | 0.2 | 5.5 | |||
Other comprehensive income (loss) | $ (10.2) | $ (16.7) | (67.1) | (8.4) | |
Ending balance | (155.9) | (29.3) | (155.9) | (29.3) | |
Derivative Instruments Designated as Cash Flow Hedges | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | 0.9 | 0 | |||
Other comprehensive income (loss) before reclassifications | (8.3) | 1.6 | |||
Tax (provision) benefit | [1] | 2.4 | (0.9) | ||
Other comprehensive income (loss) before reclassifications, net of taxes | (5.9) | 0.7 | |||
Reclassifications | [2] | (8) | 0.7 | ||
Tax provision (benefit) | 2.4 | (0.1) | |||
Reclassifications, net of tax | (5.6) | 0.6 | |||
Other comprehensive income (loss) | (11.5) | 1.3 | |||
Ending balance | (10.6) | 1.3 | (10.6) | 1.3 | |
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (3.1) | 47.3 | |||
Other comprehensive income (loss) before reclassifications | (61.4) | (14.6) | |||
Tax (provision) benefit | [1] | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications, net of taxes | (61.4) | (14.6) | |||
Reclassifications | 0 | 0 | |||
Tax provision (benefit) | 0 | 0 | |||
Reclassifications, net of tax | 0 | 0 | |||
Other comprehensive income (loss) | (61.4) | (14.6) | |||
Ending balance | (64.5) | 32.7 | (64.5) | 32.7 | |
Benefit Plans | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (86.6) | (68.2) | |||
Other comprehensive income (loss) before reclassifications | 0 | 0 | |||
Tax (provision) benefit | [1] | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications, net of taxes | 0 | 0 | |||
Reclassifications | [3] | 8.9 | 7.5 | ||
Tax provision (benefit) | (3.1) | (2.6) | |||
Reclassifications, net of tax | 5.8 | 4.9 | |||
Other comprehensive income (loss) | 5.8 | 4.9 | |||
Ending balance | $ (80.8) | $ (63.3) | $ (80.8) | $ (63.3) | |
[1] | Income taxes are not provided for foreign currency translation adjustment. | ||||
[2] | See Note 5 of the notes to condensed consolidated financial statements. | ||||
[3] | These components are included in the computation of net periodic pension cost. See Note 9 of the notes to condensed consolidated financial statements. |
Net Sales Based on Location of
Net Sales Based on Location of External Customer and Identifiable Assets by Geographic Region (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 865.7 | $ 830 | $ 2,545.2 | $ 2,456.4 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 606.5 | 565.4 | 1,772.6 | 1,671.9 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 107.4 | 118.8 | 322.6 | 365.3 |
Japan | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 41.6 | 41.9 | 125.8 | 123.1 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 110.2 | $ 103.9 | $ 324.2 | $ 296.1 |
Total Net Sales by Product Grou
Total Net Sales by Product Group Category (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 865.7 | $ 830 | $ 2,545.2 | $ 2,456.4 |
Vascular | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 250.5 | 231.5 | 731 | 683.7 |
Urology | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 212.3 | 209.6 | 627.1 | 618.1 |
Oncology | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 239.3 | 229.7 | 699.1 | 673.4 |
Surgical Specialties | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 139.8 | 135.6 | 419.5 | 410.1 |
Other Product Group | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 23.8 | $ 23.6 | $ 68.5 | $ 71.1 |