|
|
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
36-4316614
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
One Edwards Way, Irvine, California 92614
(Address of principal executive offices) (ZIP Code)
|
||
(949) 250-2500
Registrant's telephone number, including area code
|
||
Securities registered pursuant to Section 12(b) of the Act:
|
|
Name of each exchange on which registered:
|
Common Stock, par value $1.00 per share
|
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the Act:
None
|
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller Reporting Company
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
federal, state, and foreign anti-kickback laws and regulations, which generally prohibit payments to physicians or other purchasers of medical products as an inducement to purchase a product;
|
•
|
the Stark law, which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these programs for the provision of certain designated health services if the physician (or a member of the physician's immediate family) has a financial relationship with that provider;
|
•
|
federal and state laws and regulations that protect the confidentiality of certain patient health information, including patient records, and restrict the use and disclosure of such information, in particular, the Health Insurance Portability and Accountability Act of 1996;
|
•
|
the Physician Payments Sunshine Act, which requires public disclosure of the financial relationships of United States physicians and teaching hospitals with applicable manufacturers, including medical device, pharmaceutical, and biologics companies;
|
•
|
the False Claims Act, which prohibits the submission of false or otherwise improper claims for payment to a federally funded health care program, and health care fraud statutes that prohibit false statements and improper claims to any third-party payor; and
|
•
|
the United States Foreign Corrupt Practices Act, which can be used to prosecute companies in the United States for arrangements with foreign government officials or other parties outside the United States.
|
•
|
product standards and specifications;
|
•
|
packaging requirements;
|
•
|
labeling requirements;
|
•
|
product collection and disposal requirements;
|
•
|
quality system requirements;
|
•
|
import restrictions;
|
•
|
tariffs;
|
•
|
duties; and
|
•
|
tax requirements.
|
•
|
changes in local medical reimbursement policies and programs;
|
•
|
changes in foreign regulatory requirements;
|
•
|
changes in a specific country's or region's political or economic conditions, including changing circumstances in emerging regions, that may reduce the number of procedures that use our products;
|
•
|
trade protection measures, quotas, embargoes, import or export licensing requirements, and duties, tariffs, or surcharges;
|
•
|
potentially negative impact of tax laws, including transfer pricing liabilities and tax costs associated with the repatriation of cash;
|
•
|
difficulty in staffing and managing global operations;
|
•
|
cultural, exchange rate, or other local factors affecting financial terms with customers;
|
•
|
local economic and financial conditions, including sovereign defaults and decline in sovereign credit ratings, affecting the collectability of receivables, including receivables from sovereign entities;
|
•
|
an outbreak of any life-threatening communicable disease;
|
•
|
economic and political instability and local economic and political conditions;
|
•
|
differing labor regulations; and
|
•
|
differing protection of intellectual property.
|
•
|
announcements of innovations, new products, strategic developments, or business combinations by us or our competitors;
|
•
|
demand for and clinical acceptance of products;
|
•
|
the timing and execution of customer contracts, particularly large contracts that would materially affect our operating results in a given quarter;
|
•
|
the timing of sales of products and of the introduction of new products;
|
•
|
the timing of marketing, training, and other expenses related to the introduction of new products;
|
•
|
the timing of regulatory approvals;
|
•
|
changes in foreign currency exchange rates;
|
•
|
delays or problems in introducing new products, such as slower than anticipated adoption of transcatheter heart valves;
|
•
|
changes in our pricing policies or the pricing policies of our competitors;
|
•
|
the timing of approvals of governmental reimbursement rates or changes in reimbursement rates for our products;
|
•
|
increased expenses, whether related to sales and marketing, raw materials or supplies, product development, or administration;
|
•
|
changes in the level of economic activity in the United States or other regions in which we do business;
|
•
|
changes to accounting standards;
|
•
|
costs related to acquisitions of technologies or businesses; and
|
•
|
our ability to expand our operations and the amount and timing of expansion-related expenditures.
|
North America
|
|
|
|
|
Irvine, California
|
(1
|
)
|
|
Corporate Headquarters, Research and Development, Regulatory and Clinical Affairs, Manufacturing, Administration
|
Draper, Utah
|
(1
|
)
|
|
Administration, Manufacturing
|
Haina, Dominican Republic
|
(2
|
)
|
|
Manufacturing
|
Añasco, Puerto Rico
|
(2
|
)
|
|
Manufacturing
|
Central America
|
|
|
|
|
Costa Rica
|
(2
|
)
|
|
Manufacturing
|
Europe
|
|
|
|
|
Horw, Switzerland
|
(2
|
)
|
|
Manufacturing, Administration
|
Nyon, Switzerland
|
(1
|
)
|
|
Administration, Marketing
|
Prague, Czech Republic
|
(2
|
)
|
|
Administration
|
Asia
|
|
|
|
|
Tokyo, Japan
|
(2
|
)
|
|
Administration, Marketing, Distribution
|
Shanghai, China
|
(2
|
)
|
|
Administration
|
Singapore
|
(1),(2)
|
|
|
Manufacturing, Marketing, Distribution, Administration
|
(1)
|
Owned property.
|
(2)
|
Leased property.
|
|
2016
|
|
2015
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
Calendar Quarter Ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||
March 31
|
$
|
89.93
|
|
|
$
|
72.20
|
|
|
$
|
75.21
|
|
|
$
|
61.99
|
|
June 30
|
112.00
|
|
|
86.73
|
|
|
73.65
|
|
|
61.38
|
|
||||
September 30
|
121.73
|
|
|
98.02
|
|
|
79.50
|
|
|
62.53
|
|
||||
December 31
|
121.75
|
|
|
81.12
|
|
|
83.43
|
|
|
70.32
|
|
Period
|
|
|
|
Total Number
of Shares
(or Units)
Purchased (a)
|
|
Average
Price Paid
per Share
(or Unit)
|
|
Total Number of
Shares (or Units)
Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number
(or Approximate
Dollar Value) of
Shares that
May Yet Be
Purchased
Under the Plans
or Programs
(in millions) (b), (c)
|
|
||||||
October 1, 2016 through October 31, 2016
|
|
44,109
|
|
|
$
|
101.82
|
|
|
44,109
|
|
|
$
|
277.5
|
|
|
||
November 1, 2016 through November 30, 2016
|
|
411
|
|
|
89.63
|
|
|
—
|
|
|
1,277.5
|
|
|
||||
December 1, 2016 through December 31, 2016
|
|
2,700,000
|
|
|
91.25
|
|
|
2,700,000
|
|
|
1,031.0
|
|
|
||||
Total
|
|
2,744,520
|
|
|
91.42
|
|
|
2,744,109
|
|
|
|
|
(a)
|
The difference between the total number of shares (or units) purchased and the total number of shares (or units) purchased as part of publicly announced plans or programs is due to shares withheld by us to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees.
|
(b)
|
On July 10, 2014, the Board of Directors approved a stock repurchase program authorizing us to purchase on the open market, including pursuant to a Rule 10b5-1 plan and in privately negotiated transactions, up to $750.0 million of our common stock. On November 10, 2016, the Board of Directors approved a new stock repurchase program providing for an additional $1.0 billion of repurchases of our common stock.
|
(c)
|
In October 2016, our accelerated share repurchase ("ASR") agreement concluded and we received an additional 44 thousand shares of our common stock. Shares purchased pursuant to the ASR agreement are presented in the table above in the periods in which they were received.
|
Total Cumulative Return
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
||||||||||
Edwards Lifesciences
|
$
|
127.54
|
|
|
$
|
93.01
|
|
|
$
|
180.17
|
|
|
$
|
223.42
|
|
|
$
|
265.06
|
|
S&P 500
|
116.00
|
|
|
153.58
|
|
|
174.60
|
|
|
177.01
|
|
|
198.18
|
|
|||||
S&P 500 Healthcare Equipment Index
|
117.42
|
|
|
150.28
|
|
|
181.96
|
|
|
194.37
|
|
|
207.46
|
|
|
|
As of or for the Years Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
(in millions, except per share data)
|
||||||||||||||||||
OPERATING RESULTS
|
Net sales
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
|
$
|
2,045.5
|
|
|
$
|
1,899.6
|
|
|
Gross profit
|
2,166.3
|
|
|
1,876.5
|
|
|
1,697.3
|
|
|
1,528.9
|
|
|
1,408.6
|
|
|||||
|
Net income(a)
|
569.5
|
|
|
494.9
|
|
|
811.1
|
|
|
389.1
|
|
|
291.5
|
|
|||||
COMMON STOCK INFORMATION
|
Net income per common share(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic
|
$
|
2.67
|
|
|
$
|
2.30
|
|
|
$
|
3.81
|
|
|
$
|
1.74
|
|
|
$
|
1.27
|
|
|
Diluted
|
2.61
|
|
|
2.25
|
|
|
3.74
|
|
|
1.71
|
|
|
1.23
|
|
|||||
|
Cash dividends declared per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
BALANCE SHEET DATA
|
Total assets
|
$
|
4,510.0
|
|
|
$
|
4,056.3
|
|
|
$
|
3,519.0
|
|
|
$
|
2,704.8
|
|
|
$
|
2,209.3
|
|
|
Long-term debt(b)
|
822.3
|
|
|
596.9
|
|
|
594.1
|
|
|
588.0
|
|
|
189.3
|
|
(a)
|
The above results include special charges of
$34.5 million
during
2016
and
$70.7 million
during
2014
. In addition, the above results include $750.0 million ($487.9 million, net of tax) in 2014 for an upfront payment received under a litigation settlement agreement. See Part II, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of Operations
" and Note 3 and Note 4 to the
"Consolidated Financial Statements"
for additional information.
|
(b)
|
In October 2013, we issued $600.0 million of 2.875% fixed-rate unsecured senior notes due October 15, 2018 ("the Notes").
|
•
|
we received FDA approval for an expanded indication study of the
Edwards SAPIEN 3
valve. The investigational device exemption study will enroll elderly patients with severe, symptomatic aortic stenosis who have been determined by a heart team to be at low risk for mortality if they were to undergo surgical aortic valve replacement;
|
•
|
we received FDA approval to expand use of the
Edwards SAPIEN XT
transcatheter heart valve for pulmonic valve replacement procedures. The approval enables the treatment of adult and pediatric patients who suffer from either a narrowed pulmonary valve or moderate or greater pulmonary regurgitation caused by congenital heart disease;
|
•
|
we received approval in Japan of the
Edwards SAPIEN 3
valve for the treatment of patients suffering from severe, symptomatic aortic stenosis;
|
•
|
we received FDA approval of our advanced
EDWARDS INTUITY Elite Valve System
, a rapid deployment device for surgical aortic valve replacement, and CE Mark for our
INSPIRIS RESILIA
aortic valve, the first in a new class of resilient heart valves, designed for potential future valve-in-valve procedures;
|
•
|
we received FDA approval and CE Mark to expand use of the
Edwards SAPIEN 3
valve for the treatment of patients suffering from severe, symptomatic aortic stenosis who have been determined by a heart team to be at intermediate risk for open-heart surgery;
|
•
|
we received CE Mark for our
Acumen Hypotension Probability Indicator
("HPI")
, a technology that alerts clinicians to potential hypotension, or abnormally low blood pressure, in their surgical and critical care patients before it occurs; and
|
•
|
we entered into an agreement to acquire Valtech, a privately held company based in Israel and developer of the Cardioband System for transcatheter repair of the mitral and tricuspid valves. We completed the acquisition on January 23, 2017.
|
|
Years Ended December 31,
|
|
Change
|
|
Percent Change
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
United States
|
$
|
1,615.7
|
|
|
$
|
1,262.9
|
|
|
$
|
1,047.3
|
|
|
$
|
352.8
|
|
|
$
|
215.6
|
|
|
27.9
|
%
|
|
20.6
|
%
|
Europe
|
749.0
|
|
|
717.3
|
|
|
744.5
|
|
|
31.7
|
|
|
(27.2
|
)
|
|
4.4
|
%
|
|
(3.6
|
)%
|
|||||
Japan
|
309.3
|
|
|
246.2
|
|
|
257.9
|
|
|
63.1
|
|
|
(11.7
|
)
|
|
25.6
|
%
|
|
(4.6
|
)%
|
|||||
Rest of World
|
289.7
|
|
|
267.3
|
|
|
273.2
|
|
|
22.4
|
|
|
(5.9
|
)
|
|
8.4
|
%
|
|
(2.1
|
)%
|
|||||
International
|
1,348.0
|
|
|
1,230.8
|
|
|
1,275.6
|
|
|
117.2
|
|
|
(44.8
|
)
|
|
9.5
|
%
|
|
(3.5
|
)%
|
|||||
Total net sales
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
|
$
|
470.0
|
|
|
$
|
170.8
|
|
|
18.8
|
%
|
|
7.4
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Percent Change
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
Transcatheter Heart Valve Therapy
|
$
|
1,628.5
|
|
|
$
|
1,180.3
|
|
|
$
|
943.6
|
|
|
$
|
448.2
|
|
|
$
|
236.7
|
|
|
38.0
|
%
|
|
25.1
|
%
|
Surgical Heart Valve Therapy
|
774.9
|
|
|
785.0
|
|
|
826.1
|
|
|
(10.1
|
)
|
|
(41.1
|
)
|
|
(1.3
|
)%
|
|
(5.0
|
)%
|
|||||
Critical Care
|
560.3
|
|
|
528.4
|
|
|
553.2
|
|
|
31.9
|
|
|
(24.8
|
)
|
|
6.0
|
%
|
|
(4.5
|
)%
|
|||||
Total net sales
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
|
$
|
470.0
|
|
|
$
|
170.8
|
|
|
18.8
|
%
|
|
7.4
|
%
|
•
|
increased sales of the
Edwards SAPIEN 3
valve, driven by its launch in July 2015;
|
•
|
lower sales of the
Edwards SAPIEN XT
valve as customers converted to
Edwards SAPIEN 3.
|
•
|
the
Edwards SAPIEN 3
valve, driven by its launch in July 2015; and
|
•
|
the
Edwards SAPIEN XT
valve, driven by its launch in June 2014;
|
•
|
lower sales of the
Edwards SAPIEN
valve as customers converted to
Edwards SAPIEN XT.
|
•
|
the
Edwards SAPIEN 3
valve, driven primarily by its launch in Europe in January 2014; and
|
•
|
the
Edwards SAPIEN XT
valve in Japan, driven by its launch in October 2013;
|
•
|
lower sales of the
Edwards SAPIEN XT
valve in Europe, as customers converted to
Edwards SAPIEN 3
; and
|
•
|
foreign currency exchange rate fluctuations, which decreased net sales by $71.2 million, due primarily to the weakening of the Euro against the United States dollar.
|
•
|
lower sales of aortic tissue valves in the United States, as sales of
Edwards SAPIEN 3
increased; and
|
•
|
lower international sales of mitral tissue valves, primarily in Europe and Rest of World, primarily due to supply constraints;
|
•
|
higher sales of aortic tissue valves in Europe, Japan, and Rest of World; and
|
•
|
foreign currency exchange rate fluctuations, which increased net sales by
$2.2 million
, due primarily to the strengthening of the Japanese yen against the United States dollar, partially offset by the weakening of various currencies against the United States dollar.
|
•
|
foreign currency exchange rate fluctuations, which decreased net sales by $59.7 million, due primarily to the weakening of the Euro and the Japanese yen against the United States dollar;
|
•
|
higher sales of (1) surgical heart valve products, driven by pericardial aortic tissue valves, primarily in Europe, Japan, and the United States, and (2)
EDWARDS INTUITY Elite
valves, primarily in Europe.
|
•
|
higher sales of enhanced surgical recovery products in the United States, Europe, and Rest of World;
|
•
|
higher sales of core hemodynamic products, primarily in Rest of World;
|
•
|
higher sales of hardware in the United States; and
|
•
|
foreign currency exchange rate fluctuations, which increased net sales by
$5.0 million
due primarily to the strengthening of the Japanese yen against the United States dollar, partially offset by the weakening of various currencies against the United States dollar.
|
•
|
foreign currency exchange rate fluctuations, which decreased net sales by $41.3 million due primarily to the weakening of the Euro and the Japanese yen against the United States dollar;
|
•
|
higher sales of enhanced surgical recovery products in the United States, Europe, and Rest of World.
|
•
|
a 4.3 percentage point decrease due to the impact of foreign currency exchange rate fluctuations, including the settlement of foreign currency hedging contracts; and
|
•
|
investments in manufacturing capacity;
|
•
|
a 1.6 percentage point increase in the United States, and a 0.5 percentage point increase in international markets, due to an improved product mix, driven by THVT products.
|
•
|
a 1.9 percentage point increase due to the impact of foreign currency exchange rate fluctuations, including the settlement of foreign currency hedging contracts; and
|
•
|
a 0.9 percentage point increase in the United States, and a 0.4 percentage point increase in international markets, due to an improved product mix, driven by THVT products;
|
•
|
multiple investments in our operations, including an increase in costs to improve our manufacturing processes.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Charitable foundation contribution
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange losses, net
|
0.5
|
|
|
4.8
|
|
|
2.0
|
|
|||
(Gain) loss on investments
|
(0.2
|
)
|
|
(0.1
|
)
|
|
4.5
|
|
|||
Promissory note impairment
|
—
|
|
|
—
|
|
|
4.0
|
|
|||
Insurance settlement gain
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|||
Lease contract termination costs
|
—
|
|
|
—
|
|
|
1.0
|
|
|||
Other
|
(0.4
|
)
|
|
(0.7
|
)
|
|
(0.1
|
)
|
|||
Total other expense, net
|
$
|
4.9
|
|
|
$
|
4.0
|
|
|
$
|
7.7
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense at U.S. federal statutory rate
|
$
|
258.3
|
|
|
$
|
217.8
|
|
|
$
|
400.4
|
|
Foreign income taxed at different rates
|
(88.6
|
)
|
|
(105.8
|
)
|
|
(67.1
|
)
|
|||
State and local taxes, net of federal tax benefit
|
9.7
|
|
|
3.1
|
|
|
19.3
|
|
|||
Tax credits, federal and state
|
(21.3
|
)
|
|
(15.7
|
)
|
|
(13.5
|
)
|
|||
Build (release) of reserve for uncertain tax positions for prior years
|
4.6
|
|
|
3.3
|
|
|
(4.8
|
)
|
|||
U.S. tax on foreign earnings, net of credits
|
5.1
|
|
|
20.5
|
|
|
(3.1
|
)
|
|||
Nondeductible stock-based compensation
|
3.6
|
|
|
2.3
|
|
|
2.1
|
|
|||
Other
|
(3.0
|
)
|
|
2.0
|
|
|
(0.4
|
)
|
|||
Income tax provision
|
$
|
168.4
|
|
|
$
|
127.5
|
|
|
$
|
332.9
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Uncertain gross tax positions, January 1
|
$
|
216.1
|
|
|
$
|
192.3
|
|
|
$
|
127.7
|
|
Current year tax positions
|
29.0
|
|
|
29.6
|
|
|
75.9
|
|
|||
Increase prior year tax positions
|
2.7
|
|
|
2.2
|
|
|
0.6
|
|
|||
Decrease prior year tax positions
|
(0.9
|
)
|
|
(7.4
|
)
|
|
(10.5
|
)
|
|||
Settlements
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(1.0
|
)
|
|||
Lapse of statutes of limitations
|
(1.1
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Uncertain gross tax positions, December 31
|
$
|
245.5
|
|
|
$
|
216.1
|
|
|
$
|
192.3
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
4-5
Years
|
|
After 5
Years
|
||||||||||
Debt
|
$
|
825.0
|
|
|
$
|
—
|
|
|
$
|
825.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
72.6
|
|
|
22.3
|
|
|
24.9
|
|
|
8.8
|
|
|
16.6
|
|
|||||
Interest on debt
|
30.8
|
|
|
16.4
|
|
|
14.4
|
|
|
—
|
|
|
—
|
|
|||||
Pension obligations (a)
|
6.1
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital commitment obligations (b)
|
0.6
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||||
Purchase and other commitments
|
16.4
|
|
|
13.7
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations (c), (d)
|
$
|
951.5
|
|
|
$
|
58.8
|
|
|
$
|
867.3
|
|
|
$
|
8.8
|
|
|
$
|
16.6
|
|
(a)
|
The amount included in "Less Than 1 Year" reflects anticipated contributions to our various pension plans. Anticipated contributions beyond one year are not determinable. The total accrued benefit liability for our pension plans recognized as of
December 31, 2016
was
$50.1 million
. This amount is impacted by, among other items, pension expense funding levels, changes in plan demographics and assumptions, and investment returns on plan assets. Therefore, we are unable to make a reasonably reliable estimate of the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table. See Note 12 to the "
Consolidated Financial Statements
" for further information.
|
(b)
|
Capital commitment obligations consist primarily of cash that we are obligated to pay to our limited partnership and limited liability corporation investees. These investees make equity investments in various development stage biopharmaceutical and medical device companies, and it is not certain if and/or when these payments will be made.
|
(c)
|
As of
December 31, 2016
, the gross liability for uncertain tax positions, including interest, was
$271.0 million
. We have been pursuing an APA between the Switzerland and United States governments for the years 2009 through 2013 covering transfer pricing matters with the possibility of a roll-forward of the results to subsequent years. These transfer pricing matters are significant to our consolidated financial statements, and the final outcome of the negotiations is uncertain. Management believes that adequate amounts of tax and related penalty and interest have been provided in income tax expense for any adjustments that may result for our uncertain tax positions. We are unable to make a reasonably reliable estimate of the amount and period in which the liability might be paid, and did not include this amount in the contractual obligations table.
|
(d)
|
We acquire assets still in development, enter into research and development arrangements, acquire businesses, and sponsor certain clinical trials that often require milestone, royalty, or other future payments to third-parties, contingent upon the occurrence of certain future events. In situations where we have no ability to influence the achievement of the milestone or otherwise avoid the payment, we have included those payments in the table above. However, we have excluded from the table contingent milestone payments and other contingent liabilities for which we cannot reasonably predict future payments or for which we can avoid making payment by unilaterally deciding to stop development of a product or cease progress of a clinical trial. We estimate that these contingent payments could be up to approximately
$510.0 million
if all milestones or other contingent obligations were met. Included in this amount is $350.0 million of contingent obligations related to our acquisition of Valtech, which may be paid through a combination of cash and issuance of common stock. In addition, the Valtech acquisition closed in January 2017, and the consideration paid included the issuance of approximately 2.8 million shares of our common stock (fair value of $266.5 million) and cash of $84.3 million, which has not been included in the above table.
|
•
|
timing and probability of success of clinical events or regulatory approvals;
|
•
|
timing and probability of success of meeting commercial milestones; and
|
•
|
discount rates.
|
|
|
Financial Statements:
|
|
|
|
|
|
For the Years Ended December 31, 2016, 2015, and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other schedules are not applicable and have not been submitted.
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
Cost of sales
|
797.4
|
|
|
617.2
|
|
|
625.6
|
|
|||
Gross profit
|
2,166.3
|
|
|
1,876.5
|
|
|
1,697.3
|
|
|||
Selling, general, and administrative expenses
|
904.7
|
|
|
850.7
|
|
|
858.0
|
|
|||
Research and development expenses
|
443.3
|
|
|
383.1
|
|
|
346.5
|
|
|||
Intellectual property litigation expenses (income), net (Note 3)
|
32.6
|
|
|
7.0
|
|
|
(740.4
|
)
|
|||
Special charges (Note 4)
|
34.5
|
|
|
—
|
|
|
70.7
|
|
|||
Interest expense
|
19.2
|
|
|
17.2
|
|
|
17.2
|
|
|||
Interest income
|
(10.8
|
)
|
|
(7.9
|
)
|
|
(6.4
|
)
|
|||
Other expense, net (Note 15)
|
4.9
|
|
|
4.0
|
|
|
7.7
|
|
|||
Income before provision for income taxes
|
737.9
|
|
|
622.4
|
|
|
1,144.0
|
|
|||
Provision for income taxes (Note 16)
|
168.4
|
|
|
127.5
|
|
|
332.9
|
|
|||
Net income
|
$
|
569.5
|
|
|
$
|
494.9
|
|
|
$
|
811.1
|
|
Share information
(Note 2):
|
|
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
2.67
|
|
|
$
|
2.30
|
|
|
$
|
3.81
|
|
Diluted
|
$
|
2.61
|
|
|
$
|
2.25
|
|
|
$
|
3.74
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
213.0
|
|
|
215.5
|
|
|
213.0
|
|
|||
Diluted
|
217.8
|
|
|
220.3
|
|
|
217.0
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
569.5
|
|
|
$
|
494.9
|
|
|
$
|
811.1
|
|
Other comprehensive loss, net of tax (Note 14):
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(16.1
|
)
|
|
(65.1
|
)
|
|
(96.2
|
)
|
|||
Unrealized gain (loss) on cash flow hedges
|
4.9
|
|
|
(20.5
|
)
|
|
28.8
|
|
|||
Defined benefit pension plans—net actuarial (loss) gain and other
|
(6.2
|
)
|
|
5.4
|
|
|
(5.6
|
)
|
|||
Unrealized gain (loss) on available-for-sale investments
|
0.5
|
|
|
(2.6
|
)
|
|
(0.3
|
)
|
|||
Reclassification of net realized investment loss to earnings
|
1.1
|
|
|
1.1
|
|
|
—
|
|
|||
Other comprehensive loss, net of tax
|
(15.8
|
)
|
|
(81.7
|
)
|
|
(73.3
|
)
|
|||
Comprehensive income
|
$
|
553.7
|
|
|
$
|
413.2
|
|
|
$
|
737.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
569.5
|
|
|
$
|
494.9
|
|
|
$
|
811.1
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
71.2
|
|
|
65.8
|
|
|
68.6
|
|
|||
Stock-based compensation (Notes 2 and 13)
|
56.9
|
|
|
49.9
|
|
|
48.3
|
|
|||
Excess tax benefit from stock plans (Notes 2 and 13)
|
(64.3
|
)
|
|
(41.3
|
)
|
|
(49.4
|
)
|
|||
Deferred income taxes
|
(37.4
|
)
|
|
(95.0
|
)
|
|
(71.1
|
)
|
|||
Purchased in-process research and development (Note 4)
|
34.5
|
|
|
—
|
|
|
10.6
|
|
|||
Other
|
7.9
|
|
|
11.0
|
|
|
13.9
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts and other receivables, net
|
(56.7
|
)
|
|
(38.3
|
)
|
|
(26.8
|
)
|
|||
Inventories
|
(65.6
|
)
|
|
(67.7
|
)
|
|
(30.5
|
)
|
|||
Accounts payable and accrued liabilities
|
74.0
|
|
|
29.4
|
|
|
112.9
|
|
|||
Income taxes
|
105.1
|
|
|
134.5
|
|
|
128.1
|
|
|||
Prepaid expenses and other current assets
|
(12.6
|
)
|
|
(0.2
|
)
|
|
(0.9
|
)
|
|||
Other
|
21.9
|
|
|
6.7
|
|
|
7.5
|
|
|||
Net cash provided by operating activities
|
704.4
|
|
|
549.7
|
|
|
1,022.3
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(176.1
|
)
|
|
(102.7
|
)
|
|
(82.9
|
)
|
|||
Purchases of held-to-maturity investments (Note 6)
|
(594.7
|
)
|
|
(928.5
|
)
|
|
(1,956.4
|
)
|
|||
Proceeds from held-to-maturity investments (Note 6)
|
852.5
|
|
|
1,260.1
|
|
|
1,611.2
|
|
|||
Purchases of available-for-sale investments (Note 6)
|
(470.4
|
)
|
|
(380.3
|
)
|
|
(160.4
|
)
|
|||
Proceeds from available-for-sale investments (Note 6)
|
232.6
|
|
|
179.6
|
|
|
1.7
|
|
|||
Investments in unconsolidated affiliates (Note 6)
|
(7.6
|
)
|
|
(5.1
|
)
|
|
(11.2
|
)
|
|||
Proceeds from unconsolidated affiliates (Note 6)
|
1.9
|
|
|
3.0
|
|
|
2.1
|
|
|||
Investments in trading securities, net
|
(9.8
|
)
|
|
(9.2
|
)
|
|
(14.4
|
)
|
|||
Acquisitions (Notes 7 and 8)
|
—
|
|
|
(331.6
|
)
|
|
(15.0
|
)
|
|||
Investments in intangible assets and in-process research and development
|
(41.3
|
)
|
|
(3.8
|
)
|
|
(10.8
|
)
|
|||
Proceeds from sale of assets
|
2.4
|
|
|
2.4
|
|
|
3.1
|
|
|||
Other
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(211.7
|
)
|
|
(316.1
|
)
|
|
(633.0
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of debt
|
253.5
|
|
|
31.4
|
|
|
226.3
|
|
|||
Payments on debt and capital lease obligations
|
(31.4
|
)
|
|
(29.5
|
)
|
|
(239.0
|
)
|
|||
Purchases of treasury stock
|
(662.3
|
)
|
|
(280.1
|
)
|
|
(300.9
|
)
|
|||
Proceeds from stock plans
|
103.3
|
|
|
87.2
|
|
|
113.3
|
|
|||
Excess tax benefit from stock plans (Notes 2 and 13)
|
64.3
|
|
|
41.3
|
|
|
49.4
|
|
|||
Other
|
4.1
|
|
|
(8.9
|
)
|
|
(2.1
|
)
|
|||
Net cash used in financing activities
|
(268.5
|
)
|
|
(158.6
|
)
|
|
(153.0
|
)
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
(12.5
|
)
|
|
(10.4
|
)
|
|
(2.9
|
)
|
|||
Net increase in cash and cash equivalents
|
211.7
|
|
|
64.6
|
|
|
233.4
|
|
|||
Cash and cash equivalents at beginning of year
|
718.4
|
|
|
653.8
|
|
|
420.4
|
|
|||
Cash and cash equivalents at end of year
|
$
|
930.1
|
|
|
$
|
718.4
|
|
|
$
|
653.8
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
16.1
|
|
|
$
|
14.1
|
|
|
$
|
15.5
|
|
Income taxes
|
$
|
99.9
|
|
|
$
|
86.9
|
|
|
$
|
274.7
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures accruals
|
$
|
22.7
|
|
|
$
|
15.1
|
|
|
$
|
8.3
|
|
Capital additions transferred from inventory
|
$
|
3.8
|
|
|
$
|
3.0
|
|
|
$
|
4.0
|
|
Capital lease obligations incurred
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
13.3
|
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Shares
|
|
Par Value
|
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Equity
|
||||||||||||||
BALANCE AT DECEMBER 31, 2013
|
126.0
|
|
|
$
|
126.0
|
|
|
16.7
|
|
|
$
|
(1,256.0
|
)
|
|
$
|
671.2
|
|
|
$
|
2,030.8
|
|
|
$
|
(27.6
|
)
|
|
$
|
1,544.4
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
811.1
|
|
|
|
|
|
811.1
|
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(73.3
|
)
|
|
(73.3
|
)
|
||||||
Common stock issued under equity plans, including tax benefits
|
2.9
|
|
|
2.9
|
|
|
|
|
|
|
|
|
158.9
|
|
|
|
|
|
|
|
|
161.8
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
48.3
|
|
|
|
|
|
|
|
|
48.3
|
|
||||||
Purchases of treasury stock
|
|
|
|
|
|
|
4.4
|
|
|
(300.9
|
)
|
|
|
|
|
|
|
|
|
|
|
(300.9
|
)
|
||||||
BALANCE AT DECEMBER 31, 2014
|
128.9
|
|
|
128.9
|
|
|
21.1
|
|
|
(1,556.9
|
)
|
|
878.4
|
|
|
2,841.9
|
|
|
(100.9
|
)
|
|
2,191.4
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
494.9
|
|
|
|
|
|
494.9
|
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(81.7
|
)
|
|
(81.7
|
)
|
||||||
Common stock issued under equity plans, including tax benefits
|
2.0
|
|
|
2.0
|
|
|
|
|
|
|
|
|
126.7
|
|
|
|
|
|
|
|
|
128.7
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
49.9
|
|
|
|
|
|
|
|
|
49.9
|
|
||||||
Purchases of treasury stock
|
|
|
|
|
|
|
2.6
|
|
|
(280.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(280.1
|
)
|
||||||
Stock issued to effect stock split
|
108.2
|
|
|
108.2
|
|
|
|
|
|
|
(108.2
|
)
|
|
|
|
|
|
—
|
|
||||||||||
BALANCE AT DECEMBER 31, 2015
|
239.1
|
|
|
239.1
|
|
|
23.7
|
|
|
(1,837.0
|
)
|
|
946.8
|
|
|
3,336.8
|
|
|
(182.6
|
)
|
|
2,503.1
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
569.5
|
|
|
|
|
|
569.5
|
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15.8
|
)
|
|
(15.8
|
)
|
||||||
Common stock issued under equity plans, including tax benefits
|
3.5
|
|
|
3.5
|
|
|
|
|
|
|
|
|
164.1
|
|
|
|
|
|
|
|
|
167.6
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
56.9
|
|
|
|
|
|
|
|
|
56.9
|
|
||||||
Purchases of treasury stock
|
|
|
|
|
|
|
7.3
|
|
|
(662.3
|
)
|
|
|
|
|
|
|
|
|
|
|
(662.3
|
)
|
||||||
BALANCE AT DECEMBER 31, 2016
|
242.6
|
|
|
$
|
242.6
|
|
|
31.0
|
|
|
$
|
(2,499.3
|
)
|
|
$
|
1,167.8
|
|
|
$
|
3,906.3
|
|
|
$
|
(198.4
|
)
|
|
$
|
2,619.0
|
|
•
|
the duration and extent to which the market value has been less than cost;
|
•
|
the financial condition and near term prospects of the investee/issuer;
|
•
|
the reasons for the decline in market value;
|
•
|
the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value; and
|
•
|
the investee's performance against product development milestones.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Basic:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
569.5
|
|
|
$
|
494.9
|
|
|
$
|
811.1
|
|
Weighted-average shares outstanding
|
213.0
|
|
|
215.5
|
|
|
213.0
|
|
|||
Basic earnings per share
|
$
|
2.67
|
|
|
$
|
2.30
|
|
|
$
|
3.81
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
569.5
|
|
|
$
|
494.9
|
|
|
$
|
811.1
|
|
Weighted-average shares outstanding
|
213.0
|
|
|
215.5
|
|
|
213.0
|
|
|||
Dilutive effect of stock plans
|
4.8
|
|
|
4.8
|
|
|
4.0
|
|
|||
Dilutive weighted-average shares outstanding
|
217.8
|
|
|
220.3
|
|
|
217.0
|
|
|||
Diluted earnings per share
|
$
|
2.61
|
|
|
$
|
2.25
|
|
|
$
|
3.74
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of sales
|
$
|
8.4
|
|
|
$
|
6.8
|
|
|
$
|
6.1
|
|
Selling, general, and administrative expenses
|
38.0
|
|
|
34.3
|
|
|
34.9
|
|
|||
Research and development expenses
|
10.5
|
|
|
8.8
|
|
|
7.3
|
|
|||
Total stock-based compensation expense
|
$
|
56.9
|
|
|
$
|
49.9
|
|
|
$
|
48.3
|
|
Past damages
|
$
|
754.3
|
|
License agreement
|
238.0
|
|
|
Covenant not to sue
|
77.7
|
|
|
Total
|
$
|
1,070.0
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Acquisition of IPR&D
|
$
|
34.5
|
|
|
$
|
—
|
|
|
$
|
10.2
|
|
Charitable foundation contribution
|
—
|
|
|
—
|
|
|
50.0
|
|
|||
Settlement
|
—
|
|
|
—
|
|
|
7.5
|
|
|||
Asset write-down
|
—
|
|
|
—
|
|
|
3.0
|
|
|||
Total special charges
|
$
|
34.5
|
|
|
$
|
—
|
|
|
$
|
70.7
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Accounts receivable, net
|
|
|
|
|
|
||
Trade accounts receivable
|
$
|
374.5
|
|
|
$
|
322.2
|
|
Allowance for doubtful accounts
|
(9.0
|
)
|
|
(6.8
|
)
|
||
|
$
|
365.5
|
|
|
$
|
315.4
|
|
Inventories
|
|
|
|
|
|
||
Raw materials
|
$
|
60.6
|
|
|
$
|
63.8
|
|
Work in process
|
102.4
|
|
|
64.1
|
|
||
Finished products
|
233.6
|
|
|
212.0
|
|
||
|
$
|
396.6
|
|
|
$
|
339.9
|
|
Property, plant, and equipment, net
|
|
|
|
|
|
||
Land
|
$
|
30.1
|
|
|
$
|
25.1
|
|
Buildings and leasehold improvements
|
367.2
|
|
|
293.4
|
|
||
Machinery and equipment
|
346.5
|
|
|
328.6
|
|
||
Equipment with customers
|
37.4
|
|
|
34.6
|
|
||
Software
|
100.6
|
|
|
97.4
|
|
||
Construction in progress
|
79.6
|
|
|
75.2
|
|
||
|
961.4
|
|
|
854.3
|
|
||
Accumulated depreciation
|
(381.4
|
)
|
|
(371.8
|
)
|
||
|
$
|
580.0
|
|
|
$
|
482.5
|
|
Accrued and other liabilities
|
|
|
|
|
|
||
Employee compensation and withholdings
|
$
|
216.1
|
|
|
$
|
209.4
|
|
Research and development accruals
|
40.0
|
|
|
38.6
|
|
||
Property, payroll, and other taxes
|
35.3
|
|
|
34.5
|
|
||
Accrued rebates
|
36.1
|
|
|
23.9
|
|
||
Accrued marketing expenses
|
12.6
|
|
|
9.6
|
|
||
Taxes payable
|
5.9
|
|
|
14.5
|
|
||
Litigation reserves (Note 17)
|
7.8
|
|
|
5.6
|
|
||
Fair value of derivatives
|
3.3
|
|
|
4.2
|
|
||
Other accrued liabilities
|
78.3
|
|
|
72.0
|
|
||
|
$
|
435.4
|
|
|
$
|
412.3
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
Held-to-maturity
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
Bank time deposits
|
$
|
217.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
217.0
|
|
|
$
|
440.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
440.1
|
|
U.S. government and agency securities
|
16.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
16.0
|
|
|
32.5
|
|
|
—
|
|
|
(0.2
|
)
|
|
32.3
|
|
||||||||
Asset-backed securities
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||||||
Corporate debt securities
|
3.0
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
16.4
|
|
|
—
|
|
|
—
|
|
|
16.4
|
|
||||||||
Municipal securities
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
||||||||
|
$
|
238.3
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
238.2
|
|
|
$
|
495.4
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
495.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial paper
|
$
|
35.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35.4
|
|
|
$
|
28.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.1
|
|
U.S. government and agency securities
|
143.4
|
|
|
—
|
|
|
(0.7
|
)
|
|
142.7
|
|
|
38.7
|
|
|
—
|
|
|
(0.2
|
)
|
|
38.5
|
|
||||||||
Asset-backed securities
|
86.0
|
|
|
—
|
|
|
(0.2
|
)
|
|
85.8
|
|
|
62.8
|
|
|
—
|
|
|
(0.2
|
)
|
|
62.6
|
|
||||||||
Corporate debt securities
|
333.6
|
|
|
0.4
|
|
|
(1.5
|
)
|
|
332.5
|
|
|
230.0
|
|
|
—
|
|
|
(1.3
|
)
|
|
228.7
|
|
||||||||
Municipal securities
|
4.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
4.5
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
||||||||
|
$
|
603.0
|
|
|
$
|
0.4
|
|
|
$
|
(2.5
|
)
|
|
$
|
600.9
|
|
|
$
|
364.3
|
|
|
$
|
—
|
|
|
$
|
(1.7
|
)
|
|
$
|
362.6
|
|
|
Held-to-Maturity
|
|
Available-for-Sale
|
||||||||||||
|
Cost
|
|
Fair Value
|
|
Cost
|
|
Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
Due in 1 year or less
|
$
|
230.9
|
|
|
$
|
230.9
|
|
|
$
|
110.2
|
|
|
$
|
110.1
|
|
Due after 1 year through 5 years
|
—
|
|
|
—
|
|
|
406.9
|
|
|
405.1
|
|
||||
Instruments not due at a single maturity date
|
7.4
|
|
|
7.3
|
|
|
85.9
|
|
|
85.7
|
|
||||
|
$
|
238.3
|
|
|
$
|
238.2
|
|
|
$
|
603.0
|
|
|
$
|
600.9
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Available-for-sale investments
|
|
|
|
|
|
||
Cost
|
$
|
—
|
|
|
$
|
—
|
|
Unrealized gains
|
0.1
|
|
|
0.2
|
|
||
Fair value of available-for-sale investments
|
0.1
|
|
|
0.2
|
|
||
Equity method investments
|
|
|
|
|
|
||
Cost
|
9.5
|
|
|
10.9
|
|
||
Equity in losses
|
(3.9
|
)
|
|
(4.2
|
)
|
||
Carrying value of equity method investments
|
5.6
|
|
|
6.7
|
|
||
Cost method investments
|
|
|
|
|
|
||
Carrying value of cost method investments
|
28.2
|
|
|
21.3
|
|
||
Total investments in unconsolidated affiliates
|
$
|
33.9
|
|
|
$
|
28.2
|
|
Current assets
|
|
$
|
28.1
|
|
|
Property and equipment, net
|
|
0.2
|
|
|
|
Goodwill
|
|
258.9
|
|
|
|
IPR&D
|
|
190.0
|
|
|
|
Current liabilities assumed
|
|
(32.9
|
)
|
|
|
Deferred income taxes
|
|
(66.0
|
)
|
|
|
Contingent consideration
|
|
(30.3
|
)
|
|
|
Total cash purchase price
|
|
348.0
|
|
|
|
Less: cash acquired
|
|
(27.9
|
)
|
|
|
Total cash purchase price, net of cash acquired
|
|
$
|
320.1
|
|
|
|
United
States |
|
Europe
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Goodwill at December 31, 2014
|
$
|
308.3
|
|
|
$
|
67.7
|
|
|
$
|
376.0
|
|
Goodwill acquired during the year
|
258.9
|
|
|
—
|
|
|
258.9
|
|
|||
Currency translation adjustment
|
—
|
|
|
(6.6
|
)
|
|
(6.6
|
)
|
|||
Goodwill at December 31, 2015
|
567.2
|
|
|
61.1
|
|
|
628.3
|
|
|||
Goodwill acquired during the year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Currency translation adjustment
|
—
|
|
|
(2.2
|
)
|
|
(2.2
|
)
|
|||
Goodwill at December 31, 2016
|
$
|
567.2
|
|
|
$
|
58.9
|
|
|
$
|
626.1
|
|
|
December 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Cost
|
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Cost
|
|
Accumulated
Amortization |
|
Net
Carrying Value |
||||||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Patents
|
$
|
187.6
|
|
|
$
|
(177.0
|
)
|
|
$
|
10.6
|
|
|
$
|
180.6
|
|
|
$
|
(172.3
|
)
|
|
$
|
8.3
|
|
Developed technology
|
43.0
|
|
|
(39.6
|
)
|
|
3.4
|
|
|
43.6
|
|
|
(37.9
|
)
|
|
5.7
|
|
||||||
Other
|
9.8
|
|
|
(9.0
|
)
|
|
0.8
|
|
|
10.0
|
|
|
(8.6
|
)
|
|
1.4
|
|
||||||
|
240.4
|
|
|
(225.6
|
)
|
|
14.8
|
|
|
234.2
|
|
|
(218.8
|
)
|
|
15.4
|
|
||||||
Unamortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
IPR&D
|
190.0
|
|
|
—
|
|
|
190.0
|
|
|
190.0
|
|
|
—
|
|
|
190.0
|
|
||||||
|
$
|
430.4
|
|
|
$
|
(225.6
|
)
|
|
$
|
204.8
|
|
|
$
|
424.2
|
|
|
$
|
(218.8
|
)
|
|
$
|
205.4
|
|
2017
|
$
|
7.3
|
|
2018
|
2.2
|
|
|
2019
|
1.7
|
|
|
2020
|
1.2
|
|
|
2021
|
1.0
|
|
|
December 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Amount
|
|
Effective
Interest Rate |
|
Amount
|
|
Effective
Interest Rate |
||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||
Fixed-rate 2.875% notes due October 15, 2018
|
$
|
600.0
|
|
|
2.983
|
%
|
|
$
|
600.0
|
|
|
2.983
|
%
|
Unamortized discount
|
(1.2
|
)
|
|
|
|
|
(1.7
|
)
|
|
|
|
||
Unamortized debt issuance costs
|
(1.9
|
)
|
|
|
|
(3.0
|
)
|
|
|
||||
Hedge accounting fair value adjustments (see Note 11)
|
0.4
|
|
|
|
|
|
1.6
|
|
|
|
|
||
Total carrying amount
|
$
|
597.3
|
|
|
|
|
|
$
|
596.9
|
|
|
|
|
|
Operating
Leases |
|
Aggregate
Debt Maturities |
||||
2017
|
$
|
22.3
|
|
|
$
|
—
|
|
2018
|
16.5
|
|
|
600.0
|
|
||
2019
|
8.4
|
|
|
225.0
|
|
||
2020
|
5.5
|
|
|
—
|
|
||
2021
|
3.3
|
|
|
—
|
|
||
Thereafter
|
16.6
|
|
|
—
|
|
||
Total obligations and commitments
|
$
|
72.6
|
|
|
$
|
825.0
|
|
December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
44.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44.1
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|||||||
Corporate debt securities
|
—
|
|
|
332.5
|
|
|
—
|
|
|
332.5
|
|
||||
Asset-backed securities
|
—
|
|
|
85.8
|
|
|
—
|
|
|
85.8
|
|
||||
U.S. government and agency securities
|
100.7
|
|
|
42.0
|
|
|
—
|
|
|
142.7
|
|
||||
Commercial paper
|
—
|
|
|
35.4
|
|
|
—
|
|
|
35.4
|
|
||||
Municipal securities
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
||||
Equity investments in unconsolidated affiliates
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Investments held for deferred compensation plans
|
46.0
|
|
|
—
|
|
|
—
|
|
|
46.0
|
|
||||
Derivatives
|
—
|
|
|
35.2
|
|
|
—
|
|
|
35.2
|
|
||||
|
$
|
190.9
|
|
|
$
|
535.4
|
|
|
$
|
—
|
|
|
$
|
726.3
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
Deferred compensation plans
|
46.7
|
|
|
—
|
|
|
—
|
|
|
46.7
|
|
||||
Contingent consideration obligation
|
—
|
|
|
—
|
|
|
31.6
|
|
|
31.6
|
|
||||
|
$
|
46.7
|
|
|
$
|
3.3
|
|
|
$
|
31.6
|
|
|
$
|
81.6
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
3.5
|
|
|
$
|
8.5
|
|
|
$
|
—
|
|
|
$
|
12.0
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities
|
—
|
|
|
228.7
|
|
|
—
|
|
|
228.7
|
|
||||
Asset-backed securities
|
—
|
|
|
62.6
|
|
|
—
|
|
|
62.6
|
|
||||
U.S. government and agency securities
|
9.6
|
|
|
28.9
|
|
|
—
|
|
|
38.5
|
|
||||
Commercial paper
|
—
|
|
|
28.1
|
|
|
—
|
|
|
28.1
|
|
||||
Municipal securities
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
||||
Equity investments in unconsolidated affiliates
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Investments held for deferred compensation plans
|
35.3
|
|
|
—
|
|
|
—
|
|
|
35.3
|
|
||||
Derivatives
|
—
|
|
|
23.3
|
|
|
—
|
|
|
23.3
|
|
||||
|
$
|
48.5
|
|
|
$
|
384.8
|
|
|
$
|
—
|
|
|
$
|
433.3
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
$
|
—
|
|
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
Deferred compensation plans
|
35.5
|
|
|
—
|
|
|
—
|
|
|
35.5
|
|
||||
Contingent consideration obligation
|
—
|
|
|
—
|
|
|
30.5
|
|
|
30.5
|
|
||||
|
$
|
35.5
|
|
|
$
|
4.2
|
|
|
$
|
30.5
|
|
|
$
|
70.2
|
|
Balance at December 31, 2015
|
$
|
30.5
|
|
Additions
|
—
|
|
|
Changes in fair value (recorded in "
Research and Development Expenses
")
|
1.1
|
|
|
Balance at December 31, 2016
|
$
|
31.6
|
|
|
Notional Amount
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in millions)
|
||||||
Foreign currency forward exchange contracts
|
$
|
949.7
|
|
|
$
|
1,061.6
|
|
Interest rate swap agreements
|
300.0
|
|
|
300.0
|
|
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
Other current assets
|
|
$
|
28.6
|
|
|
$
|
15.0
|
|
Interest rate swap agreements
|
Other assets
|
|
$
|
0.4
|
|
|
$
|
1.6
|
|
Liabilities
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
Accrued and other liabilities
|
|
$
|
3.3
|
|
|
$
|
4.2
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
Other current assets
|
|
$
|
6.2
|
|
|
$
|
—
|
|
Foreign currency contracts
|
Other assets
|
|
$
|
—
|
|
|
$
|
6.7
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
|
|
||||||||||||||
|
|
|
Gross Amounts
Offset in the
Consolidated
Balance Sheet
|
|
Net Amounts
Presented in the
Consolidated
Balance Sheet
|
|
|
||||||||||||||||
December 31, 2016
|
Gross
Amounts
|
|
Financial
Instruments
|
|
Cash
Collateral
Received
|
|
Net
Amount
|
||||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
34.8
|
|
|
$
|
—
|
|
|
$
|
34.8
|
|
|
$
|
(3.3
|
)
|
|
$
|
—
|
|
|
$
|
31.5
|
|
Interest rate swap agreements
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
(3.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
21.7
|
|
|
$
|
—
|
|
|
$
|
21.7
|
|
|
$
|
(4.0
|
)
|
|
$
|
—
|
|
|
$
|
17.7
|
|
Interest rate swap agreements
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
|
$
|
(4.0
|
)
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||||||||||||
|
|
||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
||||||||||||
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
16.1
|
|
|
$
|
35.3
|
|
|
Cost of sales
|
|
$
|
8.4
|
|
|
$
|
67.1
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
$
|
(0.4
|
)
|
|
$
|
0.9
|
|
||||
Net investment hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
(4.1
|
)
|
|
$
|
2.9
|
|
|
Other expense, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Amount of Gain or
(Loss) Recognized in
Income on Derivative (a)
|
||||||||||
|
Location of Gain or
(Loss) Recognized in
Income on Derivative
|
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||
|
|
|
(in millions)
|
||||||||||
Fair value hedges
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreements
|
Interest expense
|
|
$
|
(1.2
|
)
|
|
$
|
1.2
|
|
|
$
|
4.4
|
|
(a)
|
The gains and losses on the interest rate swap agreements are fully offset by the changes in the fair value of the fixed-rate debt being hedged.
|
|
|
|
Amount of Gain or
(Loss) Recognized in
Income on Derivative
|
||||||||||
|
Location of Gain or
(Loss) Recognized in
Income on Derivative
|
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||
|
|
|
(in millions)
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
Other expense, net
|
|
$
|
8.6
|
|
|
$
|
6.6
|
|
|
$
|
13.7
|
|
|
Years Ended
December 31, |
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Change in projected benefit obligation:
|
|
|
|
|
|
||
Beginning of year
|
$
|
118.1
|
|
|
$
|
123.1
|
|
Service cost
|
6.8
|
|
|
7.0
|
|
||
Interest cost
|
1.2
|
|
|
1.5
|
|
||
Participant contributions
|
1.9
|
|
|
1.8
|
|
||
Actuarial loss (gain)
|
6.5
|
|
|
(1.4
|
)
|
||
Benefits paid
|
(3.7
|
)
|
|
(1.3
|
)
|
||
Plan amendment
|
1.9
|
|
|
(2.9
|
)
|
||
Settlements
|
—
|
|
|
(4.1
|
)
|
||
Currency exchange rate changes and other
|
(4.0
|
)
|
|
(5.6
|
)
|
||
End of year
|
$
|
128.7
|
|
|
$
|
118.1
|
|
Change in fair value of plan assets:
|
|
|
|
|
|
||
Beginning of year
|
$
|
75.1
|
|
|
$
|
73.8
|
|
Actual return on plan assets
|
1.4
|
|
|
1.3
|
|
||
Employer contributions
|
6.3
|
|
|
6.1
|
|
||
Participant contributions
|
1.9
|
|
|
1.8
|
|
||
Settlements
|
—
|
|
|
(4.1
|
)
|
||
Benefits paid
|
(3.7
|
)
|
|
(1.3
|
)
|
||
Currency exchange rate changes and other
|
(2.4
|
)
|
|
(2.5
|
)
|
||
End of year
|
$
|
78.6
|
|
|
$
|
75.1
|
|
|
|
|
|
|
Years Ended
December 31, |
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Funded Status
|
|
|
|
|
|
||
Projected benefit obligation
|
$
|
(128.7
|
)
|
|
$
|
(118.1
|
)
|
Plan assets at fair value
|
78.6
|
|
|
75.1
|
|
||
Underfunded status
|
$
|
(50.1
|
)
|
|
$
|
(43.0
|
)
|
Net amounts recognized on the consolidated balance sheet:
|
|
|
|
|
|
||
Other long-term liabilities
|
$
|
50.1
|
|
|
$
|
43.0
|
|
Accumulated other comprehensive loss, net of tax:
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
(18.0
|
)
|
|
$
|
(20.0
|
)
|
Net prior service (cost) credit
|
(4.6
|
)
|
|
5.1
|
|
||
Deferred income tax benefit
|
5.0
|
|
|
3.5
|
|
||
Total
|
$
|
(17.6
|
)
|
|
$
|
(11.4
|
)
|
|
Years Ended
December 31, |
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost, net
|
$
|
6.8
|
|
|
$
|
7.0
|
|
|
$
|
6.3
|
|
Interest cost
|
1.2
|
|
|
1.5
|
|
|
2.2
|
|
|||
Expected return on plan assets
|
(1.3
|
)
|
|
(1.5
|
)
|
|
(1.6
|
)
|
|||
Settlement
|
—
|
|
|
0.6
|
|
|
—
|
|
|||
Amortization of actuarial loss
|
0.7
|
|
|
1.0
|
|
|
0.5
|
|
|||
Amortization of prior service credit
|
(0.7
|
)
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|||
Net periodic pension benefit cost
|
$
|
6.7
|
|
|
$
|
8.2
|
|
|
$
|
7.1
|
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||
Discount rate
|
0.7
|
%
|
|
1.0
|
%
|
Rate of compensation increase
|
2.5
|
%
|
|
2.7
|
%
|
Social securities increase
|
1.4
|
%
|
|
1.6
|
%
|
Pension increase
|
1.8
|
%
|
|
2.0
|
%
|
|
Years ended
December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate
|
1.0
|
%
|
|
1.4
|
%
|
|
2.2
|
%
|
Expected return on plan assets
|
1.6
|
%
|
|
1.9
|
%
|
|
2.6
|
%
|
Rate of compensation increase
|
2.7
|
%
|
|
3.0
|
%
|
|
3.1
|
%
|
Social securities increase
|
1.6
|
%
|
|
1.6
|
%
|
|
1.8
|
%
|
Pension increase
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
Insurance contracts
|
77.9
|
%
|
Equity securities
|
10.9
|
%
|
Debt securities
|
11.2
|
%
|
Total
|
100.0
|
%
|
December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.3
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States equities
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
International equities
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States government bonds
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
International government bonds
|
4.5
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
58.5
|
|
|
58.5
|
|
||||
|
$
|
20.1
|
|
|
$
|
—
|
|
|
$
|
58.5
|
|
|
$
|
78.6
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.7
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States equities
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
International equities
|
7.3
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States government bonds
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||
International government bonds
|
4.1
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
56.8
|
|
|
56.8
|
|
||||
|
$
|
18.3
|
|
|
$
|
—
|
|
|
$
|
56.8
|
|
|
$
|
75.1
|
|
|
Insurance
Contracts |
||
Balance at December 31, 2014
|
$
|
58.4
|
|
Actual return on plan assets:
|
|
|
|
Relating to assets still held at December 31, 2015
|
(0.3
|
)
|
|
Purchases, sales and settlements
|
0.7
|
|
|
Currency exchange rate impact
|
(2.0
|
)
|
|
Balance at December 31, 2015
|
56.8
|
|
|
Actual return on plan assets:
|
|
|
|
Relating to assets still held at December 31, 2016
|
1.7
|
|
|
Purchases, sales and settlements
|
1.8
|
|
|
Currency exchange rate impact
|
(1.8
|
)
|
|
Balance at December 31, 2016
|
$
|
58.5
|
|
2017
|
$
|
4.5
|
|
2018
|
4.0
|
|
|
2019
|
4.0
|
|
|
2020
|
4.6
|
|
|
2021
|
4.5
|
|
|
2021-2025
|
44.6
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Average risk-free interest rate
|
1.1
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
|||
Expected dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|||
Expected volatility
|
33
|
%
|
|
30
|
%
|
|
31
|
%
|
|||
Expected life (years)
|
4.5
|
|
|
4.6
|
|
|
4.6
|
|
|||
Fair value, per share
|
$
|
31.00
|
|
|
$
|
18.13
|
|
|
$
|
11.75
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Average risk-free interest rate
|
0.3
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|||
Expected dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|||
Expected volatility
|
29
|
%
|
|
28
|
%
|
|
30
|
%
|
|||
Expected life (years)
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|||
Fair value, per share
|
$
|
22.09
|
|
|
$
|
15.59
|
|
|
$
|
8.59
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding as of December 31, 2015
|
11.6
|
|
|
$
|
41.14
|
|
|
|
|
|
|
|
Options granted
|
1.0
|
|
|
105.30
|
|
|
|
|
|
|
||
Options exercised
|
(2.4
|
)
|
|
30.49
|
|
|
|
|
|
|
||
Options forfeited
|
(0.2
|
)
|
|
54.95
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2016
|
10.0
|
|
|
49.85
|
|
|
3.6 years
|
|
$
|
450.4
|
|
|
Exercisable as of December 31, 2016
|
6.5
|
|
|
40.99
|
|
|
2.8 years
|
|
345.3
|
|
||
Vested and expected to vest as of December 31, 2016
|
9.6
|
|
|
49.08
|
|
|
3.5 years
|
|
437.1
|
|
|
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested as of December 31, 2015
|
1.6
|
|
|
$
|
47.99
|
|
Granted (a)
|
0.4
|
|
|
84.67
|
|
|
Vested
|
(0.5
|
)
|
|
35.06
|
|
|
Forfeited
|
(0.1
|
)
|
|
51.97
|
|
|
Nonvested as of December 31, 2016
|
1.4
|
|
|
63.59
|
|
(a)
|
Includes
46,200
shares of market-based restricted stock units granted during
2016
, which represents the targeted number of shares to be issued, and
107,755
shares related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of target. As described above, the actual number of shares ultimately issued is determined based on the Company's total stockholder return relative to a selected industry peer group.
|
|
Foreign
Currency
Translation
Adjustments
|
|
Unrealized Gain
on Cash
Flow Hedges
|
|
Unrealized Gain
(Loss) on
Available-for-sale
Investments
|
|
Unrealized
Pension
Costs (a)
|
|
Total
Accumulated
Other
Comprehensive
Loss
|
||||||||||
|
(in millions)
|
||||||||||||||||||
December 31, 2013
|
$
|
(20.2
|
)
|
|
$
|
3.5
|
|
|
$
|
0.3
|
|
|
$
|
(11.2
|
)
|
|
$
|
(27.6
|
)
|
Other comprehensive (loss) income before reclassifications
|
(96.2
|
)
|
|
54.3
|
|
|
(0.8
|
)
|
|
(7.1
|
)
|
|
(49.8
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(7.6
|
)
|
|
0.4
|
|
|
0.2
|
|
|
(7.0
|
)
|
|||||
Deferred income tax (expense) benefit
|
—
|
|
|
(17.9
|
)
|
|
0.1
|
|
|
1.3
|
|
|
(16.5
|
)
|
|||||
December 31, 2014
|
(116.4
|
)
|
|
32.3
|
|
|
—
|
|
|
(16.8
|
)
|
|
(100.9
|
)
|
|||||
Other comprehensive (loss) income before reclassifications
|
(64.0
|
)
|
|
35.3
|
|
|
(2.6
|
)
|
|
5.4
|
|
|
(25.9
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(68.0
|
)
|
|
1.1
|
|
|
1.2
|
|
|
(65.7
|
)
|
|||||
Deferred income tax (expense) benefit
|
(1.1
|
)
|
|
12.2
|
|
|
—
|
|
|
(1.2
|
)
|
|
9.9
|
|
|||||
December 31, 2015
|
(181.5
|
)
|
|
11.8
|
|
|
(1.5
|
)
|
|
(11.4
|
)
|
|
(182.6
|
)
|
|||||
Other comprehensive (loss) income before reclassifications
|
(17.6
|
)
|
|
16.1
|
|
|
0.7
|
|
|
(7.7
|
)
|
|
(8.5
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(8.0
|
)
|
|
1.1
|
|
|
—
|
|
|
(6.9
|
)
|
|||||
Deferred income tax benefit (expense)
|
1.5
|
|
|
(3.2
|
)
|
|
(0.2
|
)
|
|
1.5
|
|
|
(0.4
|
)
|
|||||
December 31, 2016
|
$
|
(197.6
|
)
|
|
$
|
16.7
|
|
|
$
|
0.1
|
|
|
$
|
(17.6
|
)
|
|
$
|
(198.4
|
)
|
(a)
|
For the years ended
December 31, 2016
,
2015
, and
2014
, the change in unrealized pension costs consisted of the following (in millions):
|
|
Pre-Tax
Amount |
|
Tax Benefit (Expense)
|
|
Net of Tax
Amount |
||||||
2016
|
|
|
|
|
|
|
|
|
|||
Prior service credit arising during period
|
$
|
(9.0
|
)
|
|
$
|
1.0
|
|
|
$
|
(8.0
|
)
|
Amortization of prior service credit
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||
Net prior service cost arising during period
|
(9.7
|
)
|
|
1.0
|
|
|
(8.7
|
)
|
|||
Net actuarial gain arising during period
|
2.0
|
|
|
0.5
|
|
|
2.5
|
|
|||
Unrealized pension credits, net
|
$
|
(7.7
|
)
|
|
$
|
1.5
|
|
|
$
|
(6.2
|
)
|
2015
|
|
|
|
|
|
|
|
|
|||
Prior service credit arising during period
|
$
|
2.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
2.6
|
|
Amortization of prior service credit
|
(0.4
|
)
|
|
0.1
|
|
|
(0.3
|
)
|
|||
Net prior service credit arising during period
|
2.5
|
|
|
(0.2
|
)
|
|
2.3
|
|
|||
Net actuarial gain arising during period
|
4.1
|
|
|
(1.0
|
)
|
|
3.1
|
|
|||
Unrealized pension costs, net
|
$
|
6.6
|
|
|
$
|
(1.2
|
)
|
|
$
|
5.4
|
|
2014
|
|
|
|
|
|
|
|
|
|||
Prior service cost arising during period
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
Amortization of prior service credit
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Net prior service credit arising during period
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||
Net actuarial loss arising during period
|
(7.4
|
)
|
|
1.3
|
|
|
(6.1
|
)
|
|||
Unrealized pension credits, net
|
$
|
(6.9
|
)
|
|
$
|
1.3
|
|
|
$
|
(5.6
|
)
|
|
Years Ended December 31,
|
|
|
||||||
Details about Accumulated Other Comprehensive Loss
Components
|
2016
|
|
2015
|
|
Affected Line on Consolidated
Statements of Operations
|
||||
Gain on cash flow hedges
|
$
|
8.0
|
|
|
$
|
68.0
|
|
|
Cost of sales
|
|
(3.4
|
)
|
|
(25.0
|
)
|
|
Provision for income taxes
|
||
|
$
|
4.6
|
|
|
$
|
43.0
|
|
|
Net of tax
|
Gain (loss) on available-for-sale investments
|
$
|
(1.1
|
)
|
|
$
|
(1.1
|
)
|
|
Other expense, net
|
|
—
|
|
|
—
|
|
|
Provision for income taxes
|
||
|
$
|
(1.1
|
)
|
|
$
|
(1.1
|
)
|
|
Net of tax
|
Amortization of pension adjustments
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
|
(a)
|
|
—
|
|
|
0.2
|
|
|
Provision for income taxes
|
||
|
$
|
—
|
|
|
$
|
(1.0
|
)
|
|
Net of tax
|
(a)
|
This item is included in the components of net periodic benefit costs. See Note 12 for additional information.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Charitable foundation contribution
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange losses, net
|
0.5
|
|
|
4.8
|
|
|
2.0
|
|
|||
(Gain) loss on investments
|
(0.2
|
)
|
|
(0.1
|
)
|
|
4.5
|
|
|||
Promissory note impairment
|
—
|
|
|
—
|
|
|
4.0
|
|
|||
Insurance settlement gain
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|||
Lease contract termination costs
|
—
|
|
|
—
|
|
|
1.0
|
|
|||
Other
|
(0.4
|
)
|
|
(0.7
|
)
|
|
(0.1
|
)
|
|||
Total other expense, net
|
$
|
4.9
|
|
|
$
|
4.0
|
|
|
$
|
7.7
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
378.2
|
|
|
$
|
182.8
|
|
|
$
|
791.1
|
|
International, including Puerto Rico
|
359.7
|
|
|
439.6
|
|
|
352.9
|
|
|||
|
$
|
737.9
|
|
|
$
|
622.4
|
|
|
$
|
1,144.0
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current
|
|
|
|
|
|
|
|
|
|||
United States:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
153.4
|
|
|
$
|
102.4
|
|
|
$
|
341.5
|
|
State and local
|
12.1
|
|
|
7.4
|
|
|
23.3
|
|
|||
International, including Puerto Rico
|
27.4
|
|
|
33.5
|
|
|
34.8
|
|
|||
Current income tax expense
|
$
|
192.9
|
|
|
$
|
143.3
|
|
|
$
|
399.6
|
|
Deferred
|
|
|
|
|
|
|
|
|
|||
United States:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(19.6
|
)
|
|
$
|
(12.5
|
)
|
|
$
|
(46.4
|
)
|
State and local
|
(4.3
|
)
|
|
(2.6
|
)
|
|
(8.1
|
)
|
|||
International, including Puerto Rico
|
(0.6
|
)
|
|
(0.7
|
)
|
|
(12.2
|
)
|
|||
Deferred income tax benefit
|
(24.5
|
)
|
|
(15.8
|
)
|
|
(66.7
|
)
|
|||
Total income tax provision
|
$
|
168.4
|
|
|
$
|
127.5
|
|
|
$
|
332.9
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets
|
|
|
|
|
|
||
Compensation and benefits
|
$
|
100.8
|
|
|
$
|
94.0
|
|
Benefits from uncertain tax positions
|
56.7
|
|
|
50.0
|
|
||
Net tax credit carryforwards
|
45.6
|
|
|
39.3
|
|
||
Net operating loss carryforwards
|
30.2
|
|
|
27.0
|
|
||
Accrued liabilities
|
29.4
|
|
|
24.2
|
|
||
Inventories
|
11.5
|
|
|
11.9
|
|
||
State income taxes
|
2.4
|
|
|
0.5
|
|
||
Investments
|
2.6
|
|
|
2.6
|
|
||
Other intangible assets
|
4.2
|
|
|
3.8
|
|
||
Other
|
3.1
|
|
|
4.5
|
|
||
Total deferred tax assets
|
286.5
|
|
|
257.8
|
|
||
Deferred tax liabilities
|
|
|
|
|
|
||
Property, plant, and equipment
|
(28.2
|
)
|
|
(25.1
|
)
|
||
Cash flow hedges
|
(1.2
|
)
|
|
(0.4
|
)
|
||
Deferred tax on foreign earnings
|
(6.0
|
)
|
|
(10.9
|
)
|
||
Inventories
|
(4.1
|
)
|
|
(0.9
|
)
|
||
Other intangible assets
|
(4.2
|
)
|
|
(4.1
|
)
|
||
Other
|
(0.2
|
)
|
|
(0.5
|
)
|
||
Total deferred tax liabilities
|
(43.9
|
)
|
|
(41.9
|
)
|
||
Valuation allowance
|
(47.7
|
)
|
|
(45.2
|
)
|
||
Net deferred tax assets
|
$
|
194.9
|
|
|
$
|
170.7
|
|
|
Carryforward
Amount |
|
Tax Benefit
Amount |
|
Valuation
Allowance |
|
Net Tax
Benefit |
|
Carryforward
Period Ends |
||||||||
United States state net operating losses
|
$
|
10.6
|
|
|
$
|
0.6
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
|
2017-2034
|
Non-United States net operating losses
|
57.2
|
|
|
14.3
|
|
|
(13.9
|
)
|
|
0.4
|
|
|
2017-2025
|
||||
Non-United States net operating losses
|
46.4
|
|
|
15.6
|
|
|
(15.6
|
)
|
|
—
|
|
|
Indefinite
|
||||
Total
|
$
|
114.2
|
|
|
$
|
30.5
|
|
|
$
|
(29.8
|
)
|
|
$
|
0.7
|
|
|
|
|
Carryforward
Amount |
|
Valuation
Allowance |
|
Net Tax
Benefit |
|
Carryforward
Period Ends |
||||||
California research expenditure tax credits
|
$
|
76.6
|
|
|
$
|
—
|
|
|
$
|
76.6
|
|
|
Indefinite
|
Puerto Rico purchases credit
|
14.4
|
|
|
(14.4
|
)
|
|
—
|
|
|
Indefinite
|
|||
Total
|
$
|
91.0
|
|
|
$
|
(14.4
|
)
|
|
$
|
76.6
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense at U.S. federal statutory rate
|
$
|
258.3
|
|
|
$
|
217.8
|
|
|
$
|
400.4
|
|
Foreign income taxed at different rates
|
(88.6
|
)
|
|
(105.8
|
)
|
|
(67.1
|
)
|
|||
State and local taxes, net of federal tax benefit
|
9.7
|
|
|
3.1
|
|
|
19.3
|
|
|||
Tax credits, federal and state
|
(21.3
|
)
|
|
(15.7
|
)
|
|
(13.5
|
)
|
|||
Build (release) of reserve for uncertain tax positions for prior years
|
4.6
|
|
|
3.3
|
|
|
(4.8
|
)
|
|||
U.S. tax on foreign earnings, net of credits
|
5.1
|
|
|
20.5
|
|
|
(3.1
|
)
|
|||
Nondeductible stock-based compensation
|
3.6
|
|
|
2.3
|
|
|
2.1
|
|
|||
Other
|
(3.0
|
)
|
|
2.0
|
|
|
(0.4
|
)
|
|||
Income tax provision
|
$
|
168.4
|
|
|
$
|
127.5
|
|
|
$
|
332.9
|
|
|
December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Uncertain gross tax positions, January 1
|
$
|
216.1
|
|
|
$
|
192.3
|
|
|
$
|
127.7
|
|
Current year tax positions
|
29.0
|
|
|
29.6
|
|
|
75.9
|
|
|||
Increase prior year tax positions
|
2.7
|
|
|
2.2
|
|
|
0.6
|
|
|||
Decrease prior year tax positions
|
(0.9
|
)
|
|
(7.4
|
)
|
|
(10.5
|
)
|
|||
Settlements
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(1.0
|
)
|
|||
Lapse of statutes of limitations
|
(1.1
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Uncertain gross tax positions, December 31
|
$
|
245.5
|
|
|
$
|
216.1
|
|
|
$
|
192.3
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Segment Net Sales
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
1,615.7
|
|
|
$
|
1,262.8
|
|
|
$
|
1,047.3
|
|
Europe
|
745.9
|
|
|
842.9
|
|
|
741.4
|
|
|||
Japan
|
279.6
|
|
|
297.2
|
|
|
270.8
|
|
|||
Rest of World
|
303.6
|
|
|
315.1
|
|
|
285.1
|
|
|||
Total segment net sales
|
$
|
2,944.8
|
|
|
$
|
2,718.0
|
|
|
$
|
2,344.6
|
|
Segment Pre-tax Income
|
|
|
|
|
|
|
|
||||
United States
|
$
|
1,050.2
|
|
|
$
|
747.8
|
|
|
$
|
605.6
|
|
Europe
|
360.9
|
|
|
409.1
|
|
|
328.1
|
|
|||
Japan
|
139.6
|
|
|
139.4
|
|
|
125.2
|
|
|||
Rest of World
|
73.0
|
|
|
82.2
|
|
|
78.6
|
|
|||
Total segment pre-tax income
|
$
|
1,623.7
|
|
|
$
|
1,378.5
|
|
|
$
|
1,137.5
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net Sales Reconciliation
|
|
|
|
|
|
|
|
|
|||
Segment net sales
|
$
|
2,944.8
|
|
|
$
|
2,718.0
|
|
|
$
|
2,344.6
|
|
Foreign currency
|
18.9
|
|
|
(224.3
|
)
|
|
(21.7
|
)
|
|||
Consolidated net sales
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
Pre-tax Income Reconciliation
|
|
|
|
|
|
|
|
||||
Segment pre-tax income
|
$
|
1,623.7
|
|
|
$
|
1,378.5
|
|
|
$
|
1,137.5
|
|
Unallocated amounts:
|
|
|
|
|
|
||||||
Corporate items
|
(826.1
|
)
|
|
(711.3
|
)
|
|
(659.2
|
)
|
|||
Special charges
|
(34.5
|
)
|
|
—
|
|
|
(70.7
|
)
|
|||
Intellectual property (expenses) income, net
|
(32.6
|
)
|
|
(7.0
|
)
|
|
740.4
|
|
|||
Interest expense, net
|
(8.4
|
)
|
|
(9.3
|
)
|
|
(10.8
|
)
|
|||
Foreign currency
|
15.8
|
|
|
(28.5
|
)
|
|
6.8
|
|
|||
Consolidated pre-tax income
|
$
|
737.9
|
|
|
$
|
622.4
|
|
|
$
|
1,144.0
|
|
|
As of or for the Years Ended
December 31, |
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions)
|
||||||||||
Net Sales by Geographic Area
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
1,615.7
|
|
|
$
|
1,262.9
|
|
|
$
|
1,047.3
|
|
Europe
|
749.0
|
|
|
717.3
|
|
|
744.5
|
|
|||
Japan
|
309.3
|
|
|
246.2
|
|
|
257.9
|
|
|||
Rest of World
|
289.7
|
|
|
267.3
|
|
|
273.2
|
|
|||
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
Net Sales by Major Product Area
|
|
|
|
|
|
|
|
||||
Transcatheter Heart Valve Therapy
|
$
|
1,628.5
|
|
|
$
|
1,180.3
|
|
|
$
|
943.6
|
|
Surgical Heart Valve Therapy
|
774.9
|
|
|
785.0
|
|
|
826.1
|
|
|||
Critical Care
|
560.3
|
|
|
528.4
|
|
|
553.2
|
|
|||
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
Long-lived Tangible Assets by Geographic Area
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
555.5
|
|
|
$
|
473.6
|
|
|
$
|
347.6
|
|
Europe
|
27.9
|
|
|
36.0
|
|
|
42.1
|
|
|||
Japan
|
8.0
|
|
|
8.1
|
|
|
8.5
|
|
|||
Rest of World
|
108.6
|
|
|
96.0
|
|
|
93.9
|
|
|||
|
$
|
700.0
|
|
|
$
|
613.7
|
|
|
$
|
492.1
|
|
Years Ended December 31,
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
697.3
|
|
|
$
|
759.3
|
|
|
$
|
739.4
|
|
|
$
|
767.7
|
|
|
$
|
2,963.7
|
|
Gross profit
|
517.0
|
|
|
556.8
|
|
|
538.0
|
|
|
554.5
|
|
|
2,166.3
|
|
|||||
Net income
|
143.0
|
|
|
126.6
|
|
|
141.4
|
|
|
158.5
|
|
|
569.5
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
0.67
|
|
|
0.60
|
|
|
0.66
|
|
|
0.74
|
|
|
2.67
|
|
|||||
Diluted
|
0.66
|
|
|
0.58
|
|
|
0.65
|
|
|
0.73
|
|
|
2.61
|
|
|||||
Market price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
High
|
$
|
89.93
|
|
|
$
|
112.00
|
|
|
$
|
121.73
|
|
|
$
|
121.75
|
|
|
$
|
121.75
|
|
Low
|
72.20
|
|
|
86.73
|
|
|
98.02
|
|
|
81.12
|
|
|
72.20
|
|
|||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
590.3
|
|
|
$
|
616.8
|
|
|
$
|
615.5
|
|
|
$
|
671.1
|
|
|
$
|
2,493.7
|
|
Gross profit
|
454.3
|
|
|
458.2
|
|
|
468.8
|
|
|
495.2
|
|
|
1,876.5
|
|
|||||
Net income
|
123.4
|
|
|
112.7
|
|
|
118.1
|
|
|
140.7
|
|
|
494.9
|
|
|||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
0.57
|
|
|
0.52
|
|
|
0.55
|
|
|
0.65
|
|
|
2.30
|
|
|||||
Diluted
|
0.56
|
|
|
0.51
|
|
|
0.54
|
|
|
0.64
|
|
|
2.25
|
|
|||||
Market price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
High
|
$
|
75.21
|
|
|
$
|
73.65
|
|
|
$
|
79.50
|
|
|
$
|
83.43
|
|
|
$
|
83.43
|
|
Low
|
61.99
|
|
|
61.38
|
|
|
62.53
|
|
|
70.32
|
|
|
61.38
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
From
Reserves
|
|
Balance at
End of
Period
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for doubtful accounts (a)
|
$
|
13.1
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
(1.8
|
)
|
|
$
|
12.8
|
|
Tax valuation allowance (b)
|
45.2
|
|
|
1.2
|
|
|
1.3
|
|
|
—
|
|
|
47.7
|
|
|||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for doubtful accounts (a)
|
$
|
11.3
|
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
$
|
13.1
|
|
Tax valuation allowance (b)
|
47.7
|
|
|
4.8
|
|
|
—
|
|
|
(7.3
|
)
|
|
45.2
|
|
|||||
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for doubtful accounts (a)
|
$
|
12.2
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
(1.7
|
)
|
|
$
|
11.3
|
|
Tax valuation allowance (b)
|
46.4
|
|
|
2.0
|
|
|
—
|
|
|
(0.7
|
)
|
|
47.7
|
|
(a)
|
The deductions related to allowances for doubtful accounts represent accounts receivable which are written off.
|
(b)
|
The tax valuation allowances are provided for other-than-temporary impairments and unrealized losses related to certain investments that may not be recognized due to the uncertainty of the ready marketability of certain impaired investments, and net operating loss and credit carryforwards that may not be recognized due to insufficient taxable income.
|
|
EDWARDS LIFESCIENCES CORPORATION
|
||
February 17, 2017
|
By:
|
|
/s/ MICHAEL A. MUSSALLEM
|
|
|
|
Michael A. Mussallem
Chairman of the Board and
Chief Executive Officer
|
Signature
|
Title
|
|
Date
|
|
|
|
|
/s/ MICHAEL A. MUSSALLEM
|
Chairman of the Board and Chief Executive Officer
|
|
February 17, 2017
|
Michael A. Mussallem
|
(Principal Executive Officer)
|
|
|
|
|
|
|
/s/ SCOTT B. ULLEM
|
Corporate Vice President, Chief Financial Officer
|
|
February 17, 2017
|
Scott B. Ullem
|
(Principal Financial Officer)
|
|
|
|
|
|
|
/s/ ROBERT W.A. SELLERS
|
Vice President, Corporate Controller
|
|
February 17, 2017
|
Robert W.A. Sellers
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
/s/ JOHN T. CARDIS
|
Director
|
|
February 17, 2017
|
John T. Cardis
|
|
|
|
|
|
|
|
/s/ KIERAN T. GALLAHUE
|
Director
|
|
February 17, 2017
|
Kieran T. Gallahue
|
|
|
|
|
|
|
|
/s/ LESLIE S. HEISZ
|
Director
|
|
February 17, 2017
|
Leslie S. Heisz
|
|
|
|
|
|
|
|
/s/ WILLIAM J. LINK, PH.D.
|
Director
|
|
February 17, 2017
|
William J. Link, Ph.D.
|
|
|
|
|
|
|
|
/s/ STEVEN R. LORANGER
|
Director
|
|
February 17, 2017
|
Steven R. Loranger
|
|
|
|
|
|
|
|
/s/ MARTHA H. MARSH
|
Director
|
|
February 17, 2017
|
Martha H. Marsh
|
|
|
|
|
|
|
|
/s/ WESLEY W. VON SCHACK
|
Director
|
|
February 17, 2017
|
Wesley W. von Schack
|
|
|
|
|
|
|
|
/s/ NICHOLAS J. VALERIANI
|
Director
|
|
February 17, 2017
|
Nicholas J. Valeriani
|
|
|
|
Exhibit No.
|
Exhibit No.
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Edwards Lifesciences Corporation dated May 16, 2013 (incorporated by reference to Exhibit 3.1 in Edwards Lifesciences' report on Form 8-K dated May 17, 2013)
|
3.2
|
|
Bylaws of Edwards Lifesciences Corporation amended and restated as of February 25, 2016 (incorporated by reference to Exhibit 3.1 in Edwards Lifesciences' report on Form 8-K dated March 2, 2016)
|
4.1
|
|
Specimen form of certificate representing Edwards Lifesciences Corporation common stock (incorporated by reference to Exhibit 4.1 in Edwards Lifesciences' Registration Statement on Form 10 (File No. 001-15525) filed on March 15, 2000)
|
4.2
|
|
Indenture, dated as of September 6, 2013, between Edwards Lifesciences Corporation and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.5 in Edwards Lifesciences' Registration Statement on Form S-3 (File No. 333-191022) filed on September 6, 2013) (the "Indenture")
|
4.3
|
|
First Supplemental Indenture, dated as of October 3, 2013, to the Indenture (incorporated by reference to Exhibit 4.1 in Edwards Lifesciences' report on Form 8-K, filed on October 3, 2013) ("First Supplemental Indenture")
|
4.4
|
|
Form of Global Note for the 2.875% Senior Notes due 2018 (incorporated by reference to Exhibit A in the First Supplemental Indenture filed as Exhibit 4.1 in Edwards Lifesciences' report on Form 8-K, filed on October 3, 2013)
|
10.1
|
|
Five-Year Credit Agreement, dated as of July 18, 2014, among Edwards Lifesciences Corporation and certain of its subsidiaries, as Borrowers; the lenders signatory thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and Issuing Bank; JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents; and Deutsche Bank Securities Inc., HSBC Bank USA, National Association, PNC Bank, National Association, The Bank of Tokyo-Mitsubishi UFJ, Ltd., and U.S. Bank National Association, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 8-K, filed on July 24, 2014)
|
#10.2
|
|
Settlement Agreement, dated May 19, 2014, between Edwards Lifesciences Corporation and Medtronic, Inc. (incorporated by reference to Exhibit 10.2 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2014)
|
*10.3
|
|
Edwards Lifesciences Corporation Form of Employment Agreement (incorporated by reference to Exhibit 10.8 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2003)
|
*10.4
|
|
Edwards Lifesciences Corporation Amended and Restated Employment Agreement for Michael A. Mussallem dated March 30, 2009 (incorporated by reference to Exhibit 10.2 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2009)
|
*10.5
|
|
Edwards Lifesciences Corporation Amended and Restated Chief Executive Officer Change-in-Control Severance Agreement, dated October 9, 2012 (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended September 30, 2012)
|
*10.6
|
|
Edwards Lifesciences Corporation Form of Change-in-Control Severance Agreement (incorporated by reference to Exhibit 10.2 in Edward Lifesciences' report on Form 10-Q for the quarterly period ended September 30, 2012)
|
*10.7
|
|
Edwards Lifesciences Corporation 2015 Edwards Incentive Plan (incorporated by reference to Appendix A in Edwards Lifesciences’ Definitive Proxy Statement filed on March 30, 2015)
|
*10.8
|
|
Edwards Lifesciences Corporation Long-Term Stock Incentive Compensation Program, as amended and restated as of February 19, 2015 (the "Long-Term Stock Program") (incorporated by reference to Appendix A in Edwards Lifesciences' Definitive Proxy Statement filed on March 31, 2016)
|
*10.9
|
|
Edwards Lifesciences Corporation Form of Participant Stock Option Statement and related Long-Term Stock Program Global Nonqualified Stock Option Award Agreement for awards granted prior to May 2015 (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2011)
|
*10.10
|
|
Edwards Lifesciences Corporation Form of Participant Restricted Stock Unit Statement and related Long-Term Stock Program Global Restricted Stock Unit Award Agreement for awards granted prior to May 2015 (incorporated by reference to Exhibit 10.4 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2011)
|
*10.11
|
|
Edwards Lifesciences Corporation Form of Performance-Based Restricted Stock Unit Statement and related Long-Term Stock Program Global Performance-Based Restricted Stock Unit Award Agreement for awards granted prior to May 2015 (incorporated by reference to Exhibit 10.4 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2012)
|
*10.12
|
|
Edwards Lifesciences Corporation Long-Term Stock Program Global Nonqualified Stock Option Award Agreement for awards granted beginning May 2015 (incorporated by reference to Exhibit 10.3 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2015)
|
Exhibit No.
|
Exhibit No.
|
|
*10.13
|
|
Edwards Lifesciences Corporation Long-Term Stock Program Global Restricted Stock Unit Award Agreement for awards granted beginning May 2015 (incorporated by reference to Exhibit 10.4 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2015)
|
*10.14
|
|
Edwards Lifesciences Corporation Form of Performance-Based Restricted Stock Unit Statement and related Long-Term Stock Program Global Performance-Based Restricted Stock Unit Award Agreement for awards granted beginning May 2015 (incorporated by reference to Exhibit 10.4 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2015)
|
*10.15
|
|
Edwards Lifesciences Corporation Nonemployee Directors Stock Incentive Program, as amended and restated as of February 25, 2016 (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2016)
|
*10.16
|
|
Edwards Lifesciences Corporation Form of Participant Stock Option Statement and related Nonemployee Directors Stock Incentive Program Nonqualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2013)
|
*10.17
|
|
Edwards Lifesciences Corporation Form of Nonemployee Directors Stock Incentive Program Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.4 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2011)
|
*10.18
|
|
Edwards Lifesciences Corporation Form of Nonemployee Directors Stock Incentive Program Restricted Stock Agreement (incorporated by reference to Exhibit 10.5 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2011)
|
*10.19
|
|
Edwards Lifesciences Corporation Severance Pay Plan, restated effective January 1, 2013 (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2013)
|
*10.20
|
|
Edwards Lifesciences Corporation Executive Deferred Compensation Plan, as amended and restated effective November 9, 2011 (incorporated by reference to Exhibit 10.7 in Edwards Lifesciences' report on Form 10-K for the fiscal year ended December 31, 2011)
|
*10.21
|
|
Edwards Lifesciences Corporation of Puerto Rico Savings and Investment Plan, as amended and restated January 1, 2011 (incorporated by reference to Exhibit 10.17 in Edwards Lifesciences' report on Form 10-K for the fiscal year ended December 31, 2012)
|
*10.22
|
|
Edwards Lifesciences Corporation 401(k) Savings and Investment Plan, restated effective January 1, 2016 (incorporated by reference to Exhibit 10.2 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended March 31, 2016)
|
*10.23
|
|
Amendment #1 to the Edwards Lifesciences Corporation 401(k) Savings and Investment Plan, dated May 2, 2016 (incorporated by reference to Exhibit 10.1 in Edwards Lifesciences' report on Form 10-Q for the quarterly period ended June 30, 2016)
|
*10.24
|
|
Amendment #2 to the Edwards Lifesciences Corporation 401(k) Savings and Investment Plan, dated December 19, 2016
|
*10.25
|
|
Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for United States Employees, as amended and restated November 10, 2009 (incorporated by reference to Appendix B in Edwards Lifesciences' Definitive Proxy Statement filed on March 29, 2013)
|
*10.26
|
|
Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for International Employees, as amended and restated February 20, 2014 (incorporated by reference to Appendix B in Edwards Lifesciences' Definitive Proxy Statement filed on March 28, 2014)
|
*10.27
|
|
Edwards Lifesciences Corporation 2015 Edwards Incentive Plan (incorporated by reference to Appendix A in Edwards Lifesciences' Definitive Proxy Statement filed on March 30, 2015)
|
*10.28
|
|
Edwards Lifesciences Corporation Officer Perquisite Program Guidelines, as of February 20, 2013 (incorporated by reference to Exhibit 10.25 in Edwards Lifesciences' report on Form 10-K for the fiscal year ended December 31, 2012)
|
*10.29
|
|
Edwards Lifesciences Corporation Form of Indemnification Agreement (incorporated by reference to Exhibit 10.20 in Edwards Lifesciences' report on Form 10-K for the fiscal year ended December 31, 2011)
|
12.1
|
|
Ratio of Earnings to Fixed Charges
|
21.1
|
|
Subsidiaries of Edwards Lifesciences Corporation
|
23
|
|
Consent of Independent Registered Public Accounting Firm
|
31.1
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Exhibit No.
|
Exhibit No.
|
|
101
|
|
The following financial statements from Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes
|
$
|
737.9
|
|
|
$
|
622.4
|
|
|
$
|
1,144.0
|
|
|
$
|
511.2
|
|
|
$
|
388.2
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
26.8
|
|
|
24.7
|
|
|
24.8
|
|
|
18.4
|
|
|
12.4
|
|
|||||
Distributed income of equity investees
|
1.4
|
|
|
2.2
|
|
|
2.1
|
|
|
—
|
|
|
0.3
|
|
|||||
Earnings, as adjusted
|
$
|
766.1
|
|
|
$
|
649.3
|
|
|
$
|
1,170.9
|
|
|
$
|
529.6
|
|
|
$
|
400.9
|
|
Fixed charges
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
17.5
|
|
|
$
|
15.5
|
|
|
$
|
15.5
|
|
|
$
|
8.9
|
|
|
$
|
3.9
|
|
Amortized premiums, discounts and capitalized expenses related to indebtedness
|
1.7
|
|
|
1.7
|
|
|
1.7
|
|
|
0.9
|
|
|
0.5
|
|
|||||
Interest portion of rental expense (a)
|
7.6
|
|
|
7.5
|
|
|
7.6
|
|
|
8.6
|
|
|
8.0
|
|
|||||
Fixed charges
|
$
|
26.8
|
|
|
$
|
24.7
|
|
|
$
|
24.8
|
|
|
$
|
18.4
|
|
|
$
|
12.4
|
|
Ratio of earnings to fixed charges
|
28.6
|
|
|
26.3
|
|
|
47.1
|
|
|
28.7
|
|
|
32.4
|
|
(a)
|
One-third of all rental expense is deemed to be interest, which we believe to be a conservative estimate of an interest factor in our leases.
|
Legal Entity
|
|
State of
Incorporation/
Formation
|
|
Country of
Incorporation/
Formation
|
Edwards Lifesciences Asset Management Corporation
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences CardiAQ LLC.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Corporation of Puerto Rico
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Financing LLC
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Holding, Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Innovation Holding LLC
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences International Assignments Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences International Holdings LLC
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences LLC
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences NY Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Neptune, Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Research Holding LLC
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences (U.S.) Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences World Trade Corporation
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences PVT, Inc.
|
|
Delaware
|
|
U.S.
|
Red Hill Holding LLC
|
|
Delaware
|
|
U.S.
|
Red Hill Insurance Corporation
|
|
D.C.
|
|
U.S.
|
Valtech Cardio Inc.
|
|
Delaware
|
|
U.S.
|
Edwards Lifesciences Austria GmbH
|
|
|
|
Austria
|
Edwards Lifesciences Pty. Limited
|
|
|
|
Australia
|
Edwards Lifesciences S.P.R.L.
|
|
|
|
Belgium
|
Edwards Lifesciences Macchi Ltda.
|
|
|
|
Brazil
|
Edwards Lifesciences Participacoes e Comercial Ltda.
|
|
|
|
Brazil
|
Edwards Lifesciences Comercio de Produtos Medico-Cirurgicos Ltda.
|
|
|
|
Brazil
|
Edwards Lifesciences (Canada) Inc.
|
|
|
|
Canada
|
Edwards Lifesciences (Shanghai) Medical Products Co., Ltd.
|
|
|
|
China
|
Edwards Lifesciences Colombia S.A.S.
|
|
|
|
Colombia
|
Edwards Lifesciences Czech Republic s.r.o.
|
|
|
|
Czech Republic
|
Edwards Lifesciences Costa Rica, S.R.L.
|
|
|
|
Costa Rica
|
Edwards Lifesciences A/S
|
|
|
|
Denmark
|
Edwards Lifesciences SAS
|
|
|
|
France
|
Edwards Lifesciences Services GmbH
|
|
|
|
Germany
|
Valtech Cardio GmbH
|
|
|
|
Germany
|
Edwards Lifesciences Hellas, EPE
|
|
|
|
Greece
|
Edwards Lifesciences (India) Private Limited
|
|
|
|
India
|
Edwards Lifesciences (Israel) Ltd.
|
|
|
|
Israel
|
Edwards Lifesciences Sales (Israel) Ltd.
|
|
|
|
Israel
|
Valtech Cardio, Ltd.
|
|
|
|
Israel
|
Edwards Lifesciences Italia SpA
|
|
|
|
Italy
|
Edwards Lifesciences (Japan) Limited
|
|
|
|
Japan
|
Edwards Lifesciences Korea Co., Ltd.
|
|
|
|
Korea
|
Edwards Lifesciences (Malaysia) Sdn. Bhd.
|
|
|
|
Malaysia
|
Legal Entity
|
|
State of
Incorporation/
Formation
|
|
Country of
Incorporation/
Formation
|
Edwards Lifesciences Mexico, S.A. de C.V.
|
|
|
|
Mexico
|
Edwards Lifesciences (New Zealand) Limited
|
|
|
|
New Zealand
|
BMEYE B.V.
|
|
|
|
The Netherlands
|
Edwards Lifesciences B.V.
|
|
|
|
The Netherlands
|
Edwards Lifesciences Holding B.V.
|
|
|
|
The Netherlands
|
EL Research C.V.
|
|
|
|
The Netherlands
|
Edwards Lifesciences Poland Sp.z o.o
|
|
|
|
Poland
|
Edwards Lifesciences (Portugal) Comércio e Distribuicao de Dispositivos Medicos, Lda.
|
|
|
|
Portugal
|
1.
|
I have reviewed this annual report on Form 10-K of Edwards Lifesciences Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By:
|
|
/s/ MICHAEL A. MUSSALLEM
|
|
|
Michael A. Mussallem
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Edwards Lifesciences Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
By:
|
|
/s/ SCOTT B. ULLEM
|
|
|
Scott B. Ullem
Corporate Vice President,
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ MICHAEL A. MUSSALLEM
|
February 17, 2017
|
|
Michael A. Mussallem
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
/s/ SCOTT B. ULLEM
|
February 17, 2017
|
|
Scott B. Ullem
Corporate Vice President,
Chief Financial Officer
|