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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-4316614
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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One Edwards Way, Irvine, California 92614
(Address of principal executive offices) (ZIP Code)
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(949) 250-2500
Registrant's telephone number, including area code
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Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered:
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Common Stock, par value $1.00 per share
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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•
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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;
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•
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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;
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•
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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;
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•
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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;
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•
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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
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•
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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.
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•
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product standards and specifications;
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•
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packaging requirements;
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•
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labeling requirements;
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•
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product collection and disposal requirements;
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•
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quality system requirements;
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•
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import restrictions;
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•
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tariffs;
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•
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duties; and
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•
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tax requirements.
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•
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changes in local medical reimbursement policies and programs;
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•
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changes in foreign regulatory requirements;
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•
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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;
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•
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trade protection measures, quotas, embargoes, import or export licensing requirements, and duties, tariffs, or surcharges;
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•
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potentially negative impact of tax laws, including transfer pricing liabilities and tax costs associated with the repatriation of cash;
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•
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difficulty in staffing and managing global operations;
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•
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currency exchange rate fluctuations;
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•
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cultural or other local factors affecting financial terms with customers;
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•
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local economic and financial conditions, including sovereign defaults and decline in sovereign credit ratings, affecting the collectability of receivables, including receivables from sovereign entities;
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•
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an outbreak of any life-threatening communicable disease;
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•
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economic and political instability and local economic and political conditions;
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•
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differing labor regulations; and
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•
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differing protection of intellectual property.
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•
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announcements of innovations, new products, strategic developments, or business combinations by us or our competitors;
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•
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demand for and clinical acceptance of products;
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•
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the timing and execution of customer contracts, particularly large contracts that would materially affect our operating results in a given quarter;
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•
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the timing of sales of products and of the introduction of new products;
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•
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the timing of marketing, training, and other expenses related to the introduction of new products;
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•
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the timing of regulatory approvals;
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•
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changes in foreign currency exchange rates;
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•
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delays or problems in introducing new products, such as slower than anticipated adoption of transcatheter heart valves;
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•
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changes in our pricing policies or the pricing policies of our competitors;
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•
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the timing of approvals of governmental reimbursement rates or changes in reimbursement rates for our products;
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•
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increased expenses, whether related to sales and marketing, raw materials or supplies, product development, or administration;
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•
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changes in the level of economic activity in the United States or other regions in which we do business;
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•
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changes to accounting standards;
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•
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costs related to acquisitions of technologies or businesses; and
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•
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our ability to expand our operations and the amount and timing of expansion-related expenditures.
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North America
|
|
|
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Irvine, California
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(1
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)
|
|
Corporate Headquarters, Research and Development, Regulatory and Clinical Affairs, Manufacturing, Marketing, Administration
|
Draper, Utah
|
(1
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)
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Manufacturing, Administration
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Haina, Dominican Republic
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(2
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)
|
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Manufacturing
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Añasco, Puerto Rico
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(2
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)
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Manufacturing
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Central America
|
|
|
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Cartago, Costa Rica
|
(2
|
)
|
|
Manufacturing (under construction)
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Europe
|
|
|
|
|
Nyon, Switzerland
|
(1
|
)
|
|
Administration, Marketing
|
Prague, Czech Republic
|
(2
|
)
|
|
Administration
|
Shannon, Ireland
|
(2
|
)
|
|
Manufacturing (under construction)
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Asia
|
|
|
|
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Tokyo, Japan
|
(2
|
)
|
|
Administration, Marketing, Distribution
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Shanghai, China
|
(2
|
)
|
|
Administration, Marketing
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Singapore
|
(1),(2)
|
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Manufacturing, Distribution, Administration
|
(1)
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Owned property.
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(2)
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Leased property.
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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, 2018 through October 31, 2018
|
|
1,475,683
|
|
|
$
|
150.26
|
|
|
1,475,683
|
|
|
$
|
544.8
|
|
|
||
November 1, 2018 through November 30, 2018
|
|
597
|
|
|
147.80
|
|
|
—
|
|
|
544.8
|
|
|
||||
December 1, 2018 through December 31, 2018
|
|
338,086
|
|
|
148.05
|
|
|
338,086
|
|
|
494.6
|
|
|
||||
Total
|
|
1,814,366
|
|
|
149.84
|
|
|
1,813,769
|
|
|
|
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(a)
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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.
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(b)
|
On November 15, 2017, 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, or in privately negotiated transactions, up to $1.0 billion of our common stock. The repurchase program does not have an expiration date.
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(c)
|
In October 2018, we paid $250.0 million under our accelerated share repurchase ("ASR") agreement and received an initial delivery of 1.4 million shares of our common stock, representing approximately 80 percent of the total contract value. In November 2018, the ASR agreement concluded and we received an additional 0.3 million shares. Shares purchased pursuant to the ASR agreement are presented in the table above in the periods in which they were received.
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|
Total Cumulative Return
|
||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||
Edwards Lifesciences
|
$
|
193.70
|
|
|
$
|
240.21
|
|
|
$
|
284.98
|
|
|
$
|
342.79
|
|
|
$
|
465.85
|
|
S&P 500
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
|||||
S&P 500 Health Care Equipment
|
126.28
|
|
|
133.82
|
|
|
142.50
|
|
|
186.53
|
|
|
216.82
|
|
|
|
As of or for the Years Ended December 31,
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||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
(in millions, except per share data)
|
||||||||||||||||||
OPERATING RESULTS
|
Net sales
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
|
$
|
2,493.7
|
|
|
$
|
2,322.9
|
|
|
Gross profit
|
2,783.4
|
|
|
2,560.0
|
|
|
2,166.3
|
|
|
1,876.5
|
|
|
1,697.3
|
|
|||||
|
Operating income (a)
|
748.2
|
|
|
1,089.4
|
|
|
751.2
|
|
|
636.1
|
|
|
1,212.5
|
|
|||||
|
Net income (a)
|
722.2
|
|
|
583.6
|
|
|
569.5
|
|
|
494.9
|
|
|
811.1
|
|
|||||
COMMON STOCK INFORMATION
|
Net income per common share (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic
|
$
|
3.45
|
|
|
$
|
2.77
|
|
|
$
|
2.67
|
|
|
$
|
2.30
|
|
|
$
|
3.81
|
|
|
Diluted
|
3.38
|
|
|
2.70
|
|
|
2.61
|
|
|
2.25
|
|
|
3.74
|
|
|||||
|
Cash dividends declared per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
BALANCE SHEET DATA
|
Total assets
|
$
|
5,323.7
|
|
|
$
|
5,666.4
|
|
|
$
|
4,518.5
|
|
|
$
|
4,056.3
|
|
|
$
|
3,519.0
|
|
|
Long-term debt (b)
|
593.8
|
|
|
438.4
|
|
|
822.3
|
|
|
596.9
|
|
|
594.1
|
|
(a)
|
The above results include special charges of
$109.1 million
during
2018
and
$59.9 million
during
2017
. Also, the above results include a $180.0 million ($137.5 million, net of tax) charge related to a litigation settlement, a
$112.5 million
($70.3 million, net of tax) gain for a litigation payment received in 2017, and a $750.0 million ($487.9 million, net of tax) gain for a payment received in 2014 under a litigation settlement. In addition, in 2017, the above results reflect a $262.0 million tax expense related to the implementation of U.S. tax law changes. See Part II, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of Operations
" and Note 3, Note 4 and Note 16 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 "2013 Notes"). At December 31, 2017, the 2013 Notes were classified as short-term obligations as these obligations were due within one year. These 2013 Notes were paid in October 2018. In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes due June 15, 2028, which were classified as long-term obligations. Amounts outstanding under our Five-Year Credit Agreement ("Credit Agreement") have been classified as long-term obligations in accordance with the terms of the Credit Agreement.
|
•
|
we received CE Mark for the
SAPIEN 3 Ultra
system for transcatheter aortic valve replacement in severe, symptomatic aortic stenosis patients and we received FDA approval for the
SAPIEN 3 Ultra
system for those patients who are determined to be at intermediate or greater risk of open-heart surgery;
|
•
|
we received CE Mark for our self-expanding
CENTERA
valve for severe, symptomatic aortic stenosis patients at high risk of open-heart surgery, and we initiated a pivotal trial in the United States to study
CENTERA
for severe, symptomatic aortic stenosis patients at intermediate risk of open-heart surgery;
|
•
|
we received regulatory approval of our
Acumen Hypotension Prediction Index
in the United States. This technology leverages predictive analytics to alert clinicians of hypotension, or low blood pressure, before it occurs in their surgical patients;
|
•
|
we received CE Mark for the
Edwards Cardioband
tricuspid valve reconstruction system for the treatment of tricuspid regurgitation;
|
•
|
we received FDA approval for the
Acumen
suite of intelligent decision-support solutions for use on the
HemoSphere
advanced monitoring platform; and
|
•
|
we reached an agreement with Boston Scientific Corporation ("Boston Scientific") in January 2019 to settle all outstanding patent disputes for a one-time payment to Boston Scientific of $180.0 million.
|
|
Years Ended December 31,
|
|
Change
|
|
Percent Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
United States
|
$
|
2,055.3
|
|
|
$
|
1,907.6
|
|
|
$
|
1,615.7
|
|
|
$
|
147.7
|
|
|
$
|
291.9
|
|
|
7.7
|
%
|
|
18.1
|
%
|
Europe
|
885.1
|
|
|
831.0
|
|
|
749.0
|
|
|
54.1
|
|
|
82.0
|
|
|
6.5
|
%
|
|
10.9
|
%
|
|||||
Japan
|
396.8
|
|
|
350.3
|
|
|
309.3
|
|
|
46.5
|
|
|
41.0
|
|
|
13.3
|
%
|
|
13.3
|
%
|
|||||
Rest of World
|
385.6
|
|
|
346.4
|
|
|
289.7
|
|
|
39.2
|
|
|
56.7
|
|
|
11.4
|
%
|
|
19.5
|
%
|
|||||
International
|
1,667.5
|
|
|
1,527.7
|
|
|
1,348.0
|
|
|
139.8
|
|
|
179.7
|
|
|
9.2
|
%
|
|
13.3
|
%
|
|||||
Total net sales
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
|
$
|
287.5
|
|
|
$
|
471.6
|
|
|
8.4
|
%
|
|
15.9
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Percent Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Transcatheter Heart Valve Therapy
|
$
|
2,286.7
|
|
|
$
|
2,027.2
|
|
|
$
|
1,628.5
|
|
|
$
|
259.5
|
|
|
$
|
398.7
|
|
|
12.8
|
%
|
|
24.5
|
%
|
Surgical Heart Valve Therapy
|
761.6
|
|
|
807.1
|
|
|
774.9
|
|
|
(45.5
|
)
|
|
32.2
|
|
|
(5.6
|
)%
|
|
4.2
|
%
|
|||||
Critical Care
|
674.5
|
|
|
601.0
|
|
|
560.3
|
|
|
73.5
|
|
|
40.7
|
|
|
12.2
|
%
|
|
7.3
|
%
|
|||||
Total net sales
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
|
$
|
287.5
|
|
|
$
|
471.6
|
|
|
8.4
|
%
|
|
15.9
|
%
|
•
|
higher sales of the
Edwards SAPIEN 3
valve across all regions, particularly the United States and Japan, driven by strong therapy adoption; and
|
•
|
foreign currency exchange rate fluctuations, which increased net sales by
$20.0 million
, due primarily to the strengthening of the Euro against the United States dollar.
|
•
|
the
Edwards SAPIEN 3
valve, driven by strong therapy adoption.
|
•
|
the
Edwards SAPIEN 3
valve, due primarily to increased sales in Japan, driven by its launch in March 2016, and Europe, driven by strong therapy adoption;
|
•
|
lower sales of the
Edwards SAPIEN XT
valve as customers converted to
Edwards SAPIEN 3.
|
•
|
sales return reserves in the United States related to our conversion to a consignment inventory model for surgical valves;
|
•
|
increased sales of surgical aortic tissue valves in the United States and Rest of World; and
|
•
|
foreign currency exchange rate fluctuations, which increased net sales by
$9.2 million
, due primarily to the strengthening of the Euro against the United States dollar.
|
•
|
surgical aortic tissue valves in Europe and the United States, primarily due to increased sales of the
EDWARDS INTUITY Elite Valve System,
and growth in our core products, partially offset by the continuing shift from our surgical aortic tissue valves to transcatheter aortic valves; and
|
•
|
mitral tissue valves, due to increased sales in Rest of World, primarily China.
|
•
|
a 0.7 percentage point increase in the United States and a 0.2 percentage point increase in international markets due to an improved product mix, driven by THVT products;
|
•
|
the impact of multiple investments in our operations, including an increase in costs to improve our manufacturing processes; and
|
•
|
a 0.2 percentage point decrease due to the impact of foreign currency exchange rate fluctuations, including the settlement of foreign currency hedging contracts.
|
•
|
a 1.3 percentage point increase in the United States and a 0.3 percentage point increase in international markets due to an improved product mix, driven by THVT products;
|
•
|
expenses associated with flooding from Hurricane Maria in Puerto Rico and the planned closure of our manufacturing plant in Switzerland.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign exchange (gains) losses, net
|
$
|
(6.7
|
)
|
|
$
|
5.4
|
|
|
$
|
0.5
|
|
Loss (gain) on investments
|
1.7
|
|
|
2.7
|
|
|
(0.2
|
)
|
|||
Non-service cost components of net periodic pension benefit (credit) cost
|
(0.1
|
)
|
|
(6.1
|
)
|
|
—
|
|
|||
Charitable foundation contribution
|
—
|
|
|
—
|
|
|
5.0
|
|
|||
Other
|
1.1
|
|
|
(0.6
|
)
|
|
(0.4
|
)
|
|||
Total other (income) expense, net
|
$
|
(4.0
|
)
|
|
$
|
1.4
|
|
|
$
|
4.9
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax expense at U.S. federal statutory rate
|
$
|
159.9
|
|
|
$
|
362.2
|
|
|
$
|
258.3
|
|
Foreign income taxed at different rates
|
(16.2
|
)
|
|
(106.9
|
)
|
|
(88.6
|
)
|
|||
State and local taxes, net of federal tax benefit
|
6.8
|
|
|
11.5
|
|
|
9.7
|
|
|||
Tax credits, federal and state
|
(36.7
|
)
|
|
(25.8
|
)
|
|
(21.3
|
)
|
|||
(Release) build of reserve for prior years' uncertain tax positions
|
(35.5
|
)
|
|
(7.7
|
)
|
|
4.6
|
|
|||
U.S. tax on foreign earnings, net of credits
|
(12.2
|
)
|
|
(30.3
|
)
|
|
5.1
|
|
|||
Foreign-derived intangible income deduction
|
(6.6
|
)
|
|
—
|
|
|
—
|
|
|||
Deductible employee share-based compensation
|
(41.8
|
)
|
|
(48.2
|
)
|
|
—
|
|
|||
Nondeductible employee share-based compensation
|
2.8
|
|
|
3.9
|
|
|
3.6
|
|
|||
Impacts related to 2017 U.S. Tax Reform
|
15.8
|
|
|
294.1
|
|
|
—
|
|
|||
Other
|
2.9
|
|
|
(1.5
|
)
|
|
(3.0
|
)
|
|||
Income tax provision
|
$
|
39.2
|
|
|
$
|
451.3
|
|
|
$
|
168.4
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Uncertain gross tax positions, January 1
|
$
|
225.6
|
|
|
$
|
245.5
|
|
|
$
|
216.1
|
|
Current year tax positions
|
37.8
|
|
|
77.7
|
|
|
29.0
|
|
|||
Increase in prior year tax positions
|
13.9
|
|
|
63.7
|
|
|
2.7
|
|
|||
Decrease in prior year tax positions
|
(78.8
|
)
|
|
(65.0
|
)
|
|
(0.9
|
)
|
|||
Settlements
|
(46.5
|
)
|
|
(95.3
|
)
|
|
(0.3
|
)
|
|||
Lapse of statutes of limitations
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(1.1
|
)
|
|||
Uncertain gross tax positions, December 31
|
$
|
150.7
|
|
|
$
|
225.6
|
|
|
$
|
245.5
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
4-5
Years
|
|
After 5
Years
|
||||||||||
Debt
|
$
|
600.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600.0
|
|
Operating leases
|
91.2
|
|
|
25.6
|
|
|
35.0
|
|
|
16.3
|
|
|
14.3
|
|
|||||
Interest on debt
|
185.5
|
|
|
20.0
|
|
|
40.1
|
|
|
39.6
|
|
|
85.8
|
|
|||||
Transition tax on unremitted foreign earnings and profits (a)
|
270.5
|
|
|
8.9
|
|
|
49.8
|
|
|
71.6
|
|
|
140.2
|
|
|||||
Litigation settlement obligation
|
180.0
|
|
|
180.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension obligations (b)
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase and other commitments
|
34.6
|
|
|
12.6
|
|
|
19.5
|
|
|
0.6
|
|
|
1.9
|
|
|||||
Total contractual cash obligations (c), (d)
|
$
|
1,363.7
|
|
|
$
|
249.0
|
|
|
$
|
144.4
|
|
|
$
|
128.1
|
|
|
$
|
842.2
|
|
(a)
|
As of
December 31, 2018
, we had recorded $270.5 million of income tax liabilities related to the one-time transition tax that resulted from the enactment of the 2017 Act. The transition tax is due in eight annual installments, and the first annual installment was paid in 2018. The second annual installment is 8% of the total liability, net of a $16.1 million overpayment of 2017 federal income taxes. The remaining installment amounts will be equal to 8% of the total liability, payable in fiscal years 2020 through 2022, 15% in fiscal year 2023, 20% in fiscal year 2024, and 25% in fiscal year 2025. See Note 16 to the "
Consolidated Financial Statements
" for additional information about the one-time transition tax.
|
(b)
|
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, 2018
was
$37.0 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.
|
(c)
|
As of
December 31, 2018
, the gross liability for uncertain tax positions, including interest, was
$157.2 million
and relates primarily to transfer pricing matters. During 2018, we executed an Advance Pricing Agreement ("APA") between the United States and Switzerland governments for tax years 2009 through 2020 covering various transfer pricing matters and we have updated our transfer pricing policies accordingly. Certain intercompany transactions covering tax years 2015 through 2018 were not resolved and those related tax positions remain uncertain. These transfer pricing matters may be 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
$585.0 million
if all milestones or other contingent obligations are met. This amount includes certain milestone-based contingent obligations that may be paid through a combination of cash and issuance of common stock.
|
•
|
timing and probability of success of clinical events or regulatory approvals;
|
•
|
timing and probability of success of meeting commercial milestones; and
|
•
|
discount rates.
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
Cost of sales
|
939.4
|
|
|
875.3
|
|
|
797.4
|
|
|||
Gross profit
|
2,783.4
|
|
|
2,560.0
|
|
|
2,166.3
|
|
|||
Selling, general, and administrative expenses
|
1,088.5
|
|
|
990.8
|
|
|
904.7
|
|
|||
Research and development expenses
|
622.2
|
|
|
552.6
|
|
|
442.2
|
|
|||
Intellectual property litigation expenses (income), net (Note 3)
|
214.0
|
|
|
(73.3
|
)
|
|
32.6
|
|
|||
Change in fair value of contingent consideration liabilities
|
(5.7
|
)
|
|
(9.9
|
)
|
|
1.1
|
|
|||
Special charges, net (Note 4)
|
116.2
|
|
|
9.7
|
|
|
34.5
|
|
|||
Other operating expenses
|
—
|
|
|
0.7
|
|
|
—
|
|
|||
Operating income
|
748.2
|
|
|
1,089.4
|
|
|
751.2
|
|
|||
Interest expense
|
29.9
|
|
|
23.2
|
|
|
19.2
|
|
|||
Interest income
|
(32.0
|
)
|
|
(20.3
|
)
|
|
(10.8
|
)
|
|||
Special (gains) charges, net (Note 4)
|
(7.1
|
)
|
|
50.2
|
|
|
—
|
|
|||
Other (income) expense, net (Note 15)
|
(4.0
|
)
|
|
1.4
|
|
|
4.9
|
|
|||
Income before provision for income taxes
|
761.4
|
|
|
1,034.9
|
|
|
737.9
|
|
|||
Provision for income taxes (Note 16)
|
39.2
|
|
|
451.3
|
|
|
168.4
|
|
|||
Net income
|
$
|
722.2
|
|
|
$
|
583.6
|
|
|
$
|
569.5
|
|
Share information
(Note 2):
|
|
|
|
|
|
|
|
|
|||
Earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
3.45
|
|
|
$
|
2.77
|
|
|
$
|
2.67
|
|
Diluted
|
$
|
3.38
|
|
|
$
|
2.70
|
|
|
$
|
2.61
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||
Basic
|
209.2
|
|
|
210.9
|
|
|
213.0
|
|
|||
Diluted
|
213.6
|
|
|
215.9
|
|
|
217.8
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
722.2
|
|
|
$
|
583.6
|
|
|
$
|
569.5
|
|
Other comprehensive (loss) income, net of tax (Note 14):
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(38.6
|
)
|
|
97.5
|
|
|
(16.1
|
)
|
|||
Unrealized gain (loss) on cash flow hedges
|
40.4
|
|
|
(30.6
|
)
|
|
4.9
|
|
|||
Defined benefit pension plans
|
0.6
|
|
|
3.5
|
|
|
(6.2
|
)
|
|||
Unrealized (loss) gain on available-for-sale investments
|
(3.3
|
)
|
|
(7.8
|
)
|
|
0.5
|
|
|||
Reclassification of net realized investment loss to earnings
|
2.9
|
|
|
3.1
|
|
|
1.1
|
|
|||
Other comprehensive (loss) income, net of tax
|
2.0
|
|
|
65.7
|
|
|
(15.8
|
)
|
|||
Comprehensive income
|
$
|
724.2
|
|
|
$
|
649.3
|
|
|
$
|
553.7
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
722.2
|
|
|
$
|
583.6
|
|
|
$
|
569.5
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
77.4
|
|
|
81.9
|
|
|
71.2
|
|
|||
Stock-based compensation (Notes 2 and 13)
|
71.0
|
|
|
61.6
|
|
|
56.9
|
|
|||
Excess tax benefit from stock plans
|
—
|
|
|
—
|
|
|
(64.3
|
)
|
|||
Impairment charges (Note 4)
|
118.8
|
|
|
31.0
|
|
|
—
|
|
|||
Change in fair value of contingent consideration liabilities, net (Note 10)
|
(5.7
|
)
|
|
(9.9
|
)
|
|
1.1
|
|
|||
Deferred income taxes
|
(27.3
|
)
|
|
17.8
|
|
|
(37.4
|
)
|
|||
Purchased in-process research and development
|
—
|
|
|
6.7
|
|
|
34.5
|
|
|||
Other
|
13.0
|
|
|
(6.2
|
)
|
|
7.9
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts and other receivables, net
|
(28.7
|
)
|
|
(27.8
|
)
|
|
(60.4
|
)
|
|||
Inventories
|
(65.7
|
)
|
|
(124.0
|
)
|
|
(65.6
|
)
|
|||
Accounts payable and accrued liabilities
|
192.5
|
|
|
93.8
|
|
|
77.7
|
|
|||
Income taxes
|
(157.8
|
)
|
|
293.7
|
|
|
105.1
|
|
|||
Prepaid expenses and other current assets
|
15.7
|
|
|
(9.9
|
)
|
|
(12.6
|
)
|
|||
Other
|
1.4
|
|
|
8.4
|
|
|
20.8
|
|
|||
Net cash provided by operating activities
|
926.8
|
|
|
1,000.7
|
|
|
704.4
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(238.7
|
)
|
|
(168.1
|
)
|
|
(176.1
|
)
|
|||
Deposit of cash in escrow
|
—
|
|
|
(25.0
|
)
|
|
—
|
|
|||
Purchases of held-to-maturity investments (Note 6)
|
(210.0
|
)
|
|
(804.9
|
)
|
|
(594.7
|
)
|
|||
Proceeds from held-to-maturity investments (Note 6)
|
578.1
|
|
|
654.7
|
|
|
852.5
|
|
|||
Purchases of available-for-sale investments (Note 6)
|
(249.3
|
)
|
|
(529.8
|
)
|
|
(470.4
|
)
|
|||
Proceeds from available-for-sale investments (Note 6)
|
223.2
|
|
|
448.7
|
|
|
232.6
|
|
|||
Investments in unconsolidated affiliates (Note 6)
|
(6.6
|
)
|
|
—
|
|
|
(7.6
|
)
|
|||
Proceeds from unconsolidated affiliates (Note 6)
|
0.4
|
|
|
8.3
|
|
|
1.9
|
|
|||
Investments in trading securities, net
|
(12.6
|
)
|
|
(12.7
|
)
|
|
(9.8
|
)
|
|||
Payment of contingent consideration
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisitions (Notes 7 and 8)
|
—
|
|
|
(192.9
|
)
|
|
—
|
|
|||
Issuances of notes receivable
|
—
|
|
|
(18.9
|
)
|
|
—
|
|
|||
Investments in intangible assets and in-process research and development
|
(3.0
|
)
|
|
(7.4
|
)
|
|
(41.3
|
)
|
|||
Other
|
5.2
|
|
|
0.8
|
|
|
1.2
|
|
|||
Net cash provided by (used in) investing activities
|
76.7
|
|
|
(647.2
|
)
|
|
(211.7
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of debt
|
688.0
|
|
|
994.7
|
|
|
253.5
|
|
|||
Payments on debt and capital lease obligations
|
(1,125.3
|
)
|
|
(818.4
|
)
|
|
(31.4
|
)
|
|||
Purchases of treasury stock
|
(795.5
|
)
|
|
(763.3
|
)
|
|
(662.3
|
)
|
|||
Proceeds from stock plans
|
147.0
|
|
|
113.8
|
|
|
103.3
|
|
|||
Payment of contingent consideration
|
(15.1
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from stock plans
|
—
|
|
|
—
|
|
|
64.3
|
|
|||
Other
|
(0.3
|
)
|
|
—
|
|
|
4.1
|
|
|||
Net cash used in financing activities
|
(1,101.2
|
)
|
|
(473.2
|
)
|
|
(268.5
|
)
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
(6.5
|
)
|
|
7.9
|
|
|
(12.5
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(104.2
|
)
|
|
(111.8
|
)
|
|
211.7
|
|
|||
Cash and cash equivalents at beginning of year
|
818.3
|
|
|
930.1
|
|
|
718.4
|
|
|||
Cash and cash equivalents at end of year
|
$
|
714.1
|
|
|
$
|
818.3
|
|
|
$
|
930.1
|
|
|
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, 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
|
|
||||||
Impact to retained earnings from adoption of ASU 2016-09
|
|
|
|
|
|
|
|
|
|
|
9.3
|
|
|
|
|
9.3
|
|
||||||||||||
BALANCE AT JANUARY 1, 2017
|
242.6
|
|
|
242.6
|
|
|
31.0
|
|
|
(2,499.3
|
)
|
|
1,167.8
|
|
|
3,915.6
|
|
|
(198.4
|
)
|
|
2,628.3
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
583.6
|
|
|
|
|
|
583.6
|
|
||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65.7
|
|
|
65.7
|
|
||||||
Common stock issued under equity plans
|
3.0
|
|
|
3.0
|
|
|
|
|
|
|
|
|
110.8
|
|
|
|
|
|
|
|
|
113.8
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
61.6
|
|
|
|
|
|
|
|
|
61.6
|
|
||||||
Shares issued to acquire business
|
|
|
|
|
(2.8
|
)
|
|
264.3
|
|
|
2.2
|
|
|
|
|
|
|
266.5
|
|
||||||||||
Purchases of treasury stock
|
|
|
|
|
|
|
7.7
|
|
|
(763.3
|
)
|
|
|
|
|
|
|
|
|
|
|
(763.3
|
)
|
||||||
Retirement of treasury stock
|
(33.6
|
)
|
|
(33.6
|
)
|
|
(33.6
|
)
|
|
2,746.2
|
|
|
(175.5
|
)
|
|
(2,537.1
|
)
|
|
|
|
—
|
|
|||||||
BALANCE AT DECEMBER 31, 2017
|
212.0
|
|
|
212.0
|
|
|
2.3
|
|
|
(252.1
|
)
|
|
1,166.9
|
|
|
1,962.1
|
|
|
(132.7
|
)
|
|
2,956.2
|
|
||||||
Impact to retained earnings from adoption of ASU 2016-16 and ASU 2018-02
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
|
(7.8
|
)
|
|
2.6
|
|
|||||||||||
BALANCE AT JANUARY 1, 2018
|
212.0
|
|
|
212.0
|
|
|
2.3
|
|
|
(252.1
|
)
|
|
1,166.9
|
|
|
1,972.5
|
|
|
(140.5
|
)
|
|
2,958.8
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
722.2
|
|
|
|
|
|
722.2
|
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.0
|
|
|
2.0
|
|
||||||
Common stock issued under equity plans
|
3.2
|
|
|
3.2
|
|
|
|
|
|
|
|
|
143.8
|
|
|
|
|
|
|
|
|
147.0
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
71.0
|
|
|
|
|
|
|
|
|
71.0
|
|
||||||
Shares issued in payment for contingent consideration liabilities
|
|
|
|
|
(0.3
|
)
|
|
32.2
|
|
|
2.7
|
|
|
|
|
|
|
34.9
|
|
||||||||||
Purchases of treasury stock
|
|
|
|
|
|
|
5.5
|
|
|
(795.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(795.5
|
)
|
||||||
BALANCE AT DECEMBER 31, 2018
|
215.2
|
|
|
$
|
215.2
|
|
|
7.5
|
|
|
$
|
(1,015.4
|
)
|
|
$
|
1,384.4
|
|
|
$
|
2,694.7
|
|
|
$
|
(138.5
|
)
|
|
$
|
3,140.4
|
|
•
|
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,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Basic:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
722.2
|
|
|
$
|
583.6
|
|
|
$
|
569.5
|
|
Weighted-average shares outstanding
|
209.2
|
|
|
210.9
|
|
|
213.0
|
|
|||
Basic earnings per share
|
$
|
3.45
|
|
|
$
|
2.77
|
|
|
$
|
2.67
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
722.2
|
|
|
$
|
583.6
|
|
|
$
|
569.5
|
|
Weighted-average shares outstanding
|
209.2
|
|
|
210.9
|
|
|
213.0
|
|
|||
Dilutive effect of stock plans
|
4.4
|
|
|
5.0
|
|
|
4.8
|
|
|||
Dilutive weighted-average shares outstanding
|
213.6
|
|
|
215.9
|
|
|
217.8
|
|
|||
Diluted earnings per share
|
$
|
3.38
|
|
|
$
|
2.70
|
|
|
$
|
2.61
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of sales
|
$
|
11.4
|
|
|
$
|
9.2
|
|
|
$
|
8.4
|
|
Selling, general, and administrative expenses
|
46.3
|
|
|
40.7
|
|
|
38.0
|
|
|||
Research and development expenses
|
13.3
|
|
|
11.7
|
|
|
10.5
|
|
|||
Total stock-based compensation expense
|
$
|
71.0
|
|
|
$
|
61.6
|
|
|
$
|
56.9
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Accounts receivable, net
|
|
|
|
|
|
||
Trade accounts receivable
|
$
|
465.8
|
|
|
$
|
447.2
|
|
Allowance for doubtful accounts
|
(8.9
|
)
|
|
(8.5
|
)
|
||
|
$
|
456.9
|
|
|
$
|
438.7
|
|
Inventories
|
|
|
|
|
|
||
Raw materials
|
$
|
111.5
|
|
|
$
|
101.4
|
|
Work in process
|
144.8
|
|
|
121.1
|
|
||
Finished products
|
350.7
|
|
|
332.4
|
|
||
|
$
|
607.0
|
|
|
$
|
554.9
|
|
Property, plant, and equipment, net
|
|
|
|
|
|
||
Land
|
$
|
90.7
|
|
|
$
|
39.1
|
|
Buildings and leasehold improvements
|
497.4
|
|
|
436.8
|
|
||
Machinery and equipment
|
432.4
|
|
|
393.4
|
|
||
Equipment with customers
|
41.1
|
|
|
41.0
|
|
||
Software
|
92.4
|
|
|
93.4
|
|
||
Construction in progress
|
168.8
|
|
|
88.2
|
|
||
|
1,322.8
|
|
|
1,091.9
|
|
||
Accumulated depreciation
|
(455.3
|
)
|
|
(412.2
|
)
|
||
|
$
|
867.5
|
|
|
$
|
679.7
|
|
Accrued and other liabilities
|
|
|
|
|
|
||
Employee compensation and withholdings
|
$
|
226.1
|
|
|
$
|
249.4
|
|
Litigation and insurance reserves (Note 17)
|
196.7
|
|
|
15.0
|
|
||
Taxes payable
|
31.3
|
|
|
97.8
|
|
||
Accrued rebates
|
80.0
|
|
|
71.0
|
|
||
Property, payroll, and other taxes
|
39.5
|
|
|
41.9
|
|
||
Research and development accruals
|
48.9
|
|
|
39.2
|
|
||
Fair value of derivatives
|
4.4
|
|
|
24.8
|
|
||
Accrued marketing expenses
|
22.3
|
|
|
14.9
|
|
||
Accrued professional services
|
11.0
|
|
|
8.5
|
|
||
Accrued realignment reserves
|
0.1
|
|
|
8.2
|
|
||
Accrued relocation costs
|
11.3
|
|
|
8.7
|
|
||
Other accrued liabilities
|
71.0
|
|
|
74.3
|
|
||
|
$
|
742.6
|
|
|
$
|
653.7
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
30.1
|
|
|
$
|
19.9
|
|
|
$
|
16.1
|
|
Income taxes
|
$
|
223.7
|
|
|
$
|
143.7
|
|
|
$
|
99.9
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|
|||
Fair value of shares issued in payment for contingent consideration liabilities (Note 10)
|
$
|
34.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of shares issued in connection with business combinations (Note 7)
|
$
|
—
|
|
|
$
|
266.5
|
|
|
$
|
—
|
|
Capital expenditures accruals
|
$
|
18.7
|
|
|
$
|
21.6
|
|
|
$
|
22.7
|
|
Retirement of treasury stock (Note 13)
|
$
|
—
|
|
|
$
|
2,746.2
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
Held-to-maturity
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
Bank time deposits
|
$
|
20.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.0
|
|
|
$
|
382.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
382.9
|
|
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||||||
U.S. government and agency securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
||||||||
|
$
|
20.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.0
|
|
|
$
|
388.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
388.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Bank time deposits
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Commercial paper
|
56.7
|
|
|
—
|
|
|
—
|
|
|
56.7
|
|
|
40.3
|
|
|
—
|
|
|
—
|
|
|
40.3
|
|
||||||||
U.S. government and agency securities
|
79.7
|
|
|
0.2
|
|
|
(0.7
|
)
|
|
79.2
|
|
|
69.4
|
|
|
—
|
|
|
(0.7
|
)
|
|
68.7
|
|
||||||||
Foreign government bonds
|
1.7
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
||||||||
Asset-backed securities
|
110.6
|
|
|
0.1
|
|
|
(0.5
|
)
|
|
110.2
|
|
|
121.2
|
|
|
—
|
|
|
(0.4
|
)
|
|
120.8
|
|
||||||||
Corporate debt securities
|
459.8
|
|
|
0.1
|
|
|
(4.3
|
)
|
|
455.6
|
|
|
446.5
|
|
|
0.8
|
|
|
(1.8
|
)
|
|
445.5
|
|
||||||||
Municipal securities
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||||||
|
$
|
711.3
|
|
|
$
|
0.4
|
|
|
$
|
(5.5
|
)
|
|
$
|
706.2
|
|
|
$
|
685.3
|
|
|
$
|
0.8
|
|
|
$
|
(2.9
|
)
|
|
$
|
683.2
|
|
|
Held-to-Maturity
|
|
Available-for-Sale
|
||||||||||||
|
Cost
|
|
Fair Value
|
|
Cost
|
|
Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
Due in 1 year or less
|
$
|
20.0
|
|
|
$
|
20.0
|
|
|
$
|
223.2
|
|
|
$
|
222.4
|
|
Due after 1 year through 5 years
|
—
|
|
|
—
|
|
|
385.6
|
|
|
381.7
|
|
||||
Instruments not due at a single maturity date
|
—
|
|
|
—
|
|
|
102.5
|
|
|
102.1
|
|
||||
|
$
|
20.0
|
|
|
$
|
20.0
|
|
|
$
|
711.3
|
|
|
$
|
706.2
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
U.S. government and agency securities
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
56.5
|
|
|
$
|
(0.6
|
)
|
|
$
|
57.2
|
|
|
$
|
(0.7
|
)
|
Asset-backed securities
|
4.0
|
|
|
0.1
|
|
|
61.3
|
|
|
(0.6
|
)
|
|
65.3
|
|
|
(0.5
|
)
|
||||||
Corporate debt securities
|
177.4
|
|
|
(1.1
|
)
|
|
203.7
|
|
|
(3.2
|
)
|
|
381.1
|
|
|
(4.3
|
)
|
||||||
|
$
|
182.1
|
|
|
$
|
(1.1
|
)
|
|
$
|
321.5
|
|
|
$
|
(4.4
|
)
|
|
$
|
503.6
|
|
|
$
|
(5.5
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
U.S. government and agency securities
|
$
|
31.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
37.1
|
|
|
$
|
(0.5
|
)
|
|
$
|
68.6
|
|
|
$
|
(0.7
|
)
|
Asset-backed securities
|
90.8
|
|
|
(0.3
|
)
|
|
23.2
|
|
|
(0.1
|
)
|
|
114.0
|
|
|
(0.4
|
)
|
||||||
Corporate debt securities
|
253.3
|
|
|
(1.2
|
)
|
|
59.2
|
|
|
(0.6
|
)
|
|
312.5
|
|
|
(1.8
|
)
|
||||||
|
$
|
375.6
|
|
|
$
|
(1.7
|
)
|
|
$
|
119.5
|
|
|
$
|
(1.2
|
)
|
|
$
|
495.1
|
|
|
$
|
(2.9
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Equity method investments
|
|
|
|
|
|
||
Cost
|
$
|
9.1
|
|
|
$
|
9.2
|
|
Equity in losses
|
(4.7
|
)
|
|
(5.1
|
)
|
||
Carrying value of equity method investments
|
4.4
|
|
|
4.1
|
|
||
Equity securities
|
|
|
|
|
|
||
Carrying value of non-marketable equity securities
|
18.1
|
|
|
10.7
|
|
||
Total investments in unconsolidated affiliates
|
$
|
22.5
|
|
|
$
|
14.8
|
|
Current assets
|
|
$
|
3.6
|
|
|
Property and equipment, net
|
|
0.3
|
|
|
|
Goodwill
|
|
142.1
|
|
|
|
IPR&D
|
|
53.1
|
|
|
|
Other assets
|
|
0.1
|
|
|
|
Current liabilities assumed
|
|
(0.8
|
)
|
|
|
Deferred income taxes
|
|
(12.7
|
)
|
|
|
Total purchase price
|
|
185.7
|
|
|
|
Less: cash acquired
|
|
(3.5
|
)
|
|
|
Total purchase price, net of cash acquired
|
|
$
|
182.2
|
|
|
|
United
States |
|
Europe
|
|
Rest of World
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Goodwill at December 31, 2016
|
$
|
567.2
|
|
|
$
|
58.9
|
|
|
$
|
—
|
|
|
$
|
626.1
|
|
Goodwill acquired during the year
|
142.1
|
|
|
—
|
|
|
316.5
|
|
|
458.6
|
|
||||
Currency translation adjustment
|
—
|
|
|
8.3
|
|
|
33.5
|
|
|
41.8
|
|
||||
Goodwill at December 31, 2017
|
709.3
|
|
|
67.2
|
|
|
350.0
|
|
|
1,126.5
|
|
||||
Currency translation adjustment
|
—
|
|
|
(3.0
|
)
|
|
(11.3
|
)
|
|
(14.3
|
)
|
||||
Goodwill at December 31, 2018
|
$
|
709.3
|
|
|
$
|
64.2
|
|
|
$
|
338.7
|
|
|
$
|
1,112.2
|
|
|
|
|
December 31,
|
||||||||||||||||||||||
|
Weighted-Average Useful Life (in years)
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
Cost
|
|
Accumulated
Amortization |
|
Net
Carrying Value |
|
Cost
|
|
Accumulated
Amortization |
|
Net
Carrying Value |
|||||||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Patents
|
7.4
|
|
$
|
185.8
|
|
|
$
|
(181.2
|
)
|
|
$
|
4.6
|
|
|
$
|
186.1
|
|
|
$
|
(180.4
|
)
|
|
$
|
5.7
|
|
Developed technology
|
12.3
|
|
119.8
|
|
|
(44.2
|
)
|
|
75.6
|
|
|
190.8
|
|
|
(43.8
|
)
|
|
147.0
|
|
||||||
|
11.9
|
|
305.6
|
|
|
(225.4
|
)
|
|
80.2
|
|
|
376.9
|
|
|
(224.2
|
)
|
|
152.7
|
|
||||||
Unamortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
IPR&D
|
|
|
263.0
|
|
|
—
|
|
|
263.0
|
|
|
315.3
|
|
|
—
|
|
|
315.3
|
|
||||||
|
|
|
$
|
568.6
|
|
|
$
|
(225.4
|
)
|
|
$
|
343.2
|
|
|
$
|
692.2
|
|
|
$
|
(224.2
|
)
|
|
$
|
468.0
|
|
2019
|
$
|
2.4
|
|
2020
|
2.9
|
|
|
2021
|
4.7
|
|
|
2022
|
7.2
|
|
|
2023
|
10.7
|
|
|
December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
Amount
|
|
Effective
Interest Rate |
|
Amount
|
|
Effective
Interest Rate |
||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||
Fixed-rate 4.300% 2018 Notes
|
$
|
600.0
|
|
|
4.329
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Fixed-rate 2.875% 2013 Notes
|
—
|
|
|
—
|
%
|
|
600.0
|
|
|
2.983
|
%
|
||
Total senior notes
|
600.0
|
|
|
|
|
600.0
|
|
|
|
||||
Unamortized discount
|
(1.3
|
)
|
|
|
|
|
(0.5
|
)
|
|
|
|
||
Unamortized debt issuance costs
|
(4.9
|
)
|
|
|
|
(0.8
|
)
|
|
|
||||
Hedge accounting fair value adjustments (see Note 11)
|
—
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
||
Total carrying amount
|
$
|
593.8
|
|
|
|
|
|
$
|
598.0
|
|
|
|
|
|
Operating
Leases |
|
Aggregate
Debt Maturities |
||||
2019
|
$
|
25.6
|
|
|
$
|
—
|
|
2020
|
21.5
|
|
|
—
|
|
||
2021
|
13.5
|
|
|
—
|
|
||
2022
|
9.9
|
|
|
—
|
|
||
2023
|
6.4
|
|
|
—
|
|
||
Thereafter
|
14.3
|
|
|
600.0
|
|
||
Total obligations and commitments
|
$
|
91.2
|
|
|
$
|
600.0
|
|
December 31, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
—
|
|
|
$
|
11.8
|
|
|
$
|
—
|
|
|
$
|
11.8
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|||||||
Corporate debt securities
|
—
|
|
|
455.6
|
|
|
—
|
|
|
455.6
|
|
||||
Asset-backed securities
|
—
|
|
|
110.2
|
|
|
—
|
|
|
110.2
|
|
||||
U.S. government and agency securities
|
19.6
|
|
|
59.6
|
|
|
—
|
|
|
79.2
|
|
||||
Foreign government bonds
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
||||
Commercial paper
|
—
|
|
|
56.7
|
|
|
—
|
|
|
56.7
|
|
||||
Municipal securities
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||
Investments held for deferred compensation plans
|
67.6
|
|
|
—
|
|
|
—
|
|
|
67.6
|
|
||||
Derivatives
|
—
|
|
|
29.9
|
|
|
—
|
|
|
29.9
|
|
||||
|
$
|
87.2
|
|
|
$
|
728.3
|
|
|
$
|
—
|
|
|
$
|
815.5
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
$
|
—
|
|
|
$
|
5.2
|
|
|
$
|
—
|
|
|
$
|
5.2
|
|
Deferred compensation plans
|
68.5
|
|
|
—
|
|
|
—
|
|
|
68.5
|
|
||||
Contingent consideration liabilities
|
|
|
|
—
|
|
|
178.6
|
|
|
178.6
|
|
||||
|
$
|
68.5
|
|
|
$
|
5.2
|
|
|
$
|
178.6
|
|
|
$
|
252.3
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
52.2
|
|
|
$
|
22.8
|
|
|
$
|
—
|
|
|
$
|
75.0
|
|
Available-for-sale investments:
|
|
|
|
|
|
|
|
|
|||||||
Bank time deposits
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Corporate debt securities
|
—
|
|
|
445.5
|
|
|
—
|
|
|
445.5
|
|
||||
Asset-backed securities
|
—
|
|
|
120.8
|
|
|
—
|
|
|
120.8
|
|
||||
U.S. government and agency securities
|
20.6
|
|
|
48.1
|
|
|
—
|
|
|
68.7
|
|
||||
Foreign government bonds
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
||||
Commercial paper
|
—
|
|
|
40.3
|
|
|
—
|
|
|
40.3
|
|
||||
Municipal securities
|
—
|
|
|
4.4
|
|
|
—
|
|
|
4.4
|
|
||||
Investments held for deferred compensation plans
|
63.7
|
|
|
—
|
|
|
—
|
|
|
63.7
|
|
||||
Derivatives
|
—
|
|
|
4.9
|
|
|
—
|
|
|
4.9
|
|
||||
|
$
|
136.5
|
|
|
$
|
690.3
|
|
|
$
|
—
|
|
|
$
|
826.8
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives
|
$
|
—
|
|
|
$
|
24.8
|
|
|
$
|
—
|
|
|
$
|
24.8
|
|
Deferred compensation plans
|
64.1
|
|
|
—
|
|
|
—
|
|
|
64.1
|
|
||||
Contingent consideration liabilities
|
|
|
|
—
|
|
|
244.3
|
|
|
244.3
|
|
||||
|
$
|
64.1
|
|
|
$
|
24.8
|
|
|
$
|
244.3
|
|
|
$
|
333.2
|
|
Balance at December 31, 2017
|
$
|
244.3
|
|
Payments (cash and issued shares)
|
(60.0
|
)
|
|
Changes in fair value
|
(5.7
|
)
|
|
Balance at December 31, 2018
|
$
|
178.6
|
|
|
Notional Amount
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Foreign currency forward exchange contracts
|
$
|
1,378.2
|
|
|
$
|
979.8
|
|
Cross currency swap contracts
|
300.0
|
|
|
—
|
|
|
|
|
Fair Value
|
||||||
|
Balance Sheet Location
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
||
Assets
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
Other current assets
|
|
$
|
29.1
|
|
|
$
|
4.9
|
|
Cross currency swap contracts
|
Other assets
|
|
$
|
0.8
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||
Foreign currency contracts
|
Accrued and other liabilities
|
|
$
|
4.4
|
|
|
$
|
24.8
|
|
Foreign currency contracts
|
Other long-term liabilities
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
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, 2018
|
Gross
Amounts
|
|
Financial
Instruments
|
|
Cash
Collateral
Received
|
|
Net
Amount
|
||||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
29.1
|
|
|
$
|
—
|
|
|
$
|
29.1
|
|
|
$
|
(3.6
|
)
|
|
$
|
—
|
|
|
$
|
25.5
|
|
Cross currency swap contracts
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
5.2
|
|
|
$
|
—
|
|
|
$
|
5.2
|
|
|
$
|
(3.6
|
)
|
|
$
|
—
|
|
|
$
|
1.6
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
4.9
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
1.2
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
24.8
|
|
|
$
|
—
|
|
|
$
|
24.8
|
|
|
$
|
(3.7
|
)
|
|
$
|
—
|
|
|
$
|
21.1
|
|
|
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
|
||||||||||||
|
|
||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
|
(in millions)
|
|
|
|
(in millions)
|
||||||||||||
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
$
|
35.9
|
|
|
$
|
(43.5
|
)
|
|
Cost of sales
|
|
$
|
(17.3
|
)
|
|
$
|
7.6
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
$
|
(2.3
|
)
|
|
$
|
(1.1
|
)
|
|
|
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)
Recognized in Income on Derivative (Amount Excluded from
Effectiveness Testing)
|
||||||||||||
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|||||||||
Net investment hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cross currency swap contracts
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
3.5
|
|
|
$
|
—
|
|
Foreign currency denominated debt
|
|
$
|
6.8
|
|
|
$
|
(35.5
|
)
|
|
|
|
|
|
|
(a)
|
The gains and losses on the interest rate swap agreements were fully offset by the changes in the fair value of the fixed-rate debt being hedged. In December 2017, the interest rate swap was settled at a loss of
$0.7 million
, which was amortized to interest expense over the remaining life of the debt.
|
|
|
|
Amount of Gain or
(Loss) Recognized in
Income on Derivative
|
||||||||||
|
Location of Gain or
(Loss) Recognized in
Income on Derivative
|
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||
|
|
|
(in millions)
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
Other (income) expense, net
|
|
$
|
9.7
|
|
|
$
|
(11.5
|
)
|
|
$
|
8.6
|
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||||||
|
Twelve Months Ended December 31, 2018
|
||||||||||||||
|
Cost of sales
|
|
Selling, general, and administrative expenses
|
|
Interest expense
|
|
Other (Income) Expense, net
|
||||||||
|
|
|
|
||||||||||||
Total amounts of income and expense line items shown in the consolidated statements of operations in which the effects of fair value or cash flow hedges are recorded
|
$
|
(939.4
|
)
|
|
$
|
(1,088.5
|
)
|
|
$
|
(29.9
|
)
|
|
$
|
4.0
|
|
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on fair value hedging relationships:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
||||||||
Hedged items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Derivatives designated as hedging instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||
Gain (loss) on cash flow hedging relationships:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
$
|
(17.3
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Change in projected benefit obligation:
|
|
|
|
|
|
||
Beginning of year
|
$
|
114.9
|
|
|
$
|
128.7
|
|
Service cost
|
6.0
|
|
|
7.9
|
|
||
Interest cost
|
0.8
|
|
|
1.0
|
|
||
Participant contributions
|
1.2
|
|
|
2.2
|
|
||
Actuarial loss (gain)
|
0.7
|
|
|
(7.4
|
)
|
||
Benefits paid
|
(0.3
|
)
|
|
(3.1
|
)
|
||
Plan amendment
|
(2.0
|
)
|
|
—
|
|
||
Settlements and curtailment gain
|
(22.5
|
)
|
|
(22.2
|
)
|
||
Special termination benefits
|
—
|
|
|
0.6
|
|
||
Currency exchange rate changes and other
|
(1.4
|
)
|
|
7.2
|
|
||
End of year
|
$
|
97.4
|
|
|
$
|
114.9
|
|
|
|
|
|
|
Years Ended
December 31, |
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Change in fair value of plan assets:
|
|
|
|
|
|
||
Beginning of year
|
$
|
71.2
|
|
|
$
|
78.6
|
|
Actual return on plan assets
|
(0.8
|
)
|
|
4.3
|
|
||
Employer contributions
|
3.9
|
|
|
6.5
|
|
||
Participant contributions
|
1.2
|
|
|
2.2
|
|
||
Settlements
|
(14.4
|
)
|
|
(20.7
|
)
|
||
Benefits paid
|
(0.3
|
)
|
|
(3.1
|
)
|
||
Currency exchange rate changes and other
|
(0.4
|
)
|
|
3.4
|
|
||
End of year
|
$
|
60.4
|
|
|
$
|
71.2
|
|
|
|
|
|
||||
Funded Status
|
|
|
|
|
|
||
Projected benefit obligation
|
$
|
(97.4
|
)
|
|
$
|
(114.9
|
)
|
Plan assets at fair value
|
60.4
|
|
|
71.2
|
|
||
Underfunded status
|
$
|
(37.0
|
)
|
|
$
|
(43.7
|
)
|
Net amounts recognized on the consolidated balance sheet:
|
|
|
|
|
|
||
Other long-term liabilities
|
$
|
37.0
|
|
|
$
|
43.7
|
|
Accumulated other comprehensive loss, net of tax:
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
(19.4
|
)
|
|
$
|
(17.1
|
)
|
Net prior service cost
|
2.3
|
|
|
(0.9
|
)
|
||
Deferred income tax benefit
|
3.6
|
|
|
3.9
|
|
||
Total
|
$
|
(13.5
|
)
|
|
$
|
(14.1
|
)
|
|
Years Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost, net
|
$
|
6.0
|
|
|
$
|
7.9
|
|
|
$
|
6.8
|
|
Interest cost
|
0.8
|
|
|
1.0
|
|
|
1.2
|
|
|||
Expected return on plan assets
|
(1.3
|
)
|
|
(2.0
|
)
|
|
(1.3
|
)
|
|||
Settlements and curtailment gain
|
(7.4
|
)
|
|
(6.3
|
)
|
|
—
|
|
|||
Special termination benefits
|
—
|
|
|
0.6
|
|
|
—
|
|
|||
Amortization of actuarial loss
|
0.8
|
|
|
0.9
|
|
|
0.7
|
|
|||
Amortization of prior service (credit) cost
|
(0.1
|
)
|
|
0.2
|
|
|
(0.7
|
)
|
|||
Net periodic pension benefit (credit) cost
|
$
|
(1.2
|
)
|
|
$
|
2.3
|
|
|
$
|
6.7
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
Discount rate
|
0.9
|
%
|
|
0.9
|
%
|
Rate of compensation increase
|
2.8
|
%
|
|
2.6
|
%
|
Social securities increase
|
1.8
|
%
|
|
1.5
|
%
|
Pension increase
|
1.8
|
%
|
|
1.8
|
%
|
|
Years ended
December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
0.9
|
%
|
|
0.7
|
%
|
|
1.0
|
%
|
Expected return on plan assets
|
2.3
|
%
|
|
2.4
|
%
|
|
1.6
|
%
|
Rate of compensation increase
|
2.6
|
%
|
|
2.5
|
%
|
|
2.7
|
%
|
Social securities increase
|
1.5
|
%
|
|
1.4
|
%
|
|
1.6
|
%
|
Pension increase
|
1.8
|
%
|
|
0.3
|
%
|
|
2.0
|
%
|
Equity securities
|
22.5
|
%
|
Debt securities
|
49.7
|
%
|
Real estate
|
6.8
|
%
|
Other
|
21.0
|
%
|
Total
|
100.0
|
%
|
December 31, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.0
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States equities
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||
International equities
|
9.3
|
|
|
—
|
|
|
—
|
|
|
9.3
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States government bonds
|
6.4
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
||||
International government bonds
|
23.2
|
|
|
—
|
|
|
—
|
|
|
23.2
|
|
||||
Real estate
|
—
|
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
||||
Mortgages
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.0
|
|
||||
Total plan assets measured at fair value
|
$
|
46.4
|
|
|
$
|
6.3
|
|
|
$
|
1.0
|
|
|
53.7
|
|
|
Alternative investments measured at net asset value (a)
|
|
|
|
|
|
|
6.7
|
|
|||||||
Total plan assets
|
|
|
|
|
|
|
$
|
60.4
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset Category
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States equities
|
4.5
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||
International equities
|
17.2
|
|
|
—
|
|
|
—
|
|
|
17.2
|
|
||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States government bonds
|
3.3
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
||||
International government bonds
|
24.6
|
|
|
—
|
|
|
—
|
|
|
24.6
|
|
||||
Real estate
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
||||
Mortgages
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
||||
Insurance contracts
|
—
|
|
|
—
|
|
|
2.7
|
|
|
2.7
|
|
||||
Total plan assets
|
$
|
50.9
|
|
|
$
|
7.7
|
|
|
$
|
2.7
|
|
|
$
|
61.3
|
|
Alternative investments measured at net asset value (a)
|
|
|
|
|
|
|
9.9
|
|
|||||||
Total plan assets
|
|
|
|
|
|
|
$
|
71.2
|
|
(a)
|
Certain investments that were measured at net asset value per share have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total plan assets.
|
|
Insurance
Contracts |
||
Balance at December 31, 2016
|
$
|
58.5
|
|
Actual return on plan assets:
|
|
|
|
Relating to assets still held at December 31, 2017
|
(0.9
|
)
|
|
Relating to assets sold during 2017
|
0.1
|
|
|
Purchases, sales and settlements
|
(15.5
|
)
|
|
Transfers in and/or out of Level 3
|
(42.6
|
)
|
|
Currency exchange rate impact
|
3.1
|
|
|
Balance at December 31, 2017
|
2.7
|
|
|
Actual return on plan assets:
|
|
|
|
Relating to assets still held at December 31, 2018
|
(1.6
|
)
|
|
Currency exchange rate impact
|
(0.1
|
)
|
|
Balance at December 31, 2018
|
$
|
1.0
|
|
2019
|
$
|
3.7
|
|
2020
|
3.7
|
|
|
2021
|
3.6
|
|
|
2022
|
4.4
|
|
|
2023
|
5.6
|
|
|
2024-2026
|
27.9
|
|
|
|
|
|
Initial Delivery
|
|
Final Settlement
|
|||||||||||||||||
Agreement Date
|
|
Amount
Paid
|
|
Shares
Received
|
|
Price per
Share (a)
|
|
Value of
Shares as %
of Contract
Value
|
|
Settlement
Date
|
|
Total Shares
Received
|
|
Average Price
per Share (a)
|
|||||||||
February 2016
|
|
$
|
325.0
|
|
|
3.2
|
|
|
$
|
83.60
|
|
|
82
|
%
|
|
April 2016 (tranche 1)
|
|
1.8
|
|
|
$
|
84.39
|
|
|
|
|
|
|
|
|
|
|
|
October 2016 (tranche 2)
|
|
1.7
|
|
|
$
|
101.82
|
|
||||||
November 2017
|
|
$
|
150.0
|
|
|
1.1
|
|
|
$
|
109.86
|
|
|
80
|
%
|
|
December 2017
|
|
1.3
|
|
|
$
|
114.85
|
|
April 2018
|
|
$
|
400.0
|
|
|
2.5
|
|
|
$
|
127.36
|
|
|
80
|
%
|
|
July 2018
|
|
2.8
|
|
|
$
|
142.37
|
|
October 2018
|
|
$
|
250.0
|
|
|
1.4
|
|
|
$
|
139.22
|
|
|
80
|
%
|
|
November 2018
|
|
1.7
|
|
|
$
|
150.54
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Average risk-free interest rate
|
2.9
|
%
|
|
1.8
|
%
|
|
1.1
|
%
|
|||
Expected dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|||
Expected volatility
|
29
|
%
|
|
33
|
%
|
|
33
|
%
|
|||
Expected life (years)
|
5.0
|
|
|
4.6
|
|
|
4.5
|
|
|||
Fair value, per share
|
$
|
42.51
|
|
|
$
|
33.74
|
|
|
$
|
31.00
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Average risk-free interest rate
|
0.9
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
|||
Expected dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|||
Expected volatility
|
33
|
%
|
|
33
|
%
|
|
29
|
%
|
|||
Expected life (years)
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
|||
Fair value, per share
|
$
|
36.53
|
|
|
$
|
25.69
|
|
|
$
|
22.09
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding as of December 31, 2017
|
8.7
|
|
|
$
|
59.86
|
|
|
|
|
|
|
|
Options granted
|
0.9
|
|
|
136.77
|
|
|
|
|
|
|
||
Options exercised
|
(2.3
|
)
|
|
45.41
|
|
|
|
|
|
|
||
Options forfeited
|
(0.1
|
)
|
|
97.57
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2018
|
7.2
|
|
|
73.42
|
|
|
3.4 years
|
|
$
|
576.3
|
|
|
Exercisable as of December 31, 2018
|
5.0
|
|
|
55.63
|
|
|
2.5 years
|
|
489.3
|
|
||
Vested and expected to vest as of December 31, 2018
|
6.9
|
|
|
71.60
|
|
|
3.3 years
|
|
564.1
|
|
|
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested as of December 31, 2017
|
1.2
|
|
|
$
|
85.23
|
|
Granted (a)
|
0.4
|
|
|
130.29
|
|
|
Vested
|
(0.5
|
)
|
|
59.41
|
|
|
Forfeited
|
(0.1
|
)
|
|
92.64
|
|
|
Nonvested as of December 31, 2018
|
1.0
|
|
|
113.86
|
|
(a)
|
Includes
42,025
shares of market-based restricted stock units granted during
2018
, which represents the targeted number of shares to be issued, and
50,120
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 (Loss) on Hedges
|
|
Unrealized (Loss) Gain on
Available-for-sale
Investments
|
|
Unrealized
Pension
Costs (a)
|
|
Total
Accumulated
Other
Comprehensive
Loss
|
||||||||||
|
(in millions)
|
||||||||||||||||||
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
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
84.1
|
|
|
(43.5
|
)
|
|
(8.3
|
)
|
|
9.7
|
|
|
42.0
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(6.5
|
)
|
|
3.1
|
|
|
(5.1
|
)
|
|
(8.5
|
)
|
|||||
Deferred income tax benefit (expense)
|
13.4
|
|
|
19.4
|
|
|
0.5
|
|
|
(1.1
|
)
|
|
32.2
|
|
|||||
December 31, 2017
|
(100.1
|
)
|
|
(13.9
|
)
|
|
(4.6
|
)
|
|
(14.1
|
)
|
|
(132.7
|
)
|
|||||
Impact from adoption of ASU 2016-16 and ASU 2018-02
|
(4.9
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|||||
January 1, 2018
|
(105.0
|
)
|
|
(16.8
|
)
|
|
(4.6
|
)
|
|
(14.1
|
)
|
|
(140.5
|
)
|
|||||
Other comprehensive (loss) income before reclassifications
|
(36.7
|
)
|
|
35.1
|
|
|
(3.1
|
)
|
|
7.6
|
|
|
2.9
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
19.1
|
|
|
2.9
|
|
|
(6.7
|
)
|
|
15.3
|
|
|||||
Deferred income tax expense
|
(1.9
|
)
|
|
(13.8
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(16.2
|
)
|
|||||
December 31, 2018
|
$
|
(143.6
|
)
|
|
$
|
23.6
|
|
|
$
|
(5.0
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
(138.5
|
)
|
(a)
|
For the years ended
December 31, 2018
,
2017
, and
2016
, the change in unrealized pension costs consisted of the following (in millions):
|
|
Pre-Tax
Amount |
|
Tax (Expense) Benefit
|
|
Net of Tax
Amount |
||||||
2018
|
|
|
|
|
|
|
|
|
|||
Prior service credit arising during period
|
$
|
3.3
|
|
|
$
|
(0.9
|
)
|
|
$
|
2.4
|
|
Amortization of prior service credit
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Net prior service credit arising during period
|
3.2
|
|
|
(0.9
|
)
|
|
2.3
|
|
|||
Net actuarial loss arising during period
|
(2.3
|
)
|
|
0.6
|
|
|
(1.7
|
)
|
|||
Unrealized pension costs, net
|
$
|
0.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.6
|
|
2017
|
|
|
|
|
|
|
|
|
|||
Prior service credit arising during period
|
$
|
3.5
|
|
|
$
|
(0.4
|
)
|
|
$
|
3.1
|
|
Amortization of prior service cost
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Net prior service credit arising during period
|
3.7
|
|
|
(0.4
|
)
|
|
3.3
|
|
|||
Net actuarial gain arising during period
|
0.9
|
|
|
(0.7
|
)
|
|
0.2
|
|
|||
Unrealized pension costs, net
|
$
|
4.6
|
|
|
$
|
(1.1
|
)
|
|
$
|
3.5
|
|
2016
|
|
|
|
|
|
|
|
|
|||
Prior service cost 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
|
)
|
|
Years Ended December 31,
|
|
|
||||||
Details about Accumulated Other Comprehensive Loss
Components
|
2018
|
|
2017
|
|
Affected Line on Consolidated
Statements of Operations
|
||||
Gain (loss) on hedges
|
$
|
(17.3
|
)
|
|
$
|
7.6
|
|
|
Cost of sales
|
|
(2.3
|
)
|
|
(1.1
|
)
|
|
Selling, general, and administrative expenses
|
||
|
0.5
|
|
|
—
|
|
|
Other (income) expense, net
|
||
|
(19.6
|
)
|
|
6.5
|
|
|
Total before tax
|
||
|
4.4
|
|
|
(2.8
|
)
|
|
Provision for income taxes
|
||
|
$
|
(15.2
|
)
|
|
$
|
3.7
|
|
|
Net of tax
|
(Loss) gain on available-for-sale investments
|
$
|
(2.9
|
)
|
|
$
|
(3.1
|
)
|
|
Other (income) expense, net
|
|
0.2
|
|
|
0.1
|
|
|
Provision for income taxes
|
||
|
$
|
(2.7
|
)
|
|
$
|
(3.0
|
)
|
|
Net of tax
|
Amortization of pension adjustments
|
$
|
7.1
|
|
|
$
|
(0.5
|
)
|
|
Special (gains) charges, net
|
|
(0.4
|
)
|
|
5.6
|
|
|
Other (income) expense, net
|
||
|
6.7
|
|
|
5.1
|
|
|
Total before tax
|
||
|
(0.6
|
)
|
|
(0.4
|
)
|
|
Provision for income taxes
|
||
|
$
|
6.1
|
|
|
$
|
4.7
|
|
|
Net of tax
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Foreign exchange (gains) losses, net
|
$
|
(6.7
|
)
|
|
$
|
5.4
|
|
|
$
|
0.5
|
|
Loss (gain) on investments
|
1.7
|
|
|
2.7
|
|
|
(0.2
|
)
|
|||
Non-service cost components of net periodic pension benefit (credit) cost
|
(0.1
|
)
|
|
(6.1
|
)
|
|
—
|
|
|||
Charitable foundation contribution
|
—
|
|
|
—
|
|
|
5.0
|
|
|||
Other
|
1.1
|
|
|
(0.6
|
)
|
|
(0.4
|
)
|
|||
Total other (income) expense, net
|
$
|
(4.0
|
)
|
|
$
|
1.4
|
|
|
$
|
4.9
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
266.1
|
|
|
$
|
491.5
|
|
|
$
|
378.2
|
|
International, including Puerto Rico
|
495.3
|
|
|
543.4
|
|
|
359.7
|
|
|||
|
$
|
761.4
|
|
|
$
|
1,034.9
|
|
|
$
|
737.9
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
|
|
|
|||
United States:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
10.9
|
|
|
$
|
330.8
|
|
|
$
|
153.4
|
|
State and local
|
13.6
|
|
|
32.8
|
|
|
12.1
|
|
|||
International, including Puerto Rico
|
35.9
|
|
|
60.6
|
|
|
27.4
|
|
|||
Current income tax expense
|
$
|
60.4
|
|
|
$
|
424.2
|
|
|
$
|
192.9
|
|
Deferred
|
|
|
|
|
|
|
|
|
|||
United States:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(16.1
|
)
|
|
$
|
39.3
|
|
|
$
|
(19.6
|
)
|
State and local
|
(22.4
|
)
|
|
(3.8
|
)
|
|
(4.3
|
)
|
|||
International, including Puerto Rico
|
17.3
|
|
|
(8.4
|
)
|
|
(0.6
|
)
|
|||
Deferred income tax (benefit) expense
|
(21.2
|
)
|
|
27.1
|
|
|
(24.5
|
)
|
|||
Total income tax provision
|
$
|
39.2
|
|
|
$
|
451.3
|
|
|
$
|
168.4
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
|
|
||
Compensation and benefits
|
$
|
71.4
|
|
|
$
|
53.9
|
|
Benefits from uncertain tax positions
|
22.2
|
|
|
66.1
|
|
||
Net tax credit carryforwards
|
94.4
|
|
|
78.8
|
|
||
Net operating loss carryforwards
|
42.1
|
|
|
47.3
|
|
||
Accrued liabilities
|
78.8
|
|
|
29.2
|
|
||
Inventories
|
7.2
|
|
|
6.8
|
|
||
Cash flow and net investment hedges
|
—
|
|
|
13.3
|
|
||
State income taxes
|
0.6
|
|
|
5.8
|
|
||
Investments
|
1.6
|
|
|
1.6
|
|
||
Other
|
4.1
|
|
|
1.7
|
|
||
Total deferred tax assets
|
322.4
|
|
|
304.5
|
|
||
Deferred tax liabilities
|
|
|
|
|
|
||
Property, plant, and equipment
|
(24.5
|
)
|
|
(20.0
|
)
|
||
Cash flow and net investment hedges
|
(4.5
|
)
|
|
—
|
|
||
Deferred tax on foreign earnings
|
(0.6
|
)
|
|
(3.1
|
)
|
||
Inventories
|
(3.9
|
)
|
|
(4.2
|
)
|
||
Other intangible assets
|
(77.1
|
)
|
|
(49.5
|
)
|
||
Other
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Total deferred tax liabilities
|
(110.7
|
)
|
|
(76.9
|
)
|
||
Valuation allowance
|
(46.7
|
)
|
|
(41.6
|
)
|
||
Net deferred tax assets
|
$
|
165.0
|
|
|
$
|
186.0
|
|
|
Carryforward
Amount |
|
Tax Benefit
Amount |
|
Valuation
Allowance |
|
Net Tax
Benefit |
|
Carryforward
Period Ends |
||||||||
United States federal net operating losses
|
$
|
9.6
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
2033-2036
|
United States state net operating losses
|
19.1
|
|
|
1.2
|
|
|
(1.2
|
)
|
|
—
|
|
|
2019-2036
|
||||
Non-United States net operating losses
|
42.3
|
|
|
6.6
|
|
|
(4.6
|
)
|
|
2.0
|
|
|
2019-2027
|
||||
Non-United States net operating losses
|
180.0
|
|
|
32.3
|
|
|
(17.9
|
)
|
|
14.4
|
|
|
Indefinite
|
||||
United States capital losses
|
34.2
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
—
|
|
|
2022
|
||||
Total
|
$
|
285.2
|
|
|
$
|
42.6
|
|
|
$
|
(24.2
|
)
|
|
$
|
18.4
|
|
|
|
|
Carryforward
Amount |
|
Valuation
Allowance |
|
Net Tax
Benefit |
|
Carryforward
Period Ends |
||||||
California research expenditure tax credits
|
$
|
106.4
|
|
|
$
|
—
|
|
|
$
|
106.4
|
|
|
Indefinite
|
Federal research expenditure tax credits
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
Indefinite
|
|||
Puerto Rico purchases credit
|
20.4
|
|
|
(20.4
|
)
|
|
—
|
|
|
Indefinite
|
|||
Total
|
$
|
127.0
|
|
|
$
|
(20.4
|
)
|
|
$
|
106.6
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax expense at U.S. federal statutory rate
|
$
|
159.9
|
|
|
$
|
362.2
|
|
|
$
|
258.3
|
|
Foreign income taxed at different rates
|
(16.2
|
)
|
|
(106.9
|
)
|
|
(88.6
|
)
|
|||
State and local taxes, net of federal tax benefit
|
6.8
|
|
|
11.5
|
|
|
9.7
|
|
|||
Tax credits, federal and state
|
(36.7
|
)
|
|
(25.8
|
)
|
|
(21.3
|
)
|
|||
(Release) build of reserve for prior years' uncertain tax positions
|
(35.5
|
)
|
|
(7.7
|
)
|
|
4.6
|
|
|||
U.S. tax on foreign earnings, net of credits
|
(12.2
|
)
|
|
(30.3
|
)
|
|
5.1
|
|
|||
Foreign-derived intangible income deduction
|
(6.6
|
)
|
|
—
|
|
|
—
|
|
|||
Deductible employee share-based compensation
|
(41.8
|
)
|
|
(48.2
|
)
|
|
—
|
|
|||
Nondeductible employee share-based compensation
|
2.8
|
|
|
3.9
|
|
|
3.6
|
|
|||
Impacts related to 2017 U.S. Tax Reform
|
15.8
|
|
|
294.1
|
|
|
—
|
|
|||
Other
|
2.9
|
|
|
(1.5
|
)
|
|
(3.0
|
)
|
|||
Income tax provision
|
$
|
39.2
|
|
|
$
|
451.3
|
|
|
$
|
168.4
|
|
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Uncertain gross tax positions, January 1
|
$
|
225.6
|
|
|
$
|
245.5
|
|
|
$
|
216.1
|
|
Current year tax positions
|
37.8
|
|
|
77.7
|
|
|
29.0
|
|
|||
Increase in prior year tax positions
|
13.9
|
|
|
63.7
|
|
|
2.7
|
|
|||
Decrease in prior year tax positions
|
(78.8
|
)
|
|
(65.0
|
)
|
|
(0.9
|
)
|
|||
Settlements
|
(46.5
|
)
|
|
(95.3
|
)
|
|
(0.3
|
)
|
|||
Lapse of statutes of limitations
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(1.1
|
)
|
|||
Uncertain gross tax positions, December 31
|
$
|
150.7
|
|
|
$
|
225.6
|
|
|
$
|
245.5
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Segment Net Sales
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
2,055.2
|
|
|
$
|
1,907.6
|
|
|
$
|
1,615.7
|
|
Europe
|
826.4
|
|
|
800.7
|
|
|
745.9
|
|
|||
Japan
|
398.4
|
|
|
356.5
|
|
|
279.6
|
|
|||
Rest of World
|
396.0
|
|
|
357.3
|
|
|
303.6
|
|
|||
Total segment net sales
|
$
|
3,676.0
|
|
|
$
|
3,422.1
|
|
|
$
|
2,944.8
|
|
Segment Operating Income
|
|
|
|
|
|
|
|
||||
United States
|
$
|
1,368.1
|
|
|
$
|
1,242.3
|
|
|
$
|
1,050.2
|
|
Europe
|
394.8
|
|
|
378.4
|
|
|
360.9
|
|
|||
Japan
|
237.0
|
|
|
201.1
|
|
|
139.6
|
|
|||
Rest of World
|
115.6
|
|
|
92.8
|
|
|
73.0
|
|
|||
Total segment operating income
|
$
|
2,115.5
|
|
|
$
|
1,914.6
|
|
|
$
|
1,623.7
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net Sales Reconciliation
|
|
|
|
|
|
|
|
|
|||
Segment net sales
|
$
|
3,676.0
|
|
|
$
|
3,422.1
|
|
|
$
|
2,944.8
|
|
Foreign currency
|
46.8
|
|
|
13.2
|
|
|
18.9
|
|
|||
Consolidated net sales
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
Pre-tax Income Reconciliation
|
|
|
|
|
|
|
|
||||
Segment operating income
|
$
|
2,115.5
|
|
|
$
|
1,914.6
|
|
|
$
|
1,623.7
|
|
Unallocated amounts:
|
|
|
|
|
|
||||||
Corporate items
|
(1,052.4
|
)
|
|
(893.6
|
)
|
|
(821.6
|
)
|
|||
Special charges, net
|
(116.2
|
)
|
|
(9.7
|
)
|
|
(34.5
|
)
|
|||
Intellectual property litigation (expenses) income, net
|
(214.0
|
)
|
|
73.3
|
|
|
(32.6
|
)
|
|||
Foreign currency
|
15.3
|
|
|
4.8
|
|
|
16.2
|
|
|||
Consolidated operating income
|
748.2
|
|
|
1,089.4
|
|
|
751.2
|
|
|||
Non-operating income (expense)
|
13.2
|
|
|
(54.5
|
)
|
|
(13.3
|
)
|
|||
Consolidated pre-tax income
|
$
|
761.4
|
|
|
$
|
1,034.9
|
|
|
$
|
737.9
|
|
|
As of or for the Years Ended
December 31, |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Net Sales by Geographic Area
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
2,055.3
|
|
|
$
|
1,907.6
|
|
|
$
|
1,615.7
|
|
Europe
|
885.1
|
|
|
831.0
|
|
|
749.0
|
|
|||
Japan
|
396.8
|
|
|
350.3
|
|
|
309.3
|
|
|||
Rest of World
|
385.6
|
|
|
346.4
|
|
|
289.7
|
|
|||
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
Net Sales by Major Product Area
|
|
|
|
|
|
|
|
||||
Transcatheter Heart Valve Therapy
|
$
|
2,286.7
|
|
|
$
|
2,027.2
|
|
|
$
|
1,628.5
|
|
Surgical Heart Valve Therapy
|
761.6
|
|
|
807.1
|
|
|
774.9
|
|
|||
Critical Care
|
674.5
|
|
|
601.0
|
|
|
560.3
|
|
|||
|
$
|
3,722.8
|
|
|
$
|
3,435.3
|
|
|
$
|
2,963.7
|
|
Long-lived Tangible Assets by Geographic Area
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
642.1
|
|
|
$
|
608.7
|
|
|
$
|
555.5
|
|
Europe
|
36.6
|
|
|
28.4
|
|
|
27.9
|
|
|||
Japan
|
6.7
|
|
|
7.6
|
|
|
8.0
|
|
|||
Rest of World
|
214.4
|
|
|
139.7
|
|
|
108.6
|
|
|||
|
$
|
899.8
|
|
|
$
|
784.4
|
|
|
$
|
700.0
|
|
Years Ended December 31,
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Total
Year
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
894.8
|
|
|
$
|
943.7
|
|
|
$
|
906.6
|
|
|
$
|
977.7
|
|
|
$
|
3,722.8
|
|
Gross profit
|
661.2
|
|
|
697.5
|
|
|
681.7
|
|
|
743.0
|
|
|
2,783.4
|
|
|||||
Net income (a)
|
206.6
|
|
|
282.7
|
|
|
225.9
|
|
|
7.0
|
|
|
722.2
|
|
|||||
Earnings per common share (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
0.98
|
|
|
1.35
|
|
|
1.08
|
|
|
0.03
|
|
|
3.45
|
|
|||||
Diluted
|
0.96
|
|
|
1.32
|
|
|
1.06
|
|
|
0.03
|
|
|
3.38
|
|
|||||
Market price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
High
|
$
|
143.22
|
|
|
$
|
155.22
|
|
|
$
|
175.00
|
|
|
$
|
174.99
|
|
|
$
|
175.00
|
|
Low
|
110.68
|
|
|
123.00
|
|
|
134.53
|
|
|
136.44
|
|
|
110.68
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
883.5
|
|
|
$
|
841.8
|
|
|
$
|
821.5
|
|
|
$
|
888.5
|
|
|
$
|
3,435.3
|
|
Gross profit
|
667.9
|
|
|
630.7
|
|
|
608.2
|
|
|
653.2
|
|
|
2,560.0
|
|
|||||
Net income (loss) (b)
|
230.2
|
|
|
186.1
|
|
|
170.1
|
|
|
(2.8
|
)
|
|
583.6
|
|
|||||
Earnings (loss) per common share (b):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
1.09
|
|
|
0.88
|
|
|
0.81
|
|
|
(0.01
|
)
|
|
2.77
|
|
|||||
Diluted
|
1.06
|
|
|
0.86
|
|
|
0.79
|
|
|
(0.01
|
)
|
|
2.70
|
|
|||||
Market price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
High
|
$
|
100.48
|
|
|
$
|
120.74
|
|
|
$
|
121.45
|
|
|
$
|
119.04
|
|
|
$
|
121.45
|
|
Low
|
86.55
|
|
|
92.44
|
|
|
107.35
|
|
|
100.20
|
|
|
86.55
|
|
(a)
|
The fourth quarter of 2018 includes a
$116.2 million
charge related to the other-than-temporary impairment of certain developed technology and in-process research and development assets and a
$180.0 million
charge related to a litigation settlement.
|
(b)
|
The fourth quarter of 2017 includes a
$262.0 million
tax expense related to the implementation of U.S. tax law changes and receipt of a
$112.5 million
(
$70.3 million
, net of tax) litigation payment.
|
|
|
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for doubtful accounts (a)
|
$
|
13.7
|
|
|
$
|
2.2
|
|
|
$
|
1.0
|
|
|
$
|
(3.3
|
)
|
|
$
|
13.6
|
|
Tax valuation allowance (b)
|
41.6
|
|
|
7.1
|
|
|
(1.8
|
)
|
|
(0.2
|
)
|
|
46.7
|
|
|||||
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for doubtful accounts (a)
|
$
|
12.8
|
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
|
$
|
13.7
|
|
Tax valuation allowance (b)
|
47.7
|
|
|
(8.9
|
)
|
|
2.8
|
|
|
—
|
|
|
41.6
|
|
|||||
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
|
|
(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.
|
Exhibit No.
|
Exhibit No.
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
10.1
|
|
|
#10.2
|
|
|
*10.3
|
|
|
*10.4
|
|
|
*10.5
|
|
|
*10.6
|
|
|
+*10.7
|
|
|
*10.8
|
|
Exhibit No.
|
Exhibit No.
|
|
*10.9
|
|
|
*10.10
|
|
|
*10.11
|
|
|
*10.12
|
|
|
*10.13
|
|
|
*10.14
|
|
|
*10.15
|
|
|
*10.16
|
|
|
*10.17
|
|
|
*10.18
|
|
|
*10.19
|
|
|
*10.20
|
|
|
*10.21
|
|
|
*10.22
|
|
|
*10.23
|
|
|
*10.24
|
|
|
*10.25
|
|
|
+*10.26
|
|
|
*10.27
|
|
Exhibit No.
|
Exhibit No.
|
|
*10.28
|
|
|
*10.29
|
|
|
*10.30
|
|
|
*10.31
|
|
|
*10.32
|
|
|
*10.33
|
|
|
*10.34
|
|
|
*10.35
|
|
|
*10.36
|
|
|
*10.37
|
|
|
*10.38
|
|
|
*10.39
|
|
|
*10.40
|
|
|
21.1
|
|
|
23
|
|
|
31.1
|
|
|
31.2
|
|
|
32
|
|
|
101
|
|
The following financial statements from Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2018, 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.
|
|
EDWARDS LIFESCIENCES CORPORATION
|
||
February 15, 2019
|
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 15, 2019
|
Michael A. Mussallem
|
(Principal Executive Officer)
|
|
|
|
|
|
|
/s/ SCOTT B. ULLEM
|
Corporate Vice President, Chief Financial Officer
|
|
February 15, 2019
|
Scott B. Ullem
|
(Principal Financial Officer)
|
|
|
|
|
|
|
/s/ ROBERT W.A. SELLERS
|
Vice President, Corporate Controller
|
|
February 15, 2019
|
Robert W.A. Sellers
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
/s/ KIERAN T. GALLAHUE
|
Director
|
|
February 15, 2019
|
Kieran T. Gallahue
|
|
|
|
|
|
|
|
/s/ LESLIE S. HEISZ
|
Director
|
|
February 15, 2019
|
Leslie S. Heisz
|
|
|
|
|
|
|
|
/s/ WILLIAM J. LINK, PH.D.
|
Director
|
|
February 15, 2019
|
William J. Link, Ph.D.
|
|
|
|
|
|
|
|
/s/ STEVEN R. LORANGER
|
Director
|
|
February 15, 2019
|
Steven R. Loranger
|
|
|
|
|
|
|
|
/s/ MARTHA H. MARSH
|
Director
|
|
February 15, 2019
|
Martha H. Marsh
|
|
|
|
|
|
|
|
/s/ WESLEY W. VON SCHACK
|
Director
|
|
February 15, 2019
|
Wesley W. von Schack
|
|
|
|
|
|
|
|
/s/ NICHOLAS J. VALERIANI
|
Director
|
|
February 15, 2019
|
Nicholas J. Valeriani
|
|
|
|
•
|
Date of hire is before October 1, 2018;
|
•
|
Not a participant in any commission or other incentive compensation plan;
|
•
|
Full-time employee, or part-time employee regularly scheduled to work at least 20 hours per week; and
|
•
|
Participation has been submitted to and approved by the Plan Administrator or its designee; provided, however, participation by Edwards’ executive officers may be approved only by the Plan Administrator.
|
1.
|
Involuntary Termination – termination of employment due to a reduction in force, departmental restructuring or job redefinition; or
|
2.
|
Disability – when an employee becomes disabled and unable, either with or without reasonable accommodation, to perform the essential functions of his/her position in the foreseeable future; or
|
3.
|
Retirement – termination of employment after age fifty-five (55) and 10 years of service; or
|
4.
|
Death.
|
•
|
Salary and hourly wage earnings, including overtime pay
|
•
|
Shift differential pay
|
•
|
Lead pay
|
•
|
Call-in pay
|
•
|
Payments in lieu of a pay increase
|
•
|
Retroactive pay
|
•
|
Double time pay
|
•
|
Paid time-off benefits:
|
o
|
Bereavement leave pay
|
o
|
Paid holidays
|
o
|
Jury duty leave pay
|
o
|
Vacation pay
|
o
|
Paid sick time
|
o
|
Short-term disability pay
|
o
|
Military leave pay
|
•
|
Bonuses, awards, allowances, and/or reimbursements, including:
|
o
|
Incentive bonuses under the Edwards Incentive Plan and/or any other bonus plans
|
o
|
Attendance awards
|
o
|
Automobile allowances and mileage reimbursement
|
o
|
Business and travel expense reimbursements
|
o
|
Cash prizes or awards
|
o
|
Holiday gifts
|
o
|
Sales Compensation
|
o
|
Contest pay or prizes
|
o
|
Discretionary bonus awards
|
o
|
Draws toward commissions
|
o
|
Employee referral awards
|
o
|
For waiver of employee benefits or participation in any employee benefit plan
|
o
|
Hiring bonuses
|
o
|
Retention bonuses
|
o
|
Tax equalization payments to expatriates
|
o
|
Technical achievement awards
|
o
|
Travel allowances
|
o
|
Tuition reimbursements
|
o
|
Severance pay
|
o
|
Workers’ compensation benefits
|
•
|
Amounts paid, accrued or imputed as income, such as:
|
o
|
Benefits received under any government-sponsored employee benefit plan, such as a life insurance or short-term/long-term disability insurance plan
|
o
|
Deferred compensation, including deferred bonuses and interest earnings thereon
|
o
|
Executive perquisite allowances
|
o
|
Invention fees and awards
|
o
|
Income from sale of stock
|
o
|
Income from the exercise of stock options
|
o
|
Moving/relocation expenses or benefits, including mortgage differential payments and reimbursement of moving/relocation expenses
|
o
|
Non-cash prizes or awards
|
o
|
Pay for unused sick time
|
o
|
Pay for unused vacation time
|
o
|
Performance shares
|
o
|
Promotional awards
|
o
|
Restricted stock rights
|
o
|
Stock appreciation rights
|
o
|
Value of any fringe benefit granted to the participant
|
Financial Measures
|
% of Target Earned
|
Weight
|
Funding %
Per Category
|
Revenue Growth
|
100%
|
50%
|
50%
|
Net Income
|
110%
|
30%
|
33%
|
Free Cash Flow
|
100%
|
20%
|
20%
|
Funding Based on Financial Measures
|
103%
|
KOD Modifier Based on Performance
Compared to Expected Range
|
KOD Modifier – Illustrative Performance
|
||||
KOD
|
Underachieve
Points
|
Achieve
Points
|
Overachieve
Points
|
Performance Level
|
Modifier
|
1
|
0
|
60
|
120
|
Achieve
|
60
|
2
|
0
|
15
|
30
|
Overachieve
|
30
|
3
|
0
|
15
|
30
|
Achieve
|
15
|
4
|
0
|
10
|
20
|
Achieve
|
10
|
KOD Modifier
2
|
115%
|
Assumptions
|
|
|
Eligible Earnings
|
Bonus Target %
|
Bonus Target Amount
|
$100,000
|
10%
|
$10,000
|
Financial Performance
|
|
|
|
Financial Measures
|
% of Target Earned
|
Weight
|
Funding %
Per Category
|
Revenue Growth
|
100%
|
50%
|
50%
|
Net Income
|
110%
|
30%
|
33%
|
Free Cash Flow
|
100%
|
20%
|
20%
|
Funding Based on Financial Measures
|
103%
|
Business Unit Employee KOD Profile
|
|
||
KOD
|
Result
|
Weight
|
KOD Profile %
|
Business Unit
|
100%
|
70%
|
70%
|
Corporate
|
115%
|
30%
|
35%
|
Final Business Unit KOD Profile Result
|
105%
|
(c)
|
Hurricane Maria Relief Measures adopted pursuant to the Puerto Rico Treasury Department Administrative Determination No. 17-29
|
(ii)
|
Definitions:
|
|
EDWARDS LIFESCIENCES CORPORATION
ADMINISTRATIVE AND INVESTMENT COMMITTEE
|
|
|
|
|
|
By:
|
/s/ Christine Z McCauley
|
|
|
Christine Z. McCauley, Chairperson
|
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 Lifesciences PVT, 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.
|
Harpoon Medical, Inc.
|
|
Delaware
|
|
U.S.
|
Red Hill Holding LLC
|
|
Delaware
|
|
U.S.
|
Red Hill Insurance Corporation
|
|
D.C.
|
|
U.S.
|
Edwards Lifesciences Austria GmbH
|
|
|
|
Austria
|
Edwards Lifesciences Pty. Limited
|
|
|
|
Australia
|
Percutaneous Cardiovascular Solutions, Pty Ltd.
|
|
|
|
Australia
|
Edwards Lifesciences S.P.R.L.
|
|
|
|
Belgium
|
Edwards Lifesciences Comercio de Produtos Medico-Cirurgicos Ltda.
|
|
|
|
Brazil
|
Edwards Lifesciences (Canada) Inc.
|
|
|
|
Canada
|
Edwards (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, MEPE
|
|
|
|
Greece
|
Edwards Lifesciences (India) Private Limited
|
|
|
|
India
|
Edwards Lifesciences Ireland, Limited
|
|
|
|
Ireland
|
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
|
Legal Entity
|
|
State of
Incorporation/
Formation
|
|
Country of
Incorporation/
Formation
|
Edwards Lifesciences (Malaysia) Sdn. Bhd.
|
|
|
|
Malaysia
|
Edwards Lifesciences Asia Pacific Sdn. Bhd
|
|
|
|
Malaysia
|
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
|
Edwards Lifesciences Export (Puerto Rico) Corporation
|
|
|
|
Puerto Rico
|
Edwards Lifesciences (Asia) Pte. Ltd.
|
|
|
|
Singapore
|
Edwards Lifesciences (Singapore) Pte Ltd.
|
|
|
|
Singapore
|
Edwards Lifesciences (Proprietary) Ltd.
|
|
|
|
South Africa
|
Edwards Lifesciences S.L.
|
|
|
|
Spain
|
Edwards Lifesciences Nordic AB
|
|
|
|
Sweden
|
Edwards Lifesciences AG
|
|
|
|
Switzerland
|
Edwards Lifesciences Technology S.A.R.L.
|
|
|
|
Switzerland
|
Edwards Lifesciences IPRM AG
|
|
|
|
Switzerland
|
Mitral Valve Technologies S.A.R.L.
|
|
|
|
Switzerland
|
Edwards Lifesciences (Taiwan) Corporation
|
|
|
|
Taiwan
|
Edwards Lifesciences (Thailand) Ltd.
|
|
|
|
Thailand
|
Edwards Lifesciences Turkey Health Technologies Limited Sirketi
|
|
|
|
Turkey
|
Edwards Lifesciences Limited
|
|
|
|
United Kingdom
|
Whitland Research Limited
|
|
|
|
United Kingdom
|
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 15, 2019
|
|
Michael A. Mussallem
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
/s/ SCOTT B. ULLEM
|
February 15, 2019
|
|
Scott B. Ullem
Corporate Vice President,
Chief Financial Officer
|