0001099800-21-000012.txt : 20210428 0001099800-21-000012.hdr.sgml : 20210428 20210428160935 ACCESSION NUMBER: 0001099800-21-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 90 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210428 DATE AS OF CHANGE: 20210428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Edwards Lifesciences Corp CENTRAL INDEX KEY: 0001099800 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 364316614 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-15525 FILM NUMBER: 21864306 BUSINESS ADDRESS: STREET 1: ONE EDWARDS WAY CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9492502500 MAIL ADDRESS: STREET 1: ONE EDWARDS WAY CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: EDWARDS LIFESCIENCES CORP. DATE OF NAME CHANGE: 20090225 FORMER COMPANY: FORMER CONFORMED NAME: EDWARDS LIFESCIENCES CORP DATE OF NAME CHANGE: 20000203 FORMER COMPANY: FORMER CONFORMED NAME: CVG CONTROLLED INC DATE OF NAME CHANGE: 19991126 10-Q 1 ew-20210331.htm 10-Q ew-20210331
000109980012/312021Q1false00010998002021-01-012021-03-31xbrli:shares00010998002021-04-23iso4217:USD00010998002021-03-3100010998002020-12-31iso4217:USDxbrli:shares00010998002020-01-012020-03-3100010998002019-12-3100010998002020-03-310001099800us-gaap:CommonStockMember2020-12-310001099800us-gaap:TreasuryStockMember2020-12-310001099800us-gaap:AdditionalPaidInCapitalMember2020-12-310001099800us-gaap:RetainedEarningsMember2020-12-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001099800us-gaap:RetainedEarningsMember2021-01-012021-03-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001099800us-gaap:CommonStockMember2021-01-012021-03-310001099800us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001099800us-gaap:TreasuryStockMember2021-01-012021-03-310001099800us-gaap:CommonStockMember2021-03-310001099800us-gaap:TreasuryStockMember2021-03-310001099800us-gaap:AdditionalPaidInCapitalMember2021-03-310001099800us-gaap:RetainedEarningsMember2021-03-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001099800us-gaap:CommonStockMember2019-12-310001099800us-gaap:TreasuryStockMember2019-12-310001099800us-gaap:AdditionalPaidInCapitalMember2019-12-310001099800us-gaap:RetainedEarningsMember2019-12-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001099800us-gaap:RetainedEarningsMember2020-01-012020-03-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001099800us-gaap:CommonStockMember2020-01-012020-03-310001099800us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001099800us-gaap:TreasuryStockMember2020-01-012020-03-310001099800us-gaap:CommonStockMember2020-03-310001099800us-gaap:TreasuryStockMember2020-03-310001099800us-gaap:AdditionalPaidInCapitalMember2020-03-310001099800us-gaap:RetainedEarningsMember2020-03-310001099800us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-31utr:Rate00010998002020-05-072020-05-070001099800us-gaap:BankTimeDepositsMember2021-03-310001099800us-gaap:BankTimeDepositsMember2020-12-310001099800us-gaap:USTreasuryAndGovernmentMember2021-03-310001099800us-gaap:USTreasuryAndGovernmentMember2020-12-310001099800us-gaap:ForeignGovernmentDebtSecuritiesMember2021-03-310001099800us-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-310001099800us-gaap:AssetBackedSecuritiesMember2021-03-310001099800us-gaap:AssetBackedSecuritiesMember2020-12-310001099800us-gaap:CorporateDebtSecuritiesMember2021-03-310001099800us-gaap:CorporateDebtSecuritiesMember2020-12-310001099800us-gaap:MunicipalBondsMember2021-03-310001099800us-gaap:MunicipalBondsMember2020-12-31ew:investment0001099800us-gaap:OtherNonoperatingIncomeExpenseMember2021-03-310001099800us-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2021-03-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Member2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMember2021-03-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-03-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001099800us-gaap:BankTimeDepositsMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001099800us-gaap:CorporateDebtSecuritiesMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2020-12-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001099800us-gaap:USTreasuryAndGovernmentMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001099800us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMember2020-12-310001099800us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2020-12-31xbrli:pure0001099800srt:MinimumMemberus-gaap:ObligationsMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:ObligationsMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMember2021-03-310001099800us-gaap:ObligationsMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2021-03-310001099800srt:MinimumMemberus-gaap:ObligationsMemberew:MeasurementInputProbabilityOfMilestoneAchievementMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800us-gaap:ObligationsMemberew:MeasurementInputProbabilityOfMilestoneAchievementMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMember2021-03-310001099800us-gaap:ObligationsMemberew:MeasurementInputProbabilityOfMilestoneAchievementMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2021-03-310001099800ew:MeasurementInputVolatilityOfFutureRevenueMembersrt:MinimumMemberus-gaap:ObligationsMemberus-gaap:FairValueInputsLevel3Member2021-03-310001099800ew:MeasurementInputVolatilityOfFutureRevenueMemberus-gaap:ObligationsMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMember2021-03-310001099800ew:MeasurementInputVolatilityOfFutureRevenueMemberus-gaap:ObligationsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMember2021-03-310001099800us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001099800us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001099800us-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001099800us-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherCurrentAssetsMember2021-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMemberus-gaap:OtherCurrentAssetsMember2020-12-310001099800us-gaap:CurrencySwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001099800us-gaap:CurrencySwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMember2021-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMember2020-12-310001099800us-gaap:ForeignExchangeContractMember2021-03-310001099800us-gaap:CurrencySwapMember2021-03-310001099800us-gaap:ForeignExchangeContractMember2020-12-310001099800us-gaap:CurrencySwapMember2020-12-310001099800us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:CostOfSalesMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:CostOfSalesMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMember2021-01-012021-03-310001099800us-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMember2020-01-012020-03-310001099800us-gaap:CurrencySwapMemberus-gaap:InterestIncomeMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMember2021-01-012021-03-310001099800us-gaap:CurrencySwapMemberus-gaap:InterestIncomeMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMember2020-01-012020-03-31iso4217:EUR0001099800us-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMember2021-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:FairValueHedgingMember2021-01-012021-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:FairValueHedgingMember2020-01-012020-03-310001099800us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2021-01-012021-03-310001099800us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMember2020-01-012020-03-310001099800us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310001099800us-gaap:CostOfSalesMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310001099800us-gaap:CostOfSalesMember2021-01-012021-03-310001099800us-gaap:CostOfSalesMember2020-01-012020-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001099800us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-03-310001099800us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001099800us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-03-310001099800ew:EmployeeAndNonemployeeStockOptionsMember2021-01-012021-03-310001099800ew:EmployeeAndNonemployeeStockOptionsMember2020-01-012020-03-310001099800us-gaap:EmployeeStockMember2021-01-012021-03-310001099800us-gaap:EmployeeStockMember2020-01-012020-03-310001099800ew:February2021StockRepurchaseProgramMember2021-02-280001099800ew:February2021StockRepurchaseProgramMember2021-02-012021-02-280001099800ew:March2021StockRepurchaseProgramMember2021-03-012021-03-31ew:lawsuit0001099800us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001099800us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-03-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001099800us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-03-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001099800us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001099800us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-03-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-03-310001099800us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-310001099800us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-03-310001099800us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-310001099800us-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001099800us-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001099800us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001099800us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310001099800us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310001099800us-gaap:StockCompensationPlanMember2021-01-012021-03-310001099800us-gaap:StockCompensationPlanMember2020-01-012020-03-310001099800ew:UnitedStatesSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001099800ew:UnitedStatesSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310001099800ew:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001099800ew:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-03-310001099800us-gaap:OperatingSegmentsMemberew:JapanSegmentMember2021-01-012021-03-310001099800us-gaap:OperatingSegmentsMemberew:JapanSegmentMember2020-01-012020-03-310001099800us-gaap:OperatingSegmentsMemberew:RestOfWorldSegmentMember2021-01-012021-03-310001099800us-gaap:OperatingSegmentsMemberew:RestOfWorldSegmentMember2020-01-012020-03-310001099800us-gaap:OperatingSegmentsMember2021-01-012021-03-310001099800us-gaap:OperatingSegmentsMember2020-01-012020-03-310001099800us-gaap:MaterialReconcilingItemsMember2021-01-012021-03-310001099800us-gaap:MaterialReconcilingItemsMember2020-01-012020-03-310001099800us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001099800us-gaap:CorporateNonSegmentMember2020-01-012020-03-310001099800country:US2021-01-012021-03-310001099800country:US2020-01-012020-03-310001099800srt:EuropeMember2021-01-012021-03-310001099800srt:EuropeMember2020-01-012020-03-310001099800country:JP2021-01-012021-03-310001099800country:JP2020-01-012020-03-310001099800ew:RestOfWorldMember2021-01-012021-03-310001099800ew:RestOfWorldMember2020-01-012020-03-310001099800ew:TranscatheterAorticValveReplacementMember2021-01-012021-03-310001099800ew:TranscatheterAorticValveReplacementMember2020-01-012020-03-310001099800ew:TranscatheterMitralAndTricuspidTherapiesMember2021-01-012021-03-310001099800ew:TranscatheterMitralAndTricuspidTherapiesMember2020-01-012020-03-310001099800ew:SurgicalHeartValveTherapyMember2021-01-012021-03-310001099800ew:SurgicalHeartValveTherapyMember2020-01-012020-03-310001099800ew:CriticalCareMember2021-01-012021-03-310001099800ew:CriticalCareMember2020-01-012020-03-310001099800country:US2021-03-310001099800country:US2020-12-310001099800srt:EuropeMember2021-03-310001099800srt:EuropeMember2020-12-310001099800country:JP2021-03-310001099800country:JP2020-12-310001099800ew:RestOfWorldMember2021-03-310001099800ew:RestOfWorldMember2020-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2021
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
            For the transition period from                                    to            
Commission file number 1-15525
EDWARDS LIFESCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
36-4316614
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

One Edwards Way
Irvine, California 92614
(Address of principal executive offices and zip code)

(949) 250-2500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareEWNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒
The number of shares outstanding of the registrant's common stock, $1.00 par value, as of April 23, 2021 was 621,636,777.


EDWARDS LIFESCIENCES CORPORATION
FORM 10-Q
For the quarterly period ended March 31, 2021

TABLE OF CONTENTS


NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend the forward-looking statements contained in this report to be covered by the safe harbor provisions of such Acts. Some statements other than statements of historical fact in this report or referred to or incorporated by reference into this report are "forward-looking statements" for purposes of these sections. These statements include, among other things, the expected impact of COVID-19 on our business, any predictions, opinions, expectations, plans, strategies, objectives and any statements of assumptions underlying any of the foregoing relating to the company's current and future business and operations, including, but not limited to, financial matters, development activities, clinical trials and regulatory matters, manufacturing and supply operations, and product sales and demand. These statements can sometimes be identified by the use of the forward-looking words such as "may," "believe," "will," "expect," "project," "estimate," "should," "anticipate," "plan," "goal," "continue," "seek," "pro forma," "forecast," "intend," "guidance," "optimistic," "aspire," "confident," other forms of these words or similar words or expressions or the negative thereof. Statements of past performance, efforts, or results about which inferences or assumptions may be made can also be forward-looking statements and are not indicative of future performance or results; these statements can be identified by the use of words such as "preliminary," "initial," diligence," "industry-leading," "compliant," "indications," or "early feedback" or other forms of these words or similar words or expressions or the negative thereof. These forward-looking statements are subject to substantial risks and uncertainties that could cause our results or future business, financial condition, results of operations or performance to differ materially from our historical results or experiences or those expressed or implied in any forward-looking statements contained in this report. These risks and uncertainties include, but are not limited to: uncertainties regarding the severity and duration of the COVID-19 pandemic and its impact on our business and the economy generally, clinical trial or commercial results or new product approvals and therapy adoption; inability or failure to comply with regulations; unpredictability of product launches; competitive dynamics; changes to reimbursement for the company's products; the company’s success in developing new products and avoiding manufacturing and quality issues; the impact of currency exchange rates; the timing or results of research and development and clinical trials; unanticipated actions by the U.S. Food and Drug Administration and other regulatory agencies; unexpected litigation impacts or expenses; and other risks detailed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2020, as such risks and uncertainties may be amended, supplemented or superseded from time to time by our subsequent reports on Forms 10-Q and 8-K we file with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections.

Unless otherwise indicated or otherwise required by the context, the terms "we," "our," "it," "its," "Company," "Edwards," and "Edwards Lifesciences" refer to Edwards Lifesciences Corporation and its subsidiaries.


Part I. Financial Information

Item 1.    Financial Statements
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in millions, except par value; unaudited)
 March 31,
2021		December 31,
2020
ASSETS  
Current assets  
Cash and cash equivalents$1,174.2 $1,183.2 
Short-term investments (Note 3)156.4 219.4 
Accounts receivable, net of allowances of $8.5 and $9.6, respectively
586.6 514.6 
Other receivables77.7 88.2 
Inventories (Note 2)767.9 802.3 
Prepaid expenses77.3 75.1 
Other current assets229.1 208.2 
Total current assets3,069.2 3,091.0 
Long-term investments (Note 3)802.2 801.6 
Property, plant, and equipment, net1,417.9 1,395.2 
Operating lease right-of-use assets 88.5 94.2 
Goodwill 1,170.8 1,173.2 
Other intangible assets, net 330.3 331.4 
Deferred income taxes209.3 230.9 
Other assets125.5 119.6 
Total assets$7,213.7 $7,237.1 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities  
Accounts payable and accrued liabilities (Note 2)$772.5 $866.7 
Operating lease liabilities26.5 27.2 
Total current liabilities
799.0 893.9 
Long-term debt 595.2 595.0 
Contingent consideration liabilities (Note 4)181.6 186.1 
Taxes payable215.3 215.3 
Operating lease liabilities 67.1 72.7 
Uncertain tax positions224.2 214.4 
Litigation settlement accrual222.1 233.0 
Other liabilities250.8 252.4 
Commitments and contingencies (Note 8)
Stockholders' equity  
Preferred stock, $0.01 par value, authorized 50.0 shares, no shares outstanding          
— — 
Common stock, $1.00 par value, 1,050.0 shares authorized, 637.5 and 636.4 shares issued, and 621.8 and 624.3 shares outstanding, respectively
637.5 636.4 
Additional paid-in capital1,496.8 1,438.1 
Retained earnings4,903.2 4,565.0 
Accumulated other comprehensive loss (Note 9)(172.4)(161.1)
Treasury stock, at cost, 15.7 and 12.1 shares, respectively
(2,206.7)(1,904.1)
Total stockholders' equity4,658.4 4,574.3 
Total liabilities and stockholders' equity$7,213.7 $7,237.1 
The accompanying notes are an integral part of these
consolidated condensed financial statements.
1
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in millions, except per share information; unaudited)
 Three Months Ended
March 31,
 20212020
Net sales$1,216.6 $1,128.7 
Cost of sales293.4 265.1 
Gross profit923.2 863.6 
Selling, general, and administrative expenses330.8 307.8 
Research and development expenses207.0 187.4 
Intellectual property litigation expenses6.4 12.5 
Change in fair value of contingent consideration liabilities (Note 4)(4.5)(2.2)
Operating income383.5 358.1 
Interest income, net(0.3)(4.5)
Other income, net(5.5)(1.9)
Income before provision for income taxes389.3 364.5 
Provision for income taxes51.1 53.9 
Net income$338.2 $310.6 
Share information (Note 10)
  
Earnings per share:  
Basic$0.54 $0.50 
Diluted$0.54 $0.49 
Weighted-average number of common shares outstanding:  
Basic623.2 624.6 
Diluted631.3 635.1 
The accompanying notes are an integral part of these
consolidated condensed financial statements.
2
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(in millions; unaudited)
 Three Months Ended
March 31,
 20212020
Net income$338.2 $310.6 
Other comprehensive (loss) income, net of tax (Note 9):
Foreign currency translation adjustments(32.2)2.3 
Unrealized gain on hedges24.5 6.6 
Defined benefit pension plans0.3 (0.2)
Unrealized loss on available-for-sale investments(4.8)(4.6)
Reclassification of net realized investment loss (gain) to earnings0.9 (0.1)
Other comprehensive (loss) income(11.3)4.0 
Comprehensive income$326.9 $314.6 
The accompanying notes are an integral part of these
consolidated condensed financial statements.
3
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in millions; unaudited)
 Three Months Ended
March 31,
 20212020
Cash flows from operating activities  
Net income$338.2 $310.6 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization32.4 24.5 
Non-cash operating lease cost7.3 6.7 
Stock-based compensation (Note 6)28.2 23.9 
Change in fair value of contingent consideration liabilities (Note 4)(4.5)(2.2)
Deferred income taxes10.8 3.6 
Other(2.7)14.7 
Changes in operating assets and liabilities:  
Accounts and other receivables, net(89.5)(4.2)
Inventories2.5 (35.2)
Accounts payable and accrued liabilities(9.3)(144.4)
Income taxes14.1 32.2 
Prepaid expenses and other current assets(5.4)(5.5)
Litigation settlement accrual1.6 — 
Other(23.2)(17.6)
Net cash provided by operating activities300.5 207.1 
Cash flows from investing activities  
Capital expenditures(106.0)(82.2)
Purchases of held-to-maturity investments (Note 3)— (112.0)
Proceeds from held-to-maturity investments (Note 3)50.0 100.2 
Purchases of available-for-sale investments (Note 3)(77.4)(150.9)
Proceeds from available-for-sale investments (Note 3)86.8 127.8 
Issuances of notes receivable(3.6)(16.6)
Other0.5 (1.0)
Net cash used in investing activities(49.7)(134.7)
Cash flows from financing activities  
Proceeds from issuance of debt4.5 7.9 
Payments on debt and finance lease obligations(4.9)(8.2)
Purchases of treasury stock(302.6)(614.8)
Proceeds from stock plans31.6 29.1 
Other(2.9)(0.4)
Net cash used in financing activities(274.3)(586.4)
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash14.2 (2.1)
Net decrease in cash, cash equivalents, and restricted cash(9.3)(516.1)
Cash, cash equivalents, and restricted cash at beginning of period1,200.2 1,184.4 
Cash, cash equivalents, and restricted cash at end of period$1,190.9 $668.3 
The accompanying notes are an integral part of these
consolidated condensed financial statements.
4
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions; unaudited)
 Common StockTreasury Stock
 SharesPar ValueSharesAmountAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity
Balance at December 31, 2020636.4 $636.4 12.1 $(1,904.1)$1,438.1 $4,565.0 $(161.1)$4,574.3 
Net income     338.2  338.2 
Other comprehensive income, net of tax      (11.3)(11.3)
Common stock issued under stock plans1.1 1.1   30.5   31.6 
Stock-based compensation expense    28.2   28.2 
Purchases of treasury stock  3.6 (302.6)  (302.6)
Balance at March 31, 2021
637.5 $637.5 15.7 $(2,206.7)$1,496.8 $4,903.2 $(172.4)$4,658.4 
The accompanying notes are an integral part of these
consolidated condensed financial statements.

5
EDWARDS LIFESCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions; unaudited)
 Common StockTreasury Stock
 SharesPar ValueSharesAmountAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Stockholders' Equity
Balance at December 31, 2019218.1 $218.1 9.0 $(1,278.7)$1,623.3 $3,741.6 $(156.0)$4,148.3 
Net income     310.6  310.6 
Other comprehensive income, net of tax      4.0 4.0 
Common stock issued under stock plans0.4 0.4   28.7   29.1 
Stock-based compensation expense    23.9   23.9 
Purchases of treasury stock  3.0 (614.8)  (614.8)
Balance at March 31, 2020
218.5 $218.5 12.0 $(1,893.5)$1,675.9 $4,052.2 $(152.0)$3,901.1 
The accompanying notes are an integral part of these
consolidated condensed financial statements.

6

1.     BASIS OF PRESENTATION

The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences' Annual Report on Form 10-K for the year ended December 31, 2020. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. In particular, the COVID-19 pandemic has adversely impacted, and may further adversely impact, nearly all aspects of our business and markets, including our workforce and the operations of our customers, suppliers, and business partners.  The full extent to which the pandemic will directly or indirectly impact the Company's business, results of operations and financial condition, including sales, expenses, manufacturing, clinical trials, research and development costs, reserves and allowances, fair value measurements, asset impairment charges, contingent consideration obligations, and the effectiveness of the Company's hedging instruments, will depend on future developments that are highly uncertain and difficult to predict. These developments include, but are not limited to, the duration and spread of the outbreak (including new variants of COVID-19), its severity, the actions to contain the virus or address its impact, the timing, distribution, public acceptance and efficacy of vaccines and other treatments, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume.

In the opinion of management, the interim consolidated condensed financial statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

Certain reclassifications have been made to the prior year's consolidated condensed financial statements to conform to the current year presentation.

Stock Split

On May 7, 2020, the Company’s Board of Directors declared a three-for-one stock split of the Company's outstanding shares of common stock effected in the form of a stock dividend, distributed on May 29, 2020 to stockholders of record on May 18, 2020. The Company distributed two newly issued shares of common stock to holders of record of each share of common stock to effect the stock split. All applicable share and per-share amounts in the consolidated condensed financial statements and the notes to consolidated condensed financial statements have been retroactively adjusted to reflect this stock split. The consolidated condensed statement of stockholders’ equity for the three months ended March 31, 2020 has not been retroactively adjusted to reflect the stock split.


2.     OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS

Composition of Certain Financial Statement Captions

Components of selected captions in the consolidated condensed balance sheets consisted of the following (in millions):
March 31, 2021December 31, 2020
Inventories
Raw materials$132.2 $136.7 
Work in process152.8 140.0 
Finished products482.9 525.6 
$767.9 $802.3 

At March 31, 2021 and December 31, 2020, $123.0 million and $130.0 million, respectively, of the Company's finished products inventories were held on consignment.

7
March 31, 2021December 31, 2020
(in millions)
Accounts payable and accrued liabilities 
Accounts payable$150.4 $196.5 
Employee compensation and withholdings197.5 236.7 
Taxes payable (Note 11)10.7 18.6 
Property, payroll, and other taxes61.0 49.7 
Research and development accruals55.8 52.3 
Accrued rebates60.3 67.2 
Fair value of derivatives16.1 39.3 
Accrued marketing expenses15.9 14.3 
Litigation settlement 50.0 37.5 
Litigation and insurance24.9 23.3 
Accrued relocation costs21.4 21.0 
Accrued professional services6.7 7.6 
Accrued realignment reserves14.8 14.5 
Other accrued liabilities87.0 88.2 
$772.5 $866.7 

Supplemental Cash Flow Information
(in millions)
Three Months Ended
March 31,
20212020
Cash paid during the year for:
Amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$7.7 $7.1 
Non-cash investing and financing transactions:  
Right-of-use assets obtained in exchange for new lease liabilities$3.5 $4.5 
Capital expenditures accruals$36.4 $33.9 

Cash, Cash Equivalents, and Restricted Cash
(in millions)
March 31, 2021December 31, 2020
Cash and cash equivalents$1,174.2 $1,183.2 
Restricted cash included in other current assets16.4 16.6 
Restricted cash included in other assets0.3 0.4 
Total cash, cash equivalents, and restricted cash$1,190.9 $1,200.2 

Amounts included in restricted cash primarily represent funds placed in escrow related to litigation and real estate purchases, and funds restricted for construction.

8
3.     INVESTMENTS

Debt Securities

Investments in debt securities at the end of each period were as follows (in millions):
 March 31, 2021December 31, 2020
Held-to-maturityAmortized CostGross Unrealized GainsGross Unrealized LossesFair ValueAmortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Bank time deposits$— $— $— $— $50.0 $— $— $50.0 
Available-for-sale
Bank time deposits$14.1 $— $— $14.1 $24.1 $— $— $24.1 
U.S. government and agency securities
136.4 1.8 (0.1)138.1 147.0 2.2 — 149.2 
Foreign government bonds— — — — — — — — 
Asset-backed securities161.1 1.3 (0.2)162.2 149.6 1.9 — 151.5 
Corporate debt securities600.3 5.0 (1.5)603.8 600.8 7.5 — 608.3 
Municipal securities2.8 — — 2.8 2.8 — — 2.8 
Total$914.7 $8.1 $(1.8)$921.0 $924.3 $11.6 $— $935.9 
The cost and fair value of investments in debt securities, by contractual maturity, as of March 31, 2021, were as follows:
Available-for-Sale
 Amortized CostFair Value
 (in millions)
Due in 1 year or less$155.5 $156.4 
Due after 1 year through 5 years569.7 573.3 
Instruments not due at a single maturity date189.5 191.3 
$914.7 $921.0 
Actual maturities may differ from the contractual maturities due to call or prepayment rights.
The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2021, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

March 31, 2021
Less than 12 Months12 Months or GreaterTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. government and agency securities$23.1 $(0.1)$— $— $23.1 $(0.1)
Asset-backed securities58.6 (0.2)— — 58.6 (0.2)
Corporate debt securities214.4 (1.5)— — 214.4 (1.5)
$296.1 $(1.8)$— $— $296.1 $(1.8)

There were no investments that were in an unrealized loss position as of December 31, 2020.
9

Investments in Unconsolidated Affiliates

The Company has a number of equity investments in privately and publicly held companies. Investments in these unconsolidated affiliates are recorded in "Long-term Investments" on the consolidated condensed balance sheets, and are as follows:
 March 31,
2021		December 31,
2020
 (in millions)
Equity method investments  
Carrying value of equity method investments$7.1 $5.7 
Equity securities  
Carrying value of non-marketable equity securities30.5 29.4 
Total investments in unconsolidated affiliates$37.6 $35.1 
Non-marketable equity securities consist of investments in privately held companies without readily determinable fair values, and are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company recorded an upward adjustment of $1.0 million during the three months ended March 31, 2021 based on observable price changes. As of March 31, 2021, the Company had recorded accumulated upward adjustments of $4.8 million based on observable price changes, and accumulated downward adjustments of $2.6 million due to impairments and observable price changes.
During the three months ended March 31, 2021, the gross realized gains or losses from sales of available-for-sale investments were not material.

4.     FAIR VALUE MEASUREMENTS

The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, accounts and other receivables, investments, accounts payable, certain accrued liabilities, and borrowings under a revolving credit agreement. These financial instruments are held at cost, which generally approximates fair value due to their short-term nature.

Financial instruments also include notes payable. As of March 31, 2021, the fair value of the notes payable, based on Level 2 inputs, was $676.6 million.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company prioritizes the inputs used to determine fair values in one of the following three categories:
Level 1—Quoted market prices in active markets for identical assets or liabilities.
Level 2—Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly.
Level 3—Unobservable inputs that are not corroborated by market data.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.
10
Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis (in millions):
March 31, 2021Level 1Level 2Level 3Total
Assets    
Cash equivalents$10.9 $15.0 $— $25.9 
Available-for-sale investments:
Bank time deposits
— 14.1 — 14.1 
Corporate debt securities
— 603.8 — 603.8 
Asset-backed securities
— 162.2 — 162.2 
U.S. government and agency securities
55.8 82.3 — 138.1 
Municipal securities
— 2.8 — 2.8 
Investments held for deferred compensation plans113.4 — — 113.4 
Derivatives— 28.8 — 28.8 
$180.1 $909.0 $— $1,089.1 
Liabilities    
Derivatives$— $16.1 $— $16.1 
Deferred compensation plans113.0 — — 113.0 
Contingent consideration liabilities— — 181.6 181.6 
$113.0 $16.1 $181.6 $310.7 
December 31, 2020    
Assets    
Cash equivalents$16.2 $— $— $16.2 
Available-for-sale investments:
Bank time deposits
— 24.1 — 24.1 
Corporate debt securities
— 608.3 — 608.3 
Asset-backed securities
— 151.5 — 151.5 
U.S. government and agency securities
56.9 92.2 — 149.1 
Municipal securities
— 2.8 — 2.8 
Investments held for deferred compensation plans111.2 — — 111.2 
Derivatives— 8.1 — 8.1 
$184.3 $887.0 $— $1,071.3 
Liabilities    
Derivatives$— $39.3 $— $39.3 
Deferred compensation plans111.6 — — 111.6 
Contingent consideration liabilities— — 186.1 186.1 
$111.6 $39.3 $186.1 $337.0 

The following table summarizes the changes in fair value of the contingent consideration liabilities (in millions):

Three Months Ended
March 31,
 20212020
Balance at December 31$186.1 $172.5 
Changes in fair value(4.5)(2.2)
Balance at March 31$181.6 $170.3 


11
Cash Equivalents and Available-for-sale Investments

The Company estimates the fair values of its money market funds based on quoted prices in active markets for identical assets. The Company estimates the fair values of its time deposits, commercial paper, U.S. and foreign government and agency securities, municipal securities, asset-backed securities, and corporate debt securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker-dealer quotes on the same or similar securities, benchmark yields, credit spreads, prepayment and default projections based on historical data, and other observable inputs. The Company independently reviews and validates the pricing received from the third-party pricing service by comparing the prices to prices reported by a secondary pricing source. The Company’s validation procedures have not resulted in an adjustment to the pricing received from the pricing service.

Deferred Compensation Plans

The Company holds investments in trading securities related to its deferred compensation plans. The investments are in a variety of stock and bond mutual funds. The fair values of these investments and the corresponding liabilities are based on quoted market prices.

Derivative Instruments

The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and cross currency swap contracts to manage foreign currency exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of the derivative financial instruments was estimated based on quoted market foreign exchange rates and market discount rates. Judgment was employed in interpreting market data to develop estimates of fair value; accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts.

Contingent Consideration Liabilities

Certain of the Company's acquisitions involve contingent consideration arrangements. Payment of additional consideration is contingent upon the acquired company reaching certain performance milestones, such as attaining specified revenue levels or obtaining regulatory approvals. These contingent consideration liabilities are measured at estimated fair value using either a probability weighted discounted cash flow analysis or a Monte Carlo simulation model, both of which consider significant unobservable inputs. These inputs include (1) the discount rate used to present value the projected cash flows (ranging from 0.0% to 9.2%; weighted average of 3.7%), (2) the probability of milestone achievement (ranging from 0.3% to 99.7%; weighted average of 70.9%), (3) the projected payment dates (ranging from 2023 to 2027; weighted average of 2026), and (4) the volatility of future revenue (ranging from 37.0% to 40.0%; weighted average of 38.8%). The weighted average of each of the above inputs was determined based on the relative fair value of each obligation. The use of different assumptions could have a material effect on the estimated fair value amounts.

5.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes.
 Notional Amount
 March 31, 2021December 31, 2020
 (in millions)
Foreign currency forward exchange contracts$1,509.7 $1,525.5 
Cross currency swap contracts300.0 300.0 

Derivative financial instruments involve credit risk in the event the counterparty should default. It is the Company's policy to execute such instruments with global financial institutions that the Company believes to be creditworthy. The Company diversifies its derivative financial instruments among counterparties to minimize exposure to any one of these entities. The Company also uses International Swap Dealers Association master-netting agreements. The master-netting
12
agreements provide for the net settlement of all contracts through a single payment in a single currency in the event of default, as defined by the agreements.

The Company uses foreign currency forward exchange contracts and cross currency swap contracts to manage its exposure to changes in currency exchange rates from (a) future cash flows associated with intercompany transactions and certain local currency expenses expected to occur within the next 13 months (designated as cash flow hedges), (b) its net investment in certain foreign subsidiaries (designated as net investment hedges) and (c) foreign currency denominated assets or liabilities (designated as fair value hedges). The Company also uses foreign currency forward exchange contracts that are not designated as hedging instruments to offset the transaction gains and losses associated with certain assets and liabilities denominated in currencies other than their functional currencies (resulting principally from intercompany and local currency transactions).

All derivative financial instruments are recognized at fair value in the consolidated condensed balance sheets. For each derivative instrument that is designated as a fair value hedge, the gain or loss on the derivative included in the assessment of hedge effectiveness is recognized immediately to earnings, and offsets the loss or gain on the underlying hedged item. The Company reports in "Accumulated Other Comprehensive Loss" the gain or loss on derivative financial instruments that are designated, and that qualify, as cash flow hedges. The Company reclassifies these gains and losses into earnings in the same line item and in the same period in which the underlying hedged transactions affect earnings. Changes in the fair value of net investment hedges are reported in "Accumulated Other Comprehensive Loss" as a part of the cumulative translation adjustment and would be reclassified into earnings if the underlying net investment is sold or substantially liquidated. The portion of the change in fair value related to components excluded from the hedge effectiveness assessment are amortized into earnings over the life of the derivative. The gains and losses on derivative financial instruments for which the Company does not elect hedge accounting treatment are recognized in the consolidated statements of operations in each period based upon the change in the fair value of the derivative financial instrument. Cash flows from net investment hedges are reported as investing activities in the consolidated statements of cash flows, and cash flows from all other derivative financial instruments are reported as operating activities.

The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions):
  Fair Value
Derivatives designated as hedging instrumentsBalance Sheet
Location		March 31, 2021December 31, 2020
Assets   
Foreign currency contractsOther current assets$26.2 $7.3 
Cross currency swap contractsOther assets$2.6 $0.8 
Liabilities   
Foreign currency contractsAccounts payable and accrued liabilities$16.1 $39.3 

13
The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions):
    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
March 31, 2021Gross
Amounts		Financial
Instruments		Cash
Collateral
Received		Net
Amount
Derivative assets      
Foreign currency contracts$26.2 $— $26.2 $(9.5)$— $16.7 
Cross currency swap contracts$2.6 $— $2.6 $— $— $2.6 
Derivative liabilities      
Foreign currency contracts$16.1 $— $16.1 $(9.5)$— $6.6 
December 31, 2020      
Derivative assets