QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Research and development expenses | |||||||||||||||||||||||
Royalty expense | |||||||||||||||||||||||
Amortization expense | |||||||||||||||||||||||
Intangible asset impairment charges | |||||||||||||||||||||||
Contingent consideration net expense (benefit) | |||||||||||||||||||||||
Restructuring net charges (credits) | |||||||||||||||||||||||
Litigation-related net charges (credits) | |||||||||||||||||||||||
Operating income (loss) | |||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other, net | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income taxes | |||||||||||||||||||||||
Income tax expense (benefit) | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||
Preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
Net income (loss) attributable to Boston Scientific common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) per common share — basic | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) per common share — diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustment | ( | ||||||||||||||||||||||
Net change in derivative financial instruments | ( | ||||||||||||||||||||||
Net change in defined benefit pensions and other items | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||
Comprehensive income attributable to Boston Scientific common stockholders | $ | $ | $ | $ |
As of | |||||||||||
(in millions, except share and per share data) | June 30, 2023 | December 31, 2022 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade accounts receivable, net | |||||||||||
Inventories | |||||||||||
Prepaid income taxes | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Deferred tax assets | |||||||||||
Other long-term assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current debt obligations | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued expenses | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Treasury stock, at cost - | ( | ( | |||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income (loss), net of tax | |||||||||||
Total stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Preferred stock shares issued | |||||||||||||||||||||||
Beginning | |||||||||||||||||||||||
Conversion of mandatory convertible preferred stock to common stock | ( | ( | |||||||||||||||||||||
Ending | |||||||||||||||||||||||
Common stock shares issued | |||||||||||||||||||||||
Beginning | |||||||||||||||||||||||
Impact of stock-based compensation plans | |||||||||||||||||||||||
Conversion of mandatory convertible preferred stock to common stock | |||||||||||||||||||||||
Ending | |||||||||||||||||||||||
Preferred stock | |||||||||||||||||||||||
Beginning | $ | $ | $ | $ | |||||||||||||||||||
Conversion of mandatory convertible preferred stock to common stock | — | — | — | — | $ | — | |||||||||||||||||
Ending | $ | $ | $ | ||||||||||||||||||||
Common stock | |||||||||||||||||||||||
Beginning | $ | $ | $ | $ | |||||||||||||||||||
Conversion of mandatory convertible preferred stock to common stock | |||||||||||||||||||||||
Ending | $ | $ | $ | $ | |||||||||||||||||||
Treasury Stock | |||||||||||||||||||||||
Beginning | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Repurchase of common stock | |||||||||||||||||||||||
Ending | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Additional Paid-In Capital | |||||||||||||||||||||||
Beginning | $ | $ | $ | $ | |||||||||||||||||||
Impact of stock-based compensation plans | |||||||||||||||||||||||
Ending | $ | $ | $ | $ | |||||||||||||||||||
Accumulated Deficit | |||||||||||||||||||||||
Beginning | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income (loss) | |||||||||||||||||||||||
Preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
Ending | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | |||||||||||||||||||||||
Beginning | $ | $ | $ | $ | |||||||||||||||||||
Changes in other comprehensive income (loss) | ( | ||||||||||||||||||||||
Ending | $ | $ | $ | $ | |||||||||||||||||||
Total stockholders' equity | $ | $ | |||||||||||||||||||||
Noncontrolling interests | |||||||||||||||||||||||
Beginning | $ | $ | |||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
Changes in other comprehensive income (loss) | |||||||||||||||||||||||
Changes to noncontrolling ownership interest | |||||||||||||||||||||||
Ending | $ | $ | |||||||||||||||||||||
Total equity | $ | $ | |||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
Net income (loss) | $ | $ | |||||||||
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Deferred and prepaid income taxes | ( | ( | |||||||||
Stock-based compensation expense | |||||||||||
Goodwill and other intangible asset impairment charges | |||||||||||
Net loss (gain) on investments and notes receivable | |||||||||||
Contingent consideration net expense (benefit) | |||||||||||
Inventory step-up amortization | |||||||||||
Debt extinguishment costs | |||||||||||
Other, net | |||||||||||
Increase (decrease) in operating assets and liabilities, excluding purchase accounting: | |||||||||||
Trade accounts receivable | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Accounts payable, accrued expenses and other liabilities | ( | ||||||||||
Cash provided by (used for) operating activities | |||||||||||
Investing activities: | |||||||||||
Purchases of property, plant and equipment and internal use software | ( | ( | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Payments for acquisitions of businesses, net of cash acquired | ( | ( | |||||||||
Proceeds from (payments for) investments and acquisitions of certain technologies | ( | ( | |||||||||
Proceeds from royalty rights | |||||||||||
Proceeds from (payments for) settlements of hedge contracts | |||||||||||
Cash provided by (used for) investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Payment of contingent consideration previously established in purchase accounting | ( | ( | |||||||||
Payments for royalty rights | ( | ( | |||||||||
Payments on short-term borrowings | ( | ||||||||||
Net increase (decrease) in commercial paper | |||||||||||
Payments on long-term borrowings and debt extinguishment costs | ( | ||||||||||
Proceeds from long-term borrowings, net of debt issuance costs | |||||||||||
Cash dividends paid on preferred stock | ( | ( | |||||||||
Cash used to net share settle employee equity awards | ( | ( | |||||||||
Proceeds from issuances of common stock pursuant to employee stock compensation and purchase plans | |||||||||||
Cash provided by (used for) financing activities | ( | ( | |||||||||
Effect of foreign exchange rates on cash | ( | ( | |||||||||
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | ( | ( | |||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | |||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ | $ | |||||||||
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
Supplemental Information | |||||||||||
Stock-based compensation expense | $ | $ | |||||||||
Non-cash impact of transferred royalty rights | ( | ( |
As of June 30, | |||||||||||
Reconciliation to amounts within the unaudited consolidated balance sheets: | 2023 | 2022 | |||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and restricted cash equivalents included in Other current assets | |||||||||||
Restricted cash equivalents included in Other long-term assets | |||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ | $ |
(in millions) | Acotec(1) | Apollo | ||||||
Payment for acquisition, net of cash acquired (2) | $ | $ | ||||||
$ | $ |
(in millions) | Acotec | Apollo | ||||||
Goodwill | $ | $ | ||||||
Amortizable intangible assets | ||||||||
Other assets acquired | ||||||||
Liabilities assumed | ( | ( | ||||||
Net deferred tax liabilities | ( | ( | ||||||
Fair value of noncontrolling interest | ( | |||||||
$ | $ |
Amount Assigned (in millions) | Weighted Average Amortization Period (in years) | Risk-Adjusted Discount Rates used in Purchase Price Allocation | |||||||||||||||
Acotec: | |||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||
Technology-related | $ | ||||||||||||||||
Customer relationships | |||||||||||||||||
Other intangible assets | |||||||||||||||||
$ | |||||||||||||||||
Apollo: | |||||||||||||||||
Amortizable intangible assets: | |||||||||||||||||
Technology-related | $ | ||||||||||||||||
Customer relationships | |||||||||||||||||
$ | |||||||||||||||||
(in millions) | |||||
Payment for acquisition, net of cash acquired | $ | ||||
$ |
(in millions) | |||||
Goodwill | $ | ||||
Amortizable intangible assets | |||||
Other assets acquired | |||||
Liabilities assumed | ( | ||||
Net deferred tax liabilities | ( | ||||
$ |
Amount Assigned (in millions) | Weighted Average Amortization Period (in years) | Risk-Adjusted Discount Rates used in Purchase Price Allocation | |||||||||||||||
Amortizable intangible assets: | |||||||||||||||||
Technology-related | $ | ||||||||||||||||
Other intangible assets | |||||||||||||||||
$ | |||||||||||||||||
(in millions) | |||||
Balance as of December 31, 2022 | $ | ||||
Contingent consideration net expense (benefit) | |||||
Contingent consideration payments | ( | ||||
Balance as of June 30, 2023 | $ |
Contingent Consideration Liability | Fair Value as of June 30, 2023 | Valuation Technique | Unobservable Input | Range | Weighted Average(1) | ||||||||||||||||||
R&D, Regulatory and Commercialization-based Milestones | $ | Discounted Cash Flow | Discount Rate | - | |||||||||||||||||||
Probability of Payment | - | ||||||||||||||||||||||
Projected Year of Payment | 2023 | - | 2025 | 2024 | |||||||||||||||||||
Revenue-based Payments | $ | Discounted Cash Flow | Discount Rate | - | |||||||||||||||||||
Probability of Payment | |||||||||||||||||||||||
Projected Year of Payment | 2023 | - | 2024 | 2023 | |||||||||||||||||||
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Equity method investments | $ | $ | |||||||||
Measurement alternative investments(1, 2) | |||||||||||
$ | $ |
As of June 30, 2023 | As of December 31, 2022 | ||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization/ Write-offs | Gross Carrying Amount | Accumulated Amortization/ Write-offs | |||||||||||||||||||
Technology-related | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Patents | ( | ( | |||||||||||||||||||||
Other intangible assets | ( | ( | |||||||||||||||||||||
Amortizable intangible assets | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Goodwill | $ | $ | ( | $ | $ | ( | |||||||||||||||||
IPR&D | $ | $ | |||||||||||||||||||||
Technology-related | |||||||||||||||||||||||
Indefinite-lived intangible assets | $ | $ |
(in millions) | MedSurg | Cardiovascular | Total | ||||||||||||||
As of December 31, 2022 | $ | $ | $ | ||||||||||||||
Goodwill acquired | |||||||||||||||||
Impact of foreign currency fluctuations and purchase price adjustments | ( | ||||||||||||||||
As of June 30, 2023 | $ | $ | $ |
(in millions) | FASB ASC Topic 815 Designation | As of | ||||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||
Forward currency contracts | Cash flow hedge | $ | $ | |||||||||||||||||
Forward currency contracts | Net investment hedge | |||||||||||||||||||
Foreign currency-denominated debt(1) | Net investment hedge | |||||||||||||||||||
Forward currency contracts | Non-designated | |||||||||||||||||||
Total Notional Outstanding | $ | $ |
Effect of Hedging Relationships on Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||
Amount Recognized in OCI on Hedges | Unaudited Consolidated Statements of Operations(1) | Amount Reclassified from AOCI into Earnings | ||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | Location of Amount Reclassified and Total Amount of Line Item | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax | |||||||||||||||||||||||||
Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||
Forward currency contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | $ | $ | ( | $ | Cost of products sold | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
Net investment hedges(2) | ( | Interest expense | ( | ( | ||||||||||||||||||||||||||||
Foreign currency-denominated debt | ||||||||||||||||||||||||||||||||
Net investment hedges(3) | Other, net | |||||||||||||||||||||||||||||||
Interest rate derivative contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | Interest expense |
Effect of Hedging Relationships on Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||
Amount Recognized in OCI on Hedges | Unaudited Consolidated Statements of Operations(1) | Amount Reclassified from AOCI into Earnings | ||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | Location of Amount Reclassified and Total Amount of Line Item | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax | |||||||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||
Forward currency contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | $ | $ | ( | $ | Cost of products sold | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
Net investment hedges(2) | Interest expense | ( | ( | |||||||||||||||||||||||||||||
Foreign currency-denominated debt | ||||||||||||||||||||||||||||||||
Net investment hedges(3) | ( | Other, net | ||||||||||||||||||||||||||||||
Interest rate derivative contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | Interest Expense |
Effect of Hedging Relationships on Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||
Amount Recognized in OCI on Hedges | Unaudited Consolidated Statements of Operations(1) | Amount Reclassified from AOCI into Earnings | ||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | Location of Amount Reclassified and Total Amount of Line Item | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax | |||||||||||||||||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||
Forward currency contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | $ | $ | ( | $ | Cost of products sold | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
Net investment hedges (2) | ( | Interest expense | ( | ( | ||||||||||||||||||||||||||||
Foreign currency-denominated debt | ||||||||||||||||||||||||||||||||
Net investment hedges (3) | ( | ( | Other, net | |||||||||||||||||||||||||||||
Interest rate derivative contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | Interest expense |
Effect of Hedging Relationships on Accumulated Other Comprehensive Income | ||||||||||||||||||||||||||||||||
Amount Recognized in OCI on Hedges | Unaudited Consolidated Statements of Operations(1) | Amount Reclassified from AOCI into Earnings | ||||||||||||||||||||||||||||||
(in millions) | Pre-Tax Gain (Loss) | Tax Benefit (Expense) | Gain (Loss) Net of Tax | Location of Amount Reclassified and Total Amount of Line Item | Pre-Tax (Gain) Loss | Tax (Benefit) Expense | (Gain) Loss Net of Tax | |||||||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||
Forward currency contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | $ | $ | ( | $ | Cost of products sold | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
Net investment hedges (2) | Interest expense | ( | ( | |||||||||||||||||||||||||||||
Foreign currency-denominated debt | ||||||||||||||||||||||||||||||||
Net investment hedges (3) | ( | Other, net | ||||||||||||||||||||||||||||||
Interest rate derivative contracts | ||||||||||||||||||||||||||||||||
Cash flow hedges | Interest expense | ( |
(in millions) | FASB ASC Topic 815 Designation | Location on Unaudited Consolidated Statements of Operations | Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings | |||||||||||||||||
Designated Hedging Instrument | ||||||||||||||||||||
Forward currency contracts | Cash flow hedge | Cost of products sold | $ | |||||||||||||||||
Forward currency contracts | Net investment hedge | Interest expense | ||||||||||||||||||
Interest rate derivative contracts | Cash flow hedge | Interest expense | ( |
Location on Unaudited Consolidated Statements of Operations | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
Net gain (loss) on currency hedge contracts | Other, net | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
Net gain (loss) on currency transaction exposures | Other, net | ( | ( | |||||||||||||||||||||||||||||
Net currency exchange gain (loss) | $ | ( | $ | $ | ( | $ | ( |
Location on Unaudited Consolidated Balance Sheets(1) | As of | |||||||||||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | ||||||||||||||||||
Derivative and Nonderivative Assets: | ||||||||||||||||||||
Designated Hedging Instruments | ||||||||||||||||||||
Forward currency contracts | Other current assets | $ | $ | |||||||||||||||||
Forward currency contracts | Other long-term assets | |||||||||||||||||||
Non-Designated Hedging Instruments | ||||||||||||||||||||
Forward currency contracts | Other current assets | |||||||||||||||||||
Total Derivative and Nonderivative Assets | $ | $ | ||||||||||||||||||
Derivative and Nonderivative Liabilities: | ||||||||||||||||||||
Designated Hedging Instruments | ||||||||||||||||||||
Forward currency contracts | Other current liabilities | $ | $ | |||||||||||||||||
Forward currency contracts | Other long-term liabilities | |||||||||||||||||||
Foreign currency-denominated debt(2) | Long-term debt | |||||||||||||||||||
Non-Designated Hedging Instruments | ||||||||||||||||||||
Forward currency contracts | Other current liabilities | |||||||||||||||||||
Total Derivative and Nonderivative Liabilities | $ | $ |
As of | |||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Money market funds and time deposits | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Publicly-held equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
Hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Licensing arrangements | |||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Hedging instruments | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Contingent consideration liability | |||||||||||||||||||||||||||||||||||||||||||||||
Licensing arrangements | |||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ |
Licensing Arrangements | Fair Value as of June 30, 2023 | Valuation Technique | Unobservable Input | Range | Weighted Average (1) | ||||||||||||||||||
Financial Asset | $ | Discounted Cash Flow | Discount Rate | ||||||||||||||||||||
Projected Year of Payment | 2023 | - | 2025 | 2024 | |||||||||||||||||||
Financial Liability | $ | Discounted Cash Flow | Discount Rate | % | - | ||||||||||||||||||
Projected Year of Payment | 2023 | - | 2026 | 2024 |
(in millions) | |||||
Balance as of December 31, 2022 | $ | ||||
Proceeds from royalty rights | ( | ||||
Fair value adjustment (expense) benefit | |||||
Balance as of June 30, 2023 | $ |
(in millions) | |||||
Balance as of December 31, 2022 | $ | ||||
Payments for royalty rights | ( | ||||
Fair value adjustment expense (benefit) | |||||
Balance as of June 30, 2023 | $ |
(in millions, except interest rates) | Issuance Date | Maturity Date | As of | Coupon Rate(1) | ||||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
March 2024 Senior Notes | February 2019 | March 2024 | ||||||||||||||||||||||||||||||
March 2025 Senior Notes(3) | March 2022 | March 2025 | ||||||||||||||||||||||||||||||
June 2025 Senior Notes | May 2020 | June 2025 | ||||||||||||||||||||||||||||||
March 2026 Senior Notes | February 2019 | March 2026 | ||||||||||||||||||||||||||||||
December 2027 Senior Notes(3) | November 2019 | December 2027 | ||||||||||||||||||||||||||||||
March 2028 Senior Notes(3) | March 2022 | March 2028 | ||||||||||||||||||||||||||||||
March 2028 Senior Notes | February 2018 | March 2028 | ||||||||||||||||||||||||||||||
March 2029 Senior Notes | February 2019 | March 2029 | ||||||||||||||||||||||||||||||
June 2030 Senior Notes | May 2020 | June 2030 | ||||||||||||||||||||||||||||||
March 2031 Senior Notes(3) | March 2022 | March 2031 | ||||||||||||||||||||||||||||||
March 2034 Senior Notes(3) | March 2022 | March 2034 | ||||||||||||||||||||||||||||||
November 2035 Senior Notes(2) | November 2005 | November 2035 | ||||||||||||||||||||||||||||||
March 2039 Senior Notes | February 2019 | March 2039 | ||||||||||||||||||||||||||||||
January 2040 Senior Notes | December 2009 | January 2040 | ||||||||||||||||||||||||||||||
March 2049 Senior Notes | February 2019 | March 2049 | ||||||||||||||||||||||||||||||
Unamortized Debt Issuance Discount and Deferred Financing Costs | 2023 - 2049 | ( | ( | |||||||||||||||||||||||||||||
Finance Lease Obligation | Various | |||||||||||||||||||||||||||||||
Long-term debt | $ | $ |
Covenant Requirement | Actual | |||||||||||||
as of June 30, 2023 | as of June 30, 2023 | |||||||||||||
Maximum permitted leverage ratio(1) | ||||||||||||||
As of | |||||||||||
(in millions, except maturity and yield) | June 30, 2023 | December 31, 2022 | |||||||||
Commercial paper outstanding (at par) | $ | $ | |||||||||
Maximum borrowing capacity | |||||||||||
Borrowing capacity available | |||||||||||
Weighted average maturity | 5 days | 0 days | |||||||||
Weighted average yield | % | % |
Factoring Arrangements | As of June 30, 2023 | As of December 31, 2022 | |||||||||||||||||||||
Amount De-recognized | Weighted Average Interest Rate | Amount De-recognized | Weighted Average Interest Rate | ||||||||||||||||||||
Euro denominated | $ | % | $ | % | |||||||||||||||||||
Yen denominated | % | % | |||||||||||||||||||||
Renminbi denominated | % | % |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Trade accounts receivable | $ | $ | |||||||||
Allowance for credit losses | ( | ( | |||||||||
$ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Credit loss expense | |||||||||||||||||||||||
Write-offs | ( | ( | ( | ( | |||||||||||||||||||
Ending balance | $ | $ | $ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Finished goods | $ | $ | |||||||||
Work-in-process | |||||||||||
Raw materials | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Restricted cash and restricted cash equivalents | $ | $ | |||||||||
Derivative assets | |||||||||||
Licensing arrangements | |||||||||||
Other | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Land | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Equipment, furniture and fixtures | |||||||||||
Capital in progress | |||||||||||
Less: accumulated depreciation | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Restricted cash equivalents | $ | $ | |||||||||
Operating lease right-of-use assets | |||||||||||
Derivative assets | |||||||||||
Investments | |||||||||||
Licensing arrangements | |||||||||||
Indemnification asset | |||||||||||
Other | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Legal reserves | $ | $ | |||||||||
Payroll and related liabilities | |||||||||||
Rebates | |||||||||||
Contingent consideration | |||||||||||
Other | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Deferred revenue | $ | $ | |||||||||
Licensing arrangements | |||||||||||
Taxes payable | |||||||||||
Other | |||||||||||
$ | $ |
As of | |||||||||||
(in millions) | June 30, 2023 | December 31, 2022 | |||||||||
Accrued income taxes | $ | $ | |||||||||
Legal reserves | |||||||||||
Contingent consideration | |||||||||||
Licensing arrangements | |||||||||||
Operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Other | |||||||||||
$ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Effective tax rate from continuing operations | % | % | % | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Weighted average shares outstanding — basic | |||||||||||||||||||||||
Net effect of common stock equivalents | |||||||||||||||||||||||
Weighted average shares outstanding - diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Stock options outstanding(1) | |||||||||||||||||||||||
MCPS(2) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Net Sales | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
MedSurg | $ | $ | $ | $ | |||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||
Total net sales of reportable segments | |||||||||||||||||||||||
Impact of foreign currency fluctuations | |||||||||||||||||||||||
$ | $ | $ | $ |
Income (loss) before income taxes | |||||||||||||||||||||||
MedSurg | $ | $ | $ | $ | |||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||
Total operating income of reportable segments | |||||||||||||||||||||||
Unallocated amounts: | |||||||||||||||||||||||
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments | ( | ( | |||||||||||||||||||||
Goodwill and intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs | ( | ( | ( | ( | |||||||||||||||||||
Amortization expense | ( | ( | ( | ( | |||||||||||||||||||
Operating income (loss) | |||||||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Operating income margin of reportable segments | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
MedSurg | % | % | % | % | |||||||||||||||||||
Cardiovascular | % | % | % | % |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Businesses | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||||||||||||||||||||
Endoscopy | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Urology | |||||||||||||||||||||||||||||||||||
Neuromodulation | |||||||||||||||||||||||||||||||||||
MedSurg | |||||||||||||||||||||||||||||||||||
Interventional Cardiology Therapies | |||||||||||||||||||||||||||||||||||
Watchman | |||||||||||||||||||||||||||||||||||
Cardiac Rhythm Management | |||||||||||||||||||||||||||||||||||
Electrophysiology | |||||||||||||||||||||||||||||||||||
Cardiology | |||||||||||||||||||||||||||||||||||
Peripheral Interventions | |||||||||||||||||||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||||||||||||||
Total Net Sales | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Businesses | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||||||||||||||||||||
Endoscopy | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Urology | |||||||||||||||||||||||||||||||||||
Neuromodulation | |||||||||||||||||||||||||||||||||||
MedSurg | |||||||||||||||||||||||||||||||||||
Interventional Cardiology Therapies | |||||||||||||||||||||||||||||||||||
Watchman | |||||||||||||||||||||||||||||||||||
Cardiac Rhythm Management | |||||||||||||||||||||||||||||||||||
Electrophysiology | |||||||||||||||||||||||||||||||||||
Cardiology | |||||||||||||||||||||||||||||||||||
Peripheral Interventions | |||||||||||||||||||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||||||||||||||
Total Net Sales | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Geographic Regions | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
U.S. | $ | $ | $ | $ | |||||||||||||||||||
Europe, Middle East and Africa | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Latin America and Canada | |||||||||||||||||||||||
Total Net Sales | $ | $ | $ | $ | |||||||||||||||||||
Emerging Markets(1) | $ | $ | $ | $ |
(in millions) | Foreign Currency Translation Adjustments | Net Change in Derivative Financial Instruments | Net Change in Defined Benefit Pensions and Other Items | Total | |||||||||||||||||||
Balance as of March 31, 2023 | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||||||||||
(Income) loss amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ( | |||||||||||||||||||
Total other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance as of June 30, 2023 | $ | ( | $ | $ | ( | $ |
(in millions) | Foreign Currency Translation Adjustments | Net Change in Derivative Financial Instruments | Net Change in Defined Benefit Pensions and Other Items | Total | |||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||||||||||
(Income) loss amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ||||||||||||||||||||
Total other comprehensive income (loss) | |||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | ( | $ |
(in millions) | Foreign Currency Translation Adjustments | Net Change in Derivative Financial Instruments | Net Change in Defined Benefit Pensions and Other Items | Total | |||||||||||||||||||
Balance as of December 31, 2022 | $ | ( | $ | $ | $ | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
(Income) loss amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ( | |||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Balance as of June 30, 2023 | $ | ( | $ | $ | ( | $ |
(in millions) | Foreign Currency Translation Adjustments | Net Change in Derivative Financial Instruments | Net Change in Defined Benefit Pensions and Other Items | Total | |||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||||||||||
(Income) loss amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ||||||||||||||||||||
Total other comprehensive income (loss) | |||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | ( | $ |
Three Months Ended June 30, 2023 | ||||||||||||||||||||
(in millions, except per share data) | Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Attributable to Boston Scientific Common Stockholders | Impact per Share(4) | ||||||||||||||
Reported | $ | 426 | $ | 156 | $ | 270 | $ | (9) | $ | 261 | $ | 0.18 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Amortization expense | 210 | 28 | 182 | — | 182 | 0.12 | ||||||||||||||
Goodwill and other intangible asset impairment charges | 57 | 3 | 54 | — | 54 | 0.04 | ||||||||||||||
Acquisition/divestiture-related net charges (credits) | 118 | (57) | 175 | — | 175 | 0.12 | ||||||||||||||
Restructuring and restructuring-related net charges (credits) | 42 | 7 | 35 | — | 35 | 0.02 | ||||||||||||||
Investment portfolio net losses (gains) | (2) | (6) | 5 | — | 5 | 0.00 | ||||||||||||||
European Union (EU) Medical device regulation (MDR) implementation costs | 20 | 3 | 17 | — | 17 | 0.01 | ||||||||||||||
Deferred tax expenses (benefits) | — | (47) | 47 | — | 47 | 0.03 | ||||||||||||||
Discrete tax items | — | (1) | 1 | — | 1 | 0.00 | ||||||||||||||
Adjusted | $ | 871 | $ | 86 | $ | 786 | $ | (9) | $ | 777 | $ | 0.53 |
Three Months Ended June 30, 2022 | ||||||||||||||||||||
(in millions, except per share data) | Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Attributable to Boston Scientific Common Stockholders | Impact per Share(4) | ||||||||||||||
Reported | $ | 345 | $ | 85 | $ | 260 | $ | (14) | $ | 246 | $ | 0.17 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Amortization expense | 204 | 29 | 175 | — | 175 | 0.12 | ||||||||||||||
Goodwill and other intangible asset impairment charges | 7 | — | 7 | — | 7 | 0.00 | ||||||||||||||
Acquisition/divestiture-related net charges (credits) | 91 | (5) | 95 | — | 95 | 0.07 | ||||||||||||||
Restructuring and restructuring-related net charges (credits) | 35 | 5 | 30 | — | 30 | 0.02 | ||||||||||||||
Litigation-related net charges (credits) | 42 | 10 | 33 | — | 33 | 0.02 | ||||||||||||||
Investment portfolio net losses (gains) | 4 | 2 | 2 | — | 2 | 0.00 | ||||||||||||||
European Union (EU) Medical device regulation (MDR) implementation costs | 17 | 2 | 14 | — | 14 | 0.01 | ||||||||||||||
Debt extinguishment charges | 0 | 0 | 0 | — | 0 | 0.00 | ||||||||||||||
Deferred tax expenses (benefits) | — | (34) | 34 | — | 34 | 0.02 | ||||||||||||||
Discrete tax items | — | 1 | (1) | — | (1) | (0.00) | ||||||||||||||
Adjusted | $ | 744 | $ | 95 | $ | 649 | $ | (14) | $ | 635 | $ | 0.44 |
Six Months Ended June 30, 2023 | ||||||||||||||||||||
(in millions, except per share data) | Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Attributable to Boston Scientific Common Stockholders | Impact per Share(5) | ||||||||||||||
Reported | $ | 870 | $ | 287 | $ | 584 | $ | (23) | $ | 561 | $ | 0.39 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Amortization expense | 412 | 56 | 357 | — | 357 | 0.25 | ||||||||||||||
Goodwill and other intangible asset impairment charges | 57 | 3 | 54 | — | 54 | 0.04 | ||||||||||||||
Acquisition/divestiture-related net charges (credits) | 178 | (64) | 242 | — | 242 | 0.17 | ||||||||||||||
Restructuring and restructuring-related net charges (credits) | 86 | 14 | 71 | — | 71 | 0.05 | ||||||||||||||
Investment portfolio net losses (gains) | 19 | (2) | 20 | — | 20 | 0.01 | ||||||||||||||
European Union (EU) Medical device regulation (MDR) implementation costs | 36 | 5 | 31 | — | 31 | 0.02 | ||||||||||||||
Deferred tax expenses (benefits) | — | (88) | 88 | — | 88 | 0.06 | ||||||||||||||
Discrete tax items | — | (26) | 26 | — | 26 | 0.02 | ||||||||||||||
Adjusted | $ | 1,659 | $ | 186 | $ | 1,472 | $ | (23) | $ | 1,449 | $ | 1.00 |
Six Months Ended June 30, 2022 | ||||||||||||||||||||
(in millions, except per share data) | Income (Loss) Before Income Taxes | Income Tax Expense (Benefit) | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Available to Common Stockholders | Impact per Share(5) | ||||||||||||||
Reported | $ | 501 | $ | 131 | $ | 370 | $ | (28) | $ | 342 | $ | 0.24 | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Amortization expense | 402 | 56 | 345 | — | 345 | 0.24 | ||||||||||||||
Goodwill and other intangible asset impairment charges | 7 | — | 7 | — | 7 | 0.00 | ||||||||||||||
Acquisition/divestiture-related net charges (credits) | 163 | (5) | 167 | — | 167 | 0.12 | ||||||||||||||
Restructuring and restructuring-related net charges (credits) | 64 | 9 | 55 | — | 55 | 0.04 | ||||||||||||||
Litigation-related net charges (credits) | 42 | 10 | 33 | — | 33 | 0.02 | ||||||||||||||
Investment portfolio net losses (gains) | 11 | 4 | 7 | — | 7 | 0.00 | ||||||||||||||
European Union (EU) Medical device regulation (MDR) implementation costs | 33 | 5 | 28 | — | 28 | 0.02 | ||||||||||||||
Debt extinguishment charges | 194 | 45 | 149 | — | 149 | 0.10 | ||||||||||||||
Deferred tax expenses (benefits) | — | (63) | 63 | — | 63 | 0.04 | ||||||||||||||
Discrete tax items | — | 0 | (0) | — | (0) | (0.00) | ||||||||||||||
Adjusted | $ | 1,416 | $ | 191 | $ | 1,224 | $ | (28) | $ | 1,197 | $ | 0.83 |
Three Months Ended June 30, | |||||||||||||||||
(in millions) | 2023 | 2022 | Increase/(Decrease) | ||||||||||||||
Endoscopy | $ | 631 | $ | 560 | 12.7% | ||||||||||||
Urology | 485 | 450 | 7.8% | ||||||||||||||
Neuromodulation | 244 | 239 | 2.5% | ||||||||||||||
MedSurg | 1,360 | 1,248 | 9.0% | ||||||||||||||
Cardiology | 1,704 | 1,517 | 12.3% | ||||||||||||||
Peripheral Interventions | 535 | 478 | 11.9% | ||||||||||||||
Cardiovascular | 2,239 | 1,996 | 12.2% | ||||||||||||||
Net Sales | $ | 3,599 | $ | 3,244 | 11.0% | ||||||||||||
Six Months Ended June 30, | |||||||||||||||||
(in millions) | 2023 | 2022 | Increase/(Decrease) | ||||||||||||||
Endoscopy | $ | 1,207 | $ | 1,091 | 10.7% | ||||||||||||
Urology | 954 | 863 | 10.5% | ||||||||||||||
Neuromodulation | 478 | 448 | 6.9% | ||||||||||||||
MedSurg | 2,640 | 2,402 | 9.9% | ||||||||||||||
Cardiology | 3,310 | 2,925 | 13.2% | ||||||||||||||
Peripheral Interventions | 1,039 | 944 | 10.0% | ||||||||||||||
Cardiovascular | 4,349 | 3,868 | 12.4% | ||||||||||||||
Net Sales | $ | 6,988 | $ | 6,270 | 11.5% |
Percentage of Net Sales | |||||||||||
Three Months | Six Months | ||||||||||
Gross profit margin - period ended June 30, 2022 | 68.8% | 68.6% | |||||||||
Sales pricing, volume and mix | 2.3 | 1.6 | |||||||||
Manufacturing and supply costs | 2.3 | 1.9 | |||||||||
Net impact of foreign currency fluctuations | (2.0) | (1.6) | |||||||||
All other, including other period expenses | (0.8) | (0.6) | |||||||||
Gross profit margin - period ended June 30, 2023 | 70.6% | 70.0% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||
(in millions) | $ | % of Net Sales | $ | % of Net Sales | $ | % of Net Sales | $ | % of Net Sales | |||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | 1,354 | 37.6 | % | $ | 1,165 | 35.9 | % | $ | 2,570 | 36.8 | % | $ | 2,225 | 35.5 | % | |||||||||||||||||||
Research and development expenses | 359 | 10.0 | % | 335 | 10.3 | % | 695 | 10.0 | % | 654 | 10.4 | % | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Interest expense (in millions) | $ | (70) | $ | (64) | $ | (135) | $ | (343) | |||||||||||||||
Average borrowing rate | 2.9 | % | 2.7 | % | 2.8 | % | 7.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Effective tax rate from continuing operations | 36.6 | % | 24.7 | % | 32.9 | % | 26.1 | % |
Six Months Ended June 30, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
Cash provided by (used for) operating activities | $ | 848 | $ | 249 | |||||||
Cash provided by (used for) investing activities | (1,324) | (1,603) | |||||||||
Cash provided by (used for) financing activities | (26) | (350) |
3.1* | ||||||||
22 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1* | ||||||||
32.2* | ||||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101). |
BOSTON SCIENTIFIC CORPORATION | |||||||||||
By: | /s/ Daniel J. Brennan | ||||||||||
Name: | Daniel J. Brennan | ||||||||||
Title: | Executive Vice President and Chief Financial Officer |
1 | I have reviewed this Quarterly Report on Form 10-Q of Boston Scientific 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 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 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. |
Date: | August 3, 2023 | /s/ Michael F. Mahoney | ||||||||||||
Michael F. Mahoney | ||||||||||||||
Chief Executive Officer |
1 | I have reviewed this Quarterly Report on Form 10-Q of Boston Scientific 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 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 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. |
Date: | August 3, 2023 | /s/ Daniel J. Brennan | ||||||||||||
Daniel J. Brennan | ||||||||||||||
Executive Vice President and 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 Boston Scientific Corporation. |
By: | /s/ Michael F. Mahoney | |||||||
Michael F. Mahoney | ||||||||
Chief Executive Officer | ||||||||
August 3, 2023 |
(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 Boston Scientific Corporation. |
By: | /s/ Daniel J. Brennan | |||||||
Daniel J. Brennan | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
August 3, 2023 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Net income (loss) | $ 270 | $ 260 | $ 584 | $ 370 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 15 | 77 | (28) | 13 |
Net change in derivative financial instruments | 15 | 134 | (28) | 157 |
Net change in defined benefit pensions and other items | 0 | 0 | (5) | 0 |
Other comprehensive income (loss) | 30 | 211 | (61) | 170 |
Comprehensive income (loss) | 300 | 471 | 523 | 540 |
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 300 | $ 471 | $ 523 | $ 540 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2023 |
Dec. 31, 2022 |
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Condensed Consolidated Balance Sheet (Parenthetical) [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 10,062,500 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, Shares, Issued | 1,725,956,141 | 1,696,633,993 |
Treasury Stock, Common, Shares | 263,289,848 | 263,289,848 |
Consolidated Statements of Cash Flows (Supplemental Disclosure) - USD ($) $ in Millions |
6 Months Ended | |||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Supplemental Information | ||||
Stock-based compensation expense | $ 115 | $ 107 | ||
Non-cash impact of transferred royalty rights | (16) | (36) | ||
Cash and cash equivalents | 426 | 276 | $ 928 | |
Restricted cash and restricted cash equivalents included in Other current assets | 135 | 132 | 149 | |
Restricted cash equivalents included in Other long-term assets | 60 | 50 | 48 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 620 | $ 458 | $ 1,126 | $ 2,168 |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE A – BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and they do not include all of the information and footnotes required by GAAP for complete financial statements. When used in this report, the terms, "we," "us," "our," and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Accordingly, our unaudited consolidated financial statements and footnotes thereto should be read in conjunction with our audited consolidated financial statements and footnotes thereto included in Item 8 of our most recent Annual Report on Form 10-K. The accompanying unaudited consolidated financial statements include the accounts of the Company's wholly owned- subsidiaries and entities for which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. In the first quarter of 2023, we acquired a majority stake investment in Acotec Scientific Holdings Limited (Acotec) and have elected to consolidate their financial statements on a one quarter lag. Amounts reported in millions within this Quarterly Report on Form 10-Q are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts. Subsequent Events We evaluate events occurring after the date of our accompanying unaudited consolidated balance sheet for potential recognition or disclosure in our financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly. Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note H – Commitments and Contingencies for further details.
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Acquisitions, Divestitures and Strategic Investments |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS AND STRATEGIC INVESTMENTS | NOTE B – ACQUISITIONS, DIVESTITURES AND STRATEGIC INVESTMENTS Our accompanying unaudited consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our accompanying unaudited consolidated financial statements. Further, transaction costs were immaterial to our accompanying unaudited consolidated financial statements and were expensed as incurred. On June 15, 2022, we announced our entry into a definitive agreement with Synergy Innovation Co, Ltd, to purchase its majority stake in M.I. Tech Co., Ltd., (M.I. Tech), a publicly traded Korean manufacturer and distributor of medical devices for endoscopic and urological procedures. The agreement required global regulatory approvals that we were not able to obtain in some countries. As a result, the original agreement was terminated, and on June 15, 2023, we purchased a 9.9 percent minority stake in M.I. Tech. 2023 Acquisitions On April 4, 2023, we completed our acquisition of 100 percent of the outstanding equity of Apollo Endosurgery, Inc. (Apollo), a public company which offers a portfolio of devices used during endoluminal procedures to close gastrointestinal defects, manage gastrointestinal complications and aid in weight loss for patients suffering from obesity. The transaction consisted of an upfront cash payment of $636 million, net of cash acquired. The Apollo business is being integrated into our Endoscopy division. On February 20, 2023, we completed the acquisition of a majority stake investment in Acotec, a publicly traded Chinese manufacturer of drug-coated balloons used in the treatment of vascular and other diseases. We acquired approximately 65 percent of the outstanding shares of Acotec, for an upfront cash payment of HK$20.00 per share, or $519 million at foreign currency exchange rates at closing. The Acotec portfolio complements our existing Peripheral Interventions portfolio. Purchase Price Allocation We accounted for these transactions as business combinations in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations (FASB ASC Topic 805). The preliminary purchase prices were comprised of the amounts presented below:
(1) Excludes approximately $140 million of cash on hand at the closing of the transaction (2) Represents majority stake investment in Acotec We recorded the assets acquired, liabilities assumed and specific to Acotec, the noncontrolling interest, at their respective fair values as of the closing of the transaction. The preliminary purchase price allocations were comprised of the following components and the final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805:
The fair value of Acotec's noncontrolling interest was based on the publicly traded market value of the remaining 35 percent of the outstanding shares we did not acquire as of the transaction date and is presented within Stockholders' equity within our accompanying unaudited consolidated balance sheets. Goodwill was primarily established for Acotec due to opportunities for collaboration in research and development, manufacturing and commercial strategies and for Apollo due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes. We allocated a portion of the purchase price to the specific intangible asset categories as follows:
2022 Acquisition On February 14, 2022, we completed our acquisition of Baylis Medical Company Inc. (Baylis Medical), a privately-held company which developed the radiofrequency (RF) NRG™ and VersaCross™ Transseptal Platforms as well as a family of guidewires, sheaths and dilators used to support left heart access, which expanded our electrophysiology and structural heart product portfolios. The transaction consisted of an upfront cash payment of $1.463 billion, net of cash acquired, subject to closing adjustments. We are integrating the Baylis Medical business into our Cardiology division. Purchase Price Allocation We accounted for the acquisition of Baylis Medical as a business combination in accordance with FASB ASC Topic 805. The final purchase price was comprised of the amount presented below:
We recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The final purchase price allocation was comprised of the following components:
Goodwill was primarily established due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, and was deductible for tax purposes. We allocated a portion of the purchase price to the specific intangible asset categories as follows:
Contingent Consideration None of our acquisitions that closed during 2023 or 2022 contained contingent consideration arrangements. Changes in the fair value of our contingent consideration liability during the first six months of 2023 associated with prior period acquisitions were as follows:
The payments made during the first six months of 2023 primarily related to our 2021 acquisition of Farapulse, Inc. As of June 30, 2023, the maximum amount of future contingent consideration (undiscounted) that we could be required to pay associated with our completed acquisitions was approximately $364 million. Refer to Note B – Acquisitions and Strategic Investments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information. The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:
(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. Projected contingent payment amounts related to research and development (R&D), regulatory and commercialization-based milestones and revenue-based payments are discounted back to the current period, primarily using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of June 30, 2023. Strategic Investments The aggregate carrying amount of our strategic investments was comprised of the following:
(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying unaudited consolidated statements of operations. (2) Includes publicly-held securities and convertible notes measured at fair value with changes in fair value recognized in Other, net within our accompanying unaudited consolidated statements of operations. These investments are classified as Other long-term assets within our accompanying unaudited consolidated balance sheets, in accordance with GAAP and our accounting policies. As of June 30, 2023, the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $230 million, which represents amortizable intangible assets, in-process research and development (IPR&D), goodwill and deferred tax liabilities.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE C – GOODWILL AND OTHER INTANGIBLE ASSETS The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:
The increase in our balance of goodwill and amortizable intangible assets is related primarily to our majority stake investment in Acotec completed in the first quarter of 2023 and our acquisition of Apollo completed in the second quarter of 2023. The following represents a roll-forward of our goodwill balance by global reportable segment:
Goodwill and Intangible Asset Impairments We did not record any goodwill impairment charges in the first six months of 2023 or 2022. We test our goodwill balances in the second quarter of each year as of April 1 for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We identified the following reporting units for purposes of our annual goodwill impairment test: Interventional Cardiology, Rhythm Management, Peripheral Interventions, Endoscopy, Urology and Neuromodulation. Based on the criteria prescribed in FASB ASC Topic 350, we aggregated the Interventional Cardiology Therapies and Watchman components of our Cardiology operating segment into a single Interventional Cardiology reporting unit and aggregated the Cardiac Rhythm Management and Electrophysiology components of our Cardiology operating segment into a single Rhythm Management reporting unit. In the second quarter of 2023, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASC Topic 350, Intangibles - Goodwill and Other (FASB ASC Topic 350). The qualitative approach was used for testing reporting units where fair value has historically exceeded carrying value by greater than 100 percent, and all other reporting units were tested using the quantitative approach. For the reporting units tested using the qualitative approach, after assessing the totality of events, it was determined that it was not more likely than not that the fair value of the reporting units was less than their carrying value, and it was not deemed necessary to proceed to the quantitative test. For the reporting unit tested using the quantitative approach, we determined that the fair value of the reporting unit exceeded the carrying value and concluded that goodwill was not impaired or at risk of impairment. We recorded Intangible asset impairment charges of $57 million in the second quarter and first six months of 2023 and $7 million in the second quarter and first six months of 2022. The impairment charges recorded in 2023 were primarily associated with the cancellation of an IPR&D program due to the incremental time and cost to complete the program and bring the technology to market. We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets. In addition, we review our indefinite-lived intangible assets for classification and impairment more frequently if impairment indicators exist. Refer to Note A – Significant Accounting Policies to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for further discussion of our annual goodwill and intangible asset impairment testing.
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HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS | NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS Derivative Instruments and Hedging Activities We address market risk from changes in foreign currency exchange rates and interest rates through risk management programs which include the use of derivative and nonderivative financial instruments. We manage concentration of counterparty credit risk by limiting acceptable counterparties to major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to individual counterparties and actively monitoring counterparty credit ratings. We also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency. Currency Hedging Instruments Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities, forecasted intercompany and third-party transactions, and net investments in certain subsidiaries. We manage currency exchange rate risk at a consolidated level to reduce the cost of hedging by taking advantage of offsetting transactions. We employ derivative and nonderivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates. The success of our currency risk management program depends, in part, on forecast transactions denominated primarily in euro, British pound sterling, Swiss franc, Japanese yen, Chinese renminbi and Australian dollar. We may experience unanticipated currency exchange gains or losses to the extent the actual activity is different than forecast. In addition, changes in currency exchange rates related to any unhedged transactions may impact our earnings and cash flows. Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815, Derivatives and Hedging (FASB ASC Topic 815), and are intended to protect the U.S. dollar value of forecasted transactions. The gain or loss on a derivative instrument designated as a cash flow hedge is recorded in the Net change in derivative financial instruments component of Other comprehensive income (loss), net of tax (OCI) within our unaudited consolidated statements of comprehensive income (loss) until the underlying third-party transaction occurs. When the underlying third-party transaction occurs, we recognize the gain or loss in earnings within Cost of products sold in our unaudited consolidated statements of operations. In the event the hedging relationship is no longer effective, or if the occurrence of the hedged forecast transaction becomes no longer probable, we reclassify the gains or losses within Accumulated other comprehensive income (loss), net of tax (AOCI) to earnings at that time. The cash flows related to the derivative instruments designated as cash flow hedges are reported as operating activities in our consolidated statements of cash flows. We designate certain euro-denominated debt as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in the euro. As of June 30, 2023 and December 31, 2022, we designated as a net investment hedge our €900 million in aggregate principal amount of 0.625% euro-denominated senior notes issued in November 2019 and due in 2027 (2027 Notes). For these nonderivative instruments, we defer recognition of the foreign currency remeasurement gains and losses within the Foreign currency translation adjustment (CTA) component of Other comprehensive income (loss), net of tax. We reclassify these gains and losses to current period earnings within Other, net in our accompanying unaudited consolidated statements of operations only when the hedged item affects earnings, which would occur upon disposal or substantial liquidation of the underlying foreign subsidiary. We also use forward currency contracts that are not part of designated hedging relationships as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions. These non-designated currency forward contracts have an original time to maturity consistent with the hedged currency transaction exposures, generally less than one year, and are marked-to-market with changes in fair value recorded to earnings within Other, net within our accompanying unaudited consolidated statements of operations. Interest Rate Hedging Instruments Our interest rate risk relates primarily to U.S. dollar and euro-denominated borrowings partially offset by U.S. dollar cash investments. We use interest rate derivative instruments to mitigate the risk to our earnings and cash flows associated with exposure to changes in interest rates. Under these agreements, we and the counterparty, at specified intervals, exchange the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We designate these derivative instruments either as fair value or cash flow hedges in accordance with FASB ASC Topic 815. We had no interest rate derivative instruments designated as cash flow hedges outstanding as of June 30, 2023 or December 31, 2022. In the event that we designate outstanding interest rate derivative instruments as cash flow hedges, we record the changes in the fair value of the derivatives within OCI until the underlying hedged transaction occurs. The following table presents the contractual amounts of our hedging instruments outstanding:
(1) Foreign currency-denominated debt is the €900 million debt principal associated with our 2027 Notes designated as a net investment hedge. As of June 30, 2023, the remaining time to maturity is within 36 months for all forward currency contracts designated as cash flow hedges and generally less than one year for all non-designated forward currency contracts. The forward currency contracts designated as net investment hedges generally mature between one and three years. The euro-denominated debt principal designated as a net investment hedge has a contractual maturity of December 1, 2027. The following presents the effect of our derivative and nonderivative instruments designated as cash flow and net investment hedges under FASB ASC Topic 815 in our accompanying unaudited consolidated statements of operations. Refer to Note M – Changes in Other Comprehensive Income for the total amounts relating to derivative and nonderivative instruments presented within our accompanying unaudited consolidated statements of comprehensive income (loss).
(1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings. (2) For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current and prior period, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings. (3) For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the CTA component of OCI. No amounts were reclassified from AOCI to current period earnings. As of June 30, 2023, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below:
Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:
Fair Value Measurements FASB ASC Topic 815 requires all derivative and nonderivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative and nonderivative instruments using the framework prescribed by FASB ASC Topic 820, Fair Value Measurements and Disclosures (FASB ASC Topic 820) and considering the estimated amount we would receive or pay to transfer these instruments at the reporting date with respect to current currency exchange rates, interest rates, the creditworthiness of the counterparty for unrealized gain positions and our own creditworthiness for unrealized loss positions. In certain instances, we may utilize financial models to measure fair value of our derivative and nonderivative instruments. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other observable inputs for the asset or liability and inputs derived principally from, or corroborated by, observable market data by correlation or other means. The following are the balances of our derivative and nonderivative assets and liabilities:
(1) We classify derivative and nonderivative assets and liabilities as current when the settlement date of the contract is one year or less. (2) Foreign currency-denominated debt is the €900 million debt principal associated with our 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item. Recurring Fair Value Measurements On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices. Where quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. FASB ASC Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The category of a financial asset or a financial liability within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows: •Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities. •Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs. •Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. Assets and liabilities measured at fair value on a recurring basis consist of the following:
Our investments in money market funds and time deposits are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as Cash and cash equivalents within our accompanying unaudited consolidated balance sheets, in accordance with GAAP and our accounting policies. In addition to $17 million invested in money market funds and time deposits as of June 30, 2023 and $673 million as of December 31, 2022, we held $409 million in interest-bearing and non-interest-bearing bank accounts as of June 30, 2023 and $256 million as of December 31, 2022. Our recurring fair value measurements using Level 3 inputs include those related to our contingent consideration liability. Refer to Note B – Acquisitions, Divestitures and Strategic Investments for a discussion of the changes in the fair value of our contingent consideration liability. In addition, our recurring fair value measurements using Level 3 inputs related to our licensing arrangements, including the contractual right to receive future royalty payments related to the Zytiga™ Drug. We maintain a financial asset and associated liability for our licensing arrangements measured at fair value in our accompanying unaudited consolidated balance sheets in accordance with FASB ASC Topic 825, Financial Instruments. We elected the fair value option to measure the financial asset and associated liability as it provides for consistency and comparability of these financial instruments with others. Refer to Note D – Hedging Activities and Fair Value Measurements to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information. The recurring Level 3 fair value measurements of our licensing arrangements recognized in our accompanying unaudited consolidated balance sheets as of June 30, 2023 include the following significant unobservable inputs:
(1) Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. Changes in the fair value of our licensing arrangements' financial asset were as follows:
Changes in the fair value of our licensing arrangements' financial liability were as follows:
Non-Recurring Fair Value Measurements We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods after initial recognition. The fair value of a measurement alternative investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. Refer to Note B – Acquisitions, Divestitures and Strategic Investments for a discussion of our strategic investments and Note C – Goodwill and Other Intangible Assets for a discussion of the fair values of our intangible assets including goodwill. The fair value of our outstanding debt obligations was $8.441 billion as of June 30, 2023 and $8.203 billion as of December 31, 2022. We determined fair value by using quoted market prices for our publicly registered senior notes, classified as Level 1 within the fair value hierarchy, and face value for commercial paper, term loans and credit facility borrowings outstanding. Refer to Note E – Contractual Obligations and Commitments for a discussion of our debt obligations.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONTRACTUAL OBLIGATIONS AND COMMITMENTS | NOTE E – CONTRACTUAL OBLIGATIONS AND COMMITMENTS Borrowings and Credit Arrangements We had total debt outstanding of $9.053 billion as of June 30, 2023 and $8.935 billion as of December 31, 2022, with current obligations of $559 million as of June 30, 2023 and $20 million as of December 31, 2022. The debt maturity schedule for our long-term debt obligations is presented below:
Note: The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges. (1) Coupon rates are semi-annual, except for the euro-denominated senior notes, which bear an annual coupon. (2) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. Effective May 2023, the interest rate payable decreased by 0.25 percent and began accruing at a rate of 6.50 percent following recent upgrades to our credit ratings. (3) These notes are euro-denominated and presented in U.S. dollars based on the exchange rate in effect as of June 30, 2023 and December 31, 2022, respectively. Revolving Credit Facility On May 10, 2021, we entered into our $2.750 billion revolving credit facility (2021 Revolving Credit Facility) with a global syndicate of commercial banks scheduled to mature on May 10, 2026, with one-year extension options, subject to certain conditions. On March 1, 2023, we entered into an amendment of the 2021 Revolving Credit Facility credit agreement, which provided for an extension of the scheduled maturity date to May 10, 2027 and replaced the London Interbank Offered Rate (LIBOR) with the Secured Overnight Financing Rate (SOFR) as the Eurocurrency Rate for Dollars, including applicable credit spread adjustments and relevant SOFR benchmark provisions, among other things described under Financial Covenant below. This facility provides backing for our commercial paper program, and outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. There were no amounts outstanding under the 2021 Revolving Credit Facility as of June 30, 2023 or December 31, 2022. Financial Covenant As of June 30, 2023, we were in compliance with the financial covenant required by the 2021 Revolving Credit Facility, as amended.
(1)Ratio of total debt to consolidated EBITDA, as defined by the credit agreements, as amended. The 2021 Revolving Credit Facility includes the financial covenant requirement for all of our credit arrangements that we maintain the maximum permitted leverage ratio of 3.75 times through the remaining term. The agreement provides for higher leverage ratios, at our election, for the period following a qualified acquisition for which consideration exceeds $1.000 billion. In the event of such an acquisition, for the four succeeding quarters immediately following, including the quarter in which the acquisition occurs, the maximum permitted leverage ratio is 4.75 times. The maximum permitted ratio steps down for the fifth, sixth and seventh succeeding quarters to 4.50 times, 4.25 times and 4.00 times, respectively. Thereafter, a maximum leverage ratio of 3.75 times is required through the remaining term of the 2021 Revolving Credit Facility. We have not elected to increase the maximum permitted leverage ratio for any qualified acquisitions due to our funding of these acquisitions using cash on hand or commercial paper. The financial covenant requirement, as amended on March 1, 2023, provides for an exclusion from the calculation of consolidated EBITDA, as defined by the credit agreement, through maturity, of certain charges and expenses. The credit agreement amendment reset the starting date for purposes of calculating such permitted exclusions in each case from March 31, 2021 to December 31, 2022. Permitted exclusions include any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses associated with our current or future restructuring plans. As of June 30, 2023, we had $416 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreement, are excluded from the calculation of consolidated EBITDA, as defined by the agreement, provided that the sum of any excluded net cash litigation payments do not exceed $1.000 billion plus all accrued legal liabilities as of December 31, 2022, for a total of $1.443 billion. As of June 30, 2023, we had $1.413 billion of the litigation exclusion remaining. Any inability to maintain compliance with this covenant could require us to seek to renegotiate the terms of our credit arrangements or seek waivers from compliance with this covenant, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers on terms acceptable to us. In this case, all 2021 Revolving Credit Facility commitments would terminate, and any amounts borrowed under the facility would become immediately due and payable. Furthermore, any termination of our 2021 Revolving Credit Facility may negatively impact the credit ratings assigned to our commercial paper program, which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable. Commercial Paper Our commercial paper program is backed by the 2021 Revolving Credit Facility. We had $41 million of commercial paper outstanding as of June 30, 2023 and none as of December 31, 2022.
Senior Notes We had senior notes outstanding of $9.063 billion as of June 30, 2023 and $8.986 billion as of December 31, 2022. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (refer to Other Arrangements below). In March 2022, American Medical Systems Europe B.V. (AMS Europe), an indirect, wholly owned subsidiary of Boston Scientific, completed a registered public offering (the Offering) of €3.000 billion in aggregate principal amount of euro-dominated senior notes comprised of €1.000 billion of 0.750% Senior Notes due 2025, €750 million of 1.375% Senior Notes due 2028, €750 million of 1.625% Senior Notes due 2031 and €500 million of 1.875% Senior Notes due 2034 (collectively, the Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the Eurobonds, and no other subsidiary of Boston Scientific will guarantee these obligations. AMS Europe is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X. The financial condition, results of operations and cash flows of AMS Europe are consolidated in the financial statements of Boston Scientific. The Offering resulted in cash proceeds of $3.270 billion, net of investor discounts and issuance costs. We used the net proceeds from the Offering to fund the tender offer and early redemption of combined aggregate principal amount of $3.275 billion of certain of our outstanding senior notes, as well as to pay accrued interest, tender premiums, fees and expenses. We recorded associated debt extinguishment charges of $194 million during the first quarter of 2022 presented in Interest expense within our accompanying unaudited consolidated statements of operations. Other Arrangements We have accounts receivable factoring programs in certain European countries and with commercial banks in China and Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860, Transfers and Servicing. We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net within our accompanying unaudited consolidated balance sheets, are aggregated by contract denominated currency below (in millions):
Other Contractual Obligations and Commitments We had outstanding letters of credit of $148 million as of June 30, 2023 and $135 million as of December 31, 2022, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of June 30, 2023 and December 31, 2022 we had not recognized a related liability for any outstanding letters of credit within our accompanying unaudited consolidated balance sheets. We have a supplier financing program offered primarily in the U.S. where our suppliers can opt to receive early payment at a nominal discount, while allowing us to lengthen our payment terms and optimize working capital. Our standard payment term in the U.S. is 90 days. All outstanding payables related to the supplier finance program are classified within Accounts Payable within our unaudited consolidated balance sheets and were $124 million as of June 30, 2023 and $129 million as of December 31, 2022. Refer to Note E – Contractual Obligations and Commitments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information on our borrowings and credit agreements.
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Supplemental Balance Sheet Information |
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Supplemental Balance Sheet Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL BALANCE SHEET INFORMATION | NOTE F – SUPPLEMENTAL BALANCE SHEET INFORMATION Components of selected captions within our accompanying unaudited consolidated balance sheets are as follows: Trade accounts receivable, net
The following is a roll forward of our Allowance for credit losses:
In accordance with FASB ASC Topic 326, Financial Instruments - Credit Losses (FASB ASC Topic 326), we record credit loss reserves to Allowance for credit losses when we establish Trade accounts receivable if credit losses are expected over the asset's contractual life. We base our estimates of credit loss reserves on historical experience and adjust, as necessary, to reflect current conditions using reasonable and supportable forecasts not already reflected in the historical loss information. We utilize an accounts receivable aging approach, applying country or region-specific factors, to determine the reserve to record at accounts receivable commencement for certain customers. In performing the assessment of outstanding accounts receivable, regardless of country or region, we may consider significant factors relevant to collectability, including those specific to a customer such as bankruptcy, lengthy average payment cycles and type of account. We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic and geopolitical conditions. Our sales to government-owned or supported customers, particularly in southern Europe, are subject to an increased number of days outstanding prior to payment relative to other entities, and, in southern Europe, relative to those in other countries. In addition, we have seen an increase in the volume of our U.S. business conducted in ambulatory surgery centers and office-based laboratories. Many of these customers are smaller than those we have historically done business with and may have more limited liquidity. We have adjusted our estimates of credit loss reserves for these customers, regions and conditions based on collection trends. Inventories
Other current assets
Property, plant and equipment, net
Depreciation expense was $88 million for the second quarter of 2023, $80 million for the second quarter of 2022, $170 million for the first six months of 2023 and $156 million for the first six months of 2022. Other long-term assets
Accrued expenses
Other current liabilities
Other long-term liabilities
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE G – INCOME TAXES Our effective tax rate from continuing operations is presented below:
The changes in our reported tax rates for the second quarter and first six months of 2023, compared to the same periods in 2022, relate primarily to the impact of certain receipts and charges that are taxed at different rates than our effective tax rate. These include acquisition-related charges, debt extinguishment charges, as well as certain discrete tax items primarily related to unrecognized tax benefits and provision-to-return adjustments recorded in the second quarter of 2023. As of June 30, 2023, we had $471 million of gross unrecognized tax benefits, of which a net $406 million, if recognized, would affect our effective tax rate. As of December 31, 2022, we had $492 million of gross unrecognized tax benefits, of which a net $410 million, if recognized, would affect our effective tax rate. The change in our gross unrecognized tax benefit is primarily related to remeasurement of historic positions after tax law changes and audit activities. It is reasonably possible that within the next 12 months, we will resolve multiple issues with foreign, federal and state taxing authorities, resulting in a reduction in our balance of unrecognized tax benefits of up to $61 million.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE H – COMMITMENTS AND CONTINGENCIES The medical device market in which we participate is largely technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Over the years, there has been litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These dynamics frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies. During recent years, we successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters; however, there continues to be outstanding litigation. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity. In addition, product liability, securities and commercial claims have been asserted against us and similar claims may be asserted against us in the future related to events not known to management at the present time. We maintain an insurance policy providing limited coverage against securities claims and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities and commercial litigation and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity. In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local government agencies in the U.S. and other countries in which we operate. From time to time we are the subject of qui tam actions and governmental investigations often involving regulatory, marketing and other business practices. These qui tam actions and governmental investigations could result in the commencement of civil and criminal proceedings, substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity. For additional information, refer to Note I – Commitments and Contingencies to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K. In accordance with FASB ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We record certain legal and product liability charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related net charges (credits) within our accompanying unaudited consolidated financial statements. All other legal and product liability charges, credits and costs are recorded within Selling, general and administrative expenses within our accompanying unaudited consolidated statements of operations. Our accrual for legal matters that are probable and estimable was $419 million as of June 30, 2023 and $443 million as of December 31, 2022 and includes certain estimated costs of settlement, damages and defense primarily related to product liability cases or claims related to our transvaginal surgical mesh products. A portion of this accrual is already funded through our qualified settlement fund, which is included in restricted cash and restricted cash equivalents in Other current assets of $135 million as of June 30, 2023 and $149 million as of December 31, 2022. Refer to Note F – Supplemental Balance Sheet Information for additional information. We did not record litigation-related net charges during the second quarter or first six months of 2023, and recorded $42 million during the second quarter and first six months of 2022. We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our financial covenant. In management's opinion, we are not currently involved in any legal proceedings other than those disclosed in our most recent Annual Report on Form 10-K and those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated. Patent Litigation On October 28, 2015, the Company filed suit against Cook Group Limited and Cook Medical LLC (collectively, Cook) in the United States District Court for the District of Delaware (1:15-cv-00980) alleging infringement of certain Company patents regarding Cook’s Instinct™ Endoscopic Hemoclip. The Company seeks lost profits, a reasonable royalty and a permanent injunction. The case was transferred to the District Court for the Southern District of Indiana. Cook filed Inter Partes Review (IPR) requests with the U.S. Patent and Trademark Office (USPTO) against four then-asserted patents, which resulted in the court staying the case until 2020. All IPRs concluded and confirmed the validity of certain claims of each challenged patent. In February 2023, the District Court issued summary judgment rulings dismissing certain claims and defenses. Trial on the remaining two asserted patents took place in May and June 2023 and the jury found that the Company’s patents are both valid and infringed and awarded the Company $158 million as lost profits. On July 26, 2023, the parties notified the District Court that they had reached a settlement in principle to resolve all claims and end the related suit. On November 20, 2017, The Board of Regents, University of Texas System and TissueGen. Inc. (collectively, UT), served a lawsuit against us in the Western District of Texas. The complaint against the Company alleges patent infringement of two U.S. patents owned by UT, relating to “Drug Releasing Biodegradable Fiber Implant” and “Drug Releasing Biodegradable Fiber for Delivery of Therapeutics,” and affects the manufacture, use and sale of our Synergy™ Stent System. UT primarily seeks a reasonable royalty. On March 12, 2018, the District Court for the Western District of Texas dismissed the action and transferred it to the United States District Court for the District of Delaware. On September 5, 2019, the Court of Appeals for the Federal Circuit affirmed the dismissal of the District Court for the Western District of Texas. In April 2020, the United States Supreme Court denied the UT’s Petition for Certiorari. UT proceeded with its case against us in Delaware. In January 2023, a jury trial was held on the issue of whether the one UT patent still asserted in the case was valid and whether it was infringed by the Company. On January 31, 2023, a jury concluded that UT’s patent was valid and willfully infringed by the Company, and awarded UT $42 million in damages. Following the trial, UT has filed a motion seeking prejudgment interest and enhanced damages. The Company has filed a motion seeking judgment as a matter of law in its favor or alternatively a new trial. Product Liability Litigation Multiple product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse have been asserted against us, predominantly in the United States, Canada, the United Kingdom, Scotland, Ireland, and Australia. Plaintiffs generally seek monetary damages based on allegations of personal injury associated with the use of our transvaginal surgical mesh products, including design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. We have entered into individual and master settlement agreements in principle or are in the final stages of entering agreements with certain plaintiffs' counsel, to resolve the majority of these cases and claims. All settlement agreements were entered into solely by way of compromise and without any admission or concession by us of any liability or wrongdoing. In addition, in April 2021 the Company's Board of Directors received a shareholder demand under section 220 of the Delaware General Corporation Law, for inspection of books and records related to mesh settlements. The Company has notified our insurer and retained counsel to respond to the demand. We have established a product liability accrual for remaining claims asserted against us associated with our transvaginal surgical mesh products and the costs of defense thereof. We continue to engage in discussions with plaintiffs’ counsel regarding potential resolution of pending cases and claims. We continue to vigorously contest these cases and claims. The final resolution of the cases and claims is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products. Governmental Investigations and Qui Tam Matters On December 1, 2015, the Brazilian governmental entity known as CADE (the Administrative Council of Economic Defense), served a search warrant on the offices of our Brazilian subsidiary, as well as on the Brazilian offices of several other major medical device makers who do business in Brazil, in furtherance of an investigation into alleged anti-competitive activity with respect to certain tender offers for government contracts. On June 20, 2017, CADE, through the publication of a “technical note,” announced that it was launching a formal administrative proceeding against Boston Scientific’s Brazilian subsidiary, Boston Scientific do Brasil Ltda. (BSB), as well as against the Brazilian operations of Medtronic, Biotronik and St. Jude Medical, two Brazilian associations, ABIMED and AMBIMO and 29 individuals for alleged anti-competitive behavior. Under applicable guidance, BSB could be fined a percentage of BSB’s 2016 gross revenues. In August 2021, the investigating commissioner issued a preliminary recommendation of liability against all of the involved companies, and also recommended that CADE impose fines and penalties. However, on October 25, 2021, the CADE Attorney General's office recommended dismissal of the charges and allegations against BSB and the individual BSB employees who were still individual defendants. Subsequently, on March 30, 2022, the Federal Prosecutor’s office issued a non-binding recommendation that is contrary to the Attorney General’s recommendation. The full Commission is considering both of these recommendations but has not yet issued its decision. We continue to deny the allegations, intend to defend ourselves vigorously and will appeal any decision of liability by the full Commission to the Brazilian courts. During such an appeal, the decision would have no force and effect, and the Court would consider the case without being bound by CADE’s decision. In March 2022, the Company received a whistleblower letter alleging Foreign Corrupt Practices Act violations in Vietnam. The Company has received related subpoenas for documents from the Office of the U.S. Attorney for the District of Massachusetts and the Securities and Exchange Commission. The Company is cooperating with government agencies while investigating these allegations. On April 5, 2023, the Company received a subpoena from the U.S. Department of Justice (DOJ) that seeks documents and information relating to its ambulatory electrocardiography monitoring (AECG) business. The Company is cooperating with the DOJ in responding to this subpoena. Other Proceedings On December 4, 2020, Enrique Jevons, individually and on behalf of all others similarly situated, filed a class action complaint against the Company, Michael F. Mahoney and Daniel J. Brennan, stemming from the recall and retirement of the LOTUS Edge™ Aortic Valve System (LOTUS System) in United States District Court for the Eastern District of New York. On December 14, 2020, the parties agreed to transfer the case to the United States District Court for the District of Massachusetts. On December 16, 2020, Mariano Errichiello, individually and on behalf of all others similarly situated, filed a second, materially similar class action complaint against the Company, Michael F. Mahoney, Joseph M. Fitzgerald, and Daniel J. Brennan in the United States District Court for the District of Massachusetts. Subsequently, on March 30, 2021, the Court consolidated the two actions, and appointed Mariano Errichiello as the lead plaintiff. The plaintiffs filed an Amended Complaint in June 2021 that seeks unspecified compensatory damages in favor of the alleged class as well as unspecified equitable relief. The Company filed a Motion to Dismiss in July 2021, which, in December 2022, the Court granted in part and denied in part. The Company intends to vigorously defend itself against the surviving allegations. On December 15, 2020, the Securities and Exchange Commission’s Boston Regional Office (Boston SEC) notified the Company that it was conducting an investigation related to the Company’s decision to retire the LOTUS System and issued a voluntary request for documents and information related to that decision. On February 10, 2021, the Boston SEC issued a second voluntary request for additional documents and information. The Company cooperated fully with the requests, and on January 3, 2022, the SEC informed us that it was concluding its investigation and that it did not intend to recommend an enforcement action. On February 8, 2021, the Company received a letter from The Vladimir Gusinsky Revocable Trust, a shareholder, demanding that the Company’s Board of Directors conduct an investigation into actions by the Company’s directors and executive officers regarding statements made about the effectiveness and commercial viability of the LOTUS System. The Trust subsequently agreed to stay its demand, pending the outcome of any dispositive motion against the Amended Complaint in the class action complaint described above. The Company received letters on behalf of the Union Excavators Local 731 Pension Fund, Diane Nachbaur, and Frank Tripson, three stockholders of the Company, on July 26, 2021, July 29, 2021, and February 13, 2023, respectively, each demanding access to certain books and records of the Company, pursuant to Section 220 of the Delaware General Corporation Law, regarding the business, operations, effectiveness and commercial viability of the LOTUS system, and related items. On April 7, 2023, Diane Nachbaur filed a shareholder derivative complaint in the United States District Court for the District of Massachusetts against the Company, Michael F. Mahoney, Nelda J. Connors, Charles J. Dockendorff, Yoshiaki Fujimori, Donna A. James, Edward J. Ludwig, David Roux, John E. Sununu, Ellen M. Zane, Joseph M. Fitzgerald, Daniel J. Brennan, Shawn McCarthy, Ian Meredith, Kevin Ballinger, and Susan Vissers Lisa. On May 8, 2023, the Court stayed the case until the conclusion of the consolidated class action case.
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Stockholders' Equity |
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Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE I – STOCKHOLDERS' EQUITY Preferred Stock We are authorized to issue 50 million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders. On May 27, 2020, we completed an offering of 10,062,500 shares of 5.50% Mandatory Convertible Preferred Stock, Series A (MCPS) at a price to the public and liquidation preference of $100 per share. The net proceeds from the MCPS offering were approximately $975 million after deducting underwriting discounts and commissions and offering expenses. During the second quarter of 2023, the Audit Committee of our Board of Directors, pursuant to authority delegated to such committee by our Board of Directors, declared, and we paid, a final cash dividend of $1.375 per MCPS share to holders of our MCPS as of May 15, 2023, representing a dividend period from March 2023 through May 2023. On June 1, 2023, (the Mandatory Conversion Date), all outstanding shares of MCPS automatically converted into shares of common stock. The conversion rate for each share of MCPS was 2.3834 shares of common stock. No action by the holders of the MCPS was required in connection with the mandatory conversion. Cash was paid in lieu of fractional shares in accordance with the terms of the MCPS. An aggregate of approximately 24 million shares of common stock, including shares of common stock issued to holders of MCPS that elected to convert prior to the Mandatory Conversion Date, were issued upon conversion of the MCPS. Following the mandatory conversion of the MCPS, there were no outstanding shares of MCPS. Refer to Note J – Stockholders' Equity to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for information on the pertinent rights and privileges of our outstanding common stock.
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Weighted Average Shares Outstanding |
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Weighted Average Number Of Shares Outstanding [Text Block] | NOTE J – WEIGHTED AVERAGE SHARES OUTSTANDING
The following securities were excluded from the calculation of diluted weighted average shares outstanding because their effect in the periods presented below would have been anti-dilutive:
(1) Represents stock options outstanding pursuant to our employee stock-based compensation plans with exercise prices that were greater than the average fair market value of our common stock for the related periods. (2) Represents common stock issuable upon the conversion of MCPS. Refer to Note I – Stockholders' Equity for additional information. We base Net income (loss) per common share - diluted upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options, stock awards and, prior to the Mandatory Conversion Date, our MCPS, from the calculation if the effect would be anti-dilutive. The dilutive effect of MCPS is calculated using the if-converted method. The if-converted method assumes that these securities were converted to shares of common stock at the beginning of the reporting period to the extent that the effect is dilutive. For the first six months of 2023 and 2022, the effect of assuming the conversion of MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of earnings per share (EPS). Accordingly, Net income was reduced by cumulative Preferred stock dividends, as presented within our accompanying unaudited consolidated statements of operations, for purposes of calculating Net income attributable to Boston Scientific common stockholders. On June 1, 2023, all outstanding shares of MCPS automatically converted into shares of common stock. We issued approximately 25 million shares of our common stock in the second quarter of 2023, approximately 29 million shares in the first six months of 2023, less than one million shares in the second quarter of 2022, and approximately four million shares in the first six months of 2022. Shares were issued following the automatic conversion of the MCPS, the exercise of stock options, vesting of restricted stock units or purchases under our employee stock purchase plan. We did not repurchase any shares of our common stock in the first six months of 2023 or 2022. On December 14, 2020, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.000 billion of our common stock. As of June 30, 2023, we had the full amount remaining available under the authorization.
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Segment Reporting |
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Segment Reporting Disclosure [Text Block] | NOTE K – SEGMENT REPORTING We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments. We measure and evaluate our reportable segments based on their respective net sales, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from operating income of reportable segments certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker (CODM) considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits); and certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from operating income of reportable segments, they are included in reported Income (loss) before income taxes within our accompanying unaudited consolidated statements of operations and are included in the reconciliation below. Refer to Note L – Revenue for net sales by reportable segment presented in accordance with GAAP. A reconciliation of the totals reported for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows (in millions, except percentages). Prior period amounts have been restated at constant currency to conform to current year presentation.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | NOTE L – REVENUE We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes within our accompanying unaudited consolidated statements of operations. Our business structure is organized into five operating segments. The following tables disaggregate our revenue from contracts with customers by component and geographic region (in millions). We allocate revenue from contracts with customers to geographic regions based on the location where the sale originated.
Refer to Note K- Segment Reporting for information on our reportable segments.
(1)Periodically, we assess our list of Emerging Markets countries, and effective January 1, 2023, modified our list to include all countries except the United States, Western and Central Europe, Japan, Australia, New Zealand and Canada. We have revised prior year amounts to conform to the current year's presentation. Deferred Revenue Contract liabilities are classified within Other current liabilities and Other long-term liabilities within our accompanying unaudited consolidated balance sheets. Our deferred revenue balance was $537 million as of June 30, 2023 and $509 million as of December 31, 2022. Our contractual liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiology business, for which revenue is recognized over the average service period based on device and patient longevity. Our contractual liabilities also include deferred revenue related to the LUX-Dx™ Insertable Cardiac Monitor system, also within our Cardiology business, for which revenue is recognized over the average service period based on device longevity and usage. We recognized revenue of $35 million in the second quarter that was included in the above contract liability balance as of December 31, 2022. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred. Variable Consideration For additional information on variable consideration, refer to Note A – Significant Accounting Policies to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K.
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Changes in Other Comprehensive Income |
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Other Comprehensive Income (Loss), Net of Tax, Period Change [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | NOTE M – CHANGES IN OTHER COMPREHENSIVE INCOME The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax:
Refer to Note D – Hedging Activities and Fair Value Measurements for further detail on our net investment hedges recorded in Foreign currency translation adjustments and our cash flow hedges recorded in Net change in derivative financial instruments.
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New Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements, Policy | NOTE N – NEW ACCOUNTING PRONOUNCEMENTS Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our accompanying unaudited consolidated financial statements. During the first six months of 2023, we implemented the following standards on a prospective basis, none of which had a material impact on our financial position or results of operations. ASC Update No. 2022-01 ASC Update No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. Update No. 2022-01 expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method, among other updates to these methods. ASC Update No. 2022-02 ASC Update No. 2022-02, Financial Instruments- Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures makes amendments related to troubled debt restructurings for entities that have adopted Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as amendments related to vintage disclosures for entities with investments in financing receivables that have adopted Update No. 2016-13. ASC Update No. 2022-04 ASC Update No. 2022-04, Liabilities— Supplier Finance Programs (Subtopic 405-50) enhances the transparency of supplier finance programs by requiring that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. Standards to be Implemented In June 2022, the FASB issued ASC Update No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. Update No. 2022-03 clarifies the guidance in Topic 820 related to measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, as well as introduces new disclosure requirements for these types of equity securities. Update No. 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We do not expect the adoption to have a material impact on our financial position or results of operations. No other new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our accompanying unaudited consolidated financial statements.
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Insider Trading Arrangements - shares |
3 Months Ended | 6 Months Ended | |
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Apr. 06, 2023 |
Jun. 30, 2023 |
Jun. 30, 2023 |
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Trading Arrangements, by Individual | |||
Non-Rule 10b5-1 Arrangement Adopted | false | ||
Non-Rule 10b5-1 Arrangement Terminated | false | ||
Jeffrey B. Mirviss [Member] | |||
Trading Arrangements, by Individual | |||
Material Terms of Trading Arrangement | On April 6, 2023, Jeffrey B. Mirviss, our Senior Vice President and President, Peripheral Interventions, terminated a trading plan that was originally entered into on February 23, 2023 and intended to satisfy the affirmative defense conditions of the prior version of Rule 10b5-1(c). The plan covered the sale of up to 76,992 shares of our common stock, including up to 27,208 shares to be acquired upon vesting of performance share units and restricted share units and 30,172 shares to be acquired upon exercise of stock options, between March 27, 2023 and February 23, 2024. Transactions under the plan were based upon pre-established dates and stock price thresholds. | On May 25, 2023, Jeffrey B. Mirviss, our Senior Vice President and President, Peripheral Interventions, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Mr. Mirviss’ plan covers the sale of up 105,490 shares of our common stock, including up to 56,690 shares to be acquired upon determination and/or vesting of performance share units and restricted share units and 30,172 shares to be acquired upon exercise of stock options, between August 24, 2023 and March 29, 2024. Transactions under the plan are based upon pre-established dates and stock price thresholds. | |
Name | Jeffrey B. Mirviss | Jeffrey B. Mirviss | |
Title | Senior Vice President and President, Peripheral Interventions | Senior Vice President and President, Peripheral Interventions | |
Rule 10b5-1 Arrangement Adopted | true | ||
Adoption Date | April 6, 2023 | May 25, 2023 | |
Rule 10b5-1 Arrangement Terminated | true | ||
Arrangement Duration | 333 days | 218 days | |
Aggregate Available | 76,992 | 105,490 | 105,490 |
Charles Dockendorff [Member] | |||
Trading Arrangements, by Individual | |||
Material Terms of Trading Arrangement | On May 19, 2023, Charles Dockendorff, an independent member of our Board of Directors, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Mr. Dockendorff’s plan covers the sale of 21,025 shares of our common stock between August 18, 2023 and May 31, 2024. Transactions under the plan are based upon pre-established dates and stock price thresholds. | ||
Name | Charles Dockendorff | ||
Title | independent member of our Board of Directors | ||
Adoption Date | May 19, 2023 | ||
Arrangement Duration | 287 days | ||
Aggregate Available | 21,025 | 21,025 | |
Vance R. Brown [Member] | |||
Trading Arrangements, by Individual | |||
Material Terms of Trading Arrangement | On May 26, 2023, Vance R. Brown, our Senior Vice President, General Counsel and Corporate Secretary, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Mr. Brown’s plan covers the sale of 15,750 shares of our common stock between August 25, 2023 and December 29, 2023. Transactions under the plan are based upon pre-established dates and stock price thresholds. | ||
Name | Vance R. Brown | ||
Title | Senior Vice President, General Counsel and Corporate Secretary | ||
Rule 10b5-1 Arrangement Adopted | true | ||
Adoption Date | May 26, 2023 | ||
Arrangement Duration | 126 days | ||
Aggregate Available | 15,750 | 15,750 |
Basis of Presentation Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events We evaluate events occurring after the date of our accompanying unaudited consolidated balance sheet for potential recognition or disclosure in our financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly. Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note H – Commitments and Contingencies for further details.
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Fair Value Measurements Hedging Activities and Fair Value Measurements (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement, Policy [Policy Text Block] | FASB ASC Topic 815 requires all derivative and nonderivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative and nonderivative instruments using the framework prescribed by FASB ASC Topic 820, Fair Value Measurements and Disclosures |
Commitments and Contingencies Commitments and Contingencies (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Costs, Policy [Policy Text Block] | In accordance with FASB ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We record certain legal and product liability charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related net charges (credits) within our accompanying unaudited consolidated financial statements. All other legal and product liability charges, credits and costs are recorded within Selling, general and administrative expenses within our accompanying unaudited consolidated statements of operations. |
New Accounting Pronouncements (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
ASC Update No. 2022-01, Derivatives and Hedging (Topic 815): FV Hedging -Portfolio Layer Method | ASC Update No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method. Update No. 2022-01 expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method, among other updates to these methods. |
ASC Update No. 2022-02, Financial Instruments, Credit Losses (Topic 326:Troubled Debt Restructurings and Vintage Disclosures) | ASC Update No. 2022-02, Financial Instruments- Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures makes amendments related to troubled debt restructurings for entities that have adopted Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as amendments related to vintage disclosures for entities with investments in financing receivables that have adopted Update No. 2016-13. |
ASC Update No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50) | ASC Update No. 2022-04, Liabilities— Supplier Finance Programs (Subtopic 405-50) enhances the transparency of supplier finance programs by requiring that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. |
ASC Update No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. | In June 2022, the FASB issued ASC Update No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. Update No. 2022-03 clarifies the guidance in Topic 820 related to measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, as well as introduces new disclosure requirements for these types of equity securities. Update No. 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We do not expect the adoption to have a material impact on our financial position or results of operations. |
Acquisitions, Divestitures and Strategic Investments (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Changes in the fair value of our contingent consideration liability during the first six months of 2023 associated with prior period acquisitions were as follows:
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Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:
(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.
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Investment [Table Text Block] | The aggregate carrying amount of our strategic investments was comprised of the following:
(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying unaudited consolidated statements of operations. (2) Includes publicly-held securities and convertible notes measured at fair value with changes in fair value recognized in Other, net within our accompanying unaudited consolidated statements of operations.
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Acotec | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
(1) Excludes approximately $140 million of cash on hand at the closing of the transaction (2) Represents majority stake investment in Acotec
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The preliminary purchase price allocations were comprised of the following components and the final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | We allocated a portion of the purchase price to the specific intangible asset categories as follows:
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The final purchase price allocation was comprised of the following components:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | We allocated a portion of the purchase price to the specific intangible asset categories as follows:
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Goodwill and Other Intangible Assets Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:
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Schedule of Goodwill [Table Text Block] | The following represents a roll-forward of our goodwill balance by global reportable segment:
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Hedging Activities and Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table presents the contractual amounts of our hedging instruments outstanding:
(1) Foreign currency-denominated debt is the €900 million debt principal associated with our 2027 Notes designated as a net investment hedge.
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Derivative Instruments, Gain (Loss) [Table Text Block] |
(1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings. (2) For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current and prior period, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings. (3) For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the CTA component of OCI. No amounts were reclassified from AOCI to current period earnings.
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Derivative Instruments, Gain (Loss) that may be Reclassified from AOCI to Earnings within Twelve Months [Table Text Block] | As of June 30, 2023, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below:
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Derivatives Not Designated as Hedging Instruments [Table Text Block] | Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following are the balances of our derivative and nonderivative assets and liabilities:
(1) We classify derivative and nonderivative assets and liabilities as current when the settlement date of the contract is one year or less. (2) Foreign currency-denominated debt is the €900 million debt principal associated with our 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item.
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Assets and liabilities measured at fair value on a recurring basis consist of the following:
(1) Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average. Changes in the fair value of our licensing arrangements' financial asset were as follows:
Changes in the fair value of our licensing arrangements' financial liability were as follows:
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Contractual Obligations and Commitments (Tables) |
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Short-term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | The debt maturity schedule for our long-term debt obligations is presented below:
Note: The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges. (1) Coupon rates are semi-annual, except for the euro-denominated senior notes, which bear an annual coupon. (2) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. Effective May 2023, the interest rate payable decreased by 0.25 percent and began accruing at a rate of 6.50 percent following recent upgrades to our credit ratings. (3) These notes are euro-denominated and presented in U.S. dollars based on the exchange rate in effect as of June 30, 2023 and December 31, 2022, respectively.
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Summary Of Term Loan And Revolving Credit Facility Agreement Compliance With Debt Covenants [Table Text Block] | As of June 30, 2023, we were in compliance with the financial covenant required by the 2021 Revolving Credit Facility, as amended.
(1)Ratio of total debt to consolidated EBITDA, as defined by the credit agreements, as amended.
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Transfer of Financial Assets Accounted for as Sales [Table Text Block] |
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Schedule of Short-term Debt [Table Text Block] | We had $41 million of commercial paper outstanding as of June 30, 2023 and none as of December 31, 2022.
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Supplemental Balance Sheet Information (Tables) |
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Trade accounts receivable, net [Table Text Block] |
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Inventory Disclosure [Table Text Block] |
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Schedule of Other Current Assets [Table Text Block] |
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Property, plant and equipment, net [Table Text Block] |
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Schedule of Other Assets [Table Text Block] |
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Schedule of Accrued Liabilities [Table Text Block] |
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Other Current Liabilities [Table Text Block] |
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Other long-term liabilities [Table Text Block] |
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Income Taxes (Tables) |
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Schedule of Income Tax Rate Reconciliation [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate from Continuing Operations [Table Text Block] |
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Weighted Average Shares Outstanding (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares [Table Text Block] |
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities were excluded from the calculation of diluted weighted average shares outstanding because their effect in the periods presented below would have been anti-dilutive:
(1) Represents stock options outstanding pursuant to our employee stock-based compensation plans with exercise prices that were greater than the average fair market value of our common stock for the related periods. (2) Represents common stock issuable upon the conversion of MCPS. Refer to Note I – Stockholders' Equity for additional information.
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Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | A reconciliation of the totals reported for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows (in millions, except percentages). Prior period amounts have been restated at constant currency to conform to current year presentation.
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Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following tables disaggregate our revenue from contracts with customers by component and geographic region (in millions). We allocate revenue from contracts with customers to geographic regions based on the location where the sale originated.
Refer to Note K- Segment Reporting for information on our reportable segments.
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Changes in Other Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Comprehensive Income (Loss), Net of Tax, Period Change [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Other Comprehensive Income [Table Text Block] | The following tables provide the reclassifications out of Other comprehensive income (loss), net of tax:
|
Basis of Presentation (Details) |
6 Months Ended |
---|---|
Jun. 30, 2023
reportablesegments
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Strategic Investments (Details) - USD ($) $ in Millions |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Schedule of Investments [Line Items] | ||
Equity method investments | $ 206 | $ 188 |
Measurement alternative investments(1, 2) | 215 | 219 |
Investments | 422 | $ 407 |
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity | $ 230 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||
Effective tax rate from continuing operations | 36.60% | 24.70% | 32.90% | 26.10% | |
Unrecognized Tax Benefits | $ 471 | $ 471 | $ 492 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 406 | 406 | $ 410 | ||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 61 | $ 61 |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 31, 2023
USD ($)
|
Jun. 30, 2023
USD ($)
units
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2023
USD ($)
units
|
Jun. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Loss Contingencies [Line Items] | ||||||
Accrual for legal matters that are probable and estimable | $ 419 | $ 419 | $ 443 | |||
Restricted Cash and Cash Equivalents in Other current assets | $ 135 | $ 132 | $ 135 | $ 132 | $ 149 | |
Brazil CADE - # of individuals for alleged anti-competitive behavior | units | 29 | 29 | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 42 | |||||
Litigation Settlement, Amount Awarded from Other Party | $ 158 | |||||
Litigation-related net charges (credits) | $ 0 | $ 42 | $ 0 | $ 42 |
Stockholders' Equity (Details) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
May 27, 2020
USD ($)
$ / shares
shares
|
Jun. 30, 2023
$ / shares
shares
|
Dec. 31, 2022
shares
|
|
Class of Stock [Line Items] | |||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Preferred Stock, Shares Issued | 0 | 10,062,500 | |
5.50% MCPS, Series A [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Shares Issued | 10,062,500 | ||
Preferred Stock, Dividend Rate, Percentage | 5.50% | ||
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 100 | ||
Net proceeds from issuance of preferred stock in connection with public offering | $ | $ 975 | ||
Preferred Stock, Dividends, Per Share, Cash Paid | $ / shares | $ 1.375 | ||
Preferred Stock, Convertible, Conversion Ratio | 2.3834 | ||
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Conversion of Stock, Shares Converted | 24,000,000 |
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