Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-15525 EDWARDS LIFESCIENCES CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-43 ...

Edwards Lifesciences Corporation (NYSE:EW) Q2 2022 Earnings Conference Call July 28, 2022 5:00 PM ET Company Participants Mark Wilterding - VP, IR and Treasurer Mike Mussallem - Chairman and CEO Scott Ullem - CFO Larry Wood - Global Leader, TAVR Bernard Zovighian - Global Leader, TMTT Conference Call Participants Robbie Marcus - JPMorgan Larry Biegelsen - Wells Fargo Vijay Kumar - Evercore ISI Joanne Wuensch - Citi Cecilia Furlong - Morgan Stanley Travis Steed - Bank of America Suraj Kalia - Oppenheimer Ed ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-15525 EDWARDS LIFESCIENCES CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-4316614 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-15525 EDWARDS LIFESCIENCES CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-431661 ...

Edwards Lifesciences Corporation (NYSE:EW) Q1 2022 Earnings Conference Call April 26, 2022 5:00 PM ET Company Participants Mark Wilterding - Vice President, Investor Relations & Treasurer Mike Mussallem - Chairman & Chief Executive Officer Scott Ullem - Chief Financial Officer Conference Call Participants Larry Biegelsen - Wells Fargo Robbie Marcus - JPMorgan Matt Miksic - Credit Suisse William Plovanic - Canaccord Genuity Shagun Singh - RBC Capital Markets Cecilia Furlong - Morgan Stanley Josh Jennings - C ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number 1-15525 EDWARDS LIFESCIENCES CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-4316614 (St ...

Edwards Lifesciences Corporation (NYSE:EW) Q4 2021 Earnings Conference Call January 26, 2022 5:00 PM ET Company Participants Mark Wilterding - Vice President, Investor Relations & Treasurer Mike Mussallem - Chairman & Chief Executive Officer Scott Ullem - Chief Financial Officer Conference Call Participants Robbie Marcus - JPMorgan Larry Biegelsen - Wells Fargo Vijay Kumar - Evercore ISI Joanne Wuensch - Citibank Matt Miksic - Crédit Suisse Josh Jennings - Cowen Cecilia Furlong - Morgan Stanley Danielle Ant ...

Part I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents unaudited consolidated financial statements, including balance sheets, income, cash flows, equity, and related notes [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | September 30, 2021 ($M) | December 31, 2020 ($M) | | :----------------------- | :---------------------- | :--------------------- | | Total Assets | 8,160.3 | 7,237.1 | | Total Liabilities | 2,619.0 | 2,662.8 | | Total Stockholders' Equity | 5,541.3 | 4,574.3 | [Consolidated Condensed Statements of Operations](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Outlines financial performance over periods, detailing net sales, gross profit, operating income, net income, and diluted EPS | Metric | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | | Net Sales | 3,902.8 | 3,194.6 | | Gross Profit | 2,963.4 | 2,410.3 | | Operating Income | 1,315.9 | 546.2 | | Net Income | 1,167.8 | 513.9 | | Diluted EPS | 1.85 | 0.82 | [Consolidated Condensed Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income) Presents total comprehensive income, including net income and other comprehensive income (loss) components, reflecting equity changes | Metric | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Net Income | 1,167.8 | 513.9 | | Other Comprehensive Income (Loss) | 5.7 | (1.9) | | Comprehensive Income | 1,173.5 | 512.0 | [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Details cash inflows and outflows from operating, investing, and financing activities, showing net change in cash | Metric | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :------------------------------------------------------ | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | 1,358.5 | 654.5 | | Net cash used in investing activities | (756.6) | (271.2) | | Net cash used in financing activities | (294.3) | (528.3) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | 319.7 | (154.9) | [Consolidated Condensed Statements of Stockholders' Equity](index=10&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders%27%20Equity) Provides a detailed account of changes in the company's equity, including common stock, paid-in capital, retained earnings, and treasury stock | Metric | December 31, 2020 ($M) | September 30, 2021 ($M) | | :--------------------------------- | :--------------------- | :---------------------- | | Common Stock Par Value | 636.4 | 641.2 | | Additional Paid-in Capital | 1,438.1 | 1,643.1 | | Retained Earnings | 4,565.0 | 5,732.8 | | Accumulated Other Comprehensive Loss | (161.1) | (155.4) | | Treasury Stock | (1,904.1) | (2,320.4) | | Total Stockholders' Equity | 4,574.3 | 5,541.3 | [Notes to Consolidated Condensed Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) Provides detailed explanations and additional information supporting the consolidated condensed financial statements [1. BASIS OF PRESENTATION](index=12&type=section&id=1.%20BASIS%20OF%20PRESENTATION) Interim financial statements are unaudited and GAAP-compliant, with condensed disclosures, noting COVID-19's adverse impact and uncertainties - Interim consolidated condensed financial statements are unaudited and prepared pursuant to SEC rules and GAAP, with certain information condensed or omitted[31](index=31&type=chunk) - The COVID-19 pandemic has adversely impacted, and may further impact, nearly all aspects of the business, with the full extent of its impact remaining highly uncertain and difficult to predict[32](index=32&type=chunk) [2. OTHER CONSOLIDATED FINANCIAL STATEMENT DETAILS](index=12&type=section&id=2.%20OTHER%20CONSOLIDATED%20FINANCIAL%20STATEMENT%20DETAILS) Provides detailed breakdown of balance sheet captions, including inventories, accrued liabilities, and cash components, for operational insight | Inventories (Sept 30, 2021) | Amount ($M) | | :-------------------- | :---------- | | Raw materials | 129.1 | | Work in process | 159.5 | | Finished products | 449.2 | | Total Inventories | 737.8 | | Accrued and Other Liabilities (Sept 30, 2021) | Amount ($M) | | :------------------------------------ | :---------- | | Employee compensation and withholdings | 325.0 | | Legal and insurance | 77.4 | | Other accrued liabilities | 88.3 | | Total Accrued and Other Liabilities | 802.8 | | Cash, Cash Equivalents, and Restricted Cash (Sept 30, 2021) | Amount ($M) | | :---------------------------------------------------- | :---------- | | Cash and cash equivalents | 1,506.9 | | Restricted cash included in other current assets | 9.8 | | Restricted cash included in other assets | 3.2 | | Total Cash, Cash Equivalents, and Restricted Cash | 1,519.9 | [3. INTELLECTUAL PROPERTY LITIGATION EXPENSES](index=13&type=section&id=3.%20INTELLECTUAL%20PROPERTY%20LITIGATION%20EXPENSES) Details the July 2020 settlement with Abbott Laboratories resolving patent disputes, resulting in a pre-tax charge and ongoing royalty expenses - The Company reached a settlement agreement with Abbott Laboratories in July 2020 to resolve all outstanding patent disputes related to transcatheter mitral and tricuspid repair products[39](index=39&type=chunk) - The settlement resulted in an estimated **$367.9 million pre-tax charge** recorded in June 2020 for past damages[39](index=39&type=chunk) - The Company will incur estimated royalty expenses totaling **$100 million** through May 2024, with a one-time **$100 million payment** made in July 2020[39](index=39&type=chunk) [4. INVESTMENTS](index=14&type=section&id=4.%20INVESTMENTS) Breaks down debt securities and investments in unconsolidated entities, noting increased available-for-sale investments and a medical device company stake | Available-for-sale Debt Securities (Fair Value, Sept 30, 2021) | Amount ($M) | | :--------------------------------------------- | :---------- | | Bank time deposits | 3.0 | | Commercial paper | 2.9 | | U.S. government and agency securities | 146.8 | | Asset-backed securities | 300.1 | | Corporate debt securities | 949.2 | | Municipal securities | 2.8 | | Total Available-for-sale | 1,404.8 | | Investments in Unconsolidated Entities | Sept 30, 2021 ($M) | Dec 31, 2020 ($M) | | :----------------------------------- | :----------------- | :---------------- | | Equity method investments | 8.4 | 5.7 | | Non-marketable equity securities | 73.6 | 29.4 | | Total | 82.0 | 35.1 | - In April 2021, the Company invested **$35.9 million** in a privately-held medical device company and paid **$5.7 million** for an exclusive contingent option to acquire it, with potential for additional investments[45](index=45&type=chunk) [5. FAIR VALUE MEASUREMENTS](index=15&type=section&id=5.%20FAIR%20VALUE%20MEASUREMENTS) Outlines fair value measurement hierarchy, detailing assets and liabilities, and noting a reduction in contingent consideration liabilities | Assets Measured at Fair Value (Sept 30, 2021) | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | Total ($M) | | :------------------------------------------ | :----------- | :----------- | :----------- | :--------- | | Cash equivalents | 18.9 | 20.5 | — | 39.4 | | Available-for-sale investments | 38.9 | 1,358.0 | — | 1,399.8 | | Investments held for deferred compensation plans | 123.4 | — | — | 123.4 | | Derivatives | — | 48.2 | — | 48.2 | | Total Assets | 181.2 | 1,434.6 | — | 1,615.8 | | Liabilities Measured at Fair Value (Sept 30, 2021) | Level 1 ($M) | Level 2 ($M) | Level 3 ($M) | Total ($M) | | :--------------------------------------------- | :----------- | :----------- | :----------- | :--------- | | Derivatives | — | 3.5 | — | 3.5 | | Deferred compensation plans | 123.0 | — | — | 123.0 | | Contingent consideration liabilities | — | — | 80.1 | 80.1 | | Other liability | — | — | 14.0 | 14.0 | | Total Liabilities | 123.0 | 3.5 | 94.1 | 220.6 | - Contingent consideration liabilities decreased by **$105.2 million** during the three months ended June 30, 2021, due to changes in projected probabilities and timing of milestone achievements and cash inflows[56](index=56&type=chunk) [6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES](index=18&type=section&id=6.%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) Details the use of foreign currency and cross currency swap contracts to manage risks, outlining notional amounts, fair values, and financial statement impact | Derivative Instruments (Notional Amount, Sept 30, 2021) | Amount ($M) | | :------------------------------------------------ | :---------- | | Foreign currency forward exchange contracts | 1,518.7 | | Cross currency swap contracts | 300.0 | | Derivatives Designated as Hedging Instruments (Fair Value, Sept 30, 2021) | Assets ($M) | Liabilities ($M) | | :-------------------------------------------------------- | :---------- | :--------------- | | Foreign currency contracts | 35.6 | 3.5 | | Cross currency swap contracts | 12.6 | — | - The Company uses derivatives to manage foreign currency and interest rate exposures, not for trading or speculation, and diversifies among creditworthy counterparties[63](index=63&type=chunk)[64](index=64&type=chunk) [7. STOCK-BASED COMPENSATION](index=22&type=section&id=7.%20STOCK-BASED%20COMPENSATION) Details stock-based compensation expenses, award types (options, RSUs), fair value assumptions, and remaining compensation cost for nonvested awards | Stock-Based Compensation Expense (Nine Months Ended Sept 30) | 2021 ($M) | 2020 ($M) | | :------------------------------------------- | :-------- | :-------- | | Cost of sales | 16.1 | 13.6 | | Selling, general, and administrative expenses | 50.7 | 43.5 | | Research and development expenses | 18.3 | 14.6 | | Total stock-based compensation expense | 85.1 | 71.7 | - As of September 30, 2021, the total remaining compensation cost for nonvested stock options, restricted stock units, market-based restricted stock units, and ESPP awards was **$184.4 million**, to be amortized over a weighted-average remaining service period of **32 months**[76](index=76&type=chunk) - During the nine months ended September 30, 2021, the Company granted **1.6 million stock options** (weighted-average exercise price **$93.74**) and **0.6 million restricted stock units** (weighted-average grant-date fair value **$94.85**)[77](index=77&type=chunk) [8. ACCELERATED SHARE REPURCHASE](index=23&type=section&id=8.%20ACCELERATED%20SHARE%20REPURCHASE) Describes a February 2021 Accelerated Share Repurchase (ASR) agreement, under which the company repurchased 3.0 million shares for $250.0 million - In February 2021, the Company entered into an Accelerated Share Repurchase (ASR) agreement for **$250.0 million**[81](index=81&type=chunk) - Under the ASR agreement, **3.0 million shares** were received at an average price of **$84.51 per share**[81](index=81&type=chunk) [9. COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) Discloses ongoing legal and regulatory matters, including an FCPA investigation and patent lawsuit, with management assessing no material adverse financial effect - The Company is reviewing and investigating potential violations of the Foreign Corrupt Practices Act (FCPA) in Japan and other markets, having voluntarily notified the SEC and DOJ[82](index=82&type=chunk)[83](index=83&type=chunk) - A lawsuit was filed on September 28, 2021, by Aortic Innovations LLC alleging patent infringement by Edwards' SAPIEN 3 Ultra product[84](index=84&type=chunk) - Management does not believe that any loss relating to the lawsuits would have a material adverse effect on the Company's overall financial condition, results of operations, or cash flows[85](index=85&type=chunk) [10. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=25&type=section&id=10.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Summarizes activity and components of accumulated other comprehensive loss, including foreign currency adjustments, hedge gains/losses, investments, and pension costs | Component of Accumulated Other Comprehensive Loss | December 31, 2020 ($M) | September 30, 2021 ($M) | | :------------------------------------------------ | :--------------------- | :---------------------- | | Foreign Currency Translation Adjustments | (122.4) | (156.3) | | Unrealized Gain (Loss) on Hedges | (27.7) | 17.5 | | Unrealized Gain (Loss) on Available-for-sale Investments | 8.6 | 3.0 | | Unrealized Pension Costs | (19.6) | (19.6) | | Total Accumulated Other Comprehensive Loss | (161.1) | (155.4) | [11. EARNINGS PER SHARE](index=26&type=section&id=11.%20EARNINGS%20PER%20SHARE) Presents basic and diluted earnings per share computations, showing increases for the reporting periods and weighted-average shares outstanding | Earnings Per Share (Nine Months Ended Sept 30) | 2021 | 2020 | | :--------------------------------------- | :--- | :--- | | Basic EPS | $1.87 | $0.83 | | Diluted EPS | $1.85 | $0.82 | | Weighted-average shares outstanding (Basic) | 623.0 | 622.3 | | Dilutive weighted-average shares outstanding | 631.0 | 628.8 | - Stock options, restricted stock units, and market-based restricted stock units to purchase an aggregate of **2.0 million common shares** for the nine months ended September 30, 2021, were excluded from diluted EPS computation as their effect would have been anti-dilutive[91](index=91&type=chunk) [12. INCOME TAXES](index=27&type=section&id=12.%20INCOME%20TAXES) Discusses effective income tax rates, tax benefits, and ongoing IRS examinations, including a significant NOPA related to transfer pricing that the company is disputing | Effective Income Tax Rate | Three Months Ended Sept 30, 2021 | Three Months Ended Sept 30, 2020 | Nine Months Ended Sept 30, 2021 | Nine Months Ended Sept 30, 2020 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Effective Tax Rate | 13.0% | 10.7% | 11.9% | 8.3% | - The effective rates were lower than the federal statutory rate of **21%** primarily due to tax benefits from employee share-based compensation, foreign earnings taxed at lower rates, and Federal and California research and development credits[92](index=92&type=chunk) - The Company received a Notice of Proposed Adjustment (NOPA) from the IRS for 2015-2017 tax years, proposing an increase to U.S. taxable income that could result in approximately **$180 million** in additional tax expense related to Surgical/TAVR intercompany royalty transactions. The Company has formally disagreed and submitted a protest[100](index=100&type=chunk)[101](index=101&type=chunk) [13. SEGMENT INFORMATION](index=29&type=section&id=13.%20SEGMENT%20INFORMATION) Provides financial information segmented by geographic region and major product area, demonstrating growth across all categories and reconciling segment results | Segment Net Sales (Nine Months Ended Sept 30) | 2021 ($M) | 2020 ($M) | | :------------------------------------ | :-------- | :-------- | | United States | 2,223.7 | 1,845.6 | | Europe | 806.1 | 695.9 | | Japan | 384.6 | 325.0 | | Rest of World | 393.6 | 323.4 | | Total segment net sales | 3,808.0 | 3,189.9 | | Net Sales by Major Product Area (Nine Months Ended Sept 30, 2021) | Amount ($M) | | :-------------------------------------------------- | :---------- | | Transcatheter Aortic Valve Replacement | 2,551.0 | | Transcatheter Mitral and Tricuspid Therapies | 60.7 | | Surgical Structural Heart | 667.8 | | Critical Care | 623.3 | | Total | 3,902.8 | | Segment Operating Income (Nine Months Ended Sept 30) | 2021 ($M) | 2020 ($M) | | :------------------------------------- | :-------- | :-------- | | United States | 1,544.1 | 1,264.0 | | Europe | 426.5 | 356.2 | | Japan | 258.3 | 209.9 | | Rest of World | 145.2 | 105.2 | | Total segment operating income | 2,374.1 | 1,935.3 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial performance and condition, detailing COVID-19 impact, sales trends, key metrics, liquidity, capital resources, and critical accounting policies [Overview](index=33&type=section&id=Overview) Introduces Edwards Lifesciences as a global leader in medical innovations for structural heart disease, critical care, and surgical monitoring, outlining operations and product categories - Edwards Lifesciences is a global leader in patient-focused medical innovations for structural heart disease, critical care, and surgical monitoring[113](index=113&type=chunk) - The company operates worldwide, managed across geographical regions: United States, Europe, Japan, and Rest of World[113](index=113&type=chunk) - Products are categorized into Transcatheter Aortic Valve Replacement (TAVR), Transcatheter Mitral and Tricuspid Therapies (TMTT), Surgical Structural Heart, and Critical Care[113](index=113&type=chunk) [Financial Highlights and COVID-19](index=33&type=section&id=Financial%20Highlights%20and%20COVID-19) Summarizes key financial performance and discusses the adverse impact and subsequent recovery from the COVID-19 pandemic on business operations and sales - The COVID-19 pandemic has adversely impacted business, but manufacturing operations continued, and the company proactively managed inventory and logistics[115](index=115&type=chunk) - Strong recovery began in Q2 2021 due to widespread vaccine adoption, but the Delta variant significantly impacted U.S. hospital resources and TAVR sales in the last two months of Q3 2021[117](index=117&type=chunk)[120](index=120&type=chunk) - Net sales for the first nine months of 2021 were **$3.9 billion**, an increase of **$708.2 million** over 2020, driven by TAVR products, increased Surgical sales, and recovering Critical Care capital product demand[120](index=120&type=chunk) [Healthcare Environment, Opportunities, and Challenges](index=35&type=section&id=Healthcare%20Environment,%20Opportunities,%20and%20Challenges) Addresses the competitive medical technology industry, highlighting the company's commitment to innovation, patient care, intellectual property defense, and R&D investment - The medical technology industry is highly competitive and continuously evolving[122](index=122&type=chunk) - The company is committed to developing innovative products, providing patient care, and defending its intellectual property[122](index=122&type=chunk) - Investment in research and development was **17.2% of net sales** in the first nine months of 2021[122](index=122&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Analyzes financial performance, focusing on net sales trends, gross profit, and operating expenses across various segments and product groups [Net Sales Trends](index=35&type=section&id=Net%20Sales%20Trends) Total net sales increased significantly for both three and nine months ended September 30, 2021, with all geographic regions contributing to growth | Geographic Area | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | % Change | | :---------------- | :------------------------------------ | :------------------------------------ | :------- | | United States | 753.2 | 662.0 | 13.8% | | Europe | 291.1 | 253.8 | 14.7% | | Japan | 125.9 | 113.9 | 10.6% | | Rest of World | 140.0 | 111.2 | 25.7% | | Total net sales | 1,310.2 | 1,140.9 | 14.8% | | Geographic Area | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | % Change | | :---------------- | :----------------------------------- | :----------------------------------- | :------- | | United States | 2,223.6 | 1,845.6 | 20.5% | | Europe | 880.9 | 707.8 | 24.5% | | Japan | 390.0 | 330.7 | 17.9% | | Rest of World | 408.3 | 310.5 | 31.5% | | Total net sales | 3,902.8 | 3,194.6 | 22.2% | [Net Sales by Product Group](index=36&type=section&id=Net%20Sales%20by%20Product%20Group) All major product groups experienced significant net sales growth for both three and nine months ended September 30, 2021, with TMTT showing the highest percentage increase | Product Group | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | Change ($M) | Percent Change | | :--------------------------------- | :----------------------------------- | :----------------------------------- | :---------- | :------------- | | Transcatheter Aortic Valve Replacement | 2,551.0 | 2,081.1 | 469.9 | 22.6% | | Transcatheter Mitral and Tricuspid Therapies | 60.7 | 28.7 | 32.0 | 111.5% | | Surgical Structural Heart | 667.8 | 557.6 | 110.2 | 19.8% | | Critical Care | 623.3 | 527.2 | 96.1 | 18.2% | | Total net sales | 3,902.8 | 3,194.6 | 708.2 | 22.2% | [Transcatheter Aortic Valve Replacement](index=36&type=section&id=Transcatheter%20Aortic%20Valve%20Replacement) TAVR product sales increased due to improved COVID-19 conditions and SAPIEN platform adoption, despite Q3 Delta variant impact, and received key SAPIEN 3 regulatory approvals - TAVR product sales increased due to improved COVID-19 conditions and strong adoption of the Edwards SAPIEN platform in the United States, Europe, and Japan[129](index=129&type=chunk) - Sales were negatively impacted in the last two months of Q3 2021 as U.S. procedures declined due to the significant impact of the Delta variant on hospital resources[129](index=129&type=chunk) - In April 2021, the company received U.S. pivotal trial approval for TAVR in moderate aortic stenosis patients, Japan approval for low-risk SAPIEN 3, and SAPIEN 3 CE Mark approval for pulmonic position treatment[130](index=130&type=chunk) [Transcatheter Mitral and Tricuspid Therapies](index=38&type=section&id=Transcatheter%20Mitral%20and%20Tricuspid%20Therapies) TMTT product sales increased significantly due to improved COVID-19 conditions and PASCAL system adoption in Europe, with five pivotal trials progressing for mitral and tricuspid therapies - Net sales of TMTT products increased primarily due to improved COVID-19 conditions compared to 2020 and continued adoption of the PASCAL system in Europe[134](index=134&type=chunk) - The company is progressing in the enrollment of five pivotal trials for mitral and tricuspid regurgitation therapies, including the CLASP trials for PASCAL Precision and TRISCEND II pivotal trial for EVOQUE[135](index=135&type=chunk) [Surgical Structural Heart](index=39&type=section&id=Surgical%20Structural%20Heart) Surgical product sales increased due to improved COVID-19 conditions and higher sales of INSPIRIS RESILIA and KONECT, with MITRIS valve receiving Japan approval and Q2 2021 launch - Net sales of Surgical products increased primarily due to improved COVID-19 conditions and increased sales of the INSPIRIS RESILIA aortic valve and the KONECT aortic valved conduit, primarily in the United States[139](index=139&type=chunk) - Foreign currency exchange rate fluctuations increased international net sales by **$14.8 million** for the nine months ended September 30, 2021[139](index=139&type=chunk) - The MITRIS valve, incorporating RESILIA technology, received regulatory approval in Japan in January 2021 and was launched in Q2 2021[140](index=140&type=chunk) [Critical Care](index=40&type=section&id=Critical%20Care) Critical Care product sales increased due to higher demand for Hemosphere platforms, pressure monitoring, and enhanced surgical recovery products, with Acumen HPI software receiving FDA clearance - Net sales of Critical Care products increased due to increased demand for Hemosphere platforms, pressure monitoring products (due to elevated hospitalizations), and enhanced surgical recovery products, primarily in the United States[142](index=142&type=chunk) - Foreign currency exchange rate fluctuations increased international net sales by **$11.1 million** for the nine months ended September 30, 2021[142](index=142&type=chunk) - In June 2021, the Acumen Hypotension Prediction Index software with the Acumen IQ finger cuff received U.S. FDA clearance, offering the first noninvasive solution for predicting hypotension[143](index=143&type=chunk) [Gross Profit](index=41&type=section&id=Gross%20Profit) Gross profit as a percentage of net sales increased due to improved product mix, lower COVID-19 costs, and manufacturing efficiencies, partially offset by foreign currency fluctuations | Gross Profit | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Gross Profit | 998.5 | 859.9 | 2,963.4 | 2,410.3 | | % of Net Sales | 76.2% | 75.4% | 75.9% | 75.4% | - The increase in gross profit as a percentage of net sales was driven by an improved product mix (TAVR products), lower incremental costs associated with COVID-19, and manufacturing efficiencies[147](index=147&type=chunk) - This increase was partially offset by a **0.3 percentage point** (three months) and **1.2 percentage point** (nine months) decrease due to the impact of foreign currency exchange rate fluctuations, including hedging contract settlements[147](index=147&type=chunk) [Selling, General, and Administrative ("SG&A") Expenses](index=41&type=section&id=Selling,%20General,%20and%20Administrative%20(%22SG%26A%22)%20Expenses) SG&A expenses increased due to higher personnel costs, increased commercial activities compared to prior year, and foreign currency exchange rate fluctuations | SG&A Expenses | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :-------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | SG&A Expenses | 364.4 | 307.2 | 1,069.7 | 889.9 | | % of Net Sales | 27.8% | 26.9% | 27.4% | 27.9% | - SG&A expenses increased primarily due to higher personnel-related costs and increased commercial activities compared to the prior year, which was impacted by COVID-19[150](index=150&type=chunk) - Foreign currency exchange rate fluctuations increased expenses by **$4.4 million** (three months) and **$24.6 million** (nine months) due to the weakening of the United States dollar against multiple currencies, primarily the Euro[150](index=150&type=chunk) [Research and Development ("R&D") Expenses](index=43&type=section&id=Research%20and%20Development%20(%22R%26D%22)%20Expenses) R&D expenses increased due to continued investments in transcatheter innovations and increased clinical trial activity, recovering from 2020 COVID-19 related pauses | R&D Expenses | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | R&D Expenses | 238.0 | 195.5 | 670.3 | 565.0 | - R&D expenses increased primarily due to continued investments in transcatheter innovations, including increased clinical trial activity[154](index=154&type=chunk) - Spending on clinical trials was reduced in Q2 2020 due to temporary pauses in certain mitral and tricuspid active pivotal clinical trials caused by COVID-19[154](index=154&type=chunk) [Change in Fair Value of Contingent Consideration Liabilities](index=43&type=section&id=Change%20in%20Fair%20Value%20of%20Contingent%20Consideration%20Liabilities) Change in fair value of contingent consideration liabilities resulted in income, primarily due to changes in projected probabilities and timing of milestone achievements and cash inflows | Change in Fair Value of Contingent Consideration Liabilities | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :------------------------------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Change in Fair Value | 1.1 (expense) | (9.0) (income) | (106.0) (income) | 8.4 (expense) | - The income in the first nine months of 2021 was driven by changes in the projected probability and timing of milestone achievements and the projected timing of cash inflows[155](index=155&type=chunk) [Other Income, net](index=43&type=section&id=Other%20Income,%20net) Other income, net, showed a gain, primarily influenced by foreign exchange gains and investment gains, partially offset by derivative instrument gains and losses | Other Income, net | Three Months Ended Sept 30, 2021 ($M) | Three Months Ended Sept 30, 2020 ($M) | Nine Months Ended Sept 30, 2021 ($M) | Nine Months Ended Sept 30, 2020 ($M) | | :------------------ | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Other income, net | (1.4) | (5.7) | (11.3) | (7.3) | - Net foreign exchange gains relate to foreign currency fluctuations in global trade and intercompany receivable and payable balances, partially offset by gains and losses on derivative instruments[155](index=155&type=chunk) - The (gain) loss on investments primarily represents the net share of gains and losses in equity method investments and realized gains and losses on equity securities[156](index=156&type=chunk) [Provision for Income Taxes](index=44&type=section&id=Provision%20for%20Income%20Taxes) Effective income tax rate increased but remained below federal statutory rate due to tax benefits, with ongoing IRS audits including a disputed NOPA related to transfer pricing | Effective Income Tax Rate | Three Months Ended Sept 30, 2021 | Three Months Ended Sept 30, 2020 | Nine Months Ended Sept 30, 2021 | Nine Months Ended Sept 30, 2020 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Effective Tax Rate | 13.0% | 10.7% | 11.9% | 8.3% | - The effective rates were lower than the federal statutory rate of **21%** primarily due to tax benefits from employee share-based compensation, foreign earnings taxed at lower rates, and Federal and California research and development credits[159](index=159&type=chunk) - The Company received a Notice of Proposed Adjustment (NOPA) from the IRS for 2015-2017 tax years, proposing an increase to U.S. taxable income that could result in approximately **$180 million** in additional tax expense related to Surgical/TAVR intercompany royalty transactions. The Company has formally disagreed and submitted a protest[164](index=164&type=chunk)[165](index=165&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash sources, including cash, investments, credit facilities, and stock repurchase programs, affirming sufficient liquidity for the next twelve months - The company's sources of cash liquidity include cash and cash equivalents, short-term investments, cash from operations, and amounts available under credit facilities, which are believed to be sufficient for the next twelve months[169](index=169&type=chunk) | Cash and Short-term Investments (Sept 30, 2021) | Amount ($M) | | :---------------------------------------------- | :---------- | | Held in the United States | 981.5 | | Held outside the United States | 813.2 | - The company has a **$750.0 million** Five-Year Credit Agreement maturing April 28, 2023, with no outstanding borrowings as of September 30, 2021. It also has a **$1.0 billion** stock repurchase program, having repurchased **$402.3 million** in shares during the nine months ended September 30, 2021[171](index=171&type=chunk)[173](index=173&type=chunk) [Consolidated Cash Flows - For the nine months ended September 30, 2021 and 2020](index=46&type=section&id=Consolidated%20Cash%20Flows%20-%20For%20the%20nine%20months%20ended%20September%2030,%202021%20and%202020) Analyzes significant changes in cash flows from operating, investing, and financing activities for the nine-month periods ended September 30, 2021 and 2020 - Net cash provided by operating activities increased by **$704.0 million** to **$1.4 billion** for the nine months ended September 30, 2021, primarily due to improved operating performance and lower litigation settlement payments[177](index=177&type=chunk) - Net cash used in investing activities was **$756.6 million** for the nine months ended September 30, 2021, primarily for capital expenditures (**$236.0 million**) and net purchases of investments (**$507.6 million**)[178](index=178&type=chunk) - Net cash used in financing activities was **$294.3 million** for the nine months ended September 30, 2021, primarily due to purchases of treasury stock (**$416.3 million**), partially offset by proceeds from stock plans (**$124.7 million**)[179](index=179&type=chunk) [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Confirms no significant changes to the company's critical accounting policies and estimates since the last annual report - There have been no significant changes to the company's critical accounting policies and estimates from those described in the Annual Report on Form 10-K for the year ended December 31, 2020[180](index=180&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to the Annual Report on Form 10-K for market risk discussion, noting no significant changes, and highlights investment risks related to debt and equity securities - There have been no significant changes to the company's exposure to interest rate risk, foreign currency risk, credit risk, and concentrations of risk from those discussed in the Annual Report on Form 10-K for 2020[181](index=181&type=chunk) - The company is exposed to investment risks related to changes in the financial condition and credit capacity of certain investments, including **$1.5 billion** in debt securities and **$82.0 million** in equity instruments as of September 30, 2021[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2021[184](index=184&type=chunk) - There have been no material changes in internal control over financial reporting during the quarter ended September 30, 2021[185](index=185&type=chunk) Part II. OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Discloses ongoing legal matters, including an FCPA investigation, a patent infringement lawsuit, and environmental compliance, with management assessing no material financial impact - The company is reviewing and investigating whether business activities in Japan and other markets violate certain provisions of the Foreign Corrupt Practices Act (FCPA), having voluntarily notified the SEC and DOJ[188](index=188&type=chunk) - On September 28, 2021, Aortic Innovations LLC filed a lawsuit alleging that Edwards' SAPIEN 3 Ultra product infringes certain of its patents. The company believes the claims are without merit and will vigorously defend itself[189](index=189&type=chunk) - Management believes that compliance with environmental protection laws will not have a material impact on the company's financial results[190](index=190&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to the risk factors previously reported in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - There have been no material changes to the risk factors associated with the business as previously reported in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[191](index=191&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details issuer purchases of equity securities, showing common stock repurchases during July and September 2021 under existing programs, with $1.2 billion remaining authorization | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | | :-------------------------------------- | :------------------------------- | :------------------------------- | | July 1, 2021 through July 31, 2021 | 1,800 | 106.68 | | September 1, 2021 through September 30, 2021 | 13,139 | 121.00 | | Total | 14,939 | 119.27 | - As of September 30, 2021, the company had remaining authority to purchase **$1.2 billion** of its common stock under Board-authorized repurchase programs, including a new **$1.0 billion** program approved in May 2021[193](index=193&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists exhibits filed, furnished, or incorporated by reference as part of this Form 10-Q report, including organizational documents, certifications, and XBRL taxonomy - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Sarbanes-Oxley Act certifications (Sections 302 and 906), and various XBRL taxonomy documents[196](index=196&type=chunk) [Signatures](index=50&type=section&id=Signatures) Confirms the official signing of the Form 10-Q report by the registrant's authorized officers on October 29, 2021 - The report was signed on October 29, 2021, by Scott B. Ullem, Chief Financial Officer, and Robert W.A. Sellers, Corporate Controller[199](index=199&type=chunk)

Edwards Lifesciences Corporation (NYSE:EW) Q3 2021 Earnings Conference Call October 28, 2021 5:00 PM ET Company Participants Mike Mussallem – Chairman and Chief Executive Officer Mark Wilterding – Vice President of Investor Relations and Treasurer Scott Ullem – Chief Financial Officer Conference Call Participants Vijay Kumar – Evercore ISI Bob Hopkins – Bank of America Robert Marcus – JPMorgan Josh Jennings – Cowen Matt Miksic – Credit Suisse Danielle Antalffy – SDD Leerink Cecilia Furlong – Morgan Stanley ...

Edwards Lifesciences Corporation (NYSE:EW) Q2 2021 Earnings Conference Call July 29, 2021 5:00 PM ET Company Participants Mark Wilterding - President, Investor Relations Mike Mussallem - Chairman and Chief Executive Officer Scott Ullem - Chief Financial Officer Conference Call Participants Bob Hopkins - Bank of America Vijay Kumar - Evercore ISI Larry Biegelsen - Wells Fargo Robert Marcus - JPMorgan Pito Chickering - Deutsche Bank Matt Miksic - Credit Suisse Cecilia Furlong - Morgan Stanley Travis Steed - B ...