SEC Filings

10-K
INTUITIVE SURGICAL INC filed this Form 10-K on 02/02/2018
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There were no transfers between Level 1 and Level 2 measurements during the year ended December 31, 2017, and there were no changes in the valuation techniques used.
The following table summarizes the contractual maturities of the Company’s cash equivalents and available-for-sale investments (excluding cash and money market funds), at December 31, 2017 (in millions):
 
Amortized
Cost
 
Fair
Value
Mature in less than one year
$
1,320.7

 
$
1,317.9

Mature in one to five years
1,898.3

 
1,885.9

Total
$
3,219.0

 
$
3,203.8

Realized gains and losses, net of tax, were not material for any of the periods presented.
As of December 31, 2017, and 2016, net unrealized losses on investments of $11.3 million and $8.6 million, net of tax, respectively, were included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets.
The following tables present the breakdown of the available-for-sale investments with unrealized losses at December 31, 2017, and 2016 (in millions):
 
Unrealized losses less
than 12 months
 
Unrealized losses 12
months or greater
 
Total
December 31, 2017
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate securities
$
567.6

 
$
(2.1
)
 
$
277.0

 
$
(2.3
)
 
$
844.6

 
$
(4.4
)
U.S. treasuries
763.5

 
(2.5
)
 
206.2

 
(2.2
)
 
969.7

 
(4.7
)
U.S. government agencies
428.9

 
(1.3
)
 
345.5

 
(3.1
)
 
774.4

 
(4.4
)
Municipal securities
236.3

 
(1.3
)
 
51.7

 
(0.6
)
 
288.0

 
(1.9
)
 
$
1,996.3

 
$
(7.2
)
 
$
880.4

 
$
(8.2
)
 
$
2,876.7

 
$
(15.4
)
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
1,056.1

 
$
(5.0
)
 
$

 
$

 
$
1,056.1

 
$
(5.0
)
U.S. treasuries
357.1

 
(2.0
)
 

 

 
357.1

 
(2.0
)
U.S. government agencies
538.2

 
(2.9
)
 

 

 
538.2

 
(2.9
)
Municipal securities
728.8

 
(3.5
)
 

 

 
728.8

 
(3.5
)
 
$
2,680.2

 
$
(13.4
)
 
$

 
$

 
$
2,680.2

 
$
(13.4
)
The unrealized losses on the available-for-sale investments are related to corporate securities and government securities. The Company determined these unrealized losses to be temporary. Factors considered in determining whether a loss is temporary included the length of time and extent to which the investment’s fair value has been less than the cost basis; the financial condition and near-term prospects of the investee; extent of the loss related to credit of the issuer; the expected cash flows from the security; the Company’s intent to sell the security; and whether or not the Company will be required to sell the security before the recovery of its amortized cost.
Foreign currency derivatives
The objective of the Company’s hedging program is to mitigate the impact of changes in currency exchange rates on net cash flow from foreign currency denominated sales, expenses, and intercompany balances and other monetary assets or liabilities denominated in currencies other than the U.S. dollar (“USD”). The derivative assets and liabilities are measured using Level 2 fair value inputs.
Cash Flow Hedges. The Company enters into currency forward contracts as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than the USD, primarily the European Euro (“EUR”), the British Pound (“GBP”), the Japanese Yen (“JPY”), and the Korean Won (“KRW”). The Company also enters into currency forward contracts as cash flow hedges to hedge certain forecasted expense transactions denominated in EUR and Swiss Franc (“CHF”).
For these derivatives, the Company reports the after-tax gain or loss from the hedge as a component of accumulated other comprehensive loss in stockholders' equity and reclassifies into earnings in the same period in which the hedge transaction affects earnings. The Company reclassified a net loss of $2.9 million and net gains of $0.9 million and $7.2 million to revenue related to the hedged revenue transactions for the years ended December 31, 2017, 2016, and 2015, respectively. The amounts reclassified to expenses related to the hedged transactions and the ineffective portions of cash flow hedges were not material for the periods presented.

75

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