|INTUITIVE SURGICAL INC filed this Form 10-K on 02/02/2018|
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asserted that such injuries were caused, in whole or in part, by the Company’s purported failure to properly train, warn, and instruct the surgeon. The lawsuit sought unspecified damages for past medical expenses, pain and suffering, loss of consortium as well as punitive damages. A trial commenced on April 15, 2013. On May 23, 2013, the jury returned a defense verdict, finding that the Company was not negligent. Judgment was entered in the Company’s favor on June 7, 2013. Subsequent to the verdict, the plaintiff filed a notice of appeal. That appeal was denied on July 7, 2015. On July 27, 2015, plaintiff filed a motion for reconsideration with the court of appeal; the court of appeal denied the motion for reconsideration on August 10, 2015. On September 9, 2015, plaintiff filed a Petition for Review with the Washington State Supreme Court (“Washington Supreme Court”). On February 10, 2016, the Washington Supreme Court issued an order granting the plaintiff’s Petition for Review. Oral argument on the appeal before the Washington Supreme Court was heard on June 7, 2016. On February 9, 2017, the Washington Supreme Court vacated the defense verdict and remanded the case for retrial. In November 2017, the Company reached a confidential settlement with the plaintiff, which did not have a material adverse effect on the Company’s business, financial position, or future results of operations.
On June 30, 2017, Ethicon LLC, Ethicon Endo-Surgery, Inc., and Ethicon US LLC (collectively, “Ethicon”) filed a complaint for patent infringement against the Company in the United States District Court for the District of Delaware. The complaint, which was served on the Company on July 12, 2017, alleges that the Company’s EndoWrist Stapler instruments infringe several of Ethicon’s patents. Based on currently available information, the Company is unable to make a reasonable estimate of loss or range of losses, if any, arising from this matter.
NOTE 8. STOCKHOLDERS’ EQUITY
STOCK REPURCHASE PROGRAM
The Company’s Board of Directors (the “Board”) has authorized an aggregate of $6.2 billion of funding for the Company’s common stock repurchase program (the “Repurchase Program”) since originally established in March 2009, of which the most recent authorization occurred in December 2016 when the Board increased the authorized amount available under the Repurchase Program to $3.0 billion. As of December 31, 2017, the remaining amount of share repurchases authorized by the Board under the Repurchase Program was approximately $717.5 million.
On January 24, 2017, the Company entered into an accelerated share repurchase program (the “ASR Program”) with Goldman Sachs & Co. LLC (“Goldman”) to repurchase $2.0 billion of the Company’s common stock. On January 27, 2017, the Company made a payment of $2.0 billion to Goldman and Goldman delivered to the Company an initial delivery of approximately 7.3 million shares of the Company’s common stock, which represents 80% of the payment amount divided by the closing price of the Company’s common stock on January 23, 2017. Settlement was based on the daily volume-weighted average price per share of the Company’s common stock during the repurchase period, less a discount, and resulted in the Company being required either to deliver shares of common stock or to make a cash payment to Goldman. On December 7, 2017, the Company completed the ASR Program by making a final settlement payment of $274.0 million to Goldman.
The following table provides the stock repurchase activities during the years ended December 31, 2017, 2016, and 2015 (in millions, except per share amounts):
The Company uses the par value method of accounting for its stock repurchases. As a result of the share repurchases during the years ended December 31, 2017, 2016, and 2015, the Company reduced common stock and additional paid-in capital by an aggregate of $152.0 million, $4.1 million, and $16.3 million, respectively, and charged $2,122.0 million, $38.4 million, $167.4 million, respectively, to retained earnings.
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