Edwards Lifesciences Corp

Previous wording

Our net sales for the first three months of 2025 were $1.4 billion, representing an increase of $82.8 million compared to the first three months of 2024, driven primarily by sales of our TMTT and TAVR products.

Current wording

Our net sales for the first six months of 2025 were $2.9 billion, representing an increase of $245.6 million compared to the first six months of 2024, driven primarily by sales of our TAVR and TMTT products.

Previous wording

Our gross profit increased in the three months ended March 31, 2025, driven by our sales growth. Gross profit as a percentage of sales increased primarily due to foreign currency rate fluctuations. The increase in our diluted earnings per share in the three months ended March 31, 2025, was driven by our aforementioned operational performance.

Current wording

Our gross profit increased in the six months ended June 30, 2025, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to higher manufacturing expenses related to the expansion of new therapies as well as impact from the foreign currency rate fluctuations. The increase in our diluted earnings per share in the six months ended June 30, 2025, was driven by our aforementioned operational performance.

Previous wording

The medical technology industry is highly competitive and continues to evolve. Our success is measured both by the development of innovative products and the value we bring to our stakeholders. We are committed to developing new technologies and innovations, and we are committed to defending our intellectual property in support of those developments. Our vision for growth is to treat patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation.

Current wording

The medical technology industry is highly competitive and continues to evolve. We measure our success both by the development of innovative products and the value we bring to our stakeholders. We are committed to developing new technologies and innovations, and we are committed to defending our intellectual property in support of those developments. Our vision for growth is to treat patients with both valvular and non-valvular structural heart disease, such as heart failure, which is a natural progression of the disease for many patients suffering from aortic stenosis and mitral and tricuspid regurgitation.

Previous wording

We are dedicated to generating robust clinical, economic, and quality-of-life evidence increasingly expected by patients, clinicians, and payors in the current healthcare environment, with the goal of encouraging the adoption of innovative new medical therapies that demonstrate superior outcomes.

Current wording

We are dedicated to generating robust clinical, economic, and quality-of-life evidence that is increasingly expected by patients, clinicians, and payors in the current healthcare environment, with the goal of encouraging the adoption of innovative new medical therapies that demonstrate superior outcomes.

Previous wording

Net sales of TAVR products increased for the three months ended March 31, 2025, driven by:

Current wording

Net sales of TAVR products increased for the three and six months ended June 30, 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and Europe. In addition, during the three months ended June 30, 2025, foreign currency exchange rate fluctuations increased net sales outside of the United States by $11.3 million primarily due to the strengthening of the Euro against the United States dollar. During the six months ended June 30, 2025, foreign currency exchange rate fluctuations decreased net sales outside of the United States by $3.8 million due to weakening of multiple other currencies against the United States dollar.

Previous wording

In April 2025, we received United States Food and Drug Administration ("FDA") approval for the SAPIEN 3 platform for severe aortic stenosis patients without symptoms.

Current wording

In April 2025, we received United States Food and Drug Administration approval for the SAPIEN 3 platform for severe aortic stenosis patients without symptoms.

Previous wording

Net sales of TMTT products increased for the three months ended March 31, 2025, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Current wording

Net sales of TMTT products increased for the three and six months ended June 30, 2025, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Previous wording

Net sales of Surgical products increased for the three months ended March 31, 2025, primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States and Europe, the KONECT RESILIA tissue valved conduit in the United States, and the MITRIS RESILIA valve in the United States, Europe, and China.

Current wording

Net sales of Surgical products increased for the three and six months ended June 30, 2025, primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States and Europe, the MITRIS RESILIA valve in the United States, Europe, and China, and the KONECT RESILIA tissue valved conduit in the United States.

Previous wording

Our gross profit increased in the three months ended March 31, 2025, driven by our sales growth discussed above. Gross profit as a percentage of net sales increased for the three months ended March 31, 2025, driven by a 0.4 percentage point impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts.

Current wording

Our gross profit increased in the three and six months ended June 30, 2025, primarily driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased for the three and six months ended June 30, 2025, primarily driven by higher manufacturing expenses related to the expansion of new therapies and 0.6 percentage point negative impact from the foreign currency rate fluctuations for the three months ended June 30, 2025.

Previous wording

SG&A expenses increased for the three months ended March 31, 2025, primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States and (b) professional services costs to support a transition services agreement. Foreign currency exchange rate fluctuations decreased expenses by $6.7 million for the three months ended March 31, 2025, primarily due to the strengthening of United States dollar against the Euro and multiple other currencies.

Current wording

SG&A expenses increased for the three and six months ended June 30, 2025, primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States and (b) increased professional services costs to support a transition services agreement. Foreign currency exchange rate fluctuations increased expenses by $1.3 million during the three months ended June 30, 2025, primarily due to the weakening of United States dollar against multiple currencies, and decreased expenses by $5.4 million during the six months ended June 30, 2025, primarily due to the strengthening of United States dollar against the Euro and multiple other currencies.

Previous wording

R&D expenses decreased for the three months ended March 31, 2025, primarily due to decreased investments in our aortic transcatheter valve innovations, partially offset by increased investments in implantable heart failure management innovations after our recent business combinations.

Current wording

R&D expenses increased for the three and six months ended June 30, 2025, primarily due to increased investments in implantable heart failure management innovations, including increased clinical activity, after our recent business combinations, partially offset by decreased investments in our transcatheter aortic valve innovations.

Previous wording

We incurred certain litigation expenses related to intellectual property litigation and tax litigation of $10.9 million and $8.9 million during the three months ended March 31, 2025 and 2024, respectively.

Current wording

We incurred certain litigation expenses related to intellectual property litigation and tax litigation of $15.5 million and $8.1 million during the three months ended June 30, 2025 and 2024, respectively, and $26.4 million and $17.0 million during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Other operating income, net of $19.1 million in three months ended March 31, 2025, included income from a transition services agreement of $17.9 million (see Note 4 to the Consolidated Condensed Financial Statements).

Current wording

Other operating income, net of $21.3 million and $40.4 million in three and six months ended June 30, 2025, respectively, included income from a transition services agreement of $19.9 million and $37.8 million, respectively. (see Note 4 to the Consolidated Condensed Financial Statements).

Previous wording

Our effective income tax rate attributable to continuing operations was 16.2% and 12.5% for the three months ended March 31, 2025 and 2024, respectively. The increase in the effective rate between the three months ended March 31, 2025 and 2024, was primarily due toan increase in global minimum tax ("Pillar Two," as noted below) and a decrease in the tax benefit from employee share-based compensation. In addition, the effective rates for the three months ended March 31, 2025 and 2024, were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit from employee share-based compensation attributable to continuing operations of$1.3 million and$5.8 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Our effective income tax rate attributable to continuing operations was 16.1% and 5.2% for the three months ended June 30, 2025 and 2024, respectively, and 16.1% and 8.8% for the six months ended June 30, 2025 and 2024, respectively. The increase in the effective rate between the six months ended June 30, 2025 and 2024 was primarily due toan increase in global minimum tax (“Pillar Two,” as noted below), a decrease in the tax benefit from employee share-based compensation, and a decrease in the benefit from favorable global income tax audit settlements. In addition, the effective rates for the six months ended June 30, 2025 and 2024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit (shortfall) from employee share-based compensation attributable to continuing operations of$(0.3) million and$3.8 million for the three months ended June 30, 2025 and 2024, respectively, and $1.0 million and$9.5 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two ("Pillar Two") rules that impose a global minimum tax of 15% on reported profits. Although Pillar Two provides a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. As countries continue to enact and refine the Pillar Two rules, we will evaluate the potential effects of Pillar Two on our effective tax rate. In 2025, we expect the Pillar Two provisions to result in additional tax expense of approximately $60 million.

Current wording

Many countries are implementing some or all of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting Pillar Two (“Pillar Two”) rules that impose a global minimum tax of 15% on reported profits. Although Pillar Two provides a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. As countries continue to enact and refine the Pillar Two rules, we will evaluate the potential effects of Pillar Two on our effective tax rate. In 2025, we expect the Pillar Two provisions to result in additional tax expense of approximately $50 million.

Previous wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $240 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals ("Appeals"). The Appeals process culminated in the third quarter of 2023, when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Current wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $250 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Previous wording

During the fourth quarter of 2023, Appeals issued a notice of deficiency ("NOD") increasing our 2015 through 2017 United States federal income tax in amounts resulting from the income adjustments previously reflected in the NOPA. The additional tax sought in excess of our filing is $269.3 million before consideration of interest and a repatriation tax

Current wording

During the fourth quarter of 2023, Appeals issued a notice of deficiency (“NOD”) increasing our 2015 through 2017 United States federal income tax in amounts resulting from the income adjustments previously reflected in the NOPA. The additional tax sought in excess of our filing position is $269.3 million before consideration of interest and a repatriation tax offset.

Previous wording

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the "ITA") wherein the ITA claimed that we owe approximately $110.0 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. We maintain that we did not transfer intellectual property outside of Israel and intend to vigorously defend that position through administrative proceedings including with a formal appeal of the assessment that was filed during the third quarter of 2024. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16.0 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We filed a formal appeal in the first quarter of 2025 and, if necessary, expect to defend our position through judicial proceedings. There can be no assurance that this matter will be resolved in our favor and an adverse outcome could have a material effect on our consolidated financial statements.

Current wording

During the first quarter of 2024, we received a notice of assessment from the Israel Tax Authority (the “ITA”) wherein the ITA claimed that we owe approximately $110 million of tax excluding interest and penalties in connection with a claimed 2017 transfer of intellectual property. On July 31, 2025, the ITA formally informed us that it was withdrawing its 2017 assessment but reserves the right to evaluate whether intellectual property was transferred in later years. We maintain that we did not transfer intellectual property outside of Israel and would vigorously defend that position through administrative proceedings including with appeals if the issue is raised in later years. If necessary, we expect to defend that position through judicial proceedings. During the fourth quarter of 2024, we received a notice of assessment from the ITA claiming that we owe additional tax of approximately $16 million excluding interest and penalties for the 2018 through 2022 tax years based entirely on the collateral impacts of the 2017 assessment. We filed a formal appeal in the first quarter of 2025 and, if necessary, expect to defend its position through judicial proceedings. While the appeals process for the 2018 through 2022 years runs through March 2026, we expect the 2018 through 2022 assessment to also be withdrawn prior to expiration of the appeals process based on the ITA’s conclusion that IP was not transferred in 2017.

Previous wording

As of March 31, 2025, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.4 billion and $538.7 million, respectively.

Current wording

As of June 30, 2025, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.4 billion and $638.3 million, respectively.

Previous wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the "2018 Notes") due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of March 31, 2025, we have not elected to redeem any of the 2018 Notes. As of March 31, 2025, the carrying value of the 2018 Notes was $597.8 million.

Current wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of June 30, 2025, we have not elected to redeem any of the 2018 Notes. As of June 30, 2025, the carrying value of the 2018 Notes was $598.0 million.

Previous wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the three months ended March 31, 2025, under the Board authorized repurchase program, we repurchased a total of 3.4 million shares at an aggregate cost of $306.9 million, including pursuant to a $250 million accelerated share repurchase agreement (see Note 10 to the Consolidated Condensed Financial Statements). As of March 31, 2025, we had remaining authority to purchase $1.1 billion of our common stock under the share repurchase program.

Current wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the six months ended June 30, 2025, under the Board authorized repurchase program, we repurchased a total of 3.4 million shares at an aggregate cost of $306.9 million, including pursuant to a $250 million accelerated share repurchase agreement (see Note 10 to the Consolidated Condensed Financial Statements). As of June 30, 2025, we had remaining authority to purchase $1.1 billion of our common stock under the share repurchase program.

Previous wording

We have purchased options to acquire and have agreed to provide promissory notes to various entities. These arrangements could result in additional cash outlays in the future should we decide to exercise the options or should the entities

Current wording

We have purchased options to acquire and have agreed to provide promissory notes to various entities. These arrangements could result in additional cash outlays in the future should we decide to exercise the options or should the entities draw on the promissory notes.

Previous wording

Consolidated Cash Flows - For the three months ended March 31, 2025 and 2024:

Current wording

Consolidated Cash Flows - For the six months ended June 30, 2025 and 2024:

Previous wording

Net cash flows provided byoperating activities of $280.4 million for the three months ended March 31, 2025, increased $333.9 million over the same period last year, primarily due to tax payments in the three months ended March 31, 2024 of $349.2 million, which included a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (see Note 14 to the Consolidated Condensed Financial Statements).

Current wording

Net cash flows provided byoperating activities of $570.6 million for the six months ended June 30, 2025, increased $252.6 million over the same period last year primarily due to (1) lower tax payments during the six months ended June 30, 2025, which included $160.0 million of local tax payments associated with the sale of Critical Care, compared to the six months ended June 30, 2024, which included a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (see Note 14 to the Consolidated Condensed Financial Statements), and (2) improved operating performance.

Previous wording

Net cash provided byinvesting activities of $85.3 million for the three months ended March 31, 2025, consisted primarily of net proceeds from investments of $198.4 million, partially offset by capital expenditures of $56.0 million and a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care.

Current wording

Net cash used ininvesting activities of $86.8 million for the six months ended June 30, 2025, consisted primarily of capital expenditures of $105.3 million, an issuance of notes receivable of $70.6 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care, and payment of acquisition options of $17.0 million, partially offset by net proceeds from investments of $145.8 million.

Previous wording

Net cash provided by investing activities of $63.1 million for the three months ended March 31, 2024, consisted primarily of net proceeds from investments of $161.4 million, partially offset by capital expenditures of $65.3 million.

Current wording

Net cash provided by investing activities of $187.9 million for the six months ended June 30, 2024, consisted primarily of net proceeds from investments of $391.7 million, partially offset by capital expenditures of $150.7 million.

Previous wording

Net cash used infinancing activities of $258.0 million for the three months ended March 31, 2025, consisted primarily of purchases of treasury stock of $308.6 million, partially offset by proceeds from stock plans of $49.9 million.

Current wording

Net cash used infinancing activities of $205.3 million for the six months ended June 30, 2025, consisted primarily of purchases of treasury stock of $314.1 million, partially offset by proceeds from stock plans of $107.1 million.

Previous wording

Net cash provided by financing activities of $61.7 million for the three months ended March 31, 2024, consisted primarily of proceeds from stock plans of $62.1 million.

Current wording

Net cash used in financing activities of $34.9 million for the six months ended June 30, 2024, consisted primarily of purchases of treasury stock of $158.3 million, partially offset by proceeds from stock plans of $116.4 million.