-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KL8O9RH0rUu8IHCVzJztPRZVX1bjQGEbvGs/f9J4duM0vkLWZobIFGY5+9q3Jv4z bBYmxOdecq8V+h3t5kNvng== 0001047469-09-007409.txt : 20090807 0001047469-09-007409.hdr.sgml : 20090807 20090807170924 ACCESSION NUMBER: 0001047469-09-007409 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20090630 FILED AS OF DATE: 20090807 DATE AS OF CHANGE: 20090807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Edwards Lifesciences Corp CENTRAL INDEX KEY: 0001099800 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 364316614 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-15525 FILM NUMBER: 09996657 BUSINESS ADDRESS: STREET 1: ONE EDWARDS WAY CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9492502500 MAIL ADDRESS: STREET 1: ONE EDWARDS WAY CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: Alliance HealthCare Services, Inc. DATE OF NAME CHANGE: 20090225 FORMER COMPANY: FORMER CONFORMED NAME: EDWARDS LIFESCIENCES CORP. DATE OF NAME CHANGE: 20090225 FORMER COMPANY: FORMER CONFORMED NAME: EDWARDS LIFESCIENCES CORP DATE OF NAME CHANGE: 20000203 10-Q 1 a2193912z10-q.htm 10-Q

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 10-Q

(Mark One)    

ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2009

or

o

 

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
(State or other jurisdiction of
incorporation or organization)
  36-4316614
(I.R.S. Employer Identification No.)

One Edwards Way, Irvine, California
(Address of principal executive offices)

 

92614
(Zip Code)

(949) 250-2500
(Registrant's telephone number, including area code)



        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller Reporting Company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        The number of shares outstanding of the registrant's common stock, $1.00 par value, as of July 31, 2009 was 56,418,947.


Table of Contents


EDWARDS LIFESCIENCES CORPORATION

FORM 10-Q
For the quarterly period ended June 30, 2009

TABLE OF CONTENTS

 
   
  Page
Number
 

Part I.

 

FINANCIAL INFORMATION

       

Item 1.

 

Financial Statements (Unaudited)

   
1
 

 

    Consolidated Condensed Balance Sheets

   
1
 

 

    Consolidated Condensed Statements of Operations

   
2
 

 

    Consolidated Condensed Statements of Cash Flows

   
3
 

 

    Notes to Consolidated Condensed Financial Statements

   
4
 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

   
22
 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

   
35
 

Item 4.

 

Controls and Procedures

   
36
 

Part II.

 

OTHER INFORMATION

       

Item 1.

 

Legal Proceedings

   
37
 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

   
38
 

Item 4.

 

Submission of Matters to a Vote of Security Holders

   
38
 

Item 6.

 

Exhibits

   
39
 

Signature

   
40
 

Exhibits

   
41
 

Table of Contents


Part I. Financial Information

Item 1.    Financial Statements

        


EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(in millions, except par value; unaudited)

 
  June 30,
2009
  December 31,
2008
 
       

ASSETS

             

Current assets

             
 

Cash and cash equivalents

  $ 183.1   $ 218.7  
 

Short-term investments (Note 3)

    5.2     8.1  
 

Accounts and other receivables, net of allowances of $11.5 and $9.9, respectively (Note 4)

    274.5     204.7  
 

Inventories, net

    160.9     151.8  
 

Deferred income taxes

    38.3     42.4  
 

Prepaid expenses

    44.8     30.7  
 

Other current assets

    38.8     35.5  
           
   

Total current assets

    745.6     691.9  

Property, plant and equipment, net

    239.1     230.1  

Goodwill

    315.7     315.7  

Other intangible assets, net

    91.3     96.9  

Investments in unconsolidated affiliates (Note 7)

    20.3     14.7  

Deferred income taxes

    36.4     37.7  

Other assets

    16.7     13.2  
           

  $ 1,465.1   $ 1,400.2  
           
     

LIABILITIES AND STOCKHOLDERS' EQUITY

             

Current liabilities

             
 

Accounts payable and accrued liabilities

  $ 245.1   $ 258.5  
           

Long-term debt

    113.9     175.5  
           

Other long-term liabilities

    103.0     87.4  
           

Commitments and contingencies (Note 12)

             

Stockholders' equity

             
 

Preferred stock, $.01 par value, authorized 50.0 shares, no shares outstanding

         
 

Common stock, $1.00 par value, 350.0 shares authorized, 75.1 and 73.7 shares issued, and 56.4 and 55.9 shares outstanding, respectively

    75.1     73.7  
 

Additional paid-in capital

    998.1     940.4  
 

Retained earnings

    784.9     676.9  
 

Accumulated other comprehensive loss

    (23.7 )   (35.4 )
 

Treasury stock, at cost, 18.7 and 17.8 shares, respectively

    (831.3 )   (776.8 )
           
   

Total stockholders' equity

    1,003.1     878.8  
           

  $ 1,465.1   $ 1,400.2  
           

The accompanying notes are an integral part of these
consolidated condensed financial statements.

1


Table of Contents


EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(in millions, except per share information; unaudited)

 
  Three Months
Ended June 30,
  Six Months
Ended June 30,
 
 
  2009   2008   2009   2008  

Net sales

  $ 335.5   $ 327.6   $ 649.0   $ 624.4  
 

Cost of goods sold

    101.9     113.0     198.9     215.9  
                   

Gross profit

    233.6     214.6     450.1     408.5  
 

Selling, general and administrative expenses

    128.5     126.5     250.4     241.1  
 

Research and development expenses

    42.6     35.4     82.5     68.3  
 

Special charges (gains), net (Note 2)

    1.5     (0.8 )   (29.3 )   9.3  
 

Interest expense, net

    0.2     0.4     0.3     0.8  
 

Other (income) expense, net

    (2.0 )   1.0     (1.6 )   2.2  
                   

Income before provision for income taxes

    62.8     52.1     147.8     86.8  
 

Provision for income taxes

    15.3     12.4     39.8     28.9  
                   

Net income

  $ 47.5   $ 39.7   $ 108.0   $ 57.9  
                   

Share information (Note 14)

                         
 

Earnings per share:

                         
   

Basic

  $ 0.85   $ 0.72   $ 1.93   $ 1.04  
   

Diluted

  $ 0.81   $ 0.67   $ 1.85   $ 0.98  
 

Weighted-average number of common shares outstanding:

                         
   

Basic

    56.2     55.4     56.1     55.8  
   

Diluted

    58.5     60.2     58.5     60.7  

The accompanying notes are an integral part of these
consolidated condensed financial statements.

2


Table of Contents


EDWARDS LIFESCIENCES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in millions; unaudited)

 
  Six Months
Ended June 30,
 
 
  2009   2008  

Cash flows from operating activities

             
 

Net income

  $ 108.0   $ 57.9  
 

Adjustments to reconcile net income to cash provided by operating activities:

             
   

Depreciation and amortization

    29.1     27.5  
   

Stock-based compensation (Note 11)

    12.6     12.8  
   

Deferred income taxes

    4.8     1.0  
   

Special (gains) charges, net (Note 2)

    (25.9 )   8.4  
   

(Gain) loss on trading securities

    (1.0 )   1.2  
   

Loss on investments

        0.8  
   

Other

    3.2     (1.0 )
 

Changes in operating assets and liabilities:

             
   

Accounts and other receivables, net (Note 4)

    (62.1 )   (19.6 )
   

Inventories, net

    (8.0 )   0.1  
   

Accounts payable and accrued liabilities

    (27.9 )   (19.2 )
   

Prepaid expenses and other current assets

    (11.5 )   (19.1 )
   

Other

    6.6     8.1  
           
     

Net cash provided by operating activities

    27.9     58.9  

Cash flows from investing activities

             
 

Capital expenditures

    (28.2 )   (20.7 )
 

Investments in intangible assets

        (0.4 )
 

(Investments in) proceeds from unconsolidated affiliates, net

    (3.5 )   1.9  
 

Investments in trading securities, net

    (0.3 )   (0.4 )
 

Proceeds from investments (Note 3)

    4.2     23.4  
 

Proceeds from sale of assets (Note 2)

    30.5     74.0  
           
     

Net cash provided by investing activities

    2.7     77.8  

Cash flows from financing activities

             
 

Proceeds from issuance of long-term debt

    99.3     97.0  
 

Payments on long-term debt

    (157.7 )   (22.5 )
 

Purchases of treasury stock

    (54.5 )   (214.8 )
 

Proceeds from stock plans

    33.2     35.3  
 

Excess tax benefit from stock plans

    10.3     8.0  
 

Other

        1.3  
           
     

Net cash used in financing activities

    (69.4 )   (95.7 )

Effect of currency exchange rate changes on cash and cash equivalents

    3.2     5.4  
           
     

Net (decrease) increase in cash and cash equivalents

    (35.6 )   46.4  

Cash and cash equivalents at beginning of period

    218.7     141.8  
           

Cash and cash equivalents at end of period

  $ 183.1   $ 188.2  
           

The accompanying notes are an integral part of these
consolidated condensed financial statements.

3


Table of Contents

1. BASIS OF PRESENTATION

        The accompanying interim consolidated condensed financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the consolidated financial statements and notes included in Edwards Lifesciences Corporation's Annual Report on Form 10-K for the year ended December 31, 2008. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.

        In the opinion of management of Edwards Lifesciences Corporation (the "Company" or "Edwards Lifesciences"), the interim consolidated condensed financial statements reflect all adjustments considered necessary for a fair statement of the interim periods. All such adjustments are of a normal, recurring nature. In connection with the preparation of the consolidated condensed financial statements, the Company has evaluated subsequent events through August 7, 2009, which is the date the financial statements were issued. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. Certain reclassifications of previously reported amounts have been made to conform to classifications used in the current year.

Recently Adopted Accounting Standards

        In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS 157"), which defined fair value, established a framework for measuring fair value, and expanded disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position ("FSP") No. 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2"), which delayed the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis, until fiscal years beginning after November 15, 2008. The Company's adoption of SFAS 157, as it applies to those non-financial assets and liabilities affected by the one-year delay, did not have a material impact on the Company's consolidated financial statements. See Note 8 for further information.

        In December 2007, the FASB ratified the consensus reached by the Emerging Issues Task Force ("EITF") in EITF Issue No. 07-1, "Accounting for Collaborative Arrangements" ("EITF 07-1"). EITF 07-1 defines collaborative arrangements and establishes reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. EITF 07-1 also establishes the appropriate income statement presentation and classification for joint operating activities and payments between participants, as well as the sufficiency of the disclosures related to these arrangements. EITF 07-1 was effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Retrospective application to all prior periods presented is required for all collaborative arrangements existing as of the effective date. The Company's adoption of EITF 07-1 did not have a material impact on its consolidated financial statements. See Note 16 for further information.

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS 141R"). SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Among other requirements, SFAS 141R expands the definition of a business combination, requires acquisitions to be accounted for at fair value, and requires transaction

4


Table of Contents


costs and restructuring charges to be expensed. SFAS 141R was effective for fiscal years beginning on or after December 15, 2008. SFAS 141R will impact the Company if it is involved in a business combination.

        In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's derivative instruments and hedging activities, including (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 was effective for fiscal years and interim periods beginning after November 15, 2008. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. See Note 9 for further information.

        In April 2008, the FASB issued FSP No. FAS 142-3, "Determination of the Useful Life of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets." FSP 142-3 applies to intangible assets that are acquired individually or with a group of other assets acquired in business combinations and asset acquisitions. FSP 142-3 also requires expanded disclosure related to the determination of intangible asset useful lives. FSP 142-3 was effective for fiscal years beginning after December 15, 2008. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In November 2008, the FASB ratified the consensus reached by the EITF in EITF Issue No. 08-6, "Equity Method Investment Accounting Considerations" ("EITF 08-6"). EITF 08-6 clarifies the accounting for certain transactions and impairment considerations involving equity method investments. EITF 08-6 was effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In November 2008, the FASB ratified the consensus reached by the EITF in EITF Issue No. 08-7, "Accounting for Defensive Intangible Assets" ("EITF 08-7"). EITF 08-7 clarifies the accounting for certain separately identifiable intangible assets which an acquirer does not intend to actively use but intends to hold to prevent its competitors from obtaining access to them. EITF 08-7 requires an acquirer in a business combination to account for a defensive intangible asset as a separate unit of accounting which should be amortized to expense over a period the asset diminishes in value. EITF 08-7 was effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 141 (R)-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" ("FSP 141R-1"). FSP 141R-1 amends the guidance in SFAS 141R to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably determined. If the fair value cannot be reasonably determined, then the assets and liabilities should be recognized at the amount that would be recognized in accordance with SFAS No. 5, "Accounting for Contingencies," and FASB Interpretation No. 14, "Reasonable Estimation of the Amount of a Loss." The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 provides additional guidance for estimating fair value in

5


Table of Contents


accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 was effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments" ("FSP 115-2 and 124-2"). FSP 115-2 and 124-2 amends the other-than-temporary impairment guidance related to debt securities and expands and increases the frequency of existing disclosures about other-than-temporary impairments for debt and equity securities. In addition, FSP 115-2 and 124-2 requires that the annual disclosures in SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and FSP No. FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments," be made for interim periods. FSP 115-2 and 124-2 was effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the SEC issued Staff Accounting Bulletin ("SAB") No. 111, "Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities" ("SAB 111"). SAB 111 amends SAB Topic 5M to reflect the guidance in FSP 115-2 and 124-2. SAB 111 maintains the prior staff views related to equity securities but amends SAB Topic 5M to exclude debt securities from its scope. The adoption of SAB 111 did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments" ("FSP 107-1 and 28-1"). FSP 107-1 and 28-1 requires disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FSP 107-1 and 28-1 was effective for interim reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. SFAS 165 was effective for interim or annual financial periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In June 2009, the SEC issued SAB No. 112, "Update of Codification of Staff Accounting Bulletins" ("SAB 112"). SAB 112 amends or rescinds portions of the SEC staff's interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with SFAS 141R and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements." The adoption of SAB 112 did not have a material impact on the Company's consolidated financial statements.

New Accounting Standards Not Yet Adopted

        In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" ("SFAS 167"). SFAS 167 eliminates the exemption for qualifying special purpose entities and establishes a new approach for determining the primary beneficiary of a variable interest entity ("VIE") based on whether the entity (1) has the power to direct the activities of the VIE that most significantly impact the entity's economic performance and (2) has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. SFAS 167

6


Table of Contents


requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a VIE. Enhanced disclosures are also required to provide information about an enterprise's involvement in a VIE. SFAS 167 is effective for the first annual reporting period beginning after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company does not expect the adoption of SFAS 167 will have a material impact on its consolidated financial statements.

        In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles" ("SFAS 168"). SFAS 168 establishes the FASB Accounting Standards Codification™ as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with generally accepted accounting principles ("GAAP"). Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 replaces SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company does not expect the adoption of SFAS 168 will have a material impact on its consolidated financial statements.

2. SPECIAL CHARGES (GAINS), NET

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  
 
  (in millions)
 

Loss (gain) on sale of product lines

  $ 1.5   $   $ (25.5 ) $ 8.1  

Sale of distribution rights

            (2.8 )    

Reserve reversal

            (1.0 )    

Litigation settlement

                2.1  

Realignment expenses, net

        (0.8 )       (0.9 )
                   
 

Special charges (gains), net

  $ 1.5   $ (0.8 ) $ (29.3 ) $ 9.3  
                   

    Loss (Gain) on Sale of Product Lines

        In June 2009, the Company entered into a definitive agreement to sell certain assets related to its hemofiltration product line. Under the terms of the agreement, the Company will receive a cash payment of approximately $55.9 million, and may receive up to an additional $9.0 million upon the buyer's achievement of certain revenue objectives over the next two years. The Company will provide transition services to the buyer. This transaction allows the Company to better focus on its global strategic priorities. The Company expects this transaction to close in the third quarter of 2009, pending regulatory approvals. In June 2009, the Company recorded a $1.5 million charge for transaction costs and employee severance related to the pending sale.

        In January 2008, the Company completed the sale of certain assets related to the Edwards LifeStent peripheral vascular product line. Under the terms of the sale agreement, the Company received an initial cash payment of $74.0 million at closing, and was entitled to receive up to an additional $65.0 million in cash upon the achievement of certain milestones. In addition, the Company agreed to provide transition services until the earlier of mid-2010 or the transfer of manufacturing to the buyer. In December 2008, the Company received a $23.0 million LifeStent milestone payment in connection with the transfer of its pre-market approval to the buyer. In February 2009, the Company received an additional $27.0 million milestone payment associated with the LifeStent pre-market

7


Table of Contents


approval. The remaining $15.0 million milestone payment will be recorded upon the transfer of LifeStent device manufacturing to the buyer.

        In connection with the LifeStent transaction, the Company recorded in January 2008 a pre-tax loss of $8.1 million consisting of the cash proceeds of $74.0 million, offset by a $34.6 million write-off of goodwill associated with this product line, $36.9 million related to the net book value of inventory, fixed assets, and intangible assets that were sold, $6.9 million of deferred revenue related to the transition services the Company has agreed to provide, and $3.7 million of transaction and other costs related to the sale.

    Sale of Distribution Rights

        In March 2009, the Company recorded a $2.8 million gain related to the sale of its distribution rights in Europe for a specialty vascular graft.

    Reserve Reversal

        In 2004, the Company discontinued its Lifepath AAA endovascular graft program. In March 2009, upon completion of its remaining clinical obligations related to this program, the Company reversed its remaining $1.0 million clinical reserve.

    Litigation Settlement

        In March 2008, the Company recorded a $2.1 million charge for the settlement of litigation related to its divested United States perfusion services business. Under the terms of the divestiture, this was the Company's last outstanding case.

    Realignment Expenses, net

        In June 2008, the Company recorded a $0.8 million reversal of previously accrued severance costs from the fourth quarter of 2007 related to the global reduction in workforce.

        In March 2008, the Company recorded a $1.3 million charge for executive severance associated with the Company's business realignment, offset by a $1.4 million reversal of the December 2007 accrued severance related to the sale of the LifeStent product line. As of June 30, 2009, all payments related to the executive severance charge were substantially complete.

        In December 2007, the Company recorded realignment expenses of $13.9 million primarily related to (1) severance expenses associated with the sale of the Company's LifeStent product line and a global reduction in workforce, primarily in the United States, Europe, and Japan (impacting approximately 180 employees), and (2) the termination of the Company's intra-aortic balloon pump distribution agreement in Japan. As of June 30, 2009, remaining payments of approximately $1.7 million are expected to be paid through the end of 2009.

3. INVESTMENTS

        The Company holds an investment in the Bank of America Columbia Strategic Cash fund, a private placement money market mutual fund, which was closed to new subscriptions or redemptions in December 2007, resulting in the Company's inability to immediately redeem its investments for cash. During the three and six months ended June 30, 2009, the Company recognized unrealized gains of $0.3 million and $0.4 million, respectively, included in "Accumulated Other Comprehensive Loss." During the three and six months ended June 30, 2008, the Company recognized realized losses and unrealized losses considered other-than-temporary of $0.2 million and 0.8 million, respectively, included in "Other (Income) Expense, net." Additionally, during the three months ended June 30, 2008, the Company recognized an unrealized gain of $0.2 million, included in "Accumulated Other Comprehensive

8


Table of Contents


Loss," related to an increase in the net asset value of the fund since March 31, 2008. Since December 31, 2007, the Company has received cash redemptions of $39.7 million. The fair value of the Company's remaining investment in this fund as of June 30, 2009 and December 31, 2008 was estimated to be $7.1 million and $10.9 million, respectively, based on the net asset value of the fund. Based on information received from the fund manager regarding the timing of the expected redemptions, the Company expects to receive cash redemptions of approximately $5.2 million through the second quarter of 2010, which has been classified as "Short-term Investments" on the accompanying consolidated condensed balance sheet as of June 30, 2009. The remaining $1.9 million of the investment is expected to be received after the second quarter of 2010, and has been classified as "Other Assets." As of December 31, 2008, $8.1 million of the investment was classified as "Short-term Investments" and $2.8 million was classified as "Other Assets" based on the redemption schedule communicated to the Company at that time.

4. ACCOUNTS RECEIVABLE SECURITIZATION

        The Company terminated its securitization program in Japan in February 2009. Previously, under the Japan Receivables Facility, the Company sold eligible accounts receivable directly to a financial institution, and the transactions were accounted for as sales of accounts receivable. Upon termination of the program, the Company paid the financial institution $39.0 million for the outstanding accounts receivable and February collections.

5. INVENTORIES

        Inventories consisted of the following (in millions):

 
  June 30,
2009
  December 31,
2008
 

Raw materials

  $ 35.3   $ 36.5  

Work in process

    28.4     19.5  

Finished products

    97.2     95.8  
           

  $ 160.9   $ 151.8  
           

6. OTHER INTANGIBLE ASSETS

        Other intangible assets subject to amortization consisted of the following (in millions):

June 30, 2009
  Patents   Unpatented
Technology
  Other   Total  

Cost

  $ 209.3   $ 35.0   $ 13.5   $ 257.8  

Accumulated amortization

    (136.1 )   (25.9 )   (4.5 )   (166.5 )
                   
 

Net carrying value

  $ 73.2   $ 9.1   $ 9.0   $ 91.3  
                   
December 31, 2008
  Patents   Unpatented
Technology
  Other   Total  

Cost

  $ 204.1   $ 35.0   $ 13.4   $ 252.5  

Accumulated amortization

    (127.3 )   (24.6 )   (3.7 )   (155.6 )
                   
 

Net carrying value

  $ 76.8   $ 10.4   $ 9.7   $ 96.9  
                   

        Patents include $11.1 million of capitalized legal costs related to the defense and enforcement of issued patents and trademarks for which success is deemed probable as of June 30, 2009.

9


Table of Contents

        Amortization expense related to other intangible assets was $5.4 million and $4.6 million for the three months ended June 30, 2009 and 2008, respectively, and $10.7 million and $9.2 million for the six months ended June 30, 2009 and 2008, respectively. Estimated amortization expense for each of the years ending December 31 is as follows (in millions):

2009

  $ 20.8  

2010

    20.6  

2011

    18.1  

2012

    14.7  

2013

    14.5  

        The Company expenses costs incurred to renew or extend the term of acquired intangible assets. No such costs were incurred during the three months ended June 30, 2009.

7. INVESTMENTS IN UNCONSOLIDATED AFFILIATES

        The Company has entered into a number of strategic alliances with privately and publicly held companies. Investments in these unconsolidated affiliates are as follows:

 
  June 30,
2009
  December 31,
2008
 
 
  (in millions)
 

Available-for-sale investments

             
 

Cost

  $ 10.9   $ 10.9  
 

Unrealized losses

    (2.6 )   (5.8 )
           
   

Fair value of available-for-sale investments

    8.3     5.1  
           

Equity method investments

             
 

Cost

    10.4     9.7  
 

Equity in losses

    (1.7 )   (1.1 )
           
   

Carrying value of equity method investments

    8.7     8.6  
           

Cost method investments

             
 

Carrying value of cost method investments

    3.3     1.0  
           

Total investments in unconsolidated affiliates

  $ 20.3   $ 14.7  
           

        There were no sales of available-for-sale investments during the six months ended June 30, 2009. Proceeds from sales of available-for-sale investments were $1.1 million and $2.3 million for the three and six months ended June 30, 2008, respectively. The Company realized pre-tax gains from these sales of $0.6 million and $1.3 million for the three and six months ended June 30, 2008, respectively.

8. FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

        The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on an historical cost basis. Financial instruments of the Company consist of cash deposits, short-term investments, accounts and other receivables, investments in unconsolidated affiliates, accounts payable, certain accrued liabilities, and debt.

        The Company adopted SFAS 157 as of January 1, 2008 with respect to its financial assets and liabilities, and as of January 1, 2009 with respect to its non-financial assets and liabilities. SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs used to

10


Table of Contents


determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

 
   
   
    Level 1—   Quoted market prices in active markets for identical assets or liabilities.
    Level 2—   Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly.
    Level 3—   Unobservable inputs that are not corroborated by market data.

        In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.

    Assets and Liabilities Measured at Fair Value on a Recurring Basis

        The following table summarizes the Company's assets and liabilities which are measured at fair value on a recurring basis (in millions):

June 30, 2009
  Level 1   Level 2   Level 3   Total  

Assets

                         

Investment in the Bank of America Columbia Strategic Cash fund

  $   $   $ 7.1   $ 7.1  

Investments held for executive deferred compensation plan

    11.7             11.7  

Investments in unconsolidated affiliates

    8.3             8.3  
                   

  $ 20.0   $   $ 7.1   $ 27.1  
                   

Liabilities

                         

Derivatives

  $   $ 4.3   $   $ 4.3  
                   

  $   $ 4.3   $   $ 4.3  
                   
December 31, 2008
  Level 1   Level 2   Level 3   Total  

Assets

                         

Investment in the Bank of America Columbia Strategic Cash fund

  $   $   $ 10.9   $ 10.9  

Investments held for executive deferred compensation plan

    10.2             10.2  

Investments in unconsolidated affiliates

    5.1             5.1  

Residual interest in accounts receivable securitizations

            6.6     6.6  
                   

  $ 15.3   $   $ 17.5   $ 32.8  
                   

Liabilities

                         

Derivatives

  $   $ 1.3   $   $ 1.3  
                   

  $   $ 1.3   $   $ 1.3  
                   

11


Table of Contents

        The following table summarizes the changes in fair value of the Company's financial assets and liabilities that have been classified as Level 3 (in millions):

 
  Six Months Ended June 30, 2009  
 
  Investment in
the Columbia
Strategic
Cash Fund
  Residual
Interest in
Accounts
Receivable
Securitizations
  Total  

Balance at December 31, 2008

  $ 10.9   $ 6.6   $ 17.5  
 

Total gains—realized and unrealized:

                   
   

Included in other comprehensive loss

    0.4         0.4  
 

Purchases, sales, issuances, and settlements

    (4.2 )   (6.6 )   (10.8 )
               

Balance at June 30, 2009

  $ 7.1   $   $ 7.1  
               

 

 
  Six Months Ended June 30, 2008  
 
  Investment in
the Columbia
Strategic
Cash Fund
  Residual
Interest in
Accounts
Receivable
Securitizations
  Total  

Balance at December 31, 2007

  $ 49.4   $ 8.8   $ 58.2  
 

Total losses—realized and unrealized:

                   
   

Included in earnings (a)

    (0.8 )       (0.8 )
   

Included in other comprehensive loss

    0.2         0.2  
 

Purchases, sales, issuances, and settlements

    (23.4 )   1.6     (21.8 )
               

Balance at June 30, 2008

  $ 25.4   $ 10.4   $ 35.8  
               

(a)
Recorded as a component of "Other (Income) Expense, net" in the consolidated condensed statement of operations.

        The Company's investment in the Bank of America Columbia Strategic Cash fund, a private placement money market mutual fund, was closed to new subscriptions or redemptions in December 2007, resulting in the Company's inability to immediately redeem its investment for cash. The fair value of the Company's remaining investment in this fund was estimated based on the net asset value of the fund. The fair value of the underlying securities held by the fund was determined based on quoted market prices or broker quotes, when possible. In the absence of observable market quotations, the underlying securities were valued based on alternative valuation techniques using inputs that may not be observable. In these cases, the fair value was based on available information believed to be reliable, which may be affected by conditions in the financial markets. Different market participants may reach different opinions as to the value of any particular security based on their varying market outlooks, the market information available to them, and the particular circumstances of their portfolios. The Company has procedures to independently verify and test valuations received from third parties.

        The Company estimates the fair value of the residual interest in accounts receivable securitizations using the net carrying amount of the accounts receivables less the discount paid on the sale of the receivables. This amount is calculated using future expected credit losses and calculated contractual rebates to distributors to determine the future expected cash flows, which generally approximate fair value given the securitized portfolio's short-term weighted-average life. The Company terminated its securitization program in the United States in August 2008 and in Japan in February 2009.

        The Company's other financial instruments generally approximate their fair values based on the short-term nature of these instruments.

12


Table of Contents

    Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

        The Company has assets that are subject to measurement at fair value on a non-recurring basis, including assets acquired in a business combination, such as goodwill and intangible assets, and other long-lived assets. The Company reviews the carrying value of these assets whenever events and circumstances indicate that the carrying amounts of the assets may not be recoverable. If it is determined that the assets are impaired, the carrying value would be reduced to estimated fair market value. During the six months ended June 30, 2009, the Company had no impairments related to these assets.

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

        Edwards Lifesciences maintains an overall risk management strategy that may incorporate the use of a variety of derivative financial instruments, as summarized below, to mitigate its exposure to significant unplanned fluctuations in earnings and cash flow caused by volatility in interest rates and currency exchange rates. Derivative instruments that are used as part of the Company's interest and foreign exchange rate management strategy can include interest rate swaps, option-based products, and forward exchange contracts. As of June 30, 2009, all derivative instruments owned were designated as hedges of underlying exposures. Edwards Lifesciences does not use any of these instruments for trading or speculative purposes.

 
  June 30, 2009  
 
  Notional
Amount
  Fair Value
Asset
(Liability)
 
 
  (in millions)
 

Forward currency agreements

  $ 222.4   $ (3.9 )

Currency option contracts

    141.7     (0.4 )

        The Company utilizes forward currency agreements and option contracts to hedge a portion of its exposure to forecasted intercompany and third-party foreign currency transactions. These contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates. These contracts are entered into to reduce the risk that the Company's earnings and cash flows resulting from certain forecasted transactions will be adversely affected by changes in foreign currency exchange rates. These agreements have a maximum duration of one year.

        Derivative instruments used by the Company involve, to varying degrees, elements of credit risk, in the event a counterparty should default, and market risk, as the instruments are subject to rate and price fluctuations. Credit risk is managed through the use of credit standard guidelines, counterparty diversification, monitoring of counterparty financial condition, and International Swap Dealers Association master-netting agreements in place with all derivative counterparties. The master-netting agreements reduce our counterparty payment settlement risk on any given maturity date to the net amount of any receipts or payments due between us and the counterparty financial institution. Although these protections do not eliminate concentrations of credit, the Company does not consider the risk of counterparty default to be significant. All derivative financial instruments are with a diversified group of major financial institutions assigned investment grade ratings with national rating agencies. None of the Company's outstanding derivative instruments contain credit-risk related contingent features that may require the Company to post or permit the Company to call collateral from any counterparty.

        All derivatives are recognized on the balance sheet at their fair value. On the date that the Company enters into a derivative contract, it designates the derivative as either (a) a hedge of a forecasted transaction or the variability of cash flows that are to be received or paid in connection with a recognized asset or liability (a "cash flow" hedge), or (b) a hedge of an exposure to changes in the

13


Table of Contents


fair value of an asset, liability, or an unrecognized firm commitment (a "fair value" hedge). Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a cash flow hedge to the extent that the hedge is effective, are recorded in "Accumulated Other Comprehensive Loss" until earnings are affected by the variability of cash flows of the hedged transaction (e.g., until periodic settlements of a variable asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a fair value hedge, are recorded in current-period earnings.

        The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheet as of June 30, 2009 (in millions):

 
  June 30, 2009  
 
  Asset Derivatives   Liability Derivatives  
 
  Balance Sheet
Location
  Fair Value   Balance Sheet
Location
  Fair Value  

Derivatives designated as hedging instruments under SFAS 133

                     

Foreign exchange contracts

  Prepaid expenses   $   Accrued liabilities   $ 4.3  

        The following tables present the effect of derivative instruments on the consolidated statement of operations for the three and six months ended June 30, 2009 (in millions):

 
   
  Amount of Gain or (Loss) Recognized
in Income on Derivative
 
 
  Location of Gain or (Loss)
Recognized in Income
on Derivative
  Three Months
Ended
June 30,
2009
  Six Months
Ended
June 30,
2009
 

Derivatives in SFAS 133 fair value hedging relationships

                 

Foreign exchange contracts

  Other (income) expense, net   $ (1.2 ) $ (0.4 )

 

 
  Amount of Gain or (Loss)
Recognized in OCI on
Derivative (Effective Portion)
   
  Amount of Gain or (Loss)
Reclassified from Accumulated
OCI into Income
 
 
  Three Months
Ended
June 30,
2009
  Six Months
Ended
June 30,
2009
  Location of Gain or
(Loss) Reclassified from
Accumulated OCI into
Income
  Three Months
Ended
June 30,
2009
  Six Months
Ended
June 30,
2009
 

Derivatives in SFAS 133 cash flow hedging relationships

                             

Foreign exchange contracts

  $ (7.1 ) $ 5.0   Cost of goods sold   $ 4.8   $ 6.1  

        The Company expects that during the next twelve months it will reclassify to earnings a $2.8 million gain currently recorded in "Accumulated Other Comprehensive Loss." For both the three and six months ended June 30, 2009, the Company expensed $0.5 million related to the time value of option-based products and did not record any gains or losses due to hedge ineffectiveness.

14


Table of Contents

10. DEFINED BENEFIT PLANS

        The components of net periodic benefit costs for the three and six months ended June 30, 2009 and 2008 were as follows (in millions):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Service cost

  $ 1.3   $ 0.9   $ 2.7   $ 1.9  

Employee contributions

                 

Interest cost

    0.5     0.4     0.9     0.7  

Expected return on plan assets

    (0.2 )   (0.2 )   (0.4 )   (0.4 )

Amortization of prior service cost and other

    0.2         0.3      
                   
 

Net periodic pension benefit cost

  $ 1.8   $ 1.1   $ 3.5   $ 2.2  
                   

11. STOCK-BASED COMPENSATION

        Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and six months ended June 30, 2009 and 2008 was as follows (in millions):

 
  Three Months
Ended
June 30
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Cost of goods sold

  $ 0.5   $ 0.6   $ 1.1   $ 1.2  

Selling, general and administrative expenses

    4.3     4.6     9.5     9.2  

Research and development expenses

    0.9     1.0     2.0     2.4  
                   
 

Total stock-based compensation expense

  $ 5.7   $ 6.2   $ 12.6   $ 12.8  
                   

        At June 30, 2009, the total remaining compensation cost related to unvested stock options, restricted stock units, and employee stock purchase subscription awards amounted to $55.7 million and will be amortized on a straight-line basis over a weighted-average vesting period of approximately 32 months.

        During the six months ended June 30, 2009, the Company granted 0.9 million stock options at a weighted-average exercise price of $62.93 and 0.2 million shares of restricted stock units at a weighted-average grant-date fair value of $62.59.

15


Table of Contents

    Fair Value Disclosures

        The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods:

    Option Awards

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Risk-free interest rate

    1.9 %   3.0 %   1.9 %   3.0 %

Expected dividend yield

    None     None     None     None  

Expected volatility

    28.2 %   23.5 %   28.1 %   23.3 %

Expected term (years)

    4.6     4.4     4.6     4.4  

Fair value, per share

  $ 17.00   $ 14.43   $ 16.98   $ 14.31  

        The Black-Scholes option pricing model was used with the following weighted-average assumptions for employee stock purchase plan ("ESPP") subscriptions granted during the following periods:

    ESPP

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Risk-free interest rate

    0.5 %   1.5 %   0.4 %   3.3 %

Expected dividend yield

    None     None     None     None  

Expected volatility

    37.3 %   25.6 %   36.7 %   23.8 %

Expected term (years)

    0.7     0.6     0.7     0.6  

Fair value, per share

  $ 16.56   $ 10.22   $ 16.36   $ 10.58  

12. COMMITMENTS AND CONTINGENCIES

        In August 2003, Edwards Lifesciences filed a lawsuit against Medtronic, Inc. and its affiliate, Medtronic Vascular, Inc. (collectively, "Medtronic"); Cook, Inc. ("Cook"); and W.L. Gore & Associates ("Gore") alleging infringement of a patent exclusively licensed to the Company. The lawsuit was filed in the United States District Court for the Northern District of California, seeking monetary damages and injunctive relief. In September 2003, a second patent exclusively licensed to the Company was added to the lawsuit. As announced in January 2006, Edwards Lifesciences settled this litigation with Medtronic. Edwards Lifesciences remains in litigation with Cook and Gore. In March 2008, the District Court granted summary judgment of non-infringement in favor of Cook and subsequently in favor of Gore. In 2008, Edwards Lifesciences appealed these judgments to the Federal Circuit Court of Appeals; the appeal was heard in July 2009.

        In May 2007, Edwards Lifesciences filed a lawsuit against CoreValve, Inc. ("CoreValve"), alleging that CoreValve's ReValving System infringes on a European patent, one of the Andersen family of patents. The lawsuit was filed in the District Patent Court in Dusseldorf, Germany, seeking injunctive and declaratory relief. As announced in October 2008, the Court rejected this assertion and dismissed the infringement lawsuit. The Company has appealed this decision. In May 2007, and June 2007, CoreValve filed separate lawsuits in London, United Kingdom, and Munich, Germany, respectively, against the three inventors of this patent alleging that the patent is invalid. The Company then asserted that CoreValve's ReValving System infringes the Andersen patent in the United Kingdom. In January 2009, the United Kingdom Court determined that the Andersen patent was valid but not infringed by

16


Table of Contents


CoreValve. The parties have filed cross-appeals on the validity and infringement decisions. In February 2008, the Company filed a lawsuit against CoreValve in the United States alleging infringement of three of the U.S. Andersen patents. This lawsuit is ongoing.

        In February 2008, Cook filed a lawsuit in the District Patent Court in Dusseldorf, Germany, against Edwards Lifesciences alleging that the Edwards SAPIEN transcatheter heart valve infringes on a Cook patent. Edwards Lifesciences subsequently filed lawsuits in London, United Kingdom, and in Munich, Germany, against Cook alleging that the patents in each country are invalid. In the United Kingdom lawsuit, Cook counterclaimed, alleging infringement by Edwards. As announced, the German Court ruled in March 2009 that the Company does not infringe the Cook patent. In June 2009, the United Kingdom Court also ruled that the Company does not infringe the Cook patent and, further, that the Cook patent is invalid. Cook is appealing the judgments in Germany and the United Kingdom.

        In addition, Edwards Lifesciences is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits related primarily to products and services currently or formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such cases and claims raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Upon resolution of any such legal matter or other claim, Edwards Lifesciences may incur charges in excess of established reserves. While any such charge could have a material adverse impact on Edwards Lifesciences' net income or cash flows in the period in which it is recorded or paid, management does not believe that any such charge relating to any currently pending lawsuit would have a material adverse effect on Edwards Lifesciences' financial position, results of operations, or liquidity.

        Edwards Lifesciences is subject to various environmental laws and regulations both within and outside of the United States. The operations of Edwards Lifesciences, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance will not have a material impact on Edwards Lifesciences' financial position, results of operations, or liquidity.

13. COMPREHENSIVE INCOME

        Reconciliation of net income to comprehensive income is as follows (in millions):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Net income

  $ 47.5   $ 39.7   $ 108.0   $ 57.9  

Other comprehensive income:

                         
 

Currency translation adjustments

    15.1     (0.8 )   9.0     17.2  
 

Unrealized net gain (loss) on investments in unconsolidated affiliates, net of tax

    2.2     (0.4 )   3.3     (4.1 )
 

Unrealized net (loss) gain on cash flow hedges, net of tax

    (7.2 )   3.1     (0.6 )   (1.5 )
                   

Comprehensive income

  $ 49.1   $ 41.6   $ 119.7   $ 69.5  
                   

14. EARNINGS PER SHARE

        Basic earnings per share is computed by dividing net income by the weighted-average common shares outstanding during a period. Employee equity share options, nonvested shares, and similar

17


Table of Contents


equity instruments granted by the Company are treated as potential common shares in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of the conversion of convertible debt, restricted stock units, and in-the-money options. The dilutive impact of the restricted stock units and in-the-money options is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of compensation expense for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive.

        The table below presents the computation of basic and diluted earnings per share (in millions, except per share information):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Basic:

                         
 

Net income

  $ 47.5   $ 39.7   $ 108.0   $ 57.9  
                   
 

Weighted-average shares outstanding

    56.2     55.4     56.1     55.8  
                   
 

Basic earnings per share

  $ 0.85   $ 0.72   $ 1.93   $ 1.04  
                   

Diluted:

                         
 

Net income

  $ 47.5   $ 39.7   $ 108.0   $ 57.9  
 

Interest expense related to convertible debt, net of tax

        0.7         1.7  
                   
 

Net income applicable to diluted shares

  $ 47.5   $ 40.4   $ 108.0   $ 59.6  
                   
 

Weighted-average shares outstanding

    56.2     55.4     56.1     55.8  
 

Dilutive effect of convertible debt

        2.0         2.4  
 

Dilutive effect of stock plans

    2.3     2.8     2.4     2.5  
                   
 

Dilutive weighted-average shares outstanding

    58.5     60.2     58.5     60.7  
                   
 

Diluted earnings per share

  $ 0.81   $ 0.67   $ 1.85   $ 0.98  
                   

        Stock options and restricted stock units to purchase 1.8 million and 1.4 million shares for the three months ended June 30, 2009 and 2008, respectively, and 1.4 million and 2.4 million for the six months ended June 30, 2009 and 2008, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. Diluted shares included shares issuable pursuant to the Company's $150 million convertible debentures until they were redeemed on June 9, 2008.

15. INCOME TAXES

        The effective income tax rates were 24.4% and 26.9% for the three and six months ended June 30, 2009, respectively, and 23.8% and 33.3% for the three and six months ended June 30, 2008, respectively. The income tax rate for the six months ended June 30, 2009 included the tax effect on a LifeStent milestone receipt. The income tax rate for the six months ended June 30, 2008 included the tax effect on the sale of the LifeStent product line. See Note 2 for further information.

        As of June 30, 2009, March 31, 2009, and December 31, 2008, the liability for income taxes associated with uncertain tax positions was $43.0 million, $38.0 million, and $35.9 million, respectively. These liabilities could be reduced by $3.8 million, $1.9 million, and $2.3 million, respectively, from

18


Table of Contents


offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes, and timing adjustments. The net amounts of $39.2 million, $36.1 million, and $33.6 million, respectively, if recognized, would favorably affect the Company's effective tax rate. Changes to potential interest expense upon settlement during the period were immaterial.

        As a result of on-going audits, the total liability for unrecognized tax benefits may change within the next 12 months due to either settlements of audits or expiration of statutes of limitations. Quantification of those potential changes cannot be estimated at this time. At June 30, 2009, the Company has concluded all United States federal income tax matters for years through 2006. All material state, local, and foreign income tax matters have been concluded for years through 2003.

        In February 2009, California enacted tax legislation which will be effective beginning 2011. The impact of the new legislation has been considered in determining the Company's tax provision for the three and six months ended June 30, 2009, including the realizability of its California research and development credit carryforward.

16. COLLABORATIVE AGREEMENT

        The Company has a collaboration agreement with DexCom, Inc. ("DexCom") to develop products for continuously monitoring blood glucose levels in patients hospitalized for a variety of conditions. The agreement provides Edwards Lifesciences with an exclusive license to all of DexCom's applicable intellectual property. In December 2008, at the inception of the agreement, the Company recorded a charge of $13.4 million related to the upfront licensing and collaboration fee. The Company will also pay up to $24 million over the next three years in product development costs and regulatory approval milestones. The product development costs are expensed to "Research and Development Expenses" as incurred, and the regulatory approval milestones are recorded as "Other Intangible Assets" and amortized over the useful life of the product. In addition, DexCom will receive either a profit-sharing payment or a royalty based upon commercial sales. Edwards Lifesciences will be responsible for global sales and marketing, which is expected to begin in 2010, and DexCom will be responsible for initial manufacturing. The Company recorded $1.1 million and $3.2 million of product development costs for the three and six months ended June 30, 2009.

17. SEGMENT INFORMATION

        Edwards Lifesciences conducts operations worldwide and is managed in four geographical regions: United States, Europe, Japan, and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease.

        The Company evaluates the performance of its segments based on net sales and income before provision for income taxes ("pre-tax income"). The accounting policies of the segments are substantially the same as those described in Note 2, "Summary of Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Net sales and pre-tax income of reportable segments are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent.

        Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest expense, global marketing expenses, corporate research and development expenses, United States manufacturing variances, corporate headquarters costs, in-process research and development, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs, and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment pre-tax income, due to the Company's methodology for cost build-up, it is impractical to determine the amount of depreciation

19


Table of Contents


expense included in each segment. The Company neither discretely allocates assets to its operating segments, nor evaluates the operating segments using discrete asset information.

        The table below presents information about Edwards Lifesciences' reportable segments (in millions):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Net Sales

                         

United States

  $ 143.5   $ 138.1   $ 278.4   $ 273.6  

Europe

    102.2     95.3     203.1     180.6  

Japan

    46.0     42.3     87.3     79.7  

Rest of world

    39.5     33.2     73.5     63.5  
                   
 

Total segment net sales

  $ 331.2   $ 308.9   $ 642.3   $ 597.4  
                   

Pre-Tax Income

                         

United States

  $ 77.7   $ 71.3   $ 150.1   $ 142.3  

Europe

    33.9     31.2     68.5     57.1  

Japan

    21.6     18.5     41.0     34.2  

Rest of world

    11.3     9.3     19.3     16.5  
                   
 

Total segment pre-tax income

  $ 144.5   $ 130.3   $ 278.9   $ 250.1  
                   

        The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Net Sales Reconciliation

                         

Segment net sales

  $ 331.2   $ 308.9   $ 642.3   $ 597.4  

Foreign currency

    4.3     18.7     6.7     27.0  
                   

Consolidated net sales

  $ 335.5   $ 327.6   $ 649.0   $ 624.4  
                   

Pre-Tax Income Reconciliation

                         

Segment pre-tax income

  $ 144.5   $ 130.3   $ 278.9   $ 250.1  

Unallocated amounts:

                         
 

Corporate items

    (88.0 )   (77.7 )   (173.3 )   (148.0 )
 

Special (charges) gains, net

    (1.5 )   0.8     29.3     (9.3 )
 

Interest expense, net

    (0.2 )   (0.4 )   (0.3 )   (0.8 )
 

Foreign currency

    8.0     (0.9 )   13.2     (5.2 )
                   

Consolidated pre-tax income

  $ 62.8   $ 52.1   $ 147.8   $ 86.8  
                   

20


Table of Contents

Enterprise-Wide Information

        Enterprise-wide information is based on foreign exchange rates used in the Company's consolidated financial statements.

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  
 
  (in millions)
 

Net Sales by Geographic Area

                         

United States

  $ 143.5   $ 139.7   $ 278.4   $ 275.2  

Other countries

    192.0     187.9     370.6     349.2  
                   

  $ 335.5   $ 327.6   $ 649.0   $ 624.4  
                   

Net Sales by Major Product and Service Area

                         

Heart Valve Therapy

  $ 182.1   $ 162.6   $ 352.5   $ 309.3  

Critical Care

    113.0     116.6     217.5     223.3  

Cardiac Surgery Systems

    24.1     23.5     46.6     44.9  

Vascular

    16.3     24.9     32.4     46.9  
                   

  $ 335.5   $ 327.6   $ 649.0   $ 624.4  
                   

 

 
  June 30,
2009
  December 31,
2008
 
 
  (in millions)
 

Long-Lived Tangible Assets by Geographic Area

             

United States

  $ 176.5   $ 171.4  

Other countries

    99.6     86.6  
           

  $ 276.1   $ 258.0  
           

21


Table of Contents

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company intends the forward-looking statements contained in this report to be covered by the safe harbor provisions of such Acts. All statements other than statements of historical fact in this report or referred to or incorporated by reference into this report are "forward-looking statements" for purposes of these sections. These statements include, among other things, any predictions of earnings, revenues, expenses or other financial items, plans or expectations with respect to development activities, clinical trials, or regulatory approvals, any statements of plans, strategies, and objectives of management for future operations, any statements concerning the Company's future operations, financial conditions and prospects, and any statement of assumptions underlying any of the foregoing. These statements can sometimes be identified by the use of the forward-looking words such as "may," "believe," "will," "expect," "project," "estimate," "should," "anticipate," "plan," "continue," "seek," "pro forma," "forecast," "intend" or other similar words or expressions or the negative thereof. Investors are cautioned not to unduly rely on such forward-looking statements. These forward-looking statements are subject to substantial risks and uncertainties that could cause the Company's future business, financial condition, results of operations, or performance to differ materially from the Company's historical results or those expressed in any forward-looking statements contained in this report. Investors should carefully review the information contained in, or incorporated by reference into, the Company's annual report on Form 10-K for the year ended December 31, 2008 for a description of certain of these risks and uncertainties.

Overview

        Edwards Lifesciences Corporation ("Edwards Lifesciences" or the "Company") is a global leader in products and technologies designed to treat advanced cardiovascular disease. The Company is focused specifically on technologies that treat structural heart disease and critically ill patients.

        The products and technologies provided by Edwards Lifesciences are categorized into four main areas: Heart Valve Therapy; Critical Care; Cardiac Surgery Systems; and Vascular.

        Edwards Lifesciences' Heart Valve Therapy portfolio is comprised of tissue heart valves and heart valve repair products. A pioneer in the development and commercialization of heart valve products, Edwards Lifesciences is the world's leading manufacturer of tissue heart valves and repair products used to replace or repair a patient's diseased or defective heart valve. In the Critical Care area, Edwards Lifesciences is a world leader in hemodynamic monitoring equipment used to measure a patient's cardiovascular function and in disposable pressure transducers, and also provides central venous access products for fluid and drug delivery. The Company's Cardiac Surgery Systems portfolio comprises a diverse line of products for use during cardiac surgery including cannula, EMBOL-X technologies, and other disposable products used during cardiopulmonary bypass procedures. Cardiac Surgery Systems also includes the Company's minimally invasive surgery ("MIS") product line. Edwards Lifesciences' Vascular portfolio includes a line of balloon catheter-based products, surgical clips and inserts, and artificial implantable grafts. Through early 2008, Edwards manufactured and sold LifeStent balloon-expandable and self-expanding non-coronary stents. The Company sold the LifeStent product line in January 2008, but will continue to manufacture these products for the buyer until the earlier of mid-2010 or the transfer of manufacturing to the buyer.

        The healthcare marketplace continues to be competitive with strong global and local competitors. The Company competes with many companies, ranging from small start-up enterprises to companies that are larger and more established than Edwards Lifesciences with access to significant financial resources. Furthermore, rapid product development and technological change characterize the market in which the Company competes. Global demand for healthcare is increasing as the population ages. There is mounting pressure to contain healthcare costs in the face of this increasing demand, which has

22


Table of Contents


resulted in pricing and market share pressures. The cardiovascular segment of the medical device industry is dynamic, and technology, cost-of-care considerations, regulatory reform, industry and customer consolidation, and evolving patient needs are expected to continue to drive change.

Recently Adopted Accounting Standards

        In September 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS 157"), which defined fair value, established a framework for measuring fair value, and expanded disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position ("FSP") No. 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2"), which delayed the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis, until fiscal years beginning after November 15, 2008. The Company's adoption of SFAS 157, as it applies to those non-financial assets and liabilities affected by the one-year delay, did not have a material impact on the Company's consolidated financial statements.

        In December 2007, the FASB ratified the consensus reached by the Emerging Issues Task Force ("EITF") in EITF Issue No. 07-1, "Accounting for Collaborative Arrangements" ("EITF 07-1"). EITF 07-1 defines collaborative arrangements and establishes reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. EITF 07-1 also establishes the appropriate income statement presentation and classification for joint operating activities and payments between participants, as well as the sufficiency of the disclosures related to these arrangements. EITF 07-1 was effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Retrospective application to all prior periods presented is required for all collaborative arrangements existing as of the effective date. The Company's adoption of EITF 07-1 did not have a material impact on its consolidated financial statements.

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS 141R"). SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Among other requirements, SFAS 141R expands the definition of a business combination, requires acquisitions to be accounted for at fair value, and requires transaction costs and restructuring charges to be expensed. SFAS 141R was effective for fiscal years beginning on or after December 15, 2008. SFAS 141R will impact the Company if it is involved in a business combination.

        In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's derivative instruments and hedging activities, including (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 was effective for fiscal years and interim periods beginning after November 15, 2008. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2008, the FASB issued FSP No. FAS 142-3, "Determination of the Useful Life of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS

23


Table of Contents


No. 142, "Goodwill and Other Intangible Assets." FSP 142-3 applies to intangible assets that are acquired individually or with a group of other assets acquired in business combinations and asset acquisitions. FSP 142-3 also requires expanded disclosure related to the determination of intangible asset useful lives. FSP 142-3 was effective for fiscal years beginning after December 15, 2008. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In November 2008, the FASB ratified the consensus reached by the EITF in EITF Issue No. 08-6, "Equity Method Investment Accounting Considerations" ("EITF 08-6"). EITF 08-6 clarifies the accounting for certain transactions and impairment considerations involving equity method investments. EITF 08-6 was effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In November 2008, the FASB ratified the consensus reached by the EITF in EITF Issue No. 08-7, "Accounting for Defensive Intangible Assets" ("EITF 08-7"). EITF 08-7 clarifies the accounting for certain separately identifiable intangible assets which an acquirer does not intend to actively use but intends to hold to prevent its competitors from obtaining access to them. EITF 08-7 requires an acquirer in a business combination to account for a defensive intangible asset as a separate unit of accounting which should be amortized to expense over a period the asset diminishes in value. EITF 08-7 was effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 141 (R)-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" ("FSP 141R-1"). FSP 141R-1 amends the guidance in SFAS 141R to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably determined. If the fair value cannot be reasonably determined, then the assets and liabilities should be recognized at the amount that would be recognized in accordance with SFAS No. 5, "Accounting for Contingencies," and FASB Interpretation No. 14, "Reasonable Estimation of the Amount of a Loss." The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 was effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments" ("FSP 115-2 and 124-2"). FSP 115-2 and 124-2 amends the other-than-temporary impairment guidance related to debt securities and expands and increases the frequency of existing disclosures about other-than-temporary impairments for debt and equity securities. In addition, FSP 115-2 and 124-2 requires that the annual disclosures in SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and FSP No. FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments," be made for interim periods. FSP 115-2 and 124-2 was effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

24


Table of Contents

        In April 2009, the SEC issued Staff Accounting Bulletin ("SAB") No. 111, "Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities" ("SAB 111"). SAB 111 amends SAB Topic 5M to reflect the guidance in FSP 115-2 and 124-2. SAB 111 maintains the prior staff views related to equity securities but amends SAB Topic 5M to exclude debt securities from its scope. The adoption of SAB 111 did not have a material impact on the Company's consolidated financial statements.

        In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments" ("FSP 107-1 and 28-1"). FSP 107-1 and 28-1 requires disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FSP 107-1 and 28-1 was effective for interim reporting periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165"). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. SFAS 165 was effective for interim or annual financial periods ending after June 15, 2009. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

        In June 2009, the SEC issued SAB No. 112, "Update of Codification of Staff Accounting Bulletins" ("SAB 112"). SAB 112 amends or rescinds portions of the SEC staff's interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with SFAS 141R and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements." The adoption of SAB 112 did not have a material impact on the Company's consolidated financial statements.

New Accounting Standards Not Yet Adopted

        In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" ("SFAS 167"). SFAS 167 eliminates the exemption for qualifying special purpose entities and establishes a new approach for determining the primary beneficiary of a variable interest entity ("VIE") based on whether the entity (1) has the power to direct the activities of the VIE that most significantly impact the entity's economic performance and (2) has the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. SFAS 167 requires an ongoing reconsideration of the primary beneficiary, and amends the events that trigger a reassessment of whether an entity is a VIE. Enhanced disclosures are also required to provide information about an enterprise's involvement in a VIE. SFAS 167 is effective for the first annual reporting period beginning after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company does not expect the adoption of SFAS 167 will have a material impact on its consolidated financial statements.

        In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles" ("SFAS 168"). SFAS 168 establishes the FASB Accounting Standards Codification™ as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with generally accepted accounting principles ("GAAP"). Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 replaces SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS 168 is effective for financial statements issued for interim and

25


Table of Contents


annual periods ending after September 15, 2009. The Company does not expect the adoption of SFAS 168 will have a material impact on its consolidated financial statements.

Results of Operations

    Net Sales Trends

        The following is a summary of United States and international net sales (dollars in millions):

 
  Three Months
Ended
June 30,
   
   
  Six Months
Ended
June 30,
   
   
 
 
   
  Percent
Change
   
  Percent
Change
 
 
  2009   2008   Change   2009   2008   Change  

United States

  $ 143.5   $ 139.7   $ 3.8     2.7 % $ 278.4   $ 275.2   $ 3.2     1.2 %

International

    192.0     187.9     4.1     2.2 %   370.6     349.2     21.4     6.1 %
                                       
 

Total net sales

  $ 335.5   $ 327.6   $ 7.9     2.4 % $ 649.0   $ 624.4   $ 24.6     3.9 %
                                       

        In the United States, the $3.8 million and $3.2 million increases in net sales for the three and six months ended June 30, 2009, respectively, were due primarily to:

    Heart Valve Therapy products, which increased net sales by $10.2 million and $13.4 million, respectively, driven primarily by the Magna mitral valve and the Carpentier-Edwards PERIMOUNT Magna with ThermaFix valve;

        partially offset by:

    Vascular products, which decreased net sales by $6.3 million and $10.4 million, respectively, primarily due to the divestiture of the LifeStent product line in mid-January 2008. Sales after the divestiture result from the on-going manufacturing requirements of the sale agreement, which will continue until the earlier of mid-2010 or the transfer of manufacturing to the buyer.

        International net sales increased $4.1 million and $21.4 million for the three and six months ended June 30, 2009, respectively, due primarily to:

    Heart Valve Therapy products, which increased net sales by $9.4 million and $29.9 million, respectively. The increase was driven primarily by the Edwards SAPIEN transcatheter heart valve, the Carpentier-Edwards PERIMOUNT Magna Ease valve, and the Magna aortic valve in Japan, offset by foreign exchange fluctuations of $10.2 million and $15.3 million, respectively;

        partially offset by:

    Critical Care products, which decreased net sales by $2.7 million and $3.9 million, respectively, due primarily to foreign exchange fluctuations of $6.2 million and $9.5 million, respectively, offset by increased sales of FloTrac systems of $2.4 million and $4.7 million, respectively; and

    Vascular products, which decreased net sales by $2.3 million and $4.0 million, respectively, due primarily to the divestiture of the LifeStent product line and the termination of distributed sales in Europe of a specialty vascular graft.

        Foreign currency exchange rate fluctuations are due primarily to the weakening of the Euro against the United States dollar. The impact of foreign currency exchange rate fluctuations on net sales would not necessarily be indicative of the impact on net income due to the corresponding effect of foreign currency exchange rate fluctuations on international manufacturing and operating costs and the Company's hedging activities. For more information see Item 3, "Quantitative and Qualitative Disclosures About Market Risk."

26


Table of Contents

    Net Sales by Product Line

        The following table is a summary of net sales by product line (dollars in millions):

 
  Three Months
Ended
June 30,
   
   
  Six Months
Ended
June 30,
   
   
 
 
   
  Percent
Change
   
  Percent
Change
 
 
  2009   2008   Change   2009   2008   Change  

Heart Valve Therapy

  $ 182.1   $ 162.6   $ 19.5     12.0 % $ 352.5   $ 309.3   $ 43.2     14.0 %

Critical Care

    113.0     116.6     (3.6 )   (3.1 )%   217.5     223.3     (5.8 )   (2.6 )%

Cardiac Surgery Systems

    24.1     23.5     0.6     2.6 %   46.6     44.9     1.7     3.8 %

Vascular

    16.3     24.9     (8.6 )   (34.5 )%   32.4     46.9     (14.5 )   (30.9 )%
                                       
 

Total net sales

  $ 335.5   $ 327.6   $ 7.9     2.4 % $ 649.0   $ 624.4   $ 24.6     3.9 %
                                       

    Heart Valve Therapy

        Net sales of Heart Valve Therapy products for the three and six months ended June 30, 2009 increased by $19.5 million and $43.2 million, respectively, including the negative impact from foreign currency exchange of $10.2 million and $15.3 million, respectively. The increases were due primarily to:

    the Edwards SAPIEN transcatheter heart valve, which increased net sales by $12.8 million and $29.3 million, respectively; and

    pericardial tissue valves, which increased net sales by $3.9 million and $12.6 million, respectively, primarily as a result of the Carpentier-Edwards PERIMOUNT Magna Ease valve, the Magna with ThermaFix aortic and mitral valves, and the launch of the Magna aortic valve in Japan in the second quarter of 2008.

        The Company expects that its SAPIEN transcatheter heart valve will continue to be a strong contributor to 2009 sales, and anticipates introducing new products across the aortic, mitral, and valve repair categories. The Company received Food and Drug Administration ("FDA") approval for its Magna Ease aortic valve in May 2009. The Magna Ease valve is designed for easier implantation and has the potential for leadership in the largest segment of surgical valve replacement. In July 2009, the Company received United States regulatory approval for its newest Magna Mitral valve, called the Magna Mitral Ease, and expects a limited launch of the product in the fourth quarter of 2009. The Magna Mitral Ease will extend the Magna platform by providing improved MIS capabilities and ease of implantation. The Company launched the Carpentier-Edwards Physio II ring in the United States and Europe during the first quarter of 2009, and expects this product to lift its growth in the repair segment. Physio II is the next generation repair product for the degenerative segment of mitral repair. In Japan, the Company received regulatory approval for its IMR ETlogix ring during the first quarter of 2009, and expects to launch this product in Japan pending reimbursement approval.

    Critical Care

        The $3.6 million and $5.8 million decreases in net sales of Critical Care products for the three and six months ended June 30, 2009, respectively, were due primarily to:

    foreign exchange fluctuations, which decreased net sales by $6.2 million and $9.5 million, respectively; and

    decreased sales of advanced hemodynamic monitoring products;

        partially offset by:

    FloTrac systems, which increased net sales by $3.0 million and $6.0 million, respectively.

27


Table of Contents

        The Company expects worldwide FloTrac system sales to continue to be a significant contributor to Critical Care sales growth in 2009, and that it will continue to expand the market for minimally invasive hemodynamic monitoring. During the first quarter of 2009, the Company launched a third generation algorithm enhancement for the FloTrac system that enhances its accuracy when used in patients with sepsis and other critical illnesses. At the end of the third quarter of 2009, the Company expects to launch a substantial upgrade that will strengthen the FloTrac system's applicability in the medical intensive care unit. In addition, the Company anticipates launching a new hardware platform in the third quarter of 2009 with a simpler, more intuitive informational display, and expects to ultimately consolidate all parameters into one platform.

        During the fourth quarter of 2008, the Company entered into a collaboration agreement with DexCom, Inc. to develop products for continuously monitoring blood glucose levels in patients hospitalized for a variety of conditions. During 2009, the Company expects to complete clinical studies to support regulatory approval and, if the clinical studies are successful, anticipates introducing a first generation product in Europe by year end.

        During the second quarter of 2009, the Company entered into a definitive agreement to sell certain assets related to its hemofiltration product line. The Company expects this transaction to close in the third quarter of 2009, pending regulatory approvals. For more information see "Special Charges (Gains), net."

    Cardiac Surgery Systems

        The $0.6 million and $1.7 million increases in net sales of Cardiac Surgery Systems products for the three and six months ended June 30, 2009, respectively, were due primarily to MIS products, which increased net sales by $1.5 million and $2.7 million, respectively.

    Vascular

        The $8.6 million and $14.5 million decreases in net sales of Vascular products for the three and six months ended June 30, 2009, respectively, were due primarily to the reduced sales of the LifeStent product line which was divested in January 2008. The Company agreed to provide transition services, including manufacturing, to the buyer until the earlier of mid-2010 or the transfer of manufacturing to the buyer. LifeStent sales after the divestiture result from the on-going manufacturing requirements of the sale agreement.

    Gross Profit

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
 
  2009   2008   Change   2009   2008   Change  

Gross profit as a percentage of net sales

    69.6 %   65.5 %   4.1 pts.     69.4 %   65.4 %   4.0 pts.  

        The 4.1 and 4.0 percentage point increases in gross profit as a percentage of net sales for the three and six months ended June 30, 2009, respectively, were driven by:

    the impact from the expiration of foreign currency hedging contracts;

    a 1.6 percentage point and a 1.4 percentage point increase in the United States gross profit as a percentage of net sales for the three and six months ended June 30, 2009, respectively, due primarily to a more profitable product mix, primarily from reduced sales of LifeStent products under the on-going manufacturing requirements of the LifeStent sale agreement; and

28


Table of Contents

    a 0.8 percentage point and a 1.3 percentage point increase in international gross profit as a percentage of net sales for the three and six months ended June 30, 2009, respectively, due to a more profitable product mix, primarily higher sales of Heart Valve Therapy products and FloTrac systems;

        partially offset by:

    the unfavorable impact of Critical Care manufacturing variations.

    Selling, General and Administrative (SG&A) Expenses

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
 
  2009   2008   Change   2009   2008   Change  
 
  (dollars in millions)
 

SG&A expenses

  $ 128.5   $ 126.5   $2.0   $ 250.4   $ 241.1   $ 9.3  

SG&A expenses as a percentage of net sales

    38.3 %   38.6 % (0.3) pts.     38.6 %   38.6 %    

        The $2.0 million and $9.3 million increases in SG&A expenses for the three and six months ended June 30, 2009, respectively, were due primarily to (1) investments for the transcatheter heart valve program in Europe and (2) higher sales-related spending in the Heart Valve Therapy product line. The increases were partially offset by the favorable impact of foreign currency (primarily the weakening of the Euro against the United States dollar) in the amounts of $7.0 million and 10.9 million, respectively.

    Research and Development Expenses

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
  2009   2008   Change   2009   2008   Change
 
  (dollars in millions)

Research and development expenses

  $ 42.6   $ 35.4   $7.2   $ 82.5   $ 68.3   $14.2

Research and development expenses as a percentage of net sales

    12.7 %   10.8 % 1.9 pts.     12.7 %   10.9 % 1.8 pts.

        The increases in research and development expenses for the three and six months ended June 30, 2009 were due primarily to additional investments in the transcatheter heart valve, FloTrac, and glucose programs.

        The following are the developments related to the Company's transcatheter aortic valve replacement program (formerly Percutaneous Valve Technologies, Inc.'s percutaneous aortic valve program):

    the Company received conditional Investigational Device Exemption ("IDE") approval from the FDA in March 2007 to initiate its PARTNER trial, a pivotal clinical trial of the Company's Edwards SAPIEN transcatheter heart valve technology. The PARTNER trial, which has two study arms, began enrollment during the second quarter of 2007 and will evaluate the Edwards SAPIEN transcatheter heart valve in patients who are considered at high risk for conventional open-heart valve surgery. In the first study arm ("Cohort A"), patients are randomized on a 1:1 basis to either high risk surgery or the Edwards SAPIEN transcatheter heart valve. Cohort A will have 690 patients (enrollment completion is anticipated by the end of August 2009) and is a non-inferiority analysis. In the second study arm ("Cohort B"), patients who are deemed non-operable are randomized 1:1 to medical management or the Edwards SAPIEN transcatheter heart valve. Enrollment of 350 patients in Cohort B, which is a superiority analysis, was completed in the first quarter of 2009. In addition, the Company received FDA approval for

29


Table of Contents

      continued access to Cohort B for all of its existing PARTNER sites, and is working with the FDA to achieve continued access to Cohort A once enrollment is complete to ensure this technology remains available for patients;

    the Company received CE Mark approval in the fourth quarter of 2008 for European commercial sales of its RetroFlex III transfemoral delivery system, which simplifies the delivery of its SAPIEN valve. In addition, in the first quarter of 2009, the Company received IDE approval to use its RetroFlex III delivery system in its United States PARTNER trial;

    the Company began its United States feasibility trial of the SAPIEN valve in the pulmonic position in April 2008. The goal of this clinical study is to enable physicians to offer a minimally invasive alternative to patients with a failing pulmonic valve, using the Company's transcatheter valve platform and RetroFlex delivery system. The Company expects to complete enrollment by the end of the third quarter of 2009 and then transition to a larger humanitarian device exemption trial; and

    first-in-man cases using the Company's next generation transcatheter heart valve, the Edwards SAPIEN XT, were performed during the first quarter of 2008. In December 2008, the first three implants were performed in the CE Mark trial. In the second quarter of 2009, the first implants were performed with SAPIEN XT and NovaFlex, the Company's next generation valve and transfemoral delivery system. The Company believes that this next generation valve's features will help reduce its delivery profile without compromising strength, enabling it to better address the requirements of transfemoral delivery. In Europe, the Company believes the patients enrolled in its CE Mark PREVAIL trial will fulfill the requirements for a CE mark approval and support a European launch in the first quarter of 2010. In the United States, the Company anticipates submitting an IDE in the third quarter of 2009, which could result in approval for a clinical trial before the end of 2009.

        The following are the developments related to the Company's transcatheter mitral valve program (formerly ev3, Inc.'s percutaneous mitral valve repair program):

    in October 2008, the Company announced the continuation of the EVOLUTION II clinical trial of the Edwards MONARC system which is deployed into the coronary sinus. The Company has expanded the trial to include specialty heart failure centers in order to increase the pace of enrollment.

    Special Charges (Gains), net

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  
 
  (in millions)
 

Loss (gain) on sale of product lines

  $ 1.5   $   $ (25.5 ) $ 8.1  

Sale of distribution rights

            (2.8 )    

Reserve reversal

            (1.0 )    

Litigation settlement

                2.1  

Realignment expenses, net

        (0.8 )       (0.9 )
                   
 

Special charges (gains), net

  $ 1.5   $ (0.8 ) $ (29.3 ) $ 9.3  
                   

    Loss (Gain) on Sale of Product Lines

        In June 2009, the Company entered into a definitive agreement to sell certain assets related to its hemofiltration product line. Under the terms of the agreement, the Company will receive a cash

30


Table of Contents

payment of approximately $55.9 million, and may receive up to an additional $9.0 million upon the buyer's achievement of certain revenue objectives over the next two years. The Company will provide transition services to the buyer. This transaction allows the Company to better focus on its global strategic priorities. The Company expects this transaction to close in the third quarter of 2009, pending regulatory approvals. In June 2009, the Company recorded a $1.5 million charge for transaction costs and employee severance related to the pending sale.

        In January 2008, the Company completed the sale of certain assets related to the Edwards LifeStent peripheral vascular product line. Under the terms of the sale agreement, the Company received an initial cash payment of $74.0 million at closing, and was entitled to receive up to an additional $65.0 million in cash upon the achievement of certain milestones. In addition, the Company agreed to provide transition services until the earlier of mid-2010 or the transfer of manufacturing to the buyer. In December 2008, the Company received a $23.0 million LifeStent milestone payment in connection with the transfer of its pre-market approval to the buyer. In February 2009, the Company received an additional $27.0 million milestone payment associated with the LifeStent pre-market approval. The remaining $15.0 million milestone payment will be recorded upon the transfer of LifeStent device manufacturing to the buyer.

        In connection with the LifeStent transaction, the Company recorded in January 2008 a pre-tax loss of $8.1 million consisting of the cash proceeds of $74.0 million, offset by a $34.6 million write-off of goodwill associated with this product line, $36.9 million related to the net book value of inventory, fixed assets, and intangible assets that were sold, $6.9 million of deferred revenue related to the transition services the Company has agreed to provide, and $3.7 million of transaction and other costs related to the sale.

    Sale of Distribution Rights

        In March 2009, the Company recorded a $2.8 million gain related to the sale of its distribution rights in Europe for a specialty vascular graft.

    Reserve Reversal

        In 2004, the Company discontinued its Lifepath AAA endovascular graft program. In March 2009, upon completion of its remaining clinical obligations related to this program, the Company reversed its remaining $1.0 million clinical reserve.

    Litigation Settlement

        In March 2008, the Company recorded a $2.1 million charge for the settlement of litigation related to its divested United States perfusion services business. Under the terms of the divestiture, this was the Company's last outstanding case.

    Realignment Expenses, net

        In June 2008, the Company recorded a $0.8 million reversal of previously accrued severance costs from the fourth quarter of 2007 related to the global reduction in workforce.

        In March 2008, the Company recorded a $1.3 million charge for executive severance associated with the Company's business realignment, offset by a $1.4 million reversal of the December 2007 accrued severance related to the sale of the LifeStent product line. As of June 30, 2009, all payments related to the executive severance charge were substantially complete.

        In December 2007, the Company recorded realignment expenses of $13.9 million primarily related to (1) severance expenses associated with the sale of the Company's LifeStent product line and a global reduction in workforce, primarily in the United States, Europe, and Japan (impacting approximately

31


Table of Contents


180 employees), and (2) the termination of the Company's intra-aortic balloon pump distribution agreement in Japan. As of June 30, 2009, remaining payments of approximately $1.7 million are expected to be paid through the end of 2009.

    Interest Expense, net

 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
 
  2009   2008   Change   2009   2008   Change  
 
  (in millions)
 

Interest expense

  $ 0.5   $ 1.9   $ (1.4 ) $ 1.3   $ 4.0   $ (2.7 )

Interest income

    (0.3 )   (1.5 )   1.2     (1.0 )   (3.2 )   2.2  
                           
 

Interest expense, net

  $ 0.2   $ 0.4   $ (0.2 ) $ 0.3   $ 0.8   $ (0.5 )
                           

        The decrease in interest expense for the three and six months ended June 30, 2009 resulted primarily from lower interest rates and a lower average debt balance as compared to the prior year period. The decrease in interest income resulted primarily from lower average interest rates and lower cash and short-term investment balances as compared to the prior year period.

    Other (Income) Expense, net

        The following is a summary of other (income) expense, net (in millions):

 
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
 
 
  2009   2008   2009   2008  

Foreign exchange (gains) losses, net

  $ (2.0 ) $ 1.2   $ (2.5 ) $ 2.3  

Accounts receivable securitization costs

        0.5         1.1  

Investment impairment and realized losses

        0.2         0.8  

Loss (gain) on investments in unconsolidated affiliates

    0.1     (0.6 )   1.0     (1.3 )

Other

    (0.1 )   (0.3 )   (0.1 )   (0.7 )
                   
 

Other (income) expense, net

  $ (2.0 ) $ 1.0   $ (1.6 ) $ 2.2  
                   

        The foreign exchange (gains) losses for the three and six months ended June 30, 2009 relate to the foreign currency fluctuations on the Company's global trade and intercompany receivable and payable balances. Foreign exchange resulted in a net gain in 2009 compared to a net loss in 2008 due primarily to fluctuations in the Euro.

        The decrease in securitization costs in 2009 was due to the Company's termination of its securitization programs in the United States in August 2008 and in Japan in February 2009.

        The investment impairment and realized losses represent the realized losses and estimated impairment in the value of the Company's investment in the Bank of America Columbia Strategic Cash fund. See the "Liquidity and Capital Resources" section for further information.

        The loss (gain) on investments in unconsolidated affiliates primarily represents the Company's share of gains and losses in investments accounted for under the equity method, and realized gains and losses on the Company's available-for-sale investments.

    Provision for Income Taxes

        The provision for income taxes consists of provisions for federal, state, and foreign income taxes. The Company operates in an international environment with significant operations in various locations

32


Table of Contents

outside the United States, which have statutory tax rates lower than the United States tax rate. Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates. The effective income tax rates were 24.4% and 26.9% for the three and six months ended June 30, 2009, respectively, and 23.8% and 33.3% for the three and six months ended June 30, 2008, respectively. The income tax rate for the six months ended June 30, 2009 included the tax effect on a LifeStent milestone receipt (see the "Special Charges (Gains), net" section for further information). The income tax rate for the six months ended June 30, 2008 included the tax effect on the sale of the LifeStent product line.

        As of June 30, 2009, March 31, 2009, and December 31, 2008, the liability for income taxes associated with uncertain tax positions was $43.0 million, $38.0 million, and $35.9 million, respectively. These liabilities could be reduced by $3.8 million, $1.9 million, and $2.3 million, respectively, from offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes, and timing adjustments. The net amounts of $39.2 million, $36.1 million, and $33.6 million, respectively, if recognized, would favorably affect the Company's effective tax rate. Changes to potential interest expense upon settlement during the period were immaterial.

        In February 2009, California enacted tax legislation which will be effective beginning 2011. The impact of the new legislation has been considered in determining the Company's tax provision for the three and six months ended June 30, 2009, including the realizability of its California research and development credit carryforward.

Liquidity and Capital Resources

        The Company's sources of cash liquidity include cash on hand and cash equivalents, amounts available under credit facilities, and cash from operations. The Company believes that these sources are sufficient to fund the current requirements of working capital, capital expenditures, and other financial commitments. The Company is not currently experiencing any limitation on access to its credit facility as a result of the recent turmoil in global financial markets. The Company further believes that it has the financial flexibility to attract long-term capital to fund short-term and long-term growth objectives. However, no assurances can be given that such long-term capital will be available to Edwards Lifesciences on favorable terms, or at all.

        The Company has a Five-Year Unsecured Revolving Credit Agreement ("the Credit Agreement"), which matures on September 29, 2011. The Credit Agreement provides up to an aggregate of $500.0 million in one- to six-month borrowings in multiple currencies. Borrowings currently bear interest at the London interbank offering rate ("LIBOR") plus 0.40%, which includes a facility fee subject to adjustment for leverage ratio changes as defined in the Credit Agreement. The Company pays a facility fee regardless of available or outstanding borrowings, currently at an annual rate of 0.075%. All amounts outstanding under the Credit Agreement have been classified as long-term obligations, as these borrowings are expected to be refinanced pursuant to the Credit Agreement. As of June 30, 2009, borrowings of $113.9 million were outstanding under the Credit Agreement. The Credit Agreement contains various financial and other covenants, all of which the Company was in compliance with at June 30, 2009.

        The Company previously securitized, on a continuous basis, an undivided interest in certain eligible pools of trade accounts receivable in the United States and Japan. In August 2008, the Company terminated its securitization program in the United States, and repurchased $50.0 million of accounts receivable. In February 2009, the Company terminated its securitization program in Japan and paid $39.0 million for the outstanding accounts receivable and February collections. The securitization programs no longer offered an attractive financing alternative.

        In December 2007, the Company received notification that the Bank of America Columbia Strategic Cash fund, a private placement money market mutual fund in which the Company had

33


Table of Contents


invested $50.1 million as of December 31, 2007, was being closed to new subscriptions or redemptions, resulting in the Company's inability to immediately redeem its investments for cash. During the three and six months ended June 30, 2009, the Company recognized unrealized gains of $0.3 million and $0.4 million, respectively, included in "Accumulated Other Comprehensive Loss." The fair value of the Company's remaining investment in this fund as of June 30, 2009 and December 31, 2008 was estimated to be $7.1 million and $10.9 million, respectively, based on the net asset value of the fund. Based on information received from the fund manager regarding the timing of the expected redemptions, the Company expects to receive cash redemptions of approximately $5.2 million through the second quarter of 2010, which has been classified as "Short-term Investments" on the accompanying consolidated condensed balance sheet as of June 30, 2009. The remaining $1.9 million of the investment is expected to be received after the second quarter of 2010, and has been classified as "Other Assets."

        In June 2009, the Company entered into a definitive agreement to sell certain assets related to its hemofiltration product line. Under the terms of the agreement, the Company will receive a cash payment of approximately $55.9 million, and may receive up to an additional $9.0 million upon the buyer's achievement of certain revenue objectives over the next two years. The Company will provide transition services to the buyer. The Company expects this transaction to close in the third quarter of 2009, pending regulatory approvals.

        In January 2008, the Company completed the sale of certain assets related to the Edwards LifeStent peripheral vascular product line. Under the terms of the sale agreement, the Company received an initial cash payment of $74.0 million at closing, and was entitled to receive up to an additional $65.0 million in cash upon the achievement of certain milestones. In addition, the Company agreed to provide transition services until the earlier of mid-2010 or the transfer of manufacturing to the buyer. In December 2008, the Company recorded a gain of $23.0 million for the receipt of a LifeStent milestone payment in connection with the transfer of its pre-market approval to the buyer. In February 2009, the Company received an additional $27.0 million milestone payment associated with the LifeStent pre-market approval, and the remaining $15.0 million milestone payment will be recorded upon the transfer of LifeStent device manufacturing to the buyer.

        In July 2008, the Board of Directors approved a stock repurchase program authorizing the Company to purchase on the open market and in privately negotiated transactions up to $250.0 million of the Company's common stock. During the six months ended June 30, 2009, the Company repurchased 0.9 million shares at an aggregate cost of $54.5 million and as of June 30, 2009 had remaining authority to purchase $139.0 million of common stock.

        At June 30, 2009, there had been no material changes in the Company's significant contractual obligations and commercial commitments as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2008.

        Net cash flows provided by operating activities of $27.9 million for the six months ended June 30, 2009 decreased $31.0 million from the same period a year ago. This decrease was due primarily to a $39.0 million cash payment during the first quarter of 2009 to terminate the Company's accounts receivable securitization program in Japan.

        Net cash provided by investing activities of $2.7 million for the six months ended June 30, 2009 consisted primarily of $27.0 million of cash received for a milestone achievement associated with the LifeStent pre-market approval and a $3.5 million cash advance related to the sale of the hemofiltration product line which is expected to close in the third quarter of 2009, partially offset by capital expenditures of $28.2 million.

        Net cash provided by investing activities of $77.8 million for the six months ended June 30, 2008 consisted primarily of $74.0 million of cash received from the sale of the LifeStent product line and

34


Table of Contents


$23.4 million in cash redemptions associated with the Bank of America Columbia Strategic Cash fund, partially offset by capital expenditures of $20.7 million.

        Net cash used in financing activities of $69.4 million for the six months ended June 30, 2009 consisted primarily of net payments on long-term debt of $58.4 million and purchases of treasury stock of $54.5 million, partially offset by the proceeds from stock plans of $33.2 million.

        Net cash used in financing activities of $95.7 million for the six months ended June 30, 2008 consisted primarily of purchases of treasury stock of $214.8 million, partially offset by net proceeds from long-term debt of $74.5 million and the proceeds from stock plans of $35.3 million.

Critical Accounting Policies

        The consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to the Company's critical accounting policies which the Company believes could have the most significant effect on the Company's reported results and require subjective or complex judgments by management is contained on pages 38-43 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", of the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Management believes that at June 30, 2009, there had been no material changes to this information.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

    Interest Rate Risk

        For a complete discussion of the Company's exposure to interest rate risk, refer to Item 7A "Quantitative and Qualitative Disclosures About Market Risk" on pages 46-48 of the Company's Annual Report on Form 10-K for the year ended December 31, 2008. There have been no significant changes from the information discussed therein.

    Currency Risk

        For a complete discussion of the Company's exposure to foreign currency risk, refer to Item 7A "Quantitative and Qualitative Disclosures About Market Risk" on pages 46-48 of the Company's Annual Report on Form 10-K for the year ended December 31, 2008. There have been no significant changes from the information discussed therein.

    Credit Risk

        For a complete discussion of the Company's exposure to credit risk, refer to Item 7A "Quantitative and Qualitative Disclosures About Market Risk" on pages 46-48 of the Company's Annual Report on Form 10-K for the year ended December 31, 2008. There have been no significant changes from the information discussed therein.

    Concentrations of Credit Risk

        In the normal course of business, Edwards Lifesciences provides credit to customers in the healthcare industry, performs credit evaluations of these customers and maintains allowances for potential credit losses which have historically been adequate compared to actual losses.

35


Table of Contents

    Investment Risk

        Edwards Lifesciences is exposed to investment risks related to changes in the fair values of its investments. The Company invests in equity instruments of public and private companies. These investments are classified in "Investments in Unconsolidated Affiliates" on the consolidated condensed balance sheets.

        As of June 30, 2009, Edwards Lifesciences had $20.3 million of investments in equity instruments of other companies and had recorded unrealized losses of $2.4 million on these investments in "Accumulated Other Comprehensive Loss," net of tax. Should these companies experience a decline in financial condition or fail to meet certain development milestones, the decline in the investments' value may be considered other-than-temporary and impairment charges may be necessary.

        The Company holds an investment in the Bank of America Columbia Strategic Cash fund, a private placement money market mutual fund, which was closed to new subscriptions or redemptions in December 2007, resulting in the Company's inability to immediately redeem its investments for cash. During the three and six months ended June 30, 2009, the Company recognized unrealized gains of $0.3 million and $0.4 million, respectively, included in "Accumulated Other Comprehensive Loss." The fair value of the Company's remaining investment in this fund as of June 30, 2009 was estimated to be $7.1 million based on the net asset value of the fund. Based on information received from the fund manager regarding the timing of the expected redemptions, the Company expects to receive cash redemptions of approximately $5.2 million through the second quarter of 2010, which has been classified as "Short-term Investments" on the accompanying consolidated condensed balance sheet as of June 30, 2009. The remaining $1.9 million of the investment is expected to be received after the second quarter of 2010, and has been classified as "Other Assets." The markets relating to these investments are subject to ongoing illiquidity and remain uncertain. There may be further decreases in the value of these investments until the fund is fully liquidated.

Item 4.    Controls and Procedures

        The Company's management, including the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures as of June 30, 2009. Based on their evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that such controls and procedures are designed at a reasonable assurance level and are effective in providing reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. There have been no changes in the Company's internal controls over financial reporting that were identified during this evaluation that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

36


Table of Contents


Part II. Other Information

Item 1.    Legal Proceedings

        In August 2003, Edwards Lifesciences filed a lawsuit against Medtronic, Inc. and its affiliate, Medtronic Vascular, Inc. (collectively, "Medtronic"); Cook, Inc. ("Cook"); and W.L. Gore & Associates ("Gore") alleging infringement of a patent exclusively licensed to the Company. The lawsuit was filed in the United States District Court for the Northern District of California, seeking monetary damages and injunctive relief. In September 2003, a second patent exclusively licensed to the Company was added to the lawsuit. As announced in January 2006, Edwards Lifesciences settled this litigation with Medtronic. Edwards Lifesciences remains in litigation with Cook and Gore. In March 2008, the District Court granted summary judgment of non-infringement in favor of Cook and subsequently in favor of Gore. In 2008, Edwards Lifesciences appealed these judgments to the Federal Circuit Court of Appeals; the appeal was heard in July 2009.

        In May 2007, Edwards Lifesciences filed a lawsuit against CoreValve, Inc. ("CoreValve"), alleging that CoreValve's ReValving System infringes on a European patent, one of the Andersen family of patents. The lawsuit was filed in the District Patent Court in Dusseldorf, Germany, seeking injunctive and declaratory relief. As announced in October 2008, the Court rejected this assertion and dismissed the infringement lawsuit. The Company has appealed this decision. In May 2007, and June 2007, CoreValve filed separate lawsuits in London, United Kingdom, and Munich, Germany, respectively, against the three inventors of this patent alleging that the patent is invalid. The Company then asserted that CoreValve's ReValving System infringes the Andersen patent in the United Kingdom. In January 2009, the United Kingdom Court determined that the Andersen patent was valid but not infringed by CoreValve. The parties have filed cross-appeals on the validity and infringement decisions. In February 2008, the Company filed a lawsuit against CoreValve in the United States alleging infringement of three of the U.S. Andersen patents. This lawsuit is ongoing.

        In February 2008, Cook filed a lawsuit in the District Patent Court in Dusseldorf, Germany, against Edwards Lifesciences alleging that the Edwards SAPIEN transcatheter heart valve infringes on a Cook patent. Edwards Lifesciences subsequently filed lawsuits in London, United Kingdom, and in Munich, Germany, against Cook alleging that the patents in each country are invalid. In the United Kingdom lawsuit, Cook counterclaimed, alleging infringement by Edwards. As announced, the German Court ruled in March 2009 that the Company does not infringe the Cook patent. In June 2009, the United Kingdom Court also ruled that the Company does not infringe the Cook patent and, further, that the Cook patent is invalid. Cook is appealing the judgments in Germany and the United Kingdom.

        In addition, Edwards Lifesciences is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits related primarily to products and services currently or formerly manufactured or performed, as applicable, by Edwards Lifesciences. Such cases and claims raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Upon resolution of any such legal matter or other claim, Edwards Lifesciences may incur charges in excess of established reserves. While any such charge could have a material adverse impact on Edwards Lifesciences' net income or cash flows in the period in which it is recorded or paid, management does not believe that any such charge relating to any currently pending lawsuit would have a material adverse effect on Edwards Lifesciences' financial position, results of operations, or liquidity.

        Edwards Lifesciences is subject to various environmental laws and regulations both within and outside of the United States. The operations of Edwards Lifesciences, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance

37


Table of Contents


will not have a material impact on Edwards Lifesciences' financial position, results of operations, or liquidity.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Period
  Total Number
of Shares
(or Units)
Purchased
  Average
Price Paid
per Share
(or Unit)
  Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs
  Maximum Number
(or Approximate
Dollar Value)
of Shares
that May Yet
Be Purchased
Under the
Plans or
Programs
(in millions)
(a)
 

April 1, 2009 through April 30, 2009

    157,500   $ 58.97     157,500   $ 157.4  

May 1, 2009 through May 31, 2009

    150,000     63.20     150,000     147.9  

June 1, 2009 through June 30, 2009

    137,500     65.01     137,500     139.0  
                       

Total

    445,000     62.26     445,000        
                       

(a)
On July 11, 2008, the Company announced that the Board of Directors approved a stock repurchase program authorizing the Company to purchase on the open market and in privately negotiated transactions up to $250.0 million of the Company's common stock.

Item 4.    Submission of Matters to a Vote of Security Holders

        The Company's annual meeting of stockholders was held on May 7, 2009. Each of the nominees for directors, as listed in the proxy statement, was elected with the number of votes set forth below:

 
  In Favor   Against   Abstain  

Mike R. Bowlin

    42,309,022     8,538,109     58,856  

William J. Link, Ph.D

    50,535,212     312,524     58,251  

Barbara J. McNeil, M.D., Ph.D

    42,323,663     8,521,041     61,283  

Michael A. Mussallem

    41,895,125     8,954,048     56,814  

        In addition, as of May 7, 2009, the following directors' terms of office are continuing:

      John T. Cardis
      Robert A. Ingram
      David E.I. Pyott

        The results of the other matters voted upon at the annual meeting are as follows:

 
  In Favor   Against   Abstain  

Amendment and restatement of the Company's Long-Term Stock Incentive Compensation Program

    33,571,149     13,689,335     113,746  

Ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal year 2009

    49,864,651     1,001,409     39,926  

38


Table of Contents

Item 6.    Exhibits

        Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index hereto and include the following:

  10.14   2001 Employee Stock Purchase Plan for United States Employees (as amended and restated on July 9, 2009)
  10.15   2001 Employee Stock Purchase Plan for International Employees (as amended and restated on July 9, 2009)
  31.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

39


Table of Contents


SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    EDWARDS LIFESCIENCES CORPORATION
(Registrant)

Date: August 7, 2009

 

By:

 

/s/ THOMAS M. ABATE

Thomas M. Abate
Corporate Vice President,
Chief Financial Officer and Treasurer
(Chief Accounting Officer)

40


Table of Contents


EXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSION

Exhibit No.   Description
  10.14   2001 Employee Stock Purchase Plan for United States Employees (as amended and restated on July 9, 2009)
  10.15   2001 Employee Stock Purchase Plan for International Employees (as amended and restated on July 9, 2009)
  31.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32      Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

41



EX-10.14 2 a2193912zex-10_14.htm EXHIBIT 10.14
QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.14


EDWARDS LIFESCIENCES CORPORATION
2001 EMPLOYEE STOCK PURCHASE PLAN
FOR UNITED STATES EMPLOYEES

(As Amended and Restated July 9, 2009)


Edwards Lifesciences Corporation
2001 Employee Stock Purchase Plan
For United States Employees

(As Amended and Restated July 9, 2009)


ARTICLE I—PURPOSE

1.01.  Purpose

        The Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for United States Employees is intended to provide a method whereby employees of Edwards Lifesciences Corporation (the "Company") and its participating subsidiary companies authorized by the Committee (or an officer designated by the Committee pursuant to Section 9.02) to extend the benefits of the Plan to their Eligible Employees will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Company's common stock. It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended, although the Company makes no undertaking or representation to maintain such qualification. The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of Code Section 423.

        The Plan was initially adopted by the Board on February 8, 2001, and subsequently approved by the stockholders on May 10, 2001. The Plan was subsequently amended and restated by the Board on February 20, 2003, September 13, 2005 and July 9, 2009.


ARTICLE II—DEFINITIONS

2.01.  Base Pay

        "Base Pay" shall mean regular straight-time earnings plus commissions and payments in lieu of regular earnings (such as vacation, sick pay and holiday pay). In the case of a part-time hourly employee, such employee's base pay during an Offering shall be determined by multiplying such employee's hourly rate of pay by the number of regularly scheduled hours of work for such employee during such Offering.

2.02.  Change in Control

        "Change in Control" of the Company shall mean the occurrence of any one of the following events:

    (a)
    Any "Person", as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities; or

    (b)
    During any period of not more than twenty-four (24) months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2.02(a), 2.02(c), or 2.02(d) of this Section 2.02) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or

2


    (c)
    The consummation of a merger or consolidation of the Company with any other entity, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than thirty percent (30%) of the combined voting power of the Company's then outstanding securities; or

    (d)
    The Company's stockholders approve a plan of complete liquidation or dissolution of the Company, or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (or any transaction having a similar effect).

2.03.  Code

        "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.04.  Committee

        "Committee" shall mean the individuals appointed by the Company to administer the Plan as described in Article IX.

2.05.  Company

        "Company" shall mean Edwards Lifesciences Corporation.

2.06.  Corporate Affiliate

        "Corporate Affiliate" shall mean any parent or subsidiary corporation or limited liability company of the Company (as determined in accordance with Code section 424), whether now existing or subsequently established.

2.07.  Eligible Employee

        "Eligible Employee" means, unless local laws prohibit such employee's participation in the Plan, any regular employee of a Participating Company who is scheduled to work 20 or more hours per week.

2.08.  Enrollment Period

        "Enrollment Period" shall mean with respect to any Offering, the period designated by the Committee prior to such Offering during which Eligible Employees may authorize payroll deductions through a Subscription. Unless the Committee determines otherwise, the Enrollment Period with respect to any Offering shall end on the twenty-fifth day of the month immediately preceding the Offering Commencement Date and any Subscription received after such date shall be deemed to be an enrollment in the next following Offering.

2.09.  Exchange Act

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, or any successor thereto.

3


2.10.  Fair Market Value

        The "Fair Market Value" of a share of Stock on a given day shall be determined as follows: (i) if the Stock is listed on any established stock exchange or a national market system (a) for any date of determination except the Purchase Date, Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; (b) for the Purchase Date, Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such exchange or system on the Purchase Date, as reported in The Wall Street Journal or such other source as the Committee deems reliable, or (ii) in the absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Committee.

2.11.  Offering

        "Offering" shall mean the quarterly offering of the Company's Stock, the duration of which shall not exceed twenty seven (27) months.

2.12.  Offering Commencement Date

        "Offering Commencement Date" shall mean June 1, 2001 and, unless determined otherwise by the Committee, the first day of each calendar quarter thereafter.

2.13.  Offering End Date

        "Offering End Date" shall mean, with respect to each Offering beginning prior to July 1, 2007, the first to occur of the day preceding the second annual anniversary of the Offering Commencement Date or the day preceding July 1, 2007, unless determined otherwise by the Committee prior to the Offering Commencement Date or such date as determined pursuant to Section 6.04. "Offering End Date" shall mean, with respect to each Offering beginning on or after July 1, 2007, the day preceding the first annual anniversary of the Offering Commencement Date, unless determined otherwise by the Committee prior to the Offering Commencement Date or such date as determined pursuant to Section 6.04.

2.14.  Participant

        "Participant" shall mean an Eligible Employee who has elected to participate in an Offering by entering a Subscription during the Enrollment Period for such Offering.

2.15.  Participating Company

        "Participating Company" shall mean the Company and each Corporate Affiliate as may be authorized from time to time by the Committee to extend the benefits of the Plan to their Eligible Employees and set forth in Appendix A to this Plan.

2.16.  Plan

        "Plan" shall mean the Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for United States Employees, as amended from time to time.

2.17.  Purchase Date

        "Purchase Date" shall mean with respect to any Offering, the last day of each calendar quarter (or such other dates determined by the Committee prior to the Offering Commencement Date or pursuant to Section 6.04) during the period beginning with the Offering Commencement Date for such Offering and ending with the Offering End Date; provided, however, if any such day is not a business day, the Purchase Date shall be the next preceding business date on which shares of Stock are traded.

4


2.18.  Stock

        "Stock" shall mean the common stock, par value $1.00, of the Company.

2.19.  Subscription

        "Subscription" shall mean an Eligible Employee's authorization for payroll deductions made in the form and manner specified by the Committee (which may include enrollment by submitting forms, by voice response, internet access or other electronic means). Unless withdrawn earlier in accordance with Section 6.02, each Subscription shall be in effect for the duration of the Offering to which it applies. No more than one Subscription may be in effect for an Eligible Employee during any calendar quarter.


ARTICLE III—ELIGIBILITY AND PARTICIPATION

3.01.  Initial Eligibility

        Any individual who is an Eligible Employee on an Offering Commencement Date shall be eligible to participate in the Offering commencing on such date, subject to the terms and conditions of the Plan.

3.02.  Leave of Absence

        For purposes of participation in the Plan, a Participant on a leave of absence shall be deemed to be an employee for a period of up to 90 days or, if longer, during the period the Participant's right to reemployment is guaranteed by statute or contract. If the leave of absence is paid, deductions authorized under any Subscription in effect at the time the leave began will continue. If the leave of absence is unpaid, no deductions or contributions will be permitted during the leave. If such a Participant returns to active status within 90 days or the guaranteed reemployment period, as applicable, payroll deductions under the Subscription in effect at the time the leave began will automatically begin again upon the Participant's return to active status, unless the Subscription has expired. If the Participant does not return to active status within 90 days or the guaranteed reemployment period, as applicable, the Participant shall be treated as having terminated employment for all purposes of the Plan. If such terminated Participant later returns to active employment as an Eligible Employee or if a Participant returns to active employment as an Eligible Employee after the Subscription has expired, such individual will be treated as a new employee and will be eligible to participate in Offerings commencing after his or her reemployment date by filing a Subscription during the applicable Enrollment Period for such Offering.

3.03.  Restrictions on Participation

        Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee shall be granted a right to purchase Stock:

    (a)
    if, immediately after the grant, such employee would own Stock, and/or hold outstanding options to purchase Stock, possessing 5% or more of the total combined voting power or value of all classes of the Company's stock (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any employee); or

    (b)
    which permits the employee's rights to purchase Stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 in Fair Market Value of the Stock (determined at the time such right to purchase Stock is granted) for each calendar year in which such right is outstanding (as computed to comply with Section 423(b)(8) of the Code).

        Further, with respect to any Offering, in no event shall an employee be granted a right to purchase in excess of 10,000 shares of Stock, subject to adjustment pursuant to Section 10.03.

5


3.04.  Commencement of Participation

        An Eligible Employee may become a Participant in any Offering by entering a Subscription during the Enrollment Period for such Offering. Payroll deductions for such Offering shall commence on the applicable Offering Commencement Date and shall end on the applicable Offering End Date unless withdrawn by the Participant or sooner terminated in accordance with Article VII. Only one Subscription may be in effect with respect to any Participant at any one time.

3.05.  Participation After Rehire

        An Eligible Employee's Subscription will automatically terminate on the date he or she is no longer an employee of any Participating Company. If the Eligible Employee terminates employment with a Subscription in effect with respect to an Offering and is rehired prior to the Offering End Date for that Offering, the Subscription will not be reinstated and the Eligible Employee will not be allowed to again make payroll deductions under such Offering. The Eligible Employee may elect to participate in Offerings commencing after his or her reemployment date by entering a Subscription during the applicable Enrollment Period for such Offering. Notwithstanding the foregoing, an Eligible Employee's transfer from one Participating Company to another shall not terminate such Eligible Employee's Subscription.

3.06.  Transfers

        An Eligible Employee's transfer from one Participating Company under this Plan to another shall not terminate such Eligible's Subscription.

        If an Eligible Employee transfers to a Corporate Affiliate that is not a Participating Company under this Plan, the employee will be treated as a terminated Participant under this Plan. The employee may become eligible to participate in the Company's stock purchase plan for international employees if the employee is transferred to a subsidiary or affiliate of the Company that is designated to participate in the stock purchase plan for international employees subject to the terms and conditions set forth in that plan.


ARTICLE IV—OFFERINGS

4.01.  Quarterly Offerings

        The Plan commenced with an Offering beginning on June 1, 2001 and, unless determined otherwise by the Committee, will continue in operation with a new Offering commencing on the first day of each calendar quarter thereafter. Eligible Employees may not have in effect more than one Subscription at a time.

        Participants may subscribe to any Offering by entering a Subscription during the Enrollment Period for such Offering in such manner as the Committee may prescribe (which may include enrollment by submitting forms, by voice response, internet access or other electronic means).

        A Subscription that is in effect on an Offering End Date will automatically be deemed to be a Subscription for the Offering that commences immediately following such Offering End Date, provided that the Participant is still an Eligible Employee and has not withdrawn the Subscription. Under the foregoing automatic enrollment provisions, payroll deductions will continue at the level in effect immediately prior to the new Offering Commencement Date, unless changed in advance by the Participant in accordance with Section 5.03.

6


4.02.  Purchase Price

        The purchase price per share of Stock under each Offering shall be the lower of:

    (a)
    85% of the Fair Market Value of the Stock on the Offering Commencement Date; or

    (b)
    85% of the Fair Market Value of the Stock on the Purchase Date.

        Such purchase price may only be paid with accumulated payroll deductions in accordance with Article V.


ARTICLE V—PAYROLL DEDUCTIONS

5.01.  Amount of Deduction

        An Eligible Employee's Subscription shall authorize payroll deductions at a rate, in whole percentages, of no less than 1% and no more than 12% of Base Pay on each payday that the Subscription is in effect.

5.02.  Participant's Account

        All payroll deductions made with respect to a Participant shall be credited to his or her recordkeeping account under the Plan. A Participant may not make any separate cash payment into such account. No interest will accrue or be paid on any amount withheld from a Participant's pay under the Plan or credited to the Participant's account. Except as otherwise provided in this Section 5.02, all amounts in a Participant's account will be used to purchase whole shares of Stock and no cash refunds shall be made from such account. Any amounts that are insufficient to purchase whole shares shall be credited to the Participant's account, and added to any fractional amounts resulting on subsequent Purchase Dates. Upon liquidation or other closing of a Participant's account, any fractional amounts shall be paid in cash to the Participant based on the then current Fair Market Value of the Stock. In addition, any amounts that are withheld but unable to be applied to the purchase of Stock because of the limitations of Section 3.03 shall be returned to the Participant without interest and will not be used to purchase shares with respect to any other Offering under the Plan.

5.03.  Changes in Payroll Deductions

        During an Offering, a Participant may change his or her level of payroll deduction with respect to such Offering within the limits described in Section 5.01 in accordance with procedures established by the Committee (including, without limitation, rules relating to the frequency of such changes); provided, however, if the Participant reduces his or her payroll deductions to zero, it shall be deemed to be a withdrawal of the Subscription and the Participant may not thereafter participate in such Offering but must wait until the next Offering to resubscribe to the Plan. Any such discontinuance or change in level shall be effective as soon as administratively practicable.


ARTICLE VI—EXERCISE OF RIGHTS TO PURCHASE STOCK

6.01.  Automatic Exercise

        A Participant's right to purchase Stock with respect to any Offering will be automatically exercised on each Purchase Date for the Offering. The right to purchase Stock will be exercised by using the accumulated payroll deductions in the Participant's account as of each such Purchase Date to purchase the number of whole shares of Stock that may be purchased at the purchase price on such date, determined in accordance with Section 4.02.

7


6.02.  Withdrawal From Offering

        A Participant may not withdraw the accumulated payroll deductions in his or her account during an Offering. If the Participant withdraws his or her Subscription with respect to any Offering, the accumulated payroll deductions in the Participant's account at the time the Subscription is withdrawn will be used to purchase shares of Stock at the next Purchase Date for the Offering to which the Subscription related, in accordance with Section 6.01.

6.03.  Delivery of Stock

        Stock purchases under the Plan will be held in an account in the Participant's name in uncertificated form unless certification is requested by the Participant. Furthermore, Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant.

6.04.  Change in Control

        If pursuant to a Change in Control rights to purchase Stock are not assumed or otherwise continued in full force and effect, then each right to purchase Stock under each Offering in effect at the time of the Change in Control shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions of each Participant for the Offering in which such Change in Control occurs to the purchase of whole shares of Stock at a purchase price per share equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Stock on the start date of the applicable Offering or (ii) the Fair Market Value per share of Stock immediately prior to the effective date of such Change in Control.


ARTICLE VII—WITHDRAWAL

7.01.  Effect on Subsequent Participation

        The Committee shall have the authority to decide the Participant's eligibility to participate in any succeeding Offering if Participant withdraws from any Offering.

7.02.  Termination of Employment

        Subject to the following provisions of this Section 7.02, upon termination of the Participant's employment for any reason that results in the Participant not qualifying as an Eligible Employee, any Subscription then in effect will be deemed to have been withdrawn and any payroll deductions credited to the Participant's account will be used to purchase Stock on the next Purchase Date for the Offering with respect to which such deductions relate. Notwithstanding the foregoing, if the Participant has a Subscription in effect on the Participant's termination of employment, payroll deductions (at the rate in effect on the termination date) shall continue to be made from Base Pay earned prior to termination of employment, if any, that is paid to the Participant after such termination of employment and before the earlier of (i) the three-month anniversary of such termination of employment, or (ii) the Offering End Date of such Offering. Any such payroll deduction shall be used to purchase Stock on the next Purchase Date for the Offering after the deduction is made.

7.03.  Effect of Hardship Rules

        At the discretion of the Company, the Company may cancel or suspend a Participant from participating in the Plan if the Participant claims a hardship with respect to his/her participation in any applicable benefit program and pursuant to the applicable benefit program, the Participant cannot be permitted to continue to participate in the Plan. If cancellation or suspension is required, the Company will determine whether accumulated contributions should be refunded or may be held to purchase shares on the next Purchase Date and when the Participant will become eligible to participate in the Plan in the future.

8



ARTICLE VIII—STOCK

8.01.  Maximum Shares

        The maximum number of shares which may be issued under the Plan, subject to adjustment upon changes in capitalization of the Company as provided in Section 10.03, shall be 1,500,000 shares. If the total number of shares for which rights to purchase Stock are exercised on any Purchase Date exceeds the maximum number of shares available for issuance, the Company shall make a pro rata allocation of the shares available for delivery and distribution in as nearly a uniform manner as shall be practicable and as it shall determine to be equitable, and the balance of payroll deductions credited to the account of each Participant under the Plan shall be returned to him as promptly as possible.

8.02.  Participant's Interest in Rights to Purchase Stock

        The Participant will have no interest in Stock covered by a right to purchase Stock under the Plan until such right has been exercised.


ARTICLE IX—ADMINISTRATION

9.01.  Appointment of Committee

        The Company's Board of Directors shall appoint a Committee to administer the Plan. No member of the Committee who is not an Eligible Employee shall be eligible to purchase Stock under the Plan.

9.02.  Authority of Committee

        Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provisions of the Plan, to adopt rules and regulations for administering the Plan, to adopt sub-plans creating additional rules and restrictions for participation and to make all other determinations deemed necessary or advisable for administering the Plan. The Committee shall also have full power and authority to determine whether, to what extent and under what circumstances any Eligible Employee's participation in the Plan shall be cancelled or suspended as a result of 401(k) hardship rules or similar rules, as determined at the sole discretion of the Committee. The Committee's determination on the foregoing matters shall be conclusive. The Committee shall also have the authority to determine if and when the employees of Corporate Affiliates organized or acquired after the Effective Date shall be eligible for participation in the Plan. The Committee may delegate to an officer its authority under this Section 9.02 to determine if and when the employees of a Corporate Affiliate shall be eligible or ineligible for participation in the Plan.

9.03.  Rules Governing the Administration of the Committee

        The Company's Board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable and may hold telephonic meetings. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan, in the manner and to the extent it shall deem desirable. Any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

9


9.04.  Statements

        Each Participant shall receive a statement of his account showing the number of shares of Stock held and the amount of cash credited to such account. Such statements will be provided as soon as administratively feasible following the end of each calendar quarter.


ARTICLE X—MISCELLANEOUS

10.01.  Transferability

        Neither payroll deductions credited to a Participant's account nor any rights with regard to the exercise of a right to purchase Stock or to receive Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the Participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect. During a Participants lifetime, rights to purchase Stock that are held by such Participant shall be exercisable only by that Participant.

10.02.  Use of Funds

        All payroll deductions received or held by the Participating Company under this Plan may be used by the Participating Company for any corporate purpose and the Participating Company shall not be obligated to segregate such payroll deductions.

10.03.  Adjustment Upon Changes in Capitalization

        In the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares, merger, spin-off or similar event, the Committee shall adjust equitably (a) the number and class of shares or other securities that are reserved for sale under the Plan, (b) the number and class of shares or other securities that are subject to outstanding rights to purchase Stock, (c) the maximum number of shares of Stock that can be purchased by a Participant with respect to any Offering and (d) the appropriate market value and other price determinations applicable to rights to purchase Stock. The Committee shall make all determinations under this Section 10.03, and all such determinations shall be conclusive and binding.

10.04.  Amendment and Termination

        The Company's Board of Directors shall have complete power and authority to terminate or amend the Plan at any time and for any reason; provided, however, that the Company's Board of Directors shall not, without the approval of the stockholders of the Company in accordance with Section 423 of the Code, (i) increase the maximum number of shares which may be issued under any Offering (except pursuant to Section 10.03); (ii) amend the requirements as to the class of employees eligible to purchase stock under the Plan; or (iii) permit members of the Committee who are not Eligible Employees to purchase stock under the Plan.

        Upon termination of the Plan, the date of termination shall be considered a Purchase Date, and any cash remaining in Participant accounts will be applied to the purchase of Stock, unless determined otherwise by the Company's Board of Directors. Upon termination of the Plan, the Company's Board of Directors shall have authority to establish administrative procedures regarding the exercise of outstanding rights to purchase Stock or to determine that such rights shall not be exercised.

10.05.  Effective Date

        This Plan became effective as of June 1, 2001.

10


10.06.  No Employment Rights

        The Plan does not, directly or indirectly, create in any employee or class of employees any right with respect to continuation of employment with the Company or any Corporate Affiliate, and it shall not be deemed to interfere in any way with the right of the Company or any Corporate Affiliate employing such person to terminate, or otherwise modify, an employee's employment at any time.

10.07.  Effect of Plan

        The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee's estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee.

10.08.  Governing Law

        The law of the State of California will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States.

11



APPENDIX A

LIST OF PARTICIPATING COMPANIES

        Following is a list of Participating Companies as of February 20, 2003:

Edwards Lifesciences Corporation
Edwards Lifesciences International Assignments Inc.
Edwards Lifesciences LLC
Edwards Lifesciences (U.S.) Inc.
Edwards Lifesciences Research Medical, Inc.

12




QuickLinks

EDWARDS LIFESCIENCES CORPORATION 2001 EMPLOYEE STOCK PURCHASE PLAN FOR UNITED STATES EMPLOYEES
ARTICLE I—PURPOSE
ARTICLE II—DEFINITIONS
ARTICLE III—ELIGIBILITY AND PARTICIPATION
ARTICLE IV—OFFERINGS
ARTICLE V—PAYROLL DEDUCTIONS
ARTICLE VI—EXERCISE OF RIGHTS TO PURCHASE STOCK
ARTICLE VII—WITHDRAWAL
ARTICLE VIII—STOCK
ARTICLE IX—ADMINISTRATION
ARTICLE X—MISCELLANEOUS
APPENDIX A LIST OF PARTICIPATING COMPANIES
EX-10.15 3 a2193912zex-10_15.htm EXHIBIT 10.15
QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.15


EDWARDS LIFESCIENCES CORPORATION
2001 EMPLOYEE STOCK PURCHASE PLAN
FOR INTERNATIONAL EMPLOYEES

(As Amended and Restated July 9, 2009)


Edwards Lifesciences Corporation
2001 Employee Stock Purchase Plan
For International Employees

(As Amended and Restated July 9, 2009)


ARTICLE I—PURPOSE

1.01.  Purpose

        The Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for International Employees is intended to provide a method whereby certain employees of participating subsidiary companies of Edwards Lifesciences Corporation (the "Company") authorized by the Committee (or an officer designated by the Committee pursuant to Section 9.02) to extend the benefits of the Plan to their Eligible Employees will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Company's common stock.

        The Plan was initially adopted by the Board on February 8, 2001, and subsequently amended and restated by the Board on February 20, 2003, September 13, 2005 and July 9, 2009.


ARTICLE II—DEFINITIONS

2.01.  Base Pay

        "Base Pay" shall mean regular straight-time earnings plus commissions (where legally permissible and administratively feasible as determined by the Company in its sole discretion) and payments in lieu of regular earnings and any legally mandated bonus or other pay. In the case of a part-time hourly employee, such employee's base pay during an Offering shall be determined by multiplying such employee's hourly rate of pay by the number of regularly scheduled hours of work for such employee during such Offering.

2.02.  Change in Control

        "Change in Control" of the Company shall mean the occurrence of any one of the following events:

    (a)
    Any "Person", as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and any trustee or other fiduciary holding securities under an employee benefit plan of the Company or such proportionately owned corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the Company's then outstanding securities; or

    (b)
    During any period of not more than twenty-four (24) months, individuals who at the beginning of such period constitute the Board of Directors of the Company, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 2.02(a), 2.02(c), or 2.02(d) of this Section 2.02) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or

2


    (c)
    The consummation of a merger or consolidation of the Company with any other entity, other than: (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than thirty percent (30%) of the combined voting power of the Company's then outstanding securities; or

    (d)
    The Company's stockholders approve a plan of complete liquidation or dissolution of the Company, or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (or any transaction having a similar effect).

2.03.  Code

        "Code" shall mean the United States Internal Revenue Code of 1986, as amended.

2.04.  Committee

        "Committee" shall mean the individuals appointed by the Company to administer the Plan as described in Article IX.

2.05.  Company

        "Company" shall mean Edwards Lifesciences Corporation.

2.06.  Corporate Affiliate

        "Corporate Affiliate" shall mean any parent or subsidiary corporation or limited liability company of the Company (as determined in accordance with Code section 424) whether now existing or subsequently established.

2.07.  Conversion Rate

        "Conversion Rate" shall mean with respect to any non-United States currency, the rate established by the Company's Corporate Treasury Department for purposes of converting such currency to United States dollars.

2.08.  Eligible Employee

        "Eligible Employee" means, unless local laws prohibit or require such employee's participation in the Plan, any regular employee of a Participating Company who is scheduled to work 20 or more hours per week. Eligible Employee shall also mean any other employee of a Participating Company to the extent that local law requires the Plan to be extended to such employee. The Committee shall designate the Corporate Affiliates that shall be eligible to participate in the Plan.

2.09.  Enrollment Period

        "Enrollment Period" shall mean with respect to any Offering, the period designated by the Committee prior to such Offering during which Eligible Employees may authorize payroll deductions (or, if payroll deductions are not permitted under local law, other means of contributions specified by the Committee) through a Subscription. Unless the Committee determines otherwise, the Enrollment Period with respect to any Offering shall end on the twenty-fifth day of the month immediately preceding the Offering Commencement Date and any Subscription received after such date shall be deemed to be an enrollment in the next following Offering.

3


2.10.  Exchange Act

        "Exchange Act" shall mean the United States Securities Exchange Act of 1934, as amended from time to time, or any successor thereto.

2.11.  Fair Market Value

        The "Fair Market Value" of a share of Stock on a given day shall be determined as follows: (i) if the Stock is listed on any established stock exchange or a national market system, (a) for any date of determination except the Purchase Date, Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; (b) for the Purchase Date, Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such exchange or system on the Purchase Date, as reported in The Wall Street Journal or such other source as the Committee deems reliable, or (ii) in the absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Committee.

2.12.  Offering

        "Offering" shall mean the quarterly offering of the Company's Stock, the duration of which shall not exceed twenty seven (27) months.

2.13.  Offering Commencement Date

        "Offering Commencement Date" shall mean June 1, 2001 and, unless determined otherwise by the Committee, the first day of each calendar quarter thereafter.

2.14.  Offering End Date

        "Offering End Date" shall mean, with respect to each Offering beginning prior to July 1, 2007, the first to occur of the day preceding the second annual anniversary of the Offering Commencement Date or the day preceding July 1, 2007, unless determined otherwise by the Committee prior to the Offering Commencement Date or such date as determined pursuant to Section 6.04. "Offering End Date" shall mean, with respect to each Offering beginning on or after July 1, 2007, the day preceding the first annual anniversary of the Offering Commencement Date, unless determined otherwise by the Committee prior to the Offering Commencement Date or such date as determined pursuant to Section 6.04.

2.15.  Participant

        "Participant" shall mean an Eligible Employee who has elected to participate in an Offering by entering a Subscription during the Enrollment Period for such Offering.

2.16.  Participating Company

        "Participating Company" shall mean each Corporate Affiliate as may be authorized from time to time by the Committee to extend the benefits of the Plan to their Eligible Employees and set forth in Appendix A of this Plan. The Committee may determine that some Eligible Employees of a Participating Company shall not be offered participation in the Plan.

2.17.  Plan

        "Plan" shall mean the Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for International Employees, as amended from time to time.

4


2.18.  Purchase Date

        "Purchase Date" shall mean with respect to any Offering, the last day of each calendar quarter (or such other dates determined by the Committee prior to the Offering Commencement Date or pursuant to Section 6.04) during the period beginning with the Offering Commencement Date for such Offering and ending with the Offering End Date; provided, however, if any such day is not a business day, the Purchase Date shall be the next preceding business date on which shares of Stock are traded.

2.19.  Stock

        "Stock" shall mean the common stock, par value US$1.00, of the Company.

2.20.  Subscription

        "Subscription" shall mean an Eligible Employee's authorization for payroll deductions or contributions, as applicable, made in the form and manner specified by the Committee (which may include enrollment by submitting forms, by voice response, internet access or other electronic means). Unless withdrawn earlier in accordance with Section 6.02, each Subscription shall be in effect for the duration of the Offering to which it applies. No more than one Subscription may be in effect for an Eligible Employee during any calendar quarter.


ARTICLE III—ELIGIBILITY AND PARTICIPATION

3.01.  Initial Eligibility

        Any individual who is an Eligible Employee on an Offering Commencement Date shall be eligible to participate in the Offering commencing on such date, subject to the terms and conditions of the Plan.

3.02.  Leave of Absence

        For purposes of participation in the Plan, a Participant on a leave of absence shall be deemed to be an employee for a period of up to 90 days or, if longer, during the period the Participant's right to reemployment is guaranteed by statute or contract. If the leave of absence is paid, deductions authorized under any Subscription in effect at the time the leave began will continue. If the leave of absence is unpaid, no deductions or contributions will be permitted during the leave unless this provision is contrary to applicable local law. If such a Participant returns to active status within 90 days or the guaranteed reemployment period, as applicable, payroll deductions or contributions, as applicable, under the Subscription in effect at the time the leave began will automatically begin again upon the Participant's return to active status, unless the Subscription has expired. If the Participant does not return to active status within 90 days or the guaranteed reemployment period, as applicable, the Participant shall be treated as having terminated employment for all purposes of the Plan, unless otherwise required under local law. If such terminated Participant later returns to active employment as an Eligible Employee or if a Participant returns to active employment as an Eligible Employee after the Subscription has expired, such individual will be treated as a new employee and will be eligible to participate in Offerings commencing after his or her reemployment date by filing a Subscription during the applicable Enrollment Period for such Offering.

5


3.03.  Restrictions on Participation

        Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee shall be granted a right to purchase Stock: (a) if, immediately after the grant, such employee would own Stock, and/or hold outstanding options to purchase Stock, possessing 5% or more of the total combined voting power or value of all classes of the Company's stock (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any employee); or (b) which permits the employee's rights to purchase Stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 in Fair Market Value of the Stock (determined at the time such right to purchase Stock is granted) for each calendar year in which such right is outstanding. Further, the Committee may additionally limit the number of shares of Stock or contributions per Eligible Employee made available for purchase under the Plan by Eligible Employees in certain countries, locations or Participating Companies, if necessary or advisable to avoid securities law filings, achieve tax objectives or to meet or facilitate other Company compliance objectives in particular locations outside the U.S.

        Further, with respect to any Offering, in no event shall an employee be granted a right to purchase in excess of 10,000 shares of Stock, subject to adjustment pursuant to Section 10.03.

3.04.  Commencement of Participation

        An Eligible Employee may become a Participant in any Offering by entering a Subscription during the Enrollment Period for such Offering. Payroll deductions or contributions, as applicable, for such Offering shall commence on the applicable Offering Commencement Date and shall end on the applicable Offering End Date unless withdrawn by the Participant or sooner terminated in accordance with Article VII. Only one Subscription may be in effect with respect to any Participant at any one time.

3.05.  Participation After Rehire

        An Eligible Employee's Subscription will automatically terminate on the date he or she is no longer an employee of any Participating Company. If the Eligible Employee terminates employment with a Subscription in effect with respect to an Offering and is rehired prior to the Offering End Date for that Offering, the Subscription will not be reinstated and the Eligible Employee will not be allowed to again make payroll deductions or contributions, as applicable, under such Offering. The Eligible Employee may elect to participate in Offerings commencing after his or her reemployment date by entering a Subscription during the applicable Enrollment Period for such Offering. Notwithstanding the foregoing, an Eligible Employee's transfer from one Participating Company to another shall not terminate such Eligible Employee's Subscription.

3.06.  Transfers

        An Eligible Employee's transfer from one Participating Company under this Plan to another shall not terminate such Eligible Employee's Subscription.

        If an Eligible Employee transfers to the Company or a Corporate Affiliate that is not a Participating Company under this Plan, the employee will be treated as a terminated Participant under this Plan. The employee may become eligible to participate in the Company's stock purchase plan for United States employees if the employee is transferred to the Company or a subsidiary or affiliate of the Company that is designated to participate in the stock purchase plan for United States employees subject to the terms and conditions set forth in that plan.

6



ARTICLE IV—OFFERINGS

4.01.  Quarterly Offerings

        The Plan commenced with an Offering beginning on June 1, 2001 and, unless determined otherwise by the Committee, will continue in operation with a new Offering commencing on the first day of each calendar quarter thereafter. Eligible Employees may not have in effect more than one Subscription at a time.

        Participants may subscribe to any Offering by entering a Subscription during the Enrollment Period for such Offering in such manner as the Committee may prescribe (which may include enrollment by submitting forms, by voice response, internet access or other electronic means).

        A Subscription that is in effect on an Offering End Date will automatically be deemed to be a Subscription for the Offering that commences immediately following such Offering End Date, provided that the Participant is still an Eligible Employee and has not withdrawn the Subscription. Under the foregoing automatic enrollment provisions, payroll deductions or contributions, as applicable, will continue at the level in effect immediately prior to the new Offering Commencement Date, unless changed in advance by the Participant in accordance with Section 5.03.

4.02.  Purchase Price

        The purchase price per share of Stock under each Offering shall be the lower of:

    (a)
    85% of the Fair Market Value of the Stock on the Offering Commencement Date; or

    (b)
    85% of the Fair Market Value of the Stock on the Purchase Date.

        Such purchase price may only be paid with accumulated payroll deductions subject to and in accordance with Article V.


ARTICLE V—PAYROLL DEDUCTIONS

5.01.  Amount of Deduction

        An Eligible Employee's Subscription shall authorize payroll deductions at a rate, in whole percentages, of no less than 1% and no more than 12% of Base Pay on each payday that the Subscription is in effect, unless payroll deductions are not permitted under local laws, in which case, an Eligible Employee may contribute by such other means as specified by the Committee subject to the contribution limits specified in this section.

5.02.  Participant's Account

        All payroll deductions or contributions, as applicable, made with respect to a Participant shall be credited to his or her recordkeeping account under the Plan unless a separate bank account is required to be set up under applicable local law. A Participant may not make any separate cash payment into such account unless required under applicable local law. Unless required by local law, no interest will accrue or be paid on any amount withheld from a Participant's pay under the Plan or credited to the Participant's account. Except as otherwise provided in this Section 5.02, all amounts in a Participant's account will be used to purchase whole shares of Stock and no cash refunds shall be made from such account. Any amounts that are insufficient to purchase whole shares shall be credited to the Participant's account, and added to any fractional amounts resulting on subsequent Purchase Dates. Upon liquidation or other closing of a Participant's account, any fractional amounts shall be paid in cash to the Participant based on the then current Fair Market Value of the Stock. In addition, any amounts that are withheld but unable to be applied to the purchase of Stock because of the limitations of Section 3.03 shall be returned to the Participant without interest and will not be used to purchase shares with respect to any other Offering under the Plan.

7


5.03.  Changes in Payroll Deductions

        During an Offering, a Participant may change his or her level of payroll deduction or contributions, as applicable with respect to such Offering within the limits described in Section 5.01 in accordance with procedures established by the Committee (including, without limitation, rules relating to the frequency of such changes); provided, however, if the Participant reduces his or her payroll deductions or contributions, as applicable, to zero, it shall be deemed to be a withdrawal of the Subscription and the Participant may not thereafter participate in such Offering but must wait until the next Offering to resubscribe to the Plan. Any such discontinuance or change in level shall be effective as soon as administratively practicable.


ARTICLE VI—EXERCISE OF RIGHTS TO PURCHASE STOCK

6.01.  Automatic Exercise

        A Participant's right to purchase Stock with respect to any Offering will be automatically exercised on each Purchase Date for the Offering. The right to purchase Stock will be exercised by using the accumulated payroll deductions in the Participant's account as of each such Purchase Date or contributions, as applicable, to purchase the number of whole shares of Stock that may be purchased at the purchase price on such date, determined in accordance with Section 4.02. If the Participant is paid in a non-United States currency, the Participant's accumulated payroll deductions or contributions shall be converted into United States dollars using the Conversion Rate in effect on the Purchase Date.

6.02.  Withdrawal From Offering

        A Participant may not withdraw the accumulated payroll deductions in his or her account during an Offering unless the Committee determines otherwise for local law reasons. If the Participant withdraws his or her Subscription with respect to any Offering, the accumulated payroll deductions or contributions, as applicable, in the Participant's account at the time the Subscription is withdrawn will be used to purchase shares of Stock at the next Purchase Date for the Offering to which the Subscription related, in accordance with Section 6.01. Notwithstanding the foregoing, in the event a Participant withdraws his or her Subscription with respect to an Offering and terminates his or her employment prior to the next Purchase Date for which the Participant's accumulated payroll deductions or contributions would be used to purchase shares of Stock, then Participant's accumulated payroll deductions or contributions shall be refunded to Participant in accordance with Section 7.02.

6.03.  Delivery of Stock

        Stock purchases under the Plan will be held in an account in the Participant's name in uncertificated form unless certification is requested by the Participant. Furthermore, Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant.

6.04.  Change in Control

        If pursuant to a Change in Control rights to purchase Stock are not assumed or otherwise continued in full force and effect, then each right to purchase Stock under each Offering in effect at the time of the Change in Control shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions or contributions, as applicable, of each Participant for the Offering in which such Change in Control occurs to the purchase of whole shares of Stock at a purchase price per share equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Stock on the start date of the applicable Offering or (ii) the Fair Market Value per share of Stock immediately prior to the effective date of such Change in Control.

8



ARTICLE VII—WITHDRAWAL

7.01.  Effect on Subsequent Participation

        The Committee shall have the authority to decide the Participant's eligibility to participate in any succeeding Offering if Participant withdraws from an Offering.

7.02.  Termination of Employment

        Upon termination of the Participant's employment for any reason that results in the Participant not qualifying as an Eligible Employee, any Subscription then in effect will be deemed to have been withdrawn and any payroll deductions or contributions, as applicable, credited to the Participant's account will be promptly refunded to such Participant in the currency in which such Participant is paid by his or her Participating Company.

7.03.  Effect of Hardship Rules

        At the discretion of the Company, the Company may cancel or suspend a Participant from participating in the Plan if the Participant claims a hardship with respect to his/her participation in any applicable benefit program and pursuant to the applicable benefit program, the Participant cannot be permitted to continue to participate in the Plan. If cancellation or suspension is required, the Company will determine whether accumulated contributions should be refunded or may be held to purchase shares on the next Purchase Date and when the Participant will become eligible to participate in the Plan in the future.


ARTICLE VIII—STOCK

8.01.  Maximum Shares

        The maximum number of shares which may be issued under the Plan, subject to adjustment upon changes in capitalization of the Company as provided in Section 10.03, shall be 650,000 shares. If the total number of shares for which rights to purchase Stock are exercised on any Purchase Date exceeds the maximum number of shares available for issuance, the Company shall make a pro rata allocation of the shares available for delivery and distribution in as nearly a uniform manner as shall be practicable and as it shall determine to be equitable, and the balance of payroll deductions or contributions, as applicable, credited to the account of each Participant under the Plan shall be returned to him as promptly as possible.

8.02.  Participant's Interest in Rights to Purchase Stock

        The Participant will have no interest in Stock covered by a right to purchase Stock under the Plan until such right has been exercised.


ARTICLE IX—ADMINISTRATION

9.01.  Appointment of Committee

        The Company's Board of Directors shall appoint a Committee to administer the Plan. No member of the Committee who is not an Eligible Employee shall be eligible to purchase Stock under the Plan.

9


9.02.  Authority of Committee

        Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provisions of the Plan, to adopt rules and regulations for administering the Plan, to adopt sub-plans creating additional rules and restrictions for participation and to make all other determinations deemed necessary or advisable for administering the Plan. Without limiting the generality of the foregoing, the Committee specifically is authorized to adopt rules and regulations regarding the handling of payroll deductions, payment of interest, conversion of local currency, payroll tax, withholding procedures, participation limits and handling of stock certificates which vary with local requirements. The Committee shall also have full power and authority to determine whether, to what extent and under what circumstances any Eligible Employee's participation in the Plan shall be cancelled or suspended as a result of applicable hardship rules or similar rules, as determined at the sole discretion of the Committee. The Committee's determination on the foregoing matters shall be conclusive. The Committee shall also have the authority to determine if and when the employees of Corporate Affiliates organized or acquired after the Effective Date shall be eligible for participation in the Plan. The Committee may delegate to an officer its authority under this Section 9.02 to determine if and when the employees of a Corporate Affiliate shall be eligible or ineligible for participation in the Plan.

9.03.  Rules Governing the Administration of the Committee

        The Company's Board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable and may hold telephonic meetings. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan, in the manner and to the extent it shall deem desirable. Any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

9.04.  Statements

        Each Participant shall receive a statement of his account showing the number of shares of Stock held and the amount of cash credited to such account. Such statements will be provided as soon as administratively feasible following the end of each calendar quarter.


ARTICLE X—MISCELLANEOUS

10.01.  Transferability

        Neither payroll deductions nor contributions credited to a Participant's account nor any rights with regard to the exercise of a right to purchase Stock or to receive Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the Participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect. During a Participants lifetime, rights to purchase Stock that are held by such Participant shall be exercisable only by that Participant.

10.02.  Use of Funds

        All payroll deductions or contributions, as applicable, received or held by the Participating Company under this Plan may be used by the Participating Company for any corporate purpose and the Participating Company shall not be obligated to segregate such payroll deductions or contributions, as applicable; provided, however, such amounts shall be held in trust or otherwise segregated from the Participating Company's general assets to the extent required under local law.

10


10.03.  Adjustment Upon Changes in Capitalization

        In the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares, merger, spin-off, or similar event, the Committee shall adjust equitably (a) the number and class of shares or other securities that are reserved for sale under the Plan, (b) the number and class of shares or other securities that are subject to outstanding rights to purchase Stock, (c) the maximum number of shares of Stock that can be purchased by a Participant with respect to any Offering and (d) the appropriate market value and other price determinations applicable to rights to purchase Stock. The Committee shall make all determinations under this Section 10.03, and all such determinations shall be conclusive and binding.

10.04.  Amendment and Termination

        The Company's Board of Directors shall have complete power and authority to terminate or amend the Plan at any time and for any reason. Upon termination of the Plan, the date of termination shall be considered a Purchase Date, and any cash remaining in Participant accounts will be applied to the purchase of Stock, unless determined otherwise by the Company's Board of Directors. Upon termination of the Plan, the Company's Board of Directors shall have authority to establish administrative procedures regarding the exercise of outstanding rights to purchase Stock or to determine that such rights shall not be exercised.

10.05.  Effective Date

        This Plan became effective as of June 1, 2001.

10.06.  No Employment Rights

        The Plan does not, directly or indirectly, create in any employee or class of employees any right with respect to continuation of employment with the Company or any Corporate Affiliate, and it shall not be deemed to interfere in any way with the right of the Company or any Corporate Affiliate employing such person to terminate, or otherwise modify, an employee's employment at any time.

10.07.  Effect of Plan

        The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee's estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee.

10.08.  Governing Law

        The law of the State of California will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States.

11



APPENDIX A

LIST OF PARTICIPATING COMPANIES

        Following is a list of Participating Companies as of September 13, 2005:

Name
  Country
Edwards Lifesciences Pty. Ltd.   Australia
Edwards Lifesciences Austria GmbH   Austria
Edwards Lifesciences S.P.R.L.   Belgium
Edwards Lifesciences (Canada) Inc.   Canada
Edwards Lifesciences World Trade (Shanghai) Co., Ltd.   China
Edwards Lifesciences Nordic AB   Finland, Norway, Sweden
Edwards Lifesciences SAS   France
Edwards Lifesciences Germany GmbH   Germany
Edwards Lifesciences Holding Germany GmbH   Germany
Edwards Lifesciences Services GmbH   Germany
Edwards Lifesciences Hellas, EPE   Greece
Edwards Lifesciences AG   Switzerland, Czech Republic
Edwards Lifesciences P.V.T. Ltd   Israel
Edwards Lifesciences Italia SpA   Italy
Edwards Lifesciences Limited   Japan
Edwards Lifesciences Korea Co. LTD   Korea
Edwards Lifesciences Mexico, S.A. de C.V.   Mexico
Edwards Lifesciences Corporation of Puerto Rico   Puerto Rico
Edwards Lifesciences Export (Puerto Rico) Corporation   Puerto Rico
Edwards Lifesciences Sales Corporation   Puerto Rico
Edwards Lifesciences World Trade Corporation   Singapore, Taiwan
Edwards Lifesciences (Singapore) Pte Ltd.   Singapore
Edwards Lifesciences South Africa Pty. LTD   South Africa
Edwards Lifesciences, S.L.   Spain
Edwards Lifesciences (Thailand) Ltd.   Thailand
Edwards Lifesciences B.V.   The Netherlands
Edwards Lifesciences Services B.V.   The Netherlands
Edwards Lifesciences Limited   United Kingdom


ADDENDUM FOR PARTICIPANTS
IN JAPAN EMPLOYED BY
EDWARDS LIFESCIENCES LIMITED

Effective February 20, 2003

        For purposes of Eligible Employees of Edwards Lifesciences Limited, the Company's subsidiary in Japan, the following terms shall apply and replace any similar provisions in the Plan document. To the extent there is a conflict between the terms of the Plan document and this Addendum, this Addendum shall govern. Otherwise, the terms of the Plan document shall control.

2.12.   Offering

        "Offering" shall mean the annual offering on July 1 of each year of the Company's Stock, the duration of which shall not exceed twenty seven (27) months.

2.13.   Offering Commencement Date

        "Offering Commencement Date" shall mean July 1 of each year, unless determined otherwise by the Committee.

4.01.   Annual Offerings

        The Plan shall consist of annual Offering commencing on July 1 of each calendar year. Eligible Employees may not have in effect more than one Subscription at a time.

        Participants may subscribe to any Offering by entering a Subscription during the Enrollment Period for such Offering in such manner as the Committee may prescribe (which may include enrollment by submitting forms, by voice response, internet access or other electronic means).

        A Subscription that is in effect on an Offering End Date will automatically be deemed to be a Subscription for the Offering that commences immediately following such Offering End Date, provided that the Participant is still an Eligible Employee and has not withdrawn the Subscription. Under the foregoing automatic enrollment provisions, payroll deductions will continue at the level in effect immediately prior to the new Offering Commencement Date, unless changed in advance by the Participant in accordance with Section 5.03.




QuickLinks

EDWARDS LIFESCIENCES CORPORATION 2001 EMPLOYEE STOCK PURCHASE PLAN FOR INTERNATIONAL EMPLOYEES
ARTICLE I—PURPOSE
ARTICLE II—DEFINITIONS
ARTICLE III—ELIGIBILITY AND PARTICIPATION
ARTICLE IV—OFFERINGS
ARTICLE V—PAYROLL DEDUCTIONS
ARTICLE VI—EXERCISE OF RIGHTS TO PURCHASE STOCK
ARTICLE VII—WITHDRAWAL
ARTICLE VIII—STOCK
ARTICLE IX—ADMINISTRATION
ARTICLE X—MISCELLANEOUS
APPENDIX A LIST OF PARTICIPATING COMPANIES
ADDENDUM FOR PARTICIPANTS IN JAPAN EMPLOYED BY EDWARDS LIFESCIENCES LIMITED
EX-31.1 4 a2193912zex-31_1.htm EXHIBIT 31.1
QuickLinks -- Click here to rapidly navigate through this document


Exhibit 31.1

EDWARDS LIFESCIENCES CORPORATION
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Michael A. Mussallem, certify that:

        1.     I have reviewed this quarterly report on Form 10-Q of Edwards Lifesciences 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(s) 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(s) 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 7, 2009   By:   /s/ MICHAEL A. MUSSALLEM

Michael A. Mussallem
Chairman of the Board and
Chief Executive Officer



QuickLinks

EX-31.2 5 a2193912zex-31_2.htm EXHIBIT 31.2
QuickLinks -- Click here to rapidly navigate through this document


Exhibit 31.2

EDWARDS LIFESCIENCES CORPORATION
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Thomas M. Abate, certify that:

        1.     I have reviewed this quarterly report on Form 10-Q of Edwards Lifesciences 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(s) 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(s) 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 7, 2009   By:   /s/ THOMAS M. ABATE

Thomas M. Abate
Corporate Vice President,
Chief Financial Officer and Treasurer
(Chief Accounting Officer)



QuickLinks

EX-32 6 a2193912zex-32.htm EXHIBIT 32
QuickLinks -- Click here to rapidly navigate through this document


Exhibit 32

EDWARDS LIFESCIENCES CORPORATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of Edwards Lifesciences Corporation (the "Company") on Form 10-Q for the period ended June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Michael A. Mussallem, Chairman of the Board and Chief Executive Officer of the Company, and Thomas M. Abate, Corporate Vice President, Chief Financial Officer and Treasurer, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

            (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 the Company.

August 7, 2009       /s/ MICHAEL A. MUSSALLEM

Michael A. Mussallem
Chairman of the Board and
Chief Executive Officer

August 7, 2009

 

 

 

/s/ THOMAS M. ABATE

Thomas M. Abate
Corporate Vice President,
Chief Financial Officer and Treasurer
(Chief Accounting Officer)



QuickLinks

-----END PRIVACY-ENHANCED MESSAGE-----