Edwards Lifesciences Presentation

Edwards Lifesciences

Patient-Focused Innovations for Structural Heart Disease and Critical Care Monitoring

Use of Non-GAAP Financial Measures

Unless otherwise indicated, all figures are GAAP financial measures

The Company uses the term “underlying” when referring to non-GAAP sales information, which excludes discontinued and acquired products, foreign exchange fluctuations, and the THVT sales return reserves and “excluding special items” and “adjusted net income” and “adjusted EPS” to also exclude gains and losses from special items such as significant investments, litigation, amortization and business development transactions.

A reconciliation of non-GAAP historical financial measures to the most comparable GAAP measure is available at www.edwards.com

The Company is not able to provide a reconciliation of future projections that exclude special items to expected reported results due to the unknown effect, timing and potential significance of special charges or gains, and management’s inability to forecast charges associated with future transactions and initiatives

29/16/16

http://www.edwards.com/

Cautionary Statement

Presentations and comments made today by the management of Edwards Lifesciences Corporation will include 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. These forward-looking statements can sometimes be identified by the use of words such as “may,” “will,” “should,”

“anticipate,” “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “guidance,” “outlook,” “optimistic,” “aspire,” “confident” or

other forms of these words or similar expressions. These may include, but are not limited to, the company’s financial goals or

expectations for 2016 and beyond; expectations for new products, therapy adoption and the global TAVR opportunity; the timing

and results of clinical trials and regulatory approvals; and strategies and opportunities for growth.

Forward-looking statements are based on estimates and assumptions made by management of the company and are believed to

be reasonable, though they are inherently uncertain and difficult to predict. Our forward-looking statements speak only as of the

date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or

circumstances after the date of the statement. If the Company does update or correct one or more of these statements, investors

and others should not conclude that the company will make additional updates or corrections.

Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from

that expressed or implied by the forward-looking statements. Factors that could cause actual results or experience to differ

materially from that expressed or implied by the forward looking statements are detailed in the company's filings with the

Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2015. These

filings, along with important safety information about our products, may be found at edwards.com.

39/16/16

Driven by a Passion to Help Patients

Edwards partners with

clinicians to develop innovative

technologies in the areas of

structural heart disease and

critical care monitoring that

enable them to save and

enhance lives.

49/16/16

Global Leadership

Over 95% of sales from products in #1 global positions

Serving patients in more than 100 countries worldwide

5

U.S.

Europe

Japan

ROW

2010 2015

Transcatheter

Heart

Valve Therapy

Surgical

Heart

Valve

Therapy

Critical

CareSurgical

Heart

Valve

Therapy

Critical

Care

THVT

9/16/16

Edwards’ Strategy

6

• Breakthrough therapies

with superior clinical

and economic

evidence

• Active product portfolio

management

Focused Innovation

• Pioneering legacy of

establishing standards

of care

• Trusted relationships

with clinicians, payors

and regulators

Industry LeadershipPatient-Centric

• Fulfilling unmet needs

of structural heart and

critically ill patients

• Transforming care

drives enduring value

creation

Create Value with Therapies that Transform Patient Care

9/16/16

Industry Leadership

9/16/16 7

Edwards is Well Positioned to Maintain Global TAVR Leadership

A beating heart alternative to traditional surgery for certain aortic stenosis patients

An increasing body of evidence is changing the treatment of aortic stenosis

– SAPIEN 3 has delivered superior clinical outcomes

Continuing to build robust clinical evidence to expand patient access

Investing to be the technology leader

89/16/16

Global TAVR Opportunity Could Exceed $5B in 2021

9

ObservationsFor Severe, Symptomatic AS Patients

• Age plays a significant role in the

diagnosis and treatment of aortic

stenosis

• Additional risk factors not captured

in STS score become more important

with patient age

• A safe interventional procedure has

the potential to lift treatment rates in

older age group

(1) Nkomo 2006, Iivanainen 1996, Aronow 1991, Bach 2007, Freed 2010, Iung 2007, Pellikka 2005, Brown 2008, Thourani 2015, internal estimates.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

50 55 60 65 70 75 80 85 90 95 100

SAVR

TAVR

Untreated (estimated)

Age

Pa

tie

nts

2015 Severe Symptomatic

AS Patients in the U.S.1

9/16/16

There are Many Patients Who May Benefit From TAVR

10

Moderate and Severe Aortic Stenosis(1) (AS)~1.6 M

Severe AS(1)

~580,000

Severe AS,

Symptomatic(2)

~290,000

~1/2 Symptomatic

(1) Nkomo 2006, Iivanainen 1996, Aronow 1991, Bach 2007 (2) Internal estimates, Freed 2010, Iung 2007, Pellikka 2005; Brown 2008 (n=622)

~260,000~1/2 Asymptomatic

Severe AS,

Asymptomatic(2)

~290,000

2015 Total U.S. Population

High

Risk

Intermediate

Risk

Low Risk Asymptomatic

9/16/16

Positive Outcomes and Expanded Indications Should Encourage Untreated Patients to Seek Therapy

11

Low risk patients: STS <4

Randomized 1:1 to

surgery

Approx. 1,300 patients;

1-yr follow-up

Currently enrolling; est.

completion mid-2017

Low Risk Trial

High Risk

Intermediate

Risk

Low Risk

Intermediate Risk

SAPIEN 3 better than

surgery at one year(1)

SAPIEN 3 approved for

intermediate risk patients

in the U.S.

Expansion of CE Mark

indication est. late 2016

or early 2017

(1) The SAPIEN 3 valve was better than surgery at one year on a composite primary endpoint of mortality, stroke and moderate or severe aortic regurgitation.

9/16/16

Product Enhancements, New Technologies and Expanded Indications Strengthen Leadership

The Edwards SAPIEN 3 Ultra System

– On-balloon delivery system

– Next-generation sheath

– CE Mark approval expected in 2H 2017

Pulmonic indication for SAPIEN XT enables treatment of adult and pediatric patients

CENTERA design expected to be best-in-class self-expanding platform; CE Mark anticipated in 2H 2017

Pursuing indication expansion utilizing current platforms

Next generation valve platforms under development

12

Edwards SAPIEN 3 Ultra System

The Edwards SAPIEN 3 Ultra System and CENTERA are not approved for sale.

9/16/16

The Leader in a ~$1.8B Global Surgical Heart Valve Segment

Differentiated, long-term evidence and highly trusted brand

– More long-term clinical publications than any other surgical valve

Surgical AVR expected to continue to be an important option for younger patients and complex procedures

Innovation planned beyond aortics, expanding treatment options in other valve positions

Strategy is to differentiate surgical offerings with superior clinical and health economic evidence

139/16/16

14

(1) Flameng W, et al. J Thorac Cardiovasc Surg. 2015;149:340–45INSPIRIS not approved for sale.

EDWARDS INTUITY Elite

– Facilitates MIS AVR

– Trusted platform, rapid deployment, and smaller incision

– Now approved in the U.S.

INSPIRIS

– RESILIA tissue has demonstrated reduced calcification and improved hemodynamics in rigorous preclinical studies1

– VFit technology is designed for potential future valve-in-valve procedures

– EU and U.S. launches anticipated in 2017

INTUITY and INSPIRIS Should Extend Our Leadership in Surgical Valves

9/16/16

Edwards’ Unmatched Portfolio of Market Leading Hemodynamic Products is a Competitive Advantage

15

ClearSightFinger Cuff

Swan-Ganz Pulmonary

Artery Catheter

FloTrac Sensor

TruWaveTransducers

Core Hemodynamic Products Enhanced Surgical Recovery Products

EV1000 Clinical Platform

9/16/16

Enhanced Surgical Recovery is an Underpenetrated Global Opportunity

Enhanced surgical recovery is focused on reducing complications and length of stay

ClearSight noninvasive sensor expands benefits of ESR to a broader patient population

Innovating to drive future ESR growth

– Next generation hemodynamic monitor

– Integrated semi-closed loop system for standardized management of patient fluid levels

16

Size of ESR Opportunity

Unpenetrated$550M

Penetrated

$150M

Large Opportunity Exists

to Reduce Complications

from Surgery

9/16/16

Innovation Fuels Long-Term Growth

9/16/16 17

Edwards is Investing Aggressively to Lead Transformational Structural Heart Therapies

18

CardiAQ-Edwards Mitral Replacement

FORMA Tricuspid Repair

HF Programs LV Restoration

CardioKinetix LV Reduction

Harpoon Degenerative Mitral Repair

FMR Program Functional Mitral Repair

Selected Programs Description

Ad

jac

en

t V

alv

es

He

art

Fa

ilu

re

9/16/16

Note: Harpoon and CardioKinetix are external programs.

Combined CardiAQ-Edwards Platform Can Drive Leadership

Focus on building clinical experience in TMVR

CardiAQ platform complements the FORTIS program

– One valve, multiple delivery systems

– Unique anchoring mechanism

Early patient experience is encouraging; more study needed

Planned clinical timelines:

– U.S. EFS underway; CE Mark trial to begin soon*

Near-term product additions:

– Lower valve profile, additional valve sizes, delivery system improvements, Edwards tissue

19

The CardiAQ-Edwards valve is not available for sale. *Guidance as of July 26, 2016

9/16/16

Other Structural Heart Initiatives Focused on Significant Unmet Patient Needs

20

FORMA Harpoon CardioKinetix

Implantable spacer that reduces regurgitant tricuspid flow

1.6M U.S. patients suffer from moderate-to-severe TR1

Early human clinical experience is promising

U.S. EFS underway

Transcatheter approach to chordal repair

1.6M U.S. patients 45-85 years old2

Minority investment and option to acquire Harpoon Medical

CE Mark trial enrollment underway

Treatment for left ventricular dysfunction

1.4M U.S. Class III patients underserved3

Minority investment and option to acquire CardioKinetix

U.S. pivotal trial 50% enrolled; CE Mark as of 2011

(1) Stuge and Liddicoat. Emerging opportunities for cardiac surgeons within structural heart disease. J Thorac Cardio Surg 2006;132:1258-1261 (2) Singh et al., Prevalence and Clinical Determinants of

MR…(Framingham), Am J Cardiology 1999 (3) IMPROVE-HF Registry, Nursing Home Survey 2004, NHANES 2009-12, CVRG 2015. FORMA, Harpoon and CardioKinetix are not available for sale.

9/16/16

Financial Highlights

9/16/16 21

Edwards is an Attractive Investment

Strong organic topline growth

Disciplined SG&A expense control

Successful long-term track record

Shareholder-friendly governance profile

Pay-for-performance philosophy

Robust free cash flow

Commitment to returning capital to shareholders

22

Net Sales($ in billions and underlying growth rates)

$1.90 $2.05 $2.32

$2.49

High End$2.70 -

3.00

2012 2013 2014 2015 2016E

11%13% 17%

~18%

Underlying figures exclude impacts from foreign currency and special items.

9/16/16

Guidance as of 7/26/16. Not an update.

Q2 Results Add to Strong First Half of 2016

Sales grew 23% (non-GAAP +21%)

– THVT sales grew 49% (non-GAAP +45%)

EPS was $0.58, up 14% (adjusted EPS $0.76, +33%)

2016 sales guidance raised to high end of $2.7 - $3.0 billion

2016 THVT sales guidance raised to $1.5 - $1.7 billion based on strong therapy adoption

2016 Adjusted EPS guidance increased to $2.78 - $2.88

23

$0.57

$0.76

2Q15 2Q16

+33%

Total Underlying Sales (000s)

Adjusted EPS

$627.0

$759.3

2Q15 2Q16

+21%

Underlying/adjusted figures exclude impacts from foreign currency and special items.

9/16/16


2016 Non-GAAP Financial Goals

24

($ in millions, except EPS) 2016 Guidance

Total Net SalesHigh End of

$2,700 - $3,000

Gross Profit Margin 73% - 74%

Free Cash Flow $500- $600

EPS $2.78 - $2.88

9/16/16


Capital Allocation Priorities

259/16/16

Fund strategic external investments:

– Selective acquisitions, likely smaller in size

– Minority investments and options

– Intellectual property

Disciplined capital expenditures to support growth

Share repurchase is the preferred method for returning capital to investors

Management is committed to disciplined use of cash

Edwards is Poised for Long-Term Success

Patient-centric culture

Leading edge research and development

Industry leading competitive positions

Trusted relationships with clinicians, regulators and payors globally

Strong geographic diversification

Nimble, adaptive business model

Focused strategy to deliver patient benefit and shareholder value

269/16/16

Non-GAAP Reconciliations

9/16/16 28

EDWARDS LIFESCIENCES CORPORATION

Non-GAAP Financial Information

Management considers free cash flow to be a liquidity measure which provides useful information to management and investors about

the amount of cash generated by business operations, after deducting payments for capital expenditures, which cash can then be used

for strategic opportunities or other business purposes including, among others, investing in the Company's business, making strategic

acquisitions, strengthening the balance sheet, and repurchasing stock.

Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to

other companies and should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures

calculated in accordance with GAAP. A reconciliation of non-GAAP historical financial measures to the most comparable GAAP measure

is provided in the tables below.

Intellectual Property Litigation Expenses - The Company incurred intellectual property litigation expenses of $9.1 million and $1.0

million in the second quarter of 2016 and 2015, respectively.

Foreign Exchange - Fluctuations in exchange rates impact the comparative results and sales growth rates of the Company's underlying

business. Management believes that excluding the impact of foreign exchange rate fluctuations from its sales growth provides investors

a more meaningful comparison to historical financial results. The impact of foreign exchange rate fluctuations has been detailed in the

"Unaudited Reconciliation of Sales by Product Group and Region."

Purchased In-process Research and Development - The Company recorded a $34.5 million charge in the second quarter of 2016

related to the acquisition of technology for use in its transcatheter heart valve programs.

Amortization of Intellectual Property - The Company recorded amortization expense of $1.9 million and $1.7 million in the second

quarter of 2016 and 2015, respectively, related to intellectual property.

To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), the

Company uses non-GAAP historical financial measures. The Company uses the term “underlying” when referring to non-GAAP sales

information, which excludes foreign exchange fluctuations, adjustments for discontinued and acquired products, and sales return

reserves associated with transcatheter heart valve therapy ("THVT") product upgrades; and “adjusted” to also exclude amortization of

intellectual property, gains and losses from significant investments, impairments, litigation, and business development transactions.

Guidance for sales and sales growth rates is provided on an "underlying basis," and projections for diluted earnings per share, net

income and growth, gross profit margin, taxes, and free cash flow are also provided on a non-GAAP basis as adjusted for the items

identified below due to the inherent difficulty in forecasting such items. The Company is not able to provide a reconciliation of the non-

GAAP guidance to comparable GAAP measures due to the unknown effect, timing, and potential significance of special charges or

gains, and management's inability to forecast charges associated with future transactions and initiatives. Management does not consider

the excluded items or adjustments as part of its day-to-day business or reflective of the core operational activities of the Company as

they result from transactions outside the ordinary course of business.

Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results, and evaluating

current performance. These non-GAAP financial measures are used in addition to and in conjunction with results presented in

accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations by investors that, when viewed with

its GAAP results, provide a more complete understanding of factors and trends affecting the Company's business.

The items described below are adjustments to the GAAP financial results in the reconciliations that follow:

THVT Sales Return Reserve and Related Costs - In the second quarter of 2015, the Company recorded a net sales return reserve and

related costs, primarily related to inventory reserves, of $15.9 million related to estimated THVT product returns expected upon

introduction of next-generation THVT products.


Unaudited Reconciliation of GAAP to Non-GAAP Financial Information

RECONCILIATION OF GAAP TO ADJUSTED NET INCOME

(in millions, except per share data) 2016 2015

GAAP Net Income 126.6$ 112.7$

Growth Rate % 12.3%

Non-GAAP adjustments: (A)

THVT sales returns reserve and related costs - 15.9

Intellectual property litigation expenses 9.1 1.0

Amortization of intellectual property 1.9 1.7

Purchased in-process research and development 34.5 -

Provision for income taxes

Tax effect on reconciling items (B) (7.5) (5.6)

Non-GAAP Net Income 164.6$ 125.7$

Growth Rate % 30.9%

RECONCILIATION OF GAAP TO ADJUSTED DILUTED EARNINGS PER SHARE

GAAP Diluted Earnings Per Share (C)

0.58$ 0.51$

Growth Rate % 13.7%

Non-GAAP adjustments: (A), (D)

THVT sales returns reserve and related costs - 0.05

Intellectual property litigation expenses 0.03 -

Amortization of intellectual property 0.01 0.01

Purchased in-process research and development 0.14 -

Adjusted Diluted Earnings Per Share 0.76$ 0.57$

Growth Rate % 33.3%

Note: Numbers may not calculate due to rounding.

(D) All amounts are tax effected, calculated based upon the impact of the relevant tax jurisdictions' statutory tax rates on

the Company's estimated annual effective tax rate, or discrete rate in the quarter, as applicable.

Three Months Ended

June 30,

(A) See description of non-GAAP adjustments on the Non-GAAP Financial Information page.

(B) The tax effect on non-GAAP adjustments is calculated based upon the impact of the relevant tax jurisdictions' statutory

tax rates on the Company's estimated annual effective tax rate, or discrete rate in the quarter, as applicable.

(C) All per share amounts for the prior years were adjusted for the December 11, 2015 two-for-one stock split.


Unaudited Reconciliation of Sales by Product Group and Region

($ in millions)

Sales by Product Group (YTD) 2Q 2016 2Q 2015 Change

GAAP

Growth

Rate*

Sales Return

Reserve

2Q 2016

Underlying

Sales

Sales Return

Reserve FX Impact

2Q 2015

Underlying

Sales

Underlying

Growth Rate *

Transcatheter Heart Valve Therapy 418.6$ 281.4$ 137.2$ 48.7% -$ 418.6$ 5.0$ 2.0$ 288.4$ 45.1%

Surgical Heart Valve Therapy 198.7 204.0 (5.3) (2.6%) - 198.7 - 1.5 205.5 (3.3%)

Critical Care 142.0 131.4 10.6 8.0% - 142.0 - 1.7 133.1 6.7%

Total Sales 759.3$ 616.8$ 142.5$ 23.1% -$ 759.3$ 5.0$ 5.2$ 627.0$ 21.1%

* Numbers may not calculate due to rounding.

2015 Adjusted2016 Adjusted


Unaudited Reconciliation of Sales by Product Group

($ in millions)

Sales by Product Group (YTD) 2015 2014 Change

GAAP

Growth

Rate*

Sales Returns

Reserve

2014

Underlying

Sales

Sales Returns

Reserve FX Impact

2013

Underlying

Sales

Underlying

Growth Rate *

Transcatheter Heart Valves 1,180.3$ 943.6$ 236.7$ 25.1% 1.7$ 1,182.0$ (14.1)$ (71.2)$ 858.3$ 37.7%

Surgical Heart Valve Therapy 785.0 826.1 (41.1) (5.0%) - 785.0 - (59.7) 766.4 2.5%

Critical Care 528.4 553.2 (24.8) (4.5%) - 528.4 - (41.3) 511.9 3.2%

Total Sales 2,493.7$ 2,322.9$ 170.8$ 7.4% 1.7$ 2,495.4$ (14.1)$ (172.2)$ 2,136.6$ 16.8%


2015 Adjusted 2014 Adjusted



($ in millions)

Sales by Product Group (YTD)

2014 2013 Change

GAAP

Growth

Rate*

Sales Returns

Reserve

2014

Underlying

Sales

Sales Returns

Reserve FX Impact

2013

Underlying

Sales

Underlying

Growth Rate *

Transcatheter Heart Valves 943.6$ 707.7$ 235.9$ 33.3% (14.1)$ 929.5$ 14.1$ (0.5)$ 721.3$ 28.9%

Surgical Heart Valve Therapy 826.1 801.2 24.9 3.1% - 826.1 - (10.5) 790.7 4.5%

Critical Care 553.2 536.6 16.6 3.1% - 553.2 - (12.0) 524.6 5.5%

Total Sales 2,322.9$ 2,045.5$ 277.4$ 13.6% (14.1)$ 2,308.8$ 14.1$ (23.0)$ 2,036.6$ 13.3%





($ in millions)

Sales by Product Group (YTD) 2013 2012 Change

GAAP

Growth

Rate*

Sales Returns

Reserve

2013

Underlying

Sales FX Impact

2012

Underlying

Sales

Underlying

Growth Rate *

Transcatheter Heart Valves 707.7$ 552.1$ 155.6$ 28.2% 14.1$ 721.8$ 5.2$ 557.3$ 29.5%

Surgical Heart Valve Therapy 801.2 787.5 13.7 1.7% - 801.2 (20.2) 767.3 0.0

Critical Care 536.6 560.0 (23.4) (4.2%) - 536.6 (28.9) 531.1 1.0%

Total Sales 2,045.5$ 1,899.6$ 145.9$ 7.7% 14.1$ 2,059.6$ (43.9)$ 1,855.7$ 10.8%



Edwards Lifesciences Presentation

Healthcare

Transcript of Edwards Lifesciences Presentation