SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We manage our business based on three geographical segments: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific). Our segments provide a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. In the first quarter of 2021, the information provided to our Chief Executive Officer for purposes of allocating resources and assessing performance was updated to reallocate contracted services activities performed at a German manufacturing facility from our EMEA segment to our Americas segment. The contracted services performed at that facility are part of our BioPharma Solutions business, which is managed as part of the Americas segment. Accordingly, the reported financial results of the Americas segment now include the contracted services activities performed at that facility. Segment results for the three and nine months ended September 30, 2020 have been recast to conform to the current period presentation.

We use operating income on a segment basis to make resource allocation decisions and assess the ongoing performance of our business segments. Intersegment sales are eliminated in consolidation.

Certain items are maintained at Corporate and are not allocated to a segment. They primarily include corporate headquarters costs, certain R&D costs, certain product category support costs, stock compensation expense, certain employee benefit plan costs, certain foreign currency hedging activities, and certain gains, losses, and other charges (such as business optimization, acquisition and integration costs, intangible asset amortization and asset impairments). Our chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment.

Financial information for our segments is as follows.

	Three months ended September 30,				Nine months ended September 30,
(in millions)	2021		2020		2021		2020
Net sales:
Americas	$	1,727	$	1,606	$	4,911	$	4,640
EMEA	779		720		2,300		2,077
APAC	720		646		2,059		1,775
Total net sales	$	3,226	$	2,972	$	9,270	$	8,492
Operating income:
Americas	$	676	$	611	$	1,907	$	1,726
EMEA	167		126		461		364
APAC	166		161		456		432
Total segment operating income	$	1,009	$	898	$	2,824	$	2,522

The following is a reconciliation of segment operating income to income before income taxes per the condensed consolidated statements of income.

	Three months ended September 30,				Nine months ended September 30,
(in millions)	2021		2020		2021		2020
Total segment operating income	$	1,009	$	898	$	2,824	$	2,522
Corporate and other	(496)		(428)		(1,497)		(1,312)
Total operating income	513		470		1,327		1,210
Interest expense, net	50		39		118		96
Other expense, net	12		16		15		32
Income before income taxes	$	451	$	415	$	1,194	$	1,082

Refer to Note 9 for additional information on Net Sales by product category.