SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

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

The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic 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 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019. Segment net sales and segment pre-tax income 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. Net sales by geographic area are based on the location of the customer.

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, manufacturing variances, corporate headquarters costs, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs, changes in the fair value of contingent consideration liabilities, 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 expense included in each segment, and, therefore, a portion is maintained at the corporate level. 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    September 30,				Nine Months Ended    September 30,
	2020		2019		2020		2019
Segment Net Sales
United States	$	662.0	$	647.8	$	1,845.6	$	1,835.5
Europe	241.5		219.8		695.9		684.3
Japan	109.9		110.0		325.0		322.9
Rest of World	115.2		112.0		323.4		316.5
Total segment net sales	$	1,128.6	$	1,089.6	$	3,189.9	$	3,159.2
Segment Operating Income
United States	$	453.8	$	447.4	$	1,264.0	$	1,258.3
Europe	124.2		111.5		356.2		353.2
Japan	69.2		70.7		209.9		202.8
Rest of World	35.6		36.7		105.2		99.8
Total segment operating income	$	682.8	$	666.3	$	1,935.3	$	1,914.1

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

	Three Months Ended    September 30,						Nine Months Ended    September 30,
	2020			2019			2020			2019
Net Sales Reconciliation
Segment net sales	$	1,128.6		$	1,089.6		$	3,189.9		$	3,159.2
Foreign currency	12.3			4.4			4.7			14.7
Consolidated net sales	$	1,140.9		$	1,094.0		$	3,194.6		$	3,173.9
Pre-tax Income Reconciliation
Segment operating income	$	682.8		$	666.3		$	1,935.3		$	1,914.1
Unallocated amounts:
Corporate items	(331.9		)	(384.2		)	(1,005.6		)	(1,073.1		)
Special charge (Note 4)	—			—			—			(24.0		)
Intellectual property litigation expenses	(8.4		)	(7.9		)	(400.8		)	(19.5		)
Change in fair value of contingent consideration liabilities, net	9.0			2.3			(8.4		)	(12.4		)
Foreign currency	6.3			17.8			25.7			50.9
Consolidated operating income	357.8			294.3			546.2			836.0
Non-operating income	6.5			7.4			14.4			15.0
Consolidated pre-tax income	$	364.3		$	301.7		$	560.6		$	851.0

Enterprise-wide Information

The following enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements.

	Three Months Ended    September 30,				Nine Months Ended    September 30,
	2020		2019		2020		2019
	(in millions)
Net Sales by Geographic Area
United States	$	662.0	$	647.8	$	1,845.6	$	1,835.5
Europe	253.8		222.6		707.8		699.0
Japan	113.9		112.9		330.7		324.4
Rest of World	111.2		110.7		310.5		315.0
	$	1,140.9	$	1,094.0	$	3,194.6	$	3,173.9
Net Sales by Major Product Group
Transcatheter Aortic Valve Replacement	$	744.6	$	700.0	$	2,081.1	$	1,975.4
Transcatheter Mitral and Tricuspid Therapies	12.1		9.7		28.7		21.0
Surgical Structural Heart	203.3		204.1		557.6		636.6
Critical Care	180.9		180.2		527.2		540.9
	$	1,140.9	$	1,094.0	$	3,194.6	$	3,173.9

	September 30, 2020		December 31, 2019
	(in millions)
Long-lived Tangible Assets by Geographic Area
United States	$	1,031.9	$	849.1
Europe	159.1		101.5
Japan	18.6		21.7
Rest of World	293.3		269.4
	$	1,502.9	$	1,241.7