Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information [Abstract]

Segment Information

14.   Segment Information

We design, develop, manufacture and market orthopaedic reconstructive implants, dental implants, spinal implants, trauma products and related surgical products which include surgical supplies and instruments designed to aid in surgical procedures and post-operation rehabilitation. We also provide other healthcare-related services which generate revenues that are less than 1 percent of our total net sales. We manage operations through three major geographic segments — the Americas, which is comprised principally of the U.S. and includes other North, Central and South American markets; Europe, which is comprised principally of Europe and includes the Middle East and African markets; and Asia Pacific, which is comprised primarily of Japan and includes other Asian and Pacific markets. This structure is the basis for our reportable segment information discussed below. Management evaluates reportable segment performance based upon segment operating profit exclusive of operating expenses pertaining to share-based payment expense, inventory step-up, “Certain claims,” goodwill impairment, “Special items” and global operations and corporate functions. Global operations and corporate functions include research, development engineering, medical education, brand management, corporate legal, finance, and human resource functions, U.S. and Puerto Rico-based manufacturing operations and logistics and intangible amortization resulting from business combination accounting. Intercompany transactions have been eliminated from segment operating profit.

Net sales and segment operating profit are as follows (in millions):

	Net Sales				Operating Profit
	Three Months				Three Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011			2010
Americas	$	608.6	$	609.3	$	302.0		$	307.5
Europe		324.7		276.5		105.4			101.8
Asia Pacific		204.1		171.9		73.1			65.7
Total	$	1,137.4	$	1,057.7
Share-based compensation						(17.4	)		(17.9	)
Inventory step-up						(3.4	)		—
Certain Claims						(50.0	)		(75.0	)
Special items						(13.5	)		(11.5	)
Global operations and corporate functions						(137.1	)		(142.5	)
Operating profit					$	259.1		$	228.1

	Net Sales				Operating Profit
	Six Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011			2010
Americas	$	1,238.3	$	1,225.0	$	613.4		$	614.3
Europe		623.9		562.6		216.2			206.6
Asia Pacific		390.8		332.9		147.0			126.8
Total	$	2,253.0	$	2,120.5
Share-based compensation						(31.7	)		(30.6	)
Inventory step-up						(7.8	)		(1.3	)
Certain Claims						(50.0	)		(75.0	)
Special items						(39.0	)		(14.1	)
Global operations and corporate functions						(291.8	)		(304.5	)
Operating profit					$	556.3		$	522.2

Net sales by product category are as follows (in millions):

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
Reconstructive
Knees	$	470.9	$	452.9	$	933.1	$	913.3
Hips		345.0		317.1		682.3		632.8
Extremities		40.7		38.2		83.6		76.6
Total		856.6		808.2		1,699.0		1,622.7
Dental		67.1		55.9		129.5		107.6
Trauma		69.1		57.8		139.2		118.2
Spine		56.4		57.9		113.3		117.9
Surgical and other		88.2		77.9		172.0		154.1
Total	$	1,137.4	$	1,057.7	$	2,253.0	$	2,120.5