17.

Segment Data

We design, develop, manufacture and market orthopaedic reconstructive implants, biologics, 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. 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 inventory step-up and certain other inventory and manufacturing related charges, “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., Puerto Rico and Ireland-based manufacturing operations and logistics and intangible asset amortization resulting from business combination accounting and share-based payment expense. Intercompany transactions have been eliminated from segment operating profit. Management reviews accounts receivable, inventory, property, plant and equipment, goodwill and intangible assets by reportable segment exclusive of U.S., Puerto Rico and Ireland-based manufacturing operations and logistics and corporate assets.

Net sales and other information by segment is as follows (in millions):


	Americas		Europe		Asia Pacific		Global Operations and Corporate Functions			Total
As of and for the Year Ended December 31, 2014
Net sales	$	2,594.2	$	1,269.5	$	809.6	$	–		$	4,673.3
Depreciation and amortization		79.6		72.0		31.7		192.5			375.8
Segment operating profit		1,288.4		398.6		351.0		(604.1	)		1,433.9
Inventory step-up and certain other inventory and manufacturing related charges											(21.2	)
Certain claims											(21.5	)
Special items											(356.5	)

Operating profit											1,034.7
Long-lived assets		877.6		301.4		109.8		–			1,288.8
Total assets		2,856.9		2,113.1		530.3		4,134.4			9,634.7
Additions to instruments		0.2		17.0		6.0		174.2			197.4
Additions to other property, plant and equipment		9.8		14.1		9.1		111.9			144.9

As of and for the Year Ended December 31, 2013
Net sales	$	2,619.8	$	1,212.6	$	791.0	$	–		$	4,623.4
Depreciation and amortization		70.9		72.6		30.7		184.3			358.5
Segment operating profit		1,302.6		359.7		342.3		(634.8	)		1,369.8
Inventory step-up and certain other inventory and manufacturing related charges											(70.5	)
Certain claims											(47.0	)
Special items											(216.7	)

Operating profit											1,035.6
Long-lived assets		810.8		306.3		107.6		–			1,224.7
Total assets		2,814.9		2,343.8		541.9		3,880.0			9,580.6
Additions to instruments		0.2		14.8		6.5		171.4			192.9
Additions to other property, plant and equipment		9.0		10.3		7.6		73.1			100.0

As of and for the Year Ended December 31, 2012
Net sales	$	2,476.3	$	1,177.4	$	818.0	$	–		$	4,471.7
Depreciation and amortization		73.7		73.6		36.3		179.5			363.1
Segment operating profit		1,256.3		369.1		311.1		(617.9	)		1,318.6
Inventory step-up and certain other inventory and manufacturing related charges											(4.8	)
Certain claims											(15.0	)
Goodwill impairment											(96.0	)
Special items											(155.4	)

Operating profit											1,047.4
Long-lived assets		776.0		326.1		108.6		–			1,210.7
Total assets		2,690.6		2,308.0		578.3		3,435.5			9,012.4
Additions to instruments		–		14.0		7.1		127.8			148.9
Additions to other property, plant and equipment		0.7		21.9		6.4		85.7			114.7

The Americas long-lived tangible assets are located primarily in the U.S. $198.7 million of Europe long-lived tangible assets as of December 31, 2014 are located in Switzerland.

For segment reporting purposes, deployed instruments are included in the measurement of reportable segment assets while undeployed instruments at U.S., Puerto Rico and Ireland-based manufacturing operations and logistics are included in global operations and corporate functions. The majority of instruments are purchased by U.S., Puerto Rico and Ireland-based manufacturing operations and logistics and are deployed to the reportable segments as needed for the business. Therefore, the reportable segment assets include deployed instruments even though that reportable segment may not report the instrument addition.

U.S. sales were $2,397.9 million, $2,418.2 million and $2,280.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. Sales within any other individual country were less than 10 percent of our consolidated sales. Sales are attributable to a country based upon the customer’s country of domicile.

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


For the Years Ended December 31,	2014		2013		2012
Reconstructive
Knees	$	1,965.8	$	1,909.9	$	1,833.8
Hips		1,326.4		1,330.5		1,342.0
Extremities		204.3		193.8		173.8

		3,496.5		3,434.2		3,349.6
Dental		242.8		239.3		237.7
Trauma		316.7		315.6		307.9
Spine		207.2		202.3		208.9
Surgical and other		410.1		432.0		367.6

Total	$	4,673.3	$	4,623.4	$	4,471.7