Segment Data

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Data

19.Segment Data

We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; spine, craniomaxillofacial and thoracic products (“CMFT”); dental implants; and related surgical products.  Our chief operating decision maker (“CODM”) allocates resources to achieve our operating profit goals through four operating segments.  These operating segments, which also constitute our reportable segments, are Americas Orthopedics; EMEA; Asia Pacific; and Americas Spine and Global Dental.    

As a result of changes to our organizational structure in advance of the planned spinoff of ZimVie that were effective April 1, 2021, we added an additional operating segment to reflect a change in how our CODM allocates resources to achieve our operating profit goals.  The new operating segment consists of the Americas Spine and Global Dental businesses, which was carved out of the previous Americas and Global Businesses operating segment (subsequently renamed to Americas Orthopedics).  The EMEA and Asia Pacific operating segments still include the spine product category results in those regions and therefore did not change.

Additionally, starting April 1, 2021 the financial information provided to the CODM from the Americas Orthopedics excluded certain costs related to operations, distribution, quality assurance and regulatory assurance that had previously been reported within this segment.  This group of functions and related costs do not meet the criteria to be a separate operating segment and are now reported within Corporate functions.

We have reclassified previously reported information related to the change in operating segments and Corporate functions, along with other insignificant changes, to conform to the new presentation.

Our CODM evaluates performance based upon segment operating profit exclusive of operating expenses pertaining to certain inventory and manufacturing-related charges, intangible asset amortization, goodwill and intangible asset impairment, restructuring and other cost reduction initiatives, quality remediation, acquisition, integration, divestiture and related, litigation, litigation settlement gain, certain European Union Medical Device Regulation expenses, other charges and corporate functions.  Corporate functions include corporate legal, finance, information technology, human resources and other corporate departments as well as stock-based compensation.  Intercompany transactions have been eliminated from segment operating profit.

Our Americas Orthopedics operating segment is comprised principally of the U.S. and includes other North, Central and South American markets for our orthopedic product categories.  This segment also includes research, development engineering, medical education, and brand management for our orthopedic product category headquarter locations.  Our EMEA operating segment is comprised principally of Europe and includes the Middle East and African markets for all product categories except Dental.  Our Asia Pacific operating segment is comprised principally of Japan, China and Australia and includes other Asian and Pacific markets for all product categories except Dental.  The EMEA and Asia Pacific operating segments include the commercial operations as well as regional headquarter expenses to operate in those markets. The Americas Spine and Global Dental segment is comprised principally of the U.S. and includes other North, Central and South American markets for our spine business, and all geographic markets for our dental business.  This segment also includes research, development engineering, medical education and brand management at the product category headquarter locations as well as other directly attributable distribution and operations expenses.  

Since the Americas Orthopedics segment includes additional costs related to centralized orthopedic product category headquarter expenses, profitability metrics in this operating segment are not comparable to the EMEA and Asia Pacific operating segments.  Similarly, since the Americas Spine and Global Dental segment also includes research, development engineering, medical education, and brand management at the product category headquarter locations as well as other directly attributable distribution and operations expenses, its profitability metrics are not comparable to the other operating segments.  

Our CODM does not review asset information by operating segment.  Instead, our CODM reviews cash flow and other financial ratios by operating segment.

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

	Net Sales						Operating Profit (Loss)									Depreciation and Amortization
	Year Ended December 31,						Year Ended December 31,									Year Ended December 31,
	2021		2020		2019		2021			2020			2019			2021		2020		2019
Americas Orthopedics	$	4,102.1	$	3,699.5	$	4,148.8	$	1,709.3		$	1,528.2		$	1,831.8		$	143.1	$	135.6	$	126.6
EMEA		1,533.8		1,288.6		1,623.1		392.7			308.9			484.0			74.4		77.5		77.0
Asia Pacific		1,318.3		1,256.9		1,323.8		429.4			420.5			472.7			74.6		71.3		65.3
Americas Spine and Global Dental		882.0		779.5		886.5		136.0			105.6			150.9			26.0		32.7		35.6
Total	$	7,836.2	$	7,024.5	$	7,982.2
Corporate Functions								(632.2	)		(754.1	)		(750.9	)		133.6		118.0		117.3
Inventory and manufacturing-related charges								(41.8	)		(54.2	)		(53.9	)		-		-		-
Intangible asset amortization								(615.7	)		(597.6	)		(584.3	)		615.7		597.6		584.3
Goodwill and intangible asset impairment								(16.3	)		(645.0	)		(70.1	)		-		-		-
Restructuring and other cost reduction initiatives								(130.5	)		(116.9	)		(50.0	)		-		-		-
Quality remediation								(53.2	)		(49.8	)		(87.6	)		-		-		-
Acquisition, integration, divestiture and related								(81.8	)		(23.8	)		(12.2	)		-		-		-
Litigation								(192.9	)		(159.8	)		(65.0	)		-		-		-
Litigation settlement gain								-			-			23.5			-		-		-
European Union Medical Device Regulation								(46.5	)		(25.3	)		(30.9	)		-		-		-
Certain R&D agreements								(65.0	)		-			-			-		-		-
Other charges								(11.4	)		(24.5	)		(120.5	)		-		-		-
Total							$	780.1		$	(87.8	)	$	1,137.5		$	1,067.4	$	1,032.7	$	1,006.1

We conduct business in the following countries that hold 10 percent or more of our total consolidated Property, plant and equipment, net (in millions):

	As of December 31,
	2021		2020
United States	$	1,212.6	$	1,252.6
Other countries		803.9		795.1
Property, plant and equipment, net	$	2,016.5	$	2,047.7

U.S. sales were $4,529.5 million, $4,123.5 million, and $4,592.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.  Sales within any other individual country were less than 10 percent of our consolidated sales in each of those years.  Sales are attributable to a country based upon the customer's country of domicile.