14. Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

14. SEGMENT INFORMATION

Bio-Rad is a multinational manufacturer and worldwide distributor of its own life science research products and clinical diagnostics products.  We have two reportable segments:  Life Science and Clinical Diagnostics.  These reportable segments are strategic business lines that offer more than 8,000 different products and services and require different marketing strategies. We do not disclose quantitative information about our different products and services as it is impractical to do so based primarily on the numerous products and services that we sell and the global markets that we serve.

The Life Science segment develops, manufactures, sells and services reagents, apparatus and instruments used for biological research.  These products are sold to university and medical school laboratories, pharmaceutical and biotechnology companies, food testing laboratories and government and industrial research facilities.

The Clinical Diagnostics segment develops, manufactures, sells and services automated test systems, informatics systems, test kits and specialized quality controls for the healthcare market.  These products are sold to reference laboratories, hospital laboratories, state newborn screening facilities, physicians’ office laboratories, transfusion laboratories and insurance and forensic testing laboratories.

Other Operations include the remainder of our Analytical Instruments segment.

Segment results are presented in the same manner as we present our operations internally to make operating decisions and assess performance. The accounting policies of the segments are the same as those described in Significant Accounting Policies (see Note 1).  Segment profit or loss includes an allocation of corporate expense based upon sales and an allocation of interest expense based upon accounts receivable and inventories.  The difference between total segment allocated interest expense, depreciation and amortization, and capital expenditures and the corresponding consolidated amounts is attributable to our corporate headquarters.  Segments are expected to manage only assets completely under their control.  Accordingly, segment assets include primarily accounts receivable, inventories and gross machinery and equipment.  Goodwill balances have been included in corporate for segment reporting purposes.

Information regarding industry segments at December 31, 2016, 2015, and 2014 and for the years then ended is as follows (in millions):

		Life Science			Clinical Diagnostics		Other Operations
Segment net sales	2016	$	730.7		$	1,323.3	$	14.2
	2015	695.0			1,310.4		14.0
	2014	728.3			1,432.3		14.4
Allocated interest expense	2016	$	6.4		$	15.5	$	—
	2015	6.1			15.4		0.1
	2014	5.5			15.9		0.1
Depreciation and amortization	2016	$	31.7		$	80.5	$	—
	2015	30.7			77.8		0.1
	2014	33.2			95.8		—
Segment (loss) profit	2016	$	(19.2	)	$	57.0	$	0.9
	2015	(0.7		)	152.4		0.7
	2014	(14.7		)	167.1		1.2
Segment assets	2016	$	381.4		$	918.0	$	4.9
	2015	390.5			878.3		4.4
Capital expenditures	2016	$	14.3		$	67.1	$	—
	2015	8.2			51.3		0.1

Net corporate operating expense consists of receipts and expenditures that are not the primary responsibility of segment operating management and therefore are not allocated to the segments for performance assessment by our chief operating decision maker. In 2014, this included the accrual of $20.1 million associated with the U.S. Securities and Exchange Commission and Department of Justice investigations relating to the U.S. Foreign Corrupt Practices Act, for which a final settlement was reached in the fourth quarter of 2014. The following reconciles total segment profit to consolidated income before taxes (in millions):

	Year Ended December 31,
	2016			2015			2014
Total segment profit	$	38.7		$	152.4		$	153.6
Foreign exchange losses	(4.5		)	(10.2		)	(9.3		)
Net corporate operating, interest and other expense, net not allocated to segments	(7.5		)	(7.5		)	(25.7		)
Other income (expense), net	14.9			11.1			13.0
Consolidated income before taxes	$	41.6		$	145.8		$	131.6

The following reconciles total segment assets to consolidated total assets (in millions):

	December 31,
	2016		2015
Total segment assets	$	1,304.3	$	1,273.2
Cash and other current assets	980.3		926.9
Property, plant and equipment, net, excluding
segment specific gross machinery and equipment	81.6		46.1
Goodwill, net	477.1		495.9
Other long-term assets	1,007.2		967.6
Total assets	$	3,850.5	$	3,709.7

The following presents net sales to external customers by geographic region based primarily on the location of the use of the product or service (in millions):

	Year Ended December 31,
	2016		2015		2014
Europe	$	742.2	$	763.7	$	901.7
Pacific Rim	427.1		392.2		417.5
United States	770.6		735.0		704.9
Other (primarily Canada and Latin America)	128.3		128.5		150.9
Total net sales	$	2,068.2	$	2,019.4	$	2,175.0

The following presents Property, plant and equipment, net, Other investments and other assets, excluding deferred income taxes, by geographic region based upon the location of the asset (in millions):

	December 31,
	2016		2015
Europe	$	221.1	$	204.4
Pacific Rim	16.1		15.1
United States	1,084.7		962.6
Other (primarily Canada and Latin America)	12.3		9.1
Total Property, plant and equipment, net, Other investments and other assets, excluding deferred income taxes	$	1,334.2	$	1,191.2