Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Selected Income Statement Information by Segment

Selected Statement of Income Information

	Earnings						Depreciation and Amortization(a)
	Three Months Ended						Three Months Ended
	September 30,						September 30,
(MILLIONS OF DOLLARS)	2020			2019			2020		2019
U.S.
Revenue	$	996		$	844
Cost of sales	194			163
Gross profit	802			681
Gross margin	80.5		%	80.7		%
Operating expenses	157			130
Other (income)/deductions-net	—			—
U.S. Earnings	645			551			$	15	$	12
International
Revenue(b)	767			721
Cost of sales	245			234
Gross profit	522			487
Gross margin	68.1		%	67.5		%
Operating expenses	122			134
Other (income)/deductions-net	—			—
International Earnings	400			353			15		13
Total operating segments	1,045			904			30		25
Other business activities	(87)			(87)			6		7
Reconciling Items:
Corporate	(207)			(172)			27		19
Purchase accounting adjustments	(48)			(55)			48		55
Acquisition-related costs	(1)			(6)			—		—
Certain significant items(c)	(9)			17			—		—
Other unallocated	(96)			(73)			—		1
Total Earnings(d)	$	597		$	528		$	111	$	107

(a)    Certain production facilities are shared. Depreciation and amortization is allocated to the reportable operating segments based on estimates of where the benefits of the related assets are realized.

(b)    Revenue denominated in euros was $186 million and $176 million for the three months ended September 30, 2020 and September 30, 2019, respectively.

(c)    For the three months ended September 30, 2020, primarily represents CEO transition-related costs of $5 million.

For the three months ended September 30, 2019, primarily includes income of $20 million resulting from a contingent payment received pursuant to an agreement related to the 2016 sale of certain manufacturing sites.    

(d)    Defined as income before provision for taxes on income.                     

	Earnings						Depreciation and Amortization(a)
	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
(MILLIONS OF DOLLARS)	2020			2019			2020		2019
U.S.
Revenue	$	2,605		$	2,342
Cost of sales	515			468
Gross profit	2,090			1,874
Gross margin	80.2		%	80.0		%
Operating expenses	418			367
Other (income)/deductions-net	4			—
U.S. Earnings	1,668			1,507			$	40	$	31
International
Revenue(b)	2,203			2,181
Cost of sales	697			662
Gross profit	1,506			1,519
Gross margin	68.4		%	69.6		%
Operating expenses	364			412
Other (income)/deductions-net	1			—
International Earnings	1,141			1,107			41		38
Total operating segments	2,809			2,614			81		69
Other business activities	(264)			(246)			19		18
Reconciling Items:
Corporate	(559)			(512)			75		49
Purchase accounting adjustments	(155)			(179)			155		165
Acquisition-related costs	(15)			(33)			—		—
Certain significant items(c)	(4)			(56)			—		—
Other unallocated	(236)			(224)			2		2
Total Earnings(d)	$	1,576		$	1,364		$	332	$	303

(a)    Certain production facilities are shared. Depreciation and amortization is allocated to the reportable operating segments based on estimates of where the benefits of the related assets are realized.

(b)    Revenue denominated in euros was $517 million and $541 million for the nine months ended September 30, 2020 and September 30, 2019, respectively.

(c)    For the nine months ended September 30, 2020, primarily represents a net gain resulting from net cash proceeds received pursuant to an agreement related to the 2016 sale of certain U.S. manufacturing sites of $18 million, partially offset by CEO transition-related costs of $14 million.

For the nine months ended September 30, 2019, primarily represents (i) a change in estimate related to inventory costing of $68 million, (ii) income of $20 million resulting from a contingent payment received pursuant to an agreement related to the 2016 sale of certain manufacturing sites, and (iii) product transfer costs and consulting fees of $7 million related to our supply network strategy.    

(d)    Defined as income before provision for taxes on income.