Segment and Geographic Information

6 Months Ended

Oct. 27, 2023

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic Information

Segment disclosures are on a performance basis consistent with internal management reporting. Net sales of the Company's reportable segments include end-customer revenues from the sale of products the segment develops, manufactures, and distributes. The Company’s management evaluates performance of the segments and allocates resources based on net sales and segment operating profit. Segment operating profit represents income before income taxes, excluding interest income or expense, amortization of intangible assets, centralized distribution costs, currency impact of remeasurement and hedging, non-operating income or expense items, certain corporate charges, stock-based compensation, and other items not allocated to the segments.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 28, 2023. Certain depreciable assets may be recorded by one segment, while the depreciation expense is allocated to another segment. The allocation of depreciation expense is based on the proportion of the assets used by each segment.

As of the beginning of fiscal year 2024, the Company realigned the operating segment structure as a result of how the Chief Operating Decision Maker assesses business performance. We continue to have four reportable segments: Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit. The Medical Surgical Portfolio now consists of two operating segments which have been aggregated based upon similar economic and operating characteristics. Prior period segment operating profit has been recast to reflect the new reporting structure, which primarily includes allocating certain prior Medical Surgical businesses to the Other line. Prior period amounts have also been recast to reallocate certain expenses from segment operating profit to centralized distribution costs to conform to classifications used in the current year.

The following tables present reconciliations of financial information from the segments to the applicable line items in the Company's consolidated financial statements:

Segment Operating Profit

	Three months ended				Six months ended
(in millions)	October 27, 2023		October 28, 2022		October 27, 2023		October 28, 2022
Cardiovascular	$	1,117	$	1,071	$	2,208	$	2,049
Neuroscience	929		901		1,858		1,741
Medical Surgical	790		761		1,509		1,454
Diabetes	101		97		186		176
Other (1)	9		(21)		12		(45)
Segment operating profit	2,946		2,809		5,774		5,376
Interest expense, net	(180)		(118)		(329)		(282)
Other non-operating income, net	154		109		230		192
Amortization of intangible assets	(425)		(421)		(855)		(844)
Corporate	(431)		(402)		(879)		(816)
Stock-based compensation	(146)		(137)		(219)		(199)
Centralized distribution costs	(391)		(388)		(786)		(794)
Currency (2)	32		138		29		219
Restructuring and associated costs	(91)		(95)		(182)		(171)
Acquisition and divestiture-related items	(58)		(63)		(107)		(174)
Certain litigation charges	(65)		—		(105)		—
Medical device regulations	(30)		(37)		(62)		(70)
Income before income taxes	$	1,313	$	1,395	$	2,510	$	2,438

(1)Includes the operations from the Renal Care Solutions business contributed to Mozarc Medical on April 1, 2023 and Transition Manufacturing and Service Agreements for previously divested businesses.

(2)Includes the net impact of remeasurement and the Company's hedging programs recorded in other operating income, net.

Geographic Information

Net sales are attributed to the country based on the location of the customer taking possession of the products or in which the services are rendered. The following table presents net sales for the three and six months ended October 27, 2023 and October 28, 2022 for the Company's country of domicile, countries with significant concentrations, and all other countries:

	Three months ended				Six months ended
(in millions)	October 27, 2023		October 28, 2022		October 27, 2023		October 28, 2022
Ireland	$	29	$	25	$	58	$	47
United States	4,175		4,069		8,099		7,835
Rest of world	3,780		3,491		7,528		7,073
Total other countries, excluding Ireland	7,955		7,560		15,627		14,908
Total	$	7,984	$	7,585	$	15,686	$	14,955