Segment Reporting

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE K – SEGMENT REPORTING

We have three reportable segments comprised of Cardiovascular, Rhythm Management and MedSurg, which represent an aggregation of our operating segments.

Each of our reportable segments generates revenues from the sale of medical devices. We measure and evaluate our reportable segments based on segment net sales and operating income, excluding the impact of changes in foreign currency. Sales generated from reportable segments, as well as operating results of reportable segments and corporate expenses, are based on internally-derived standard currency exchange rates, which may differ from year to year and do not include intersegment profits.

We restated segment information for the prior period based on our internally-derived standard currency exchange rates as of January 1, 2017, used for the current period in order to remove the impact of foreign currency exchange fluctuation. We exclude from segment operating income certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker considers to be non-operational, such as acquisition-related, restructuring- and restructuring-related, and litigation-related net credits and charges, and amortization expense. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income (loss) and are included in the reconciliation below.

A reconciliation of the totals reported for the reportable segments to the applicable line items in our accompanying unaudited condensed consolidated statements of operations is as follows:

	Three Months Ended March 31,
(in millions)	2017			2016
				(restated)
Net sales
Interventional Cardiology	$	605		$	560
Peripheral Interventions	266			248
Cardiovascular	871			808
Cardiac Rhythm Management	471			439
Electrophysiology	65			60
Rhythm Management	536			499
Endoscopy	387			339
Urology and Pelvic Health	265			230
Neuromodulation	142			122
MedSurg	794			691
Net sales allocated to reportable segments	2,201			1,998
Impact of foreign currency fluctuations	(41		)	(34		)
	$	2,160		$	1,964
Income (loss) before income taxes
Cardiovascular	$	245		$	254
Rhythm Management	101			67
MedSurg	238			214
Operating income allocated to reportable segments	584			535
Corporate expenses and currency exchange	(88		)	(41		)
Acquisition-related, restructuring- and restructuring-related, and litigation-related net credits (charges)	11			(65		)
Amortization expense	(143		)	(136		)
Operating income (loss)	364			293
Other expense, net	(59		)	(65		)
Income (loss) before income taxes	$	305		$	228