Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE N – 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 intersegment profits. In 2017, we have updated our presentation of segment net sales and operating income to include foreign exchange fluctuations, since our chief operating decision maker (CODM) reviews operating results both including and excluding foreign exchange rates and the following presentation more closely aligns to our consolidated financial statements. We exclude from segment operating income certain corporate-related expenses and certain transactions or adjustments that our CODM considers to be non-operational, such as amounts related to amortization expense, intangible asset impairment charges, acquisition-related items, restructuring and restructuring-related items and litigation-related items. 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 consolidated statements of operations is as follows:

	Year Ended December 31,
(in millions)	2017		2016		2015
			(restated)		(restated)
Net sales
Interventional Cardiology	$	2,419	$	2,281	$	2,033
Peripheral Interventions	1,081		1,011		904
Cardiovascular	3,500		3,292		2,937
Cardiac Rhythm Management	1,895		1,850		1,807
Electrophysiology	278		243		233
Rhythm Management	2,173		2,093		2,040
Endoscopy	1,619		1,440		1,306
Urology and Pelvic Health	1,124		1,005		693
Neuromodulation	635		556		501
MedSurg	3,377		3,001		2,500
	$	9,048	$	8,386	$	7,477

	Year Ended December 31,
(in millions)	2017		2016		2015
			(restated)		(restated)
Depreciation expense
Cardiovascular	$	120	$	118	$	112
Rhythm Management	79		80		91
MedSurg	79		72		71
	$	279	$	270	$	274

	Year Ended December 31,
(in millions)	2017			2016			2015
				(restated)			(restated)
Income (loss) before income taxes
Cardiovascular	$	988		$	946		$	788
Rhythm Management	429			314			255
MedSurg	1,092			941			745
Operating income allocated to reportable segments	2,509			2,200			1,788
Corporate expenses, including hedging activities	(252		)	(179		)	(118		)
Intangible asset impairment charges, acquisition-related, restructuring- and restructuring-related, and litigation-related net credits (charges)	(407		)	(1,029		)	(1,458		)
Amortization expense	(565		)	(545		)	(495		)
Operating income (loss)	1,285			447			(283		)
Other expense, net	(353		)	(270		)	(367		)
	$	933		$	177		$	(650	)

	Year Ended December 31,
	2017		2016		2015
Operating income as a percentage of segment net sales
Cardiovascular	28.2	%	28.7	%	26.7	%
Rhythm Management	19.7	%	15.0	%	12.5	%
MedSurg	32.3	%	31.3	%	29.8	%

	As of December 31,
(in millions)	2017		2016
Total assets
Cardiovascular	$	1,824	$	1,748
Rhythm Management	1,266		1,250
MedSurg	2,212		1,499
Total assets allocated to reportable segments	5,302		4,497
Goodwill	6,998		6,678
Other intangible assets, net	5,837		5,883
All other corporate assets	905		1,038
	$	19,042	$	18,096

	Year Ended December 31,
(in millions)	2017		2016		2015
Net sales by major country
United States	$	5,162	$	4,759	$	4,229
Japan	737		750		602
Other countries	3,149		2,877		2,646
	$	9,048	$	8,386	$	7,477

	As of December 31,
(in millions)	2017		2016		2015
Long-lived assets
United States	$	1,065	$	1,082	$	1,018
Ireland	210		181		170
Other countries	422		367		302
Property, plant and equipment, net	1,697		1,630		1,490
Goodwill	6,998		6,678		6,473
Other intangible assets, net	5,837		5,883		6,194
	$	14,531	$	14,191	$	14,157