Segment Reporting

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE K – SEGMENT REPORTING

In the first quarter of 2022, we reorganized our operational structure in order to strengthen our category leadership in the markets we serve and, in particular, benefit our Cardiology customers and patients. Following the reorganization, we have aggregated our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. There was no impact to the reporting units identified for purposes of our annual goodwill impairment testing.

We measure and evaluate our reportable segments based on their respective net sales, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all excluding the impact of foreign currency. We exclude from operating income of reportable segments certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker (CODM) considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits); and certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from operating income of reportable segments, they are included in reported Income (loss) before income taxes within our accompanying unaudited consolidated statements of operations and are included in the reconciliation below. Refer to Note L – Revenue for net sales by reportable segment presented in accordance with U.S. GAAP.

A reconciliation of the totals reported for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows (in millions, except percentages). We have revised prior periods to conform to the current year presentation:

	Three Months Ended March 31,
Net Sales	2022		2021
MedSurg	$	1,164	$	1,048
Cardiovascular	1,902		1,661
Total net sales of reportable segments	3,066		2,709
Specialty Pharmaceuticals(1)	—		13
Net sales	3,066		2,722
Impact of foreign currency fluctuations	(40)		30
	$	3,026	$	2,752

Income (loss) before income taxes
MedSurg	$	371	$	345
Cardiovascular	477		459
Total operating income of reportable segments	847		805
Specialty Pharmaceuticals(1)	—		4
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments	(66)		(139)
Intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), and certain litigation-related net charges (credits) and EU MDR implementation costs	(117)		(114)
Amortization expense	(198)		(185)
Operating income (loss)	466		370
Other expense, net	(310)		(45)
Income (loss) before income taxes	$	156	$	325
(1) On March 1, 2021, we completed the divestiture of the Specialty Pharmaceuticals business. Prior to the divestiture, we presented the Specialty Pharmaceuticals business as a standalone operating segment alongside our reportable segments.

	Three Months Ended March 31,
Operating income margin of reportable segments	2022		2021
MedSurg	31.8	%	32.9	%
Cardiovascular	25.1	%	27.7	%