Segment Reporting

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE J – SEGMENT REPORTING

We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments. Our chief operating decision maker (CODM) is our President and Chief Executive Officer.

We measure and evaluate our reportable segments based on their respective net sales, cost of goods sold, selling, general and administrative expenses, research and development expenses, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from segment expenses and 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, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from segment expenses and segment operating income 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. The CODM uses segment operating income in the budget and forecasting process and to monitor budget versus actual results, which are used in assessing the performance of the reportable segments and to allocate resources across our reportable segments Refer to Note K – Revenue for net sales by reportable segment presented in accordance with GAAP.

A reconciliation of sales and operating income for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows (in millions, except percentages). Prior period amounts have been restated at constant currency to conform to current year presentation.

	Three Months Ended March 31, 2025
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,598			$	3,133			$	4,731
Impact of foreign currency fluctuations									(69)
Total net sales									4,663
Segment expenses:
Cost of products sold	435		27.2	%	925		29.5	%	1,360
Selling, general and administrative expenses	509		31.8	%	867		27.7	%	1,376
Research and development expenses	121		7.5	%	282		9.0	%	403
Other segment items(1)	6		0.3	%	6		0.2	%	11
Segment operating income(2)	528		33.1	%	1,053		33.6	%	1,582
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(232)
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs									(209)
Amortization expense									(219)
Operating income (loss)									921
Other income (expense), net									(116)
Income (loss) before income taxes									$	805

	Three Months Ended March 31, 2024
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,417			$	2,458			$	3,875
Impact of foreign currency fluctuations									(19)
Total net sales									3,856
Segment expenses:
Cost of products sold	381		26.9	%	811		33.0	%	1,192
Selling, general and administrative expenses	439		31.0	%	740		30.1	%	1,180
Research and development expenses	107		7.6	%	228		9.3	%	335
Other segment items(1)	5		0.3	%	4		0.2	%	9
Segment operating income(2)	485		34.2	%	674		27.4	%	1,159
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(146)
Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs									(124)
Amortization expense									(214)
Operating income (loss)									675
Other income (expense), net									(67)
Income (loss) before income taxes									$	608

(1) Includes royalty expense.

(2) Calculated as Net sales of reportable segments less Segment expenses.

	Three Months Ended March 31,
Depreciation expense (in millions)	2025		2024
MedSurg	$	27	$	24
Cardiovascular	78		66
Consolidated depreciation expense	$	106	$	90

	As of
Total assets (in millions)	March 31, 2025		December 31, 2024
MedSurg	$	3,127	$	3,093
Cardiovascular	7,413		7,084
Total assets of reportable segments	10,540		10,177
Goodwill	17,340		17,089
Other intangible assets, net	6,566		6,684
All other corporate assets	5,695		5,446
	$	40,140	$	39,395

	As of
Long-lived assets (in millions)	March 31, 2025		December 31, 2024
U.S.	$	1,522	$	1,461
Ireland	655		631
Costa Rica	557		530
Other countries	654		672
Property, plant and equipment, net	3,389		3,294
Goodwill	17,340		17,089
Other intangible assets, net	6,566		6,684
Operating lease right-of-use assets in Other long-term assets	448		449
	$	27,743	$	27,516