Segment Reporting

6 Months Ended

Jun. 30, 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 June 30, 2025
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,714			$	3,341			$	5,055
Impact of foreign currency fluctuations									6
Total net sales									5,061
Segment expenses:
Cost of products sold	470		27.4	%	1,046		31.3	%	1,516
Selling, general and administrative expenses	517		30.2	%	908		27.2	%	1,426
Research and development expenses	120		7.0	%	315		9.4	%	435
Other segment items(1)	8		0.5	%	6		0.2	%	14
Segment operating income(2)	599		34.9	%	1,065		31.9	%	1,664
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(264)
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									(355)
Amortization expense									(225)
Operating income (loss)									819
Other income (expense), net									122
Income (loss) before income taxes									$	941

	Six Months Ended June 30, 2025
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	3,312			$	6,474			$	9,786
Impact of foreign currency fluctuations									(62)
Total net sales									9,724
Segment expenses:
Cost of products sold	905		27.3	%	1,971		30.4	%	2,876
Selling, general and administrative expenses	1,026		31.0	%	1,775		27.4	%	2,801
Research and development expenses	241		7.3	%	597		9.2	%	838
Other segment items(1)	13		0.4	%	12		0.2	%	25
Segment operating income(2)	1,127		34.0	%	2,119		32.7	%	3,246
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(497)
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									(564)
Amortization expense									(444)
Operating income (loss)									1,740
Other income (expense), net									6
Income (loss) before income taxes									$	1,746

	Three Months Ended June 30, 2024
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,495			$	2,665			$	4,160
Impact of foreign currency fluctuations									(40)
Total net sales									4,120
Segment expenses:
Cost of products sold	401		26.8	%	851		31.9	%	1,251
Selling, general and administrative expenses	454		30.4	%	796		29.9	%	1,250
Research and development expenses	114		7.6	%	231		8.7	%	345
Other segment items(1)	4		0.3	%	5		0.2	%	9
Segment operating income(2)	522		34.9	%	782		29.4	%	1,304
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(185)
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									(386)
Amortization expense									(213)
Operating income (loss)									520
Other income (expense), net									(100)
Income (loss) before income taxes									$	420

	Six months ended June 30, 2024
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	2,912			$	5,123			$	8,035
Impact of foreign currency fluctuations									(59)
Total net sales									7,977
Segment expenses:
Cost of products sold	781		26.8	%	1,662		32.4	%	2,444
Selling, general and administrative expenses	894		30.7	%	1,536		30.0	%	2,430
Research and development expenses	221		7.6	%	459		9.0	%	681
Other segment items(1)	9		0.3	%	9		0.2	%	18
Segment operating income(2)	1,007		34.6	%	1,456		28.4	%	2,463
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(332)
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									(510)
Amortization expense									(427)
Operating income (loss)									1,195
Other income (expense), net									(167)
Income (loss) before income taxes									$	1,028

(1) Includes royalty expense.

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

	Three Months Ended June 30,				Six Months Ended June 30,
Depreciation expense (in millions)	2025		2024		2025		2024
MedSurg	$	28	$	27	$	55	$	52
Cardiovascular	83		71		162		136
Consolidated depreciation expense	$	111	$	98	$	217	$	188

	As of
Total assets (in millions)	June 30, 2025		December 31, 2024
MedSurg	$	3,331	$	3,093
Cardiovascular	7,498		7,084
Total assets of reportable segments	10,829		10,177
Goodwill	18,076		17,089
Other intangible assets, net	7,260		6,684
All other corporate assets	5,395		5,446
	$	41,559	$	39,395

	As of
Long-lived assets (in millions)	June 30, 2025		December 31, 2024
U.S.	$	1,530	$	1,461
Ireland	701		631
Costa Rica	574		530
Other countries	656		672
Property, plant and equipment, net	3,461		3,294
Goodwill	18,076		17,089
Other intangible assets, net	7,260		6,684
Operating lease right-of-use assets in Other long-term assets	492		449
	$	29,288	$	27,516