Segment Reporting

9 Months Ended

Sep. 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 September 30, 2025
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,714			$	3,327			$	5,041
Impact of foreign currency fluctuations									23
Total net sales									5,065
Segment expenses:
Cost of products sold	483		28.2	%	930		27.9	%	1,413
Selling, general and administrative expenses	531		31.0	%	920		27.6	%	1,451
Research and development expenses	128		7.5	%	337		10.1	%	465
Other segment items(1)	5		0.3	%	6		0.2	%	11
Segment operating income(2)	566		33.0	%	1,135		34.1	%	1,701
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(282)
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									(146)
Amortization expense									(225)
Operating income (loss)									1,048
Other income (expense), net									(110)
Income (loss) before income taxes									$	939

	Nine Months Ended September 30, 2025
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	5,027			$	9,801			$	14,827
Impact of foreign currency fluctuations									(39)
Total net sales									14,788
Segment expenses:
Cost of products sold	1,388		27.6	%	2,901		29.6	%	4,289
Selling, general and administrative expenses	1,557		31.0	%	2,695		27.5	%	4,252
Research and development expenses	369		7.3	%	934		9.5	%	1,303
Other segment items(1)	18		0.4	%	18		0.2	%	37
Segment operating income(2)	1,693		33.7	%	3,253		33.2	%	4,947
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(779)
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									(711)
Amortization expense									(669)
Operating income (loss)									2,788
Other income (expense), net									(103)
Income (loss) before income taxes									$	2,685

	Three Months Ended September 30, 2024
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	1,484			$	2,740			$	4,224
Impact of foreign currency fluctuations									(14)
Total net sales									4,209
Segment expenses:
Cost of products sold	412		27.8	%	838		30.6	%	1,250
Selling, general and administrative expenses	440		29.7	%	791		28.9	%	1,231
Research and development expenses	113		7.6	%	244		8.9	%	357
Other segment items(1)	(0)		0.0	%	5		0.2	%	4
Segment operating income(2)	518		34.9	%	862		31.5	%	1,380
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(234)
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									(205)
Operating income (loss)									733
Other income (expense), net									(65)
Income (loss) before income taxes									$	669

	Nine Months Ended September 30, 2024
	MedSurg		% of net sales		Cardiovascular		% of net sales		Total
Net sales of reportable segments	$	4,396			$	7,863			$	12,259
Impact of foreign currency fluctuations									(73)
Total net sales									12,186
Segment expenses:
Cost of products sold	1,193		27.1	%	2,500		31.8	%	3,694
Selling, general and administrative expenses	1,334		30.3	%	2,327		29.6	%	3,661
Research and development expenses	335		7.6	%	703		8.9	%	1,038
Other segment items(1)	9		0.2	%	14		0.2	%	23
Segment operating income(2)	1,525		34.7	%	2,318		29.5	%	3,843
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments									(565)
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									(719)
Amortization expense									(631)
Operating income (loss)									1,928
Other income (expense), net									(231)
Income (loss) before income taxes									$	1,697

(1) Includes royalty expense.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
Depreciation expense (in millions)	2025		2024		2025		2024
MedSurg	$	29	$	27	$	84	$	79
Cardiovascular	89		75		250		211
Consolidated depreciation expense	$	117	$	102	$	334	$	290

	As of
Total assets (in millions)	September 30, 2025		December 31, 2024
MedSurg	$	3,392	$	3,093
Cardiovascular	7,799		7,084
Total assets of reportable segments	11,191		10,177
Goodwill	18,214		17,089
Other intangible assets, net	7,162		6,684
All other corporate assets	6,140		5,446
	$	42,707	$	39,395

	As of
Long-lived assets (in millions)	September 30, 2025		December 31, 2024
U.S.	$	1,812	$	1,461
Ireland	707		631
Costa Rica	593		530
Other countries	683		672
Property, plant and equipment, net	3,795		3,294
Goodwill	18,214		17,089
Other intangible assets, net	7,162		6,684
Operating lease right-of-use assets in Other long-term assets	495		449
	$	29,665	$	27,516