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SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2014
SEGMENT INFORMATION  
SEGMENT INFORMATION

17.   SEGMENT INFORMATION

        Edwards Lifesciences conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease.

        The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic segments based on net sales and income before provision for income taxes ("pre-tax income"). The accounting policies of the segments are substantially the same as those described in Note 2 of the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013. Segment net sales and segment pre-tax income are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent. Net sales by geographic area are based on the location of the customer.

        Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include net interest expense, global marketing expenses, corporate research and development expenses, manufacturing variances, corporate headquarters costs, special gains and charges, stock-based compensation, foreign currency hedging activities, certain litigation costs and most of the Company's amortization expense. Although most of the Company's depreciation expense is included in segment pre-tax income, due to the Company's methodology for cost build-up, it is impractical to determine the amount of depreciation expense included in each segment, and, therefore, a portion is maintained at the corporate level. The Company neither discretely allocates assets to its operating segments, nor evaluates the operating segments using discrete asset information.

        The table below presents information about Edwards Lifesciences' reportable segments (in millions):

 
   Three Months
Ended
June 30,		   Six Months
Ended
June 30,		  
 
   2014   2013   2014   2013  

Segment Net Sales

                          

United States

   $ 242.0   $ 240.5   $ 464.4   $ 468.4  

Europe

     188.3     160.7     363.9     316.2  

Japan

     68.2     73.0     128.4     140.3  

Rest of World

     75.1     63.1     138.8     117.6  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total segment net sales

   $ 573.6   $ 537.3   $ 1,095.5   $ 1,042.5  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Segment Pre-tax Income

                          

United States

   $ 131.2   $ 142.7   $ 249.6   $ 275.5  

Europe

     87.7     73.7     167.9     146.2  

Japan

     31.9     36.9     59.5     70.4  

Rest of World

     23.7     17.5     40.0     30.0  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total segment pre-tax income

   $ 274.5   $ 270.8   $ 517.0   $ 522.1  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

        The table below presents reconciliations of segment net sales to consolidated net sales and segment pre-tax income to consolidated pre-tax income (in millions):

 
   Three Months
Ended
June 30,		   Six Months
Ended
June 30,		  
 
   2014   2013   2014   2013  

Net Sales Reconciliation

                          

Segment net sales

   $ 573.6   $ 537.3   $ 1,095.5   $ 1,042.5  

Foreign currency

     1.5     (20.1 )   2.0     (28.6 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated net sales

   $ 575.1   $ 517.2   $ 1,097.5   $ 1,013.9  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Pre-tax Income Reconciliation

                          

Segment pre-tax income

   $ 274.5   $ 270.8   $ 517.0   $ 522.1  

Unallocated amounts:

                          

Corporate items

     (158.1 )   (143.3 )   (312.7 )   (283.0 )

Special charges (Note 4)

     (50.0 )   —     (57.5 )   —  

Intellectual property litigation income (expense), net (Note 3)

     747.4     (5.5 )   741.9     72.6  

Interest expense, net

     (3.1 )   (0.4 )   (6.6 )   (0.2 )

Foreign currency

     2.5     (1.1 )   8.4     (0.4 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated pre-tax income

   $ 813.2   $ 120.5   $ 890.5   $ 311.1  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Enterprise-Wide Information

        Enterprise-wide information is based on actual foreign exchange rates used in the Company's consolidated condensed financial statements.

 
   Three Months
Ended
June 30,		   Six Months
Ended
June 30,		  
 
   2014   2013   2014   2013  
 
   (in millions)
  

Net Sales by Geographic Area

                          

United States

   $ 242.0   $ 240.5   $ 464.4   $ 468.4  

Europe

     193.8     155.3     374.1     309.8  

Japan

     66.7     59.3     125.4     119.3  

Rest of World

     72.6     62.1     133.6     116.4  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 575.1   $ 517.2   $ 1,097.5   $ 1,013.9  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Net Sales by Major Product and Service Area

                          

Transcatheter Heart Valves

   $ 219.7   $ 182.1   $ 408.9   $ 351.8  

Surgical Heart Valve Therapy

     214.0     204.3     416.6     402.4  

Critical Care

     141.4     130.8     272.0     259.7  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

   $ 575.1   $ 517.2   $ 1,097.5   $ 1,013.9  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
   June 30,
2014		   December 31,
2013		  
 
   (in millions)
  

Long-lived Tangible Assets by Geographic Area

              

United States

   $ 310.7   $ 308.2  

Europe

     41.8     40.9  

Japan

     10.0     10.8  

Rest of World

     95.7     97.1  
           
​ ​ ​ ​ ​ ​ ​ ​

 

   $ 458.2   $ 457.0  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​