SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

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 structural heart disease and critically ill patients.

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, 2015. 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 pre-tax income 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, certain 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    September 30,				Nine Months Ended    September 30,
	2016		2015		2016		2015
Segment Net Sales
United States	$	417.1	$	323.1	$	1,194.2	$	909.3
Europe	171.2		194.6		556.3		625.0
Japan	68.1		73.8		203.8		217.7
Rest of World	72.4		78.8		220.9		230.5
Total segment net sales	$	728.8	$	670.3	$	2,175.2	$	1,982.5
Segment Pre-tax Income
United States	$	274.2	$	197.0	$	776.0	$	530.8
Europe	80.1		95.3		273.0		306.4
Japan	33.4		35.1		101.5		103.1
Rest of World	17.4		22.8		54.4		61.1
Total segment pre-tax income	$	405.1	$	350.2	$	1,204.9	$	1,001.4

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    September 30,						Nine Months Ended    September 30,
	2016			2015			2016			2015
Net Sales Reconciliation
Segment net sales	$	728.8		$	670.3		$	2,175.2		$	1,982.5
Foreign currency	10.6			(54.8		)	20.8			(159.9		)
Consolidated net sales	$	739.4		$	615.5		$	2,196.0		$	1,822.6
Pre-tax Income Reconciliation
Segment pre-tax income	$	405.1		$	350.2		$	1,204.9		$	1,001.4
Unallocated amounts:
Corporate items	(211.9		)	(185.0		)	(613.4		)	(520.6		)
Special charges (Note 3)	—			—			(34.5		)	—
Intellectual property litigation expenses	(6.5		)	(2.4		)	(27.8		)	(3.7		)
Interest expense, net	(2.1		)	(2.5		)	(6.9		)	(6.7		)
Foreign currency	0.6			(9.6		)	15.2			(15.0		)
Consolidated pre-tax income	$	185.2		$	150.7		$	537.5		$	455.4

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    September 30,				Nine Months Ended    September 30,
	2016		2015		2016		2015
	(in millions)
Net Sales by Geographic Area
United States	$	417.1	$	323.1	$	1,194.2	$	909.3
Europe	172.3		166.4		564.4		533.6
Japan	79.8		60.3		226.3		180.7
Rest of World	70.2		65.7		211.1		199.0
	$	739.4	$	615.5	$	2,196.0	$	1,822.6
Net Sales by Major Product and Service Area
Transcatheter Heart Valve Therapy	$	410.1	$	296.1	$	1,196.5	$	846.0
Surgical Heart Valve Therapy	190.9		187.9		585.5		588.8
Critical Care	138.4		131.5		414.0		387.8
	$	739.4	$	615.5	$	2,196.0	$	1,822.6

	September 30, 2016		December 31, 2015
	(in millions)
Long-lived Tangible Assets by Geographic Area
United States	$	531.5	$	473.6
Europe	30.2		36.0
Japan	9.8		8.1
Rest of World	97.0		96.0
	$	668.5	$	613.7