Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

15. Segment Information

We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; craniomaxillofacial and thoracic products (“CMFT”); and related surgical products. Our chief operating decision maker (“CODM”) allocates resources to achieve our operating profit goals through three operating segments. These operating segments, which also constitute our reportable segments, are Americas; EMEA; and Asia Pacific.

Our CODM evaluates performance based upon segment operating profit exclusive of operating expenses and income pertaining to intangible asset amortization, certain inventory and manufacturing-related charges, goodwill and intangible asset impairment, restructuring and other cost reduction initiatives, quality remediation, acquisition, integration, divestiture and related, litigation, certain European Union Medical Device Regulation (“EU MDR”) expenses, certain research and development ("R&D") agreements, other charges and corporate functions (collectively referred to as “Corporate items”). Corporate functions include corporate legal, finance, information technology, human resources and other corporate departments as well as certain operations, distribution, quality assurance and regulatory assurance expenses. Intercompany transactions have been eliminated from segment operating profit.

Our Americas operating segment is comprised principally of the U.S. and includes other North, Central and South American markets. This segment also includes research, development engineering, medical education, and brand management for our product category headquarter locations. Our EMEA operating segment is comprised principally of Europe and includes the Middle East and African markets. Our Asia Pacific operating segment is comprised principally of Japan, China and Australia and includes other Asian and Pacific markets. The EMEA and Asia Pacific operating segments include the commercial operations as well as regional headquarter expenses to operate in those markets. Since the Americas segment includes additional costs related to centralized product category headquarter expenses, profitability metrics in this operating segment are not comparable to the EMEA and Asia Pacific operating segments.

Our CODM does not review asset information by operating segment. Instead, our CODM reviews cash flow and other financial ratios by operating segment.

Net sales and operating profit by segment are as follows (in millions):

	Net Sales				Operating Profit
	Three Months Ended				Three Months Ended
	September 30,				September 30,
	2022		2021		2022			2021
Americas	$	1,045.1	$	1,009.3	$	430.8		$	422.2
EMEA		319.3		354.5		80.2			86.9
Asia Pacific		305.4		321.6		100.5			106.7
Total	$	1,669.8	$	1,685.4
Corporate items						(234.7	)		(240.6	)
Intangible asset amortization						(131.5	)		(132.2	)
Operating profit					$	245.3		$	243.0

	Net Sales				Operating Profit
	Nine Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022			2021
Americas	$	3,142.1	$	3,013.7	$	1,309.6		$	1,254.7
EMEA		1,079.1		1,065.7		284.3			261.0
Asia Pacific		893.6		970.7		301.8			325.9
Total	$	5,114.8	$	5,050.1
Corporate items						(772.8	)		(700.1	)
Intangible asset amortization						(395.3	)		(398.7	)
Intangible asset impairment						(3.0	)		(16.3	)
Operating profit					$	724.6		$	726.5