Segment And Geographic Information

9 Months Ended

Sep. 28, 2013

Segment Reporting [Abstract]

Segment And Geographic Information

SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

On August 30, 2012, the Company announced the realignment of its product divisions into two new business units (or divisions): the Implantable Electronic Systems Division (combining its legacy Cardiac Rhythm Management and Neuromodulation product divisions) and the Cardiovascular and Ablation Technologies Division (combining its legacy Cardiovascular and Atrial Fibrillation product divisions). In addition, the Company centralized certain support functions, including information technology, human resources, legal, business development and certain marketing functions. The organizational changes were part of a comprehensive plan to accelerate our growth, reduce costs, leverage economies of scale and increase investment in product development. The Company began reporting under the new organizational structure as of the beginning of fiscal year 2013. Prior period amounts in the tables below have been recast to conform to the Company's new reportable segment structure.

The Company's principal products in each business unit are as follows: Implantable Electronic Systems Division (IESD) – tachycardia implantable cardioverter defibrillator systems (ICDs), bradycardia pacemaker systems (pacemakers) and neurostimulation products (spinal cord and deep brain stimulation devices); and Cardiovascular and Ablation Technologies Division (CATD) – vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography (OCT) imaging products, vascular plugs and other vascular accessories), structural heart products (heart valve replacement and repair products and structural heart defect devices) and atrial fibrillation (AF) products (electrophysiology (EP) introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems).

IESD and CATD are considered the Company's reportable segments. Net sales of the Company’s reportable segments include end-customer revenues from the sale of products they each develop and manufacture or distribute. The costs included in each of the reportable segments’ operating results include the direct costs of the products sold to customers and operating expenses managed by each of the reportable segments. Certain expenses managed by the Company’s selling and corporate functions, including all stock-based compensation expense, impairment charges, certain acquisition-related charges, IPR&D charges, excise tax expense, special charges and centralized support groups' operating expenses are not recorded in the IESD and CATD reportable segments. As a result, reportable segment operating profit is not representative of the operating profit of the products in these reportable segments. Additionally, certain assets are managed by the Company’s selling and corporate functions, principally including trade receivables, inventory, cash and cash equivalents, certain marketable securities and certain deferred income taxes. For management reporting purposes, the Company does not compile capital expenditures by reportable segment; therefore, this information has not been presented, as it is impracticable to do so.

The following table presents net sales and operating profit by reportable segment (in millions):

	IESD		CATD		Other			Total
Three Months ended September 28, 2013:
Net sales	$	786	$	552	$	—		$	1,338
Operating profit	534		321		(542		)	313
Three Months ended September 29, 2012:
Net sales	$	792	$	534	$	—		$	1,326
Operating profit	547		319		(631		)	235
Nine Months ended September 28, 2013:
Net sales	$	2,389	$	1,690	$	—		$	4,079
Operating profit	1,630		995		(1,722		)	903
Nine Months ended September 29, 2012:
Net sales	$	2,482	$	1,649	$	—		$	4,131
Operating profit	1,720		980		(1,825		)	875

The following table presents the Company’s total assets by reportable segment (in millions):

Total Assets	September 28, 2013		December 29, 2012
IESD	$	2,644	$	2,320
CATD	3,301		2,967
Other	4,020		3,984
	$	9,965	$	9,271

Geographic Information

The following table presents net sales by geographic location of the customer (in millions):

	Three Months Ended				Nine Months Ended
Net Sales	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
United States	$	646	$	640	$	1,955	$	1,969
International
Europe	333		311		1,066		1,059
Japan	142		172		418		500
Asia Pacific	125		118		362		339
Other	92		85		278		264
	692		686		2,124		2,162
	$	1,338	$	1,326	$	4,079	$	4,131

The amounts for long-lived assets by significant geographic market include net property, plant and equipment by physical location of the asset as follows (in millions):

Long-Lived Assets	September 28, 2013		December 29, 2012
United States	$	1,046	$	1,036
International
Europe	81		82
Japan	34		32
Asia Pacific	77		82
Other	189		193
	381		389
	$	1,427	$	1,425