Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three new reportable segments comprised of: Cardiovascular, Rhythm Management, and MedSurg. Our reportable segments represent an aggregate of operating segments. We have restated the prior period to conform to the current year presentation of our reportable segments.

Each of our reportable segments generates revenues from the sale of medical devices. We measure and evaluate our reportable segments based on segment net sales and operating income, excluding the impact of changes in foreign currency exchange rates and sales from divested businesses. Sales generated from reportable segments and divested businesses, as well as operating results of reportable segments and corporate expenses, are based on internally-derived standard currency exchange rates, which may differ from year to year, and do not include intersegment profits. We restated segment information for the prior period based on standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange fluctuations. Based on information regularly reviewed by our chief operating decision maker following our reorganization, we also restated certain expenses associated with our manufacturing and corporate operations. We exclude from segment operating income certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker considers to be non-recurring and/or non-operational, such as amounts related to goodwill and other intangible asset impairment charges; acquisition-, divestiture-, restructuring-, and litigation-related charges and credits; and amortization expense. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income (loss) and are included in the reconciliation below.

A reconciliation of the totals reported for the reportable segments to the applicable line items in our accompanying unaudited condensed consolidated statements of operations is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2013			2012*			2013			2012*
Net sales
Interventional Cardiology	$	537		$	551		$	1,050		$	1,149
Peripheral Interventions	205			196			400			384
Cardiovascular	742			747			1,450			1,533
Cardiac Rhythm Management	485			494			970			998
Electrophysiology	37			37			72			74
Rhythm Management	522			531			1,042			1,072
Endoscopy	334			309			647			607
Urology/Women's Health	126			125			245			243
Neuromodulation	111			92			200			175
MedSurg	571			526			1,092			1,025
Net sales allocated to reportable segments	1,835			1,804			3,584			3,630
Sales generated from divested businesses	19			31			55			60
Impact of foreign currency fluctuations	(45		)	(7		)	(69		)	4
	$	1,809		$	1,828		$	3,570		$	3,694
Income (loss) before income taxes
Cardiovascular	$	194		$	195		$	364		$	386
Rhythm Management	61			77			124			160
MedSurg	183			150			333			283
Operating income allocated to reportable segments	438			422			821			829
Corporate expenses and currency exchange	(77		)	(71		)	(146		)	(155		)
Goodwill and other intangible asset impairment charges; and acquisition-, divestiture-, restructuring-, and litigation related charges and credits	(40		)	(3,839		)	(580		)	(3,869		)
Amortization expense	(101		)	(99		)	(204		)	(195		)
Operating (loss) income	220			(3,587		)	(109		)	(3,390		)
Other expense, net	(68		)	(31		)	(133		)	(105		)
Income (loss) before income taxes	$	152		$	(3,618	)	$	(242	)	$	(3,495	)

* We have restated prior year detail to conform to current year presentation.