Segment Reporting

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE K – SEGMENT REPORTING

Our seven core businesses are organized into three reportable segments: MedSurg, Rhythm and Neuro, and Cardiovascular, which represent an aggregation of our operating segments that generate revenues from the sale of medical devices. We measure and evaluate our reportable segments based on net sales of reportable segments, operating income of reportable segments, excluding intersegment profits, and operating income of reportable segments as a percentage of net sales of reportable segments. Operating income of reportable segments as a percentage of net sales of reportable segments is defined as operating income of reportable segments divided by net sales of reportable segments. We exclude from operating income of reportable segments certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker (CODM) considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from operating income of reportable segments, they are included in reported Income (loss) before income taxes in our accompanying unaudited consolidated statements of operations and are included in the reconciliation below.

A reconciliation of the totals reported for the reportable segments to the applicable line items within our accompanying unaudited consolidated statements of operations is as follows (in millions, except percentages):

	Three Months Ended March 31,
Net sales	2021			2020
MedSurg	$	860		$	774
Rhythm and Neuro	750			703
Cardiovascular	1,129			1,026
Total net sales of reportable segments	2,739			2,502
All other (Specialty Pharmaceuticals)(1)	13			41
Consolidated net sales	$	2,752		$	2,543
	Three Months Ended March 31,
Income (loss) before income taxes	2021			2020
MedSurg	$	332		$	259
Rhythm and Neuro	148			99
Cardiovascular	338			199
Total operating income of reportable segments	819			556
All other (Specialty Pharmaceuticals)(1)	4			26
Unallocated amounts:
Corporate expenses, including hedging activities	(153)			(33)
Intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs	(114)			(202)
Amortization expense	(185)			(201)
Operating income (loss)	370			146
Other expense, net	(45)			(124)
Income (loss) before income taxes	$	325		$	22
(1) On March 1, 2021, we completed the divestiture of the Specialty Pharmaceuticals business. Our consolidated net sales and income (loss) before income taxes for the first quarter of 2021 include Specialty Pharmaceuticals up to the date of the closing of the transaction.
Operating income of reportable segments as a percentage of net sales of reportable segments	Three Months Ended March 31,
	2021			2020
MedSurg	38.6		%	33.4		%
Rhythm and Neuro	19.7		%	14.1		%
Cardiovascular	30.0		%	19.4		%