Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE O – SEGMENT REPORTING

Our 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. 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), certain investment portfolio net losses (gains) and 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 consolidated statements of operations and are included in the reconciliation below.

On March 1, 2021, we completed the divestiture of the Specialty Pharmaceuticals business. Our consolidated net sales and income (loss) before income taxes include Specialty Pharmaceuticals up to the date of the closing of the transaction.

In the first quarter of 2022, we are reorganizing our operational structure in order to strengthen our category leadership in the markets we serve, and, in particular, benefit our Cardiology customers and patients. Following the reorganization, we will aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular.

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

	Year Ended December 31,
Net sales	2021		2020		2019
MedSurg	$	3,724	$	3,066	$	3,307
Rhythm and Neuro	3,293		2,752		3,140
Cardiovascular	4,858		3,876		4,208
Total net sales of reportable segments	11,875		9,694		10,654
All other (Specialty Pharmaceuticals)	13		219		$	81
Consolidated net sales	$	11,888	$	9,913	$	10,735

	Year Ended December 31,
Depreciation expense	2021		2020		2019
MedSurg	$	81	$	80	$	75
Rhythm and Neuro	104		96		92
Cardiovascular	167		154		138
Total depreciation expense of reportable segments	352		330		306
All other (Specialty Pharmaceuticals)	—		$	3	$	6
Consolidated depreciation expense	$	352	$	333	$	311

	Year Ended December 31,
Income (loss) before income taxes	2021		2020		2019
MedSurg	$	1,399	$	1,079	$	1,204
Rhythm and Neuro	607		439		666
Cardiovascular	1,448		661		1,137
Total operating income of reportable segments	3,454		2,179		3,007
All other (Specialty Pharmaceuticals)	4		143		56
Unallocated amounts:
Corporate expenses, including hedging activities	(447)		(405)		(264)
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 EU Medical Device Regulation (MDR) implementation costs	(1,070)		(1,208)		(582)
Amortization expense	(741)		(789)		(699)
Operating income (loss)	1,199		(80)		1,518
Other income (expense), net	(123)		1		(831)
Income (loss) before income taxes	$	1,076	$	(79)	$	687

Operating income of reportable segments as a percentage of net sales of reportable segments	Year Ended December 31,
	2021		2020		2019
MedSurg	37.6	%	35.2	%	36.4	%
Rhythm and Neuro	18.4	%	15.9	%	21.2	%
Cardiovascular	29.8	%	17.1	%	27.0	%

	As of December 31,
Total assets	2021		2020
MedSurg	$	1,794	$	1,638
Rhythm and Neuro	1,981		1,827
Cardiovascular	2,821		2,461
Total assets of reportable segments	6,595		5,926
All other (Specialty Pharmaceuticals)	—		1,133
Goodwill	11,988		9,951
Other intangible assets, net	6,121		5,917
All other corporate assets	7,525		7,850
	$	32,229	$	30,777

Following the announcement of our plan to sell our Specialty Pharmaceuticals business, as of December 31, 2020, we classified the assets and liabilities of our Specialty Pharmaceuticals business (disposal group) as held for sale within our consolidated balance sheet at their respective carrying values, which approximated fair value, less costs to sell. Accordingly, the total assets of the Specialty Pharmaceuticals business as of December 31, 2020 reflected above include goodwill and intangible assets attributable to the disposal group that were not previously allocated to our reportable segments.

	As of December 31,
Long-lived assets	2021		2020		2019
U.S.	$	1,190	$	1,151	$	1,148
Ireland	436		382		327
Other countries	625		551		604
Property, plant and equipment, net	2,252		2,084		2,079
Goodwill	11,988		9,951		10,176
Other intangible assets, net	6,121		5,917		7,886
Operating lease right-of-use assets in Other long-term assets	435		458		336
	$	20,795	$	18,409	$	20,477