Segment Reporting

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE K – SEGMENT REPORTING

We aggregate our core businesses into two reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments.

We measure and evaluate our reportable segments based on their respective net sales, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all excluding the impact of foreign currency. 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); and 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 within our accompanying unaudited consolidated statements of operations and are included in the reconciliation below. Refer to Note L – Revenue for net sales by reportable segment presented in accordance with U.S. GAAP.

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	2023		2022
MedSurg	$	1,252	$	1,164
Cardiovascular	2,049		1,902
Total net sales of reportable segments	3,301		3,066
Impact of foreign currency fluctuations	88		(40)
	$	3,389	$	3,026

Income (loss) before income taxes
MedSurg	$	400	$	371
Cardiovascular	541		477
Total operating income of reportable segments	940		847
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments	(75)		(66)
Goodwill and 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	(110)		(117)
Amortization expense	(203)		(198)
Operating income (loss)	552		466
Other expense, net	(108)		(310)
Income (loss) before income taxes	$	444	$	156

	Three Months Ended March 31,
Operating income margin of reportable segments	2023		2022
MedSurg	31.9	%	31.8	%
Cardiovascular	26.4	%	25.1	%