Business segments and other information

12 Months Ended

Dec. 31, 2014

The following tables present the Company’s segment results for the twelve months ended December 31, 2014, 2013 and 2012:



	Year Ended December 31:
	2014		2013		2012
	(Dollars in thousands)
Revenue
Vascular North America	$	259,227	$	231,112	$	222,749
Anesthesia/Respiratory North America	222,650		228,485		180,363
Surgical North America	150,121		146,058		143,875
EMEA	593,065		557,427		510,248
Asia	237,696		207,207		173,721
OEM	143,966		131,173		140,230
All other	233,107		194,809		179,823
Consolidated net revenues	$	1,839,832	$	1,696,271	$	1,551,009



	Year Ended December 31:
	2014			2013			2012
	(Dollars in thousands)
Operating Profit
Vascular North America	$	41,079		$	23,798		$	26,048
Anesthesia/Respiratory North America	26,574			21,910			14,048
Surgical North America	49,592			50,334			50,615
EMEA	114,650			87,902			65,822
Asia	62,152			63,822			52,541
OEM	30,635			27,328			31,664
All other	40,482			27,191			18,759
Total segment operating profit ⁽¹⁾	365,164			302,285			259,497
Unallocated expenses ⁽²⁾	(80,302		)	(69,024		)	(356,872		)
Income from continuing operations before interest, loss on extinguishments of debt and taxes	$	284,862		$	233,261		$	(97,375	)

(1)

Segment operating profit includes segment net revenues from external customers reduced by its standard cost of goods sold, adjusted for certain manufacturing variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective amounts of one of several items (such as sales, numbers of employees, and amount of time spent), depending on the category of expense involved.


(2)	Unallocated expenses primarily include manufacturing variances and fixed manufacturing costs, with the exception of certain manufacturing variances allocated to the segments as noted above, as well as net gain on sales of assets, goodwill impairment and restructuring and other impairment charges.



	Year Ended December 31:
	2014		2013		2012
	(Dollars in thousands)
Depreciation and Amortization
Vascular North America	$	31,782	$	28,719	$	23,063
Anesthesia/Respiratory North America	17,109		13,162		7,955
Surgical North America	6,316		10,549		3,646
EMEA	38,062		29,947		22,975
Asia	8,515		4,960		3,653
OEM	6,175		4,876		4,083
All other	19,071		15,722		29,509
Consolidated depreciation and amortization	$	127,030	$	107,935	$	94,884

Business segments and other information

An operating segment is a component of the Company (a) that engages in business activities from which it may earn revenues and incur expenses, (b) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance, and (c) for which discrete financial information is available. The Company does not evaluate its operating segments using discrete asset information.

Effective January 1, 2014, the Company realigned its operating segments due to changes in the Company’s internal financial reporting structure. The Company’s North American Vascular, Anesthesia/Respiratory and Surgical businesses, which previously comprised much of the former Americas reportable segment, are now separate reportable segments. As a result, the Company now has six reportable segments: Vascular North America, Anesthesia/Respiratory North America, Surgical North America, EMEA, Asia and OEM. Certain operating segments are not material and are therefore included in the “All other” line item in tabular presentations of segment information. Additionally, the Company changed the allocation methodology for certain corporate costs, including manufacturing variances and research and development costs, among its businesses to improve accountability, which resulted in changes to the previously reported segment operating profit. All prior comparative periods have been restated to reflect these changes.

The Company’s reportable segments other than the OEM segment design, manufacture and distribute medical devices primarily used in critical care, surgical applications and cardiac care and generally serve two end markets: hospitals and healthcare providers, and home health. The products of these segments are most widely used in the acute care setting for a range of diagnostic and therapeutic procedures and in general and specialty surgical applications. The Company’s OEM segment designs, manufactures and supplies devices and instruments for other medical device manufacturers.

The following tables present the Company’s segment results for the twelve months ended December 31, 2014, 2013 and 2012:



	Year Ended December 31:
	2014		2013		2012
	(Dollars in thousands)
Revenue
Vascular North America	$	259,227	$	231,112	$	222,749
Anesthesia/Respiratory North America	222,650		228,485		180,363
Surgical North America	150,121		146,058		143,875
EMEA	593,065		557,427		510,248
Asia	237,696		207,207		173,721
OEM	143,966		131,173		140,230
All other	233,107		194,809		179,823
Consolidated net revenues	$	1,839,832	$	1,696,271	$	1,551,009



	Year Ended December 31:
	2014			2013			2012
	(Dollars in thousands)
Operating Profit
Vascular North America	$	41,079		$	23,798		$	26,048
Anesthesia/Respiratory North America	26,574			21,910			14,048
Surgical North America	49,592			50,334			50,615
EMEA	114,650			87,902			65,822
Asia	62,152			63,822			52,541
OEM	30,635			27,328			31,664
All other	40,482			27,191			18,759
Total segment operating profit ⁽¹⁾	365,164			302,285			259,497
Unallocated expenses ⁽²⁾	(80,302		)	(69,024		)	(356,872		)
Income from continuing operations before interest, loss on extinguishments of debt and taxes	$	284,862		$	233,261		$	(97,375	)

(1)


(2)	Unallocated expenses primarily include manufacturing variances and fixed manufacturing costs, with the exception of certain manufacturing variances allocated to the segments as noted above, as well as net gain on sales of assets, goodwill impairment and restructuring and other impairment charges.



	Year Ended December 31:
	2014		2013		2012
	(Dollars in thousands)
Depreciation and Amortization
Vascular North America	$	31,782	$	28,719	$	23,063
Anesthesia/Respiratory North America	17,109		13,162		7,955
Surgical North America	6,316		10,549		3,646
EMEA	38,062		29,947		22,975
Asia	8,515		4,960		3,653
OEM	6,175		4,876		4,083
All other	19,071		15,722		29,509
Consolidated depreciation and amortization	$	127,030	$	107,935	$	94,884

The following table provides total net revenues and total net property, plant and equipment by geographic region for the years ended December 31, 2014, 2013 and 2012:



	Year Ended
	2014		2013		2012
	(Dollars in thousands)
Net revenues (based on the Company's selling location):
United States	$	916,619	$	844,884	$	789,771
Other Americas	60,736		57,098		53,665
Europe	664,982		568,559		516,982
All Other	197,495		225,730		190,591
	$	1,839,832	$	1,696,271	$	1,551,009
Net property, plant and equipment:
United States	$	174,893	$	203,985	$	180,833
Malaysia	36,427		29,313		27,764
Czech Republic	35,655		41,607		45,884
All Other	70,460		50,995		43,464
	$	317,435	$	325,900	$	297,945

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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