Business segments and other information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business segments and other information

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.

Following the Company's acquisition of Vascular Solutions, the Company commenced an integration program under which it is combining the Vascular Solutions business with some of its legacy businesses. Specifically, the Company is combining the Vascular Solutions North American business with the Company's interventional access business, which formerly was part of the Vascular North America operating segment, and the Company's cardiac business, which formerly was a separate operating segment included in the "all other" category for purposes of segment reporting. These businesses are now in the Company's Interventional North America operating segment. Additionally, the Company is combining the Vascular Solutions businesses in Europe, Asia and Latin America with the Company's legacy businesses in the respective locations, and these Vascular Solutions businesses are now part of the EMEA (Europe, Middle East and Africa), Asia and Latin America operating segments, respectively. The changes in the Company’s operating segments, which became effective in the fourth quarter 2017, also reflect the manner in which the Company’s new chief operating decision maker assesses business performance and allocation of resources.

As a result of the operating segment changes described above, the Company has the following seven reportable segments: Vascular North America, Interventional North America, Anesthesia North America, Surgical North America, Europe, Middle East and Africa ("EMEA"), Asia and Original Equipment and Development Services ("OEM"). In connection with the presentation of segment information, we will continue to present certain operating segments, which now include Interventional Urology North America and Respiratory North America as well as Latin America, in the “all other” category because they are not material. All prior comparative periods presented have been restated to reflect these changes. Additionally, because these change affected certain of the Company's reporting units, the Company reallocated the goodwill balances using relative fair values of the reporting units and performed goodwill impairment analyses on the affected reporting units. The Company did not record any goodwill impairment charges as a result of these analyses.

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 years ended December 31, 2017, 2016 and 2015:

	Year Ended December 31,
	2017		2016		2015
	(Dollars in thousands)
Revenue
Vascular North America	$	313,618	$	295,206	$	284,097
Interventional North America	220,611		82,431		75,196
Anesthesia North America	197,982		198,772		189,297
Surgical North America	175,216		172,223		161,230
EMEA	552,722		510,934		514,443
Asia	269,208		249,416		241,726
OEM	182,967		160,990		149,399
All other	233,979		198,055		194,302
Consolidated net revenues	$	2,146,303	$	1,868,027	$	1,809,690

	Year Ended December 31,
	2017			2016			2015
	(Dollars in thousands)
Operating Profit
Vascular North America	$	77,036		$	77,122		$	59,441
Interventional North America	25,972			13,264			5,800
Anesthesia North America	62,901			55,544			48,311
Surgical North America	63,931			56,608			52,529
EMEA	92,430			84,392			92,326
Asia	75,637			75,770			67,887
OEM	41,578			33,641			33,162
All other	11,142			26,486			28,399
Total segment operating profit (1)	450,627			422,827			387,855
Unallocated expenses (2)	(78,348		)	(103,374		)	(71,964		)
Income from continuing operations before interest, loss on extinguishment of debt and taxes	$	372,279		$	319,453		$	315,891

(1) Segment operating profit includes segment net revenues from external customers reduced by its standard cost of goods sold, adjusted for fixed manufacturing cost absorption 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, with the exception of fixed manufacturing cost absorption variances, restructuring and impairment charges and gain on sale of assets.

	Year Ended December 31,
	2017		2016		2015
	(Dollars in thousands)
Depreciation and Amortization
Vascular North America	$	31,058	$	35,117	$	35,259
Interventional North America	29,108		6,993		7,823
Anesthesia North America	8,573		10,932		7,089
Surgical North America	8,694		10,459		12,289
EMEA	34,322		30,505		32,178
Asia	11,868		11,275		11,382
OEM	8,337		8,404		6,834
All other	28,378		14,661		12,480
Consolidated depreciation and amortization	$	160,338	$	128,346	$	125,334

Geographic data

The following tables provide total net revenues and total net property, plant and equipment by geographic region for the years ended December 31, 2017, 2016 and 2015:

	Year Ended December 31,
	2017		2016		2015
	(Dollars in thousands)
Net revenues (based on the Company's selling location):
United States	$	1,254,825	$	1,018,786	$	967,819
Europe	591,370		567,320		570,672
Asia and Asia Pacific	220,110		208,841		196,796
All other	79,998		73,080		74,403
	$	2,146,303	$	1,868,027	$	1,809,690
Net property, plant and equipment:
United States	$	216,568	$	167,167	$	178,895
Malaysia	43,730		31,415		33,777
Ireland	43,867		36,569		33,219
Czech Republic	35,715		30,843		32,305
All other	43,119		36,905		37,927
	$	382,999	$	302,899	$	316,123