v2.4.1.9
Segment Information
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
Note 18:    Segment Information
We operate in two business segments—human pharmaceutical products and animal health. Our business segments are distinguished by the ultimate end user of the product—humans or animals. Performance is evaluated based on profit or loss from operations before income taxes. The accounting policies of the individual segments are the same as those described in the summary of significant accounting policies in Note 1 to the consolidated financial statements.
Our human pharmaceutical products segment includes the discovery, development, manufacturing, marketing, and sales of human pharmaceutical products worldwide in the following therapeutic areas: endocrinology, neuroscience, oncology, cardiovascular, and other. We lost U.S. patent exclusivity for Cymbalta® in December 2013 and Evista® in March 2014, which resulted in the immediate entry of generic competitors and a rapid and severe decline in revenue.
Our animal health segment, operating through our Elanco animal health division, includes the development, manufacturing, marketing, and sales of animal health products worldwide for both food and companion animals. Animal health products include Rumensin®, Posilac®, Tylan®, Optaflexx®, Maxiban® and other products for livestock and poultry, as well as Trifexis®, Comfortis®, and other products for companion animals.
Most of our pharmaceutical products are distributed through wholesalers that serve pharmacies, physicians and other health care professionals, and hospitals. For the years ended December 31, 2014, 2013, and 2012, our three largest wholesalers each accounted for between 8 percent and 19 percent of consolidated total revenue. Further, they each accounted for between 9 percent and 18 percent of accounts receivable as of December 31, 2014 and 2013. Animal health products are sold primarily to wholesale distributors.
We manage our assets on a total company basis, not by operating segment, as the assets of the animal health business are intermixed with those of the pharmaceutical products business. Therefore, our chief operating decision maker does not review any asset information by operating segment and, accordingly, we do not report asset information by operating segment.
We are exposed to the risk of changes in social, political, and economic conditions inherent in foreign operations, and our results of operations and the value of our foreign assets are affected by fluctuations in foreign currency exchange rates.
The following table summarizes our revenue activity for the years ended December 31, 2014, 2013, and 2012:
 
 
 
 
2014
 
2013
 
2012
Segment revenue—to unaffiliated customers:
 
 
 
 
 
 
Human pharmaceutical products:
 
 
 
 
 
 
 
 
 
 
 
 
 
Endocrinology:
 
 
 
 
 
 
Humalog®
 
$
2,785.2

 
$
2,611.2

 
$
2,395.5

Humulin®
 
1,400.1

 
1,315.8

 
1,239.1

Forteo®
 
1,322.0

 
1,244.9

 
1,151.0

Evista
 
419.8

 
1,050.4

 
1,010.1

Trajenta
 
328.8

 
249.2

 
88.6

Other Endocrinology
 
683.1

 
832.9

 
926.6

Total Endocrinology
 
6,939.0

 
7,304.4

 
6,810.9

 
 
 
 
 
 
 
Neuroscience:
 
 
 
 
 
 
Cymbalta
 
1,614.7

 
5,084.4

 
4,994.1

Zyprexa®
 
1,037.3

 
1,194.8

 
1,701.4

Strattera®
 
738.5

 
709.2

 
621.4

Other Neuroscience
 
206.0

 
227.8

 
258.2

Total Neuroscience
 
3,596.5

 
7,216.2

 
7,575.1

 
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
2012
Oncology:
 
 
 
 
 
 
Alimta
 
2,792.0

 
2,703.0

 
2,594.3

Erbitux
 
373.3

 
373.7

 
397.0

Other Oncology
 
227.7

 
191.8

 
290.3

Total Oncology
 
3,393.0

 
3,268.5

 
3,281.6

 
 
 
 
 
 
 
Cardiovascular:
 
 
 
 
 
 
Cialis®
 
2,291.0

 
2,159.4

 
1,926.8

Effient
 
522.2

 
508.7

 
457.2

Other Cardiovascular
 
240.3

 
255.1

 
248.5

Total Cardiovascular
 
3,053.5

 
2,923.2

 
2,632.5

 
 
 
 
 
 
 
Other pharmaceuticals
 
287.0

 
249.3

 
266.8

Total human pharmaceutical products
 
17,269.0

 
20,961.6

 
20,566.9

Animal health
 
2,346.6

 
2,151.5

 
2,036.5

Total segment revenue
 
$
19,615.6

 
$
23,113.1

 
$
22,603.4

 
 
 
 
 
 
 
Segment profits(1):
 
 
 
 
 
 
Human pharmaceutical products
 
$
3,132.0

 
$
5,015.0

 
$
4,393.4

Animal health
 
564.2

 
556.6

 
508.1

Total segment profits
 
$
3,696.2

 
$
5,571.6

 
$
4,901.5

 
 
 
 
 
 
 
Reconciliation of total segment profits to consolidated income before taxes:
 
 
 
 
 
 
Segment profits
 
$
3,696.2

 
$
5,571.6

 
$
4,901.5

Other profits (losses):
 
 
 
 
 
 
Income related to termination of the exenatide collaboration with Amylin Pharmaceuticals, Inc. (Note 4)
 
—

 
495.4

 
787.8

Income related to transfer of linagliptin and empagliflozin rights in certain countries to Boehringer Ingelheim (Note 4)
 
92.0

 
—

 
—

Acquired in-process research and development (Notes 3 and 4)
 
(200.2
)
 
(57.1
)
 
—

Asset impairment, restructuring, and other special charges (Note 5)
 
(468.7
)
 
(120.6
)
 
(281.1
)
U.S. Branded Prescription Drug Fee
 
(119.0
)
 
—

 
—

Total consolidated income before taxes
 
$
3,000.3

 
$
5,889.3

 
$
5,408.2


1
Human pharmaceutical products segment profit includes total depreciation and amortization expense of $1.27 billion, $1.35 billion, and $1.37 billion for the years ended December 31, 2014, 2013, and 2012, respectively. Animal health segment profit includes total depreciation and amortization expense of $111.5 million, $99.4 million, and $91.1 million for the years ended December 31, 2014, 2013, and 2012, respectively.
For internal management reporting presented to the chief operating decision maker, certain costs are fully allocated to our human pharmaceutical products segment and therefore are not reflected in the animal health segment's profit. Such items include costs associated with treasury-related financing, global administrative services, certain acquisition-related transaction costs, and certain manufacturing costs.
 
 
 
 
2014
 
2013
 
2012
Geographic Information
 
 
 
 
 
 
Revenue—to unaffiliated customers(1):
 
 
 
 
 
 
United States
 
$
9,134.1

 
$
12,889.7

 
$
12,313.1

Europe
 
4,506.7

 
4,338.4

 
4,259.7

Japan
 
2,027.1

 
2,063.8

 
2,246.2

Other foreign countries
 
3,947.7

 
3,821.2

 
3,784.4

Revenue
 
$
19,615.6

 
$
23,113.1

 
$
22,603.4

 
 
 
 
 
 
 
Long-lived assets(2):
 
 
 
 
 
 
United States
 
$
4,566.2

 
$
4,649.6

 
$
5,064.7

Europe
 
2,401.5

 
2,469.7

 
2,281.1

Japan
 
80.4

 
81.1

 
101.5

Other foreign countries
 
1,499.1

 
1,540.9

 
1,543.2

Long-lived assets
 
$
8,547.2

 
$
8,741.3

 
$
8,990.5


1
Revenue is attributed to the countries based on the location of the customer.
2
Long-lived assets consist of property and equipment and certain sundry assets.