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SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2016
SEGMENT INFORMATION

14. SEGMENT INFORMATION

Baxter’s two segments are strategic businesses that are managed separately because each business develops, manufactures and markets distinct products and services. The segments and a description of their products and services are as follows:

The Renal business provides products and services to treat end-stage renal disease, or irreversible kidney failure, along with other renal therapies. The Renal business offers a comprehensive portfolio to meet the needs of patients across the treatment continuum, including technologies and therapies for peritoneal dialysis (PD), in-center hemodialysis (HD), home HD, continuous renal replacement therapy and additional dialysis services.

The Hospital Products business manufactures intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, inhalation anesthetics, and biosurgery products. The business also provides products and services related to pharmacy compounding, drug formulation and packaging technologies.

The company uses income from continuing operations before net interest expense, income tax expense, depreciation and amortization expense (Segment EBITDA), on a segment basis to make resource allocation decisions and assess the ongoing performance of the company’s business segments. Intersegment sales are eliminated in consolidation.

Certain items are maintained at Corporate and are not allocated to a segment. They primarily include most of the company’s debt and cash and equivalents and related net interest expense, foreign exchange fluctuations (principally relating to intercompany receivables, payables and loans denominated in a foreign currency) and the majority of the foreign currency hedging activities, corporate headquarters costs, stock compensation expense, nonstrategic investments and related income and expense, certain employee benefit plan costs as well as certain nonrecurring gains, losses, and other charges (such as business optimization, integration and separation-related costs, and asset impairment). Financial information for the company’s segments is as follows.

 

      Three months ended  
     March 31,  
(in millions)    2016      2015  

Net sales

      

Renal

      $      898         $      913   

Hospital Products

      1,477         1,490   

Total net sales

      $   2,375         $   2,403   
   

EBITDA

      

Renal

      $      122         $        85   

Hospital Products

      509         487   

Total segment EBITDA

     

 

 $      631

 

   

 

      $      572   
   
     
      March 31,      December 31,  
(in millions)    2016      2015  

Total assets

      

Renal

      $    4,719         $    4,609   

Hospital Products

      6,787         6,632   

Other

      5,844         9,721   

Total assets

      $   17,350         $  20,962   
   

 

The following is a reconciliation of segment EBITDA to income from continuing operations before income taxes per the condensed consolidated statements of income.

 

      Three months ended  
     March 31,  
(in millions)    2016     2015  

Total segment EBITDA

    $ 631      $ 572   

Reconciling items

     

Depreciation and amortization

      (189 )      (187 ) 

Stock compensation

      (23 )      (29 ) 

Net interest expense

      (28 )      (30 ) 

Business optimization items

      (5 )      —   

Certain foreign currency fluctuations and hedging activities

      22        108   

Net realized gains on Retained Shares transactions

      3,239        —   

Net loss on debt extinguishment

      (101 )      —   

Other Corporate items

      (217 )      (286 ) 

Income from continuing operations before income taxes

    $ 3,329      $ 148