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Geographic and Segment Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Geographic and Segment Information
Note 19. Geographic and Segment Information
Segment Information
We identify operating segments based on the way we manage, evaluate and internally report our business activities for purposes of allocating resources, developing and executing our strategy, and assessing performance. We have three reportable segments: Cardiopulmonary, Neuromodulation and Advanced Circulatory Support.
Effective in the fourth quarter of 2021, LivaNova changed its reportable segments corresponding to changes in how the Company’s chief operating decision maker regularly reviews information, allocates resources and assesses performance. The segment financial information presented herein reflects these changes for all periods presented. The Company’s changes to its reportable segments are summarized as follows:
•The Company’s Advanced Circulatory Support business is no longer assessed as part of the Company’s previously reported Cardiovascular reportable segment and is evaluated independently as its own reportable segment.
•The Company’s Cardiopulmonary business is no longer assessed as part of the Company’s previously reported Cardiovascular reportable segment and is evaluated independently as its own reportable segment.
•The Company’s Heart Valves business, which was disposed of on June 1, 2021, is now included within Other.
Our Cardiopulmonary segment is engaged in the development, production and sale of cardiopulmonary products, including oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae and other related accessories.
Our Neuromodulation segment generates its revenue from the design, development and marketing of devices that deliver neuromodulation therapy to treat DRE, DTD and OSA. Neuromodulation products include the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories.
Our Advanced Circulatory Support segment is engaged in the development, production and sale of leading-edge temporary life support products. These products include cardiopulmonary and respiratory support solutions consisting of temporary life support controllers and product kits that can include a combination of pumps, oxygenators, and cannulae.
“Other” includes the results of our Heart Valves business, which was disposed of on June 1, 2021, and corporate shared service expenses for finance, legal, human resources, information technology and corporate business development.
Net sales of our reportable segments include revenues from the sale of products that each reportable segment develops and manufactures or distributes. We define segment income as operating income before merger and integration, restructuring and amortization of intangibles.
We operate under three geographic regions: U.S., Europe, and Rest of World. The table below presents net sales by operating segment and geographic region (in thousands):
Year Ended December 31,
202120202019
Cardiopulmonary
United States$154,073 $132,543 $161,471 
Europe134,562 122,062 135,632 
Rest of World194,344 192,127 207,613 
482,979 446,732 504,716 
Neuromodulation
United States358,476 282,509 335,332 
Europe51,435 39,019 46,262 
Rest of World46,261 32,916 42,953 
456,172 354,444 424,547 
Advanced Circulatory Support
United States53,821 41,094 30,781 
Europe1,120 1,027 741 
Rest of World518 200 401 
55,459 42,321 31,923 
Other (1)
United States4,929 12,488 18,900 
Europe14,407 31,259 40,548 
Rest of World21,419 46,997 63,536 
40,755 90,744 122,984 
Totals
United States571,299 468,634 546,484 
Europe (2)
201,525 193,367 223,183 
Rest of World262,541 272,240 314,503 
Total (3) (4)
$1,035,365 $934,241 $1,084,170 
(1)Other primarily includes the net sales of the Company’s Heart Valves business, which was disposed of on June 1, 2021.
(2)Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in Rest of World.
(3)Net sales to external customers includes $35.8 million, $29.7 million and $37.7 million in the United Kingdom, our country of domicile, for the years ended December 31, 2021, 2020 and 2019, respectively.
(4)No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S.
The table below presents a reconciliation of segment income (loss) from continuing operations to consolidated loss from continuing operations before tax (in thousands):
Year Ended December 31,
2021
2020 (1)
2019 (1)
Cardiopulmonary (2)
$(6,429)$35,735 $50,533 
Neuromodulation (3)
169,499 109,273 83,333 
Advanced Circulatory Support2,195 (575)3,941 
Other (4) (5)
(129,082)(365,116)(233,275)
Total reportable segment income (loss) from continuing operations36,183 (220,683)(95,468)
Other expenses (6)
36,967 53,216 76,086 
Operating loss from continuing operations(784)(273,899)(171,554)
Interest income435 131 803 
Interest expense(50,151)(40,837)(15,091)
Loss on debt extinguishment(60,238)(1,407)— 
Foreign exchange and other gains/(losses)(13,734)(32,010)(2,536)
Loss from continuing operations before tax$(124,472)$(348,022)$(188,378)
(1)Segment loss from continuing operations for the years ended December 31, 2020 and 2019 have been revised. For further details refer to “Note 1. Nature of Operations.”
(2)Results for the years ended December 31, 2021, 2020 and 2019 include a Litigation provision, net of $38.1 million, $3.9 million and $(0.6) million, respectively. Refer to “Note 13. Commitments and Contingencies” for additional information.
(3)Results for the year ended December 31, 2019 include the ImThera impairment of the IPR&D asset of $50.3 million. Refer to “Note 7. Goodwill and Intangible Assets” for additional information.
(4)Results for the year ended December 31, 2020 include $180.2 million and $21.3 million in impairments of the Heart Valves disposal group and allocated goodwill, respectively. Refer to “Note 4. Divestiture of Heart Valve Business” for additional information. Additionally, the results for the year ended December 31, 2020 include a $42.2 million decommissioning provision at our Saluggia site. Refer to “Note 13. Commitments and Contingencies” for additional information. Results for the year ended December 31, 2019 include the Caisson impairments of goodwill and the IPR&D asset of $42.4 million and $89.0 million, respectively. Refer to “Note 7. Goodwill and Intangible Assets” for additional information.
(5)Other includes the results of the Company’s Heart Valves business, which was disposed of on June 1, 2021, and corporate shared service expenses for finance, legal, human resources, information technology and corporate business development.
(6)Other expenses consists of merger and integration expense, restructuring expense and amortization of intangible assets.
Assets by reportable segment as of December 31, 2021 and 2020, was as follows (in thousands):
Total Assets2021
2020 (1)
Cardiopulmonary$921,481 $1,040,318 
Neuromodulation646,394 673,579 
Advanced Circulatory Support231,846 239,404 
Other (2)
401,230 446,660 
$2,200,951 $2,399,961 
(1)Total assets as of December 31, 2020 have been revised. For further details refer to “Note 1. Nature of Operations.”
(2)Other includes corporate assets as of December 31, 2021 and 2020, and the assets of the Company’s Heart Valves business, which was disposed of on June 1, 2021 as of December 31, 2020.
Capital expenditures by segment were as follows (in thousands):
Year Ended December 31,
Capital Expenditures202120202019
Cardiopulmonary$14,824 $20,975 $16,302 
Neuromodulation179 7,318 3,415 
Advanced Circulatory Support1,326 733 540 
Other (1)
5,984 6,890 7,720 
$22,313 $35,916 $27,977 
(1)Other includes corporate capital expenditures as well as capital expenditures for the Company’s Heart Valves business, which was disposed of on June 1, 2021.
Geographic Information
Property, plant and equipment, net by geographic region as of December 31, 2021 and 2020, was as follows (in thousands):
Property, Plant and Equipment, Net20212020
United States$60,852 $64,553 
Europe85,313 93,821 
Rest of World3,901 5,431 
$150,066 $163,805