Covidien restructures, divests units

Covidien has reported several internal changes that will affect its financial reporting, including the combination of its pharmaceutical products and imaging solutions segments into a single operating segment called pharmaceuticals.

The company also is planning to sell its sleep diagnostics and oxygen therapy product lines as well as its sleep therapy product line. Covidien said this decision was made to reallocate resources to its "higher-margin businesses."

The Dublin, Ireland-based Covidien said its specialty chemicals business, previously reported in discontinued operations, has been reclassified to continuing operations within the pharmaceuticals segment as a result of its decision to cease marketing the business for sale. The reclassification of the business to continuing operations will impact the company’s operations and cash flow results from continuing operations.

Covidien said a number of segment reporting changes have been made to align external segment reporting with recent changes to its internal reporting structure. The changes include:

• the reclassification of the SharpSafety and clinical care product lines in the United States and Europe from the medical devices segment to the medical supplies segment;
• the reclassification of product line sales within medical supplies; and
• the reclassification of hernia mechanical devices from the endomechanical product line to the soft tissue repair product line, both in the medical devices segment.

Several other minor reclassifications have also been made between product lines and segments, according to the company. However, none of the changes impacts its consolidated results of operations, financial condition or cash flows.