Revenue

3 Months Ended

Jul. 26, 2019

Revenue from Contract with Customer [Abstract]

The Company's revenues are principally derived from device-based medical therapies and services related to cardiac rhythm disorders, cardiovascular disease, renal disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, chronic pain, urological and digestive disorders, ear, nose, and throat conditions, and diabetes conditions as well as advanced and general surgical care products, respiratory and monitoring solutions, and neurological surgery technologies. The Company's primary customers include hospitals, clinics, third-party health care providers, distributors, and other institutions, including governmental health care programs and group purchasing organizations.

The table below illustrates net sales by segment and division for the three months ended July 26, 2019 and July 27, 2018:



	Three months ended⁽¹⁾
(in millions)	July 26, 2019		July 27, 2018
Cardiac Rhythm & Heart Failure	$	1,382	$	1,426
Coronary & Structural Heart	941		917
Aortic, Peripheral, & Venous	467		468
Cardiac and Vascular Group	2,790		2,811
Surgical Innovations	1,417		1,397
Respiratory, Gastrointestinal, & Renal	683		655
Minimally Invasive Therapies Group	2,100		2,052
Brain Therapies	740		674
Spine	658		652
Specialty Therapies	322		309
Pain Therapies	292		314
Restorative Therapies Group	2,012		1,949
Diabetes Group	592		572
Total	$	7,493	$	7,384

(1) Revenue amounts have intentionally been rounded to the nearest million and, therefore, may not sum.

During the first quarter of fiscal year 2020, the Company realigned its divisions within the Restorative Therapies Group, which included a movement of revenue from Transformative Solutions product lines previously included in Specialty Therapies to a product line under Brain Therapies. As a result, net sales for the three months ended July 27, 2018 have been recast to adjust for this realignment.

The table below illustrates net sales by market geography for each segment for the three months ended July 26, 2019 and July 27, 2018:



	U.S.⁽¹⁾⁽⁴⁾				Non-U.S. Developed Markets⁽²⁾⁽⁴⁾				Emerging Markets⁽³⁾⁽⁴⁾
	Three months ended				Three months ended				Three months ended
(in millions)	July 26, 2019		July 27, 2018		July 26, 2019		July 27, 2018		July 26, 2019		July 27, 2018
Cardiac and Vascular Group	$	1,361	$	1,389	$	930	$	947	$	499	$	475
Minimally Invasive Therapies Group	913		857		791		828		396		367
Restorative Therapies Group	1,338		1,294		426		428		248		227
Diabetes Group	306		324		231		203		55		45
Total	$	3,918	$	3,864	$	2,377	$	2,406	$	1,198	$	1,114


(1)	U.S. includes the United States and U.S. territories.


(2)	Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries within Western Europe.


(3)	Emerging markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not included in the non-U.S. developed markets, as defined above.


(4)	Revenue amounts have intentionally been rounded to the nearest million and, therefore, may not sum.

The amount of revenue recognized reflects sales rebates and returns. Adjustments to rebates and returns reserves are recorded as increases or decreases of revenue. At July 26, 2019, $761 million of rebates were classified as other accrued expenses and $426 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheets. At April 26, 2019, $764 million of rebates were classified as other accrued expenses and $432 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheets. The Company includes obligations for returns in other accrued expenses in the consolidated balance sheets and the right-of-return asset in other current assets in the consolidated balance sheets. The right-of-return asset and liability at July 26, 2019 and April 26, 2019 were not material. For the three months ended July 26, 2019 and July 27, 2018, adjustments to rebate and return reserves recognized in revenue that were included in the rebate and return reserves at the beginning of the period were not material.

Deferred Revenue and Remaining Performance Obligations

The Company records a deferred revenue liability if a customer pays consideration before the Company transfers a good or service to the customer. Deferred revenue at July 26, 2019 and April 26, 2019 was $295 million and $315 million, respectively. At July 26, 2019 and April 26, 2019, $195 million and $211 million was included in other accrued expenses, respectively, and $100 million and $104 million was included in other liabilities, respectively. During the three months ended July 26, 2019, the Company recognized $98 million of revenue that was included in deferred revenue as of April 26, 2019.

Remaining performance obligations include deferred revenue and amounts the Company expects to receive for goods and services that have not yet been delivered or provided under existing, noncancellable contracts with minimum purchase commitments. At July 26, 2019, the estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied for executed contracts with an original duration of one year or more was approximately $1.0 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next four years.