Revenue

6 Months Ended

Oct. 25, 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 and six months ended October 25, 2019 and October 26, 2018:


	Three months ended⁽¹⁾						Six months ended⁽¹⁾
(in millions)	October 25, 2019		October 26, 2018		October 25, 2019		October 26, 2018
Cardiac Rhythm & Heart Failure	$	1,426	$	1,472	$	2,807	$	2,898
Coronary & Structural Heart	955		906		1,896		1,823
Aortic, Peripheral, & Venous	474		480		942		948
Cardiac and Vascular Group	2,855		2,858		5,645		5,669
Surgical Innovations	1,454		1,393		2,871		2,790
Respiratory, Gastrointestinal, & Renal	688		654		1,371		1,309
Minimally Invasive Therapies Group	2,142		2,047		4,242		4,099
Brain Therapies	772		701		1,512		1,375
Spine	692		656		1,349		1,308
Specialty Therapies	333		322		656		631
Pain Therapies	315		314		607		628
Restorative Therapies Group	2,112		1,993		4,124		3,942
Diabetes Group	596		583		1,188		1,155
Total	$	7,706	$	7,481	$	15,199	$	14,865

(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 fiscal year 2019 have been recast to adjust for this realignment.

The table below illustrates net sales by market geography for each segment for the three and six months ended October 25, 2019 and October 26, 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)	October 25, 2019		October 26, 2018		October 25, 2019		October 26, 2018		October 25, 2019		October 26, 2018
Cardiac and Vascular Group	$	1,455	$	1,482	$	890	$	895	$	510	$	481
Minimally Invasive Therapies Group	922		872		782		772		438		403
Restorative Therapies Group	1,440		1,357		416		412		256		224
Diabetes Group	311		334		226		203		59		46
Total	$	4,129	$	4,045	$	2,315	$	2,282	$	1,262	$	1,154

	U.S.⁽¹⁾⁽⁴⁾						Non-U.S. Developed Markets⁽²⁾⁽⁴⁾						Emerging Markets⁽³⁾⁽⁴⁾
	Six months ended						Six months ended						Six months ended
(in millions)	October 25, 2019		October 26, 2018		October 25, 2019		October 26, 2018		October 25, 2019		October 26, 2018
Cardiac and Vascular Group	$	2,816	$	2,871	$	1,820	$	1,842	$	1,009	$	956
Minimally Invasive Therapies Group	1,835		1,729		1,573		1,600		834		770
Restorative Therapies Group	2,778		2,651		842		840		504		451
Diabetes Group	618		658		457		406		113		91
Total	$	8,046	$	7,909	$	4,692	$	4,688	$	2,460	$	2,268

(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 is reduced by sales rebates and returns. Adjustments to rebates and returns reserves are recorded as increases or decreases of revenue. At October 25, 2019, $797 million of rebates were classified as other accrued expenses and $439 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 October 25, 2019 and April 26, 2019 were not material. For the three and six months ended October 25, 2019 and October 26, 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 October 25, 2019 and April 26, 2019 was $291 million and $315 million, respectively. At October 25, 2019 and April 26, 2019, $189 million and $211 million, respectively, was included in other accrued expenses and $102 million and $104 million, respectively, was included in other liabilities. During the six months ended October 25, 2019, the Company recognized $150 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 October 25, 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 $1.1 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next four years.