Revenue

9 Months Ended

Jan. 24, 2020

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 nine months ended January 24, 2020 and January 25, 2019:


	Three months ended⁽¹⁾						Nine months ended⁽¹⁾
(in millions)	January 24, 2020		January 25, 2019		January 24, 2020		January 25, 2019
Cardiac Rhythm & Heart Failure	$	1,393	$	1,397	$	4,201	$	4,295
Coronary & Structural Heart	948		913		2,844		2,736
Aortic, Peripheral, & Venous	478		476		1,420		1,424
Cardiac and Vascular Group	2,819		2,786		8,464		8,455
Surgical Innovations	1,474		1,434		4,345		4,224
Respiratory, Gastrointestinal, & Renal	702		690		2,073		1,999
Minimally Invasive Therapies Group	2,176		2,124		6,418		6,223
Brain Therapies	795		732		2,307		2,107
Spine	674		655		2,023		1,963
Specialty Therapies	340		325		996		956
Pain Therapies	303		314		910		942
Restorative Therapies Group	2,111		2,026		6,235		5,968
Diabetes Group	610		610		1,798		1,765
Total	$	7,717	$	7,546	$	22,916	$	22,411

(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 nine months ended January 24, 2020 and January 25, 2019:


	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)	January 24, 2020		January 25, 2019		January 24, 2020		January 25, 2019		January 24, 2020		January 25, 2019
Cardiac and Vascular Group	$	1,366	$	1,369	$	915	$	924	$	538	$	493
Minimally Invasive Therapies Group	934		930		791		796		451		398
Restorative Therapies Group	1,409		1,354		436		435		266		237
Diabetes Group	312		348		236		213		63		49
Total	$	4,021	$	4,001	$	2,377	$	2,368	$	1,318	$	1,177

	U.S.⁽¹⁾⁽⁴⁾						Non-U.S. Developed Markets⁽²⁾⁽⁴⁾						Emerging Markets⁽³⁾⁽⁴⁾
	Nine months ended						Nine months ended						Nine months ended
(in millions)	January 24, 2020		January 25, 2019		January 24, 2020		January 25, 2019		January 24, 2020		January 25, 2019
Cardiac and Vascular Group	$	4,182	$	4,240	$	2,735	$	2,766	$	1,547	$	1,449
Minimally Invasive Therapies Group	2,769		2,659		2,364		2,396		1,285		1,168
Restorative Therapies Group	4,187		4,005		1,278		1,275		770		688
Diabetes Group	930		1,006		693		619		176		140
Total	$	12,068	$	11,910	$	7,069	$	7,056	$	3,778	$	3,445

(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 January 24, 2020, $862 million of rebates were classified as other accrued expenses and $447 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 January 24, 2020 and April 26, 2019 were not material. For the three and nine months ended January 24, 2020 and January 25, 2019, 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 January 24, 2020 and April 26, 2019 was $303 million and $315 million, respectively. At January 24, 2020 and April 26, 2019, $212 million and $211 million, respectively, was included in other accrued expenses and $91 million and $104 million, respectively, was included in other liabilities. During the nine months ended January 24, 2020, the Company recognized $192 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 January 24, 2020, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $1.2 billion. The Company expects to recognize revenue on the majority of these remaining performance obligations over the next four years.