Revenue

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

NOTE L – REVENUE

We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes in our unaudited condensed consolidated statements of operations. The following tables disaggregate our revenue from contracts with customers by business and geographic region (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
Businesses	2019		2018		2019		2018
Endoscopy
U.S.	$	270	$	245	$	523	$	477
International	200		197		387		384
Worldwide	470		442		910		861
Urology and Pelvic Health
U.S.	248		213		479		409
International	100		96		195		192
Worldwide	348		308		674		601
Cardiac Rhythm Management
U.S.	288		290		576		580
International	210		204		413		407
Worldwide	498		494		989		987
Electrophysiology
U.S.	39		39		75		74
International	46		40		89		79
Worldwide	84		79		164		154
Neuromodulation
U.S.	160		160		304		291
International	44		42		86		79
Worldwide	204		202		390		371
Interventional Cardiology
U.S.	318		296		614		577
International	388		366		753		730
Worldwide	706		662		1,367		1,307
Peripheral Interventions
U.S.	155		152		311		297
International	165		152		320		294
Worldwide	320		304		631		591
Total Company
U.S.	1,478		1,394		2,881		2,704
International	1,153		1,096		2,243		2,166
Net Sales	$	2,631	$	2,490	$	5,124	$	4,870

	Three Months Ended June 30,				Six Months Ended June 30,
Geographic Regions	2019		2018		2019		2018
U.S.	$	1,478	$	1,394	$	2,881	$	2,704
EMEA (Europe, Middle East and Africa)	571		558		1,132		1,121
APAC (Asia-Pacific)	481		442		918		857
Latin America and Canada	101		96		192		188
	$	2,631	$	2,490	$	5,124	$	4,870
Emerging Markets†	$	318	$	283	$	614	$	545

^†We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. Our current list is comprised of the following countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia, Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Thailand, Turkey and Vietnam. We have revised prior year amounts to the current year’s presentation. The revision had an immaterial impact on prior year Emerging Markets sales.

Deferred Revenue

Contract liabilities are classified within Other current liabilities and Other long-term liabilities on our accompanying unaudited condensed consolidated balance sheets. Our deferred revenue balance was $368 million as of June 30, 2019 and $373 million as of December 31, 2018. Our contractual liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System. Revenue is recognized over the average service period which is based on device and patient longevity. We recognized revenue of $36 million in the second quarter of 2019 and $72 million in the first six months of 2019 that was included in the above December 31, 2018 contract liability balance. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred.

Variable Consideration

We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit and record the amount for estimated sales returns as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer.

We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. If we are unable to reasonably estimate the expected rebates, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above.