Revenue

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

NOTE K – 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 March 31,
	2020						2019
Businesses	U.S.		OUS		Total		U.S.		OUS		Total
Endoscopy	$	256	$	186	$	442	$	253	$	187	$	440
Urology and Pelvic Health	237		95		332		231		94		326
Cardiac Rhythm Management	255		182		437		288		203		491
Electrophysiology	32		43		74		36		43		79
Neuromodulation	151		40		191		144		42		186
Interventional Cardiology	297		336		633		296		365		661
Peripheral Interventions	224		168		392		156		155		311
Specialty Pharmaceuticals	37		4		41		n/a		n/a		n/a
Net Sales	$	1,489	$	1,054	$	2,543	$	1,403	$	1,090	$	2,493

	Three Months Ended March 31,
Geographic Regions	2020		2019
U.S.	$	1,452	$	1,403
EMEA (Europe, Middle East and Africa)	552		561
APAC (Asia-Pacific)	409		437
LACA (Latin America and Canada)	89		92
Medical Devices	2,502		2,493
U.S.	37		n/a
OUS	4		n/a
Specialty Pharmaceuticals	41		n/a
Net Sales	$	2,543	$	2,493
Emerging Markets (1)	$	267	$	297

(1) 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, which is currently 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.

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 $390 million as of March 31, 2020 and $400 million as of December 31, 2019. 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 $35 million in the first quarter of 2020 that was included in the above December 31, 2019 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.