Revenue

6 Months Ended

Jun. 30, 2020

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,
	2020						2019
Businesses	U.S.		OUS		Total		U.S.		OUS		Total
Endoscopy	$	190	$	158	$	348	$	270	$	200	$	470
Urology and Pelvic Health	162		66		228		248		100		348
Cardiac Rhythm Management	208		143		351		288		210		498
Electrophysiology	22		30		51		39		46		84
Neuromodulation	100		23		122		160		44		204
Interventional Cardiology	189		306		495		318		388		706
Peripheral Interventions	189		151		340		155		165		320
Specialty Pharmaceuticals	60		8		68		n/a		n/a		n/a
Net Sales	$	1,118	$	885	$	2,003	$	1,478	$	1,153	$	2,631

	Six Months Ended June 30,
	2020						2019
Businesses	U.S.		OUS		Total		U.S.		OUS		Total
Endoscopy	$	445	$	345	$	790	$	523	$	387	$	910
Urology and Pelvic Health	400		161		560		479		195		674
Cardiac Rhythm Management	463		325		788		576		413		989
Electrophysiology	53		72		126		75		89		164
Neuromodulation	250		63		313		304		86		390
Interventional Cardiology	486		642		1,128		614		753		1,367
Peripheral Interventions	413		319		732		311		320		631
Specialty Pharmaceuticals	97		12		109		n/a		n/a		n/a
Net Sales	$	2,607	$	1,939	$	4,546	$	2,881	$	2,243	$	5,124

	Three Months Ended June 30,				Six Months Ended June 30,
Geographic Regions	2020		2019		2020		2019
U.S.	$	1,058	$	1,478	$	2,510	$	2,881
EMEA (Europe, Middle East and Africa)	416		571		968		1,132
APAC (Asia-Pacific)	410		481		819		918
LACA (Latin America and Canada)	51		101		140		192
Medical Devices	1,935		2,631		4,437		5,124
U.S.	60		n/a		97		n/a
OUS	8		n/a		12		n/a
Specialty Pharmaceuticals	68		n/a		109		n/a
Net Sales	$	2,003	$	2,631	$	4,546	$	5,124
Emerging Markets (1)	$	255	$	318	$	522	$	614

(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 $393 million as of June 30, 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 $31 million in the second quarter and $66 million in the first six months 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.