Revenue

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

NOTE P – REVENUE

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

	Year Ended December 31,
	2021						2020						2019
Businesses	U.S.		OUS		Total		U.S.		OUS		Total		U.S.		OUS		Total
Endoscopy	$	1,222	$	919	$	2,141	$	1,000	$	780	$	1,780	$	1,080	$	814	$	1,894
Urology and Pelvic Health	1,120		463		1,583		918		368		1,286		1,005		408		1,413
Cardiac Rhythm Management	1,214		805		2,019		992		712		1,704		1,135		804		1,939
Electrophysiology	128		237		365		118		169		287		148		180		329
Neuromodulation	713		196		909		610		151		761		695		178		873
Interventional Cardiology	1,508		1,530		3,038		981		1,317		2,299		1,293		1,522		2,816
Peripheral Interventions	996		824		1,820		888		689		1,577		741		651		1,392
Specialty Pharmaceuticals	10		4		13		193		27		219		70		11		81
Net Sales	$	6,911	$	4,978	$	11,888	$	5,701	$	4,212	$	9,913	$	6,167	$	4,569	$	10,735

On March 1, 2021, we completed the divestiture of the Specialty Pharmaceuticals business. Our consolidated net sales and income (loss) before income taxes include Specialty Pharmaceuticals up to the date of the closing of the transaction.

	Year Ended December 31,
Geographic Regions	2021		2020		2019
U.S.	$	6,901	$	5,508	$	6,097
EMEA (Europe, Middle East and Africa)	2,518		2,097		2,264
APAC (Asia-Pacific)	2,070		1,781		1,898
LACA (Latin America and Canada)	386		307		395
Medical Devices	11,875		9,694		10,654
U.S.	10		193		70
International	4		27		11
Specialty Pharmaceuticals	13		219		81
Net Sales	$	11,888	$	9,913	$	10,735
Emerging Markets(1)	$	1,429	$	1,138	$	1,282

(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 countries, and effective January 1, 2021, modified our list to include the following countries: Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia, Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Taiwan, Thailand, Turkey and Vietnam. We have revised prior period amounts to conform to the current year's presentation.

Contract liabilities are classified within Other current liabilities and Other long-term liabilities in our accompanying consolidated balance sheets. Our deferred revenue balance was $484 million as of December 31, 2021 and $395 million as of December 31, 2020. Our contractual liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiac Rhythm Management (CRM) business, for which revenue is recognized over the average service period based on device and patient longevity. Our contractual liabilities also include deferred revenue related to the LUX-Dx™ Insertable Cardiac Monitor (ICM) system, also within our CRM business, for which revenue is recognized over the average service period based on device longevity and usage. We recognized revenue of $159 million in 2021 that was included in the above contract liability balance as of December 31, 2020. 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.

We capitalize sales force commissions related to contracts with customers when the associated revenue is expected to be earned over a period that exceeds one year. Deferred commissions are primarily related to the sale of devices enabled with our LATITUDE™ Patient Management System. We have elected to expense commission costs when incurred for contracts with an expected duration of one year or less. Capitalized commission fees are amortized over the period the associated products or services are transferred. Similarly, we capitalize certain recoverable costs related to the delivery of the LATITUDE™ Remote Monitoring Service. These fulfillment costs are amortized over the average service period.

We received FDA approval in mid-2020 and began the U.S. launch of our next generation WATCHMAN FLX™ Left Atrial Appendage Closure (LAAC) Device within our Interventional Cardiology business. The next generation WATCHMAN FLX™ Device is indicated to reduce the risk of stroke in patients with non-valvular atrial fibrillation (NVAF) who need an alternative to oral anticoagulation therapy by permanently closing off the left atrial appendage. In 2020, we recorded $179 million in revenue reserves primarily related to our conversion to a consignment commercial model for our LAAC franchise with the launch of our next-generation WATCHMAN FLX™ Device in the U.S. In connection with the conversion, we repurchased customer-owned inventory and will recognize revenue for consigned units as they are consumed by customers.

Refer to Note A – Significant Accounting Policies for additional information on our accounting policies relating to revenue recognition.