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Revenue Recognition
 3 Months Ended
Mar. 31, 2025
Revenue Recognition [Abstract]  
Revenue Recognition REVENUE RECOGNITION
Our policies for recognizing sales have not changed from those
described in our Annual Report on Form 10-K for 2024.
We disaggregate our net sales by business and geographic
location for each of our segments as we believe it best depicts
how the nature, amount, timing and certainty of our net sales and
cash flows are affected by economic factors.
In the first quarter 2025 we changed the name of our
Neurovascular business to Vascular due the acquisition of Inari
Medical, Inc. (Inari).
In the fourth quarter 2024 we reorganized our Spine business to
align with certain updates to our internal reporting structure. The
spine enabling technologies portfolio (Enabling Technologies)
was reclassified to Other Orthopaedics and Spine, the
interventional spine (IVS) portfolio was reclassified to Neuro
Cranial and the remaining Spine business was renamed to Spinal
Implants. In addition we changed the name of our “Orthopaedics
and Spine” operating segment to “Orthopaedics.” Neuro Cranial
includes sales related to IVS of $118 and $98 for the three
months 2025 and 2024. Other Orthopaedics includes sales
related to Enabling Technologies of $29 and $31 for the three
months 2025 and 2024. We have reflected these changes in all
historical periods presented.
Net Sales by Business
Three Months
2025
2024
MedSurg and Neurotechnology:
Instruments
$730
$667
Endoscopy
867
778
Medical
945
864
Vascular
406
310
Neuro Cranial
563
478
$3,511
$3,097
Orthopaedics:
Knees
$639
$588
Hips
443
393
Trauma and Extremities
945
830
Spinal Implants
166
171
Other
162
164
$2,355
$2,146
Total
$5,866
$5,243
Net Sales by Geography
Three Months 2025
Three Months 2024
United
States
International
United
States
International
MedSurg and Neurotechnology:
Instruments
$587
$143
$532
$135
Endoscopy
710
157
636
142
Medical
802
143
715
149
Vascular
203
203
121
189
Neuro Cranial
465
98
390
88
$2,767
$744
$2,394
$703
Orthopaedics:
Knees
$464
$175
$429
$159
Hips
269
174
251
142
Trauma and Extremities
713
232
611
219
Spinal Implants
118
48
117
54
Other
109
53
112
52
$1,673
$682
$1,520
$626
Total
$4,440
$1,426
$3,914
$1,329
Costs to Obtain or Fulfill a Contract
We typically do not incur costs to fulfill a contract before a
product or service is provided to a customer due to the nature of
our products and services. Our costs to obtain contracts are
typically in the form of sales commissions paid to employees or
third-party agents. Certain sales commissions paid to employees
prior to recognition of sales are recorded as deferred contract
costs. We expense sales commissions associated with obtaining
a contract at the time of the sale or as incurred as the
amortization period is generally less than one year. These costs
have been presented within selling, general and administrative
expenses. On March 31, 2025 and December 31, 2024 deferred
contracts costs recorded in our Consolidated Balance Sheets
were not significant.
Contract Assets and Liabilities
Our contract assets primarily relate to conditional rights to
consideration for work completed but not billed at the reporting
date. On March 31, 2025 and December 31, 2024 contract
assets recorded in our Consolidated Balance Sheets were not
significant.
Our contract liabilities arise as a result of consideration received
from customers at inception of contracts for certain businesses or
where the timing of billing for services precedes satisfaction of
our performance obligations. This occurs primarily when payment
is received upfront for certain multi-period extended service
contracts. Our contract liabilities of $1,028 and $978 on
March 31, 2025 and December 31, 2024 are classified within
accrued expenses and other liabilities and other noncurrent
liabilities in our Consolidated Balance Sheets based on the timing
of when we expect to complete our performance obligations.
Changes in contract liabilities during the three months 2025 were
as follows:
March 31
2025
Beginning contract liabilities
$978
Revenue recognized from beginning of year contract liabilities
(199)
Net advance consideration received during the period
249
Ending contract liabilities
$1,028
Transfers and Servicing of Financial Assets
We sell certain customer lease agreements and the related
leased assets to third-party financial institutions to accelerate our
cash collection cycle. The lease receivables are sold without
recourse and are derecognized from our Consolidated Balance
Sheets at the time of sale. Under the terms of our arrangements,
we collect lease payments on behalf of the financial institutions
but maintain no other form of continuing involvement. Sales of
these lease agreements are classified as operating activities in
our Consolidated Statements of Cash Flows. Fees earned for our
servicing activities are immaterial. Revenue related to customer
lease agreements sold under these arrangements represented
less than 4% of our total revenue for the three months 2025 and
2024.