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Net revenues | 6 Months Ended
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Jul. 01, 2018
Deferred Revenue Disclosure [Abstract] |
Net revenues | Net revenues The Company primarily generates revenue from the sale of medical devices including single use disposable devices and, to a lesser extent, reusable devices, instruments and capital equipment. Revenue is recognized when obligations under the terms of a contract with the Company’s customer are satisfied; this occurs upon the transfer of control of the products. Generally, transfer of control to the customer occurs at the point in time when the Company’s products are shipped from the manufacturing or distribution facility. For the Company’s OEM segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no alternative use and the Company has an enforceable right to payment for performance completed to date. The Company markets and sells products through its direct sales force and distributors to customers within the following end markets: (1) hospitals and healthcare providers; (2) other medical device manufacturers; and (3) home care providers such as pharmacies, which comprised 87%, 9% and 4% of consolidated net revenues, respectively, for the six months ended July 1, 2018. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. With respect to the custom products sold in the OEM segment, revenue is measured using the units produced output method. Payment is generally due 30 days from the date of invoice. The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying ASC 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service; (5) the Company classifies shipping and handling costs within cost of goods sold; and (6) with respect to the OEM segment, the Company has applied the practical expedient to exclude disclosure of remaining performance obligations as the contracts typically have a term of one year or less. The amount of consideration the Company receives and revenue the Company recognizes varies as a result of changes in customer sales incentives, including discounts and rebates, and returns offered to customers. The estimate of revenue is adjusted upon the earlier of the following events: (i) the most likely amount of consideration expected to be received changes or (ii) the consideration becomes fixed. The Company’s policy is to accept returns only in cases in which the product is defective and covered under the Company’s standard warranty provisions. When the Company gives customers the right to return products, the Company estimates the expected returns based on an analysis of historical experience. The reserve for returns and allowances was $4.2 million and $4.5 million as of July 1, 2018 and July 2, 2017, respectively. In estimating customer rebates, the Company considers the lag time between the point of sale and the payment of the customer’s rebate claim, customer-specific trend analyses, contractual commitments, including stated rebate rates, historical experience with respect to specific customers and other relevant information as the Company has a history of providing similar rebates on similar products to similar customers. The reserve for customer incentive programs, including customer rebates, was $13.6 million and $10.7 million at July 1, 2018 and July 2, 2017, respectively. The Company expects the amounts subject to the reserve as of July 1, 2018 to be paid within 90 days subsequent to period-end. The following table disaggregates revenue by global product category for the three and six months ended July 1, 2018 and July 2, 2017.
| Three Months Ended |  | Six Months Ended
| July 1, 2018 |  | July 2, 2017 |  | July 1, 2018 |  | July 2, 2017
Revenue by global product category (1) (2) | (Dollars in thousands)
Vascular access | $ | 140,604 |  |  | $ | 133,323 |  |  | $ | 284,845 |  |  | $ | 263,345 |
Anesthesia | 89,810 |  |  | 85,938 |  |  | 175,229 |  |  | 167,143 |
Interventional | 77,179 |  |  | 68,425 |  |  | 148,858 |  |  | 112,391 |
Surgical | 90,489 |  |  | 90,740 |  |  | 176,139 |  |  | 178,044 |
Interventional urology | 47,674 |  |  | — |  |  | 89,974 |  |  | — |
OEM | 52,594 |  |  | 45,132 |  |  | 98,448 |  |  | 88,478 |
Other (3) | 111,516 |  |  | 105,055 |  |  | 223,603 |  |  | 207,093 |
Net revenues | $ | 609,866 |  |  | $ | 528,613 |  |  | $ | 1,197,096 |  |  | $ | 1,016,494 |
(1) | The product categories listed above are presented on a global basis; in contrast, the Company’s North American reportable segments generally are defined largely based on the particular products sold by the segments, and its non-North American reportable segments are defined exclusively based on the geographic location of segment operations (with the exception of the Original Equipment and Development Services ("OEM") reportable segment, which operates globally). The Company’s EMEA and Asia reportable segments, as well as its Latin America operating segment, include net revenues from each of the product categories listed above.
(2) | The methodology used to determine the product revenues included within certain of the product categories listed in the table above differs from the methodology used to recognize revenues in our reportable segments, including the similarly named North American reportable segments. The differences are due to the fact that segment classification generally is determined based on the call point within the customer's organization from which the purchase order resulting in the sales originated, while the classification of products within the product categories listed in the table above includes all sales of products within the listed product category, regardless of the call point within the customer's organization from which the sales originated.
(3) Other revenues in the table above comprise the Company’s respiratory, urology and cardiac product categories.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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