Balance

Beginning

Balance at

(amounts in thousands)

of Year

Additions

Deletions

Adjustments

End of Year

Year ended December 31, 2015

         Allowance for doubtful accounts (1)

$

1,180

$

2,680

$

2,196

$

—

$

1,664

         Allowance for sales returns (2)

173

4,918

4,725

—

366

         Allowance for rental revenue adjustments (3)

2,392

8,543

6,820

—

4,115

         Allowance for inventory reserves (4)

141

89

102

—

128

         Allowance for rental asset loss (5)

832

498

480

—

850

Year ended December 31, 2014

         Allowance for doubtful accounts (1)

$

1,141

$

1,692

$

1,404

$

(249

)

$

1,180

         Allowance for sales returns (2)

134

3,451

3,412

—

173

         Allowance for rental revenue adjustments (3)

2,115

8,267

8,239

249

2,392

         Allowance for inventory reserves (4)

100

201

160

—

141

         Allowance for rental asset loss (5)

157

1,443

768

—

832

Year ended December 31, 2013

         Allowance for doubtful accounts (1)

$

742

$

2,045

$

1,284

$

(362

)

$

1,141

         Allowance for sales returns (2)

64

1,770

1,700

—

134

         Allowance for rental revenue adjustments (3)

1,255

6,613

6,115

362

2,115

         Allowance for inventory reserves (4)

98

78

76

—

100

         Allowance for rental asset loss (5)

77

292

212

—

157

(1)

The additions to the allowance for doubtful accounts represent the estimates of bad debt expense based upon factors for which the company evaluates the collectability of accounts receivable, with actual recoveries netted into additions. Deductions are the actual write-offs of the receivables.

(2)

The additions to the allowance for sales returns represent estimates of returns based upon historical returns experience, primarily for the direct-to-consumer sales channel. Deductions are the actual returns of products.

(3)

The additions to the allowance for rental revenue adjustments represent estimates of revenue adjustments that will need to be recorded for billing errors on rental revenue, net of recoveries. Deductions are the actual adjustments and write-offs of the rental receivables for such revenue adjustments.

(4)

The inventory allowances are adjusted quarterly for potentially excess, obsolete, slow-moving, lost or impaired items.

(5)

The allowance for rental asset loss is based on estimated losses of the Company’s rental assets that will potentially be lost, stolen or unrecoverable from the patient.