Balance

Beginning

Balance at

(amounts in thousands)

of Year

Additions

Deletions

Adjustments

End of Year

Year ended December 31, 2016

Allowance for doubtful accounts (1)

$

1,664

$

3,580

$

2,575

$

(800

)

$

1,869

Allowance for sales returns (2)

366

7,502

7,283

—

585

Allowance for rental revenue adjustments (3)

4,115

10,777

9,614

800

6,078

Allowance for inventory reserves (4)

128

133

70

—

191

Allowance for rental asset loss (5)

850

455

580

—

725

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

(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 adjustments 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.