Minnesota | 1-7707 | 41-0793183 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
710 Medtronic Parkway Minneapolis, Minnesota | 55432 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Exhibits. |
MEDTRONIC, INC. | ||||||
By | /s/ Gary L. Ellis | |||||
Date: August 20, 2013 | Gary L. Ellis | |||||
Senior Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1 | Press release dated August 20, 2013 |
NEWS RELEASE |
Contacts: | ||||
Cindy Resman | Jeff Warren | |||
Public Relations | Investor Relations | |||
+1-763-505-0291 | +1-763-505-2696 |
• | Revenue of $4.1 Billion Grew 3% at Constant Currency; 2% as Reported |
• | International Revenue Grew 9% at Constant Currency; 6% as Reported |
• | Non-GAAP Diluted EPS of $0.88; GAAP Diluted EPS of $0.93 |
FY13 | FY13 | FY13 | FY13 | FY13 | FY14 | FY14 | FY14 | FY14 | FY14 | |||||||||||||||||||||||||||||||
($ millions) | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | ||||||||||||||||||||||||||||||
REPORTED REVENUE : | ||||||||||||||||||||||||||||||||||||||||
CARDIAC RHYTHM DISEASE MANAGEMENT | $ | 1,193 | $ | 1,227 | $ | 1,171 | $ | 1,332 | $ | 4,922 | $ | 1,193 | $ | — | $ | — | $ | — | $ | 1,193 | ||||||||||||||||||||
Defibrillation Systems | 675 | 689 | 654 | 755 | 2,773 | 655 | — | — | — | 655 | ||||||||||||||||||||||||||||||
Pacing Systems | 463 | 480 | 459 | 505 | 1,906 | 474 | — | — | — | 474 | ||||||||||||||||||||||||||||||
AF & Other | 55 | 58 | 58 | 72 | 243 | 64 | — | — | — | 64 | ||||||||||||||||||||||||||||||
CORONARY | $ | 433 | $ | 429 | $ | 445 | $ | 465 | $ | 1,773 | $ | 435 | $ | — | $ | — | $ | — | $ | 435 | ||||||||||||||||||||
STRUCTURAL HEART | $ | 280 | $ | 271 | $ | 272 | $ | 310 | $ | 1,133 | $ | 313 | $ | — | $ | — | $ | — | $ | 313 | ||||||||||||||||||||
ENDOVASCULAR | $ | 209 | $ | 210 | $ | 212 | $ | 235 | $ | 867 | $ | 219 | $ | — | $ | — | $ | — | $ | 219 | ||||||||||||||||||||
CARDIAC & VASCULAR GROUP | $ | 2,115 | $ | 2,137 | $ | 2,100 | $ | 2,342 | $ | 8,695 | $ | 2,160 | $ | — | $ | — | $ | — | $ | 2,160 | ||||||||||||||||||||
SPINE | $ | 786 | $ | 782 | $ | 753 | $ | 811 | $ | 3,131 | $ | 765 | $ | — | $ | — | $ | — | $ | 765 | ||||||||||||||||||||
Core Spine | 645 | 649 | 639 | 671 | 2,603 | 641 | — | — | — | 641 | ||||||||||||||||||||||||||||||
BMP | 141 | 133 | 114 | 140 | 528 | 124 | — | — | — | 124 | ||||||||||||||||||||||||||||||
NEUROMODULATION | $ | 419 | $ | 454 | $ | 447 | $ | 492 | $ | 1,812 | $ | 428 | $ | — | $ | — | $ | — | $ | 428 | ||||||||||||||||||||
SURGICAL TECHNOLOGIES | $ | 324 | $ | 344 | $ | 350 | $ | 407 | $ | 1,426 | $ | 361 | $ | — | $ | — | $ | — | $ | 361 | ||||||||||||||||||||
RESTORATIVE THERAPIES GROUP | $ | 1,529 | $ | 1,580 | $ | 1,550 | $ | 1,710 | $ | 6,369 | $ | 1,554 | $ | — | $ | — | $ | — | $ | 1,554 | ||||||||||||||||||||
DIABETES GROUP | $ | 364 | $ | 378 | $ | 377 | $ | 407 | $ | 1,526 | $ | 369 | $ | — | $ | — | $ | — | $ | 369 | ||||||||||||||||||||
TOTAL | $ | 4,008 | $ | 4,095 | $ | 4,027 | $ | 4,459 | $ | 16,590 | $ | 4,083 | $ | — | $ | — | $ | — | $ | 4,083 | ||||||||||||||||||||
ADJUSTMENTS : | ||||||||||||||||||||||||||||||||||||||||
CURRENCY IMPACT (1) | $ | (55 | ) | $ | — | $ | — | $ | — | $ | (55 | ) | ||||||||||||||||||||||||||||
COMPARABLE OPERATIONS (1) | $ | 4,008 | $ | 4,095 | $ | 4,027 | $ | 4,459 | $ | 16,590 | $ | 4,138 | $ | — | $ | — | $ | — | $ | 4,138 |
(1) | Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. |
FY13 | FY13 | FY13 | FY13 | FY13 | FY14 | FY14 | FY14 | FY14 | FY14 | |||||||||||||||||||||||||||||||
($ millions) | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | ||||||||||||||||||||||||||||||
REPORTED REVENUE : | ||||||||||||||||||||||||||||||||||||||||
CARDIAC RHYTHM DISEASE MANAGEMENT | $ | 623 | $ | 645 | $ | 595 | $ | 653 | $ | 2,517 | $ | 603 | $ | — | $ | — | $ | — | $ | 603 | ||||||||||||||||||||
Defibrillation Systems | 399 | 411 | 383 | 425 | 1,618 | 383 | — | — | — | 383 | ||||||||||||||||||||||||||||||
Pacing Systems | 196 | 202 | 182 | 193 | 774 | 186 | — | — | — | 186 | ||||||||||||||||||||||||||||||
AF & Other | 28 | 32 | 30 | 35 | 125 | 34 | — | — | — | 34 | ||||||||||||||||||||||||||||||
CORONARY | $ | 144 | $ | 139 | $ | 134 | $ | 146 | $ | 563 | $ | 141 | $ | — | $ | — | $ | — | $ | 141 | ||||||||||||||||||||
STRUCTURAL HEART | $ | 102 | $ | 102 | $ | 96 | $ | 110 | $ | 410 | $ | 102 | $ | — | $ | — | $ | — | $ | 102 | ||||||||||||||||||||
ENDOVASCULAR | $ | 81 | $ | 83 | $ | 77 | $ | 89 | $ | 329 | $ | 80 | $ | — | $ | — | $ | — | $ | 80 | ||||||||||||||||||||
CARDIAC & VASCULAR GROUP | $ | 950 | $ | 969 | $ | 902 | $ | 998 | $ | 3,819 | $ | 926 | $ | — | $ | — | $ | — | $ | 926 | ||||||||||||||||||||
SPINE | $ | 558 | $ | 549 | $ | 522 | $ | 559 | $ | 2,190 | $ | 536 | $ | — | $ | — | $ | — | $ | 536 | ||||||||||||||||||||
Core Spine | 430 | 430 | 422 | 437 | 1,722 | 426 | — | — | — | 426 | ||||||||||||||||||||||||||||||
BMP | 128 | 119 | 100 | 122 | 468 | 110 | — | — | — | 110 | ||||||||||||||||||||||||||||||
NEUROMODULATION | $ | 295 | $ | 324 | $ | 309 | $ | 332 | $ | 1,259 | $ | 293 | $ | — | $ | — | $ | — | $ | 293 | ||||||||||||||||||||
SURGICAL TECHNOLOGIES | $ | 209 | $ | 218 | $ | 215 | $ | 249 | $ | 891 | $ | 233 | $ | — | $ | — | $ | — | $ | 233 | ||||||||||||||||||||
RESTORATIVE THERAPIES GROUP | $ | 1,062 | $ | 1,091 | $ | 1,046 | $ | 1,140 | $ | 4,340 | $ | 1,062 | $ | — | $ | — | $ | — | $ | 1,062 | ||||||||||||||||||||
DIABETES GROUP | $ | 215 | $ | 229 | $ | 223 | $ | 234 | $ | 900 | $ | 208 | $ | — | $ | — | $ | — | $ | 208 | ||||||||||||||||||||
TOTAL | $ | 2,227 | $ | 2,289 | $ | 2,171 | $ | 2,372 | $ | 9,059 | $ | 2,196 | $ | — | $ | — | $ | — | $ | 2,196 | ||||||||||||||||||||
ADJUSTMENTS : | ||||||||||||||||||||||||||||||||||||||||
CURRENCY IMPACT | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
COMPARABLE OPERATIONS | $ | 2,227 | $ | 2,289 | $ | 2,171 | $ | 2,372 | $ | 9,059 | $ | 2,196 | $ | — | $ | — | $ | — | $ | 2,196 |
FY13 | FY13 | FY13 | FY13 | FY13 | FY14 | FY14 | FY14 | FY14 | FY14 | |||||||||||||||||||||||||||||||
($ millions) | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | QTR 1 | QTR 2 | QTR 3 | QTR 4 | Total | ||||||||||||||||||||||||||||||
REPORTED REVENUE : | ||||||||||||||||||||||||||||||||||||||||
CARDIAC RHYTHM DISEASE MANAGEMENT | $ | 570 | $ | 582 | $ | 576 | $ | 679 | $ | 2,405 | $ | 590 | $ | — | $ | — | $ | — | $ | 590 | ||||||||||||||||||||
Defibrillation Systems | 276 | 278 | 271 | 330 | 1,155 | 272 | — | — | — | 272 | ||||||||||||||||||||||||||||||
Pacing Systems | 267 | 278 | 277 | 312 | 1,132 | 288 | — | — | — | 288 | ||||||||||||||||||||||||||||||
AF & Other | 27 | 26 | 28 | 37 | 118 | 30 | — | — | — | 30 | ||||||||||||||||||||||||||||||
CORONARY | $ | 289 | $ | 290 | $ | 311 | $ | 319 | $ | 1,210 | $ | 294 | $ | — | $ | — | $ | — | $ | 294 | ||||||||||||||||||||
STRUCTURAL HEART | $ | 178 | $ | 169 | $ | 176 | $ | 200 | $ | 723 | $ | 211 | $ | — | $ | — | $ | — | $ | 211 | ||||||||||||||||||||
ENDOVASCULAR | $ | 128 | $ | 127 | $ | 135 | $ | 146 | $ | 538 | $ | 139 | $ | — | $ | — | $ | — | $ | 139 | ||||||||||||||||||||
CARDIAC & VASCULAR GROUP | $ | 1,165 | $ | 1,168 | $ | 1,198 | $ | 1,344 | $ | 4,876 | $ | 1,234 | $ | — | $ | — | $ | — | $ | 1,234 | ||||||||||||||||||||
SPINE | $ | 228 | $ | 233 | $ | 231 | $ | 252 | $ | 941 | $ | 229 | $ | — | $ | — | $ | — | $ | 229 | ||||||||||||||||||||
Core Spine | 215 | 219 | 217 | 234 | 881 | 215 | — | — | — | 215 | ||||||||||||||||||||||||||||||
BMP | 13 | 14 | 14 | 18 | 60 | 14 | — | — | — | 14 | ||||||||||||||||||||||||||||||
NEUROMODULATION | $ | 124 | $ | 130 | $ | 138 | $ | 160 | $ | 553 | $ | 135 | $ | — | $ | — | $ | — | $ | 135 | ||||||||||||||||||||
SURGICAL TECHNOLOGIES | $ | 115 | $ | 126 | $ | 135 | $ | 158 | $ | 535 | $ | 128 | $ | — | $ | — | $ | — | $ | 128 | ||||||||||||||||||||
RESTORATIVE THERAPIES GROUP | $ | 467 | $ | 489 | $ | 504 | $ | 570 | $ | 2,029 | $ | 492 | $ | — | $ | — | $ | — | $ | 492 | ||||||||||||||||||||
DIABETES GROUP | $ | 149 | $ | 149 | $ | 154 | $ | 173 | $ | 626 | $ | 161 | $ | — | $ | — | $ | — | $ | 161 | ||||||||||||||||||||
TOTAL | $ | 1,781 | $ | 1,806 | $ | 1,856 | $ | 2,087 | $ | 7,531 | $ | 1,887 | $ | — | $ | — | $ | — | $ | 1,887 | ||||||||||||||||||||
ADJUSTMENTS : | ||||||||||||||||||||||||||||||||||||||||
CURRENCY IMPACT (1) | $ | (55 | ) | $ | — | $ | — | $ | — | $ | (55 | ) | ||||||||||||||||||||||||||||
COMPARABLE OPERATIONS (1) | $ | 1,781 | $ | 1,806 | $ | 1,856 | $ | 2,087 | $ | 7,531 | $ | 1,942 | $ | — | $ | — | $ | — | $ | 1,942 |
(1) | Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. |
Three months ended | ||||||||
July 26, 2013 | July 27, 2012 | |||||||
(in millions, except per share data) | ||||||||
Net sales | $ | 4,083 | $ | 4,008 | ||||
Costs and expenses: | ||||||||
Cost of products sold | 1,022 | 973 | ||||||
Research and development expense | 360 | 385 | ||||||
Selling, general, and administrative expense | 1,416 | 1,405 | ||||||
Special charges | 40 | — | ||||||
Restructuring charges | 18 | — | ||||||
Acquisition-related items | (96 | ) | 5 | |||||
Amortization of intangible assets | 86 | 80 | ||||||
Other expense, net | 44 | 39 | ||||||
Interest expense, net | 40 | 33 | ||||||
Total costs and expenses | 2,930 | 2,920 | ||||||
Earnings before income taxes | 1,153 | 1,088 | ||||||
Provision for income taxes | 200 | 224 | ||||||
Net earnings | $ | 953 | $ | 864 | ||||
Basic earnings per share | $ | 0.94 | $ | 0.84 | ||||
Diluted earnings per share | $ | 0.93 | $ | 0.83 | ||||
Basic weighted average shares outstanding | 1,009.7 | 1,029.8 | ||||||
Diluted weighted average shares outstanding | 1,021.2 | 1,037.1 | ||||||
Cash dividends declared per common share | $ | 0.2800 | $ | 0.2600 |
Three months ended | ||||||||||||||
July 26, 2013 | July 27, 2012 | Percentage Change | ||||||||||||
Net earnings, as reported | $ | 953 | $ | 864 | 10% | |||||||||
Special charges | 26 | (a) | — | |||||||||||
Restructuring charges | 15 | (b) | — | |||||||||||
Acquisition-related items | (96 | ) | (c) | 5 | (d) | |||||||||
Impact of authoritative convertible debt guidance on interest expense, net | — | 14 | (e) | |||||||||||
Non-GAAP net earnings | $ | 898 | $ | 883 | 2% |
Three months ended | ||||||||||||||
July 26, 2013 | July 27, 2012 | Percentage Change | ||||||||||||
Diluted EPS, as reported | $ | 0.93 | $ | 0.83 | 12% | |||||||||
Special charges | 0.03 | (a) | — | |||||||||||
Restructuring charges | 0.01 | (b) | — | |||||||||||
Acquisition-related items | (0.09 | ) | (c) | — | (d) | |||||||||
Impact of authoritative convertible debt guidance on interest expense, net | — | 0.01 | (e) | |||||||||||
Non-GAAP diluted EPS | $ | 0.88 | $ | 0.85 | (1) | 4% |
(1) | The data in this schedule has been intentionally rounded to the nearest $0.01, and therefore, may not sum. |
(a) | The $26 million ($0.03 per share) special charge represents an after-tax charitable cash donation ($40 million pre-tax) made to the Medtronic Foundation. In addition to disclosing special charges that are determined in accordance with U.S. generally accepted accounting principles (U.S. GAAP), Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding this special charge. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates this special charge when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial measure may not be the same or similar to measures presented by other companies. |
(b) | The $15 million ($0.01 per share) after-tax ($18 million pre-tax) restructuring charge was a continuation of our fourth quarter fiscal year 2013 restructuring initiative and consisted primarily of contract termination fees. In addition to disclosing restructuring charges that are determined in accordance with U.S. GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding this restructuring charge. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates this restructuring charge when evaluating the operating performance of the Company. Investors should |
(c) | The $96 million ($0.09 per share) after-tax ($96 million pre-tax) of net income related to acquisition-related items primarily includes income related to the change in fair value of contingent consideration payments associated with acquisitions subsequent to April 29, 2009. The change in fair value of contingent consideration payments is primarily related to adjustments in Ardian contingent consideration, which are based on annual revenue growth through fiscal year 2015, due to slower commercial ramp in Europe and extended U.S. regulatory process. In addition to disclosing acquisition-related items that are determined in accordance with U.S. GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding these acquisition-related items. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates these acquisition-related items when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial measure may not be the same or similar to measures presented by other companies. |
(d) | The $5 million (less than $0.01 per share) after-tax ($5 million pre-tax) acquisition-related items include charges related to the change in fair value of contingent consideration payments associated with acquisitions subsequent to April 29, 2009. In addition to disclosing certain acquisition-related items that are determined in accordance with U.S. GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding these acquisition-related items. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates these acquisition-related items when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial measure may not be the same or similar to measures presented by other companies. |
(e) | The Financial Accounting Standards Board (FASB) authoritative guidance for convertible debt accounting resulted in an after-tax impact to net earnings of $14 million ($0.01 per share) for the three months ended July 27, 2012. The pre-tax impact to interest expense, net was $23 million. This convertible debt matured in April 2013. In addition to disclosing the financial statement impact of this authoritative guidance that is determined in accordance with U.S. GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding this authoritative guidance. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates the impact of this authoritative guidance when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial measure may not be the same or similar to measures presented by other companies. |
Three months ended | Currency Impact | Constant | |||||||||||||||||||
July 26, | July 27, | Reported | on Growth (a) | Currency | |||||||||||||||||
2013 | 2012 | Growth | Dollar | Percentage | Growth (a) | ||||||||||||||||
Reported Revenue: | |||||||||||||||||||||
Defibrillation Systems | $ | 655 | $ | 675 | (3 | )% | $ | (6 | ) | (1 | )% | (2 | )% | ||||||||
Pacing Systems | 474 | 463 | 2 | (16 | ) | (4 | ) | 6 | |||||||||||||
AF & Other | 64 | 55 | 16 | (1 | ) | (2 | ) | 18 | |||||||||||||
Cardiac Rhythm Disease Management | 1,193 | 1,193 | — | (23 | ) | (2 | ) | 2 | |||||||||||||
Coronary | 435 | 433 | — | (9 | ) | (3 | ) | 3 | |||||||||||||
Structural Heart | 313 | 280 | 12 | (2 | ) | (1 | ) | 13 | |||||||||||||
Endovascular | 219 | 209 | 5 | (5 | ) | (2 | ) | 7 | |||||||||||||
Cardiac & Vascular Group | 2,160 | 2,115 | 2 | (39 | ) | (2 | ) | 4 | |||||||||||||
Core Spine | 641 | 645 | (1 | ) | (9 | ) | (2 | ) | 1 | ||||||||||||
BMP | 124 | 141 | (12 | ) | (1 | ) | (1 | ) | (11 | ) | |||||||||||
Spine | 765 | 786 | (3 | ) | (10 | ) | (2 | ) | (1 | ) | |||||||||||
Neuromodulation | 428 | 419 | 2 | (2 | ) | (1 | ) | 3 | |||||||||||||
Surgical Technologies | 361 | 324 | 11 | (4 | ) | (2 | ) | 13 | |||||||||||||
Restorative Therapies Group | 1,554 | 1,529 | 2 | (16 | ) | (1 | ) | 3 | |||||||||||||
Diabetes Group | 369 | 364 | 1 | — | — | 1 | |||||||||||||||
Total | $ | 4,083 | $ | 4,008 | 2 | % | $ | (55 | ) | (1 | )% | 3 | % |
(a) | Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. |
Three months ended | Currency Impact | Constant | |||||||||||||||||||
July 26, | July 27, | Reported | on Growth (a) | Currency | |||||||||||||||||
2013 | 2012 | Growth | Dollar | Percentage | Growth (a) | ||||||||||||||||
Reported Revenue: | |||||||||||||||||||||
Defibrillation Systems | $ | 272 | $ | 276 | (1 | )% | $ | (6 | ) | (2 | )% | 1 | % | ||||||||
Pacing Systems | 288 | 267 | 8 | (16 | ) | (6 | ) | 14 | |||||||||||||
AF & Other | 30 | 27 | 11 | (1 | ) | (4 | ) | 15 | |||||||||||||
Cardiac Rhythm Disease Management | 590 | 570 | 4 | (23 | ) | (4 | ) | 8 | |||||||||||||
Coronary | 294 | 289 | 2 | (9 | ) | (3 | ) | 5 | |||||||||||||
Structural Heart | 211 | 178 | 19 | (2 | ) | (1 | ) | 20 | |||||||||||||
Endovascular | 139 | 128 | 9 | (5 | ) | (4 | ) | 13 | |||||||||||||
Cardiac & Vascular Group | 1,234 | 1,165 | 6 | (39 | ) | (3 | ) | 9 | |||||||||||||
Core Spine | 215 | 215 | — | (9 | ) | (4 | ) | 4 | |||||||||||||
BMP | 14 | 13 | 8 | (1 | ) | (7 | ) | 15 | |||||||||||||
Spine | 229 | 228 | — | (10 | ) | (5 | ) | 5 | |||||||||||||
Neuromodulation | 135 | 124 | 9 | (2 | ) | (1 | ) | 10 | |||||||||||||
Surgical Technologies | 128 | 115 | 11 | (4 | ) | (4 | ) | 15 | |||||||||||||
Restorative Therapies Group | 492 | 467 | 5 | (16 | ) | (4 | ) | 9 | |||||||||||||
Diabetes Group | 161 | 149 | 8 | — | — | 8 | |||||||||||||||
Total | $ | 1,887 | $ | 1,781 | 6 | % | $ | (55 | ) | (3 | )% | 9 | % |
(a) | Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. |
Three months ended | Currency Impact | Constant | |||||||||||||||||||
July 26, | July 27, | Reported | on Growth (a) | Currency | |||||||||||||||||
2013 | 2012 | Growth | Dollar | Percentage | Growth (a) | ||||||||||||||||
Emerging Market Revenue (b) | $ | 504 | $ | 438 | 15 | % | $ | (1 | ) | — | % | 15 | % |
(a) | Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with U.S. GAAP. |
(b) | Emerging Market Revenue includes revenues from Asia Pacific (except Australia, Japan, Korea, and New Zealand), Central and Eastern Europe, Greater China, Latin America, the Middle East and Africa, and South Asia. |
July 26, 2013 | April 26, 2013 | |||||||
(in millions, except per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 755 | $ | 860 | ||||
Investments | 10,576 | 10,211 | ||||||
Accounts receivable, less allowances of $101 and $98, respectively | 3,627 | 3,727 | ||||||
Inventories | 1,778 | 1,712 | ||||||
Tax assets | 576 | 539 | ||||||
Prepaid expenses and other current assets | 705 | 744 | ||||||
Total current assets | 18,017 | 17,793 | ||||||
Property, plant, and equipment | 6,192 | 6,152 | ||||||
Accumulated depreciation | (3,748 | ) | (3,662 | ) | ||||
Property, plant, and equipment, net | 2,444 | 2,490 | ||||||
Goodwill | 10,333 | 10,329 | ||||||
Other intangible assets, net | 2,620 | 2,673 | ||||||
Long-term tax assets | 188 | 232 | ||||||
Other assets | 1,282 | 1,324 | ||||||
Total assets | $ | 34,884 | $ | 34,841 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | 1,543 | $ | 910 | ||||
Accounts payable | 554 | 622 | ||||||
Accrued compensation | 712 | 1,011 | ||||||
Accrued income taxes | 146 | 88 | ||||||
Deferred tax liabilities | 15 | 16 | ||||||
Other accrued expenses | 1,270 | 1,244 | ||||||
Total current liabilities | 4,240 | 3,891 | ||||||
Long-term debt | 9,637 | 9,741 | ||||||
Long-term accrued compensation and retirement benefits | 774 | 752 | ||||||
Long-term accrued income taxes | 1,186 | 1,168 | ||||||
Long-term deferred tax liabilities | 343 | 340 | ||||||
Other long-term liabilities | 185 | 278 | ||||||
Total liabilities | 16,365 | 16,170 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock— par value $1.00 | — | — | ||||||
Common stock— par value $0.10 | 100 | 102 | ||||||
Retained earnings | 18,995 | 19,061 | ||||||
Accumulated other comprehensive loss | (576 | ) | (492 | ) | ||||
Total shareholders’ equity | 18,519 | 18,671 | ||||||
Total liabilities and shareholders’ equity | $ | 34,884 | $ | 34,841 |
Three months ended | ||||||||
July 26, 2013 | July 27, 2012 | |||||||
(in millions) | ||||||||
Operating Activities: | ||||||||
Net earnings | $ | 953 | $ | 864 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 208 | 197 | ||||||
Amortization of debt discount and issuance costs | 2 | 23 | ||||||
Acquisition-related items | (96 | ) | 5 | |||||
Provision for doubtful accounts | 14 | 14 | ||||||
Deferred income taxes | 30 | (16 | ) | |||||
Stock-based compensation | 31 | 36 | ||||||
Change in operating assets and liabilities, net of effect of acquisitions: | ||||||||
Accounts receivable, net | 85 | 214 | ||||||
Inventories | (95 | ) | (61 | ) | ||||
Accounts payable and accrued liabilities | (344 | ) | (122 | ) | ||||
Other operating assets and liabilities | 181 | 129 | ||||||
Certain litigation payments | — | (6 | ) | |||||
Net cash provided by operating activities | 969 | 1,277 | ||||||
Investing Activities: | ||||||||
Acquisitions, net of cash acquired | (17 | ) | (23 | ) | ||||
Additions to property, plant, and equipment | (78 | ) | (103 | ) | ||||
Purchases of marketable securities | (2,757 | ) | (2,740 | ) | ||||
Sales and maturities of marketable securities | 2,195 | 1,895 | ||||||
Other investing activities, net | (9 | ) | (5 | ) | ||||
Net cash used in investing activities | (666 | ) | (976 | ) | ||||
Financing Activities: | ||||||||
Acquisition-related contingent consideration | (1 | ) | (15 | ) | ||||
Change in short-term borrowings, net | 761 | (284 | ) | |||||
Repayment of short-term borrowings (maturities greater than 90 days) | (125 | ) | (200 | ) | ||||
Proceeds from short-term borrowings (maturities greater than 90 days) | — | 575 | ||||||
Payments on long-term debt | (4 | ) | (6 | ) | ||||
Dividends to shareholders | (281 | ) | (267 | ) | ||||
Issuance of common stock | 568 | 24 | ||||||
Repurchase of common stock | (1,340 | ) | (470 | ) | ||||
Net cash used in financing activities | (422 | ) | (643 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 14 | (76 | ) | |||||
Net change in cash and cash equivalents | (105 | ) | (418 | ) | ||||
Cash and cash equivalents at beginning of period | 860 | 1,172 | ||||||
Cash and cash equivalents at end of period | $ | 755 | $ | 754 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for: | ||||||||
Income taxes | $ | 70 | $ | 109 | ||||
Interest | 27 | 22 |
O:EK#TC-X**BD!A'Q!,I%.JO,53X1]SQ-/%8Y%?38@S),8UM\:QL:"-OA;,6-.Y5BG[XR+)VY5%\];F[E2IF`
M"AGU9Q?*LI5;,HM](:RI50#YI=(Z'F@ZA2MWI[02@>GMF/-VSCK]+[]C&-.W
M+'WZSY8"L/H)J6O2>D$@R7N(W:]@2)<(8WY^\P3> ^>&=J(I)I^TV24`"E`P]VIO5WK'^B=:K%+;;D7*]JIIU+SI)
M0ZEQ.XMI0`=-JM0%2/. V5ALK^+U;5364=2
MIV;1"I*(1QD3IY>$65^G/#[DQ_-V,AIG&**JIDM>82F)JG+O$_V0PSG'X*>5
MW'&Z6"9P-1YOD#@E9T\D:Z^IA$'^0:E$*?YC>"MM2(8DB]7BTQ!(CQ@5R1RF
MF!C%2-N&F3@7U!XAD5`S;.54T&K5J@F99=RY<*G(B@W21(8QSF$I2E#<1VUI][JO32
MTRXIQPRD.(,Y=D;O>$!Q;RDI:0F85P$I<3&ER
;TU1B3[[=52(*264D33M(4`9
M$F1D)B0F)]L=:UW#)\2JADS++E/4FQFFRI"DIO#;S;00`!N0O=NF>.FWWQ87Z9\C
MN3>15&*E17;7&ENF?%*D;92_S0,?RT`'_P"DO,8Q=RB.8I,!$-O_`(2#W'^'
MJ.^F_P!%'$4_2VSN.![_`,,N6T?[L*SK"WZ_4V[():'^I3\1\?[&'\>#3D-%
M<5<<^2'D%-,PDDL9X1QS,,8P1!()B?7L5CC:Y#&-OLFE+3KYNBH8/X2',8/3
M2H^H.QOY;><:QAIU27GJYP*41RDW,GV`CQB?]!KXSB]IR'(GD;D,T:-H!XF;
MFGW'V0%K/6>LM
M,D4PG-:R0GPG.4SR[^$$76_+C<^8ZX,:RG,
M80DJ]/LWS1S?V-SEBQ%;%I]-,(J34.[KR%B43D5X[Z1$6C=?9=4HJ`5/N,"R
M'U0=/5L&J+=8'TD'9(:SF)3E+G#2/TVYNAX4H52EA8/FGH")'A[)>V#&