Exhibit 99.1
NEWS RELEASE |
Contacts: | ||||
Fernando Vivanco | Ryan Weispfenning | |||
Public Relations | Investor Relations | |||
+1-763-505-3780 | +1-763-505-4626 |
FOR IMMEDIATE RELEASE
MEDTRONIC REPORTS THIRD QUARTER FINANCIAL RESULTS
▪ | Revenue of $7.5 Billion Increased 2.4% Reported; Increased 4.4% Organic |
▪ | GAAP Diluted EPS of $0.94; Non-GAAP Diluted EPS of $1.29 |
▪ | Operating Margin of 20.4% Increased 90 bps; Non-GAAP Operating Margin of 29.2% Increased 140 bps |
▪ | Cash Flow from Operations of $4.9 Billion in First Nine Months vs. $3.6 Billion in Prior Year; Free Cash Flow of $4.1 Billion in First Nine Months vs. $2.9 Billion in Prior Year |
▪ | Company Raises FY19 EPS and Free Cash Flow Guidance |
DUBLIN - February 19, 2019 - Medtronic plc (NYSE: MDT) today announced financial results for its third quarter of fiscal year 2019, which ended January 25, 2019.
The company reported third quarter worldwide revenue of $7.546 billion, an increase of 2.4 percent as reported or 4.4 percent on an organic basis, which adjusts for a $149 million negative impact from foreign currency. As reported, third quarter GAAP net income and diluted earnings per share (EPS) were $1.269 billion and $0.94, respectively. As detailed in the financial schedules included through the link at the end of this release, third quarter non-GAAP net income and non-GAAP diluted EPS were $1.751 billion and $1.29, respectively, both increases of 10 percent. Adjusting for a positive 2 cent impact from foreign currency, third quarter non-GAAP diluted EPS increased 9 percent.
U.S. revenue of $4.001 billion represented 53 percent of company revenue and increased 2.3 percent as reported. Non-U.S. developed market revenue of $2.368 billion represented 31 percent of company revenue and increased 0.6 percent as reported and 3.6 percent on a constant currency basis. Emerging market revenue of $1.177 billion represented 16 percent of company revenue and increased 6.8 percent as reported and 13.9 percent on a constant currency basis.
“Our organization executed on multiple fronts to deliver a strong quarter for Medtronic,” said Omar Ishrak, Medtronic chairman and chief executive officer. “Revenue outperformance in our Minimally Invasive Therapies and Restorative Therapies Groups, as well as broad strength across Emerging Markets, helped to offset certain market-specific headwinds we faced during the quarter, reflecting the full benefits of our diversification.”
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Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH), and Aortic, Peripheral & Venous (APV) divisions. CVG revenue of $2.786 billion decreased 0.5 percent as reported, while increasing 1.6 percent on a constant currency basis. CVG revenue performance was driven by mid-single digit growth in APV and CSH, offset by low-single digit declines in CRHF, all on a constant currency basis.
▪ | Cardiac Rhythm & Heart Failure revenue of $1.397 billion decreased 4.1 percent as reported or 2.3 percent on a constant currency basis. Arrhythmia Management grew in the mid-single digits on a constant currency basis, driven by the continued uptake of the Micra® Transcatheter Pacing System and the Azure® wireless pacemaker. Arrhythmia Management results were also driven by mid-twenties growth of the TYRX® Absorbable Antibacterial Envelope and mid-teens growth in AF Solutions, both on a constant currency basis. This was offset by mid-teens declines in Heart Failure, including mid-forties declines in sales of left ventricular assist devices (LVADs). |
▪ | Coronary & Structural Heart revenue of $913 million increased 3.0 percent as reported or 5.9 percent on a constant currency basis, led by mid-teens constant currency growth in transcatheter aortic valves, reflecting the clinical benefits of the CoreValve® Evolut® PRO platform. Coronary growth was flat on a constant currency basis, driven by mid-teens growth in guide catheters and low-double digit growth in coronary balloons, offset by mid-single digit declines in drug-eluting stents, all on a constant currency basis. |
▪ | Aortic, Peripheral & Venous revenue of $476 million increased 4.2 percent as reported or 6.1 percent on a constant currency basis. The strength in the division was driven by mid-teens growth in Venous, reflecting strong demand for the VenaSeal™ closure system, mid-teens growth of drug-coated balloons, and high-single digit growth in thoracic stent graft systems, given the continued launch of Valiant Navion™. |
Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. MITG revenue of $2.124 billion increased 4.1 percent as reported or 6.6 percent on a constant currency basis. MITG revenue was driven by strong performances in both divisions, with high-single digit constant currency growth in RGR and mid-single digit constant currency growth in SI.
▪ | Surgical Innovations revenue of $1.434 billion increased 3.6 percent as reported or 6.4 percent on a constant currency basis, driven by low-double digit constant currency growth in Advanced Energy resulting from the strength of the LigaSure™ vessel sealing instruments with innovative nano-coating and Valleylab™ FT10 energy platform. Advanced Stapling grew in the high-single digits on a constant currency basis, driven by strong demand for Tri-Staple™ 2.0 endo stapling specialty reloads and the Signia™ powered stapler. |
▪ | Respiratory, Gastrointestinal & Renal revenue of $690 million increased 5.0 percent as reported or 7.0 percent on a constant currency basis. Respiratory grew in the high-single digits on a constant currency basis, with strength in Puritan Bennett™ 980 ventilators, McGRATH™ MAC video laryngoscopes, and Nellcor™ pulse oximetry products. Renal Care Solutions grew mid-teens on a constant currency basis, with strength in both renal access products and the Bellco product line. GI Solutions grew mid-single digits on a constant currency basis, led by a solid performance in GI Diagnostics. |
Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Spine, Brain Therapies, Specialty Therapies, and Pain Therapies divisions. RTG revenue of $2.026 billion increased 4.2 percent as reported or 5.5 percent on a constant currency basis. Group results were driven by low-double digit growth in Brain Therapies, mid-single digit growth in Pain Therapies, low-single digit growth in Specialty Therapies, and flat results in Spine, all on a constant currency basis.
▪ | Spine revenue of $655 million decreased 0.9 percent as reported and was flat on a constant currency basis. When combined with the company’s sales of enabling technology used in spine surgeries, including robotics, navigation, imaging, and powered surgical instruments that are recognized in the Brain Therapies division, global Spine revenue and U.S. Core Spine revenue both grew in the mid-single digits on a constant currency basis. Posterior Cervical grew in the mid-teens on a constant currency basis, driven by the continued launch of the Infinity™ OCT System. |
▪ | Brain Therapies revenue of $650 million increased 11.1 percent as reported or 13.2 percent on a constant currency basis, driven by high-teens constant currency growth in both Neurovascular and Neurosurgery. Neurovascular delivered mid-twenties constant currency growth in stent retrievers for acute ischemic stroke, on the strength of Solitaire™ Platinum. The business also had double-digit growth on a constant currency basis in neuro access, flow diversion, and embolic products. Neurosurgery was led by strong capital equipment sales of StealthStation® S8 surgical navigation systems, O-arm® surgical imaging systems, Mazor X™ robotic guidance systems, and Midas Rex® powered surgical instrument systems. |
▪ | Specialty Therapies revenue of $407 million increased 2.3 percent as reported or 3.3 percent on a constant currency basis. Results were led by mid-teens constant currency growth in Transformative Solutions on strong sales of the Aquamantys™ bipolar sealers. |
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▪ | Pain Therapies revenue of $314 million increased 4.7 percent as reported or 5.7 percent on a constant currency basis. The division had high-single digit constant currency growth in Pain Stimulation on the continued strength of the Intellis™ platform for spinal cord stimulation. The division also had mid-single digit constant currency growth in Interventional Pain. |
Diabetes Group
The Diabetes Group includes the Advanced Insulin Management (AIM) and Emerging Technologies divisions. Diabetes Group revenue of $610 million increased 4.5 percent as reported or 6.5 percent on a constant currency basis. Despite facing more difficult comparisons on pump sales given the backlog of patient orders that the company cleared in the prior year, revenue increased 4.6 percent versus the prior quarter as reported.
▪ | Advanced Insulin Management revenue grew mid-single digits constant currency, driven by the sustained global market demand for the MiniMed® 670G hybrid closed loop insulin pump system with the Guardian® Sensor 3. While the division faced more difficult comparisons versus the prior year, it grew mid-single digits versus the prior quarter as reported, including high-single digit growth in insulin pumps versus the prior quarter as reported. The global adoption of its sensor-augmented insulin pump systems has resulted in strong sensor attachment rates, with integrated CGM sales growing in the high-twenties on a constant currency basis. |
▪ | Emerging Technologies revenue grew in the low-fifties on a constant currency basis, driven by the ongoing launch of the Guardian® Connect CGM system with Sugar.IQ™ personal diabetes assistant, which grew triple digits for the third consecutive quarter. |
Guidance
The company today updated its revenue growth guidance and raised its EPS and free cash flow guidance for fiscal year 2019.
For fiscal year 2019, the company updated its organic revenue growth guidance from a range of 5.0 to 5.5 percent to a range of 5.25 to 5.5 percent. If recent exchange rates hold for the remainder of the fiscal year, the company’s fiscal year 2019 revenue would be negatively affected by approximately $425 million to $475 million.
The company increased its fiscal year 2019 diluted non-GAAP EPS guidance from the prior range of $5.10 to $5.15 to the new range of $5.14 to $5.16. If recent exchange rates hold for the remainder of the fiscal year, foreign exchange would have a modest positive impact on the company’s fiscal year 2019 EPS.
The company also increased its fiscal year 2019 free cash flow guidance from the prior range of $4.7 billion to $5.1 billion to the new range of $5.0 billion to $5.2 billion.
“We continue to make progress on our robust and exciting pipeline, which contains more opportunities for growth than at any time in our company’s history,” said Ishrak. “We expect this forthcoming innovation to disrupt existing markets and invent new markets, all with the goal of creating significant value - for patients, physicians, healthcare systems, and for our shareholders.”
Webcast Information
Medtronic will host a webcast today, February 19, at 8:00 a.m. EST (7:00 a.m. CST) to provide information about its businesses for the public, analysts, and news media. This quarterly webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at newsroom.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.
Financial Schedules
To view the third quarter financial schedules and non-GAAP reconciliations, click here. To view the third quarter earnings presentation, click here. Both documents can also be accessed by visiting newsroom.medtronic.com.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among the world’s largest medical technology, services and solutions companies - alleviating pain, restoring health and extending life for millions of people around the world. Medtronic employs more than 86,000 people worldwide, serving physicians, hospitals and patients in more than 150 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.
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FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which are subject to risks and uncertainties, including those described in Medtronic’s periodic reports and other filings with the U.S. Securities and Exchange Commission (the “SEC”). Anticipated results only reflect information available to Medtronic at this time and may differ from actual results. Medtronic does not undertake to update its forward-looking statements or any of the information contained in this press release. Certain information in this press release includes calculations or figures that have been prepared internally and have not been reviewed or audited by our independent registered public accounting firm, including but not limited to, certain information in the financial schedules accompanying this press release. Use of different methods for preparing, calculating or presenting information may lead to differences and such differences may be material.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures and guidance, including adjusted net income and adjusted diluted EPS, which are considered “non-GAAP” financial measures under applicable SEC rules and regulations. References to quarterly figures increasing, decreasing or remaining flat are in comparison to the third quarter of fiscal year 2018.
Medtronic management believes that non-GAAP financial measures provide information useful to investors in understanding the company’s underlying operational performance and trends and to facilitate comparisons with the performance of other companies in the med tech industry. Non-GAAP net income and diluted EPS exclude the effect of certain charges or gains that contribute to or reduce earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate management’s review of the operational performance of the company and as a basis for strategic planning. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies. Management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial schedules accompanying this press release.
Medtronic calculates forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, forward-looking revenue growth projections exclude the impact of foreign currency fluctuations. Forward-looking non-GAAP EPS guidance also excludes other potential charges or gains that would be recorded as Non-GAAP Adjustments to earnings during the fiscal year. Medtronic does not attempt to provide reconciliations of forward-looking non-GAAP EPS guidance to projected GAAP EPS guidance because the combined impact and timing of recognition of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
-end-
View FY19 Third Quarter Financial Schedules & Non-GAAP Reconciliations
View FY19 Third Quarter Earnings Presentation
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MEDTRONIC PLC
WORLD WIDE REVENUE
(Unaudited)
THIRD QUARTER | THIRD QUARTER YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||||||
REPORTED | CONSTANT CURRENCY | REPORTED | COMPARABLE CONSTANT CURRENCY | |||||||||||||||||||||||||||||||||||||||||
(in millions) | FY19 | FY18 | Growth | Currency Impact (2) | FY19 | Growth | FY19 | FY18 | Growth | Currency Impact (2) | Revised FY18 (3) | Growth | ||||||||||||||||||||||||||||||||
Cardiac & Vascular Group | $ | 2,786 | $ | 2,800 | (1 | )% | $ | (60 | ) | $ | 2,846 | 2 | % | $ | 8,455 | $ | 8,219 | 3 | % | $ | (62 | ) | $ | 8,219 | 4 | % | ||||||||||||||||||
Cardiac Rhythm & Heart Failure | 1,397 | 1,457 | (4 | ) | (26 | ) | 1,423 | (2 | ) | 4,295 | 4,314 | — | (25 | ) | 4,314 | — | ||||||||||||||||||||||||||||
Coronary & Structural Heart | 913 | 886 | 3 | (25 | ) | 938 | 6 | 2,736 | 2,557 | 7 | (29 | ) | 2,557 | 8 | ||||||||||||||||||||||||||||||
Aortic, Peripheral & Venous | 476 | 457 | 4 | (9 | ) | 485 | 6 | 1,424 | 1,348 | 6 | (8 | ) | 1,348 | 6 | ||||||||||||||||||||||||||||||
Minimally Invasive Therapies Group (1) | 2,124 | 2,041 | 4 | (52 | ) | 2,176 | 7 | 6,223 | 6,479 | (4 | ) | (68 | ) | 5,929 | 6 | |||||||||||||||||||||||||||||
Surgical Innovations | 1,434 | 1,384 | 4 | (39 | ) | 1,473 | 6 | 4,224 | 4,117 | 3 | (53 | ) | 4,024 | 6 | ||||||||||||||||||||||||||||||
Respiratory, Gastrointestinal, & Renal | 690 | 657 | 5 | (13 | ) | 703 | 7 | 1,999 | 2,362 | (15 | ) | (15 | ) | 1,905 | 6 | |||||||||||||||||||||||||||||
Restorative Therapies Group | 2,026 | 1,944 | 4 | (25 | ) | 2,051 | 6 | 5,968 | 5,616 | 6 | (23 | ) | 5,616 | 7 | ||||||||||||||||||||||||||||||
Spine | 655 | 661 | (1 | ) | (6 | ) | 661 | — | 1,963 | 1,969 | — | (5 | ) | 1,969 | — | |||||||||||||||||||||||||||||
Brain Therapies | 650 | 585 | 11 | (12 | ) | 662 | 13 | 1,867 | 1,682 | 11 | (13 | ) | 1,682 | 12 | ||||||||||||||||||||||||||||||
Specialty Therapies | 407 | 398 | 2 | (4 | ) | 411 | 3 | 1,196 | 1,132 | 6 | (3 | ) | 1,132 | 6 | ||||||||||||||||||||||||||||||
Pain Therapies | 314 | 300 | 5 | (3 | ) | 317 | 6 | 942 | 833 | 13 | (2 | ) | 833 | 13 | ||||||||||||||||||||||||||||||
Diabetes Group | 610 | 584 | 4 | (12 | ) | 622 | 7 | 1,765 | 1,495 | 18 | (13 | ) | 1,495 | 19 | ||||||||||||||||||||||||||||||
TOTAL | $ | 7,546 | $ | 7,369 | 2 | % | $ | (149 | ) | $ | 7,695 | 4 | % | $ | 22,411 | $ | 21,809 | 3 | % | $ | (166 | ) | $ | 21,259 | 6 | % |
(1) In the second quarter of fiscal year 2018, the Company realigned its divisions within the Minimally Invasive Therapies Group, which included a movement of revenue from certain product lines within Surgical Innovations to Respiratory, Gastrointestinal, & Renal. As a result, first quarter fiscal year 2018 results in the year-to-date figures have been recast to adjust for this alignment.
(2) The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.
(3) Revised revenue excludes revenue related to the divested Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses for the first quarter of fiscal year 2018.
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MEDTRONIC PLC
U.S.(1) REVENUE
(Unaudited)
THIRD QUARTER | THIRD QUARTER YEAR-TO-DATE | ||||||||||||||||||||||||||||
REPORTED | REPORTED | COMPARABLE | |||||||||||||||||||||||||||
(in millions) | FY19 | FY18 | Growth | FY19 | FY18 | Growth | Revised FY18 (3) | Growth | |||||||||||||||||||||
Cardiac & Vascular Group | $ | 1,369 | $ | 1,395 | (2 | )% | $ | 4,240 | $ | 4,151 | 2 | % | $ | 4,151 | 2 | % | |||||||||||||
Cardiac Rhythm & Heart Failure | 745 | 806 | (8 | ) | 2,334 | 2,395 | (3 | ) | 2,395 | (3 | ) | ||||||||||||||||||
Coronary & Structural Heart | 359 | 335 | 7 | 1,096 | 986 | 11 | 986 | 11 | |||||||||||||||||||||
Aortic, Peripheral & Venous | 265 | 254 | 4 | 810 | 770 | 5 | 770 | 5 | |||||||||||||||||||||
Minimally Invasive Therapies Group (2) | 930 | 862 | 8 | 2,659 | 2,902 | (8 | ) | 2,492 | 7 | ||||||||||||||||||||
Surgical Innovations | 589 | 560 | 5 | 1,706 | 1,668 | 2 | 1,613 | 6 | |||||||||||||||||||||
Respiratory, Gastrointestinal, & Renal | 341 | 302 | 13 | 953 | 1,234 | (23 | ) | 879 | 8 | ||||||||||||||||||||
Restorative Therapies Group | 1,354 | 1,300 | 4 | 4,005 | 3,779 | 6 | 3,779 | 6 | |||||||||||||||||||||
Spine | 459 | 460 | — | 1,359 | 1,372 | (1 | ) | 1,372 | (1 | ) | |||||||||||||||||||
Brain Therapies | 367 | 324 | 13 | 1,065 | 953 | 12 | 953 | 12 | |||||||||||||||||||||
Specialty Therapies | 303 | 300 | 1 | 895 | 854 | 5 | 854 | 5 | |||||||||||||||||||||
Pain Therapies | 225 | 216 | 4 | 686 | 600 | 14 | 600 | 14 | |||||||||||||||||||||
Diabetes Group | 348 | 355 | (2 | ) | 1,006 | 856 | 18 | 856 | 18 | ||||||||||||||||||||
TOTAL | $ | 4,001 | $ | 3,912 | 2 | % | $ | 11,910 | $ | 11,688 | 2 | % | $ | 11,278 | 6 | % |
(1) U.S. includes the United States and U.S. territories.
(2) In the second quarter of fiscal year 2018, the Company realigned its divisions within the Minimally Invasive Therapies Group, which included a movement of revenue from certain product lines within Surgical Innovations to Respiratory, Gastrointestinal, & Renal. As a result, first quarter fiscal year 2018 results in the year-to-date figures have been recast to adjust for this alignment.
(3) Revised revenue excludes revenue related to the divested Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses for the first quarter of fiscal year 2018.
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MEDTRONIC PLC
WORLD WIDE REVENUE: GEOGRAPHIC (1)
(Unaudited)
THIRD QUARTER | THIRD QUARTER YEAR-TO-DATE | |||||||||||||||||||||||||||||||||||||||||||
REPORTED | CONSTANT CURRENCY | REPORTED | COMPARABLE CONSTANT CURRENCY | |||||||||||||||||||||||||||||||||||||||||
(in millions) | FY19 | FY18 | Growth | Currency Impact (2) | FY19 | Growth | FY19 | FY18 | Growth | Currency Impact (2) | Revised FY18 (3) | Growth | ||||||||||||||||||||||||||||||||
U.S. | $ | 1,369 | $ | 1,395 | (2 | )% | $ | — | $ | 1,369 | (2 | )% | $ | 4,240 | $ | 4,151 | 2 | % | $ | — | $ | 4,151 | 2 | % | ||||||||||||||||||||
Non-U.S. Developed | 924 | 934 | (1 | ) | (28 | ) | 952 | 2 | 2,766 | 2,716 | 2 | (3 | ) | 2,716 | 2 | |||||||||||||||||||||||||||||
Emerging Markets | 493 | 471 | 5 | (32 | ) | 525 | 11 | 1,449 | 1,352 | 7 | (59 | ) | 1,352 | 12 | ||||||||||||||||||||||||||||||
Cardiac & Vascular Group | 2,786 | 2,800 | (1 | ) | (60 | ) | 2,846 | 2 | 8,455 | 8,219 | 3 | (62 | ) | 8,219 | 4 | |||||||||||||||||||||||||||||
U.S. | 930 | 862 | 8 | — | 930 | 8 | 2,659 | 2,902 | (8 | ) | — | 2,492 | 7 | |||||||||||||||||||||||||||||||
Non-U.S. Developed | 796 | 807 | (1 | ) | (23 | ) | 819 | 1 | 2,396 | 2,455 | (2 | ) | (6 | ) | 2,344 | 2 | ||||||||||||||||||||||||||||
Emerging Markets | 398 | 372 | 7 | (29 | ) | 427 | 15 | 1,168 | 1,122 | 4 | (62 | ) | 1,093 | 13 | ||||||||||||||||||||||||||||||
Minimally Invasive Therapies Group | 2,124 | 2,041 | 4 | (52 | ) | 2,176 | 7 | 6,223 | 6,479 | (4 | ) | (68 | ) | 5,929 | 6 | |||||||||||||||||||||||||||||
U.S. | 1,354 | 1,300 | 4 | — | 1,354 | 4 | 4,005 | 3,779 | 6 | — | 3,779 | 6 | ||||||||||||||||||||||||||||||||
Non-U.S. Developed | 435 | 429 | 1 | (12 | ) | 447 | 4 | 1,275 | 1,217 | 5 | (4 | ) | 1,217 | 5 | ||||||||||||||||||||||||||||||
Emerging Markets | 237 | 215 | 10 | (13 | ) | 250 | 16 | 688 | 620 | 11 | (19 | ) | 620 | 14 | ||||||||||||||||||||||||||||||
Restorative Therapies Group | 2,026 | 1,944 | 4 | (25 | ) | 2,051 | 6 | 5,968 | 5,616 | 6 | (23 | ) | 5,616 | 7 | ||||||||||||||||||||||||||||||
U.S. | 348 | 355 | (2 | ) | — | 348 | (2 | ) | 1,006 | 856 | 18 | — | 856 | 18 | ||||||||||||||||||||||||||||||
Non-U.S. Developed | 213 | 185 | 15 | (8 | ) | 221 | 19 | 619 | 521 | 19 | (4 | ) | 521 | 20 | ||||||||||||||||||||||||||||||
Emerging Markets | 49 | 44 | 11 | (4 | ) | 53 | 20 | 140 | 118 | 19 | (9 | ) | 118 | 26 | ||||||||||||||||||||||||||||||
Diabetes Group | 610 | 584 | 4 | (12 | ) | 622 | 7 | 1,765 | 1,495 | 18 | (13 | ) | 1,495 | 19 | ||||||||||||||||||||||||||||||
U.S. | 4,001 | 3,912 | 2 | — | 4,001 | 2 | 11,910 | 11,688 | 2 | — | 11,278 | 6 | ||||||||||||||||||||||||||||||||
Non-U.S. Developed | 2,368 | 2,355 | 1 | (71 | ) | 2,439 | 4 | 7,056 | 6,909 | 2 | (17 | ) | 6,798 | 4 | ||||||||||||||||||||||||||||||
Emerging Markets | 1,177 | 1,102 | 7 | (78 | ) | 1,255 | 14 | 3,445 | 3,212 | 7 | (149 | ) | 3,183 | 13 | ||||||||||||||||||||||||||||||
TOTAL | $ | 7,546 | $ | 7,369 | 2 | % | $ | (149 | ) | $ | 7,695 | 4 | % | $ | 22,411 | $ | 21,809 | 3 | % | $ | (166 | ) | $ | 21,259 | 6 | % |
(1) U.S. includes the United States and U.S. territories. Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries of Western Europe. Emerging Markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not included in the non-U.S. developed markets, as previously defined.
(2) The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.
(3) Revised revenue excludes revenue related to the divested Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses for the first quarter of fiscal year 2018.
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MEDTRONIC PLC
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
(in millions, except per share data) | January 25, 2019 | January 26, 2018 | January 25, 2019 | January 26, 2018 | |||||||||||
Net sales | $ | 7,546 | $ | 7,369 | $ | 22,411 | $ | 21,809 | |||||||
Costs and expenses: | |||||||||||||||
Cost of products sold | 2,265 | 2,194 | 6,672 | 6,669 | |||||||||||
Research and development expense | 561 | 559 | 1,736 | 1,664 | |||||||||||
Selling, general, and administrative expense | 2,596 | 2,523 | 7,798 | 7,642 | |||||||||||
Amortization of intangible assets | 436 | 461 | 1,327 | 1,375 | |||||||||||
Restructuring charges, net | 26 | 7 | 112 | 23 | |||||||||||
Certain litigation charges | 63 | 61 | 166 | 61 | |||||||||||
Gain on sale of businesses | — | — | — | (697 | ) | ||||||||||
Other operating expense, net | 57 | 128 | 278 | 360 | |||||||||||
Operating profit | 1,542 | 1,436 | 4,322 | 4,712 | |||||||||||
Other non-operating (income) expense, net | (71 | ) | 139 | (309 | ) | (67 | ) | ||||||||
Interest expense | 243 | 270 | 726 | 829 | |||||||||||
Income before income taxes | 1,370 | 1,027 | 3,905 | 3,950 | |||||||||||
Income tax provision | 99 | 2,419 | 437 | 2,320 | |||||||||||
Net income (loss) | 1,271 | (1,392 | ) | 3,468 | 1,630 | ||||||||||
Net (income) loss attributable to noncontrolling interests | (2 | ) | 3 | (9 | ) | 14 | |||||||||
Net income (loss) attributable to Medtronic | $ | 1,269 | $ | (1,389 | ) | $ | 3,459 | $ | 1,644 | ||||||
Basic earnings (loss) per share | $ | 0.95 | $ | (1.03 | ) | $ | 2.57 | $ | 1.21 | ||||||
Diluted earnings (loss) per share | $ | 0.94 | $ | (1.03 | ) | $ | 2.54 | $ | 1.20 | ||||||
Basic weighted average shares outstanding | 1,342.8 | 1,354.0 | 1,348.1 | 1,357.2 | |||||||||||
Diluted weighted average shares outstanding | 1,352.7 | 1,354.0 | 1,359.5 | 1,368.9 |
9
10
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Three months ended January 25, 2019 | ||||||||||||||||||||||||||||||||
(in millions, except per share data) | Net Sales | Cost of Products Sold | Gross Margin Percent | Operating Profit | Operating Profit Percent | Income Before Income Taxes | Net Income attributable to Medtronic | Diluted EPS (1) | Effective Tax Rate | |||||||||||||||||||||||
GAAP | $ | 7,546 | $ | 2,265 | 70.0 | % | $ | 1,542 | 20.4 | % | $ | 1,370 | $ | 1,269 | $ | 0.94 | 7.2 | % | ||||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||||||
Restructuring and associated costs (2) | — | (21 | ) | 0.3 | 66 | 0.9 | 66 | 54 | 0.04 | 18.2 | ||||||||||||||||||||||
Acquisition-related items (3) | — | (1 | ) | — | 17 | 0.2 | 17 | 12 | 0.01 | 29.4 | ||||||||||||||||||||||
Certain litigation charges | — | — | — | 63 | 0.8 | 63 | 51 | 0.04 | 19.0 | |||||||||||||||||||||||
(Gain)/loss on minority investments (4) | — | — | — | — | — | (7 | ) | (6 | ) | — | 14.3 | |||||||||||||||||||||
IPR&D charges (5) | — | — | — | 11 | 0.1 | 11 | 8 | 0.01 | 27.3 | |||||||||||||||||||||||
Exit of businesses (6) | — | — | — | 69 | 0.9 | 69 | 56 | 0.04 | 18.8 | |||||||||||||||||||||||
Amortization of intangible assets | — | — | — | 436 | 5.9 | 436 | 371 | 0.27 | 14.9 | |||||||||||||||||||||||
Certain tax adjustments, net (7) | — | — | — | — | — | — | (64 | ) | (0.05 | ) | — | |||||||||||||||||||||
Non-GAAP | $ | 7,546 | $ | 2,243 | 70.3 | % | $ | 2,204 | 29.2 | % | $ | 2,025 | $ | 1,751 | $ | 1.29 | 13.4 | % | ||||||||||||||
Currency impact | 149 | 47 | (0.1 | ) | (29 | ) | (0.9 | ) | (0.02 | ) | ||||||||||||||||||||||
Currency Adjusted | $ | 7,695 | $ | 2,290 | 70.2 | % | $ | 2,175 | 28.3 | % | $ | 1.27 | ||||||||||||||||||||
Three months ended January 26, 2018 | ||||||||||||||||||||||||||||||||
(in millions, except per share data) | Net Sales | Cost of Products Sold | Gross Margin Percent | Operating Profit | Operating Profit Percent | Income Before Income Taxes | Net (Loss) Income attributable to Medtronic | Diluted (LPS) EPS (1)(8) | Effective Tax Rate | |||||||||||||||||||||||
GAAP | $ | 7,369 | $ | 2,194 | 70.2 | % | $ | 1,436 | 19.5 | % | $ | 1,027 | $ | (1,389 | ) | $ | (1.03 | ) | 235.5 | % | ||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||||||
Restructuring and associated costs (2) | — | (13 | ) | 0.2 | 30 | 0.4 | 30 | 26 | 0.02 | 13.3 | ||||||||||||||||||||||
Acquisition-related items (9) | — | (4 | ) | 0.1 | 13 | 0.2 | 30 | 17 | 0.01 | 43.3 | ||||||||||||||||||||||
Certain litigation charges | — | — | — | 61 | 0.8 | 61 | 53 | 0.04 | 13.1 | |||||||||||||||||||||||
Investment loss (10) | — | — | — | — | — | 227 | 228 | 0.17 | (0.4 | ) | ||||||||||||||||||||||
IPR&D charges (5) | — | — | — | 46 | 0.6 | 46 | 41 | 0.03 | 10.9 | |||||||||||||||||||||||
Amortization of intangible assets | — | — | — | 461 | 6.3 | 461 | 374 | 0.27 | 18.9 | |||||||||||||||||||||||
Certain tax adjustments, net (11) | — | — | — | — | — | — | 2,242 | 1.64 | — | |||||||||||||||||||||||
Non-GAAP | $ | 7,369 | $ | 2,177 | 70.5 | % | $ | 2,047 | 27.8 | % | $ | 1,882 | $ | 1,592 | $ | 1.17 | 15.6 | % |
See description of non-GAAP financial measures at the end of the earnings press release.
(1) | The data in this schedule has been intentionally rounded to the nearest $0.01 and, therefore, may not sum. |
(2) | Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses. |
(3) | The charges include unvested stock option payouts and investment banker and other transaction fees, along with integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(4) | Effective in fiscal year 2019, we exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations. |
(5) | The charges were recognized in connection with the impairment of in-process research and development ("IPR&D") assets. |
(6) | The net charge relates to business exits and is primarily comprised of intangible asset impairments. |
(7) | The net benefit relates to the impact of U.S. tax reform, intercompany legal entity restructuring, and the finalization of certain income tax aspects of the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses within the Minimally Invasive Therapies Group on July 29, 2017. |
11
(8) | GAAP diluted LPS for the three months ended January 26, 2018 is calculated using diluted weighted average shares outstanding of 1,354.0 million, which is the same as basic weighted average shares, due to the net loss resulting from the tax charge as discussed in footnote (11). Non-GAAP diluted EPS for the respective period is calculated using diluted weighted average shares of 1,364.5 million as the Company had non-GAAP net income for the period. |
(9) | The charges primarily include integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(10) | The charge was recognized in connection with the impairment of certain cost and equity method investments. |
(11) | The net charge primarily relates to the impact from U.S. tax reform, inclusive of the transition tax, remeasurement of deferred tax assets and liabilities, and the decrease in the U.S. statutory tax rate. |
12
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Three months ended January 25, 2019 | ||||||||||||||||||||||||||||
(in millions) | Net Sales | SG&A Expense | SG&A Expense as a % of Net Sales | R&D Expense | R&D Expense as a % of Net Sales | Other Operating Expense, net | Other Operating Expense, net as a % of Net Sales | Other Non-Operating Income, net | ||||||||||||||||||||
GAAP | $ | 7,546 | $ | 2,596 | 34.4 | % | $ | 561 | 7.4 | % | $ | 57 | 0.8 | % | $ | (71 | ) | |||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||
Restructuring and associated costs (1) | — | (19 | ) | (0.3 | ) | — | — | — | — | — | ||||||||||||||||||
Acquisition-related items (2) | — | (77 | ) | (1.0 | ) | — | — | 61 | 0.8 | — | ||||||||||||||||||
(Gain)/loss on minority investments (3) | — | — | — | — | — | — | — | 7 | ||||||||||||||||||||
IPR&D charges (4) | — | — | — | — | — | (11 | ) | (0.2 | ) | — | ||||||||||||||||||
Exit of businesses (5) | — | — | — | — | — | (69 | ) | (0.9 | ) | — | ||||||||||||||||||
Non-GAAP | $ | 7,546 | $ | 2,500 | 33.1 | % | $ | 561 | 7.4 | % | $ | 38 | 0.5 | % | $ | (64 | ) | |||||||||||
Currency impact | 149 | 48 | — | 2 | (0.1 | ) | 81 | 1.0 | — | |||||||||||||||||||
Currency Adjusted | $ | 7,695 | $ | 2,548 | 33.1 | % | $ | 563 | 7.3 | % | $ | 119 | 1.5 | % | $ | (64 | ) |
See description of non-GAAP financial measures at the end of the earnings press release.
(1) | Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses. |
(2) | The charges include unvested stock option payouts and investment banker and other transaction fees, along with integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(3) | Effective in fiscal year 2019, we exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations. |
(4) | The charges were recognized in connection with the impairment of IPR&D assets. |
(5) | The net charge relates to business exits and is primarily comprised of intangible asset impairments. |
13
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Nine months ended January 25, 2019 | ||||||||||||||||||||||||||||||||
(in millions, except per share data) | Net Sales | Cost of Products Sold | Gross Margin Percent | Operating Profit | Operating Profit Percent | Income Before Income Taxes | Net Income attributable to Medtronic | Diluted EPS (1) | Effective Tax Rate | |||||||||||||||||||||||
GAAP | $ | 22,411 | $ | 6,672 | 70.2 | % | $ | 4,322 | 19.3 | % | $ | 3,905 | $ | 3,459 | $ | 2.54 | 11.2 | % | ||||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||||||
Restructuring and associated costs (2) | — | (58 | ) | 0.3 | 256 | 1.1 | 256 | 216 | 0.16 | 15.6 | ||||||||||||||||||||||
Acquisition-related items (3) | — | (5 | ) | — | 57 | 0.3 | 57 | 44 | 0.03 | 22.8 | ||||||||||||||||||||||
Certain litigation charges | — | — | — | 166 | 0.7 | 166 | 142 | 0.10 | 14.5 | |||||||||||||||||||||||
(Gain)/loss on minority investments (4) | — | — | — | — | — | (92 | ) | (83 | ) | (0.06 | ) | 9.8 | ||||||||||||||||||||
IPR&D charges (5) | — | — | — | 26 | 0.1 | 26 | 23 | 0.02 | 11.5 | |||||||||||||||||||||||
Exit of businesses (6) | — | — | — | 149 | 0.7 | 149 | 118 | 0.09 | 20.8 | |||||||||||||||||||||||
Amortization of intangible assets | — | — | — | 1,327 | 5.9 | 1,327 | 1,128 | 0.83 | 15.0 | |||||||||||||||||||||||
Certain tax adjustments, net (7) | — | — | — | — | — | — | (35 | ) | (0.03 | ) | — | |||||||||||||||||||||
Non-GAAP | $ | 22,411 | $ | 6,609 | 70.5 | % | $ | 6,303 | 28.1 | % | $ | 5,794 | $ | 5,012 | $ | 3.69 | 13.3 | % | ||||||||||||||
Currency impact | 166 | 132 | (0.4 | ) | (117 | ) | (0.7 | ) | (0.08 | ) | ||||||||||||||||||||||
Currency Adjusted | $ | 22,577 | $ | 6,741 | 70.1 | % | $ | 6,186 | 27.4 | % | $ | 3.61 | ||||||||||||||||||||
Nine months ended January 26, 2018 | ||||||||||||||||||||||||||||||||
(in millions, except per share data) | Net Sales | Cost of Products Sold | Gross Margin Percent | Operating Profit | Operating Profit Percent | Income Before Income Taxes | Net Income attributable to Medtronic | Diluted EPS (1) | Effective Tax Rate | |||||||||||||||||||||||
GAAP | $ | 21,809 | $ | 6,669 | 69.4 | % | $ | 4,712 | 21.6 | % | $ | 3,950 | $ | 1,644 | $ | 1.20 | 58.7 | % | ||||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||||||
Restructuring and associated costs (2) | — | (25 | ) | 0.1 | 62 | 0.3 | 62 | 52 | 0.04 | 16.1 | ||||||||||||||||||||||
Acquisition-related items (8) | — | (24 | ) | 0.1 | 84 | 0.4 | 101 | 66 | 0.05 | 34.7 | ||||||||||||||||||||||
Divestiture-related items (9) | — | — | — | 115 | 0.5 | 115 | 103 | 0.08 | 10.4 | |||||||||||||||||||||||
Certain litigation charges | — | — | — | 61 | 0.3 | 61 | 53 | 0.04 | 13.1 | |||||||||||||||||||||||
Investment loss (10) | — | — | — | — | — | 227 | 228 | 0.17 | (0.4 | ) | ||||||||||||||||||||||
IPR&D charges (11) | — | — | — | 46 | 0.2 | 46 | 41 | 0.03 | 10.9 | |||||||||||||||||||||||
Gain on sale of businesses (12) | — | — | — | (697 | ) | (3.2 | ) | (697 | ) | (697 | ) | (0.51 | ) | — | ||||||||||||||||||
Hurricane Maria (13) | — | (17 | ) | 0.1 | 34 | 0.2 | 34 | 33 | 0.02 | 2.9 | ||||||||||||||||||||||
Contribution to Medtronic Foundation | — | — | — | 80 | 0.4 | 80 | 54 | 0.04 | 32.5 | |||||||||||||||||||||||
Amortization of intangible assets | — | — | — | 1,375 | 6.2 | 1,375 | 1,134 | 0.83 | 17.5 | |||||||||||||||||||||||
Certain tax adjustments, net (14) | — | — | — | — | — | — | 1,877 | 1.37 | — | |||||||||||||||||||||||
Non-GAAP | $ | 21,809 | $ | 6,603 | 69.7 | % | $ | 5,872 | 26.9 | % | $ | 5,354 | $ | 4,588 | $ | 3.35 | 14.6 | % |
See description of non-GAAP financial measures contained in this release.
(1) | The data in this schedule has been intentionally rounded to the nearest $0.01 and, therefore, may not sum. |
(2) | Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses. |
(3) | The charges include unvested stock option payouts and investment banker and other transaction fees, along with integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(4) | Effective in fiscal year 2019, we exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations. |
(5) | The charges represent acquired IPR&D in connection with an asset acquisition and charges recognized in connection with the impairment of IPR&D assets. |
(6) | The net charge relates to business exits and is primarily comprised of intangible asset impairments. |
14
(7) | The net benefit relates to the impact of U.S. tax reform, intercompany legal entity restructuring, and the finalization of certain income tax aspects of the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses within the Minimally Invasive Therapies Group on July 29, 2017. |
(8) | The charges primarily include integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(9) | The transaction expenses incurred in connection with the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses. |
(10) | The charge was recognized in connection with the impairment of certain cost and equity method investments. |
(11) | The charge was recognized in connection with the impairment of IPR&D assets. |
(12) | The gain on the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses. |
(13) | The charges represent idle facility costs, asset write-downs, and humanitarian efforts related to Hurricane Maria. |
(14) | The net charge primarily relates to the impact of U.S. tax reform, inclusive of the transition tax, remeasurement of deferred tax assets and liabilities, and the decrease in the U.S. statutory tax rate. Additionally, the net charge includes the impacts from the divestiture of our Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, partially offset by the tax effects from the intercompany sale of intellectual property. |
15
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Nine months ended January 25, 2019 | ||||||||||||||||||||||||||||
(in millions) | Net Sales | SG&A Expense | SG&A Expense as a % of Net Sales | R&D Expense | R&D Expense as a % of Net Sales | Other Operating Expense, net | Other Operating Expense, net as a % of Net Sales | Other Non-Operating Income, net | ||||||||||||||||||||
GAAP | $ | 22,411 | $ | 7,798 | 34.8 | % | $ | 1,736 | 7.7 | % | $ | 278 | 1.2 | % | $ | (309 | ) | |||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||||||||
Restructuring and associated costs (1) | — | (86 | ) | (0.4 | ) | — | — | — | — | — | ||||||||||||||||||
Acquisition-related items (2) | — | (120 | ) | (0.5 | ) | — | — | 68 | 0.3 | — | ||||||||||||||||||
(Gain)/loss on minority investments (3) | — | — | — | — | — | — | — | 92 | ||||||||||||||||||||
IPR&D charges (4) | — | — | — | — | — | (26 | ) | (0.1 | ) | — | ||||||||||||||||||
Exit of businesses (5) | — | — | — | — | — | (149 | ) | (0.6 | ) | — | ||||||||||||||||||
Non-GAAP | $ | 22,411 | $ | 7,592 | 33.9 | % | $ | 1,736 | 7.7 | % | $ | 171 | 0.8 | % | $ | (217 | ) | |||||||||||
Currency impact | 166 | 62 | — | — | — | 89 | 0.4 | — | ||||||||||||||||||||
Currency Adjusted | $ | 22,577 | $ | 7,654 | 33.9 | % | $ | 1,736 | 7.7 | % | $ | 260 | 1.2 | % | $ | (217 | ) |
See description of non-GAAP financial measures at the end of the earnings press release.
(1) | Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses. |
(2) | The charges include unvested stock option payouts and investment banker and other transaction fees, along with integration-related costs incurred in connection with the Covidien acquisition and changes in the fair value of contingent consideration. |
(3) | Effective in fiscal year 2019, we exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations. |
(4) | The charges represent acquired IPR&D in connection with an asset acquisition and charges recognized in connection with the impairment of IPR&D assets. |
(5) | The net charge relates to business exits and is primarily comprised of intangible asset impairments. |
16
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Nine months ended | Fiscal year | Fiscal year | |||||||||
(in millions) | January 25, 2019 | 2018 | 2017 | ||||||||
Net cash provided by operating activities | $ | 4,920 | $ | 4,684 | $ | 6,880 | |||||
Additions to property, plant, and equipment | (799 | ) | (1,068 | ) | (1,254 | ) | |||||
Free Cash Flow (1) | $ | 4,121 | $ | 3,616 | $ | 5,626 |
See description of non-GAAP financial measures at the end of the earnings press release.
(1) | Free cash flow represents operating cash flows less property, plant, and equipment additions. |
17
MEDTRONIC PLC
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions) | January 25, 2019 | April 27, 2018 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,703 | $ | 3,669 | ||||
Investments | 5,439 | 7,558 | ||||||
Accounts receivable, less allowances of $197 and $193, respectively | 5,854 | 5,987 | ||||||
Inventories, net | 3,866 | 3,579 | ||||||
Other current assets | 2,015 | 2,187 | ||||||
Total current assets | 20,877 | 22,980 | ||||||
Property, plant, and equipment | 10,746 | 10,259 | ||||||
Accumulated depreciation | (6,153 | ) | (5,655 | ) | ||||
Property, plant, and equipment, net | 4,593 | 4,604 | ||||||
Goodwill | 40,003 | 39,543 | ||||||
Other intangible assets, net | 20,835 | 21,723 | ||||||
Tax assets | 1,496 | 1,465 | ||||||
Other assets | 926 | 1,078 | ||||||
Total assets | $ | 88,730 | $ | 91,393 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current debt obligations | $ | 1,356 | $ | 2,058 | ||||
Accounts payable | 1,706 | 1,628 | ||||||
Accrued compensation | 1,796 | 1,988 | ||||||
Accrued income taxes | 648 | 979 | ||||||
Other accrued expenses | 3,347 | 3,431 | ||||||
Total current liabilities | 8,853 | 10,084 | ||||||
Long-term debt | 23,674 | 23,699 | ||||||
Accrued compensation and retirement benefits | 1,313 | 1,425 | ||||||
Accrued income taxes | 2,874 | 3,051 | ||||||
Deferred tax liabilities | 1,356 | 1,423 | ||||||
Other liabilities | 719 | 889 | ||||||
Total liabilities | 38,789 | 40,571 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Ordinary shares— par value $0.0001, 2.6 billion shares authorized, 1,340,592,569 and 1,354,218,154 shares issued and outstanding, respectively | — | — | ||||||
Additional paid-in capital | 26,518 | 28,127 | ||||||
Retained earnings | 25,769 | 24,379 | ||||||
Accumulated other comprehensive loss | (2,458 | ) | (1,786 | ) | ||||
Total shareholders’ equity | 49,829 | 50,720 | ||||||
Noncontrolling interests | 112 | 102 | ||||||
Total equity | 49,941 | 50,822 | ||||||
Total liabilities and equity | $ | 88,730 | $ | 91,393 |
18
MEDTRONIC PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended | ||||||||
(in millions) | January 25, 2019 | January 26, 2018 | ||||||
Operating Activities: | ||||||||
Net income | $ | 3,468 | $ | 1,630 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,992 | 1,980 | ||||||
Provision for doubtful accounts | 55 | 36 | ||||||
Deferred income taxes | (205 | ) | (1,042 | ) | ||||
Stock-based compensation | 228 | 270 | ||||||
Gain on sale of businesses | — | (697 | ) | |||||
Investment loss | — | 227 | ||||||
Other, net | 111 | 12 | ||||||
Change in operating assets and liabilities, net of acquisitions and divestitures: | ||||||||
Accounts receivable, net | (140 | ) | 19 | |||||
Inventories, net | (367 | ) | (318 | ) | ||||
Accounts payable and accrued liabilities | 211 | 13 | ||||||
Other operating assets and liabilities | (433 | ) | 1,516 | |||||
Net cash provided by operating activities | 4,920 | 3,646 | ||||||
Investing Activities: | ||||||||
Acquisitions, net of cash acquired | (1,615 | ) | (111 | ) | ||||
Proceeds from sale of businesses | — | 6,058 | ||||||
Additions to property, plant, and equipment | (799 | ) | (776 | ) | ||||
Purchases of investments | (1,987 | ) | (2,479 | ) | ||||
Sales and maturities of investments | 4,159 | 3,060 | ||||||
Other investing activities | (3 | ) | (5 | ) | ||||
Net cash (used in) provided by investing activities | (245 | ) | 5,747 | |||||
Financing Activities: | ||||||||
Change in current debt obligations, net | (696 | ) | (391 | ) | ||||
Issuance of long-term debt | 3 | 21 | ||||||
Payments on long-term debt | (29 | ) | (4,167 | ) | ||||
Dividends to shareholders | (2,022 | ) | (1,870 | ) | ||||
Issuance of ordinary shares | 891 | 333 | ||||||
Repurchase of ordinary shares | (2,728 | ) | (1,964 | ) | ||||
Other financing activities | 10 | (88 | ) | |||||
Net cash used in financing activities | (4,571 | ) | (8,126 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (70 | ) | 124 | |||||
Net change in cash and cash equivalents | 34 | 1,391 | ||||||
Cash and cash equivalents at beginning of period | 3,669 | 4,967 | ||||||
Cash and cash equivalents at end of period | $ | 3,703 | $ | 6,358 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for: | ||||||||
Income taxes | $ | 1,206 | $ | 911 | ||||
Interest | 540 | 651 |
19