UNDERSTANDING OUR FINANCIAL INFORMATION



The following discussion and analysis provides information management believes
to be relevant to understanding the financial condition and results of
operations of the Company. The discussion focuses on our financial results for
the fiscal year ended April 29, 2022 (fiscal year 2022) and the fiscal year
ended April 30, 2021 (fiscal year 2021). A discussion on our results of
operations for fiscal year 2021 as compared to the year ended April 24, 2020
(fiscal year 2020) is included in Part II, Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of our Annual Report
on Form 10-K for the year ended April 30, 2021, filed with the SEC on June 25,
2021, and is incorporated by reference into this Form 10-K. You should read this
discussion and analysis along with our consolidated financial statements and
related notes thereto at April 29, 2022 and April 30, 2021 and for fiscal years
2022, 2021, and 2020, which are presented within "Item 8. Financial Statements
and Supplementary Data" in this Annual Report on Form 10-K. Amounts reported in
millions within this annual report are computed based on the amounts in
thousands, and therefore, the sum of the components may not equal the total
amount reported in millions due to rounding. Additionally, certain columns and
rows within tables may not sum due to rounding.

Financial Trends



Throughout this Management's Discussion and Analysis, we present certain
financial measures that facilitate management's review of the operational
performance of the Company and as a basis for strategic planning; however, such
financial measures are not presented in our financial statements prepared in
accordance with accounting principles generally accepted in the United States
(U.S.) (U.S. GAAP). These financial measures are considered "non-GAAP financial
measures" and are intended to supplement, and should not be considered as
superior to, financial measures presented in accordance with U.S. GAAP. We
believe that non-GAAP financial measures provide information useful to investors
in understanding the Company's underlying operational performance and trends and
may facilitate comparisons with the performance of other companies in the
medical technologies industry.

As presented in the GAAP to Non-GAAP Reconciliations section below, our non-GAAP
financial measures exclude the impact of certain charges or benefits that
contribute to or reduce earnings and that may affect financial trends and
include certain charges or benefits that result from transactions or events that
we believe may or may not recur with similar materiality or impact to our
operations in future periods (Non-GAAP Adjustments).

In the event there is a Non-GAAP Adjustment recognized in our operating results,
the tax cost or benefit attributable to that item is separately calculated and
reported. Because the effective rate can be significantly impacted by the
Non-GAAP Adjustments that take place during the period, we often refer to our
tax rate using both the effective rate and the non-GAAP nominal tax rate
(Non-GAAP Nominal Tax Rate). The Non-GAAP Nominal Tax Rate is calculated as the
income tax provision, adjusted for the impact of Non-GAAP Adjustments, as a
percentage of income before income taxes, excluding Non-GAAP Adjustments.

Free cash flow is a non-GAAP financial measure calculated by subtracting property, plant, and equipment additions from operating cash flows.



Refer to the "GAAP to Non-GAAP Reconciliations," "Income Taxes," and "Free Cash
Flow" sections for reconciliations of the non-GAAP financial measures to their
most directly comparable financial measures prepared in accordance with U.S.
GAAP.

EXECUTIVE LEVEL OVERVIEW

The global healthcare system is continuing to respond to the unprecedented
challenge posed by the COVID-19 pandemic ("COVID-19" or the "pandemic"). Most of
our businesses were affected by a decline in global procedural volumes during
fiscal year 2021, particularly in the first and second quarters. During fiscal
year 2022, the pandemic, to a lesser extent, continued to affect most of our
businesses, including the most recent COVID-19 lockdown in China which began in
late March. In addition to the pandemic, our business faced the impacts of
healthcare system staffing shortages on procedural volumes and significant
supply chain disruptions in certain businesses particularly in the fourth
quarter of fiscal year 2022. We cannot predict with confidence the duration and
severity of the pandemic and its impact on global procedure volumes. We expect
medical procedure rates may continue to vary by therapy and country and to be
impacted by regional COVID-19 case volumes, vaccine and booster immunization
rates, and new COVID-19 variants. Additionally, we cannot predict the impact
healthcare system staffing shortages will have on procedural volumes, and the
impact supply chain disruptions will have on the business.

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The following is a summary of revenue, diluted earnings per share, and cash flow for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g24.jpg]]

GAAP to Non-GAAP Reconciliations



Starting with the quarter ended April 29, 2022, the Company will no longer
adjust non-GAAP financial measures for certain license payments for, or
acquisitions of, technology not approved by regulators due to recent industry
guidance from the U.S. Securities and Exchange Commission. Historical non-GAAP
financial measures presented in this Annual Report on Form 10-K have been recast
for comparability.

The tables below present reconciliations of our Non-GAAP financial measures to
the most directly comparable financial measures prepared in accordance with U.S.
GAAP for fiscal years 2022 and 2021.

                                                                                          Fiscal year ended April 29, 2022
                                                                           Income Tax               Net Income
                                                    Income Before          Provision             Attributable to                                  Effective Tax
(in millions, except per share data)                Income Taxes           (Benefit)                Medtronic               Diluted EPS               Rate
GAAP                                                $    5,517          $         456          $           5,039          $       3.73                     8.3  %
Non-GAAP Adjustments:
Restructuring and associated costs (1)                     335                     54                        281                  0.21                    16.1
Acquisition-related items (2)                              (43)                     5                        (48)                (0.04)                  (11.6)
Certain litigation charges                                  95                     17                         78                  0.06                    17.9
(Gain)/loss on minority investments (3)                    (12)                     -                         (9)                (0.01)                 

-


Medical device regulations (4)                             102                     16                         86                  0.06                  

15.7


Amortization of intangible assets                        1,733                    266                      1,467                  1.09                    15.3
MCS impairment / costs (5)                                 881                    220                        661                  0.49                    25.0
Certain tax adjustments, net (6)                             -                     50                        (50)                (0.04)                      -
Non-GAAP                                            $    8,609          $       1,084          $           7,505          $       5.55                    12.6  %


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                                                                                           Fiscal year ended April 30, 2021
                                                                           Income Tax                Net Income
                                                    Income Before           (Benefit)             Attributable to                                  Effective Tax
(in millions, except per share data)                Income Taxes            Provision                Medtronic               Diluted EPS               Rate
GAAP                                                $    3,895          $          265          $           3,606          $       2.66                     6.8  %
Non-GAAP Adjustments:
Restructuring and associated costs (1)                     617                     128                        489                  0.36                    20.7
Acquisition-related items (2)                              (15)                    (20)                         4                     -                   126.7
Certain litigation charges                                 118                      23                         95                  0.07                    19.5
(Gain)/loss on minority investments (3)                    (61)                      -                        (57)                (0.04)                      -
Impairment charges (7)                                      76                       7                         68                  0.05                    10.5
Medical device regulations (4)                              83                      15                         68                  0.05                 

18.1


Debt tender premium and other charges (8)                  308                      60                        248                  0.18                 

19.5


Amortization of intangible assets                        1,783                     283                      1,500                  1.11                 

15.9


Certain tax adjustments, net (9)                             -                      41                        (41)                (0.03)                      -
Non-GAAP                                            $    6,804          $          802          $           5,980          $       4.42                    11.8  %

(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 primarily include business combination costs, changes in fair
value of contingent consideration, specifically for the fiscal year ended April
30, 2021, changes in amounts accrued for certain contingent liabilities for a
past acquisition.

(3)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 estimated incremental costs of complying with the new
European Union medical device regulations for previously registered products and
primarily include charges for contractors supporting the project and other
direct third-party expenses, which are expected to be substantially complete by
the end of fiscal year 2023.

(5)The charges relate to the Company's June 2021 decision to stop the
distribution and sale of the Medtronic HVAD System within the Mechanical
Circulatory Support Operating Unit (MCS). The charges included $515 million of
non-cash impairments, primarily related to $409 million of intangible asset
impairments, as well as $366 million for commitments and obligations in
connection with the decision, including patient support obligations,
restructuring, and other associated costs. Medtronic is committed to serving the
needs of the approximately 3,500 patients currently implanted with the HVAD
System.

(6)The net benefit primarily relates to the deferred tax impact associated with
a step up in tax basis for Swiss Cantonal purposes and a change in tax rates on
deferred taxes associated with intellectual property, which are partially offset
by the amortization on previously established deferred tax assets from
intercompany intellectual property transactions and a charge related to a change
in the Company's permanent reinvestment assertion on certain historical
earnings.

(7)The charges relate to the abandonment of certain intangible assets in our Neuroscience segment.

(8)The charges relate to the early redemption of approximately $6.0 billion of debt.



(9)The net benefit primarily relates to the finalization of an audit at the IRS
Appellate level for fiscal years 2012 through 2014 and the capitalization of
certain research and development costs for U.S. income tax purposes, which are
partially offset by the impact of an intercompany sale of assets, and a tax
basis adjustment and amortization of previously established deferred tax assets
from intercompany intellectual property transactions.

Free Cash Flow



Free cash flow, a non-GAAP financial measure, is calculated by subtracting
additions to property, plant, and equipment from net cash provided by operating
activities. Management uses this non-GAAP financial measure, in addition to U.S.
GAAP financial measures, to evaluate our operating results. Free cash flow
should be considered supplemental to, and not a substitute for, our reported
financial results prepared in accordance with U.S. GAAP. Reconciliations between
net cash provided by operating activities (the most comparable U.S. GAAP
measure) and free cash flow are as follows:
                                                   Fiscal Year
(in millions)                                   2022         2021

Net cash provided by operating activities $ 7,346 $ 6,240 Additions to property, plant, and equipment (1,368) (1,355) Free cash flow

$ 5,978      $ 4,885

Refer to the Summary of Cash Flows section for drivers of the change in cash provided by operating activities.


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NET SALES

Segment and Division

The charts below illustrate the percent of net sales by segment for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g25.jpg]][[Image Removed: mdt-20220429_g26.jpg]]



The table below includes net sales by segment and division for fiscal years 2022
and 2021:
                                                                       Net Sales by Fiscal Year
(in millions)                                                           2022                2021           Percent Change
Cardiac Rhythm & Heart Failure                                    $       5,908          $  5,584                      6  %
Structural Heart & Aortic                                                 3,055             2,834                      8
Coronary & Peripheral Vascular                                            2,460             2,354                      5
Cardiovascular                                                           11,423            10,772                      6
Surgical Innovations                                                      6,060             5,438                     11
Respiratory, Gastrointestinal, & Renal                                    3,081             3,298                     (7)
Medical Surgical                                                          9,141             8,737                      5
Cranial & Spinal Technologies                                             4,456             4,288                      4
Specialty Therapies                                                       2,592             2,307                     12
Neuromodulation                                                           1,735             1,601                      8
Neuroscience                                                              8,784             8,195                      7
Diabetes                                                                  2,338             2,413                     (3)
Total                                                             $      31,686          $ 30,117                      5  %





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Segment and Market Geography

The charts below illustrate the percent of net sales by market geography for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g27.jpg]][[Image Removed: mdt-20220429_g28.jpg]]

The table below includes net sales by market geography for each of our segments for fiscal years 2022 and 2021:



                                             U.S.(1)                                         Non-U.S. Developed Markets(2)                                       Emerging Markets(3)
                       Fiscal Year        Fiscal Year                             Fiscal Year        Fiscal Year                                                       Fiscal Year
(in millions)              2022               2021              % Change              2022               2021              % Change           Fiscal Year 2022             2021              % Change
Cardiovascular         $   5,545          $   5,248                    6  %       $   3,866          $   3,752                    3  %       $       2,012             $   1,773                   13  %
Medical Surgical           3,862              3,650                    6              3,373              3,320                    2                  1,905                 1,766                    8
Neuroscience               5,753              5,456                    5              1,801              1,724                    4                  1,229                 1,015                   21
Diabetes                     974              1,171                  (17)             1,085              1,019                    6                    279                   222                   26
Total                  $  16,135          $  15,526                    4  %       $  10,126          $   9,815                    3  %       $       5,426             $   4,777                   14  %


(1)U.S. includes the United States and U.S. territories.
(2)Non-U.S. developed markets include Japan, Australia, New Zealand, Korea,
Canada, and the countries of Western Europe.
(3)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 defined above.

The increase in net sales for fiscal year 2022 was primarily due to the recovery
of global procedure volumes from the downturn experienced in the first and
second quarters of fiscal year 2021 as a result of the COVID-19 pandemic. The
net sales increase was partially offset by supply chain challenges, particularly
in the fourth quarter of fiscal year 2022, as well as the impact of COVID-19
experienced in fiscal year 2022, particularly in the U.S. and China. For fiscal
year 2022, currency had an unfavorable impact of $107 million on non-U.S.
developed markets and a favorable impact of $33 million on emerging markets.
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Looking ahead, a number of macro-economic and geopolitical factors could negatively impact our business, including without limitation:



•The uncertain and uneven impact of COVID-19 on future procedural volumes,
supply constraints including certain electronic components and semiconductors,
healthcare staffing, worker absenteeism with our customers, suppliers, and in
our own operations and field teams, and resulting impacts on demand for our
products and therapies;

•The potential impact that sanctions and other measures being imposed in
response to the Russia-Ukraine conflict could have on revenue and supply chain.
The financial impact of the conflict in the fourth quarter of fiscal year 2022,
including on accounts receivable and inventory reserves, was not material and
for the fiscal year ended April 29, 2022, the business of the Company in these
countries represented less than 1% of the Company's consolidated revenues and
assets. Although the implications of this conflict are difficult to predict at
this time, the ongoing conflict may increase pressure on the global economy and
supply chains, resulting in increased future volatility risk for our business
operations and performance.

•Competitive product launches and pricing pressure, geographic macro-economic
risks including general price inflation, rising interest rates, reimbursement
challenges, impacts from changes in the mix of our product offerings, delays in
product registration approvals, replacement cycle challenges, and fluctuations
in currency exchange rates; and

•National and provincial tender pricing for certain products, particularly in China.



Cardiovascular

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac
resynchronization therapy devices, implantable cardioverter defibrillators
(ICD), leads and delivery systems, electrophysiology catheters, products for the
treatment of atrial fibrillation, information systems for the management of
patients with Cardiac Rhythm & Heart Failure devices, products designed to
reduce surgical site infections, coronary and peripheral stents and related
delivery systems, balloons and related delivery systems, endovascular stent
graft systems, heart valve replacement technologies, cardiac tissue ablation
systems, and open heart and coronary bypass grafting surgical products.
Cardiovascular also includes Care Management Services and Cath Lab Managed
Services (CLMS) within the Cardiac Rhythm & Heart Failure division.
Cardiovascular net sales for fiscal year 2022 were $11.4 billion, an increase of
6 percent as compared to fiscal year 2021. Currency had an unfavorable impact on
net sales for fiscal year 2022 of $32 million. The net sales increase was
primarily due to the recovery of global procedure volumes from the declines
experienced in fiscal year 2021 along with growth from recent product launches,
partially offset by global supply chain disruptions and declines in China due to
recent COVID-19 lockdowns.

The charts below illustrate the percent of Cardiovascular net sales by division for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g29.jpg]][[Image Removed: mdt-20220429_g30.jpg]]



Cardiac Rhythm & Heart Failure (CRHF) net sales increased 6 percent in fiscal
year 2022 as compared to fiscal year 2021. The increase was led by Cardiac
Rhythm Management with growth in TYRX antibacterial envelopes, CRT-Ds, and
cardiac pacing therapies due to Micra and transvenous pacemakers. Cardiac
Ablation Solutions also led growth with strong sales of Arctic Front
cryoablation systems. The net sales growth was partially offset by a decline of
Medtronic HVAD System net sales as a result of our June 2021 decision to stop
the

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distribution and sale of the system. The net sales for the Medtronic HVAD system for fiscal year 2021 was $141 million.



Structural Heart & Aortic (SHA) net sales increased 8 percent in fiscal year
2022 as compared to fiscal year 2021. The increase was led by growth in
transcatheter aortic valve replacement (TAVR) net sales as a result of continued
adoption of the CoreValve Evolut. Cardiac Surgery also contributed to the net
increase in sales as a result of broad growth across the business, particularly
from strong sales of Extra-Corporeal Life Support (ECLS) devices. These
increases were partially offset by declines within Aortic caused by field
corrective actions (FCA) and COVID-19 challenges. The most notable field
corrective actions were for the Valiant Navion Thoracic Stent Graft System FCA
issued in the fourth quarter of fiscal year 2021 and the Endurant II/IIs Stent
Graft Systems FCA issued in the third quarter of fiscal year 2022.

Coronary & Peripheral Vascular (CPV) net sales increased 5 percent in fiscal
year 2022 as compared to fiscal year 2021. The increase was led by growth in
Peripheral Vascular Health driven by strong performance of the recently launched
Abre venous self-expanding stent system for Deep Venous disease, as well as our
superficial venous product portfolio, including the VenaSeal and ClosureFast
systems. The increase was partially offset by declines in Coronary as well as
Atherectomy products due to impacts of COVID-19 on procedural volumes.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:



•Continued growth of our Micra transcatheter pacing system. The Micra AV
launched in Japan in November 2021 and received approval in China in May 2022.
Micra AV expands the Micra target population from 15 percent to 45 percent of
pacemaker patients.

•Continued acceptance and growth from the Azure XT and S SureScan pacing systems. Azure pacemakers feature Medtronic-exclusive BlueSync technology, which enables automatic, secure wireless remote monitoring with increased device longevity.

•Growth of the Cobalt and Crome portfolio of ICDs and CRT-Ds.

•Continued acceptance and expansion of the Claria MRI CRT-D system with AdaptivCRT and compatibility with TriageHF technology.



•Continued acceptance and expansion of the LINQ II cardiac monitor. Supply for
the LINQ II cardiac monitor is improving as we continue to ramp our wafer scale
manufacturing. During the third quarter of fiscal year 2022, we launched two
AccuRhythm AI algorithms on the LINQ II platform to significantly reduce false
positive alerts for Atrial Fibrillation and Pause while retaining sensitivity
for true positive detection, and reduce clinic workload and burden.

•Growth of the CRT-P quadripolar pacing system.

•Continued growth, adoption, and utilization of the TYRX Envelope for implantable devices.



•Continued acceptance and market expansion of Arctic Front cryoablation for
treatment of atrial fibrillation. In June 2021, the Arctic Front cryoablation
system received a first line therapy designation from the U.S. FDA for the
treatment of atrial fibrillation.

•Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement platform into intermediate risk indication globally and for the treatment of patients determined to be at low risk with surgery.

•Continued expansion and training of field support to increase coverage in the U.S. centers performing TAVR procedures.



•Continued acceptance and growth from Evolut PRO, which provides
industry-leading hemodynamics, reliable delivery, enhanced durability versus
SAVR procedures at 5 years, and advanced sealing with an excellent safety
profile. In August 2021, the U.S. FDA approved the Evolut FX TAVR, a system
enhancement designed to improve the overall procedural experience through
enhancements in deliverability, implant visibility and deployment stability.
During the third quarter of fiscal year 2022, Evolut PRO received NMPA approval
within China.

•Continued acceptance and growth from the VenaSeal Closure System in the U.S.
The VenaSeal Closure System is a unique non-thermal solution to address
superficial venous disease that provides improved patient comfort, reduces the
recovery time, and eliminates the risk of thermal nerve injury.

•Continued acceptance and growth of the Abre venous self-expanding stent system
in the U.S. as well as pressure from competitors re-entering the market. Abre is
designed for the unique challenges of venous disease. It offers easy deployment,
to let physicians focus on their patient, and delivers demonstrated endurance,
to give patients freedom of movement.

•Our voluntary recall of the Valiant Navion Thoracic Stent Graft System and our
ability to ramp production of our previous generation product, the Valiant
Captivia Thoracic Stent Graft System. We are currently ramping production of the
Valiant Captivia Thoracic Stent Graft System and plan to reach full production
capacity in the first quarter of fiscal year 2023.

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•Our June 2021 decision to stop the distribution and sale of the Medtronic HVAD System.



•Our ability to successfully develop, obtain regulatory approval of and
commercialize the products within our pipeline, which include, but are not
limited to, the Symplicity Spyral Multi-Electrode Renal Denervation Catheter,
Pulse Field Ablation, a novel energy source that is non-thermal, Aurora
Extravascular ICD and transcatheter mitral and tricuspid therapy products led by
our Intrepid system.

Medical Surgical

Medical Surgical's products span the entire continuum of patient care from
diagnosis to recovery, with a focus on diseases of the gastrointestinal tract,
lungs, pelvic region, kidneys, obesity, and preventable complications. The
products include those for advanced and general surgical products, surgical
stapling devices, vessel sealing instruments, wound closure, electrosurgery
products, hernia mechanical devices, mesh implants, advanced ablation,
interventional lung, ventilators, airway products, renal care products, and
sensors and monitors for pulse oximetry, capnography, level of consciousness and
cerebral oximetry. Medical Surgical's net sales for fiscal year 2022 were $9.1
billion, an increase of 5 percent as compared to fiscal year 2021. Currency had
an unfavorable impact on net sales of $44 million for fiscal year 2022. The net
sales increase was primarily due to the recovery of global procedure volumes
from the declines experienced in fiscal year 2021 partially offset by global
supply chain disruptions and declines in China due to recent COVID-19 lockdowns.

The charts below illustrate the percent of Medical Surgical net sales by division for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g31.jpg]][[Image Removed: mdt-20220429_g32.jpg]]



Surgical Innovations (SI) net sales for fiscal year 2022 increased 11 percent as
compared to fiscal year 2021. Net sales growth was led by Advanced Surgical
instruments, driven by the continued adoption of the Company's LigaSure,
Sonicision, and Tri-Staple technologies, and Hernia and Wound Management. The
increase was partially offset by declines in the fourth quarter of fiscal year
2022 resulting from global supply chain challenges, including resins,
semiconductors, and packaging trays, which impacted energy and stapling
products.

Respiratory, Gastrointestinal, & Renal (RGR) net sales for fiscal year 2022
decreased 7 percent as compared to fiscal year 2021. RGR net sales declines were
largely due to declines in ventilator demands when compared fiscal year 2021 as
demand returned to pre-pandemic levels in the fourth quarter of fiscal year
2022. These declines were partially offset by growth in Patient Monitoring, led
by the Nellcor pulse oximetry sensors and the Bispectral Index (BIS) sensors,
Gastrointestinal, driven by the esophageal product portfolio, as well as growth
in Renal Care Solutions.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:



•Continued acceptance and future growth of Open-to-MIS techniques and tools
supported by our efforts to transition open surgery to MIS (minimally invasive
surgery). The Open-to-MIS initiative focuses on furthering our presence in and
working to optimize

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open surgery globally, while capturing the market opportunity that exists in transitioning open procedures to MIS, whether through traditional MIS, or advanced technologies, including robotics.

•Continued acceptance and future growth of powered stapling and energy platform.

•Our ability to execute ongoing strategies in order to address the competitive pressure of reprocessing of our vessel sealing disposables and growth of surgical soft tissue robotics procedures in the U.S.



•Our ability to create markets and drive products and procedures into emerging
markets. We have high quality and cost-effective surgical products designed for
customers in emerging markets such as the ValleyLab LS10 single channel vessel
sealing generator, which is compatible with our line of LigaSure instruments and
designed for simplified use and affordability.

•Continued elevation of the standard of care for respiratory compromise, a progressive condition impacting a patient's ability to breathe effectively, which leverages our market leading MicroStream capnography technology.



•Continued acceptance and growth in patient monitoring, airway, and ventilation
management. Key products in this area include the Puritan Bennett 980
ventilator, Microstream Capnography, Nellcor pulse oximetry system with OxiMax
technology, Shiley tracheostomy and endotracheal tubes, McGRATH MAC video
laryngoscopes, SonarMed Airway Monitoring System for the NICU, and the Nellcor
Oxysoft pulse oximetry system for neonatal and adult critical care patients,
which received U.S. FDA clearance during the fourth quarter of fiscal year 2022.

•Continued and future acceptance of less invasive standards of care in
Gastrointestinal and Hepatology products, including the areas of GI Diagnostic
and Therapeutic product lines. Recently launched products include the PillCam
COLON capsule endoscopy, the Barrx platform through ablation with the Barrx 360
Express catheter, Endoflip imaging systems, Bravo Calibration-free reflux
testing, and the Emprint ablation system with Thermosphere Technology, which
maintains predictable spherical ablation zones throughout procedures reducing
procedure time and cost.

•Continued and future acceptance of Interventional Lung Solutions. Products
include our Illumisite navigation platform, combined with our portfolio of
biopsy tools including the Arcpoint pulmonary needle, and to access lesions
outside the airway, the CrossCountry transbronchial access tool. This
comprehensive portfolio gives the power to display position and access lung
nodules in the periphery of the lungs, in a minimally invasive approach to
accessing difficult-to-reach areas of the lung, which may aid in the diagnosis
of lung cancer.

•Expanding the use of less invasive treatments and furthering our commitment to
improving options for women with abnormal uterine bleeding. Our expanded and
strengthened surgical offerings are expected to complement our global gynecology
business.

•Continued future growth internationally for the Hugo robotic assisted surgery
(RAS) system for urologic, bariatric, gynecologic, and general surgery
procedures as well as for our easy-to-access Touch Surgery Enterprise surgical
video system. The Hugo RAS system, which received CE Mark in October 2021 as
well as secured additional regulatory approvals in the third and fourth quarters
of fiscal year 2022, is designed to help reduce unwanted variability, improve
patient outcomes, and by extension, lower per procedure cost.

•The pending contribution of our Renal Care Solutions business as a result of
the May 25, 2022 definitive agreement with DaVita Inc. Refer to the "Subsequent
Events" section of this Management's Discussion and Analysis for additional
information on the divestiture.

•Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include, but are not limited to, our Hugo RAS system in the U.S., our NextGen McGrath MAC video laryngoscopes, Signia power stapling devices, and our Ligasure and Sonicision vessel sealing devices.



Neuroscience

Neuroscience's products include various spinal implants, bone graft substitutes,
biologic products, image-guided surgery and intra-operative imaging systems,
robotic guidance systems used in the robot-assisted spine procedures, and
systems that incorporate advanced energy surgical instruments. Neuroscience's
products also focus on the treatment of overactive bladder, urinary retention,
fecal incontinence, as well as products to treat ear, nose, and throat (ENT),
and therapies to treat the diseases of the vasculature in and around the brain,
including coils, neurovascular stents and flow diversion products. Neuroscience
also manufactures products related to implantable neurostimulation therapies and
drug delivery systems for the treatment of chronic pain, movement disorders, and
epilepsy. Neuroscience's net sales for fiscal year 2022 were $8.8 billion, an
increase of 7 percent as compared to fiscal year 2021. Currency had a favorable
impact on net sales for fiscal year 2022 of $3 million. The net sales increase
was primarily due to the recovery of global procedure volumes from the declines
experienced in fiscal year 2021, partially offset by global supply chain
disruptions and declines in China due to COVID-19 lockdowns and reduced sales in
advance of potential national volume-based pricing (VBP) tenders.
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The graphs below illustrate the percent of Neuroscience net sales by division for fiscal years 2022 and 2021:

[[Image Removed: mdt-20220429_g33.jpg]][[Image Removed: mdt-20220429_g34.jpg]]



Cranial & Spinal Technologies (CST) net sales for fiscal year 2022 increased 4
percent as compared to fiscal year 2021. Net sales growth was primarily driven
by Neurosurgery with strong sales of the Midas Rex powered surgical instruments
and StealthStation Navigation and O-arm Imaging System. Growth in CST also
occurred in Spine and Biologics due to the recovery of global procedural volumes
in the U.S., Japan, and Western Europe compared to the prior fiscal year. This
growth was partially offset by recent reduced sales in China in advance of
potential national VBP tender in Spine.

Specialty Therapies (Specialty) net sales for fiscal year 2022 increased 12
percent as compared to fiscal year 2021. Net sales growth was primarily driven
by strength in Pelvic Health, ENT, and Neurovascular. Pelvic Health's growth was
led by sales of the recently launched InterStim Micro neurostimulator and
SureScan MRI leads. ENT growth was driven by the sales of StealthStation ENT
Navigation System despite continued supply constraints in disposables, which are
recovering. Neurovascular's growth was led by sales of flow diversion,
hemorrhagic stroke, and liquid embolic products.

Neuromodulation (NM) net sales for fiscal year 2022 increased 8 percent as
compared to fiscal year 2021. Sales growth occurred in both Pain Therapies and
Brain Modulation and reflected a recovery in procedural volumes. Net sales
growth was driven by strong performance of the Percept PC deep brain stimulation
(DBS) device with BrainSense technology in Brain Modulation.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:

•Continued growth from Enabling Technologies, including StealthStation Navigation and O-arm Imaging Systems, Midas Rex Powered Surgical Instruments, and ENT Navigation and Power Systems, as well as acceptance of the Stealth Autoguide cranial robotic guidance platform.

•Continued sales of Mazor robotic units and associated market adoption of robot-assisted spine procedures, including the Mazor X Stealth, our integrated robotics and navigation platform.

•Continued growth from spine titanium interbody implants.



•Continued adoption of our integrated solutions through the Surgical Synergy
strategy, which integrates our spinal implants with enabling technologies such
as imaging, navigation, power instruments, nerve monitoring, and Mazor robotics,
as well as AI-driven surgical planning, personalized spinal implants, and
robot-assisted surgery due to Medicrea technologies, acquired in fiscal year
2021.

•Market acceptance and continued global adoption of innovative new spine products and procedural solutions within our CST division such as our Infinity OCT System and Prestige LP cervical disc system.


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•Growth in the broader vertebral compression fracture (VCF) and adjacent markets as we continue to pursue the development of other therapies to treat more patients with VCF, including continued success of both the Kyphon V vertebroplasty system and the Osteocool RF Spinal Tumor ablation system.



•Continued acceptance and growth of our ENT and Pelvic Health therapies within
our Specialty Therapies division, including our InterStim therapy with InterStim
II, InterStim Micro and InterStim X neurostimulators for the treatment of the
symptoms of overactive bladder, urinary retention, and bowel incontinence, and
capital equipment sales of the Stealth Station ENT surgical navigation system
and intraoperative NIM nerve monitoring system.

•Continued acceptance and growth of the Solitaire FR revascularization device
for treatment of acute ischemic stroke and the Pipeline Embolization Devices,
endovascular treatments for large or giant wide-necked brain aneurysms.

•Continued acceptance of our React Catheter and Riptide aspiration system, along with our next-generation Solitaire revascularization device.



•Market acceptance and continued global adoption of our Intellis spinal cord
stimulator, DTM proprietary waveform, Evolve workflow algorithm, and Snapshot
reporting to treat chronic pain in major markets around the world.

•Continued acceptance and growth of our Percept PC DBS device with BrainSense
technology, including its treatment of Parkinson's Disease, epilepsy, and other
movement disorders.

•Market acceptance and growth from SCS therapy for treating Diabetic Peripheral Neuropathy (DPN) on Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator which received U.S. FDA approval in January 2022.



•Ongoing obligations under the U.S. FDA consent decree entered in April 2015
relating to the SynchroMed drug infusion system and the Neuromodulation quality
system. The U.S. FDA lifted its distribution requirements on our implantable
drug pump in October 2017 and its warning letter in November 2017.

•Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include, but are not limited to, our closed-loop Percept PC and RC devices with adaptive DBS (aDBS), our hemorrhagic stroke intravascular device, and our next-generation spine enabling technologies.

Diabetes



Diabetes' products include insulin pumps, continuous glucose monitoring (CGM)
systems, consumables, and smart insulin pen systems. Diabetes' sales for fiscal
year 2022 were $2.3 billion, a decrease of 3 percent as compared to fiscal year
2021. Currency had an unfavorable impact on net sales for fiscal year 2022 of $2
million. Diabetes' net sales decline for fiscal year 2022 was primarily
attributable to declines in the U.S. partially offset by growth in the MiniMed
780G insulin pump system and integrated CGM in the international markets.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Diabetes could be affected by the following:



•Patient demand for the MiniMed 770G insulin pump system, which launched in the
U.S. in November 2020 and in Japan in January 2022. The system is powered by
SmartGuard technology and features the added benefits of smartphone connectivity
and an expanded age indication to children as young as age two.

•Continued growth internationally for the MiniMed 780G insulin pump system. The
MiniMed 780G system was approved in the E.U. in June 2020 and has launched in
over 40 countries on four continents outside the U.S. The global adoption of
sensor-augmented insulin pump systems has resulted in strong sensor attachment
rates.

•Continued acceptance and growth of the Guardian Connect CGM system which displays glucose information directly to a smartphone to help ensure patients have access to their glucose levels seamlessly and discretely. The Guardian Connect CGM system is available on both Apple iOS and Android devices.



•Strengthening our position in the diabetes market as a result of the September
2020 acquisition of Companion Medical. Companion Medical offered a U.S. FDA
cleared InPen smart pen system that combines the freedom of a reusable Bluetooth
pen with the intelligence of an intuitive mobile application that helps users
administer the appropriate insulin dose. During the third quarter of fiscal year
2021, we integrated our CGM data into the InPen application, which allows users
to have their Medtronic CGM readings in real-time alongside insulin dose
information, all in one view.

•Continued pump and CGM competition in an expanding global market.

•Changes in medical reimbursement policies and programs, along with additional payor coverage on insulin pumps.


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•Resolution of findings contained in a December 2021 U.S. FDA warning letter
relating to the MiniMed 600 series insulin pump and a remote controller device
for MiniMed 508 and Paradigm pumps. We are currently working with the U.S. FDA
to resolve the findings. The existence of the warning letter may limit our
ability to launch certain new Diabetes products in the U.S. prior to resolution
of the findings.

•Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include, but are not limited to, our MiniMed 780G insulin pump and the Guardian 4 sensor, which have been submitted to the U.S. FDA.

COSTS AND EXPENSES

The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales:


                    [[Image Removed: mdt-20220429_g35.jpg]]

Cost of Products Sold We continue to focus on reducing our costs of production
through supplier management, manufacturing improvements, and optimizing our
manufacturing network. Cost of products sold for fiscal year 2022 was $10.1
billion as compared to $10.5 billion for fiscal year 2021. The decrease in cost
of products sold as a percentage of net sales was largely due to the conditions
of the pandemic during fiscal year 2021, which resulted in recognizing a portion
of our fixed overhead costs as period expenses, increases in our reserves in our
excess and obsolete inventory, as well as negative impact from mix, as products
in higher demand had lower gross margins. The decrease was also attributable to
charges from field correction actions in the prior year. Fiscal year 2022
included $58 million of inventory write-downs associated with our June 2021
decision to stop the distribution and sale of Medtronic's HVAD System (MCS
charges). Looking forward, our cost of products sold likely will be further
negatively impacted by inflation and higher labor and direct material costs.

Research and Development Expense We remain committed to deliver the best
possible experiences for every patient, physician, and caregiver we serve; to
create technologies that expand what's possible across the entire human body to
transform lives; to turn data and insights into real action to serve real
patient needs, dramatically improving care; and to expand healthcare access and
deliver positive outcomes that go far beyond our products. Research and
development expense for fiscal year 2022 was $2.7 billion as compared to $2.5
billion for fiscal year 2021. Fiscal year 2022 included $101 million of
acquisitions of, and license payments for, technology not approved by
regulators, primarily in our Diabetes segment.

Selling, General, and Administrative Expense Our goal is to continue to leverage
selling, general, and administrative expense initiatives. Selling, general, and
administrative expense primarily consists of salaries and wages, other
administrative costs, such as professional fees and marketing expenses, and
certain acquisition and restructuring expenses. Selling, general, and
administrative expense for fiscal year 2022 was $10.3 billion as compared to
$10.1 billion for fiscal year 2021. The decrease in selling, general, and
administrative expense as a percentage of net sales was primarily driven by net
sales growth as a result of the recovery of procedural volumes partially offset
by increases in employee travel as compared to the corresponding period in the
prior year when travel was limited.

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The following is a summary of other costs and expenses (income):



                                         Fiscal Year
(in millions)                         2022         2021

Amortization of intangible assets $ 1,733 $ 1,783 Restructuring charges, net

               60          293
Certain litigation charges               95          118
Other operating expense, net            862          315

Other non-operating income, net (318) (336) Interest expense

                        553          925


Amortization of Intangible Assets Amortization of intangible assets includes the
amortization expense of our definite-lived intangible assets, consisting of
purchased patents, trademarks, tradenames, customer relationships, purchased
technology, and other intangible assets.

Restructuring Charges, Net

Enterprise Excellence



In the third quarter of fiscal year 2018, we announced a multi-year global
Enterprise Excellence Program designed to drive long-term business growth and
sustainable efficiency. Further program details are described in Note 4 of the
consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report on Form 10-K.

Since inception, the Company has incurred pre-tax exit and disposal costs and
other costs, across all segments, of $1.6 billion in connection with the
Enterprise Excellence program. In total, the Company estimates it will recognize
approximately $1.8 billion of exit and disposal costs and other costs related to
the Enterprise Excellence program by the end of fiscal year 2023.

For fiscal years 2022 and 2021, the Company recognized net charges of
$259 million and $349 million, respectively, including $31 million and $52
million, respectively within restructuring charges, net in the consolidated
statements of income which were primarily comprised of employee termination
benefits. For fiscal years 2022 and 2021, charges also included costs incurred
as a direct result of the restructuring program, such as salaries for employees
supporting the program and consulting, including $116 million and $128 million,
respectively, recognized within cost of products sold, and $112 million and $169
million, respectively, recognized within selling, general, and administrative
expense in the consolidated statements of income.

Simplification

In the first quarter of fiscal year 2021, we initiated our Simplification restructuring program designed to make the Company a more nimble and competitive organization. Further program details are described in Note 4 of the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.



Since inception, the Company has incurred pre-tax exit and disposal costs and
other costs, across all segments, of $349 million in connection with the
Simplification program. In total, the Company estimates it will recognize
approximately $450 million of exit and disposal costs and other costs related to
the Simplification program by the end of fiscal year 2023.

For fiscal years 2022 and 2021, the Company recognized net charges of
$82 million and $268 million, respectively, including $35 million and $241
million, respectively, within restructuring charges, net in the consolidated
statements of income which were primarily comprised of employee termination
benefits. For fiscal years 2022 and 2021, charges also included costs incurred
as a direct result of the restructuring program, such as salaries for employees
supporting the program and consulting, including $45 million and $27 million,
respectively, recognized within selling, general, and administrative expense in
the consolidated statements of income. The net charges for fiscal year 2021
included $97 million of incremental defined benefit pension and post-retirement
related expenses for employees that accepted voluntary early retirement
packages.

Certain Litigation Charges We classify specified certain litigation charges and
gains related to significant legal matters as certain litigation charges in the
consolidated statements of income. For additional information, refer to Note 18
of the consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report on Form 10-K.

Other Operating Expense, Net Other operating expense, net primarily includes
royalty income and expense, currency remeasurement and derivative gains and
losses, Puerto Rico excise taxes, changes in the fair value of contingent
consideration, changes in amounts accrued for certain contingent liabilities for
a past acquisition, MCS charges, impairment charges, and income from funded
research and development arrangements.

The increase in other operating expense, net was primarily driven by MCS charges
recorded in fiscal year 2022. The charges of $823 million primarily included
$409 million of intangible asset impairments and $366 million for commitments
and obligations, including

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customer support obligations, restructuring, and other associated costs. The
increase was partially offset by changes in fair value of contingent
consideration, which resulted in $103 million of income for fiscal year 2022 as
compared to $36 million of expense in fiscal year 2021. The net currency impact
of remeasurement expense and our hedging programs also partially offset the
increase with $70 million of income in fiscal year 2022 and $47 million of
expense in fiscal year 2021. Finally, contributing to the change was a
$132 million gain related to amounts accrued for certain contingent liabilities
for a past acquisition and $76 million of impairment charges related to the
abandonment of certain intangible assets, both in fiscal year 2021. Additional
information regarding the MCS charges is described in Note 4 of the consolidated
financial statements in "Item 8. Financial Statements and Supplementary Data" in
this Annual Report on Form 10-K.

Other Non-Operating Income, Net Other non-operating income, net includes the
non-service component of net periodic pension and postretirement benefit cost,
investment gains and losses, and interest income. The decrease in other
non-operating income, net for fiscal year 2022 is driven by our equity method
and minority investments portfolio offset by an increase in income from the
non-service component of net periodic pension and postretirement benefit cost.
Gains on equity method and minority investments were $30 million and $61 million
for fiscal year 2022 and 2021, respectively, and income related to the
non-service component of net periodic pension and postretirement benefits were
$107 million and $86 million, respectively.

Interest Expense Interest expense includes interest incurred on our outstanding
borrowings, amortization of debt issuance costs and debt premiums or discounts,
amortization of gains or losses on terminated or de-designated interest rate
derivative instruments, and charges recognized in connection with the tender and
early redemption of senior notes. The decrease in interest expense for fiscal
year 2022 was primarily due to the $308 million charge incurred as a result of
the early redemption of approximately $6.0 billion of debt during fiscal year
2021.

INCOME TAXES
                                                                                Fiscal Year
(in millions)                                                             2022               2021
Income tax provision (benefit)                                        $     456          $      265
Income before income taxes                                                5,517               3,895
Effective tax rate                                                          8.3  %              6.8  %

Non-GAAP income tax provision                                         $   1,084          $      802
Non-GAAP income before income taxes                                       8,609               6,804
Non-GAAP Nominal Tax Rate                                                  12.6  %             11.8  %

Difference between the effective tax rate and Non-GAAP Nominal Tax Rate

                                                                        4.3  %              5.0  %


Many of the countries we operate in have statutory tax rates lower than our U.S.
statutory rate, thereby resulting in an overall effective tax rate less than the
U.S. statutory rate of 21.0 percent. A significant portion of our earnings are
generated from operations in Puerto Rico, Switzerland, and Ireland. The
statutory tax rates for these jurisdictions range from 12.5 percent to 37.5
percent. Our earnings in Puerto Rico are subject to certain tax incentive grants
which provide for tax rates lower than the country's statutory tax rates. Unless
our tax incentive grants are extended, they will expire between fiscal years
2023 and 2034. The tax incentive grants, which expired during fiscal year 2022,
did not have a material impact on our financial results. See Note 13 to the
consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report on Form 10-K for additional
information.

Our effective tax rate for fiscal year 2022 was 8.3 percent, as compared to 6.8
percent in fiscal year 2021. Our Non-GAAP Nominal Tax Rate for fiscal year 2022
was 12.6 percent, as compared to 11.8 percent in fiscal year 2021. The increase
in both the effective tax rate and the Non-GAAP Nominal Tax Rate was primarily
due to year-over-year changes in operational results by jurisdiction.

During fiscal year 2022, we recognized $89 million of operational tax benefits.
The operational tax benefits included a $46 million benefit from excess tax
benefits associated with stock-based compensation, and a $43 million net benefit
associated with the resolution of certain income tax audits, finalization of
certain tax returns, changes to uncertain tax position reserves, and changes to
certain deferred income tax balances.

During fiscal year 2021, we recognized $51 million of operational tax benefits,
which included a $46 million benefit from excess tax benefits associated with
stock-based compensation.

An increase in our Non-GAAP Nominal Tax Rate of one percent would result in an
additional income tax provision for fiscal years 2022 and 2021 of approximately
$86 million and $68 million, respectively.

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Certain Tax Adjustments

During fiscal year 2022, the net benefit from certain tax adjustments of $50 million, recognized in income tax provision (benefit) in the consolidated statement of income, included the following:

•A benefit of $82 million associated with a step up in tax basis for Swiss Cantonal purposes.

•A benefit of $82 million related to a change in tax rates on intangible assets.

•A cost of $47 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

•A cost of $41 million associated with a change in the Company's permanent reinvestment assertion on certain historical earnings.

•A net cost of $26 million primarily associated with an intercompany sale of assets.

During fiscal year 2021, the net benefit from certain tax adjustments of $41 million, recognized in income tax provision (benefit) in the consolidated statement of income, included the following:



•A net benefit of $106 million associated with the resolution of an audit at the
IRS Appellate level for fiscal years 2012, 2013, and 2014. The issues resolved
relate to the utilization of certain net operating losses and the allocation of
income between Medtronic, Inc. and its wholly owned subsidiary operating in
Puerto Rico for businesses that are not the subject of the U.S. Tax Court Case
for fiscal years 2005 and 2006.

•A net cost of $73 million related to a tax basis adjustment of previously
established deferred tax assets from intercompany intellectual property
transactions. The cumulative amount of deferred tax benefit previously
recognized from intercompany intellectual property transactions and recorded as
Certain Tax Adjustments is $1.5 billion. The corresponding deferred tax assets
will be amortized over a period of approximately 20 years.

•A cost of $50 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

•A net cost of $25 million associated with an internal restructuring and intercompany sale of assets.

•A benefit of $83 million related to the capitalization of certain research and development costs for U.S. income tax purposes and the establishment of a deferred tax asset at the U.S. federal statutory tax rate.



Certain tax adjustments will affect the comparability of our operating results
between periods. Therefore, we consider these Non-GAAP Adjustments. Refer to the
"Executive Level Overview" section of this Management's Discussion and Analysis
for further discussion of these adjustments.

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LIQUIDITY AND CAPITAL RESOURCES



We are currently in a strong financial position, and we believe our balance
sheet and liquidity as of April 29, 2022 provide us with flexibility, and our
cash, cash equivalents, and current investments, along with our credit facility
and related commercial paper programs will satisfy our foreseeable operating
needs.

Our liquidity and capital structure are evaluated regularly within the context
of our annual operating and strategic planning processes. We consider the
liquidity necessary to fund our operations, which includes working capital
needs, investments in research and development, property, plant, and equipment,
and other operating costs. We also consider capital allocation alternatives that
balance returning value to shareholders through dividends and share repurchases,
satisfying maturing debt, and acquiring businesses and technology.

Summary of Cash Flows



The following is a summary of cash provided by (used in) operating, investing,
and financing activities, the effect of exchange rate changes on cash and cash
equivalents, and the net change in cash and cash equivalents:
                                                                    Fiscal Year
(in millions)                                                    2022         2021
Cash provided by (used in):
Operating activities                                           $ 7,346      $ 6,240
Investing activities                                            (1,659)      (2,866)
Financing activities                                            (5,336)      (4,136)

Effect of exchange rate changes on cash and cash equivalents (231)

215


Net change in cash and cash equivalents                        $   121

$ (547)





Operating Activities The $1.1 billion increase in net cash provided was
primarily driven by an increase in cash collected from customers along with a
decrease in cash paid for income taxes. The increase in net cash provided was
partially offset by an increase in cash paid to employees. The increase in cash
collected from customers was primarily related to COVID-19 driving decreased
sales in the fourth quarter of fiscal year 2020 and first quarter of fiscal year
2021. The decrease in cash paid for income taxes was primarily due to increased
estimated federal tax payments and tax payments associated with IRS audit
settlements in fiscal year 2021. Cash paid to employees increased due to higher
annual incentive plan payouts compared to the prior fiscal year.

Investing Activities The $1.2 billion decrease in net cash used was primarily
attributable to a decrease in cash paid for acquisitions of $903 million, as
well as a decrease of net purchases of investments of $273 million as compared
to fiscal year 2021.

Financing Activities The $1.2 billion increase in net cash used was largely the
result of the increase of share repurchases of $1.9 billion. The increase in net
cash used was offset by a decrease in short-term borrowings of $311 million. For
fiscal year 2021, financing cash flows were impacted by the Mizuho Bank term
loan under which we borrowed ¥300 billion in the first quarter of fiscal year
2021, which was subsequently repaid in the fourth quarter of fiscal year 2021.
Fiscal year 2021 financing cash flows were also impacted by the issuance of
$7.2 billion of Euro-denominated senior notes offset by the early redemption of
$6.0 billion of senior notes for $6.3 billion of total consideration, and
repayment of an additional $911 million of Euro-denominated senior notes. For
more information on the Mizuho Bank term loan, and issuances and redemptions of
senior notes, refer to Note 6 of the consolidated financial statements in "Item
8. Financial Statements and Supplementary Data" in this Annual Report on Form
10-K.

Debt and Capital

Our capital structure consists of equity and interest-bearing debt. We primarily
utilize unsecured senior debt obligations to meet our financing needs and, to a
lesser extent, bank borrowings. From time to time, we may repurchase our
outstanding debt obligations in the open market or through privately negotiated
transactions.

Total debt at April 29, 2022 was $24.1 billion, as compared to $26.4 billion at April 30, 2021. The decrease in total debt was driven by fluctuations in exchange rates as it pertains to our Euro-denominated senior notes.



Subsequent to fiscal year 2022, on May 2, 2022, we entered into a term loan
agreement (Fiscal 2023 Loan Agreement) with Mizuho Bank, Ltd. for an aggregate
principal amount of up to ¥300 billion with a term of 364 days. In May and June
2022, Medtronic Luxco borrowed an aggregate of ¥297 billion, or approximately
$2.3 billion, of the term loan, under the Fiscal 2023 Loan Agreement. The
Company used the net proceeds of the borrowings to fund the early redemption of
$1.9 billion of Medtronic Inc. Senior Notes for $1.9 billion of total
consideration, and $368 million of Medtronic Luxco Senior Notes for $376 million
of total consideration. The Company will recognize a total loss on debt
extinguishment of $53 million in the quarter ended July 29, 2022, which
primarily includes cash premiums and accelerated amortization of deferred
financing costs and debt discounts and premiums. The loss will be recognized in
interest expense in the consolidated statements of income.

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We repurchase our ordinary shares on occasion as part of our focus on returning
value to our shareholders. In March 2019, the Company's Board of Directors
authorized the repurchase of $6.0 billion of the Company's ordinary shares.
There is no specific time period associated with these repurchase
authorizations. During fiscal years 2022 and 2021, we repurchased a total of 22
million and 4 million shares, respectively, under these programs at an average
price of $113.11 and $126.80, respectively. At April 29, 2022, we had
approximately $3.0 billion remaining under the share repurchase program
authorized by our Board of Directors.

For more information on credit arrangements, see Note 6 of the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

Liquidity



Our liquidity sources at April 29, 2022 included $3.7 billion of cash and cash
equivalents and $6.9 billion of current investments. Additionally, we maintain
commercial paper programs and a Credit Facility.

Our investments primarily include available-for-sale debt securities, including
U.S. and non-U.S. government and agency securities, corporate debt securities,
mortgage-backed securities, certificates of deposit, and other asset-backed
securities. See Note 5 to the consolidated financial statements in "Item 8.
Financial Statements and Supplementary Data" in this Annual Report on Form 10-K
for additional information regarding fair value measurements.

We maintain multicurrency commercial paper programs for short-term financing,
which allow us to issue unsecured commercial paper notes on a private placement
basis up to a maximum aggregate amount outstanding at any time of $3.5 billion.
At both April 29, 2022 and April 30, 2021, we had no commercial paper
outstanding. The issuance of commercial paper reduces the amount of credit
available under our existing line of credit, as explained below.

We also have a $3.5 billion five-year syndicated credit facility (Credit
Facility), which expires in December 2026. At each anniversary date of the
Credit Facility, we can request a one-year extension of the maturity date. The
Credit Facility provides backup funding for the commercial paper programs and
may also be used for general corporate purposes. The Credit Facility provides us
with the ability to increase our borrowing capacity by an additional $1.0
billion at any time during the term of the agreement. At April 29, 2022 and
April 30, 2021, no amounts were outstanding under the Credit Facility.

Interest rates on advances of our Credit Facility are determined by a pricing
matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings
Services (S&P) and Moody's Investors Service (Moody's). Facility fees are
payable on the Credit Facility and are determined in the same manner as the
interest rates. We are in compliance with all covenants related to the Credit
Facility.

The following table is a summary of our S&P and Moody's long-term debt ratings
and short-term debt ratings:

                                                       Agency Rating (1)
                                           April 29, 2022             April 30, 2021
Standard & Poor's Ratings Services
  Long-term debt                                  A                          A
  Short-term debt                                A-1                        A-1
Moody's Investors Service
  Long-term debt                                 A3                         A3
  Short-term debt                                P-2                        P-2


(1)  Agency ratings are subject to change, and there may be no assurance that an
agency will continue to provide ratings and/or maintain its current ratings. A
security rating is not a recommendation to buy, sell or hold securities, and may
be subject to revision or withdrawal at any time by the rating agency, and each
rating should be evaluated independently of any other rating.

S&P and Moody's long-term debt ratings and short-term debt ratings at April 29,
2022 were unchanged as compared to the ratings at April 30, 2021. We do not
expect the S&P and Moody's ratings to have a significant impact on our liquidity
or future flexibility to access additional liquidity given our balance sheet,
Credit Facility, and related commercial paper programs.

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Contractual Obligations and Cash Requirements

We have future contractual obligations and other minimum commercial commitments
that are entered into in the normal course of business, some of which are
recorded in our consolidated balance sheet. We believe our off-balance sheet
arrangements do not have a material current or anticipated future effect on our
consolidated earnings, financial position, and/or cash flows.

Presented below is a summary of our off-balance sheet contractual obligations
and other minimum commercial commitments at April 29, 2022, as well as long-term
contractual obligations reflected in the balance sheet at April 29, 2022.

                                                                                              Maturity by Fiscal Year
(in millions)                                      Total             2023            2024            2025             2026             2027            Thereafter
Contractual obligations related to
off-balance sheet arrangements:
Commitments to fund minority investments,
milestone payments, and royalty
obligations(1)                                  $    233          $    95          $  54          $    30          $    18          $    18          $        19
Interest payments(2)                               6,902              466            460              460              394              391                4,732
Other(3)                                             995              445            235              121               66               34                   94

Contractual obligations reflected in the
balance sheet(4):
Debt obligations(5)                             $ 24,275          $ 3,744          $   6          $ 1,895          $ 2,133          $ 1,969          $    14,528
Operating leases                                     976              213            164              130              103               82                  284
Contingent consideration(6)                          119               35             49               33                1                -                    -
Tax obligations(7)                                 1,496              176            330              440              550                -                    -


(1)Includes commitments related to the funding of minority investments,
estimated milestone payments, and royalty obligations. While it is not certain
if and/or when payments will be made, the maturity dates included in the table
reflect our best estimates.
(2)Includes the contractual interest payments on our outstanding debt and
excludes the impacts of debt premium and discount amortization. See Note 6 to
the consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report on Form 10-K for additional
information on our debt agreements.
(3)Includes inventory purchase commitments, research and development, and other
arrangements that are legally binding and specify minimum purchase quantities or
spending amounts. These purchase commitments do not exceed our projected
requirements and are in the normal course of business. Excludes open purchase
orders with a remaining term of less than one year.
(4)Excludes defined benefit plan obligations, guarantee obligations, uncertain
tax positions, non-current tax liabilities, and litigation settlements for which
we cannot make a reliable estimate of the period of cash settlement. For further
information, see Notes 13, 15, and 18 to the consolidated financial statements
in "Item 8. Financial Statements and Supplementary Data" in this Annual Report
on Form 10-K.
(5)Includes the current and non-current portion of our Senior Notes and bank
borrowings. Excludes debt premium and discount, unamortized gains from
terminated interest rate swap agreements, and commercial paper. See Notes 6 and
7 to the consolidated financial statements in "Item 8. Financial Statements and
Supplementary Data" in this Annual Report on Form 10-K for additional
information on our debt agreements and interest rate swap agreements,
respectively.
(6)Includes the fair value of our current and non-current portions of contingent
consideration. While it is not certain if and/or when payments will be made, the
maturity dates included in this table reflect our best estimates.
(7)Represents the tax obligations associated with the transition tax that
resulted from U.S. Tax Reform. The transition tax will be paid over an
eight-year period and will not accrue interest. See Note 13 to the consolidated
financial statements in "Item 8. Financial Statements and Supplementary Data" in
this Annual Report on Form 10-K for further information.

In the normal course of business, we periodically enter into agreements that
require us to indemnify customers or suppliers for specific risks, such as
claims for injury or property damage arising as a result of our products or the
negligence of our personnel or claims alleging that our products infringe
third-party patents or other intellectual property. Our maximum exposure under
these indemnification provisions is unable to be estimated, and we have not
accrued any liabilities within our consolidated financial statements or included
any indemnification provisions in the table above. Historically, we have not
experienced significant losses on these types of indemnification agreements.

Note 18 to the consolidated financial statements in "Item 8. Financial
Statements and Supplementary Data" in this Annual Report on Form 10-K provides
information regarding amounts we have accrued related to legal matters. In
accordance with U.S. GAAP, we record a liability in our consolidated financial
statements for these matters when a loss is known or considered probable and the
amount can be reasonably estimated. Actual settlements may be different than
estimated and could have a material effect on our consolidated earnings,
financial position, and/or cash flows.

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We record tax liabilities in our consolidated financial statements for amounts
that we expect to repatriate from subsidiaries (to the extent the repatriation
would be subject to tax); however, no tax liabilities are recorded for amounts
we consider to be permanently reinvested. We expect to have access to the
majority of our cash flows in the future. In addition, we continue to evaluate
our legal entity structure supporting our business operations, and to the extent
such evaluation results in a change to our overall business structure, we may be
required to accrue for additional tax obligations.

Beyond the contractual obligations and other minimum commercial commitments outlined above, we have recurring cash requirements arising from the normal operation of our business that include capital expenditures, research and developments costs, and other operational costs.

We believe our balance sheet and liquidity provide us with flexibility, and our cash, cash equivalents, current investments, Credit Facility and related commercial paper programs as well as our ability to generate operating cash flows will satisfy our current and future contractual obligations and cash requirements. We regularly review our capital needs and consider various investing and financing alternatives to support our requirements.

ACQUISITIONS

Affera, Inc. Pending Acquisition



On January 10, 2022, Medtronic and Affera, Inc. (Affera) entered into a
definitive agreement in which Medtronic will acquire Affera for $925 million,
including up to $250 million of contingent consideration related to certain
technical and regulatory milestones. The acquisition is pending clearance of
anti-trust filings and other closing conditions.

Intersect ENT Acquisition



Subsequent to fiscal year 2022, on May 13, 2022, the Company acquired Intersect
ENT. Total consideration for the transaction was approximately $1.2 billion to
acquire all outstanding shares of Intersect ENT for $28.25 per share.

Additional information regarding acquisitions is included in Note 3 of the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" within this Annual Report on Form 10-K.

SUBSEQUENT EVENTS



On May 25, 2022, the Company and DaVita Inc. ("DaVita") entered into a
definitive agreement with the intent to form a new, independent kidney
care-focused medical device company ("NewCo") with equal equity ownership. The
transaction is expected to close in calendar year 2023, subject to customary
regulatory approvals and closing conditions. We are contributing our entire
Renal Care Solutions business ("RCS") to NewCo. RCS is part of the Respiratory,
Gastrointestinal, and Renal division in our Medical Surgical portfolio, and had
revenue of $325 million in fiscal year 2022. We expect to record a non-cash
pre-tax impairment of long-lived assets of $60 million to $90 million in the
quarter ending July 29, 2022 related to goodwill.

CRITICAL ACCOUNTING ESTIMATES



We have used various accounting policies to prepare the consolidated financial
statements in accordance with U.S. GAAP. Our significant accounting policies are
disclosed in Note 1 to the consolidated financial statements in "Item 8.
Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

The preparation of the consolidated financial statements, in conformity with
U.S. GAAP, requires us to use judgment in making estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues, and expenses.
These estimates reflect our best judgment about economic and market conditions
and the potential effects on the valuation and/or carrying value of assets and
liabilities based upon relevant information available. We base our estimates on
historical experience and on various assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.

Our critical accounting estimates include the following:



Litigation Contingencies We are involved in a number of legal actions involving
product liability, intellectual property and commercial disputes, shareholder
related matters, environmental proceedings, tax disputes, and governmental
proceedings and investigations. The outcomes of these legal actions are not
completely within our control and may not be known for prolonged periods of
time. In some actions, the enforcement agencies or private claimants seek
damages, as well as other civil or criminal remedies (including injunctions
barring the sale of products that are the subject of the proceeding), that could
require significant expenditures or result in lost revenues or limit our ability
to conduct business in the applicable jurisdictions. Estimating probable losses
from our litigation and governmental proceedings is inherently difficult,
particularly when the matters are in early procedural stages, with incomplete
scientific facts or legal discovery; involve unsubstantiated or indeterminate
claims for damages; potentially involve penalties, fines, or punitive damages;
or could result in a change in business practice. The Company records a
liability in the consolidated financial statements for loss contingencies when a
loss is known or

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considered probable, and the amount may be reasonably estimated. If the
reasonable estimate of a known or probable loss is a range, and no amount within
the range is a better estimate than any other, the minimum amount of the range
is accrued. If a loss is reasonably possible but not known or probable, and may
be reasonably estimated, the estimated loss or range of loss is disclosed. Our
significant legal proceedings are discussed in Note 18 to the consolidated
financial statements in "Item 8. Financial Statements and Supplementary Data" in
this Annual Report on Form 10-K.

Income Tax Reserves We establish reserves when, despite our belief that our tax
return positions are fully supportable, we believe that certain positions are
likely to be challenged and that we may or may not prevail. Under U.S. GAAP, if
we determine that a tax position is more likely than not of being sustained upon
audit, based solely on the technical merits of the position, we recognize the
benefit. We measure the benefit by determining the amount that is greater than
50 percent likely of being realized upon settlement. We presume that all tax
positions will be examined by a taxing authority with full knowledge of all
relevant information. The calculation of our tax liabilities involves dealing
with uncertainties in the application of complex tax regulations in a multitude
of jurisdictions across our global operations. We regularly monitor our tax
positions and tax liabilities. We reevaluate the technical merits of our tax
positions and recognize an uncertain tax benefit, or derecognize a previously
recorded tax benefit, when there is (i) a completion of a tax audit, (ii)
effective settlement of an issue, (iii) a change in applicable tax law including
a tax case or legislative guidance, or (iv) the expiration of the applicable
statute of limitations. Significant judgment is required in accounting for tax
reserves. Although we believe that we have adequately provided for liabilities
resulting from tax assessments by taxing authorities, positions taken by these
tax authorities could have a material impact on our effective tax rate,
consolidated earnings, financial position and/or cash flows.

Valuation of Intangible Assets and Goodwill When we acquire a business, the
assets acquired and liabilities assumed are recorded at their respective fair
values at the acquisition date. Goodwill is the excess of the purchase price
over the estimated fair value of net assets of acquired businesses. Intangible
assets primarily include patents, trademarks, tradenames, customer
relationships, purchased technology, and in-process research and development.
Determining the fair value of intangible assets acquired as part of a business
combination requires us to make significant estimates. These estimates include
the amount and timing of projected future cash flows of each project or
technology, the discount rate used to discount those cash flows to present
value, and the assessment of the asset's life cycle. The estimates could be
impacted by legal, technical, regulatory, economic, and competitive risks.

The test for impairment of goodwill requires us to make several estimates
related to projected future cash flows to determine the fair value of the
goodwill reporting units. Our estimates associated with the goodwill impairment
test are considered critical due to the amount of goodwill recorded on our
consolidated balance sheets and the judgment required in determining fair value.
We assess the impairment of goodwill at the reporting unit level annually as of
the first day of the third quarter and whenever an event occurs or circumstances
change that would indicate that the carrying amount may be impaired.

We also test definite-lived intangible assets for impairment when an event
occurs or circumstances change that would indicate the carrying amount of the
assets or asset group may be impaired. We assess the impairment of
indefinite-lived intangible assets annually in the third quarter and whenever an
event occurs or circumstances change that would indicate that the carrying
amount may be impaired.

Our tests for goodwill and intangible assets are based on future cash flows that
require significant judgment with respect to future revenue and expense growth
rates, appropriate discount rates, asset groupings, and other assumptions and
estimates. We use estimates that are consistent with the highest and best use of
the assets based on a market participant's view of the assets being evaluated.
Actual results may differ from our estimates due to a number of factors
including, among others, changes in competitive conditions, timing of regulatory
approval, results of clinical trials, changes in worldwide economic conditions,
and fluctuations in currency exchange rates.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is included in Note 1 to the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.


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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Medtronic plc and Medtronic Global Holdings S.C.A. (Medtronic Luxco), a
wholly-owned subsidiary guarantor, each have provided full and unconditional
guarantees of the obligations of Medtronic, Inc., a wholly-owned subsidiary
issuer, under the Senior Notes (Medtronic Senior Notes) and full and
unconditional guarantees of the obligations of Covidien International Finance
S.A. (CIFSA), a wholly-owned subsidiary issuer, under the Senior Notes (CIFSA
Senior Notes). The guarantees of the CIFSA Senior Notes are in addition to the
guarantees of the CIFSA Senior Notes by Covidien Ltd. and Covidien Group
Holdings Ltd., both of which are wholly-owned subsidiary guarantors of the CIFSA
Senior Notes. Medtronic plc and Medtronic, Inc. each have provided a full and
unconditional guarantee of the obligations of Medtronic Luxco under the Senior
Notes (Medtronic Luxco Senior Notes). The following is a summary of these
guarantees:

Guarantees of Medtronic Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - Medtronic, Inc.
•Subsidiary Guarantor - Medtronic Luxco
Guarantees of Medtronic Luxco Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - Medtronic Luxco
•Subsidiary Guarantor - Medtronic, Inc.
Guarantees of CIFSA Senior Notes
•Parent Company Guarantor - Medtronic plc
•Subsidiary Issuer - CIFSA
•Subsidiary Guarantors - Medtronic Luxco, Covidien Ltd., and Covidien Group
Holdings Ltd. (CIFSA Subsidiary Guarantors)

The following tables present summarized financial information for the fiscal
year ended April 29, 2022 for the obligor groups of Medtronic and Medtronic
Luxco Senior Notes, and CIFSA Senior Notes. The obligor group consists of the
parent company guarantor, subsidiary issuer, and subsidiary guarantors for the
applicable senior notes. The summarized financial information is presented after
elimination of (i) intercompany transactions and balances among the guarantors
and issuers and (ii) equity in earnings from and investments in any subsidiary
that is a non-guarantor or issuer.

The summarized results of operations information for the fiscal year ended April 29, 2022 was as follows:



                                                                 Medtronic &
                                                               Medtronic Luxco
(in millions)                                                  Senior Notes (1)           CIFSA Senior Notes (2)
Net sales                                                    $           2,063          $                     -
Operating profit                                                           469                               (5)
Loss before income taxes                                                  (518)                            (974)
Net loss attributable to Medtronic                                        (529)                          (1,005)


The summarized balance sheet information for the fiscal year ended April 29,
2022 was as follows:

                                                                       Medtronic &
                                                                     Medtronic Luxco           CIFSA Senior
(in millions)                                                       Senior Notes (1)             Notes (2)
Total current assets(3)                                            $         20,767          $        6,881
Total noncurrent assets(4)                                                   12,099                   8,293
Total current liabilities(5)                                                 32,647                  24,302
Total noncurrent liabilities(6)                                              50,542                  60,292
Noncontrolling interests                                                        171                     171



(1)The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group
consists of the following entities: Medtronic plc, Medtronic Luxco, and
Medtronic, Inc. Refer to the guarantee summary above for further details.
(2)The CIFSA Senior Notes obligor group consists of the following entities:
Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors. Please
refer to the guarantee summary above for further details.
(3)Includes receivables due from non-guarantor subsidiaries of $20.2 billion and
$6.9 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior
Notes, respectively.
(4)Includes loans receivable due from non-guarantor subsidiaries of $6.5 billion
and $8.3 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior
Notes, respectively.
(5)Includes payables due to non-guarantor subsidiaries of $26.4 billion and
$20.2 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior
Notes, respectively.
(6)Includes loans payable due to non-guarantor subsidiaries of $29.0 billion and
$46.4 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior
Notes, respectively.
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