Medtronic : Q4 Financial Statements

MEDTRONIC PLC

WORLD WIDE REVENUE(1)

(Unaudited)

							FOURTH QUARTER												YEAR-TO-DATE(2)
			REPORTED							CONSTANT				REPORTED							CONSTANT
									CURRENCY										CURRENCY
(in millions)		FY22			FY21		Growth		Currency		FY22		Growth			FY22			FY21		Growth		Currency		FY22		Growth
				Impact(3)									Impact(3)
Cardiovascular	$	2,961	$	2,908		1.8 %	$	(84)		$	3,045	4.7 %	$	11,423	$	10,772		6.0 %	$	(32)		$	11,455	6.3 %
Cardiac Rhythm & Heart Failure		1,552			1,539		0.8			(43)			1,595	3.6			5,908			5,584		5.8			(19)			5,927	6.1
Structural Heart & Aortic		778			744		4.6			(25)			803	7.9			3,055			2,834		7.8			(12)			3,067	8.2
Coronary & Peripheral Vascular		631			624		1.1			(16)			647	3.7			2,460			2,354		4.5			(1)			2,461	4.5
Medical Surgical		2,231			2,338		(4.6)			(78)			2,309	(1.2)			9,141			8,737		4.6			(44)			9,185	5.1
Surgical Innovations		1,491			1,542		(3.3)			(56)			1,547	0.3			6,060			5,438		11.4			(31)			6,091	12.0
Respiratory, Gastrointestinal, & Renal		740			796		(7.0)			(23)			763	(4.1)			3,081			3,298		(6.6)			(13)			3,094	(6.2)
Neuroscience		2,299			2,295		0.2			(33)			2,332	1.6			8,784			8,195		7.2			3			8,781	7.2
Cranial & Spinal Technologies		1,165			1,192		(2.3)			(17)			1,182	(0.8)			4,456			4,288		3.9			(7)			4,463	4.1
Specialty Therapies		684			654		4.6			(8)			692	5.8			2,592			2,307		12.4			13			2,579	11.8
Neuromodulation		451			449		0.4			(8)			459	2.2			1,735			1,601		8.4			(2)			1,737	8.5
Diabetes		597			647		(7.7)			(19)			616	(4.8)			2,338			2,413		(3.1)			(2)			2,340	(3.0)
TOTAL	$	8,089	$	8,188		(1.2)%	$	(215)		$	8,304	1.4 %	$	31,686	$	30,117		5.2 %	$	(75)		$	31,761	5.5 %

1. The data in this schedule has been intentionally rounded to the nearest million and, therefore, may not sum.
2. Fiscal year 2021 was a 53-week fiscal year with the extra week occurring in the first fiscal month of the first quarter and is included in reported prior year-to-date results. While it is difficult to calculate the impact of the extra week, the Company estimates the extra week benefited fiscal year 2021 year-to-date revenue by approximately $360 to $390 million.
3. The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.

MEDTRONIC PLC

U.S.(1)(2) REVENUE

(Unaudited)

		FOURTH QUARTER			YEAR-TO-DATE
				REPORTED								REPORTED
(in millions)		FY22			FY21		Growth				FY22			FY21			Growth
Cardiovascular	$	1,455	$	1,394	4.4 %		$	5,545	$	5,248			5.7 %
Cardiac Rhythm & Heart Failure		826			794	4.0				3,064			2,926			4.7
Structural Heart & Aortic		334			308	8.4				1,320			1,214			8.7
Coronary & Peripheral Vascular		295			293	0.7				1,162			1,108			4.9
Medical Surgical		913			973	(6.2)				3,862			3,650			5.8
Surgical Innovations		554			602	(8.0)				2,333			2,100			11.1
Respiratory, Gastrointestinal, & Renal		358			372	(3.8)				1,529			1,550			(1.4)
Neuroscience		1,517			1,522	(0.3)				5,753			5,456			5.4
Cranial & Spinal Technologies		842			846	(0.5)				3,170			3,064			3.5
Specialty Therapies		373			374	(0.3)				1,430			1,315			8.7
Neuromodulation		302			302		-			1,154			1,077			7.1
Diabetes		213			293	(27.3)				974			1,171			(16.8)
TOTAL	$	4,097	$	4,182	(2.0)%		$	16,135	$	15,526			3.9 %

1. U.S. includes the United States and U.S. territories.
2. The data in this schedule has been intentionally rounded to the nearest million and, therefore, may not sum.

MEDTRONIC PLC

WORLD WIDE REVENUE: GEOGRAPHIC (1)(2)

(Unaudited)

							FOURTH QUARTER														YEAR-TO-DATE(3)
			REPORTED							CONSTANT						REPORTED								CONSTANT
									CURRENCY													CURRENCY
(in millions)		FY22			FY21		Growth		Currency		FY22		Growth				FY22			FY21		Growth		Currency		FY22		Growth
				Impact(4)									Impact(4)
U.S.	$	1,455	$	1,394		4.4 %	$	-	$	1,455	4.4	%		$	5,545	$	5,248		5.7	%	$	-	$	5,545	5.7	%
Non-U.S. Developed		980			1,012		(3.2)			(63)			1,043	3.1					3,866			3,752		3.0				(39)			3,905	4.1
Emerging Markets		526			501		5.0			(20)			546	9.0					2,012			1,773		13.5				7			2,005	13.1
Cardiovascular		2,961			2,908		1.8			(84)			3,045	4.7					11,423			10,772		6.0				(32)			11,455	6.3
U.S.		913			973		(6.2)			-		913	(6.2)					3,862			3,650		5.8				-		3,862	5.8
Non-U.S. Developed		852			895		(4.8)			(58)			910	1.7					3,373			3,320		1.6				(42)			3,415	2.9
Emerging Markets		466			469		(0.6)			(20)			486	3.6					1,905			1,766		7.9				(2)			1,907	8.0
Medical Surgical		2,231			2,338		(4.6)			(78)			2,309	(1.2)					9,141			8,737		4.6				(44)			9,185	5.1
U.S.		1,517			1,522		(0.3)			-		1,517	(0.3)					5,753			5,456		5.4				-		5,753	5.4
Non-U.S. Developed		471			477		(1.3)			(31)			502	5.2					1,801			1,724		4.5				(24)			1,825	5.9
Emerging Markets		311			296		5.1			(2)			313	5.7					1,229			1,015		21.1				27			1,202	18.4
Neuroscience		2,299			2,295		0.2			(33)			2,332	1.6					8,784			8,195		7.2				3			8,781	7.2
U.S.		213			293		(27.3)			-		213	(27.3)					974			1,171		(16.8)				-		974	(16.8)
Non-U.S. Developed		305			287		6.3			(17)			322	12.2					1,085			1,019		6.5				(2)			1,087	6.7
Emerging Markets		79			68		16.2			(2)			81	19.1					279			222		25.7				-		279	25.7
Diabetes		597			647		(7.7)			(19)			616	(4.8)					2,338			2,413		(3.1)				(2)			2,340	(3.0)
U.S.		4,097			4,182		(2.0)			-		4,097	(2.0)					16,135			15,526		3.9				-		16,135	3.9
Non-U.S. Developed		2,609			2,672		(2.4)			(169)			2,778	4.0					10,126			9,815		3.2				(107)			10,233	4.3
Emerging Markets		1,383			1,334		3.7			(45)			1,428	7.0					5,426			4,777		13.6				33			5,393	12.9
TOTAL	$	8,089	$	8,188		(1.2)%	$	(215)		$	8,304	1.4 %		$	31,686	$	30,117		5.2 %	$	(75)		$	31,761	5.5 %

1. U.S. includes the United States and U.S. territories. Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries of Western Europe. Emerging Markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not included in the non-U.S. developed markets, as previously defined.
2. The data in this schedule has been intentionally rounded to the nearest million and, therefore, may not sum.
3. Fiscal year 2021 was a 53-week fiscal year with the extra week occurring in the first fiscal month of the first quarter and is included in reported prior year-to-date results. While it is difficult to calculate the impact of the extra week, the Company estimates the extra week benefited fiscal year 2021 year-to-date revenue by approximately $360 to $390 million.
4. The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.

MEDTRONIC PLC

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

		Three months ended			Fiscal year ended
(in millions, except per share data)		April 29, 2022			April 30, 2021			April 29, 2022			April 30, 2021
Net sales	$	8,089	$	8,188	$	31,686	$	30,117
Costs and expenses:
Cost of products sold		2,591			2,652			10,145			10,483
Research and development expense		652			632			2,746			2,493
Selling, general, and administrative expense		2,569			2,594			10,292			10,148
Amortization of intangible assets		435			446			1,733			1,783
Restructuring charges, net		28			59			60			293
Certain litigation charges		-			-			95			118
Other operating expense, net		143			198			862			315
Operating profit		1,670			1,607			5,752			4,484
Other non-operating income, net		(74)			(102)			(318)			(336)
Interest expense		143			142			553			925
Income before income taxes		1,602			1,567			5,517			3,895
Income tax provision		110			200			456			265
Net income		1,492			1,367			5,062			3,630
Net income attributable to noncontrolling interests		(6)			(6)			(22)			(24)
Net income attributable to Medtronic	$	1,485		$	1,361		$	5,039		$	3,606
Basic earnings per share
$	1.11	$	1.01	$	3.75	$	2.68
Diluted earnings per share	$	1.10	$	1.00	$	3.73	$	2.66
Basic weighted average shares outstanding
	1,337.6			1,347.3			1,342.4			1,344.9
Diluted weighted average shares outstanding		1,344.9			1,358.4			1,351.4			1,354.0

The data in the schedule above has been intentionally rounded to the nearest million, and therefore, the quarterly amounts may not sum to the fiscal year- to-date amounts.

MEDTRONIC PLC

GAAP TO NON-GAAP RECONCILIATIONS(2)

(Unaudited)

										Three months ended April 29, 2022
					Cost of		Gross					Operating		Income	Net Income
		Net					Operating				Before	attributable		Diluted		Effective
(in millions, except per share data)			Products		Margin			Profit		Income		to
	Sales			Sold		Percent			Profit		Percent			Taxes			Medtronic			EPS		Tax Rate
GAAP	$	8,089	$	2,591	68.0 %	$	1,670	20.6 %	$	1,602			$	1,485	$	1.10	6.9 %
Non-GAAP Adjustments:
Restructuring and associated costs (3)		-			(27)	0.3			98	1.2			98				91			0.07	8.2
Acquisition-related items (4)		-			(5)	0.1			12	0.1			12				10			0.01	16.7
(Gain)/loss on minority investments (5)		-			-		-			-		-			11				11			0.01		-
Medical device regulations (6)		-			(16)	0.2			32	0.4			32				29			0.02	6.3
Amortization of intangible assets		-			-		-			435	5.4			435				374			0.28	13.8
MCS costs (7)		-			-		-			155	1.9			155				97			0.07	37.4
Certain tax adjustments, net (8)		-			-		-			-		-			-				(60)			(0.04)		-
Non-GAAP (1)	$	8,089	$	2,544	68.5 %	$	2,402	29.7 %	$	2,345			$	2,038	$	1.52	12.8 %
Currency impact		215			71		-			(9)		(0.9)										-
Currency Adjusted	$	8,304	$	2,615	68.5 %	$	2,393	28.8 %								$	1.52

										Three months ended April 30, 2021
					Cost of		Gross					Operating		Income	Net Income
		Net					Operating				Before	attributable		Diluted		Effective
(in millions, except per share data)			Products		Margin			Profit		Income		to
	Sales			Sold		Percent			Profit		Percent			Taxes			Medtronic			EPS		Tax Rate
GAAP	$	8,188	$	2,652	67.6 %	$	1,607	19.6 %	$	1,567			$	1,361	$	1.00	12.8 %
Non-GAAP Adjustments:
Restructuring and associated costs (3)		-			(33)	0.4			151	1.8			151				131			0.10	13.2
Acquisition-related items (1) (4)		-			(5)	0.1			18	0.2			18				16			0.01	11.1
(Gain)/loss on minority investments (5)		-			-		-			-		-			(34)				(34)			(0.03)		-
Medical device regulations (6)		-			(13)	0.2			24	0.3			24				20			0.01	16.7
Impairment charges (9)		-			-		-			76	0.9			76				68			0.05	10.5
Amortization of intangible assets		-			-		-			446	5.4			446				377			0.28	15.5
Certain tax adjustments, net (8)		-			-		-			-		-			-				90			0.07		-
Non-GAAP (1)	$	8,188	$	2,601	68.2 %	$	2,322	28.4 %	$	2,248			$	2,029	$	1.49	9.6 %

See description of non-GAAP financial measures contained in the press release dated May 26, 2022.

1. 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 our earnings release have been recast for comparability. The impact of this change is a decrease in non-GAAP net income and diluted EPS of $9 million and $0.01, respectively, for the three months ended April 30, 2021. There was no impact to the three months ended April 29, 2022.
2. The data in this schedule has been intentionally rounded to the nearest million or $0.01 for EPS figures, and, therefore, may not sum.
3. Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses.
4. The charges primarily include business combination costs, and specifically for the three months ended April 29, 2022, changes in fair value of contingent consideration.
5. 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.
6. The charges represent incremental costs of complying with the new European Union (E.U.) 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.
7. The charges relate to incremental commitments and obligations, including patient support obligations and other remediation costs, associated with 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).
8. The certain adjustments, net relate to amortization on previously established deferred tax assets from intercompany intellectual property transactions and impacts from tax rate changes and tax basis adjustments.
9. These charges relate to the abandonment of certain intangible assets in our Neuroscience segment.