EX-99.1 2 exhibit991-fy21q1earni.htm EX-99.1 Document


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NEWS RELEASE
        
 Contacts:  
 Erika Winkels  Ryan Weispfenning
 Public Relations  Investor Relations
 +1-763-526-8478  +1-763-505-4626

FOR IMMEDIATE RELEASE

MEDTRONIC REPORTS FIRST QUARTER FINANCIAL RESULTS

Q1 Revenue of $6.5 Billion Decreased 13% Reported and Approximately 17% Organic
Q1 GAAP Diluted EPS of $0.36; Q1 Non-GAAP Diluted EPS of $0.62

DUBLIN – August 25, 2020 – Medtronic plc (NYSE:MDT) today announced financial results for its first quarter of fiscal year 2021, which ended July 31, 2020.

The company reported first quarter worldwide revenue of $6.507 billion, a decrease of 13 percent as reported. After adjusting for the $104 million negative impact of foreign currency translation, the $15 million partial quarter inorganic benefit of the company’s acquisition of Titan Spine in the Cranial and Spinal Technologies division in the Restorative Therapies Group, and the approximate $360 to $390 million benefit the company received from an extra week compared to the first quarter of fiscal year 2020, the company’s first quarter revenue decreased by approximately 17 percent organic. Unless otherwise stated, all revenue growth rates in this press release are stated on this organic basis, which adjusts for the impact of foreign currency translation, the inorganic benefit of the Titan Spine acquisition, and the benefit of the extra week.

As reported, first quarter GAAP net income and diluted earnings per share (EPS) were $487 million and $0.36, respectively. As detailed in the financial schedules included through the link at the end of this release, first quarter non-GAAP net income and non-GAAP diluted EPS were $836 million and $0.62, respectively, both decreases of 51 percent.
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The company’s first quarter of fiscal year 2021 contained 14 weeks, one more week than the first quarter of fiscal year 2020. The extra week occurs every five or six years as a result of the company’s 52-53 week fiscal year calendar. While it is difficult to calculate an exact impact from the extra week, which occurred in the first fiscal month of the quarter, the company estimates that it resulted in a benefit to revenue as stated above and an approximate $0.06 to $0.10 benefit to non-GAAP diluted earnings per share (EPS) in the first quarter of this fiscal year.

First quarter U.S. revenue of $3.351 billion represented 52 percent of company revenue and decreased 14 percent as reported and low-twenties organic. Non-U.S. developed market revenue of $2.175 billion represented 33 percent of company revenue and decreased 8 percent as reported and low-double digit organic. Emerging Markets revenue of $981 million represented 15 percent of company revenue and decreased 18 percent as reported and high-teens organic.

“We reported solid improvement from last quarter, and our results reflect a faster than expected recovery from the depths of the pandemic we saw back in April,” said Geoff Martha, Medtronic chief executive officer. “Procedure volumes began to recover around the world, and we’re leveraging our pipeline of innovative products to drive share gains in a number of key businesses.”

Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH), and Aortic, Peripheral & Venous (APV) divisions. CVG first quarter revenue of $2.433 billion decreased 13 percent as reported and high-teens organic. CVG’s revenue reflected a year-over-year decline in procedure volumes as a result of the COVID-19 pandemic; however, revenue did improve sequentially. CVG’s organic performance was impacted by mid-teens declines in CRHF, low-twenties declines in CSH, and high-teens declines in APV.



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Cardiac Rhythm & Heart Failure first quarter revenue of $1.247 billion decreased 10 percent as reported and mid-teens organic. Arrhythmia Management revenue, including implantable defibrillators (ICDs), Pacemakers, Implantable Diagnostics, and Cardiac Ablation Solutions (previously called AF Solutions) declined in the mid-teens. This included low-forties growth in Leadless Pacemakers, and specifically low-sixties growth in the United States, on the continued adoption of the company’s Micra™ transcatheter pacing systems. Heart Failure declined in the low-double digits organic, reflecting declines in cardiac resynchronization therapy defibrillators (CRT-Ds), cardiac resynchronization therapy pacemakers (CRT-Ps), and left ventricular assist devices (LVADs).

Coronary & Structural Heart first quarter revenue of $780 million decreased 17 percent as reported and low-twenties organic, reflecting low-twenties declines in drug-eluting stents and transcatheter aortic valves (TAVR).

Aortic, Peripheral & Venous first quarter revenue of $405 million decreased 13 percent as reported and high-teens organic. Aortic declined in the high-teens, Peripheral declined in the low-double digits, and Venous declined in the low-thirties.

Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. MITG first quarter revenue of $1.801 billion decreased 14 percent as reported and high-teens organic. MITG’s revenue reflected a year-over-year decline in procedure volumes as a result of the COVID-19 pandemic. SI’s mid-twenties organic decline was partially offset by flat organic results in RGR.

Surgical Innovations first quarter revenue of $1.080 billion decreased 24 percent as reported and mid-twenties organic. The decline of worldwide surgical procedures resulted in lower demand for Advanced Stapling and Advanced Energy products, which declined in the high- and low-twenties, respectively. General Surgery products declined in the mid-twenties.
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Respiratory, Gastrointestinal & Renal first quarter revenue of $720 million increased 5 percent as reported and was flat on an organic basis, reflecting the increased demand for Respiratory Interventions products. Respiratory & Patient Monitoring grew in the mid-single digits, with sales of ventilators more than doubling as production increased to address global needs.

Restorative Therapies Group
The Restorative Therapies Group (RTG) was reorganized into the Cranial and Spinal Technologies, Specialty Therapies, and Neuromodulation divisions starting this quarter. RTG first quarter revenue of $1.712 billion decreased 15 percent as reported and low-twenties organic. RTG’s revenue reflected a year-over-year decline in procedure volumes as a result of the COVID-19 pandemic; however, revenue did improve sequentially. RTG’s organic performance this quarter included mid-teens declines in Cranial and Spinal Technologies, low-twenties declines in Specialty Therapies, and mid-twenties declines in Neuromodulation.

Cranial and Spinal Technologies first quarter revenue of $944 million decreased 10 percent as reported and mid-teens organic, including mid-teens declines in Spine and high-teens declines in Enabling Technology. Core Spine declined in the low-double digits globally, including high-single digit declines in the U.S. Sales of bone morphogenetic protein (BMP) declined in the low-twenties.

Specialty Therapies first quarter revenue of $453 million decreased 20 percent as reported and low-twenties organic. ENT declined in the mid-twenties and Neurovascular declined in the low-single digits, with low-single digit declines in Hemorrhagic Stroke and high-single digit declines in Ischemic Stroke.

Neuromodulation first quarter revenue of $314 million decreased 21 percent as reported and mid-twenties organic, including mid-twenties declines in Pain Therapies.

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Diabetes Group
Diabetes Group first quarter revenue of $562 million decreased 5 percent as reported and high-single digit organic. Diabetes Group revenue performance was impacted by a delay in new patient starts on insulin pumps and continued competitive pressure. CGM grew in the mid-single digits.

Guidance
Given the uncertainty on near-term financial results caused by the COVID-19 pandemic, the company is not providing formal annual or quarterly financial guidance at this time.

“We’re playing offense and finding a new gear at Medtronic,” said Martha. “We are driving toward faster and broader topline growth, not just as we emerge from the pandemic, but sustainable growth over the long-term.”

Webcast Information
Medtronic will host a webcast today, August 25, at 8:00 a.m. EDT (7:00 a.m. CDT) to provide information about its businesses for the public, investors, analysts, and news media. This quarterly webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at newsroom.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.

Medtronic plans to report its fiscal year 2021 second, third, and fourth quarter results on Tuesday, November 24, 2020, Tuesday, February 23, 2021, and Thursday, May 27, 2021, respectively.

Financial Schedules
To view the first quarter financial schedules and non-GAAP reconciliations, click here. To view the first quarter earnings presentation, click here. Both documents can also be accessed by visiting newsroom.medtronic.com.
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About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among the world’s largest medical technology, services and solutions companies – alleviating pain, restoring health and extending life for millions of people around the world. Medtronic employs more than 90,000 people worldwide, serving physicians, hospitals and patients in more than 150 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.

FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties, including risks related to the impact COVID-19 has had and is expected to continue to have on our business, operations and production, as well as demand for our offerings, and on our employees, medical professional and healthcare system, communities in which we operate, and our financial results and condition, competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of medical products, government regulation and general economic conditions and other risks and uncertainties described in the company’s periodic reports on file with the U.S. Securities and Exchange Commission including the most recent Annual Report on Form 10-K of the company, as filed with the U.S. Securities and Exchange Commission. In some cases, you can identify these statements by forward-looking words or expressions, such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “plan,” “possible,” “potential,” “project,” “should,” “going to,” “will,” and similar words or expressions, the negative or plural of such words or expressions and other comparable terminology. Actual results may differ materially from anticipated results. Medtronic does not undertake to update its forward-looking statements or any of the information contained in this press release, including to reflect future events or circumstances.

NON-GAAP FINANCIAL MEASURES
This press release contains financial measures, including adjusted net income, adjusted diluted EPS, and organic revenue, which are considered “non-GAAP” financial measures under applicable SEC rules and regulations. References to quarterly figures increasing, decreasing or remaining flat are in comparison to the first quarter of fiscal year 2020.

Medtronic management believes that non-GAAP financial measures provide information useful to investors in understanding the company’s underlying operational performance and trends and to facilitate comparisons with the performance of other companies in the med tech industry. Non-GAAP net income and diluted EPS exclude the effect of certain charges or gains that contribute to or reduce
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earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate management’s review of the operational performance of the company and as a basis for strategic planning. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies. Management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial schedules accompanying this press release.
-end-
View First Quarter Financial Schedules & Non-GAAP Reconciliations
View First Quarter Earnings Presentation

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MEDTRONIC PLC
WORLD WIDE REVENUE(1)
(Unaudited)
FIRST QUARTER(2)
REPORTEDCONSTANT CURRENCY
(in millions)FY21FY20Growth
Currency Impact(4)
FY21Growth
Cardiac & Vascular Group$2,433 $2,790 (12.8)%$(39)$2,472 (11.4)%
Cardiac Rhythm & Heart Failure1,247 1,382 (9.8)(16)1,263 (8.6)
Coronary & Structural Heart780 941 (17.1)(18)798 (15.2)
Aortic, Peripheral, & Venous405 467 (13.3)(6)411 (12.0)
Minimally Invasive Therapies Group1,801 2,100 (14.2)(37)1,838 (12.5)
Surgical Innovations1,080 1,417 (23.8)(25)1,105 (22.0)
Respiratory, Gastrointestinal, & Renal720 683 5.4 (12)732 7.2 
Restorative Therapies Group(3)
1,712 2,012 (14.9)(17)1,729 (14.1)
Cranial & Spinal Technologies944 1,050 (10.1)(7)951 (9.4)
Specialty Therapies 453 563 (19.5)(7)460 (18.3)
Neuromodulation 314 398 (21.1)(3)317 (20.4)
Diabetes Group562 592 (5.1)(11)573 (3.2)
TOTAL$6,507 $7,493 (13.2)%$(104)$6,611 (11.8)%

(1) The data in this schedule has been intentionally rounded to the nearest million and, therefore, may not sum.
(2) Fiscal year 2021 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the first quarter and included in reported first quarter results. While it is difficult to calculate the impact of the extra week, the Company estimates the extra week benefited first quarter constant currency growth by approximately $360 to $390 million. The first quarter of 2021 also includes $15 million of inorganic revenue related to the Titan Spine acquisition, which is included in the reported results of the Cranial & Spinal Technologies division of the Restorative Therapies Group. When excluding the impact of currency, inorganic Titan Spine revenue, and the estimated impact of the extra week, first quarter 2021 revenue declined approximately 17 percent organic.
(3) In the first quarter of fiscal year 2021, the Company realigned its divisions within the Restorative Therapies Group. As a result, fiscal year 2020 results have been recast to adjust for this realignment.
(4) The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.

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MEDTRONIC PLC
U.S.(1)(2) REVENUE
(Unaudited)
FIRST QUARTER
REPORTED
(in millions)FY21FY20
Growth
Cardiac & Vascular Group$1,206 $1,361 (11.4)%
Cardiac Rhythm & Heart Failure672 729 (7.8)
Coronary & Structural Heart306 376 (18.6)
Aortic, Peripheral, & Venous228 256 (10.9)
Minimally Invasive Therapies Group 722 913 (20.9)
Surgical Innovations400 573 (30.2)
Respiratory, Gastrointestinal, & Renal 322 340 (5.3)
Restorative Therapies Group(3)
1,136 1,338 (15.1)
Cranial & Spinal Technologies692 742 (6.7)
Specialty Therapies242 336 (28.0)
Neuromodulation202 261 (22.6)
Diabetes Group287 306 (6.2)
TOTAL$3,351 $3,918 (14.5)%

(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.
(3) In the first quarter of fiscal year 2021, the Company realigned its divisions within the Restorative Therapies Group. As a result, fiscal year 2020 results have been recast to adjust for this realignment.



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MEDTRONIC PLC
WORLD WIDE REVENUE: GEOGRAPHIC (1)(2)
(Unaudited)
FIRST QUARTER(3)
REPORTEDCONSTANT CURRENCY
(in millions)FY21FY20Growth
Currency Impact(4)
FY21Growth
U.S.$1,206 $1,361 (11.4)%$ $1,206 (11.4)%
Non-U.S. Developed853930(8.3)(15)868(6.7)
Emerging Markets374499(25.1)(24)398(20.2)
Cardiac & Vascular Group2,4332,790(12.8)(39)2,472(11.4)
U.S.722913(20.9) 722(20.9)
Non-U.S. Developed719791(9.1)(11)730(7.7)
Emerging Markets359396(9.3)(26)385(2.8)
Minimally Invasive Therapies Group1,801 2,100(14.2)(37)1,838 (12.5)
U.S.1,1361,338(15.1) 1,136(15.1)
Non-U.S. Developed376426(11.7)(6)382(10.3)
Emerging Markets199248(19.8)(11)210(15.3)
Restorative Therapies Group 1,712 2,012(14.9)(17)1,729 (14.1)
U.S.287306(6.2) 287(6.2)
Non-U.S. Developed226231(2.2)(6)2320.4 
Emerging Markets4855(12.7)(5)53(3.6)
Diabetes Group562592(5.1)(11)573(3.2)
U.S.3,3513,918(14.5) 3,351(14.5)
Non-U.S. Developed2,1752,377(8.5)(37)2,212(6.9)
Emerging Markets9811,198(18.1)(67)1,048(12.5)
TOTAL$6,507 $7,493 (13.2)%$(104)$6,611 (11.8)%

(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 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the first quarter and included in reported first quarter results. While it is difficult to calculate the impact of the extra week, the Company estimates the extra week benefited first quarter constant currency growth by approximately $360 to $390 million. The first quarter of 2021 also includes $15 million of inorganic revenue related to the Titan Spine acquisition, which is included in the reported results of the Cranial & Spinal Technologies division of the Restorative Therapies Group. When excluding the impact of currency, inorganic Titan Spine revenue, and the estimated impact of the extra week, first quarter 2021 revenue declined approximately 17 percent organic.
(4) The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.


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MEDTRONIC PLC
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) 
 Three months ended
(in millions, except per share data)July 31, 2020July 26, 2019
Net sales$6,507 $7,493 
Costs and expenses:
Cost of products sold2,505 2,366 
Research and development expense621 587 
Selling, general, and administrative expense2,417 2,543 
Amortization of intangible assets440 440 
Restructuring charges, net53 47 
Certain litigation charges, net(88)47 
Other operating income, net(114)(22)
Operating profit673 1,485 
Other non-operating income, net(82)(101)
Interest expense171 609 
Income before income taxes584 977 
Income tax provision93 100 
Net income491 877 
Net income attributable to noncontrolling interests(4)(13)
Net income attributable to Medtronic$487 $864 
Basic earnings per share$0.36 $0.64 
Diluted earnings per share$0.36 $0.64 
Basic weighted average shares outstanding1,341.9 1,340.8 
Diluted weighted average shares outstanding1,350.0 1,351.9 

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MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
 Three months ended July 31, 2020
(in millions, except per share data)Net SalesCost of Products SoldGross Margin PercentOperating ProfitOperating Profit PercentIncome Before Income TaxesNet Income Attributable to Medtronic
Diluted
EPS (1)
Effective Tax Rate
GAAP$6,507 $2,505 61.5 %$673 10.3 %$584 $487 $0.36 15.9 %
Non-GAAP Adjustments:
Restructuring and associated costs (2)
 (27)0.4 128 2.0 128 106 0.08 17.2 
Acquisition-related items (3)
 (2) (105)(1.6)(105)(75)(0.06)28.6 
Certain litigation charges   (88)(1.4)(88)(70)(0.05)20.5 
(Gain)/loss on minority investments (4)
     (10)(10)(0.01) 
IPR&D charges (5)   10 0.2 10 8 0.01 20.0 
Medical device regulations (6) (10)0.2 18 0.3 18 16 0.01 11.1 
Amortization of intangible assets   440 6.8 440 370 0.27 15.9 
Certain tax adjustments, net      4   
Non-GAAP$6,507 $2,466 62.1 %$1,076 16.5 %$977 $836 $0.62 14.0 %
Currency impact104 39  71 0.8 0.04 
Currency Adjusted$6,611 $2,505 62.1 %$1,147 17.3 %$0.66 
 Three months ended July 26, 2019
(in millions, except per share data)Net SalesCost of Products SoldGross Margin PercentOperating ProfitOperating Profit PercentIncome Before Income TaxesNet Income Attributable to Medtronic
Diluted
EPS (1)
Effective Tax Rate
GAAP$7,493 $2,366 68.4 %$1,485 19.8 %$977 $864 $0.64 10.2 %
Non-GAAP Adjustments:
Restructuring and associated costs (2) (35)0.5 124 1.7 124 109 0.08 12.1 
Acquisition-related items (7)   19 0.3 19 17 0.01 10.5 
Certain litigation charges   47 0.6 47 43 0.03 8.5 
(Gain)/loss on minority investments (4)
     1 1   
Debt tender premium and other charges (8)
   (7)(0.1)406 320 0.24 21.2 
Medical device regulations (6) (3) 8 0.1 8 7 0.01 12.5 
Amortization of intangible assets   440 5.9 440 372 0.28 15.5 
Certain tax adjustments, net (9)      (30)(0.02) 
Non-GAAP$7,493 $2,328 68.9 %$2,116 28.2 %$2,022 $1,703 $1.26 15.1 %

See description of non-GAAP financial measures at the end of the earnings press release. Fiscal year 2021 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the quarter and included in the reported first quarter results. While it is difficult to calculate the exact impact of the extra week, the Company estimates that it resulted in a benefit of approximately $360-$390 million to reported revenue and a benefit of $0.06 to $0.10 to non-GAAP diluted EPS.
(1)The data in this schedule has been intentionally rounded to the nearest $0.01 and, therefore, may not sum.
(2)Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses.
(3)The charges primarily include business combination costs, changes in fair value of contingent consideration, and a change in amounts accrued for certain contingent liabilities for recent acquisitions.
(4)We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations.
(5)The charges relate to certain license payments for unapproved technology.
(6)The charges represent 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.
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(7)The charges primarily include costs incurred in connection with legacy-Covidien enterprise resource planning deployment activities, business combination related costs, and changes in the fair value of contingent consideration.
(8)The charges, which include $413 million recognized in interest expense and ($7 million) recognized in other operating (income) expense, net, primarily related to the early redemption of approximately $5.2 billion of debt in the first quarter of fiscal year 2020.
(9)The net benefit relates to the impact of the U.S. tax reform resulting from final U.S. Treasury regulations in the first quarter of fiscal year 2020.

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MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
 Three months ended July 31, 2020
(in millions)Net SalesSG&A ExpenseSG&A Expense as a % of Net SalesR&D ExpenseR&D Expense as a % of Net SalesOther Operating (Income) Expense, netOther Operating Expense, net as a % of Net SalesOther Non-Operating Income, net
GAAP$6,507 $2,417 37.1 %$621 9.5 %$(114)(1.8)%$(82)
Non-GAAP Adjustments:
Restructuring and associated costs (1) (48)(0.7)     
Acquisition-related items (2)     108 1.7  
(Gain)/loss on minority investments (3)       10 
IPR&D charges (4)     (10)(0.2) 
Medical device regulations (5) (1) (8)(0.1)   
Non-GAAP$6,507 $2,368 36.4 %$613 9.4 %$(16)(0.2)%$(72)
Currency impact104 30 (0.1)2 (0.1)(37)(0.6) 
Currency Adjusted$6,611 $2,398 36.3 %$615 9.3 %$(53)(0.8)%$(72)

See description of non-GAAP financial measures at the end of the earnings press release. Fiscal year 2021 is a 53-week fiscal year, with the extra week occurring in the first fiscal month of the quarter and included in the reported first quarter results. While it is difficult to calculate the exact impact of the extra week, the Company estimates that it resulted in a benefit of approximately $360-$390 million to reported revenue.
(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, and a change in amounts accrued for certain contingent liabilities for recent acquisitions.
(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 relate to certain license payments for unapproved technology.
(5)The charges represent 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.


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MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS
(Unaudited)
Three months endedThree months endedFiscal yearFiscal year
(in millions)July 31, 2020July 26, 201920202019
Net cash provided by operating activities$278 $1,510 $7,234 $7,007 
Additions to property, plant, and equipment(334)(301)(1,213)(1,134)
Free Cash Flow (1)$(56)$1,209 $6,021 $5,873 
See description of non-GAAP financial measures at the end of the earnings press release.

(1)Free cash flow represents operating cash flows less property, plant, and equipment additions.
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MEDTRONIC PLC
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(in millions)July 31, 2020April 24, 2020
ASSETS
Current assets:
Cash and cash equivalents$6,499 $4,140 
Investments6,513 6,808 
Accounts receivable, less allowances and credit losses of $276 and $208, respectively
4,876 4,645 
Inventories, net4,551 4,229 
Other current assets2,070 2,209 
Total current assets24,509 22,031 
Property, plant, and equipment11,952 11,644 
Accumulated depreciation(7,070)(6,816)
Property, plant, and equipment, net4,882 4,828 
Goodwill40,714 39,841 
Other intangible assets, net18,670 19,063 
Tax assets2,988 2,832 
Other assets2,143 2,094 
Total assets$93,906 $90,689 
LIABILITIES AND EQUITY
Current liabilities:
Current debt obligations$5,823 $2,776 
Accounts payable1,720 1,996 
Accrued compensation1,815 2,099 
Accrued income taxes390 502 
Other accrued expenses3,338 2,993 
Total current liabilities13,086 10,366 
Long-term debt22,867 22,021 
Accrued compensation and retirement benefits1,962 1,910 
Accrued income taxes2,719 2,682 
Deferred tax liabilities1,231 1,174 
Other liabilities1,598 1,664 
Total liabilities43,463 39,817 
Commitments and contingencies
Shareholders’ equity:
Ordinary shares— par value $0.0001, 2.6 billion shares authorized, 1,343,318,623 and 1,341,074,724 shares issued and outstanding, respectively
  
Additional paid-in capital26,261 26,165 
Retained earnings27,817 28,132 
Accumulated other comprehensive loss(3,782)(3,560)
Total shareholders’ equity50,296 50,737 
Noncontrolling interests147 135 
Total equity50,443 50,872 
Total liabilities and equity$93,906 $90,689 

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MEDTRONIC PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


 Three months ended
(in millions)July 31, 2020July 26, 2019
Operating Activities:
Net income$491 $877 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization669 657 
Provision for doubtful accounts37 25 
Deferred income taxes3 18 
Stock-based compensation70 61 
Loss on debt extinguishment 406 
Other, net68 58 
Change in operating assets and liabilities, net of acquisitions and divestitures:   
Accounts receivable, net(142)319 
Inventories, net(235)(122)
Accounts payable and accrued liabilities(541)(629)
Other operating assets and liabilities(142)(160)
Net cash provided by operating activities278 1,510 
Investing Activities:
Acquisitions, net of cash acquired (145)
Additions to property, plant, and equipment(334)(301)
Purchases of investments(2,045)(1,669)
Sales and maturities of investments2,403 1,569 
Other investing activities(16)(5)
Net cash provided by (used in) investing activities8 (551)
Financing Activities:
Change in current debt obligations, net(16)88 
Proceeds from short-term borrowings (maturities greater than 90 days)2,789  
Issuance of long-term debt 5,567 
Payments on long-term debt(11)(5,035)
Dividends to shareholders(778)(724)
Issuance of ordinary shares26 210 
Repurchase of ordinary shares (333)
Other financing activities(51)(47)
Net cash provided by (used in) financing activities1,959 (274)
Effect of exchange rate changes on cash and cash equivalents114 2 
Net change in cash and cash equivalents2,359 687 
Cash and cash equivalents at beginning of period4,140 4,393 
Cash and cash equivalents at end of period$6,499 $5,080 
Supplemental Cash Flow Information
Cash paid for:
Income taxes$72 $198 
Interest72 86 

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