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22 Medtronic, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
(continued)
Net Sales
The table below illustrates net sales by product line and operating segment for fiscal years 2011, 2010, and 2009:
Net Sales Net Sales
Fiscal Year Fiscal Year
(dollars in millions) 2011 2010 % Change 2010 2009 % Change
Defibrillation Systems $ 2,962 $ 3,167 (6)% $ 3,167 $ 2,962 7%
Pacing Systems 1,901 1,987 (4) 1,987 1,984 —
Other 147 114 29 114 68 68
CARDIAC RHYTHM DISEASE MANAGEMENT5,010 5,268 (5) 5,268 5,014 5
Coronary and Peripheral1,591 1,489 7 1,489 1,292 15
Structural Heart 977 880 11 880 747 18
Endovascular 541 495 9 495 398 24
CARDIOVASCULAR 3,109 2,864 9 2,864 2,437 18
PHYSIO-CONTROL 425 425 — 425 343 24
TOTAL CARDIAC AND VASCULAR GROUP 8,544 8,557 — 8,557 7,794 10
Core Spinal2,530 2,632 (4) 2,632 2,560 3
Biologics884 868 2 868 840 3
SPINAL 3,414 3,500 (2) 3,500 3,400 3
NEUROMODULATION 1,592 1,560 2 1,560 1,434 9
DIABETES 1,347 1,237 9 1,237 1,114 11
SURGICAL TECHNOLOGIES 1,036 963 8 963 857 12
TOTAL RESTORATIVE THERAPIES GROUP 7,389 7,260 2 7,260 6,805 7
TOTAL $ 15,933 $ 1 5,817 1 $ 1 5,817 $ 1 4,599 8
In fiscal years 2011 and 2010, net sales were favorably impacted
by foreign currency translation of $12 million and $113 million,
respectively. The primary exchange rate movements that impact
our consolidated net sales growth are the U.S. dollar as compared
to the Euro and the Japanese Yen. The impact of foreign currency
fluctuations on net sales is not indicative of the impact on net
earnings due to the offsetting foreign currency impact on
operating costs and expenses and our hedging activities. See the
“Market Risk” section of this management’s discussion and
analysis and Note 9 to the consolidated financial statements for
further details on foreign currency instruments and our related
risk management strategies.
Forward-looking statements are subject to risk factors. See
“Risk Factors” set forth in our Annual Report on Form 10-K and
“Cautionary Factors That May Affect Future Results” in this
management’s discussion and analysis for more information on
these important risk factors.
Cardiac and Vascular Group The Cardiac and Vascular Group
is composed of the CRDM, CardioVascular, and Physio-Control
businesses. The Cardiac and Vascular Group’s products include
pacemakers, implantable defibrillators, leads and delivery systems,
ablation products, electrophysiology catheters, products for
the treatment of atrial fibrillation, information systems for the
management of patients with CRDM devices, coronary and
peripheral stents and related delivery systems, therapies for
uncontrolled hypertension, endovascular stent graft systems,
heart valve replacement technologies, tissue ablation systems,
open heart and coronary bypass grafting surgical products,
external defibrillators including manual defibrillator/monitors
used by hospitals and emergency response personnel, and
automated external defibrillators used in commercial and public
settings for the treatment of cardiac arrest. The Cardiac and
Vascular Group net sales for fiscal year 2011 were $8.544 billion,
which is flat over the same period in the prior fiscal year. Foreign
currency translation had a favorable impact on net sales of
approximately $4 million compared to the prior fiscal year. The
Cardiac and Vascular Group’s performance was a result of strong
sales in Coronary and Peripheral, Structural Heart, Endovascular,
and AF Solutions, offset by declines in CRDM defibrillation systems
and pacing systems. The Cardiac and Vascular Group’s performance
was impacted by strong international results from the AF
Solutions, Structural Heart, Endovascular, and Coronary and
Peripheral businesses offset by the continued macroeconomic
downturn, pricing pressures due to competition, slowing of
certain market growth rates, and reduced reimbursement in
certain countries including Japan, where R-Zone and foreign
reference pricing changes resulted in a decline in our selling
prices. Net sales growth for fiscal year 2011 was negatively