Medtronic 2013 Annual Report Download - page 47

75732me_10K.indd 32 6/25/13 6:39 PM
Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 Medtronic, Inc. and its subsidiaries (Medtronic or the Company, or we, us, or our). You
should read this discussion and analysis along with our consolidated financial statements and related notes thereto as of April 26,
2013 and April 27, 2012 and for each of the three fiscal years ended April 26, 2013, April 27, 2012, and April 29, 2011.
Beginning in the third quarter of fiscal year 2012, the results of operations, assets, and liabilities of the Physio-Control business,
which were previously presented as a component of the Cardiac and Vascular Group operating segment, are classified as
discontinued operations. All information in the following management’s discussion and analysis of financial condition and results
of operations includes only results from continuing operations (excluding Physio-Control) for all periods presented, unless
otherwise noted. For further information regarding discontinued operations, see Note 16 to the consolidated financial statements
in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
Organization of Financial Information Management’s discussion and analysis, presented on pages 29 to 52 of this report,
provides material historical and prospective disclosures designed to enable investors and other users to assess our financial condition
and results of operations.
Statements that are forward-looking and not historical in nature are subject to risks and uncertainties. See "Item 1A. Risk Factors"
in this Annual Report on Form 10-K and "Cautionary Factors That May Affect Future Results" in this management's discussion
and analysis for more information.
The consolidated financial statements are presented on pages 55 to 118 of this report, and include the consolidated statements of
earnings, consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of shareholders’
equity, consolidated statements of cash flows, and the related notes, which are an integral part of the consolidated financial
statements.
Financial Trends Throughout this management’s discussion and analysis, you will read about transactions or events that materially
contribute to or reduce earnings and materially affect financial trends. We refer to these transactions and events as special charges
(such as asset impairments or contributions to The Medtronic Foundation), restructuring charges, net, certain litigation charges,
net, acquisition-related items, or certain tax adjustments. These charges, or benefits, result from facts and circumstances that vary
in frequency and/or impact to operations. While understanding these charges or benefits is important to understanding and evaluating
financial trends, other transactions or events may also have a material impact on financial trends. A complete understanding of
the special charges, restructuring charges, net, certain litigation charges, net, acquisition-related items, and certain tax adjustments
is necessary in order to estimate the likelihood that they may affect financial trends in the future.
Our fiscal year-end is the last Friday in April, and therefore, the total weeks in a fiscal year can fluctuate between 52 and 53 weeks.
Fiscal years 2013, 2012, and 2011 were all 52-week years.
Executive Level Overview
Medtronic is the global leader in medical technology - alleviating pain, restoring health, and extending life for millions of people
around the world. We develop, manufacture, and market our medical devices in more than 140 countries. Our primary products
include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders, spinal conditions and musculoskeletal
trauma, urological and digestive disorders, diabetes, and ear, nose, and throat conditions.
We operate under two reportable segments and two operating segments, the Cardiac and Vascular Group (composed of the CRDM,
Coronary, Structural Heart, and Endovascular businesses) and the Restorative Therapies Group (composed of the Spine,
Neuromodulation, Diabetes, and Surgical Technologies businesses).
Net earnings for the fiscal year ended April 26, 2013 were $3.467 billion, or $3.37 per diluted share, as compared to net earnings
of $3.617 billion (including Physio-Control), or $3.41 per diluted share for the fiscal year ended April 27, 2012, representing a
decrease of 4 percent and 1 percent, respectively. Fiscal year 2013 net earnings included after-tax restructuring charges, net, certain
litigation charges, net, and acquisition-related items that decreased net earnings by an aggregate of $331 million ($378 million
pre-tax). Fiscal year 2012 net earnings included after-tax restructuring charges, net, certain litigation charges, net, and acquisition-
related items that decreased net earnings by an aggregate of $133 million ($189 million pre-tax). See further discussion of these
items in the “Restructuring Charges, Net, Certain Litigation Charges, Net, and Acquisition-Related Items” section of this
management’s discussion and analysis.
29