Medtronic 2013 Annual Report Download - page 69

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Table of Contents
In addition to the acquisitions above, we periodically acquire certain tangible or intangible assets from enterprises that do not
otherwise qualify for accounting as a business combination. These transactions are reflected in the consolidated statements of cash
flows as a component of investing activities under other investing activities, net.
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.
Operations Outside of the United States
The table below illustrates U.S. net sales versus net sales outside the U.S. for fiscal years 2013, 2012, and 2011:
Fiscal Year
(in millions) 2013 2012 2011
U.S. net sales $ 9,059 $ 8,828 $ 8,872
Non-U.S. net sales 7,531 7,356 6,636
Total net sales $ 16,590 $ 16,184 $ 15,508
For fiscal year 2013, net sales outside the U.S. increased 2 percent over the prior fiscal year. Foreign currency had an unfavorable
impact of $328 million on net sales for fiscal year 2013. Outside the U.S., net sales growth was led by strong growth in Endovascular,
Diabetes, and Surgical Technologies, and solid growth in our Neuromodulation and Structural Heart businesses. Growth was
partially offset by unfavorable foreign currency translation and slight declines in CRDM defibrillation and pacing systems and
Core Spine.
For fiscal year 2012, net sales outside the U.S. increased 11 percent over fiscal year 2011. The sales growth was led by strong
double-digit growth in Coronary, Structural Heart, Endovascular, Spine, Diabetes, and Surgical Technologies.
Net sales outside the U.S. are accompanied by certain financial risks, such as changes in foreign currency exchange rates and
collection of receivables, which typically have longer payment terms. We monitor the creditworthiness of our customers to which
we grant credit terms in the normal course of business. However, a significant amount of our outstanding accounts receivable are
with national health care systems in many countries. We continue to monitor the economic conditions in many countries outside
the U.S. (particularly Italy, Spain, Portugal, and Greece) and the average length of time it takes to collect on our outstanding
accounts receivable in these countries. As of April 26, 2013 and April 27, 2012, the aggregate accounts receivable balance for
Italy, Spain, Portugal, and Greece, net of allowance for doubtful accounts, was $770 million and $967 million, respectively. We
also continue to monitor the creditworthiness of customers located in these and other geographic areas. In the past, accounts
receivable balances with certain customers in these countries accumulated over time and were subsequently settled as large lump
sum payments. Although we do not currently foresee a significant credit risk associated with a material portion of these receivables,
repayment is dependent upon the financial stability of the economies of those countries. For certain Greece distributors,
collectability is not reasonably assured for revenue transactions and we defer revenue recognition until all revenue recognition
criteria are met. As of April 26, 2013 and April 27, 2012, our deferred revenue balance for certain Greece distributors was $21
million and $15 million, respectively. Outstanding gross receivables from customers outside the U.S. totaled $2.349 billion at
April 26, 2013, or 61 percent of total outstanding accounts receivable, and $2.408 billion as of April 27, 2012, or 62 percent of
total outstanding accounts receivable.
Cautionary Factors That May Affect Future Results
This Annual Report, and other written reports and oral statements made by or with the approval of one of the Company’s executive
officers from time to time, may include “forward-looking” statements. Forward-looking statements broadly involve our current
expectations or forecasts of future results. Our forward-looking statements generally relate to our growth and growth strategies,
financial results, product development, research and development strategy, regulatory approvals, competitive strengths,
restructuring initiatives, intellectual property rights, litigation and tax matters, government investigations, mergers and acquisitions,
divestitures, market acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations,
working capital adequacy, our effective tax rate, and sales efforts. Such statements can be identified by the use of terminology
such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “plan,” “possible,”
“potential,” “project,” “should,” “will,” and similar words or expressions. Forward-looking statements in this Annual Report
include, but are not limited to, statements regarding our ability to drive long-term shareholder value, development and future
launches of products and continued or future acceptance of products in our operating segments; expected timing for completion
of research studies relating to our products; market positioning and performance of our products, including stabilization of certain
product markets; unanticipated issues that may affect U.S. FDA and non-U.S. regulatory approval of new products; increased
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