Medtronic 2013 Annual Report Download - page 84

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75732me_10K.indd 69 6/25/13 6:39 PM
Table of Contents
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
The table below sets forth the computation of basic and diluted earnings per share:
Fiscal Year
(in millions, except per share data) 2013 2012 2011
Numerator:
Earnings from continuing operations $ 3,467 $ 3,415 $ 3,055
Earnings from discontinued operations — 202 41
Net earnings 3,467 3,617 3,096
Denominator:
Basic – weighted average shares outstanding 1,019.3 1,053.9 1,077.4
Effect of dilutive securities:
Employee stock options 2.8 0.9 0.6
Employee restricted stock units 5.3 4.9 3.4
Other 0.1 0.2 0.3
Diluted – weighted average shares outstanding 1,027.5 1,059.9 1,081.7
Basic earnings per share:
Earnings from continuing operations $ 3.40 $ 3.24 $ 2.84
Earnings from discontinued operations $ — $ 0.19 $ 0.04
Net earnings* $ 3.40 $ 3.43 $ 2.87
Diluted earnings per share:
Earnings from continuing operations $ 3.37 $ 3.22 $ 2.82
Earnings from discontinued operations $ — $ 0.19 $ 0.04
Net earnings $ 3.37 $ 3.41 $ 2.86
* All earnings per share amounts have been rounded to the nearest $0.01, and therefore, may not sum.
The calculation of weighted average diluted shares outstanding excludes options for approximately 38 million, 51 million, and
59 million shares of common stock in fiscal years 2013, 2012, and 2011, respectively, because their effect would be anti-dilutive
on the Company’s earnings per share. For fiscal years 2013, 2012, and 2011, common share equivalents related to the Company’s
$2.200 billion of 2013 Senior Convertible Notes were anti-dilutive as the market price of the Company’s stock was below the
conversion price of the 2013 Senior Convertible Notes and, therefore, were excluded from the calculation of weighted average
diluted shares.
New Accounting Standards
Recently Adopted
In June 2011, and as subsequently amended in December 2011, the Financial Accounting Standards Board (FASB) issued final
guidance on the presentation of comprehensive income. Under the newly issued guidance, net income and comprehensive income
may only be presented either as one continuous statement or in two separate, but consecutive statements. The Company
retrospectively adopted this guidance in the first quarter of fiscal year 2013, with comprehensive income shown as a separate
statement immediately following the consolidated statements of earnings. Since the new guidance only relates to presentation, its
adoption did not impact the Company’s financial position, results of operations, or cash flows.
In September 2011, the FASB updated the accounting guidance related to annual and interim goodwill impairment testing. The
updated accounting guidance allows entities to first assess qualitative factors before performing a quantitative assessment of the
fair value of a reporting unit. If it is determined on the basis of qualitative factors that the fair value of the reporting unit is more
likely than not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment
testing is required. The Company adopted this guidance in the first quarter of fiscal year 2013. The adoption did not have a material
impact on the Company’s consolidated financial statements.
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