Medtronic 2016 Annual Report Download - page 41

Table of Contents
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Free cash flow is a non-GAAP financial measure calculated by subtracting property, plant, and equipment additions from operating
cash flows.
Refer to the “GAAP to Non-GAAP Reconciliation," "Income Taxes," and "Summary of Cash Flows" sections for reconciliations
of our results of operations prepared in accordance with U.S. GAAP to the adjusted non-GAAP measurements considered by
management.
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 year 2016 was a 53-week year, with the additional week occurring in the first quarter. Fiscal years 2015 and 2014 were 52-
week years.
Executive Level Overview
Medtronic 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. We employ more than 88,000 full-time employees worldwide, serving
physicians, hospitals, and patients in approximately 160 countries. Our primary products include those for cardiac rhythm disorders,
cardiovascular disease, advanced and general surgical care, respiratory and monitoring solutions, neurological disorders, spinal
conditions and musculoskeletal trauma, urological and digestive disorders, and ear, nose, and throat and diabetes conditions.
Net income for the fiscal year ended April 29, 2016 was $3.5 billion, $2.48 per diluted share, as compared to net income of $2.7
billion, $2.41 per diluted share, for the fiscal year ended April 24, 2015, representing an increase of 32 percent and 3 percent,
respectively.
The table below illustrates net sales by operating segment for fiscal years 2016 and 2015:
Net Sales
Fiscal Year
(dollars in millions; NM - Not Meaningful) 2016 2015 % Change
Cardiac and Vascular Group $ 10,196 $ 9,361 9 %
Minimally Invasive Therapies Group (1) 9,563 2,387 301
Restorative Therapies Group 7,210 6,751 7
Diabetes Group 1,864 1,762 6
Total Net Sales $ 28,833 $ 20,261 42%
(1) The Minimally Invasive Therapies Group was a new group in the fourth quarter of fiscal year 2015 that contains the majority of Covidien's
former operations. Revenue growth is compared to a full year of operations in fiscal year 2016.
Our performance for the fiscal year ended April 29, 2016 was favorably impacted by an additional selling week during the first
quarter of fiscal year 2016 due to our 52/53 week fiscal year calendar. Currency translation had an unfavorable impact of $1.4
billion on net sales compared to the prior fiscal year. The Cardiac and Vascular Group’s performance was primarily a result of the
addition of the Covidien Peripheral business into the Aortic & Peripheral Vascular division and strong net sales across all three
divisions: Cardiac Rhythm & Heart Failure, Coronary & Structural Heart, and Aortic & Peripheral Vascular. The Surgical Solutions
and Patient Monitoring & Recovery divisions, within the Minimally Invasive Therapies Group, contributed $5.3 billion and $4.3
billion of revenue, respectively. The Restorative Therapies Group’s performance was a result of solid growth in Surgical
Technologies, and was favorably impacted by the addition of the Covidien Neurovascular division, partially offset by declines in
Spine and Neuromodulation. The Diabetes Group's performance was primarily due to growth in international markets, driven by
the next-generation MiniMed 640G System with the Enhanced Enlite Sensor. See our discussion in the “Net Sales” section of this
management’s discussion and analysis for more information on the results of our operating segments.
Acquisition of Covidien In fiscal year 2015, we acquired Covidien to continue in our mission to create a medical technology
and services company with a comprehensive product portfolio and a broad global reach that is better able to improve healthcare
outcomes. Covidien meaningfully accelerates our core strategies of therapy innovation, globalization and economic value. The
transaction was accounted for as a business combination using the acquisition method of accounting, which requires, among other
things, that assets acquired and liabilities assumed be recognized at their fair values at the Acquisition Date.
For further information regarding the Acquisition, see the section entitled “Acquisition and Investments - Acquisition of Covidien”
contained in “Item 1. Business,” and Note 2 to the consolidated financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K. The full text of the Transaction Agreement was filed as Exhibit 2.1 to
our Amendment No. 5 to the Registration Statement on Form S-4 filed with the SEC on November 20, 2014.