FinanceLooker

Excrept from filing document 2025-04-25

Aggregate market value of voting and non voting common equity of Medtronic plc held by non affiliates of the registrant as of October 25 2024 based on the closing price of 90 59 as reported on the New York Stock Exchange approximately 116 2 billion Number of Ordinary Shares outstanding on June 17 2025 1 281 264 703
This Annual Report on Form 10 K and other written reports of Medtronic plc organized under the laws of Ireland together with its consolidated subsidiaries Medtronic the Company or we us or our 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 All statements other than statements of historical fact contained in this Annual Report on Form 10 K including statements regarding our future results of operations and financial position business strategy and plans objectives of management for future operations and current expectations or forecasts of future results are forward looking statements These statements involve known and unknown risks uncertainties and other important factors that may cause our actual results performance or achievements to be materially different from any future results performance or achievements expressed or implied by the forward looking statements Our forward looking statements may include statements related to our growth and growth strategies developments in the markets for our products therapies and services financial results product development launches and effectiveness research and development strategy regulatory approvals competitive strengths the potential or anticipated direct or indirect impact of public health crises geopolitical conflicts or changing governmental executive actions and regulations including relating to global trade policies enforcement priorities and compliance requirements on our business results of operations and or financial condition restructuring and cost saving initiatives intellectual property rights litigation and tax matters governmental proceedings and investigations mergers acquisitions and divestitures market acceptance of our products therapies and services accounting estimates financing activities ongoing contractual obligations working capital adequacy the value of our investments our effective tax rate our expected returns to shareholders and sales efforts In some cases such statements may 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
development and future launches of products and continued or future acceptance of products therapies and services in our segments expected timing for completion of research studies relating to our products integration of new technologies including artificial intelligence AI and data analytics into our products therapies and services market positioning and performance of our products including stabilization of certain product markets divestitures and the potential benefits thereof the costs and benefits of integrating previous acquisitions anticipated timing for United States U S Food and Drug Administration U S FDA and non U S regulatory approval of new products increased presence in new markets including markets outside the U S changes in the market and our market share our ability to meet growing demand for our existing products acquisitions and investment initiatives including the timing of regulatory approvals as well as integration of acquired companies into our operations the resolution of tax matters the effectiveness of our development activities in reducing patient care costs and hospital stay lengths our approach towards cost containment our expectations regarding the potential impact of changing governmental executive actions and regulations including relating to global trade policies enforcement priorities and compliance requirements on our business our expectations regarding healthcare costs including potential changes to reimbursement policies and pricing pressures our expectations regarding changes to patient standards of care our ability to identify and maintain successful business partnerships the elimination of certain positions or costs related to restructuring initiatives outcomes in our litigation matters and governmental proceedings and investigations general economic conditions the adequacy of available working capital and our working capital needs our payment of dividends and redemption of shares the continued strength of our balance sheet and liquidity our accounts receivable exposure our human capital management with respect to our global workforce and the potential impact of our compliance with governmental regulations and accounting guidance
We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business results of operations financial condition and or cash flows These forward looking statements speak only as of the date of this Annual Report on Form 10 K and are subject to a number of risks uncertainties and assumptions described in the Risk Factors section and elsewhere in our Annual Report on Form 10 K Because forward looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified you should not rely on these forward looking statements as predictions of future events One must carefully consider forward looking statements and understand that such forward looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified and involve a variety of risks and uncertainties known and unknown including among others those discussed in the sections entitled Government Regulation within Item 1 Business and Item 1A Risk Factors in our Annual Report on Form 10 K as well as those related to
Consequently no forward looking statement may be guaranteed and actual results may vary materially from those projected in the forward looking statements We intend to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our forward looking statements and are including this sentence for the express purpose of enabling us to use the protections of the safe harbor with respect to all forward looking statements While we may elect to update these forward looking statements at some point in the future whether as a result of any new information future events or otherwise we have no current intention of doing so except to the extent required by applicable law
Medtronic plc headquartered in Galway Ireland is the leading global healthcare technology company Medtronic was founded in 1949 and today serves healthcare systems physicians clinicians and patients in more than 150 countries worldwide We remain committed to a mission written by our founder in 1960 that directs us to contribute to human welfare by the application of biomedical engineering in the research design manufacture and sale of products to alleviate pain restore health and extend life
Our Mission to alleviate pain restore health and extend life empowers us to engineer the extraordinary and deliver better outcomes for our world We are a company of dedication honesty integrity and service Building on this strong foundation we are embracing our role as a healthcare technology leader and evolving our business strategy in three key areas
Accelerate innovation driven growth The combination of our attractive end markets recent product launches and robust pipeline is expected to enable continued strong revenue growth We aim to bring inventive and disruptive technology to large healthcare opportunities which enables us to better meet patient needs Patients around the world deserve access to our life saving products and we are driven to use our local presence and scale to increase the adoption of our products and services in markets around the globe
Deliver superior outcomes and better experiences for patients and providers We listen to our patients and customers to better understand the challenges they face From the patient journey to creating agile partnerships that produce novel solutions to making it easier for our customers to deploy our therapies what we do is anchored in deep insight and creates simpler superior experiences
Turn data artificial intelligence AI and automation into action We are confident in our ability to maximize new technology AI and data and analytics to tailor therapies in real time facilitating remote monitoring and care delivery that conveniently manages conditions and creates new standards of care
We have four reportable segments that primarily develop manufacture distribute and sell device based medical therapies and services the Cardiovascular Portfolio the Neuroscience Portfolio the Medical Surgical Portfolio and the Diabetes Operating Unit For more information regarding our segments please see Note 19 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
The Cardiovascular Portfolio is made up of the Cardiac Rhythm Heart Failure Structural Heart Aortic and Coronary Peripheral Vascular divisions The primary medical specialists who use our Cardiovascular products include electrophysiologists implanting cardiologists heart failure specialists cardiovascular cardiothoracic and vascular surgeons and interventional cardiologists and radiologists
division develops manufactures and markets products for the diagnosis treatment and management of heart rhythm disorders and heart failure Our products include implantable devices leads and delivery systems products for the treatment of atrial fibrillation AF products designed to reduce surgical site infections and information systems for the management of patients with Cardiac Rhythm Heart Failure devices Principal products and services offered include
Implantable cardiac pacemakers including the Azure MRI SureScan Adapta Attesta MRI SureScan and the Micra transcatheter pacing system Azure pacemakers feature Medtronic exclusive BlueSync technology which enables automatic secure wireless remote monitoring with increased device longevity The 3830 lead with His bundle and left bundle branch capabilities effectively covers all current forms of conduction system pacing and sensing The Micra transcatheter pacing system which is leadless and does not have a subcutaneous device pocket like a conventional pacemaker includes the Micra VR and the Micra AV device families Both pacemakers treat patients with atrioventricular block
Implantable cardioverter defibrillators ICDs including the Aurora Extravascular ICD Visia AF MRI SureScan Evera MRI SureScan Primo MRI and the Cobalt and Crome family of BlueSync enabled ICDs as well as defibrillator leads including the Sprint Quattro Secure lead
Implantable cardiac resynchronization therapy devices CRT Ds and CRT Ps including the Claria Amplia Compia family of MRI Quad CRT D SureScan systems and the Cobalt and Crome portfolio of BlueSync enabled CRT Ds as well as the Percepta Serena Solara family of MRI Quad CRT P SureScan systems
Cardiac ablation products include a full suite of electrophysiology solutions to treat patients with arrhythmias including paroxysmal and persistent AF The portfolio includes the Arctic Front Advanced Cardiac Cryoblation System PulseSelect single shot Pulsed Field Ablation catheter the Sphere 9 focal catheter providing high density mapping capabilities combined with dual radio frequency and pulsed field energies to deliver ablation lesions and Affera Mapping and Navigation System with Prism 1 software aimed at integrating clinical information to improve patient outcomes
Insertable cardiac monitoring systems including the Reveal LINQ and LINQ II These devices are for patients who experience transient symptoms such as dizziness palpitation syncope fainting and chest pain as well as Cryptogenic Stroke patients which may indicate a cardiac arrhythmia that requires long term monitoring or ongoing management Both portfolio devices have unmatched accuracy and a streamlined workflow with AccuRhythm AI algorithms to reduce clinic workload and data burden LINQ II the premium portfolio device offers extended device longevity and remote programming capabilities
TYRX products including the Cardiac and Neuro Absorbable Antibacterial Envelopes which are designed to stabilize electronic implantable devices and help prevent infection associated with implantable pacemakers and defibrillators
Medtronic stopped the distribution and sale of the HVAD System in June 2021 We continue a support program for patients with HVAD devices and for caregivers and healthcare professionals who participate in their care
Our Structural Heart Aortic division includes the following Operating Units Structural Heart Aortic and Cardiac Surgery The division includes therapies to treat heart valve disorders and aortic disease Our devices include products for the repair and replacement of heart valves perfusion systems positioning and stabilization systems for beating heart revascularization surgery surgical ablation products and a comprehensive line of products and therapies to treat aortic disease such as aneurysms dissections and transections Principal products offered include
Surgical valve replacement and repair products for damaged or diseased heart valves including both tissue and mechanical valves blood handling products that form a circulatory support system to maintain and monitor blood circulation and coagulation status oxygen supply and body temperature during arrested heart surgery and surgical ablation systems and positioning and stabilization technologies
Endovascular stent grafts and accessories including the Endurant II Stent Graft System for the treatment of abdominal aortic aneurysms the Valiant Captivia Thoracic Stent Graft System for thoracic endovascular aortic repair procedures and the Heli FX EndoAnchor System
Our Coronary Peripheral Vascular division includes the following Operating Units Coronary Renal Denervation and Peripheral Vascular Health The division is comprised of a comprehensive line of products and therapies to treat coronary artery disease as well as peripheral vascular disease and venous disease Our products include coronary stents and related delivery systems including a broad line of balloon angioplasty catheters guide catheters guide wires diagnostic catheters and accessories peripheral drug coated balloons stent and angioplasty systems carotid embolic protection systems for the treatment of vascular disease outside the heart and products for superficial and deep venous disease Principal products offered include
Percutaneous angioplasty balloons including the IN PACT family of drug coated balloons vascular stents including the Abre venous stent directional atherectomy products including the HawkOne directional atherectomy system and other procedure support tools
The Neuroscience Portfolio is made up of the Cranial Spinal Technologies Specialty Therapies and Neuromodulation divisions The primary medical specialists who use the products of this group include spinal surgeons neurosurgeons neurologists pain management specialists anesthesiologists orthopedic surgeons urologists urogynecologists interventional radiologists and ear nose and throat specialists
Our Cranial Spinal Technologies division and Operating Unit develops manufactures and markets an integrated portfolio of devices and therapies for surgical technologies designed to improve the precision and workflow of neurological procedures and a comprehensive line of medical devices and implants used in the treatment of the spine and musculoskeletal system The division also provides biologic solutions for the orthopedic markets and offers unique and highly differentiated imaging navigation power instruments and robotic guidance systems used in spine and cranial procedures Principal products and services offered include
Neurosurgery products including platform technologies implant therapies and advanced energy products through the AiBLE spine technology ecosystem This includes our StealthStation S8 surgical navigation system Stealth Autoguide cranial robotic guidance platform O arm Imaging System Mazor robotic guidance systems used in robot assisted spine procedures UNiD adaptive spine intelligence AI driven technology for surgical planning and personalized spinal implants and our Midas Rex surgical drills including our MR8 high speed drill system
Products to treat a variety of conditions affecting the spine including degenerative disc disease spinal deformity spinal tumors fractures of the spine and stenosis These products include our CATALYFT PL expandable interbody spacers CD Horizon ModuLeX spinal system and T2 STRATOSPHERE expandable corpectomy system These products can also include titanium interbody implants and surface technologies such as our Adaptix interbody system and incorporated Titan interbody fusion device with nanoLOCK technology
Products that facilitate less invasive thoracolumbar surgeries including the CD Horizon Solera Voyager percutaneous fixation system and various retractor systems to access the spine through smaller incisions
Products to treat conditions in the cervical region of the spine including the ZEVO anterior cervical plate system the Infinity Occipitocervical Upper Thoracic OCT System and Prestige LP cervical discs
Biologic solutions products including our Infuse Bone Graft InductOs in the European Union E U which contains a recombinant human bone morphogenetic protein 2 rhBMP 2 for certain spinal trauma and oral maxillofacial applications
Our Specialty Therapies division includes the following Operating Units Neurovascular Ear Nose and Throat ENT and Pelvic Health The division develops manufactures and markets products and therapies to treat patients afflicted with acute ischemic and hemorrhagic stroke ENT diseases and patients suffering from overactive bladder and non obstructive urinary retention Principal products and services offered include
Neurovascular products to treat diseases of the vasculature in and around the brain This includes coils neurovascular stent retrievers and flow diversion products as well as access and delivery products to support procedures Products also include the Pipeline Flex and Pipeline Vantage embolization devices with Shield Technology endovascular treatments for large or giant wide necked brain aneurysms the portfolio of Solitaire revascularization devices for treatment of acute ischemic stroke the Riptide aspiration system the Onyx Liquid Embolic System and a portfolio of associated access catheters including our React aspiration catheters also for the treatment of acute ischemic stroke
ENT products including the Straightshot M5 microdebrider handpiece the Integrated Power Console IPC system NIM Vital nerve monitoring systems Propel and Sinuva Sinus Implants StealthStation ENT and StealthStation FlexENT navigation systems as well as products for hearing restoration
Pelvic health products including our InterStim X and InterStim II recharge free neurostimulators InterStim Micro rechargeable neurostimulators and SureScan MRI leads Our NURO System delivers Percutaneous Tibial Neuromodulation therapy to treat overactive bladder non obtrusive urinary retention and chronic fecal incontinence
Our Neuromodulation division and Operating Unit develops manufactures and markets spinal cord stimulation and brain modulation systems implantable drug infusion systems for chronic pain as well as interventional products Principal products and services offered include
Spinal cord stimulation products including rechargeable and recharge free devices and a large selection of leads used to treat chronic back and or limb pain and chronic pain resulting from diabetic peripheral neuropathy This includes the Inceptiv spinal cord stimulation system which offers a closed loop feature that senses biological signals along the spinal cord and automatically adjusts stimulation in real time Intellis rechargeable and Vanta recharge free spinal cord stimulation systems with
Brain modulation products including those for the treatment of Parkinson s disease essential tremor refractory epilepsy severe treatment resistant obsessive compulsive disorder approved under a Humanitarian Device Exemption HDE in the U S and chronic intractable primary dystonia approved under a HDE in the U S Specifically the Percept family of neurostimulators with proprietary adaptive BrainSense technology
Implantable drug infusion systems including our SynchroMed III Implantable Infusion System which deliver small quantities of drug directly into the intrathecal space surrounding the spinal cord to help manage chronic pain cancer pain and severe spasticity
Interventional products including our full Kyphon portfolio of minimally invasive Kyphoplasty and Vertebroplasty solutions for the treatment of vertebral compression fractures including bipedicular and unipedicular access options bone access tools inflatable balloon tamps cement and delivery systems as well as biopsy and specialty devices The OsteoCool cooled radiofrequency ablation system with simultaneous dual probe capabilities and algorithms for the treatment of painful metastatic bone lesions Emprint Microwave with Thermosphere technology for the treatment of non resectable liver tumors As well as the Accurian nerve ablation system which conducts radio frequency ablation of nerve tissues
The Medical Surgical Portfolio includes the Surgical Endoscopy and Acute Care Monitoring divisions Products and therapies of this group are used primarily by healthcare systems physicians offices ambulatory care centers and other alternate site healthcare providers While less frequent some products and therapies are also used in home settings
Our Surgical Endoscopy division includes the following Operating Units Surgical and Endoscopy The division develops manufactures and markets advanced and general surgical products including advanced stapling devices vessel sealing instruments wound closure products electrosurgery products AI powered surgical video and analytics platform robotic assisted surgery products hernia mechanical devices mesh implants gynecology products minimally invasive gastrointestinal and hepatologic diagnostics and therapies and therapies to treat diseases and conditions that are typically but not exclusively addressed by surgeons Principal products and services offered include
Advanced stapling and energy products including the Tri Staple technology platform for endoscopic stapling including the Endo GIA reloads and reinforced reloads with Tri Staple technology and the Endo GIA ultra universal stapler the Signia powered stapling system the LigaSure exact dissector and L Hook Laparoscopic Sealer Divider and the Sonicision 7 curved jaw cordless ultrasonic dissection system
Robotic and digital surgery technologies including the Hugo robotic assisted surgery RAS system designed for a broad range of soft tissue procedures and Touch Surgery Enterprise an AI powered surgical video management solution for the operating room
Products designed for the treatment of hernias including the AbsorbaTack absorbable mesh fixation device for hernia repair MaxTack motorized fixation device designed for minimally invasive hernia fixation the Symbotex composite mesh for surgical laparoscopic and open ventral hernia repair and ProGrip laparoscopic self fixating mesh a self gripping biocompatible solution for inguinal hernias
Endoscopy products including the GI Genius intelligent endoscopy module the PillCam capsule endoscopy systems the Bravo calibration free reflux testing systems the Endoflip 300 Impedance Planimetry System the Emprint ablation system with Thermosphere Technology the ManoScan high resolution manometry system the Barrx platform through ablation with the Barrx 360 Express catheter the Cool tip radiofrequency ablation system the Beacon delivery system and the Nexpowder endoscopic hemostasis system
Products focused on airway management and respiratory monitoring including Microstream capnography monitors McGRATH MAC video laryngoscopes Shiley endotracheal tubes Shiley tracheostomy tubes and DAR Breathing Systems
The Diabetes Operating Unit develops manufactures and markets products and services for the management of Type 1 and Type 2 diabetes The primary medical specialists who use and or prescribe our Diabetes products are endocrinologists and primary care physicians
Insulin pumps and consumables including the MiniMed 780G system powered by SmartGuard technology The MiniMed 780G system provides smartphone and Bluetooth connectivity a meal time detection system an adjustable glucose target down to 100 mg dl and has the capability to continuously deliver background insulin and monitor sugar levels
Continuous glucose monitoring CGM systems include the Guardian Connect CGM system and Simplera platform Both systems are worn by patients capturing glucose data to reveal patterns and potential problems such as hyperglycemic and hypoglycemic episodes The Simplera platform s discreet design simplifies the insertion and wear experience through the integration of the Simplera CGM as a Smart Multiple Daily Injections MDI system and the InPen with the Simplera Sync sensor and the MiniMed 780G system offering disposable capabilities
The InPen smart insulin pen system combines a reusable Bluetooth enabled insulin pen with an intuitive mobile app that helps users administer the appropriate insulin dose The InPen application integrates with our CGM data to provide real time CGM readings alongside insulin dose information
In May 2025 we announced our intention to separate the Diabetes business with the intention to create a new independent publicly traded company The separation is expected to be completed within 18 months of the initial announcement
Medtronic s employees deliver on our Mission every day We empower insight driven care experiences that put people first and better outcomes for our world In everything we do we are engineering the extraordinary We strive to be the employer of choice for the best and brightest global talent where employees can grow and develop fulfilling careers We aspire to create an inclusive diverse and equitable workplace that fosters innovation and creativity and where employees feel a sense of belonging and well being Medtronic has over 95 000 full time employees of which 44 are based in the U S or Puerto Rico
We believe that improving health for people from all walks of life depends on our ability to unleash the creative power of our global employees By breaking down barriers we open doors for everyone driving opportunity progress and prosperity around the world Our commitment to inclusion is a core element of the Medtronic Mission and we integrate these principles throughout our Company to ensure every operating unit team and leader recognizes and celebrates the value of diverse experiences and backgrounds Additionally Medtronic employee resource groups ERGs and Networks are employee led affinity groups that provide career development and networking opportunities to all employees and strengthen ties between employees of many different backgrounds cultures and interests
In our most recent reported period available in the United States we have achieved 100 pay equity for gender and ethnically diverse employees Globally we have achieved 99 pay equity for gender We are actively working to resolve any remaining pay inequities by continuing to expand the annual pay equity analyses for each country we operate in
Our compensation framework is designed to provide market competitive pay for the value and contributions of our employees We are committed to transparent communications on compensation Our competitive approach to compensation reflects industry benchmarks and local market standards Our programs include annual and long term equity based incentives that provide the means to share in the Company s success based on business and individual performance To attract and retain the best leaders we offer competitive benefits and cash and equity incentives We reward high performing employees with an ownership stake in the Company through restricted stock and employees have the opportunity to purchase stock at a significant discount through our Employee Stock Purchase Plan
The skills and dedication of our employees drive our business performance Our comprehensive professional development programs empower our people to build rewarding careers and help us attract world class talent from global and diverse populations Our suite of professional development programs ensures that our employees regardless of level location language or learning preferences have access to opportunities to develop and grow
In recent years we have shifted away from degree requirements to focus on skills based certification for certain roles within Medtronic Additionally as members of the Multiple Pathways Initiative we have used a skills based approach to offering opportunities to expanded pools of external talent that have previously been held back due to lack of access to undergraduate education Internally eligible U S and Puerto Rico employees can now participate through MAPS Medtronic Advancement Pathways and Skill building in undergraduate courses from top tier universities to enhance or obtain new skills at no cost to the employee We have opened opportunities for employees who have been otherwise restricted from career advancement due to degree requirements
Through our Organizational Health Survey we gain valuable insight into the Medtronic employee experience and identify where we can improve in key priority areas 1 Employee Engagement 2 Inclusion 3 Innovation 4 Ethics and 5 Quality culture as part of our commitment to Put Patients First in our everyday decisions and actions In our most recent survey ending in the fourth quarter of fiscal year 2025 more than 88 of our employees responded Medtronic carefully reviews and implements actions based on employee feedback in order to partner and create an inclusive innovative and supportive environment
Our culture is critical to achieving our vision The Medtronic Mindset builds on our core values of integrity quality inclusion and collaboration It urges us to act boldly compete to win move with speed and decisiveness foster belonging and deliver results the right way Our culture helps us meet the needs of our patients and customers and ensures our Mission endures for many years to come
As a large global employer our ability to attract and retain talent is based in part on our commitment to maintain a safe workplace and support the well being of our employees Medtronic has a comprehensive approach to providing robust support for our employees and their families in natural disasters public health crises civil unrest and armed conflicts bereavement and other challenging events Along with other programs the Medtronic Employee Assistance Program and the Medtronic Employee Emergency Assistance Fund have historically supported employees and their families when faced with difficult times by providing a variety of services such as mental health safety and financial resources and support at no cost These programs have proven invaluable in navigating our employees through unique challenges including in fiscal year 2025 The Medtronic Employee Emergency Assistance Fund is supported by donations from employees and the Medtronic Foundation and over the last five years has provided 4 million in grants to employees experiencing unexpected events creating a financial hardship
The markets in which we participate are subject to rapid technological advances and innovations Constant improvement of existing products and introduction of new products is necessary to maintain market leadership Our research and development R D efforts are directed toward maintaining or achieving technological leadership in the markets we serve to help ensure that patients using our devices and therapies receive the most advanced and effective treatment possible We remain committed to developing technological enhancements and new indications for existing products and less invasive and new technologies for new and emerging markets to address unmet patient needs That commitment leads to our initiation and participation in hundreds of clinical trials each fiscal year as the demand for clinical and economic evidence remains high Furthermore our development activities are intended to help reduce patient care costs and the length of hospital stays in the future We have not engaged in significant customer or government sponsored research
Our R D activities include improving existing products and therapies expanding their indications and applications for use developing new therapies and procedures and entering into arrangements with third parties to fund the development of certain technologies We continue to focus on optimizing innovation improving our R D productivity driving growth in international markets generating clinical evidence and assessing our R D programs based on their ability to address unmet clinical needs produce better patient outcomes and create new standards of care
We rely on a combination of patents trademarks tradenames copyrights trade secrets and agreements including non disclosure agreements to protect our business and proprietary technology In addition we have entered into exclusive and non exclusive licenses and covenants not to sue relating to a wide array of third party technologies In the aggregate these intellectual property assets agreements and licenses are of material importance to our business however we believe that no single intellectual property asset agreement or license is material in relation to our business as a whole
We operate in an industry characterized by extensive intellectual property litigation Intellectual property litigation may result in significant damage awards and injunctions that could prevent the manufacture and sale of affected products or result in significant royalty payments in order to continue selling the products At any given time we are generally involved as both a plaintiff and a defendant in a number of intellectual property actions the outcomes of which may not be known for prolonged periods of time
We sell our medical devices and therapies through a combination of direct sales representatives and independent distributors globally Additionally a portion of the Company s revenue is generated from consignment inventory maintained at hospitals Our medical supply products are used primarily in hospitals ambulatory surgical centers and alternate care facilities such as home care and long term care facilities and are marketed to materials managers group purchasing organizations GPOs and integrated delivery networks IDNs We often negotiate with GPOs and IDNs which enter into supply contracts for the benefit of their member facilities Our four largest markets are the U S Western Europe China and Japan International markets are an area of increasing focus and opportunity as we believe they remain under penetrated
Our marketing and sales strategy is focused on rapid cost effective delivery of high quality products to a diverse group of customers worldwide To achieve this objective our marketing and sales teams are organized around physician specialties This focus enables us to develop highly knowledgeable and dedicated sales representatives who are able to foster strong relationships with physicians and other customers and enhance our ability to support our customers and cross sell complementary products
than 150 countries throughout the world These markets are characterized by rapid change resulting from technological advances innovations and scientific discoveries Our product lines face a mix of competitors ranging from large manufacturers with multiple business lines to small manufacturers offering a limited selection of products In addition we face competition from providers of other medical therapies such as pharmaceutical companies including those producing glucagon like peptide 1s GLP 1s
Major shifts in industry market share have occurred in connection with product corrective actions physician advisories safety alerts results of clinical trials to support superiority claims and publications about our products reflecting the importance of product quality product efficacy and quality systems in the medical device industry In the current environment of managed care economically motivated
customers consolidation among healthcare providers increased competition declining reimbursement rates and national and provincial tender pricing competitively priced product offerings are essential to our business In order to continue to compete effectively we must continue to create or acquire advanced technology incorporate this technology into proprietary products obtain regulatory approvals in a timely manner maintain high quality manufacturing processes and successfully market these products
Government and private sector initiatives to limit the growth of healthcare costs including price regulation competitive pricing bidding and tender mechanics coverage and payment policies comparative effectiveness of therapies technology assessments and managed care arrangements are continuing in many countries where we do business including the U S These initiatives put increased emphasis on the delivery of more cost effective medical devices and therapies Government programs including Medicare and Medicaid private healthcare insurance managed care plans and volume based procurement tenders in China have attempted to control costs by limiting the amount of reimbursement they will pay for particular procedures or treatments tying reimbursement to outcomes shifting to population health management and other mechanisms Hospitals which purchase our technology are also seeking to reduce costs through a variety of mechanisms including for example centralized purchasing and in some cases limiting the number of vendors that may participate in the purchasing program Hospitals are also aligning interests with physicians through employment and other arrangements such as gainsharing where a hospital agrees with physicians to share any realized cost savings resulting from changes in practice patterns such as device standardization This has created an increased level of price sensitivity among customers for our products
We manufacture products at facilities located in various countries throughout the world We purchase many of the components and raw materials used in manufacturing our products from numerous suppliers in various countries Certain components and raw materials are available only from a sole supplier We work closely with our suppliers and have plans and measures in place to help ensure continuity of supply while maintaining high quality and reliability Generally we have been able to obtain adequate supplies of such raw materials and components However due to the U S FDA s manufacturing requirements and those of other regulatory authorities we may not be able to quickly establish additional or replacement sources for certain components or materials if we experience a sudden or unexpected reduction or interruption in supply and are unable to develop alternative sources
Our operations and products are subject to extensive regulation by numerous government agencies including the U S FDA European regulatory authorities such as the Medicines and Healthcare products Regulatory Agency in the United Kingdom the Health Products Regulatory Authority in the Republic of Ireland and the Federal Institute for Drugs and Medical Devices in Germany the China
and other government agencies inside and outside the U S To varying degrees each of these agencies requires us to comply with laws and regulations governing the development testing manufacturing labeling marketing distribution and post marketing surveillance of our products Our business is also affected by data privacy security and digital health laws such as the European Health Data Space EHDS regulation as well as government payor cost containment initiatives and environmental health and safety laws and regulations In addition as a result of the release and availability of Artificial Intelligence AI technologies including generative AI platforms we have seen a global trend toward more comprehensive regulation of AI designed to ensure the ethical use security and privacy of AI and create standards for transparency accountability and fairness including the EU AI Act which may impact our business
In many jurisdictions where we do business including the U S the E U Japan and China our products are subjected to approval and other regulatory requirements regarding performance safety and quality For instance authorization to commercially distribute a new medical device in the U S is generally obtained in one of two primary ways The first known as pre market notification or the 510 k process requires us to demonstrate that our medical device is substantially equivalent to a legally marketed medical device The second more rigorous process known as pre market approval requires us to independently demonstrate that a medical device is safe and effective for its intended use This process is generally much more time consuming and expensive than the 510 k process
In the E U conformity with the marketing authorization requirements is represented by the CE Mark To obtain a CE Mark defined products must meet minimum standards of performance safety and quality i e the essential requirements and then according to their classification comply with one or more of a selection of conformity assessment routes The competent authorities of the E U countries separately regulate the clinical research for medical devices and the market surveillance of products once they are placed on the market The Medical Device Regulation was published by the E U in 2017 and it imposes significant additional pre market and post market requirements EU MDR The regulation provided an implementation period and became effective on May 26 2021 The European Commission extended the implementation period to the end of 2027 for high risk devices and to the end of 2028 for medium and low risk devices
The global regulatory environment is increasingly stringent and unpredictable While harmonization of global regulations has been pursued requirements continue to differ among countries We expect this global regulatory environment will continue to evolve which could impact the cost the time needed to approve and ultimately our ability to maintain existing approvals or obtain future approvals for our products In addition reported potential workforce reductions and agency reorganization at the U S FDA if implemented could have an impact on product approval timelines Regulations of the U S FDA and other regulatory agencies in and outside the U S impose extensive compliance and monitoring obligations on our business These agencies review our design and manufacturing processes labeling record keeping and manufacturers required reports of adverse experiences and other information to identify potential problems with marketed products We are also subject to periodic inspections for compliance with applicable quality system regulations which govern the methods used in and the facilities and controls used for the design manufacture packaging and servicing of finished medical devices intended for human use In addition the U S FDA and other regulatory bodies both in and outside the U S including the Federal Trade Commission the Office of the Inspector General of the Department of Health and Human Services the U S Department of Justice and various state Attorneys General monitor the promotion and advertising of our products Any adverse regulatory action depending on its magnitude may limit our ability to effectively market and sell our products limit our ability to obtain future pre market approvals or result in a substantial modification to our business practices and operations For additional information see Item 1A Risk Factors under
The movement of products services technology know how and investment across borders subjects us to extensive trade laws and regulations including tariff regulations adopted by different countries or trading zones These laws and regulations govern among other things our import export and other international trade activities We are subject to the risk that these laws and regulations could change in a way that would expose us to additional costs and burdens as well as penalties if not complied with Some governments impose economic sanctions and other trade restrictions against certain countries persons or entities We also sell and provide goods technology and services to agents representatives and distributors who may in turn sell or provide such items to customers and other end users in their own countries or by means of their own cross border transactions If we or the third parties through which we do business are not in compliance with applicable import export control or economic sanctions laws and regulations we may be subject to civil or criminal enforcement action and varying degrees of liability Such actions may disrupt or delay sales of our products or services or result in restrictions on our distribution and sales of products or services that may materially impact our business
Under U S laws and regulations U S companies and their subsidiaries and affiliates outside the U S are prohibited from participating or agreeing to participate in unsanctioned foreign boycotts in connection with certain business activities including the sale purchase transfer shipping or financing of goods or services within the U S or between the U S and countries outside of the U S If we or certain third parties through which we sell or provide goods or services violate anti boycott laws and regulations we may be subject to civil or criminal enforcement action and varying degrees of liability
As a business with a significant global footprint compliance with evolving regulations and standards in data privacy and cybersecurity has resulted and may continue to result in increased costs new compliance challenges and the threat of increased regulatory enforcement activity Our business relies on the secure electronic transmission storage and hosting of sensitive information including personal information protected health information financial information intellectual property and other sensitive information related to our products and therapies customers patients and workforce
Our global operational footprint comes with the obligation for compliance and adherence to individual data security confidentiality and breach notification laws at the State Federal and International levels Examples of those laws include in the U S the Health Insurance Portability and Accountability Act of 1996 HIPAA as amended the Health Information Technology for Economic and Clinical Health Act of 2009 HITECH and various State privacy laws We also are subject to various other country specific requirements around the world such as the General Data Protection Regulation GDPR in the European Economic Area the United Kingdom s privacy laws and China s Personal Information Protection Law PIPL
Because the laws and regulations continue to expand differ from jurisdiction to jurisdiction and are subject to evolving and at times inconsistent governmental interpretation and different cross border data transfer rules compliance may require significant additional cost expenditures or changes in products or business that increase competition or reduce revenue Noncompliance could result in the imposition of fines penalties or orders to stop noncompliant activities withdrawal of noncompliant products from a market and reputational harm
The delivery of our devices is subject to regulation by the U S Department of Health and Human Services HHS and comparable state and non U S agencies responsible for reimbursement and regulation of healthcare items and services U S laws and regulations are imposed
primarily in connection with federally funded healthcare programs such as the Medicare and Medicaid programs as well as the government s interest in regulating the quality and cost of healthcare Other governments also impose regulations in connection with their healthcare reimbursement programs and the delivery of healthcare items and services In addition reported potential workforce reductions and agency reorganization at HHS if implemented could have an impact on reimbursement programs
U S federal healthcare laws apply when we or customers submit claims for items or services that are reimbursed under federally funded healthcare programs including laws related to kickbacks false claims self referrals or other healthcare fraud There are often similar state false claims anti kickback and anti self referral and insurance laws that apply to state Medicaid and other healthcare programs and private third party payors In addition as a manufacturer of U S FDA approved devices reimbursable by federal healthcare programs we are subject to the U S Physician Payments Sunshine Act Open Payments which requires us to annually report certain payments and other transfers of value we make to U S licensed physicians certain allied health professionals and U S teaching hospitals Similarly other jurisdictions impose transparency reporting obligations relating to health care professional payments Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal and civil financial penalties
Implementation of legislative or regulatory reforms to reimbursement systems or adverse decisions relating to our products by administrators of these systems in coverage or reimbursement could significantly reduce reimbursement or result in the denial of coverage which could have an impact on the acceptance of and demand for our products and the prices that our customers are willing to pay for them
We are also subject to various environmental health and safety laws and regulations both within and outside the U S Like other companies in our industry our manufacturing and other operations involve the use and transportation of substances regulated under environmental health and safety laws including those related to the use storage transportation and disposal of hazardous materials
Our Annual Reports on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and amendments to those reports filed or furnished pursuant to Section 13 a or 15 d of the Securities Exchange Act of 1934 as amended Exchange Act are made available under the Our Company Investors caption and Financials SEC Filings sub caption of our website as soon as reasonably practicable after we electronically file them with or furnish them to the Securities and Exchange Commission SEC
Information relating to our corporate governance including our Principles of Corporate Governance Code of Conduct including our Code of Ethics for Senior Financial Officers and any related amendments or waivers Code of Business Conduct and Ethics for Members of the Board of Directors AI Compass and information concerning our executive officers directors and Board committees including committee charters is available through our website at
The SEC maintains a website that contains reports proxy and information statements and other information regarding issuers including the Company that file electronically with the SEC The public may obtain any documents that we file with the SEC at
Investing in our securities involves a variety of risks and uncertainties known and unknown including among others those discussed below Each of the following risks should be carefully considered together with all the other information included in this Annual Report on Form 10 K including our consolidated financial statements and the related notes and in our other filings with the SEC Furthermore additional risks and uncertainty not presently known to us or that we currently believe to be immaterial may also adversely affect our business Our business results of operations financial condition and cash flow and prospects could be materially and adversely affected by any of these risks or uncertainties
We compete in both the therapeutic and diagnostic medical markets in more than 150 countries throughout the world These markets are characterized by rapid change resulting from technological advances innovations and scientific discoveries In the product lines in which we compete we face a range of competitors from large companies with multiple business lines to small specialized manufacturers that offer a limited selection of niche products Development by other companies of new or improved products processes technologies or the
introduction of reprocessed products or generic versions when our proprietary products lose their patent protection may make our existing or planned products less competitive In addition we face competition from providers of alternative medical therapies such as pharmaceutical companies including those producing GLP 1s
Competition may increase as additional companies enter our markets or modify their existing products to compete more directly with ours In addition academic institutions governmental agencies and other public and private research organizations also may conduct research seek patent protection and establish collaborative arrangements for discovery research clinical development and marketing of products similar to ours These companies and institutions compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring necessary product technologies From time to time we have lost and may in the future lose market share in connection with product problems physician advisories safety alerts and publications about our products which highlights the importance of product quality product efficacy and quality systems to our business In the current environment of managed care consolidation among healthcare providers increased competition declining reimbursement rates and national and provincial tender pricing as recently experienced in China competitively priced product offerings are essential to our success
Our continued growth and success depend on our ability to develop acquire and market new and differentiated products technologies and intellectual property and as a result we also face competition for marketing distribution and collaborative development agreements establishing relationships with academic and research institutions and licenses to intellectual property In order to continue to compete effectively we must continue to create invest in or acquire advanced technology incorporate this technology into our proprietary products obtain regulatory approvals in a timely manner and successfully manufacture and market our products For example data science machine learning and AI are all impacting our products and operations and the competitive landscape in which we operate and the application of these technologies is rapidly evolving at the same time as new laws and regulations of AI are being developed in jurisdictions around the world Compliance with developing regulations may require significant expenditures or may limit our ability to effectively use these technologies There can be no assurance that the application of AI in our products and operations will be successful or that we will not experience data security and privacy incidents in connection with our use of these technologies Given these factors we cannot guarantee that we will be able to compete effectively or continue our level of success
The manufacture of our products requires the timely delivery of a sufficient amount of quality components and materials and is highly exacting and complex due in part to complex trade and strict regulatory requirements We manufacture the majority of our products and procure critical third party services such as sterilization services at numerous facilities worldwide We purchase many of the components raw materials and services needed to manufacture these products from numerous suppliers in various countries We seek to maintain continuity of supply by use of multiple options for sourcing where possible We have generally been able to obtain adequate supplies of such raw materials components and services although global shortages of certain components such as semiconductors and resins have previously caused and may in the future cause disruptions to our product manufacturing supply chain In addition for reasons of quality assurance cost effectiveness or availability certain components raw materials and services needed to manufacture our products are obtained from sole suppliers Although we work closely with our suppliers to try to ensure continuity of supply while maintaining high quality and reliability the supply of these components raw materials and services may at times be interrupted or insufficient In addition due to the stringent regulations and requirements of trade and regulatory agencies including the U S FDA regarding the manufacture of our products we may not be able to quickly establish additional or replacement sources Additionally many regulatory agencies are imposing new and evolving regulatory requirements on safe use of chemicals including ethylene oxides EtOs and polyfluoroalkyl substances PFAS and their potential impact on health and the environment which also may impact supply constraints Furthermore the prices of commodities and other materials used in our products which are often volatile and outside of our control and may be subject to
tariffs could adversely impact our supply We use resins other petroleum based materials and pulp as raw materials in some of our products and the prices of oil and gas also significantly affect our costs for freight and utilities A reduction or interruption in supply and an inability to develop alternative sources for such supply could adversely affect our ability to manufacture our products in a timely or cost effective manner and could result in lost sales
Other disruptions in the manufacturing process or product sales trade and fulfillment systems for any reason including infrastructure information and equipment malfunction failure to follow specific protocols and procedures supplier or Company facility shut downs defective raw materials labor shortages natural disasters such as hurricanes tornadoes earthquakes or wildfires property damage or facility closures from riots or public protests and other environmental factors and the impact of epidemics pandemics or other public health crises and actions by businesses communities and governments in response could lead to launch delays product shortages unanticipated costs lost revenues and damage to our reputation For example in the past we were adversely impacted by the global COVID 19 pandemic and may in the future be adversely impacted by other pandemics and the related responses of governments and of our partners including suppliers manufacturers distributors and other businesses Furthermore any failure to identify and address manufacturing problems prior to the release of products to our customers could result in quality or safety issues
In addition many of our products require sterilization before sale and several of our key products are manufactured or sterilized at a particular facility with constrained capacity and limited options for alternate sterilization facilities If an event occurs that causes damage to or closure of one or more of such facilities we may be unable to manufacture or sterilize relevant products to the required quality specifications or at all Due to the time required to approve and license a manufacturing or sterilization facility a third party may not be available on a timely basis to replace production capacity in the event manufacturing or sterilization capacity is reduced or lost
Public health crises have had and may continue to have an adverse effect on certain aspects of our business results of operations financial condition and cash flows The nature and extent of future impacts are highly uncertain and unpredictable
Our global operations and interactions with healthcare systems providers and patients around the world expose us to risks associated with public health crises including epidemics and pandemics Public health crises may continue to have an adverse impact on certain aspects of our Company and business including the demand for and supply of certain of our products operations supply chains and distribution systems and our ability to generate cash flow
Our Mission is to provide a broad range of therapies to restore patients to fuller healthier lives which requires a wide variety of technologies products and capabilities The rapid pace of technological development in the medical industry and the specialized expertise required in different areas of medicine make it difficult for one company alone to develop a broad portfolio of technological solutions In addition to internally generated growth through our research and development efforts historically we have relied and expect to continue to rely upon investments and investment collaborations to provide us access to new technologies both in areas served by our existing businesses as well as in new areas We expect to make future investments where we believe that we can stimulate the development or acquisition of new technologies and products to further our strategic objectives and strengthen our existing businesses Investments and investment collaborations in and with medical technology companies and third party funding sources are inherently risky and we cannot guarantee that any of our previous or future investments or investment collaborations will be successful or will not materially adversely affect our business results of operations financial condition and cash flows
If we fail to maintain our working relationships with healthcare professionals many of our products may not be developed and marketed in line with the needs and expectations of the professionals who use and support our products which could cause a decline in our earnings and profitability The research development marketing and sales of many of our new and improved products depends on our maintaining working relationships with healthcare professionals We rely on these professionals to provide us with considerable knowledge and experience regarding the development marketing and sale of our products Healthcare professionals assist us as researchers marketing and product consultants inventors trainers and public speakers If we are unable to maintain strong relationships with these professionals the development and marketing of our products could suffer which could have a material adverse effect on our business results of operations financial condition and cash flows
We are required to use a portion of our operating cash flow to pay interest or principal on our outstanding indebtedness instead of for other corporate purposes including funding future expansion of our business We may also incur additional indebtedness in the future to supplement our existing liquidity and cash generated from operations to satisfy our needs for working capital and capital expenditures to pursue growth initiatives and to make returns of capital to shareholders Changes in business and economic conditions will impact interest rates and can cause periods of tightened credit availability and volatility in borrowing terms In addition there can be no assurance that we will be able to maintain our credit rating At the time we may incur such additional indebtedness or refinance or restructure existing
indebtedness we may be unable to obtain capital market financing with similar terms and currency denomination to our existing indebtedness or at all which could have a material adverse effect on our business and results of operations At any time the fair value of our debt outstanding will fluctuate based on several factors including foreign currency exchange rate and interest rate movements credit conditions and our credit rating
Failure to integrate acquired businesses into our operations successfully or challenges related to the Company s strategic initiatives including divestitures and third party funding arrangements as well as liabilities or claims relating to such acquired businesses divestitures or arrangements could adversely affect our business
As part of our strategy to develop and identify new products and technologies and optimize our portfolio of products we have made several significant acquisitions divestitures and third party research and development funding arrangements in recent years and may make additional acquisitions divestitures and arrangements in the future Our integration of the operations of acquired businesses or a divestiture of part of our existing businesses including our recently announced intention to separate our Diabetes business from the Company requires significant efforts including the coordination of information technologies research and development sales and marketing operations manufacturing and finance These efforts result in additional expenses and involve significant amounts of management s time that cannot then be dedicated to other projects Our failure to manage and coordinate the growth of acquired companies successfully could also have an adverse impact on our business Further acquired businesses may have liabilities or be subject to claims litigation or investigations that we did not anticipate or which exceed our estimates at the time of the acquisition In addition we cannot be certain that the businesses we acquire will become profitable or remain so Factors that will affect the success of our acquisitions include
liabilities claims litigation investigations or other adverse developments relating to acquired businesses or the business practices of acquired companies including investigations by governmental entities potential Foreign Corrupt Practices Act FCPA or product liability claims intellectual property disputes earnout or other contingent payment disputes or other unanticipated liabilities
the ability to achieve synergies among acquired companies such as increasing sales of the integrated company s products achieving cost savings and effectively combining technologies to develop new products
We also could experience negative effects on our business results of operations financial condition and cash flows from acquisition related charges amortization of intangible assets and asset impairment charges
In addition the potential exists that expected strategic benefits from any planned or completed divestiture including our recently announced intention to separate our Diabetes business from the Company or third party funding arrangement by the Company may not be realized or may take longer to realize than expected and there can be no assurance that disputes will not arise under the Company s third party funding arrangements or transition service or other agreements that have or may be executed as part of a divestiture
Our medical devices and technologies as well as our business activities are subject to a complex set of regulations and rigorous enforcement including by the U S FDA U S Department of Justice Health and Human Services Office of the Inspector General and numerous other federal state and non U S governmental authorities To varying degrees each of these agencies requires us to comply with laws and regulations governing the development testing manufacturing labeling marketing and distribution of our products As a part of the regulatory process of obtaining marketing clearance for new products and new indications for existing products we conduct and participate in numerous clinical trials or delays with a variety of study designs patient populations and trial endpoints Unfavorable clinical data from existing or future clinical trials or delays by regulators in approving or authorizing reimbursement for new products may adversely impact a our ability to obtain product approvals b our position in and share of the markets in which we participate and c our business results of operations financial condition and cash flows We cannot guarantee that we will be able to obtain or maintain marketing clearance for our new products or enhancements or modifications to existing products and the failure to maintain approvals or obtain approval or clearance could have a material adverse effect on our business results of operations financial condition and cash flows Even if we are able to obtain approval or clearance it may
Both before and after a product is commercially released we have ongoing responsibilities under the U S FDA and other applicable non U S government agency regulations For instance many of our facilities and procedures and those of our suppliers are subject to periodic inspections by the U S FDA to assess compliance with applicable regulations The results of these inspections can include and have in the past included observations on the U S FDA s Form 483 warning letters or other forms of enforcement such as a consent decree If the U S FDA were to conclude that we are not in compliance with applicable laws or regulations or that any of our medical products are ineffective or pose an unreasonable health risk the U S FDA could detain or seize what it believes to be adulterated or misbranded medical products order a recall repair replacement or refund of such products refuse to grant pending pre market approval applications or require certificates of non U S governments for exports and or require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health and in certain rare circumstances ban medical devices In addition the U S FDA has taken the position that device manufacturers are prohibited from promoting their products other than for the uses and indications set forth in the approved product labeling and any failure to comply could subject us to significant civil or criminal exposure administrative obligations and costs and or other potential penalties from and or agreements with the federal government
The U S FDA and other non U S government agencies may also assess civil or criminal penalties against us our officers or employees and impose operating restrictions on a company wide basis The U S FDA may also recommend prosecution to the U S Department of Justice Any adverse regulatory action depending on its magnitude may restrict us from effectively marketing and selling our products and limit our ability to obtain future pre market clearances or approvals and could result in a substantial modification to our business practices and operations Furthermore we occasionally receive subpoenas or other requests for information from various governmental agencies around the world and while these investigations typically relate primarily to financial arrangements with healthcare providers regulatory compliance and product promotional practices we cannot predict the timing outcome or impact of any such investigations Any adverse outcome in one or more of these investigations could include the commencement of civil and or criminal proceedings substantial fines penalties and or administrative remedies including exclusion from government reimbursement programs and or entry into Corporate Integrity Agreements CIAs with governmental agencies In addition resolution of any of these matters could involve the imposition of additional costly compliance obligations These potential consequences as well as any adverse outcome from government investigations could have a material adverse effect on our business results of operations financial condition and cash flows
Governmental regulations in the U S and outside the U S are constantly changing and may become increasingly stringent In the E U for example the Medical Device Regulation EU MDR includes significant additional pre market and post market requirements Penalties for regulatory non compliance could be severe including fines and revocation or suspension of a company s business license mandatory price reductions and criminal sanctions Implementation of the EU MDR was extended to the end of 2027 for high risk devices and to the end of 2028 for medium and low risk devices The development and implementation of future laws and regulations may have a material adverse effect on us
Quality problems have in the past and could in the future lead to recalls or safety alerts product liability claims reputational harm adverse verdicts or costly settlements and could have a material adverse effect on our business results of operations financial condition and cash flows
Quality is extremely important to us and our customers due to the impact on patients and the serious and potentially costly consequences of adverse product performance Our business exposes us to potential product liability risks that are inherent in the design manufacture and marketing of medical devices In addition many of our products are often used in intensive care settings with seriously ill patients and some of the medical devices we manufacture and sell are designed to be implanted in the human body for long periods of time or indefinitely Component failures manufacturing nonconformances design issues off label use or inadequate disclosure of product related risks or product related information with respect to our products could result in an unsafe condition or injury to or death of a patient These problems have in the past and could in the future lead to recall of or issuance of a safety alert relating to our products as well as product liability claims and lawsuits including class actions which could ultimately result in certain cases in the removal from the body of such products and claims regarding costs associated therewith Due to the strong name recognition of the Medtronic brand a material adverse event involving one of our products could result in diminished market acceptance and demand for all products within that brand and could harm our reputation and ability to market products in the future
Strong product quality is critical to the success of our goods and services If we fall short of these standards and our products are the subject of recalls or safety alerts our reputation could be damaged we could lose customers and our revenue and results of operations could decline Our success also can depend on our ability to manufacture to exact specification precision engineered components subassemblies and finished devices from multiple materials If our components fail to meet these standards or fail to adapt to evolving standards our reputation competitive advantage and market share could be harmed In certain situations we may undertake a voluntary recall of products or temporarily shut down production lines based on performance relative to our own internal safety and quality monitoring and testing data
Any of the foregoing problems including future product liability claims or lawsuits brought either individually or in the aggregate or recalls regardless of their ultimate outcome could harm our reputation and have a material adverse effect on our business results of operations financial condition and cash flows
Our failure to comply with laws and regulations relating to reimbursement of healthcare goods and services may subject us to penalties and adversely impact our reputation business results of operations financial condition and cash flows
Our devices products and therapies are purchased principally by hospitals or physicians that typically bill various third party payors such as governmental healthcare programs e g Medicare Medicaid and comparable non U S programs private insurance plans and managed care plans for the healthcare services provided to their patients The ability of our customers to obtain appropriate reimbursement for products and services from third party payors is critical because it affects which products customers purchase and the prices they are willing to pay As a result our devices products and therapies are subject to regulation regarding quality and cost by HHS including the Centers for Medicare Medicaid Services CMS as well as comparable state and non U S agencies responsible for reimbursement and regulation of health care goods and services including laws and regulations related to fair competition kickbacks false claims self referrals and healthcare fraud Many states have similar laws that apply to reimbursement by state Medicaid and other funded programs as well as in some cases to all payors In certain circumstances insurance companies attempt to bring a private cause of action against a manufacturer for causing false claims In addition as a manufacturer of U S FDA approved devices reimbursable by federal healthcare programs we are subject to the Physician Payments Sunshine Act Open Payments which requires us to annually report certain payments and other transfers of value we make to U S licensed physicians certain allied health professionals and U S teaching hospitals Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal and civil financial penalties
We also are subject to risks relating to changes in government and private medical reimbursement programs and policies and changes in legal regulatory requirements in the U S and around the world Implementation of further legislative or administrative reforms to these reimbursement systems or adverse decisions relating to coverage of or reimbursement for our products by administrators of these systems could have an impact on the acceptance of and demand for our products and the prices that our customers are willing to pay for them
We are substantially dependent on patent and other proprietary rights and failing to protect such rights or to be successful in litigation related to our rights or the rights of others may result in our payment of significant monetary damages and or royalty payments negatively impacting our ability to sell current or future products
We are substantially dependent on patent and other proprietary rights and rely on a combination of patents trademarks tradenames copyrights trade secrets and agreements such as employee and non disclosure to protect our business and proprietary intellectual property We also operate in an industry characterized by extensive intellectual property litigation Intellectual property litigation can result in significant damage awards and injunctions that could prevent our manufacture and sale of affected products or require us to pay significant royalties in order to continue to manufacture or sell affected products At any given time we are generally involved as both a plaintiff and a defendant in a number of intellectual property actions the outcomes of which may not be known for prolonged periods of time While it is not possible to predict the outcome of intellectual property litigation it is possible that the results of such litigation could require us to pay significant monetary damages and or royalty payments negatively impact our ability to sell current or future products or that enforcement actions to protect our patent and proprietary rights against others could be unsuccessful any of which could have a material adverse impact on our business results of operations financial condition and cash flows In addition any public announcements related to litigation or administrative proceedings initiated or threatened against us could cause our stock price to decline
While we intend to defend against any threats to our intellectual property our patents trademarks tradenames copyrights trade secrets or agreements such as employee and non disclosure agreements may not adequately protect our intellectual property Further pending patent applications may not result in patents being issued to us patents issued to or licensed by us may be challenged or circumvented by competitors and such patents may be found invalid unenforceable or too limited in scope to protect our technology or provide us with any competitive advantage In addition our patents will expire over time our ability to protect novel business models is uncertain and infringement may go undetected Third parties could obtain patents that may require us to negotiate licenses to conduct our business and such licenses may not be available on reasonable terms or at all In addition license agreements could be terminated We also rely on non disclosure and non competition agreements with certain employees consultants and other parties to protect in part trade secrets and other proprietary rights We cannot be certain that these agreements will not be breached that such provisions will be enforceable that we will have adequate remedies for any breach that others will not independently develop substantially equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets or proprietary knowledge Moreover in the U S the Federal Trade Commission and various states have adopted laws and regulations that purport to ban or severely restrict the use of non competition agreements which may limit our ability to use and enforce non competition agreements with employees
In addition the laws of certain countries in which we market or manufacture some of our products do not protect our intellectual property rights to the same extent as the laws of the U S which could make it easier for competitors to capture market position For example business in China comprises approximately seven percent of our total revenues This may increase our vulnerability to our technology being reverse engineered or our trade secrets being compromised If we are unable to protect our intellectual property in China or other countries it could have a material adverse effect on our business results of operations financial condition and cash flows Competitors also may
There have been and continue to be actions and proposals by several governments regulators and third party payors globally including the U S federal and state governments and the government in China to control healthcare costs and more generally to reform healthcare systems Certain of these actions and proposals among other things limit the prices we are able to charge for our products or the amounts of reimbursement available for our products increase the importance of our ability to compete on cost and could limit the acceptance and availability of our products These actions and proposals could have a material adverse effect on our business results of operations financial condition and cash flows
We rely on the proper function security and availability of our information technology systems and data as well as those of third parties throughout our global supply chain and our customer and payor base to operate our business and a breach cyber attack or other disruption to these systems or data could materially and adversely affect our business results of operations financial condition cash flows reputation or competitive position
We are increasingly dependent on sophisticated information technology systems to operate our business That technology includes systems that could be used to process transmit and store sensitive data Additionally many of our products and services include integrated software and information technology that collects data regarding patients or connects to other internal systems One of the most prevalent attacks on large organizations has been ransomware which can have a devastating impact on an organization s operations Our ransomware readiness program has required and will continue to require investment and will not guarantee that we will be immune from an incident or be able to respond rapidly enough to prevent a negative impact on our business Like all organizations we routinely experience attempted interference with the integrity of and interruptions in our technology systems via events such as cyber attacks malicious intrusions or other breakdowns The consequences could mean data breaches interference with the integrity of our products and data compromise of intellectual property or other proprietary information or other significant disruptions Furthermore we rely on third party vendors to supply and or support certain aspects of our information technology systems and resulting products and customers and payors use information technology systems to process payments relating to our products and services These third party systems could also become vulnerable to cyber attack malicious intrusions breakdowns interference or other significant disruptions and may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of our own systems In addition our global profile and international operations expose us to geopolitical events or issues which may increase cybersecurity risks on a global basis Lastly we continue to grow in part through new business acquisitions and as a result may face risks associated with defects and vulnerabilities in acquired businesses systems or difficulties or other breakdowns or disruptions in connection with the integration of the acquisitions into our information technology systems
Our worldwide operations subject us to laws and regulations in many jurisdictions including data protection and cybersecurity laws and regulations The variety of U S and international privacy and cybersecurity laws and regulations impacting our operations are described in Item 1 Business
Any data security breaches cyber attacks malicious intrusions or significant disruptions could result in actions by regulatory bodies and or civil litigation any of which could materially and adversely affect our business results of operations financial condition cash flows reputation or competitive position
In addition our information technology systems require an ongoing commitment of significant resources to maintain protect and enhance existing systems and develop new systems We experience continuing changes in information processing technology legal and regulatory standards patient and customer information use cases techniques used to obtain unauthorized access to data and information systems and the information technology needs associated with our changing products and services We also face business and regulatory risks relating to our use of AI systems in our business operations and products These systems are susceptible to flaws biases malfunctions or manipulations which may disrupt our operations result in erroneous decision making elevate our cyber risk profile or expose us to penalties from non compliance with emerging regulations There can be no assurance that our efforts to keep pace with continuing changes in information processing technologies including AI systems and to deploy these technologies to our business operations and products will be successful or that additional systems issues will not arise in the future
If our information technology systems products or services or sensitive data are compromised there are many consequences that could result Consequences include but are not limited to patients or employees being exposed to financial or medical identity theft or suffering a loss of product functionality losing existing customers or having difficulty attracting new customers experiencing difficulty preventing detecting and controlling fraud being exposed to the loss or misuse of confidential information having disputes with customers physicians and other healthcare professionals suffering regulatory sanctions or penalties under federal laws state laws or the laws of other jurisdictions experiencing increases in operating expenses or an impairment in our ability to conduct our operations incurring expenses or losing revenues as a result of a data privacy breach product failure information technology outages or disruptions or suffering other adverse consequences including lawsuits or other legal action and damage to our reputation
The U S FCPA the U K Bribery Act the Irish Criminal Justice Corruption Offences Act 2018 and similar anti corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business and to ensure adequate internal controls books and records Because of the predominance of government administered healthcare systems in many jurisdictions around the world many of our customer relationships outside of the U S are with governmental entities and are therefore potentially subject to such laws We also participate in public private partnerships and other commercial and policy arrangements with governments around the globe
Global enforcement of anti corruption laws has increased in recent years including investigations and enforcement proceedings leading to assessment of significant fines and penalties against companies and individuals Our international operations create a risk of unauthorized payments or offers of payments by one of our employees consultants sales agents or distributors We maintain various controls aligned with legal requirements to prevent and prohibit improper practices including policies programs and training for our employees and third party intermediaries acting on our behalf However existing safeguards and any future improvements may not always be effective and our employees consultants sales agents or distributors may engage in conduct for which we could be held responsible In addition regulators could seek to hold us liable for conduct committed by companies in which we invest or that we acquire Any alleged or actual violations of these regulations may subject us to government scrutiny criminal or civil sanctions and other liabilities including exclusion from government contracting and could disrupt our business adversely affect our reputation and result in a material adverse effect on our business results of operations financial condition and cash flows
The U S Department of the Treasury s Office of Foreign Assets Control OFAC and the U S Commerce Department s Bureau of Industry and Security BIS administer certain laws and regulations that restrict U S persons and in some instances non U S persons in conducting activities transacting business with or making investments in certain countries governments entities and individuals subject to U S economic sanctions or export restrictions Our international operations subject us to these laws and regulations which are complex restrict our business dealings with certain countries governments entities and individuals and are constantly changing Further restrictions may be enacted amended enforced or interpreted in a manner that materially impacts our operations
From time to time certain of our subsidiaries have limited business dealings in countries subject to comprehensive sanctions including Iran Syria Cuba and the region of Crimea as well as Russia and Belarus Certain of our subsidiaries sell medical devices and may provide related services to distributors and other purchasing bodies in such countries or regions These business dealings represent an insignificant amount of our consolidated revenues and income but expose us to a heightened risk of violating applicable sanctions regulations Violations of these regulations are punishable by civil penalties including fines denial of export privileges injunctions asset seizures debarment from government contracts and revocations or restrictions of licenses as well as criminal fines and imprisonment We have established policies and procedures designed to assist with our compliance with such laws and regulations However such regulations may impact our ability to continue operations in certain countries and require additional licenses which we may not be able to obtain or maintain There can be no assurance that our policies and procedures will prevent us from violating these regulations in every transaction in which we may engage and such a violation could adversely affect our reputation business results of operations financial condition and cash flows
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere presents risks to our current and future operations We face current and long term operational risks and have in the past experienced business interruptions from severe weather events and other natural conditions such as hurricanes tornadoes droughts extreme temperatures wildfires or flooding Such severe weather events caused by or related to climate change or other conditions caused by natural disasters have in the past and could in the future increase our operational costs pose physical risks to our facilities and adversely impact our supply chain including manufacturing and distribution networks the availability and cost of raw materials and components energy supply transportation or other inputs necessary for the operation of our business The impacts of climate change on global water resources may result in water scarcity which could impact our ability to access sufficient quantities of water in certain locations and result in increased costs Although it is difficult to predict and adequately prepare to meet the challenges to our business posed by climate change concerns over climate change also could result in new laws or regulations that are more stringent than current legal or regulatory requirements and we may experience increased compliance burdens and costs to meet the regulatory obligations as well as adverse impacts on raw material sourcing manufacturing operations and the distribution of our products
We are subject to environmental health and safety laws and regulations concerning among other things the generation handling transportation and disposal of hazardous substances or wastes the remediation of hazardous substances or materials at various sites and emissions or discharges into the land air or water We are further subject to numerous laws and regulations concerning among other things
chemical constituents in medical products and end of life disposal and take back programs for medical devices Our operations and those of certain third party suppliers involve the use of substances subject to these laws and regulations primarily those used in manufacturing and sterilization processes If we or our suppliers violate these environmental laws and regulations facilities could be shut down and violators could be fined or otherwise sanctioned New laws and regulations violations of these laws or regulations stricter enforcement of existing requirements or the discovery of previously unknown contamination could require us to incur costs or could become the basis for new or increased liabilities that could be material
There is continued focus from our stakeholders as well as regulatory authorities in the U S E U and other global jurisdictions in which we operate on sustainability practices and disclosure If we do not succeed in meeting or are perceived as not meeting goals and objectives relating to environmental stewardship inclusion initiatives supply chain practices good corporate governance workplace conduct and support for local communities or if we do not effectively respond to new or revised legal regulatory or reporting requirements concerning climate change inclusion or other sustainability concerns we may be subject to regulatory fines and penalties including potential loss of eligibility as a U S government contractor our reputation or the reputation of our brands may suffer we may be unable to attract and retain top talent and our stock price may be negatively affected In addition enhanced and sometimes conflicting sustainability laws regulations and expectations in the jurisdictions in which we do business may increase compliance burdens and costs for third parties throughout our global supply chain which could cause disruption in the sourcing manufacturing and distribution of our products and adversely affect our business financial condition or results of operations
Further we have made several public disclosures of objectives and targets targets relating to product stewardship inclusion patient safety and product quality access and innovation and climate stewardship including our ambition to be net carbon neutral in our operations by 2030 and to achieve net zero emissions by 2045 Although we intend to achieve these targets we may be required to expend significant resources to do so which could increase our operational costs In addition there can be no assurance of the extent to which any of our targets will be achieved or that any future investments we make to achieve such targets will meet investor legal and or any other regulatory expectations and requirements If we are unable to meet our targets we may face litigation and could incur regulatory fines and penalties or adverse publicity and reaction from investors advocacy groups or other stakeholders that may adversely impact our business demand for our products and services and or our financial condition and results of operations
We have elected to self insure most of our insurable risks across the Company and we made this decision based on cost and availability factors in the insurance marketplace We manage and maintain a portion of our self insured program through a wholly owned captive insurance company We continue to maintain a directors and officers liability insurance policy with third party insurers that provides coverage for the directors and officers of the Company We continue to monitor the insurance marketplace to evaluate the value of obtaining insurance coverage for other categories of losses in the future Although we believe based on historical loss trends that our self insurance program accruals and our existing insurance coverage will be adequate to cover future losses historical trends may not be indicative of future losses The absence of third party insurance coverage for other categories of losses increases our exposure to unanticipated claims and these losses could have a material adverse impact on our business results of operations financial condition and cash flows
We are subject to income taxes as well as non income based taxes in the U S Ireland and the other jurisdictions in which we operate The tax laws in any of these jurisdictions could change on a prospective or retrospective basis and any such changes could have a material impact on our business results of operations financial condition and cash flows
The Organization for Economic Co operation and Development OECD published Pillar Two Model Rules defining the global minimum tax which calls for the taxation of large multinational corporations at a minimum rate of 15 in each jurisdiction in which the group operates The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two Model Rules A number of countries including Ireland have enacted legislation to implement the core elements of the Pillar Two Model Rules which are effective for Medtronic in fiscal year 2025
We are subject to ongoing tax audits in the various jurisdictions in which we operate Tax authorities may disagree with certain positions we have taken and assess additional taxes We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision However there can be no assurance that we will accurately predict the outcomes of these audits and the actual outcomes of these audits could have a material impact on our business results of operations financial condition and cash flows
We have recorded reserves for potential payments of tax to various tax authorities related to uncertain tax positions However the calculation of such tax liabilities involves the application of complex tax laws regulations and treaties where applicable in many jurisdictions Therefore any dispute with a tax authority may result in a payment that is significantly different from current estimates If payment of these amounts ultimately proves to be less than the recorded amounts the reversal of the liabilities generally would result in tax
benefits being recognized in the period when we determine the liabilities are no longer necessary If our estimate of tax liabilities proves to be less than the amount for which it is ultimately liable we would incur additional charges and such charges could have a material adverse effect on our business results of operations financial condition and cash flows
In March 2009 the IRS issued its audit report for Medtronic Inc for fiscal years 2005 and 2006 Medtronic Inc reached agreements with the IRS on some but not all matters related to these fiscal years The remaining unresolved issue for fiscal years 2005 and 2006 relates to the allocation of income between Medtronic Inc and its wholly owned subsidiary operating in Puerto Rico which is one of our key manufacturing sites The Tax Court issued its opinion in August 2022 the IRS filed a Notice of Appeal to the U S Court of Appeals for the Eighth Circuit in September 2023 and Medtronic subsequently filed a cross appeal in October 2023 Oral argument for the Appeal occurred in May 2025 An adverse outcome in this matter could materially and adversely affect our business results of operations financial condition and cash flows See Note 18 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
Future potential changes to the U S tax laws could result in us being treated as a U S corporation for U S federal tax purposes and the IRS may not agree with the conclusion that we should be treated as a foreign corporation for U S federal income tax purposes
Because Medtronic plc is organized under the laws of Ireland we would generally be classified as a foreign corporation under the general rule that a corporation is considered tax resident in the jurisdiction of its organization or incorporation for U S federal income tax purposes Even so the IRS may assert that we should be treated as a U S corporation and therefore a U S tax resident for U S federal income tax purposes pursuant to Section 7874 of the U S Internal Revenue Code of 1986 as amended the Code In addition a retroactive change to U S tax laws in this area could change this classification If we were to be treated as a U S corporation for federal tax purposes we could be subject to substantially greater U S tax liability than currently contemplated as a non U S corporation
Various U S federal and state legislative proposals that would deny governmental contracts to U S companies that move their corporate location abroad may affect us We are unable to predict the likelihood that or final form in which any such proposed legislation might become law the nature of the regulations that may be promulgated under any future legislative enactments or the effect such enactments and increased regulatory scrutiny may have on our business
Our shareholders may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction of the United States It may not be possible to enforce court judgments obtained in the U S against us in Ireland based on the civil liability provisions of the U S federal or state securities laws In addition there is some uncertainty as to whether the courts of Ireland would recognize or enforce judgments of U S courts obtained against us or our directors or officers based on the civil liabilities provisions of the U S federal or state securities laws or hear actions against us or those persons based on those laws We have been advised that the U S currently does not have a treaty with Ireland providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters Therefore a final judgment for the payment of money rendered by any U S federal or state court based on civil liability whether or not based solely on U S federal or state securities laws would not automatically be enforceable in Ireland
As an Irish company we are governed by the Irish Companies Act 2014 as amended which differs in some material respects from laws generally applicable to U S corporations and shareholders including among others differences relating to interested director and officer transactions and shareholder lawsuits Likewise the duties of directors and officers of an Irish company generally are owed to the company only Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances Accordingly holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in the U S
Under Irish law our authorized share capital can be increased by an ordinary resolution of our shareholders and the directors may issue new ordinary or preferred shares without shareholder approval once authorized to do so by our articles of association or by an ordinary resolution of our shareholders Additionally subject to specified exceptions Irish law grants statutory preemption rights to existing shareholders where shares are being issued for cash consideration but allows shareholders to disapply such statutory preemption rights either in our articles of association or by way of special resolution Such disapplication can either be generally applicable or be in respect of a particular allotment of shares Accordingly at our 2024 Annual General Meeting our Shareholders authorized our Board of Directors to
issue up to 20 of our issued ordinary shares and further authorized our Board of Directors to issue such shares for cash without first offering them to our existing shareholders Both of these authorizations will expire on April 17 2026 unless renewed by shareholders for a further period We anticipate seeking new authorizations at our 2025 Annual General Meeting and in subsequent years We cannot provide any assurance that these authorizations will always be approved which could limit our ability to issue equity and thereby adversely affect the holders of our securities
Transfers of our shares effected by means of the transfer of book entry interests in the Depository Trust Company DTC will not be subject to Irish stamp duty However if a shareholder holds our shares directly rather than beneficially through DTC any transfer of shares could be subject to Irish stamp duty currently at the rate of 1 of the higher of the price paid or the market value of the shares acquired Payment of Irish stamp duty is generally a legal obligation of the transferee The potential for stamp duty could adversely affect the price of shares
In certain limited circumstances dividends we pay may be subject to Irish dividend withholding tax and dividends received by Irish residents and certain other shareholders may be subject to Irish income tax
In certain limited circumstances dividend withholding tax currently at a rate of 25 may arise in respect of dividends paid on our shares A number of exemptions from dividend withholding tax exist such that shareholders resident in the U S and other specified countries that have a tax treaty with Ireland may be entitled to exemptions from dividend withholding tax
Shareholders resident in the U S that hold their shares through DTC will not be subject to dividend withholding tax provided the addresses of the beneficial owners of such shares in the records of the brokers holding such shares are recorded as being in the U S and such brokers have further transmitted the relevant information to a qualifying intermediary appointed by us However other shareholders may be subject to dividend withholding tax which could adversely affect the price of their shares
Shareholders entitled to an exemption from Irish dividend withholding tax on dividends received from us will not be subject to Irish income tax in respect of those dividends unless they have some connection with Ireland other than their shareholding in our Company for example they are resident in Ireland Shareholders who are not resident nor ordinarily resident in Ireland but who receive dividends subject to Irish dividend withholding tax will generally have no further liability to Irish income tax on those dividends
Irish capital acquisitions tax CAT could apply to a gift or inheritance of our shares irrespective of the place of residence ordinary residence or domicile of the parties This is because our shares will be regarded as property situated in Ireland The person who receives the gift or inheritance has primary liability for CAT Gifts and inheritances passing between spouses are exempt from CAT Children currently have a tax free threshold of 400 000 in respect of taxable gifts or inheritances received from their parents
Changes in the prices of our goods and services customer purchasing patterns and stocking dynamics and or inflationary costs may have a material adverse effect on our business results of operations financial condition and cash flows
We have had and may continue to have periods when prices for certain of our goods and services decrease due to pricing pressure from managed care organizations and other third party payors on our customers increased market power of our customers as the healthcare industry consolidates periodic variation in timing volume and pricing associated with customer purchasing patterns and stocking dynamics and increased competition among medical engineering and manufacturing services providers We have also recently experienced and may continue to experience rising costs due to inflation If the prices for our goods and services change for any reason or inflation continues to rise we may be unable to sufficiently reduce our expenses or offset rising costs through increased prices to customers As a result our business results of operations financial condition and cash flows may be adversely affected
We develop manufacture distribute and sell our products globally We intend to continue to expand our operations and to pursue growth opportunities outside the U S especially in emerging markets Operations in different countries including emerging markets could expose us to additional and greater risks and potential costs including
Changes in the international trade policy of the U S and other countries including increased trade restrictions or tariffs have the potential to adversely impact Medtronic The ongoing global economic competition and trade tensions between the U S and China including recent increased duties imposed by both countries present risk to Medtronic China which comprises approximately seven percent of our total revenue and the U S could impose other types of restrictions such as limitations on government procurement or technology export restrictions which could affect Medtronic s access to the markets In addition the tariffs imposed by the United States on many jurisdictions including Mexico Canada the E U and other countries and regions in which we do business increase uncertainties and associated risks on our global operations
The Russia Ukraine conflict and resulting sanctions and export restrictions are creating barriers to doing business in Russia and Belarus and adversely impacting global supply chains While we have no manufacturing distribution or direct material suppliers in the region we continue to closely monitor the potential raw material sub tier supplier impact in both Russia and Ukraine including materials like palladium and neon which are both dependent on Russia supply Additional sanctions export restrictions and potential countermeasures within Russia along with geopolitical shifts in Asia and disruptions relating to Israel s conflict in Gaza may lead to greater uncertainty that could cause additional adverse impacts on global supply chains and our business results of operations financial condition and cash flows
More generally several governments including the U S have raised the possibility of policies to induce re shoring of supply chains less reliance on imported supplies and greater national production Examples include potential Buy America requirements in the U S If such steps triggered retaliation in other markets restricting access to foreign products in purchases by their government owned healthcare systems the result could be a significant impact on Medtronic
Other significant changes or disruptions to international trade arrangements such as termination or modifications of other existing trade agreements may adversely affect our business results of operations financial condition and cash flows In addition a significant amount of our trade receivables are with national healthcare systems in many countries Repayment of these receivables is dependent upon the political and financial stability of those countries In light of these global economic fluctuations we continue to monitor the creditworthiness of customers Failure to receive payment of all or a significant portion of these receivables could adversely affect our business results of operations financial condition and cash flows
Finally changes in currency exchange rates may impact the reported value of our revenues expenses and cash flows In addition the impact of currency devaluations in countries experiencing significant currency exchange fluctuations could negatively impact the Company s operating results We cannot predict changes in currency exchange rates the impact of exchange rate changes nor the degree to which we will be able to manage the impact of currency exchange rate changes
Market disruptions resulting in diminished liquidity or healthcare professional and staff strikes or other work stoppages could adversely affect our revenues results of operation or financial condition
Disruptions in international markets and supporting financial services and uncertainty about economic conditions for instance resulting from credit scarcity geopolitical risks and sovereign debt deterioration or default have in the past caused periods of tightened credit availability and increased volatility in liquidity and borrowing terms If these conditions were to recur or worsen we may experience reduced demand for a number of our products We also could experience reduced sales and profits due to delayed payments or the insolvency of healthcare professionals hospitals and other customers suppliers and vendors who experience liquidity issues including as a result of cybersecurity incidents impacting private and government health insurance payors In addition healthcare professional and staff strikes or other work stoppages have in the past and may in the future cause reduced demand for our products As a result our business results of operations financial condition and cash flows could be adversely affected
Many healthcare industry companies including healthcare systems distributors manufacturers providers and insurers are consolidating or have formed strategic alliances As the healthcare industry consolidates competition to provide goods and services to industry participants will become more intense Further this consolidation creates larger enterprises with greater negotiating power which can be used to
negotiate price concessions In addition the movement of procedures to ASCs could also create downward pricing pressure If we must reduce our prices because of industry consolidation or ASC procedures or if we lose customers as a result of consolidation or ASC procedures our business results of operations financial condition and cash flows could be adversely affected
Most of our customers and the healthcare providers to whom our customers supply medical devices rely on third party payors including government programs and private health insurance plans to reimburse some or all of the cost of the procedures in which medical devices are used The continuing efforts of governmental authorities insurance companies and other payors of healthcare costs to contain or reduce these costs could lead to patients being unable to obtain approval for payment from these third party payors If third party payor payment approval cannot be obtained by patients sales of finished medical devices that include our components may decline significantly and our customers may reduce or eliminate purchases of our components The cost containment measures that healthcare providers are instituting both in the U S and outside of the U S could harm our ability to operate profitably For example managed care organizations have successfully negotiated volume discounts for pharmaceuticals and GPOs and IDNs have also concentrated purchasing decisions for some customers which has led to downward pricing pressure for medical device companies including us
We have designed and implemented a cybersecurity risk management program to help us identify assess and mitigate cybersecurity risks relevant to our business based on the National Institute of Standards and Technology NIST Cyber Security Framework 2 0
given the smart technology within our devices our product security includes design protocols and is supported by quality systems testing and use scanning tools to assess and detect vulnerabilities that could affect our products
Risks from cybersecurity threats are integrated into Medtronic s enterprise risk management ERM program The ERM program establishes a risk management framework that seeks to identify assess and mitigate risks that could materially impact the Company s business and operation
To date the Company is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on the Company s business or operations However despite our security measures there can be no assurance that the Company or the third parties with which we interact will not experience a cybersecurity incident in the future that may materially affect us See Item 1A Risk Factors under
We rely on the proper function security and availability of our information technology systems and data as well as those of third parties throughout our global supply chain and our customer and payor base to operate our business and a breach cyber attack or other disruption to these systems or data could materially and adversely affect our business results of operations financial condition cash flows reputation or competitive position
The cybersecurity risk management program is led by the Chief Information Security Officer CISO Our CISO has over 29 years of experience assisting public and privately held companies in a variety of industries leading several enterprise wide transformation initiatives to adapt to changing cybersecurity threats The CISO has held various executive level positions within Fortune 500 companies Our CISO
reports to the Chief Information Officer CIO who leads the Global Information Technology IT organization and works closely with the Executive Committee to guide strategic direction and IT decisions to drive business outcomes
Our Board of Directors is engaged in the Company s ERM program and receives briefings on the outcomes of the ERM program and the steps the Company takes to mitigate risks that the program identifies The Quality Committee of the Board oversees the Company s cybersecurity strategies systems and controls to ensure reliability and prevent unauthorized access The Audit Committee discusses policies with respect to risk assessment and risk management including risks associated with the reliability and security of the Company s information technology and security systems and the steps management has undertaken to monitor and control such exposures The Audit Committee receives regular updates on the Company s cybersecurity risk management program from the CISO and CIO and our procedures specify escalation of certain cybersecurity events to the Audit Committee chair and full Audit Committee
Medtronic s principal executive office is located in Ireland and is owned by the Company while its main operational offices are located in the Minneapolis Minnesota metropolitan area and are owned by the Company
The Company s total manufacturing and research space is approximately 9 9 million square feet Approximately 36 percent of the manufacturing and research facilities are owned by Medtronic and the remaining balance is leased The Company s largest manufacturing facilities are located in the U S Puerto Rico Mexico China Ireland Dominican Republic Switzerland France and Italy Many of these facilities serve more than one of our divisions and also perform research activities
Medtronic also maintains sales and administrative offices outside the U S at approximately 110 locations in over 60 countries A majority of these locations are leased The Company is using substantially all of its currently available productive space to develop manufacture and market its products The Company s facilities are well maintained suitable for their respective uses and adequate for current needs
In accordance with Item 103 of Regulation S K we have adopted a 1 million disclosure threshold for proceedings under environmental laws to which a governmental authority is a party as we believe matters under this threshold are not material to the Company A discussion of the Company s legal proceedings and other loss contingencies are described in Note 18 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
In March 2024 the Company s Board of Directors authorized 5 0 billion for share repurchases There is no specific time period associated with these repurchase authorizations For additional discussion see Note 11 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
18 895 shareholders of record of the Company s ordinary shares Ordinary cash dividends declared and paid totaled 0 70 per share for each quarter of fiscal year 2025 and 0 69 per share for each quarter of fiscal year 2024 On May 21 2025 the Company announced an
The following graph compares the cumulative total shareholder return on Medtronic s ordinary shares with the cumulative total shareholder return on the Standard Poor s S P 500 Index and the S P 500 Health Care Equipment Index for the last five fiscal years The graph assumes that 100 was invested at market close on April 24 2020 in Medtronic s ordinary shares the S P 500 Index and the S P 500 Health Care Equipment Index and that all dividends were reinvested
Except as indicated below there are no restrictions on non residents of Ireland dealing in Irish domestic securities which includes ordinary shares of Irish companies Except as indicated below dividends and redemption proceeds also continue to be freely transferable to non resident holders of such securities The Financial Transfers Act 1992 provides that the Irish Minister for Finance can make provision for the restriction of financial transfers between Ireland and other countries For the purposes of this Act financial transfers include all transfers which would be movements of capital or payments within the meaning of the treaties governing the E U if they had been made between Member States of the E U To date the Irish Minister for Finance has restricted financial transfers between Ireland and a number of third countries and the list is subject to on going change
Any transfer of or payment in respect of a share or interest in a share involving the government of any country that is currently the subject of United Nations or E U sanctions any person or body controlled by any of the foregoing or by any person acting on behalf of the foregoing may be subject to restrictions pursuant to such sanctions as implemented into Irish law
in the case of a beneficial owner of Medtronic shares held in the DTC the address of the beneficial owner in the records of his or her broker is in the United States and this information is provided by the broker to the Company s qualifying intermediary or
Irish income tax may also arise with respect to dividends paid on Medtronic s ordinary shares A U S resident who meets one of the exemptions from dividend withholding tax described above and who does not hold Medtronic shares through a branch or agency in Ireland through which a trade is carried on generally will not have any Irish income tax liability on a dividend paid by Medtronic In addition if a U S shareholder is subject to the dividend withholding tax the withholding payment discharges any Irish income tax liability provided the shareholder furnishes to the Irish Revenue authorities a statement of the dividend withholding tax imposed
While the U S Ireland Double Tax Treaty contains provisions regarding withholding due to the wide scope of the exemptions from dividend withholding tax available under Irish domestic law it would generally be unnecessary for a U S resident shareholder to rely on the treaty provisions
on focuses on our financial results for the fiscal year ended April 25 2025 fiscal year 2025 and the fiscal year ended April 26 2024 fiscal year 2024 A discussion on our results of operations for fiscal year 2024 as compared to the year ended April 28 2023 fiscal year 2023 is included in Part II Item 7 Mana
You should read this discussion and analysis along with our consolidated financial statements and related notes thereto at April 25 2025 and April 26 2024 and for fiscal years 2025 2024 and 2023 which are presented within Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K Amounts reported in millions within this annual report are computed based on the amounts in thousands and therefore the sum of the components may not equal the total amount reported in millions due to rounding Additionally certain columns and rows within tables may not sum due to rounding
Throughout this Management s Discussion and Analysis we present certain financial measures that facilitate management s review of the operational performance of the Company and as a basis for strategic planning however such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States U S U S GAAP These financial measures are considered non GAAP financial measures and are intended to supplement and should not be considered as superior to financial measures presented in accordance with U S GAAP We believe that non GAAP financial measures provide information useful to investors in understanding the Company s underlying operational performance and trends and may facilitate comparisons with the performance of other companies in the medical technologies industry
As presented in the GAAP to Non GAAP Reconciliations section on the following pages our non GAAP financial measures exclude the impact of amortization of intangible assets and certain charges or benefits that contribute to or reduce earnings and that may affect financial trends and include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact to our operations in future periods Non GAAP Adjustments
In the event there is a Non GAAP Adjustment recognized in our operating results the tax cost or benefit attributable to that item is separately calculated and reported Because the effective rate can be significantly impacted by the Non GAAP Adjustments that take place during the period we often refer to our tax rate using both the effective rate and the non GAAP nominal tax rate Non GAAP Nominal Tax Rate The Non GAAP Nominal Tax Rate is calculated as the income tax provision adjusted for the impact of Non GAAP Adjustments as a percentage of income before income taxes excluding Non GAAP Adjustments
Refer to the GAAP to Non GAAP Reconciliations Income Taxes and Free Cash Flow sections for reconciliations of the non GAAP financial measures to their most directly comparable financial measures prepared in accordance with U S GAAP
Associated costs primarily include salaries and wages for employees supporting the restructuring activities consulting expenses asset write offs and for the fiscal year ended April 25 2025 contract terminations
We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct correlation to our ongoing or future business operations
The charges represent incremental costs of complying with the new European Union medical device regulations for previously registered products and primarily include charges for contractors supporting the project and other direct third party expenses We consider these costs to be duplicative of previously incurred costs and or one time costs which are limited to a specific time period
The charges predominantly include 439 million of charges related to the February 2024 decision to exit the Company s ventilator product line which primarily includes long lived intangible asset impairments and inventory write downs In addition other charges primarily consist of changes in fair value of contingent consideration and associated costs related to the previously contemplated separation of the Patient Monitoring and Respiratory Interventions businesses
The net charge primarily relates to an income tax reserve adjustment associated with the June 2023 Israeli Central Lod District Court decision and the establishment of a valuation allowance against certain net operating losses which were partially offset by a benefit from the change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes
Free cash flow a non GAAP financial measure is calculated by subtracting additions to property plant and equipment from net cash provided by operating activities Management uses this non GAAP financial measure in addition to U S GAAP financial measures to evaluate our operating results Free cash flow should be considered supplemental to and not a substitute for our reported financial results prepared in accordance with U S GAAP Reconciliations between net cash provided by operating activities the most comparable U S GAAP measure and free cash flow are as follows
Competitive product launches and pricing pressure geographic macroeconomic developments including changes in global trade policies and fluctuations in currency exchange rates general price inflation changes in interest rates reimbursement challenges impacts from changes in the mix of our product offerings delays in product registration approvals national and provincial tender pricing for certain products particularly in China replacement cycle challenges and supply chain challenges from time to time
Recent developments in global trade policy have introduced new uncertainties for our business During and subsequent to the reporting period the U S China and other jurisdictions imposed or proposed additional tariffs on imported goods Based on current imposed or proposed rates as of May 21 2025 we estimate the net tariff impact to be 200 million to 350 million in fiscal year 2026 with the majority recognized in the consolidated statements of income in the second half of the fiscal year The lower end of the range assumes that the current U S 30 and China 10 tariffs persist while the higher end of the range assumes tariffs revert to higher rates U S 145 China 125 after the 90 day pause The actual amount could vary based on changes in tariff rates duration of tariffs scope of tariffs and potential countermeasures or mitigation actions The impact of the tariffs on the financial results for fiscal year 2025 were not material While we are taking proactive steps to mitigate the effects of these tariffs the evolving nature of international trade policy continues to present a risk to our cost structure and financial performance Further escalation or expansion of trade barriers could have a material adverse effect on our results of operations
The sanctions and other measures being imposed in response to the Russia Ukraine conflict are having and could continue to have impacts on revenue and supply chain The financial impact of the conflict in fiscal year 2025 including on accounts receivable and inventory reserves was not material For fiscal year 2025 the business of the Company in these countries represented less than 1 of the Company s consolidated revenues and assets
Although the long term implications of Israel s conflict are difficult to predict at this time the financial and operational impact of the conflict in fiscal year 2025 including on accounts receivable and inventory reserves was not material As of April 25 2025 the Company had 6 facilities and approximately 1 500 employees in Israel For fiscal year 2025 the business of the Company in Israel represented less than 1 of the Company s consolidated revenues and assets
Starting in the first quarter of fiscal year 2025 the Company combined the non U S developed markets and the emerging markets into an international market geography Prior period net sales have been recast to conform to the new presentation The charts below illustrate the percent of net sales by segment for fiscal years 2025 and 2024
The increase in net sales for fiscal year 2025 was driven by growth in most businesses including strong growth in Cardiac Ablation Solutions Cardiac Pacing Therapies TAVR Diabetes Neuromodulation Spine and Advanced Energy The net sales increase was partially offset by declines in Stapling and a 90 million incremental Italian payback accrual resulting from the two July 22 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015
Cardiovascular products include pacemakers insertable cardiac monitors cardiac resynchronization therapy devices implantable cardioverter defibrillators leads and delivery systems products for the treatment of atrial fibrillation information systems for the management of patients with Cardiac Rhythm Heart Failure devices products designed to reduce surgical site infections coronary and peripheral stents and related delivery systems balloons and related delivery systems endovascular stent graft systems heart valve replacement technologies cardiac tissue ablation systems open heart and coronary bypass grafting surgical products and renal denervation systems for the treatment of hypertension Cardiovascular also includes Care Management Services and Cath Lab Managed Services CLMS within the Cardiac Rhythm Heart Failure division Cardiovascular s net sales for fiscal year 2025 were 12 5 billion an increase of 5 percent as compared to fiscal year 2024 The net sales increase was primarily due to the strong performance of Cardiac Ablation Solutions Cardiac Rhythm Management Structural Heart and Cardiac Surgery
Cardiac Rhythm Heart Failure CRHF net sales increased 7 percent in fiscal year 2025 as compared to fiscal year 2024 The net sales increase was driven by growth in Micra transcatheter pacing systems Aurora extravascular implantable cardioverter defibrillator EV ICD system and TYRX partially offset by declines in CRT Ds Cardiac Ablation Solutions experienced strong growth in PulseSelect and Affera Sphere 9 pulsed field ablation with partially offsetting declines in cryoablation
Structural Heart Aortic SHA net sales increased 6 percent in fiscal year 2025 as compared to fiscal year 2024 The net sales increase was driven by continued growth in Structural Heart from adoption of Evolut FX TAVR system and in Cardiac Surgery driven by growth in Perfusion and Surgical Valves
Coronary Peripheral Vascular CPV net sales increased 2 percent in fiscal year 2025 as compared to fiscal year 2024 The net sales increase was driven by growth in Coronary and Renal Denervation led by guide catheters balloons and the Symplicity Spyral renal denervation system partially offset by a decline in stents and impacts from tender pricing in China in Peripheral Vascular Health
Continued acceptance adoption and growth of our innovative portfolio of products in the electrophysiology EP segment including the PulseSelect pulsed field ablation system and the Affera mapping and ablation system with Sphere 9 catheter The Affera mapping and ablation system and Sphere 9 catheter received U S FDA approval in late October 2024
Continued acceptance and growth of the self expanding CoreValve Evolut transcatheter aortic valve replacement platform This includes Evolut PRO which provides enhanced hemodynamics reliable delivery enhanced durability advanced sealing and Evolut FX a system designed to improve the overall procedural experience through enhancements in deliverability implant
visibility and deployment stability The Evolut FX TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access The system was approved by the U S FDA in March 2024 and received CE Mark in late October 2024
Continued acceptance and growth of the Onyx Frontier drug eluting stent DES platform Onyx Frontier is a DES that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention PCI
Neuroscience s products include various spinal implants bone graft substitutes biologic products image guided surgery and intra operative imaging systems robotic guidance systems used in the robot assisted spine procedures and systems that incorporate advanced energy surgical instruments Neuroscience s products also focus on therapies to treat the diseases of the vasculature in and around the brain including coils neurovascular stents and flow diversion products as well as products to treat ear nose and throat ENT and the treatment of overactive bladder and urinary retention Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain movement disorders and epilepsy Neuroscience s net sales for fiscal year 2025 were 9 8 billion an increase of 5 percent as compared to fiscal year 2024 The net sales increase was primarily due to growth in Neuromodulation Spine and Biologics and Neurosurgery
Cranial Spinal Technologies CST net sales for fiscal year 2025 increased 5 percent as compared to fiscal year 2024 The net sales increase was driven by the continued adoption of the AiBLE ecosystem of spine implants and enabling technology with growth in Core Spine Biologics and Neurosurgery
Specialty Therapies Specialty net sales for fiscal year 2025 increased 1 percent as compared to fiscal year 2024 The net sales increase was driven by growth on continued adoption of the Interstim X system and ENT partially offset by impacts from tender pricing in China in Neurovascular
Neuromodulation NM net sales for fiscal year 2025 increased 11 percent as compared to fiscal year 2024 The net sales increase was driven by growth in Pain Stimulation due to the continued launch of the Inceptiv closed loop spinal cord stimulator Brain Modulation driven by the Percept RC deep brain neurostimulator and Interventional
Continued adoption and growth of our integrated solutions through the AiBLE offering which integrates spinal implants with enabling technologies StealthStation O arm Imaging Systems and Midas Mazor robotics and UNiD Adaptive Spine Intelligence AI driven technology for surgical planning and personalized spinal implants
Market acceptance and continued global adoption of innovative new spine products and procedural solutions within our CST operating unit such as Catalyft PL ModuLeX CD Horizon Voyager System and our Infinity OCT System as well as continued growth from Titan spine titanium interbody implants with Nanolock technology
Continued acceptance and growth of our Pelvic Health therapies including our InterStim therapy with InterStim X and InterStim II recharge free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder non obtrusive urinary retention and chronic fecal incontinence
Continued acceptance and growth of our ENT therapies including capital equipment sales of the StealthStation ENT surgical navigation system and intraoperative NIM nerve monitoring system and the Propel sinus implants used in the treatment of chronic rhinosinusitis
Continued acceptance and growth from spinal cord stimulation SCS therapy for treating chronic pain and Diabetic Peripheral Neuropathy DPN on the Inceptiv closed loop rechargeable neurostimulator Intellis rechargeable neurostimulator and Vanta recharge free neurostimulator The Inceptiv closed loop rechargeable SCS received U S FDA approval in April 2024
Continued acceptance and growth of our Percept family of deep brain stimulation DBS devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson s Disease epilepsy and other movement disorders In August 2024 the U S FDA approved Asleep DBS surgery for people with Parkinson s and people with essential tremor BrainSense Adaptive DBS and BrainSense Electrode Identifier received CE Mark in January 2025 and U S FDA approval in February 2025
Our ability to meet growing demand for our existing products and to successfully develop obtain regulatory approval of and commercialize the products within our pipeline which include the hemorrhagic stroke intravascular device our next generation spine enabling technologies and the percutaneous tibial neuromodulation system
Medical Surgical s products span the entire continuum of patient care from diagnosis to recovery with a focus on diseases of the gastrointestinal tract lungs pelvic region obesity and preventable complications The products include those for advanced and general surgical products surgical stapling devices vessel sealing instruments wound closure electrosurgery products hernia mechanical devices mesh implants advanced ablation interventional lung airway products and sensors and monitors for pulse oximetry capnography level of consciousness and cerebral oximetry Medical Surgical s net sales for fiscal year 2025 were 8 4 billion flat as compared to fiscal year 2024 with performance outlined below
Surgical Endoscopy SE net sales for fiscal year 2025 were flat as compared to fiscal year 2024 Net sales were impacted by declines in Stapling due to U S bariatric segment declines and continued shifts to robotic surgery and Endoscopy Partially offsetting these declines was strong growth in Advanced Energy due to continued adoption of LigaSure vessel sealing technology
Acute Care Monitoring ACM net sales for fiscal year 2025 were flat as compared to fiscal year 2024 Net sales were impacted by growth of the BIS Advance monitoring system offset by declines in Medtronic Care Management Services
Acceptance and continued growth of Open to MIS minimally invasive surgery techniques and tools through our efforts to transition open surgery to MIS Open to MIS initiative focuses on capturing the market opportunity that exists in transitioning open procedures to MIS whether through traditional MIS advanced instrumentation or robotics Through our approach in parallel we also expand our presence and optimize open surgery in current open surgery markets
Our ability to execute ongoing strategies addressing the pressures to bariatric surgery procedure volumes in the U S from pharmaceuticals and growth of surgical soft tissue robotics procedures in the U S
Continued acceptance and growth in patient monitoring and airway management Key products in this area include Microstream Capnography Nellcor pulse oximetry system with OxiMax technology Shiley tracheostomy and endotracheal tubes and McGRATH MAC video laryngoscopes
Expanding the use of less invasive treatments and furthering our commitment to improving options for women with abnormal uterine bleeding Our expanded and strengthened surgical offerings complement our global gynecology business
Global adoption of robotic assisted surgery and the safe and effective use of the Hugo robotic assisted surgery RAS system including system reliability and acceptability for urologic bariatric gynecologic hernia and general surgery procedures This
includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence powered surgical videos and analytics platform to make it easier to train and discover new techniques within the robotics platform The Hugo RAS system which received CE Mark in October 2021 as well as secured additional regulatory approvals outside the U S is designed to help reduce unwanted variability improve patient outcomes and by extension lower per procedure cost
Our ability to meet growing demand for our existing products and to successfully develop obtain regulatory approval of and commercialize the products within our pipeline which include our Hugo RAS system in the U S the adoption of AI in Endoscopy and Digital Surgical Technologies Signia powered stapling devices and our next gen Ligasure and Sonicision vessel sealing devices
Diabetes products include insulin pumps continuous glucose monitoring CGM systems and consumables Diabetes net sales for fiscal year 2025 were 2 8 billion an increase of 11 percent as compared to fiscal year 2024 The increase in net sales was primarily driven by strong U S growth as a result of the continued adoption of the MiniMed 780G automated insulated delivery AID system and strong international growth in CGM systems from increased attachment rates and adoption of Simplera Sync
The pending separation of the Diabetes business from the Company In May 2025 the Company announced its intent to separate the Diabetes Operating Unit into a new standalone company and its expectation to complete the separation within 18 months from the announcement date
Continued acceptance and growth for the MiniMed 780G insulin pump system which is powered by SmartGuard technology and features the added benefits of meal detection technology that automatically adjusts and corrects sugar levels every five minutes The global adoption of our AID systems has resulted in strong sensor attachment rates The MiniMed 780G insulin pump system with the Guardian 4 Sensor is available in the U S and the MiniMed 780G insulin pump system with Simplera Sync received U S FDA approval in April 2025 and CE Mark in early January 2024
Continued acceptance and growth of the Guardian Connect CGM system which displays glucose information directly to a smartphone to provide patients access to their glucose levels seamlessly and discretely The Guardian Connect CGM system is available on both Apple iOS and Android devices
Our ability to meet growing demand for our existing products and to successfully develop obtain regulatory approval manufacture and commercialize the products within our pipeline including our partnership with Abbott to expand CGM options for people living with diabetes our next generation insulin delivery options as well as expanded labeling in Type 2 diabetes and fast acting insulins
Cost of products sold for fiscal year 2025 was 11 6 billion as compared to 11 2 billion for fiscal year 2024 Cost of products sold as a percentage of net sales was flat as compared to the prior fiscal year Cost of products sold increased primarily driven by increases in net sales and unfavorable currency impact partially offset by lower costs for quality remediation and excess and obsolete inventory charges Fiscal year 2024 included 70 million of inventory write downs associated with our February 2024 decision to exit our ventilator product line For additional information about the ventilator inventory write down refer to Note 3 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K Looking ahead we anticipate incurring additional costs related to current imposed and proposed tariffs Refer to the Executive Level Overview section for further information
We remain committed to deliver the best possible experiences for patients physicians and caregivers we serve to create technologies that expand what s possible across the human body to transform lives to turn data and insights into real action to serve patient needs improving care and to expand healthcare access and deliver positive outcomes Research and development expense for fiscal years 2025 and 2024 was 2 7 billion
Our goal is to continue to leverage selling general and administrative expense management initiatives Selling general and administrative expense primarily consists of salaries and wages other administrative costs such as professional fees and marketing expenses certain acquisition and divestiture related costs and restructuring associated expenses Selling general and administrative expense for fiscal year 2025 was 10 8 billion as compared to 10 7 billion for fiscal year 2024 The increase in selling general and administrative expense is primarily due to new product launches and commercialization activities
Amortization of intangible assets includes the amortization expense of our definite lived intangible assets consisting of customer relationships purchased technology and patents trademarks tradenames and other intangible assets
In fiscal years 2025 and 2024 restructuring costs primarily related to cost reduction initiatives which predominantly included employee termination benefits facility consolidations and asset write downs and specifically for fiscal year 2025 contract terminations
For additional information about our restructuring programs refer to Note 4 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
in the consolidated statements of income For additional information refer to Note 18 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
Other operating income expense net primarily includes expenses associated with royalties paid for the in license of intellectual property from third parties currency remeasurement and derivative gains and losses changes in the fair value of contingent consideration certain acquisition and divestiture related items and income from funded research and development arrangements
For fiscal year 2025 the change in other operating income expense net was largely driven by a decrease in acquisition and divestiture related expenses as well as insignificant gains from certain business or asset sales in the Cardiovascular and Neuroscience Portfolios during fiscal year 2025 In fiscal year 2024 acquisition and divestiture related expenses included 369 million of charges related to the Company s decision to exit the ventilator product line which primarily included intangible asset impairments of 295 million and other charges for contract cancellation costs and severance In addition the change in fair value of contingent consideration for fiscal year 2025 was 42 million of expense as compared to 156 million of expense for fiscal year 2024
The change in other operating income expense net was partially offset by the net impact of currency remeasurement and our hedging programs The currency impact for fiscal year 2025 was a net loss of 3 million as compared to a net gain of 68 million in fiscal year 2024
Additional information on the charges associated with the ventilator product line exit is described in Note 3 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
Other non operating income net includes the non service component of net periodic pension and postretirement benefit cost investment gains and losses and interest income which includes income on marketable debt securities and our global liquidity structures
Interest income was 511 million and 597 million for fiscal year 2025 and 2024 respectively Income from the non service component of net periodic pension and postretirement benefit cost was 107 million and 124 million for fiscal year 2025 and 2024 respectively Net losses on minority investments were 213 million and 308 million for fiscal year 2025 and 2024 respectively
Interest expense net includes interest incurred on our outstanding borrowings global liquidity structures amortization of debt issuance costs and debt premiums or discounts and amortization of amounts excluded from the effectiveness assessment of certain net investment and fair value hedges
The Organization for Economic Co operation and Development OECD published Pillar Two Model Rules defining the global minimum tax which calls for the taxation of large multinational corporations at a minimum rate of 15 in each jurisdiction in which the group operates The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two Model Rules A number of countries including Ireland have enacted legislation to implement the core elements of Pillar Two Model Rules which were effective for Medtronic in fiscal year 2025
The Israeli Central Lod District Court issued its decision in Medtronic Ventor Technologies Ltd Ventor v Kfar Saba Assessing Office in June 2023 The court determined that there was a deemed taxable transfer of intellectual property As a result the Company recorded a 187 million income tax charge during fiscal year 2024 and filed an appeal with the Supreme Court of Israel
Our effective tax rate for fiscal year 2025 was 16 6 percent as compared to 23 4 percent in fiscal year 2024 The decrease in our effective tax rate was primarily attributable to the establishment of a valuation allowance on certain net operating losses and an income tax reserve adjustment made in fiscal year 2024 associated with the Ventor court decision noted above which was partially offset by the Swiss Cantonal tax rate change on previously recorded deferred tax assets in fiscal year 2024 and the implementation of the Pillar Two Model Rules noted above in fiscal year 2025
Our Non GAAP Nominal Tax Rate for fiscal year 2025 was 16 7 percent as compared to 16 0 percent in fiscal year 2024 The change in our Non GAAP Nominal Tax Rate was primarily due to the implementation of the Pillar Two Model Rules and year over year changes in operational results by jurisdiction
Certain tax adjustments will affect the comparability of our operating results between periods Therefore we consider these Non GAAP Adjustments Refer to the Executive Level Overview section of this Management s Discussion and Analysis for further discussion of these adjustments
We are currently in a strong financial position and we believe our balance sheet and liquidity as of April 25 2025 provide us with flexibility and our cash cash equivalents and current investments along with our credit facility and related commercial paper programs will satisfy our foreseeable operating needs
Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning processes We consider the liquidity necessary to fund our operations which includes working capital needs investments in research and development property plant and equipment and other operating costs We also consider capital allocation alternatives that balance returning value to shareholders through dividends and share repurchases satisfying maturing debt and acquiring businesses and technology
The following is a summary of cash provided by used in operating investing and financing activities the effect of exchange rate changes on cash and cash equivalents and the net change in cash and cash equivalents
The 257 million increase in net cash provided was primarily driven by an increase in cash collected from customers due to an increase in sales partially offset by an increase in cash paid to vendors annual incentive payouts and cash paid for taxes
The 429 million decrease in net cash used was primarily attributable to an increase in net sales and maturities of investments of 576 million and decrease in cash paid for acquisitions of 113 million partially offset by an increase in net additions to property plant and equipment of 272 million For more information on the acquisitions refer to Note 3 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
There was an 89 million decrease in net cash used compared to the prior fiscal year In the current period there was a decrease in total short term borrowings of 1 1 billion compared to an increase of 1 1 billion in the prior year Additionally in June 2024 Medtronic Inc issued four tranches of EUR denominated Senior Notes with an aggregate principal of 3 0 billion or 3 2 billion which was partially offset by an 873 million increase in net share repurchases during fiscal year 2025 For more information on Senior Notes issued refer to the Debt and Capital section below
Our capital structure consists of equity and interest bearing debt We primarily utilize unsecured senior debt obligations to meet our financing needs and to a lesser extent bank borrowings From time to time we may repurchase our outstanding debt obligations in the open market or through privately negotiated transactions
Total debt at April 25 2025 was 28 5 billion as compared to 25 0 billion at April 26 2024 The increase in total debt was primarily driven by issuance of Euro denominated Senior Notes and fluctuations in exchange rates
In June 2024 Medtronic Inc issued four tranches of EUR denominated Senior Notes with an aggregate principal of 3 0 billion with maturities ranging from fiscal year 2030 to 2054 resulting in cash proceeds of approximately 3 2 billion net of discounts and issuance costs In anticipation of the Euro denominated debt issuance the Company entered into forward currency exchange rate contracts to manage the exposure to exchange rate movements These contracts were settled in conjunction with the issuance of the June 2024 Notes
We repurchase our ordinary shares on occasion as part of our focus on returning value to our shareholders In March 2019 the Company s Board of Directors authorized 6 0 billion for repurchase of the Company s ordinary shares In March 2024 the Company s Board of Directors authorized an additional 5 0 billion for repurchase of the Company s ordinary shares There is no specific time period associated with these repurchase authorizations During fiscal years 2025 and 2024 the Company repurchased a total of 38 million and 25 million shares respectively under this program at an average price of 83 36 and 83 04 respectively At April 25 2025 we had approximately 2 1 billion remaining under the share repurchase program authorized by our Board of Directors
Our investments primarily include available for sale debt securities including U S and non U S government and agency securities corporate debt securities mortgage backed securities and other asset backed securities Refer to Note 5 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K for additional information regarding fair value measurements
We maintain multicurrency commercial paper programs for short term financing which allow us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of 3 5 billion At April 25 2025 and April 26 2024 we had no and 1 1 billion of commercial paper outstanding respectively The issuance of commercial paper reduces the amount of credit available under our existing line of credit as explained below
We also have a 3 5 billion five year syndicated credit facility Credit Facility which expires in December 2029 At each anniversary date of the Credit Facility we can request a one year extension of the maturity date The Credit Facility provides backup funding for the commercial paper programs and may also be used for general corporate purposes The Credit Facility provides us with the ability to increase our borrowing capacity by an additional 1 0 billion at any time during the term of the agreement At April 25 2025 and April 26 2024 no amounts were outstanding under the Credit Facility
Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long term debt ratings assigned by Standard Poor s Ratings Services S P and Moody s Investors Service Moody s Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates We are in compliance with all covenants related to the Credit Facility
1 Agency ratings are subject to change and there may be no assurance that an agency will continue to provide ratings and or maintain its current ratings A security rating is not a recommendation to buy sell or hold securities and may be subject to revision or withdrawal at any time by the rating agency and each rating should be evaluated independently of any other rating
S P and Moody s long term debt ratings and short term debt ratings at April 25 2025 were unchanged as compared to the ratings at April 26 2024 We do not expect the S P and Moody s ratings to have a significant impact on our liquidity or future flexibility to access additional liquidity given our balance sheet Credit Facility and related commercial paper programs
We have future contractual obligations and other minimum commercial commitments that are entered into in the normal course of business some of which are recorded in our consolidated balance sheet We believe our off balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings financial position and or cash flows
Presented below is a summary of our off balance sheet contractual obligations and other minimum commercial commitments at April 25 2025 as well as long term contractual obligations reflected in the balance sheet at April 25 2025
Includes commitments related to the funding of minority investments estimated milestone payments and royalty obligations While it is not certain if and or when payments will be made the maturity dates included in the table reflect our best estimates
Includes the contractual interest payments on our outstanding debt and excludes the impacts of debt premium and discount amortization See Note 6 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K for additional information on our debt agreements
Includes inventory purchase commitments research and development and other arrangements that are legally binding and specify minimum purchase quantities or spending amounts These purchase commitments do not exceed our projected requirements and are in the normal course of business Excludes open purchase orders with a remaining term of less than one year
Excludes defined benefit plan obligations guarantee obligations uncertain tax positions non current tax liabilities and litigation settlements for which we cannot make a reliable estimate of the period of cash settlement For further information see Notes 13 15 and 18 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
Includes the current and non current portion of our contractual maturities of debt excluding deferred financing costs and debt discounts net See Note 6 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K for additional information on our debt agreements
Includes the fair value of our current and non current portions of contingent consideration While it is not certain if and or when payments will be made the maturity dates included in this table reflect our best estimates
In the normal course of business we periodically enter into agreements that require us to indemnify customers or suppliers for specific risks such as claims for injury or property damage arising as a result of our products or the negligence of our personnel or claims alleging that our products infringe third party patents or other intellectual property Our maximum exposure under these indemnification provisions is unable to be estimated and we have not accrued any liabilities within our consolidated financial statements or included any indemnification provisions in the table above Historically we have not experienced significant losses on these types of indemnification agreements
Note 18 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K provides information regarding amounts we have accrued related to legal matters In accordance with U S GAAP we record a liability in our consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated Actual settlements may be different than estimated and could have a material effect on our consolidated earnings financial position and or cash flows
We record tax liabilities in our consolidated financial statements for amounts that we expect to repatriate from subsidiaries to the extent the repatriation would be subject to tax however no tax liabilities are recorded for amounts we consider to be permanently reinvested We expect to have access to the majority of our cash flows in the future In addition we continue to evaluate our legal entity structure supporting our business operations and to the extent such evaluation results in a change to our overall business structure we may be required to accrue for additional tax obligations
Additionally we have entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L L C collectively Blackstone to receive funding related to the development of certain products which may give rise to potential regulatory or commercialization milestone payments and royalties based on a percentage of sales of such products Payments under these agreements generally become due and payable only upon the achievement of certain development regulatory and or commercialization milestones or relevant product sales which may span several years and which may never occur These contractual obligations are not included within the table above Refer to Note 3 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K for additional information
Beyond the contractual obligations and other minimum commercial commitments outlined above we have recurring cash requirements arising from the normal operation of our business that include capital expenditures research and developments costs and other operational costs
We believe our balance sheet and liquidity provide us with flexibility and our cash cash equivalents current investments Credit Facility and related commercial paper programs as well as our ability to generate operating cash flows will satisfy our current and future contractual obligations and cash requirements We regularly review our capital needs and consider various investing and financing alternatives to support our requirements
Information regarding acquisitions and disposition activity is included in Note 3 of the consolidated financial statements in Item 8 Financial Statements and Supplementary Data within this Annual Report on Form 10 K In May 2025 we announced our intent to separate the Diabetes business with the intention to create a new independent publicly traded company The separation is expected to be completed within 18 months of the initial announcement
We have used various accounting policies to prepare the consolidated financial statements in accordance with U S GAAP Our significant accounting policies are disclosed in Note 1 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
The preparation of the consolidated financial statements in conformity with U S GAAP requires us to use judgment in making estimates and assumptions that affect the reported amounts of assets liabilities revenues and expenses These estimates reflect our best judgment about economic and market conditions and the potential effects on the valuation and or carrying value of assets and liabilities based upon relevant information available We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources
Revenue recognition on our products varies depending on the amount of consideration we ultimately receive due to return terms sales rebates chargebacks discounts and other incentives which are accounted for as variable consideration The estimate of variable consideration for rebates and distributor chargebacks is considered critical due to the materiality of the balances and use of estimates Estimates for rebates are based on sales terms historical experience and trend analysis The Company considers the lag time between the point of sale and payment of the rebate claim the stated rebate rates and other relevant information to estimate rebates
Revenue adjustments related to distributor chargebacks are the difference between distributor sales price and the end customer negotiated price A provision for outstanding chargebacks is recorded when we recognize revenue from our sale to the distributor and requires estimates for the distributor chargeback rate expected sell through levels by the distributors to contracted customers as well as estimated distributor inventory levels
At April 25 2025 and April 26 2024 there were 1 7 billion and 1 6 billion of rebates and chargebacks recorded in the consolidated balance sheets respectively During fiscal year 2025 adjustments to rebate and chargebacks recorded in prior periods were not material
We are involved in a number of legal actions from time to time involving product liability employment intellectual property and commercial disputes shareholder related matters environmental proceedings tax disputes and governmental proceedings and investigations The outcomes of legal actions are not within the Company s complete control and may not be known for prolonged periods of time In some actions the enforcement agencies or private claimants seek damages as well as other civil or criminal remedies including injunctions barring the sale of products that are the subject of the proceeding that could require significant expenditures result in lost revenues or limit the Company s ability to conduct business in the applicable jurisdictions Estimating probable losses from our litigation and governmental proceedings is inherently difficult particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery involve unsubstantiated or indeterminate claims for damages potentially involve penalties fines or punitive damages or could result in a change in business practice We base our judgments on the best information
available at the time Our estimates related to our legal and product liability accruals may change as additional information becomes available to us including information related to the nature or existence of claims against us trial court or appellate proceedings and mediation arbitration or settlement proceedings Any revision of our estimates of potential liability could have a material impact on our financial position and operating results Our significant legal proceedings are discussed in Note 18 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
We establish reserves when despite our belief that our tax return positions are fully supportable we believe that certain positions are likely to be challenged and that we may or may not prevail Under U S GAAP if we determine that a tax position is more likely than not of being sustained upon audit based solely on the technical merits of the position we recognize the benefit We measure the benefit by determining the amount that is greater than 50 percent likely of being realized upon settlement We presume that all tax positions will be examined by a taxing authority with full knowledge of all relevant information The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations We regularly monitor our tax positions and tax liabilities We reevaluate the technical merits of our tax positions and recognize an uncertain tax benefit or derecognize a previously recorded tax benefit when there is i a completion of a tax audit ii effective settlement of an issue iii a change in applicable tax law including a tax case or legislative guidance or iv the expiration of the applicable statute of limitations These reserves are subject to a high degree of estimation and management judgment Although we believe that we have adequately reserved for liabilities resulting from tax assessments by taxing authorities positions taken by these tax authorities could have a material impact on our effective tax rate consolidated earnings financial position and or cash flows
When we acquire a business the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses Intangible assets primarily include patents trademarks tradenames customer relationships purchased technology and in process research and development Determining the fair value of intangible assets acquired as part of a business combination requires us to make significant estimates These estimates include the amount and timing of projected future cash flows of each project or technology the discount rate used to discount those cash flows to present value and the assessment of the asset s life cycle The estimates could be impacted by legal technical regulatory economic and competitive risks
We have four goodwill reporting units with goodwill assigned to them We assess the impairment of goodwill at the reporting unit level annually as of the first day of the third quarter and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired The test for impairment of goodwill requires us to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units We estimated the fair value of these reporting units using the income and the market approaches weighted 50 percent each Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit Fair value under the market approach utilized revenue and earnings multiples using comparable public company information which uses valuation indicators determined from other businesses that are similar to our reporting unit We use estimates that are consistent with the highest and best use of the assets based on a market participant s view of the assets being evaluated
The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue projected earnings projected future cash flows and discount rate Our forecast of future cash flows is based on estimates of projected revenue and projected earnings based primarily on pricing raw material costs market share industry outlook general economic conditions and strategic actions to improve our earnings The fair value of the reporting unit s goodwill is sensitive to differences between estimated and actual cash flows including changes in the projected revenue projected earnings and discount rate used to evaluate the fair value of the reporting unit
Although we believe our estimate of fair value is reasonable actual results may differ from our estimates due to a number of factors including among others changes in competitive conditions timing of regulatory approval results of clinical trials changes in worldwide economic conditions and fluctuations in currency exchange rates
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
Medtronic plc and Medtronic Global Holdings S C A Medtronic Luxco a wholly owned subsidiary guarantor each have provided full and unconditional guarantees of the obligations of Medtronic Inc a wholly owned subsidiary issuer under the Senior Notes Medtronic Senior Notes and full and unconditional guarantees of the obligations of Covidien International Finance S A CIFSA a wholly owned subsidiary issuer under the Senior Notes CIFSA Senior Notes The guarantees of the CIFSA Senior Notes are in addition to the guarantees of the CIFSA Senior Notes by Covidien Ltd and Covidien Group Holdings Ltd both of which are wholly owned subsidiary guarantors of the CIFSA Senior Notes Medtronic plc and Medtronic Inc each have provided a full and unconditional guarantee of the obligations of Medtronic Luxco under the Senior Notes Medtronic Luxco Senior Notes The following is a summary of these guarantees
The following tables present summarized financial information for the fiscal year ended April 25 2025 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes and CIFSA Senior Notes The obligor group consists of the parent company guarantor subsidiary issuer and subsidiary guarantors for the applicable senior notes The summarized financial information is presented after elimination of i intercompany transactions and balances among the guarantors and issuers and ii equity in earnings from and investments in any subsidiary that is a non guarantor or issuer
The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group consists of the following entities Medtronic plc Medtronic Luxco and Medtronic Inc Refer to the guarantee summary above for further details
Due to the global nature of our operations we are exposed to currency exchange rate changes which may cause fluctuations in earnings and cash flows Fluctuations in the currency exchange rates of currency exposures that are unhedged such as in certain emerging markets may result in future earnings and cash flow volatility The gross notional amount of all currency exchange rate derivative instruments outstanding at April 25 2025 and April 26 2024 was 23 6 billion and 23 7 billion respectively At April 25 2025 these contracts were in a net unrealized loss position of 68 million Additional information regarding our currency exchange rate derivative instruments is included in Note 7 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
A sensitivity analysis of changes in the fair value of all currency exchange rate derivative contracts at April 25 2025 and April 26 2024 indicates that if the U S dollar uniformly strengthened weakened by 10 percent against all currencies the fair value of these contracts would increase decrease by approximately 1 6 billion and 1 7 billion respectively Any gains and losses on the fair value of derivative contracts would generally be offset by gains and losses on the underlying transactions These offsetting gains and losses are not reflected in the above analysis
We are subject to interest rate risk on our short term investments and our borrowings We manage interest rate risk in the aggregate while focusing on our immediate and intermediate liquidity needs Our debt portfolio at April 25 2025 was comprised of debt predominantly denominated in U S dollars and Euros which is primarily fixed rate debt We are also exposed to interest rate changes affecting our investments in interest rate sensitive instruments which include our marketable debt securities
A sensitivity analysis of the impact on our interest rate sensitive financial instruments of a hypothetical 50 basis point change in interest rates as compared to interest rates at April 25 2025 and April 26 2024 indicates that the fair value of these instruments would correspondingly change by 74 million and 64 million respectively
For a discussion of current market conditions and the impact on our financial condition and results of operations see the Liquidity section of the Management s Discussion and Analysis in Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10 K For additional discussion of market risk see Notes 5 and 7 to the consolidated financial statements in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
We have audited the accompanying consolidated balance sheets of Medtronic plc and its subsidiaries the Company as of April 25 2025 and April 26 2024 and the related consolidated statements of income of comprehensive income of equity and of cash flows for each of the three years in the period ended April 25 2025 including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended April 25 2025 appearing under Item 15 collectively referred to as the consolidated financial statements We also have audited the Company s internal control over financial reporting as of April 25 2025 based on criteria established in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO
In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of the Company as of April 25 2025 and April 26 2024 and the results of its operations and its cash flows for each of the three years in the period ended April 25 2025 in conformity with accounting principles generally accepted in the United States of America Also in our opinion the Company maintained in all material respects effective internal control over financial reporting as of April 25 2025 based on criteria established in Internal Control Integrated Framework 2013 issued by the COSO
The Company s management is responsible for these consolidated financial statements for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Management s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A Our responsibility is to express opinions on the Company s consolidated financial statements and on the Company s internal control over financial reporting based on our audits We are a public accounting firm registered with the Public Company Accounting Oversight Board United States PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement whether due to error or fraud and whether effective internal control over financial reporting was maintained in all material respects
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the consolidated financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the consolidated financial statements Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk Our audits also included performing such other procedures as we considered necessary in the circumstances We believe that our audits provide a reasonable basis for our opinions
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that i pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company ii provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and iii provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that i relates to accounts or disclosures that are material to the consolidated financial statements and ii involved our especially challenging subjective or complex judgments The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
As described in Notes 13 and 18 to the consolidated financial statements management records reserves for uncertain tax positions related to unresolved matters with the Internal Revenue Service IRS and other taxing authorities A remaining unresolved issue with the IRS relates to the allocation of income between Medtronic Inc and its wholly owned subsidiary operating in Puerto Rico which is one of the Company s manufacturing sites These reserves are subject to a high degree of estimation and management judgment Total reserves relating to uncertain tax positions as of April 25 2025 were 2 902 billion of which the Puerto Rico manufacturing reserve makes up a significant portion
The principal considerations for our determination that performing procedures relating to the income tax reserve for the uncertain tax position related to Puerto Rico manufacturing is a critical audit matter are i the significant judgment by management when determining the reserve including a high degree of estimation uncertainty relative to the unresolved issue with the IRS involving one of the Company s manufacturing sites and ii a high degree of auditor judgment subjectivity and effort in performing procedures and evaluating audit evidence related to management s measurement of the income tax reserve for the uncertain tax position related to Puerto Rico manufacturing as the nature of the evidence is often highly subjective
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements These procedures included testing the effectiveness of controls relating to the recognition of the income tax reserves for uncertain tax positions as well as controls over measurement of the reserve for the uncertain tax position related to Puerto Rico manufacturing These procedures also included among others i testing management s process for determining the reserve ii evaluating the status and results of the related U S Tax Court case and iii evaluating the consistency of the reserve calculation with the relevant documents related to the U S Tax Court case Evaluating the reasonableness of the measurement of the reserve included evaluating whether the methodology and assumptions used by the Company were consistent with the U S Tax Court s ruling
Medtronic plc Medtronic or the Company is the leading global healthcare technology company alleviating pain restoring health and extending life for millions of people around the world The Company provides innovative products and therapies to serve healthcare systems physicians clinicians and patients Medtronic was founded in 1949 and is headquartered in Galway Ireland In May 2025 the Company announced its intent to separate the Diabetes business with the intention to create a new independent publicly traded company The separation is expected to be completed within 18 months of the initial announcement
The consolidated financial statements include the accounts of Medtronic plc its wholly owned subsidiaries entities for which the Company has a controlling financial interest and variable interest entities for which the Company is the primary beneficiary Intercompany transactions and balances have been fully eliminated in consolidation Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year Amounts reported in millions within this annual report are computed based on the amounts in thousands and therefore the sum of the components may not equal the total amount reported in millions due to rounding Additionally certain columns and rows within tables may not sum due to rounding
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States U S U S GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes Estimates are used when accounting for items such as income taxes contingencies goodwill intangible assets equity investments and liability valuations Actual results may or may not differ from those estimates
The Company utilizes a 52 53 week fiscal year ending the last Friday in April for the presentation of its consolidated financial statements and related notes thereto at April 25 2025 and April 26 2024 and for each of the three fiscal years ended April 25 2025 fiscal year 2025 April 26 2024 fiscal year 2024 and April 28 2023 fiscal year 2023
The Company considers highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents These investments are carried at cost which approximates fair value
The Company invests in marketable debt and equity securities investments for which the Company has elected the fair value option investments that do not have readily determinable fair values and investments accounted for under the equity method
Marketable debt securities are classified and accounted for as available for sale These investments are recorded at fair value in the consolidated balance sheets The change in fair value for available for sale securities is recorded net of taxes as a component of
on the consolidated balance sheets The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date The classification of marketable debt securities as current or long term is based on the nature of the securities and the availability for use in current operations consistent with the Company s management of its capital structure and liquidity
Certain of the Company s investments in marketable equity securities and other securities are long term strategic investments in companies that are in various stages of development and are primarily included in
on the consolidated balance sheets Marketable equity securities are recorded at fair value in the consolidated balance sheets The change in fair value of marketable equity securities is recognized within
in the consolidated statements of income At each reporting period the Company makes a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired Equity method investments for which the Company has elected the fair value option are valued using a discounted cash flow methodology taking into consideration various assumptions including discount rate and all pertinent financial information available related to the investees including the timing of anticipated product launches historical financial results and projections of future cash flows Equity investments that do not have readily determinable fair values are measured using the measurement alternative at cost minus impairment if any plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer Equity securities accounted for under the equity method are initially recorded at the amount of the Company s investment and are adjusted each period for the Company s share of the investee s income or loss and dividends paid Securities accounted for under the equity method are reviewed quarterly for changes in circumstance or the occurrence of events that suggest other than temporary impairment has occurred
The Company grants credit to customers in the normal course of business and maintains an allowance for doubtful accounts for potential credit losses When evaluating allowances for doubtful accounts the Company considers various factors including historical experience and customer specific information Uncollectible accounts are written off against the allowance when it is deemed that a customer account is uncollectible
Inventories are stated at the lower of cost or net realizable value with cost determined on a first in first out basis The Company reduces the carrying value of inventories for items that are potentially excess obsolete or slow moving based on changes in customer demand technology developments or other economic factors
Property plant and equipment is stated at cost and depreciated over the useful lives of the assets using the straight line method Additions and improvements that extend the lives of the assets are capitalized while expenditures for repairs and maintenance are expensed as incurred The Company assesses property plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of asset groupings may not be recoverable The cost of interest that is incurred in connection with significant ongoing construction projects is capitalized using a weighted average interest rate These costs are included in property plant and equipment and amortized over the useful life of the related asset Upon retirement or disposal of property plant and equipment the costs and related amounts of accumulated depreciation or amortization are eliminated from the asset and accumulated depreciation accounts The difference if any between the net asset value and the proceeds is recognized in earnings
Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses The Company assesses goodwill for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired Impairment testing for goodwill is performed at a reporting unit level The Company calculates the excess of each reporting unit s fair value over its carrying amount including goodwill utilizing a discounted cash flow analysis and revenue and earnings multiples using comparable public company information The test for impairment of goodwill requires the Company to make several estimates related to projected future cash flows and appropriate multiples to determine the fair value of the goodwill reporting units Significant assumptions used in the reporting unit fair value measurements include forecasted cash flows including revenue and expense growth rates discount rates and revenue and earnings multiples An impairment loss is recognized when the carrying amount of the reporting unit s net assets exceeds the estimated fair value of the reporting unit
Intangible assets include patents trademarks tradenames customer relationships purchased technology and in process research and development IPR D Intangible assets with a definite life are amortized on a straight line basis with estimated useful lives typically ranging from three to 20 years Amortization is recognized within
in the consolidated statements of income Intangible assets with a definite life are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group which includes intangible assets may not be recoverable
When events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable the Company compares the asset group s carrying value to its undiscounted future cash flows If the carrying value is not recoverable an impairment loss is recognized based on the amount by which the carrying value exceeds the fair value The fair value of an asset group is estimated by utilizing a discounted cash flow analysis
Acquired IPR D represents the fair value assigned to those research and development projects that were primarily acquired in a business combination for which the related products have not received regulatory approval and have no alternative future use IPR D is capitalized at its fair value as an indefinite lived intangible asset and any development costs incurred after the acquisition are expensed as incurred The fair value of IPR D is determined by estimating the future cash flows of each project and discounting the net cash flows back to their present values Upon achieving regulatory approval or commercial viability for the related product the indefinite lived intangible asset is accounted for as a definite lived asset and is amortized on a straight line basis over the estimated useful life If the project is not completed or is terminated or abandoned the Company may have an impairment related to the IPR D which is charged to expense Indefinite lived intangible assets are tested for impairment annually in the third quarter of the fiscal year prior to moving to definite lived and whenever events or changes in circumstances indicate that the carrying amount may be impaired Impairment is calculated as the excess of the asset s carrying value over its fair value Fair value is generally determined using a discounted future cash flow analysis IPR D with no alternative future use acquired outside of a business combination is expensed immediately
Certain of the Company s business combinations involve potential payment or receipt of future consideration that is contingent upon the achievement of certain product development milestones and or contingent on the acquired business reaching certain performance milestones The Company records contingent consideration at fair value at the date of acquisition or divestiture based on the consideration expected to be transferred estimated as the probability weighted future cash flows discounted back to present value The fair value of contingent consideration is measured using projected payment dates discount rates probabilities of payment and projected revenues for revenue based considerations Projected revenues are based on the Company s most recent internal operational budgets and long range strategic plans The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies Changes in projected revenues probabilities of payment discount rates and projected payment dates may result in adjustments to the fair value measurements Contingent consideration is remeasured each reporting period using Level 3 inputs and the change in fair value including accretion for the passage of time is recognized as income or expense within
in the consolidated statements of income Contingent consideration payments made or received soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows Contingent consideration payments not made or received soon after the acquisition date that are related to the acquisition date fair value are reported as financing activities in the consolidated
The Company self insures the majority of its insurable risks including medical and dental costs disability coverage physical loss to property business interruptions workers compensation comprehensive general and product liability Insurance coverage is obtained for risks required to be insured by law or contract The Company uses claims data and historical experience as applicable to estimate liabilities associated with the exposures that the Company has self insured
The Company sponsors various retirement benefit plans including defined benefit pension plans post retirement medical plans defined contribution savings plans and termination indemnity plans covering substantially all U S employees and many employees outside the U S Refer to Note 15 for assumptions used in determining pension and post retirement benefit costs and liabilities
The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value in accordance with authoritative guidance on derivatives and hedging and presents assets and liabilities associated with derivative financial instruments on a gross basis in the consolidated financial statements For derivative instruments that are designated and qualify as hedging instruments the hedging instrument must be designated as a fair value hedge cash flow hedge or hedges of net investments based upon the exposure being hedged See Note 7 for more information on the Company s derivative instruments and hedging programs
The Company follows the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis Fair value is defined as the exit price or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from sources independent of the Company Unobservable inputs are inputs that reflect the Company s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement The hierarchy is broken down into three levels defined as follows
Level 2 Inputs include quoted prices for similar assets or liabilities in active markets quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability either directly or indirectly
Financial assets that are classified as Level 1 securities include highly liquid government bonds within U S government and agency securities mutual funds short term investments and equity securities for which quoted market prices are available In addition the Company classifies currency exchange rate contracts as Level 1 since they are valued using quoted market prices in active markets which have identical assets or liabilities
The valuation for most fixed maturity securities are classified as Level 2 Financial assets that are classified as Level 2 include corporate debt securities government and agency securities other asset backed securities and mortgage backed securities whose value is determined using inputs that are observable in the market or may be derived principally from or corroborated by observable market data such as pricing for similar securities recently executed transactions cash flow models with yield curves and benchmark securities In addition total return swaps are included in Level 2 as the Company uses inputs other than quoted prices that are observable for the asset The Level 2 derivative instruments are primarily valued using standard calculations and models that use readily observable market data as their basis
Financial assets are considered Level 3 when their fair values are determined using pricing models discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable Financial assets that are classified as Level 3 include certain investment securities for which there is limited market activity such that the determination of fair value requires significant judgment or estimation equity method investments for which the Company has elected the fair value option and auction rate securities The investment securities with limited market activity are valued using third party pricing sources that incorporate transaction details such as contractual terms maturity timing and amount of expected future cash flows as well as assumptions about liquidity and credit valuation adjustments by market participants The fair value of auction rate securities is estimated by the Company using a discounted cash flow model which incorporates significant unobservable inputs The significant unobservable inputs used in the fair value measurement of the Company s auction rate securities are years to principal recovery and the illiquidity premium that is incorporated into the discount rate
Valuation techniques for investments valued using the fair value option are included in the Investments section above For goodwill other intangible assets and IPR D inputs used in the fair value analysis fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value
Certain investments for which the fair value is measured using the net asset value per share or its equivalent practical expedient are excluded from the fair value hierarchy Financial assets for which the fair value is measured using the net asset value per share practical expedient include equity and fixed income commingled trusts partnership units and registered investment companies
The Company primarily sells its products through direct sales representatives and independent distributors Additionally a portion of the Company s revenue is generated from consignment inventory maintained at hospitals and royalty and intellectual property arrangements The Company recognizes revenue when control is transferred to the customer For products sold through direct sales representatives and independent distributors control is typically transferred upon shipment or upon delivery based on the contract terms and legal requirements For certain of our capital equipment control is transferred upon installation For consignment inventory control is transferred when the product is used or implanted Payment terms vary depending on the country of sale type of customer and type of product
If a contract contains more than one performance obligation the transaction price is allocated to each performance obligation based on relative standalone selling price Shipping and handling is treated as a fulfillment activity rather than a promised service and therefore is not considered a performance obligation Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue producing transaction and collected by the Company from customers for example sales use value added and some excise taxes are not included in revenue For contracts that have an original duration of one year or less the Company uses the practical expedient applicable to such contracts and does not adjust the transaction price for the time value of money
The amount of revenue recognized reflects sales rebates and returns which are estimated based on sales terms historical experience and trend analysis In estimating rebates the Company considers the lag time between the point of sale and the payment of the rebate claim the stated rebate rates and other relevant information The Company records adjustments to rebates and returns reserves as increases or decreases of revenue
The Company records a deferred revenue liability if a customer pays consideration or the Company has the right to invoice before the Company transfers a good or service to the customer Deferred revenue primarily represents remote monitoring services and equipment maintenance for which consideration is received at the same time as consideration for the device or equipment Revenue related to remote monitoring services and equipment maintenance is recognized over the service period as time elapses
in the consolidated statements of income and were 322 million 341 million and 351 million in fiscal years 2025 2024 and 2023 respectively Other shipping and handling costs incurred to store move and prepare products for shipment are recognized in
Research and development costs are expensed when incurred Research and development costs include costs of research engineering and technical activities to develop a new product or service or make significant improvement to an existing product or manufacturing process Research and development costs also include pre approval regulatory and clinical trial expenses and license payments for technology not yet approved by regulators
The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated If the reasonable estimate of a known or probable loss is a range and no amount within the range is a better estimate than any other the minimum amount of the range is accrued If a loss is reasonably possible but not known or probable and may be reasonably estimated the estimated loss or range of loss is disclosed
The Company has deferred taxes that arise as a result of the different treatment of transactions for U S GAAP and income tax accounting known as temporary differences The Company records the tax effect of these temporary differences as deferred tax assets and deferred tax liabilities Deferred tax assets generally represent items that may be used as a tax deduction or credit in a tax return in future years for which the Company has already recognized the tax benefit in the consolidated statements of income The Company establishes valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit Deferred tax liabilities generally represent tax expense for which payment has been deferred or expense has already been taken as a deduction on the Company s tax return but has not yet been recognized as an expense in the consolidated statements of income See Note 13 for more information on the Company s uncertain tax positions and tax policies
Other operating income expense net primarily includes royalty expense currency remeasurement and derivative gains and losses changes in fair value of contingent consideration certain acquisition and divestiture related items income from funded research and development arrangements Puerto Rico excise taxes and commitments to the Medtronic Foundation and Medtronic LABS
Other non operating income net includes the non service component of net periodic pension and post retirement benefit cost investment gains and losses and interest income which includes income on marketable debt securities and our global liquidity structures
Assets and liabilities of non U S dollar functional currency entities are translated to U S dollars at period end exchange rates and the currency impacts arising from the translation of the assets and liabilities are recorded as a cumulative translation adjustment a component of
on the consolidated balance sheets Elements of the consolidated statements of income are translated at the average monthly currency exchange rates in effect during the period Currency transaction gains and losses are included in o
The Company measures stock based compensation expense at the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period which is generally the vesting period The amount of stock based compensation expense recognized during a period is based on the portion of the awards that are expected to vest The Company estimates pre vesting forfeitures at the time of grant and revises the estimates in subsequent periods
In September 2022 the Financial Accounting Standards Board FASB issued Accounting Standards Update ASU 2022 04 Liabilities Supplier Finance Programs Subtopic 405 50 which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program s nature activity during the period changes from period to period and potential magnitude The Company adopted this guidance on April 29 2023
In November 2023 the FASB issued ASU 2023 07 Improvements to Segment Reporting Topic 280 which requires incremental disclosures on reportable segments primarily through enhanced disclosures on significant segment expenses The Company retrospectively adopted this guidance beginning in the fourth quarter of fiscal year 2025 The adoption of this standard did not have a material impact on the Company s consolidated financial statements but did require additional disclosures Refer to Note 19 for additional information
In December 2023 the FASB issued ASU 2023 09 Improvements to Income Tax Disclosures Topic 740 which requires incremental annual disclosures on income taxes including rate reconciliations income taxes paid and other disclosures The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures
In November 2024 the FASB issued ASU 2024 03 Disaggregation of Income Statement Expenses Topic 220 40 which requires tabular disclosures disaggregating certain costs and expenses within relevant income statement captions The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2028 for our annual report and for interim periods starting in fiscal year 2029 We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures
The Company s revenues are principally derived from device based medical therapies and services related to cardiac rhythm disorders cardiovascular disease hypertension neurological surgery technologies neurological disorders and diseases spinal conditions and musculoskeletal trauma chronic pain ear nose and throat conditions urological and digestive disorders advanced and general surgical care products respiratory and monitoring solutions and diabetes conditions The Company s primary customers include healthcare systems clinics third party healthcare providers distributors and other institutions including governmental healthcare programs and group purchasing organizations Starting in the first quarter of fiscal year 2025 the Company combined the non U S developed markets and the emerging markets into an international market geography Prior period net sales have been recast to conform to the new presentation
The table below illustrates net sales by segment and division and by market geography for fiscal years 2025 2024 and 2023 The U S revenue includes United States and U S territories and the international revenue includes all other non U S countries
The amount of revenue recognized is reduced by sales rebates and returns Adjustments to rebates and returns reserves are recorded as increases or decreases to revenue At April 25 2025 983 million of rebates were classified as
respectively During the fiscal year ended April 25 2025 the Company recognized 320 million of revenue that was included in deferred revenue as of April 26 2024 During the fiscal year ended April 26 2024 the Company recognized 324 million of revenue that was included in deferred revenue at April 28 2023
Remaining performance obligations include goods and services that have not yet been delivered or provided under existing noncancellable contracts with minimum purchase commitments At April 25 2025 the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately 0 3 billion The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years
The Company had acquisitions during fiscal years 2025 and 2024 that were accounted for as business combinations The assets and liabilities of the businesses acquired were recorded and consolidated on the acquisition date at their respective fair values Goodwill resulting from business combinations is largely attributable to future yet to be defined technologies new customer relationships existing workforce of the acquired businesses and synergies expected to arise after the Company s acquisition of these businesses The results of operations of acquired businesses have been included in the Company s consolidated statements of income since the date each business was acquired The results of operations of acquired businesses and the pro forma impact of the acquisitions during fiscal years 2025 and 2024 was not significant either individually or in the aggregate to the consolidated results of the Company Purchase price allocation adjustments for fiscal years 2025 and 2024 business combinations were not significant
The acquisition date fair value of net assets acquired during fiscal year 2025 was 128 million consisting of 159 million of assets acquired and 31 million of liabilities assumed Based on preliminary valuations assets acquired were primarily comprised of 108 million of goodwill and 50 million of IPR D The goodwill is not deductible for tax purposes The Company recognized 20 million of non cash contingent consideration liabilities in connection with these business combinations during fiscal year 2025 which comprised of other milestone based payments
The acquisition date fair value of net assets acquired during fiscal year 2024 was 335 million consisting of 338 million of assets acquired and 3 million of liabilities assumed Assets acquired were primarily comprised of 131 million of goodwill 150 million of IPR D and 29 million of technology based intangible assets with estimated useful lives of 10 years For tax purposes 51 million of goodwill is deductible while 80 million is not deductible The IPR D was placed into service as a definite lived intangible asset during the second quarter of fiscal year 2025 The Company recognized 30 million of non cash contingent consideration liabilities in connection with these business combinations during fiscal year 2024 which are comprised of revenue and product development milestone based payments
In February 2024 the Company announced the decision to exit its ventilator product line and retain and combine the remaining Patient Monitoring and Respiratory Interventions PMRI businesses into one business unit called Acute Care and Monitoring ACM In connection with this decision the Company recorded pre tax charges of 439 million including 369 million recognized within
in the consolidated statements of income in fiscal year 2024 The charges included 371 million of non cash impairments and write downs primarily related to 295 million of long lived asset impairments to write down the value of related intangible assets to zero and 70 million of inventory write downs The other charges primarily related to contract cancellation costs and severance The Company will continue to honor existing ventilator contracts to serve the needs of its customers and their patients
In May 2022 the Company and DaVita Inc DaVita entered into a definitive agreement for the Company to sell half of its RCS business and on April 1 2023 completed the transaction This sale was part of an agreement between Medtronic and DaVita to form a new independent kidney care focused medical device company Mozarc Medical or Mozarc with equal equity ownership At closing the Company received 45 million cash consideration recorded non cash contingent consideration receivables valued at 195 million made an additional cash investment of 224 million and retained a 50 non controlling equity interest in Mozarc valued at 307 million For the contingent consideration receivables the maximum consideration the Company could receive in the future is 300 million based on the achievement of certain milestones as further described below The Company recorded non cash pre tax charges of 136 million in fiscal year 2023 primarily related to impairment of goodwill and changes in the carrying amount of the disposal group recognized in
in the consolidated statements of income Refer to Note 9 to the consolidated financial statements for additional information on the goodwill impairment Refer to Note 5 to the consolidated financial statements for additional information on the Company s retained 50 equity investment in Mozarc as a result of this transaction
Certain of the Company s business combinations involve potential payment of future consideration that is contingent upon the achievement of certain product development milestones and or contingent on the acquired business reaching certain performance milestones A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date The fair value of the contingent consideration is remeasured at each reporting period and the change in fair value is recognized within
Unobservable inputs were weighted by the relative fair value of the contingent consideration liability For projected fiscal year of payment the amount represents the median of the inputs and is not a weighted average
In connection with the sale of our RCS business as further discussed above the Company may be entitled to receive additional consideration based on the achievement of certain revenue regulatory and profitability milestones with potential payouts starting in fiscal year 2026 through 2029 The fair value of the contingent consideration receivable at April 25 2025 and April 26 2024 was 13 million and 58 million
The Company has entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L L C collectively Blackstone to receive funding related to the development of certain products within the Cardiovascular Portfolio and Diabetes Operating Unit As there is substantive and genuine transfer of risk to Blackstone the development funding is recognized by Medtronic as an obligation to perform contractual services The Company recognizes the funding as income within
as the research and development costs are incurred and funding payments become due Under these arrangements the Company recognized income of 181 million 174 million and 202 million in fiscal years 2025 2024 and 2023 respectively As of April 25 2025 the Company is eligible to receive additional funding of 391 million under these arrangements
Following potential U S regulatory approval and commercial launch of each product covered by the Blackstone agreements Blackstone will be eligible to receive a combination of fixed regulatory and commercial milestone payments up to 1 2 billion and royalties based on percent of sales of such products Under certain termination provisions the Company s payment obligation will survive and in certain termination circumstances a payment to Blackstone of a multiple of the funded amounts may be required At the time of executing these contracts the occurrence of such circumstances was deemed to be remote
In fiscal years 2025 and 2024 the Company incurred 303 million and 389 million respectively of restructuring and associated costs primarily related to cost reduction initiatives which predominantly included employee termination benefits facility consolidations and asset write downs and specifically for fiscal year 2025 contract terminations In fiscal year 2023 restructuring costs primarily related to Enterprise Excellence and Simplification restructuring programs both of which were substantially completed as of the end fiscal year 2023 Enterprise Excellence was designed to leverage the Company s global size and scale to focus on global operations and functional and commercial optimization and had total cumulative pre tax charges of 1 8 billion Simplification was designed to focus the organization on accelerating innovation enhancing customer experience driving revenue growth and winning market share and had total cumulative pre tax charges of 0 5 billion In addition in the fourth quarter of fiscal year 2023 the Company incurred 0 3 billion of restructuring charges primarily related to employee termination benefits to support cost reduction initiatives These charges were incremental to charges incurred under our Enterprise Excellence and Simplification programs noted above
Employee related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and specifically for fiscal year 2023 voluntary early retirement benefits Associated and other costs primarily include salaries and wages of employees that are fully dedicated to restructuring activities consulting fees asset write offs and contract terminations
In fiscal year 2023 restructuring charges net included 94 million of incremental defined benefit defined contribution and post retirement related expenses for employees that accepted voluntary early retirement packages
The Company holds investments in marketable debt securities that are classified and accounted for as available for sale and are remeasured on a recurring basis The following tables summarize the Company s investments in available for sale debt securities by significant investment category and the related consolidated balance sheet classification at April 25 2025 and April 26 2024
The following tables present the gross unrealized losses and fair values of the Company s available for sale debt securities that have been in a continuous unrealized loss position deemed to be temporary aggregated by investment category at April 25 2025 and April 26 2024
The Company reviews the fair value hierarchy classification on a quarterly basis Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy There were no transfers into or out of Level 3 during the fiscal years ended April 25 2025 and April 26 2024 When a determination is made to classify an asset or liability within Level 3 the determination is based upon the significance of the unobservable inputs to the overall fair value measurement
The contractual maturities of available for sale debt securities at April 25 2025 are shown in the following table Within the table maturities of mortgage backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties
The table below includes activity related to the Company s portfolio of equity and other investments The activity for fiscal years 2024 and 2023 was not significant Gains and losses on equity and other investments are recognized in
During fiscal year 2025 there were 181 million of net unrealized losses on equity securities and other investments still held at April 25 2025 During fiscal year 2024 there were 291 million of net unrealized losses on equity securities and other investments still held at April 26 2024
As further described in Note 3 on April 1 2023 the Company sold half of its RCS business to Mozarc and as a result of the transaction the Company retained a 50 equity interest in Mozarc Although the equity investment provides the Company with the ability to exercise significant influence over Mozarc the Company has elected the fair value option to account for this equity investment The Company believes the fair value option best reflects the economics of the underlying transaction
in the consolidated statements of income During fiscal year 2025 and 2024 the Company recognized a loss of 171 million and 220 million respectively primarily driven by the timing of anticipated product launches historical financial results and projections of future cash flows
In January 2015 Medtronic Global Holdings S C A Medtronic Luxco an entity organized under the laws of Luxembourg entered into various agreements pursuant to which Medtronic Luxco may issue United States Dollar denominated unsecured commercial paper notes the 2015 CP Program on a private placement basis and in January 2020 Medtronic Luxco entered into various agreements pursuant to which Medtronic Luxco may issue Euro denominated unsecured commercial paper notes the 2020 CP Program on a private placement basis The maximum aggregate amount outstanding at any time under the 2015 CP Program and the 2020 CP Program together may not exceed the equivalent of 3 5 billion The Company and Medtronic Inc have guaranteed the obligations of Medtronic Luxco under the 2015 CP Program and the 2020 CP Program
There was no commercial paper outstanding at April 25 2025 During fiscal year 2025 the weighted average original maturity of the commercial paper outstanding was approximately 13 days and the weighted average interest rate was 5 02 percent There was 1 1 billion commercial paper outstanding at April 26 2024 During fiscal year 2024 the weighted average original maturity of the commercial paper outstanding was approximately 20 days and the weighted average interest rate was 5 45 percent The issuance of commercial paper reduces the amount of credit available under the Company s existing credit facility defined below
In October 2024 Medtronic Luxco as borrower entered into an amendment to its amended and restated credit agreement Credit Facility by and among Medtronic Medtronic Inc Medtronic Luxco the lenders from time to time party thereto and Bank of America N A as administrative agent and issuing bank extending the maturity date of the Credit Facility to December 2029
The Credit Facility provides for a 3 5 billion five year unsecured revolving credit facility Credit Facility At each anniversary date of the Credit Facility we can request a one year extension of the maturity date The Credit Facility provides the Company with the ability to increase its borrowing capacity by an additional 1 0 billion at any time during the term of the agreement The Company and Medtronic Inc have guaranteed the obligations of the borrowers under the Credit Facility and Medtronic Luxco will also guarantee the obligations of any designated borrower The Credit Facility includes a multi currency borrowing feature for certain specified foreign currencies At April 25 2025 and April 26 2024 no amounts were outstanding under the Credit Facility
Interest rates on advances on the Credit Facility are determined by a pricing matrix based on the Company s long term debt ratings assigned by Standard Poor s Ratings Services and Moody s Investors Service Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates The Company is in compliance with all covenants related to the Credit Facility
The Company has outstanding unsecured senior obligations described as senior notes in the tables above collectively the Senior Notes The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company The Company is in compliance with all covenants related to the Senior Notes
In June 2024 Medtronic Inc issued four tranches of EUR denominated Senior Notes with an aggregate principal of 3 0 billion with maturities ranging from fiscal year 2030 to 2054 resulting in cash proceeds of approximately 3 2 billion net of discounts and issuance costs In anticipation of the Euro denominated debt issuance the Company entered into forward currency exchange rate contracts to manage the exposure to exchange rate movements These contracts were settled in conjunction with the issuance of the June 2024 Notes
In May 2022 Medtronic Luxco entered into a term loan agreement Fiscal 2023 Loan Agreement by and among Medtronic Luxco Medtronic plc Medtronic Inc and Mizuho Bank Ltd as administrative agent and as lender The Fiscal 2023 Loan Agreement provides an unsecured term loan in an aggregate principal amount of up to 300 billion with a term of 364 days Borrowings under the Fiscal 2023 Loan Agreement bear interest at the TIBOR Rate as defined in the Fiscal 2023 Loan Agreement plus a margin of 0 40 per annum Medtronic plc and Medtronic Inc guaranteed the obligations of Medtronic Luxco under the Fiscal 2023 Loan Agreement In May and June 2022 Medtronic Luxco borrowed an aggregate of 297 billion or approximately 2 3 billion of the term loan under the Fiscal 2023 Loan Agreement The Company used the net proceeds of the borrowings to fund the early redemption of 1 9 billion of Medtronic Inc s 3 500 Senior Notes due 2025 for 1 9 billion of total consideration and 368 million of Medtronic Luxco s 3 350 Senior Notes due 2027 for 376 million of total consideration The Company recognized a total loss on debt extinguishment of 53 million within
in the consolidated statements of income during fiscal year 2023 which primarily includes cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums During the fourth quarter of fiscal year 2023 the Company repaid the term loan in full including interest
in the consolidated statements of income For fiscal years 2025 2024 and 2023 there was 913 million 916 million and 743 million respectively of interest expense on outstanding borrowings including amortization of debt issuance costs and debt discounts and premiums and the global liquidity structures
At April 25 2025 the estimated fair value of the Company s Senior Notes was 26 2 billion compared to a principal value of 28 6 billion At April 26 2024 the estimated fair value was 21 2 billion compared to a principal value of 24 0 billion The fair value was estimated using quoted market prices for the publicly registered Senior Notes which are classified as Level 2 within the fair value hierarchy The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and hedging activity
The Company participates in a supplier financing program that provides participating suppliers the ability to finance payment obligations from the Company with third party financial institutions in order to receive earlier payment The Company s standard payment term is 90 days The Company s outstanding payables to its suppliers including amounts due and payment terms are not affected by a supplier s participation in the program
The Company uses derivative instruments and foreign currency denominated debt to manage the impact that currency exchange rate and interest rate changes have on reported financial statements The Company does not enter into derivative contracts for speculative purposes
on a straight line basis over the term of the hedge and were not significant for the fiscal year ended April 25 2025 Cash flows related to the Company s derivative instruments designated as fair value hedges are reported as financing activities in the consolidated statements of cash flows Cash flows attributed to amounts excluded from the assessment of effectiveness are reported as operating activities in the consolidated statements of cash flows
until the hedged transaction affects earnings When the hedged transaction affects earnings the gain or loss on the derivative is reclassified to earnings Amounts excluded from the measurement of hedge effectiveness are recognized in earnings on a straight line basis over the term of the hedge Cash flows are reported as operating activities in the consolidated statements of cash flows
The Company s cash flow hedges will mature within the subsequent two year period At April 25 2025 and April 26 2024 the Company had 149 million in after tax unrealized losses and 229 million in after tax unrealized gains respectively associated with cash flow hedging instruments recorded in
The Company uses derivative instruments and foreign currency denominated debt to manage foreign currency risk associated with its net investment in foreign operations The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts
on a straight line basis over the term of the instrument For fiscal years 2025 2024 and 2023 the Company recognized 198 million 197 million and 107 million respectively of after tax unrealized gains related to excluded components in
The cash flows related to the Company s derivative instruments designated as net investment hedges are reported as investing activities in the consolidated statements of cash flows Cash flows attributable to amounts excluded from the assessment of effectiveness are reported as operating activities in the consolidated statements of cash flows
These foreign currency forward exchange rate contracts are not designated as hedges at inception and therefore changes in the fair value of these contracts are recognized in the consolidated statements of income Cash flows related to the Company s undesignated derivative contracts are reported in the consolidated statements of cash flows based on the nature of the derivative instrument
At April 25 2025 includes derivative contracts with a notional value of 5 0 billion or 5 7 billion designated as hedges of a portion of our net investment in certain European operations and derivative contracts with a notional value of 322 billion or 2 3 billion designated as hedges of a portion of our net investment in certain Japanese operations These derivative contracts mature in fiscal years 2026 through 2033
At April 25 2025 includes 18 0 billion or 20 6 billion of outstanding Euro denominated debt designated as hedges of a portion our net investment in foreign operations This debt matures in fiscal years 2026 through 2054
The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2025 2024 and 2023 were as follows
The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2025 2024 and 2023 were as follows
The following tables summarize the balance sheet classification and fair value of derivative instruments included in the consolidated balance sheets at April 25 2025 and April 26 2024 The fair value amounts are presented on a gross basis and are segregated between derivatives that are designated and qualify as hedging instruments and those that are not designated and do not qualify as hedging instruments and are further segregated by type of contract within those two categories
The Company has elected to present the fair value of derivative assets and liabilities within the consolidated balance sheets on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation The cash flows related to collateral posted and received are reported gross as investing and financing activities respectively in the consolidated statements of cash flows
The following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments netted in accordance with various criteria as stipulated by the terms of the master netting arrangements with each of the counterparties Derivatives not subject to master netting arrangements are not eligible for net presentation
Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of interest bearing investments derivative contracts and trade accounts receivable Global concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers and their dispersion across many geographic areas The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business
The Company maintains cash and cash equivalents investments and certain other financial instruments including currency exchange rate and interest rate derivative contracts with various major financial institutions The Company performs periodic evaluations of the relative credit standings of these financial institutions and limits the amount of credit exposure with any one institution In addition the Company has collateral credit agreements with its primary derivatives counterparties Under these agreements either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specific thresholds thus limiting credit exposure for both parties As of April 25 2025 the Company posted net cash collateral of 125 million to its counterparties Cash collateral posted is recorded as a reduction in
The Company did not recognize any goodwill impairment charges during fiscal years 2025 or 2024 As a result of the agreement with DaVita as disclosed in Note 3 the Company allocated 208 million of goodwill to the RCS business that met the criteria to be classified as held for sale during the first quarter of fiscal year 2023 and was subsequently sold on April 1 2023 Upon allocation a goodwill impairment test was performed for the RCS business and the Company recognized 61 million of goodwill impairment charges during fiscal year 2023 The goodwill impairment charges are recognized in
The Company did not recognize any definite lived intangible asset impairment charges during fiscal years 2025 and 2023 During fiscal year 2024 the Company recognized 295 million of definite lived intangible asset impairment charges in connection with the decision to exit its ventilator product line The intangible asset impairment charges primarily related to purchased technology customer related intangibles and trade names The intangible asset impairment charges are recognized in
There were no indefinite lived intangible asset impairment charges during fiscal year 2025 Indefinite lived intangible asset impairment charges were not significant for fiscal year 2024 and 2023 Due to the nature of IPR D projects the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials failures of such clinical trials delays or failures to obtain required market clearances other failures to achieve a commercially viable product or the discontinuation of certain projects and as a result may recognize impairment losses in the future
Intangible asset amortization expense was 1 8 billion for fiscal year 2025 including 151 million of accelerated amortization on certain intangible assets related to product line exits within the Cardiovascular Portfolio Intangible asset amortization expense was 1 7 billion for fiscal years 2024 and 2023 Estimated aggregate amortization expense by fiscal year based on the current carrying value and remaining estimated useful lives of definite lived intangible assets at April 25 2025 excluding any possible future amortization associated with acquired IPR D which has not met technological feasibility is as follows
Medtronic plc is authorized to issue 2 6 billion Ordinary Shares 0 0001 par value 40 thousand Euro Deferred Shares 1 00 par value 127 5 million Preferred Shares 0 20 par value and 500 thousand A Preferred Shares 1 00 par value
The timing declaration and payment of future dividends to holders of the Company s ordinary shares falls within the discretion of the Company s Board of Directors and depends upon many factors including the statutory requirements of Irish law the Company s earnings and financial condition the capital requirements of the Company s businesses industry practice and any other factors the Board of Directors deems relevant
Shares are repurchased on occasion to support the Company s stock based compensation programs and to return capital to shareholders During fiscal years 2025 and 2024 the Company repurchased approximately 38 million and 25 million shares respectively at an average price of 83 36 and 83 04 respectively
In March 2019 the Company s Board of Directors authorized 6 0 billion for repurchase of the Company s ordinary shares In March 2024 the Company s Board of Directors authorized an additional 5 0 billion for repurchase of the Company s ordinary shares There is no specific time period associated with these repurchase authorizations At April 25 2025 the Company had used the 6 0 billion authorized in March 2019 and 2 9 billion of the 5 0 billion authorized in March 2024 leaving approximately 2 1 billion available for future repurchases The Company accounts for repurchases of ordinary shares using the par value method and shares repurchased are cancelled
In fiscal year 2025 the Company granted stock awards under the 2021 Medtronic plc Long Term Incentive Plan 2021 Plan The 2021 Plan provides for the grant of non qualified and incentive stock options stock appreciation rights restricted stock restricted stock units performance awards and other stock and cash based awards At April 25 2025 there were approximately 67 million shares available for future grants under the 2021 Plan
The following table presents the components and classification of stock based compensation expense recognized for stock options restricted stock performance share units and employee stock purchase plan ESPP in fiscal years 2025 2024 and 2023
Options are granted at the exercise price which is equal to the closing price of the Company s ordinary shares on the grant date The majority of the Company s options are non qualified options with a ten year life and a four year ratable vesting term The Company uses the Black Scholes option pricing model Black Scholes model to determine the fair value of stock options at the grant date The fair value of stock options under the Black Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors risk free interest rates volatility of the Company s stock price and expected dividends Expected volatility is based on a blend of historical volatility and an implied volatility of the Company s ordinary shares Implied volatility is based on market traded options of the Company s ordinary shares
The following table summarizes the total cash received from the issuance of new shares upon stock option award exercises the total intrinsic value of options exercised and the related tax benefit during fiscal years 2025 2024 and 2023
Restricted stock units are expensed over the vesting period and are subject to forfeiture if employment terminates prior to the lapse of the restrictions The expense recognized for restricted stock units is equal to the grant date fair value which is equal to the closing stock price on the date of grant The majority of the Company s restricted stock units either have a four year ratable vesting term or cliff vest after three years Restricted stock units are not considered issued or outstanding ordinary shares of the Company Dividend equivalent units are accumulated on restricted stock units during the vesting period
The following table summarizes the weighted average grant date fair value of restricted stock granted total fair value of restricted stock vested and related tax benefit during fiscal years 2025 2024 and 2023
Performance share units typically cliff vest after three years The awards include three metrics relative total shareholder return rTSR revenue growth and return on invested capital ROIC rTSR is considered a market condition metric and the expense is determined at the grant date and will not be adjusted even if the market condition is not met Revenue growth and ROIC are considered performance metrics and the expense is recorded over the performance period which will be reassessed each reporting period based on the probability of achieving the various performance conditions The number of shares earned at the end of the three year period will vary based on only actual performance from 0 to 200 of the target number of performance share units granted Performance share units are subject to forfeiture if employment terminates prior to the lapse of the restrictions Performance share units are not considered issued or outstanding ordinary shares of the Company Dividend equivalent units are accumulated on performance share units for each component of the award during the vesting period
The Company calculates the fair value of the performance share units for each component individually The fair value of the rTSR metric will be determined using the Monte Carlo valuation model The fair value of the revenue growth and ROIC metrics are equal to the closing stock price on the grant date
The following table summarizes the weighted average grant date fair value of performance share units granted total fair value of performance share units vested and related tax benefit during fiscal year 2025 2024 and 2023
The Medtronic plc 2024 Employee Stock Purchase Plan allows participating employees to purchase the Company s ordinary shares at a discount through payroll deductions The expense recognized for shares purchased under the Company s ESPP is equal to the 15 percent discount the employee receives Employees purchased 3 million shares at an average price of 72 27 per share in fiscal year 2025 At April 25 2025 approximately 26 million ordinary shares were available for future purchase under the ESPP
No deferred taxes have been provided on the approximately 88 6 billion and 86 3 billion of undistributed earnings of the Company s subsidiaries at April 25 2025 and April 26 2024 respectively since these earnings have been and under current plans will continue to be permanently reinvested in these subsidiaries Due to the number of legal entities and jurisdictions involved the complexity of the legal entity structure of the Company and the complexity of the tax laws in the relevant jurisdictions the Company believes it is not practicable to estimate within any reasonable range the amount of additional taxes which may be payable upon distribution of these undistributed earnings
4 8 billion have no expiration and the remaining 6 0 billion will expire during fiscal years 2026 through 2045 Included in these net operating loss carryforwards are 3 9 billion of tax effected net operating losses generated in fiscal year 2008 as a result
of the receipt of a favorable tax ruling from certain non U S taxing authorities and 4 9 billion of tax effected net operating losses generated during fiscal year 2023 as a result of an intercompany reorganization The Company has recorded a full valuation allowance against these net operating losses as management does not believe that it is more likely than not that these net operating losses will be utilized Certain of the remaining non U S net operating loss carryforwards of 2 0 billion have a valuation allowance recorded against the carryforwards as management does not believe that it is more likely than not that these net operating losses will be utilized
At April 25 2025 the Company had 53 million of tax effected U S federal net operating loss carryforwards of which 35 million have no expiration The remaining loss carryforwards will expire during fiscal years 2026 through 2036 For U S state purposes the Company had 84 million of tax effected net operating loss carryforwards at April 25 2025 12 million of which have no expiration The remaining U S state loss carryforwards will expire during fiscal years 2026 through 2044
The Company has established valuation allowances of 12 7 billion and 13 3 billion at April 25 2025 and April 26 2024 respectively primarily related to the uncertainty of the utilization of certain deferred tax assets which are primarily comprised of tax loss and credit carryforwards in various jurisdictions The decrease in the valuation allowance during fiscal year 2025 is primarily related to a decrease in the Luxembourg tax rate applied to previously recorded deferred tax assets and associated valuation allowances and current year utilization of attributes with a full valuation allowance due to certain intercompany transactions These valuation allowances would result in a reduction to the income tax provision in the consolidated statements of income if they are ultimately not required
The Organization for Economic Co operation and Development OECD published Pillar Two Model Rules defining the global minimum tax which calls for the taxation of large multinational corporations at a minimum rate of 15 in each jurisdiction in which the group operates The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two Global Minimum Tax A number of countries including Ireland have enacted legislation to implement the core elements of Pillar Two which were effective for Medtronic in fiscal year 2025
The Israeli Central Lod District Court issued its decision in Medtronic Ventor Technologies Ltd Ventor v Kfar Saba Assessing Office in June 2023 The court determined that there was a deemed taxable transfer of intellectual property As a result the Company recorded a 187 million income tax charge during fiscal year 2024 and filed an appeal with the Supreme Court of Israel
A net cost of 764 million associated with the August 2022 U S Tax Court Tax Court Opinion on the previously disclosed litigation regarding the allocation of income between Medtronic Inc and its wholly owned subsidiary operating in Puerto Rico for fiscal years 2005 and 2006 Opinion While the Opinion rejected the IRS s position and the Tax Court determined the methodology advanced by Medtronic was appropriate for purposes of determining the intercompany royalty rate between Puerto Rico and the U S it determined that the royalty rate should be higher thereby increasing income allocated to the U S and consequently subject to U S tax This case relates only to fiscal years 2005 and 2006 The Company has assumed the Tax Court findings will be applied for all years following fiscal year 2006
Currently the Company s operations in Puerto Rico Singapore Dominican Republic Costa Rica and China have various tax holidays and tax incentive grants The tax reductions inclusive of Pillar Two global minimum tax impacts as compared to the local statutory rate favorably impacted earnings by 294 million 229 million and 115 million in fiscal years 2025 2024 and 2023 respectively and diluted earnings per share by 0 23 0 17 and 0 09 in fiscal years 2025 2024 and 2023 respectively The tax holidays are conditional upon the Company meeting certain thresholds required under statutory law The tax incentive grants unless extended will expire between fiscal years 2026 and 2049 The tax incentive grants which expired during fiscal year 2025 did not have a material impact on the Company s consolidated financial statements
The Company had 2 9 billion 2 8 billion and 2 7 billion of gross unrecognized tax benefits at April 25 2025 April 26 2024 and April 28 2023 respectively A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2025 2024 and 2023 is as follows
If all of the Company s unrecognized tax benefits at April 25 2025 April 26 2024 and April 28 2023 were recognized 2 7 billion 2 7 billion and 2 5 billion would impact the Company s effective tax rate respectively Although the Company believes that it has adequately reserved for liabilities resulting from tax assessments by taxing authorities positions taken by these tax authorities could have a material impact on the Company s effective tax rate in future periods The Company has recorded gross unrecognized tax benefits net of cash advance of 1 9 billion as a noncurrent liability The Company estimates that within the next 12 months it is reasonably possible that its uncertain tax positions excluding interest could decrease by as much as 17 million net as a result of statute of limitation lapses
The Company reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities These reserves are subject to a high degree of estimation and management judgment Resolution of these significant unresolved matters or positions taken by the IRS or other tax authorities during future tax audits could have a material impact on the Company s financial results in future periods The Company continues to believe that its reserves for uncertain tax positions are appropriate and that it has meritorious defenses for its tax filings and will vigorously defend them during the audit process appellate process and through litigation in courts as necessary
Basic earnings per share is computed based on the weighted average number of ordinary shares outstanding Diluted earnings per share is computed based on the weighted number of ordinary shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive ordinary shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from issuance of the potentially dilutive shares Potentially dilutive ordinary shares include stock based awards granted under stock based compensation plans and shares committed to be purchased under the employee stock purchase plan
The calculation of weighted average diluted shares outstanding excludes stock awards of approximately 26 million 28 million and 23 million ordinary shares in fiscal year 2025 2024 and 2023 respectively because their effect would have been anti dilutive on the Company s earnings per share
The Company sponsors various retirement benefit plans including defined benefit pension plans post retirement medical plans defined contribution savings plans and termination indemnity plans covering substantially all U S employees and many employees outside the U S The net expense related to these plans was 466 million 451 million and 494 million in fiscal years 2025 2024 and 2023 respectively
In the U S the Company maintains qualified pension plans designed to provide guaranteed minimum retirement benefits to all eligible U S participants Pension coverage for non U S employees is provided to the extent deemed appropriate through separate plans In addition to the benefits provided under the qualified pension plan retirement benefits associated with wages in excess of the IRS allowable limits are provided to certain employees under a non qualified plan U S and Puerto Rico employees are also eligible to receive a medical benefit component in addition to normal retirement benefits through the Company s post retirement benefits
During fiscal year 2023 the Company offered certain eligible U S employees voluntary early retirement packages resulting in charges of 94 million primarily related to U S pension benefits The charges were recognized in
In April 2020 the Company announced the freezing of the U S pension benefits beginning Plan year 2028 Employees will continue to earn benefits as required by the Medtronic Retirement Plan until April 30 2027 after which date benefits will no longer be earned and employees will earn benefits through the Medtronic Savings and Investment Plan
Actuarial gains and losses result from changes in actuarial assumptions such as changes in the discount rate and revised mortality rates The actuarial gains and losses were primarily driven by increases and decreases in discount rates respectively
In certain countries outside the U S fully funding pension plans is not a common practice as funding provides no income tax benefit Consequently certain pension plans were partially funded at April 25 2025 and April 26 2024 U S and non U S pension plans with accumulated benefit obligations in excess of plan assets consist of the following
The Company utilizes a full yield curve approach methodology to estimate the service and interest cost components of net periodic pension cost and net periodic post retirement benefit cost for the Company s pension and other post retirement benefits The full yield curve approach applies specific spot rates along the yield curve to their underlying projected cash flows in estimation of the cost components The current yield curves represent high quality long term fixed income instruments
The expected long term rate of return on plan assets assumptions are determined using a building block approach considering historical averages and real returns of each asset class In certain countries where historical returns are not meaningful consideration is given to local market expectations of long term returns
The Company sponsors trusts that hold the assets for U S pension plans and other U S post retirement benefit plans primarily retiree medical benefits For investment purposes the Medtronic U S pension and other U S post retirement benefit plans employ similar investment strategies with different asset allocation targets
The Company has a Qualified Plan Committee the Plan Committee that sets investment guidelines for U S pension plans and other U S post retirement benefit plans with the assistance of external consultants These guidelines are established based on market conditions risk tolerance funding requirements and expected benefit payments The Plan Committee also oversees the investment allocation process selects the investment managers and monitors asset performance As pension liabilities are long term in nature the Company employs a long term total return approach to maximize the long term rate of return on plan assets for a prudent level of risk An annual analysis on the risk versus the return of the investment portfolio is conducted to justify the expected long term rate of return assumption
The investment portfolios contain a diversified allocation of investment categories including equities fixed income securities hedge funds and private equity Securities are also diversified in terms of domestic and international short and long term growth and value styles large cap and small cap stocks and active and passive management
Outside the U S pension plan assets are typically managed by decentralized fiduciary committees There is significant variation in policy asset allocation from country to country Local regulations funding rules and financial and tax considerations are part of the funding and investment allocation process in each country The weighted average target asset allocations at April 25 2025 for the plans are
Strong performance on equity securities during the fiscal year resulted in asset allocations different than targets Management expects to move the allocations closer to target over the intermediate term
Comprised of investments in equity and fixed income securities held in pooled investment vehicles The valuations of mutual funds are based on the respective net asset values which are determined by the fund daily at market close The net asset values are calculated based on the valuation of the underlying assets which are determined using observable inputs The net asset values are publicly reported
Comprised of investments in equity securities held in pooled investment vehicles The valuations of equity commingled trusts are based on the respective net asset values which are determined by the fund daily at market close The net asset values are calculated based on the valuation of the underlying assets which are determined using observable inputs The net asset values are not publicly reported and funds are valued at the net asset value practical expedient
Comprised of investments in fixed income securities held in pooled investment vehicles The valuations of fixed income commingled trusts are based on the respective net asset values which are determined by the fund either daily or monthly depending on the investment at market close The net asset values are reported by the investment manager based on the valuation of the underlying assets held by the fund less its liabilities The net asset values are not publicly reported and funds are valued at the net asset value practical expedient
Partnership units include investment partnerships that provide exposure to long short equity absolute return strategies private equity investments and real estate investments The net asset values are reported by the investment manager based on the valuation of the underlying assets held by the partnerships less its liabilities The net asset values are not publicly reported and funds are valued at the net asset value practical expedient
Valued at net asset values which are not publicly reported The net asset values are calculated based on the valuation of the underlying assets The underlying assets are valued at the quoted market prices of shares held by the plan at year end in the active market on which the individual securities are traded
Comprised of investments in collective group insurance contracts consisting of individual insurance policies The policyholder is the employer and each member is the owner beneficiary of their individual insurance policy These policies are a part of the insurance company s general portfolio and participate in the insurer s profit sharing policy on an excess yield basis
Measurement using net asset value as a practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value
The methods described above may produce fair values that may not be indicative of net realizable value or reflective of future fair values Furthermore while the Company believes its valuation methodologies are appropriate and consistent with other market participants the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date
The following tables provide information by level for the retirement benefit plan assets that are measured at fair value as defined by U S GAAP Certain investments for which the fair value is measured using the net asset value per share or its equivalent practical expedient are not presented within the fair value hierarchy The fair value amounts presented for these investments are intended to permit reconciliation to the total fair value of plan assets at April 25 2025 and April 26 2024
The Company reviews the fair value hierarchy classification on an annual basis There were no transfers into or out of Level 3 for both the U S and non U S pension plans during the fiscal years ended April 25 2025 and April 26 2024
It is the Company s policy to fund retirement costs within the limits of allowable tax deductions During fiscal year 2025 the Company made discretionary contributions of approximately 31 million to the U S pension plan Internationally the Company contributed approximately 45 million for pension benefits during fiscal year 2025 The Company anticipates that it will make contributions of 29 million and 55 million to its U S pension benefit plans and non U S pension benefit plans respectively in fiscal year 2026 Based on the guidelines under the U S Employee Retirement Income Security Act of 1974 and the various guidelines which govern the plans outside the U S the majority of anticipated fiscal year 2026 contributions will be discretionary The Company believes that pension assets returns on invested pension assets and Company contributions will be able to meet its pension and other post retirement obligations in the future
The net periodic benefit cost associated with the Company s post retirement benefit plans was income of 16 million 16 million and 11 million in fiscal years 2025 2024 and 2023 respectively The Company s projected benefit obligation for all post retirement benefit plans was 231 million and 235 million at April 25 2025 and April 26 2024 respectively The Company s fair value of plan assets for all post retirement benefit plans was 303 million and 308 million at April 25 2025 and April 26 2024 respectively The post retirement benefit plan assets at both April 25 2025 and April 26 2024 primarily comprised of equity and fixed commingled trusts consistent with the U S retirement benefit plan assets outlined in the fair value leveling tables above
The Company has defined contribution savings plans that cover substantially all U S employees and certain non U S employees The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings Company contributions to the plans are based on employee contributions and Company performance Expense recognized under these plans was 478 million 471 million and 390 million in fiscal years 2025 2024 and 2023 respectively
The Company leases office manufacturing and research facilities and warehouses as well as transportation data processing and other equipment The Company determines whether a contract is a lease or contains a lease at inception date Upon commencement the Company recognizes a right of use asset and lease liability Right of use assets represent the Company s right to use the underlying asset for the lease term Lease liabilities are the Company s obligation to make the lease payments arising from a lease
typically do not provide an implicit rate the Company s lease liabilities are measured on a discounted basis using the Company s incremental borrowing rate Lease terms used in the recognition of right of use assets and lease liabilities include only options to extend the leases that are reasonably certain to be exercised Additionally lease terms underlying the right of use assets and lease liabilities consider terminations that are reasonably certain to be executed
The Company s lease agreements include leases that have both lease and associated nonlease components The Company has elected to account for lease components and the associated nonlease components as a single lease component The consolidated balance sheets do not include recognized assets or liabilities for leases that at the commencement date have a term of twelve months or less and do not include an option to purchase the underlying asset that is reasonably certain to be exercised The Company recognizes such leases in the consolidated statements of income on a straight line basis over the lease term Additionally the Company recognizes variable lease payments not included in its lease liabilities in the period in which the obligation for those payments is incurred Variable lease payments for fiscal year 2025 2024 and 2023 were not material
The Company s lease agreements include leases accounted for as operating leases and those accounted for as finance leases The right of use assets lease liabilities lease costs cash flows and lease maturities associated with the Company s finance leases were not material to the consolidated financial statements at April 25 2025 or April 26 2024 or for fiscal year 2025 2024 and 2023 Finance lease right of use assets are included in
The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right of use assets obtained in exchange for operating lease liabilities for fiscal year 2025 2024 and 2023
The Company makes certain products available to customers under lease arrangements including arrangements whereby equipment is placed with customers who then purchase consumable products to accompany the use of the equipment Income arising from arrangements where the Company is the lessor is recognized within
in the consolidated balance sheets Lessor income for fiscal year 2025 2024 and 2023 and the related assets and lease maturities at April 25 2025 and April 26 2024 were not material to the consolidated financial statements
The income tax on gains and losses on investment securities in other comprehensive income before reclassifications during fiscal years 2025 2024 and 2023 was an expense of 25 million an expense of 4 million and a benefit of 21 million respectively During fiscal years 2025 2024 and 2023 realized gains and losses on investment securities reclassified from AOCI were reduced by income taxes of 3 million 5 million and 9 million respectively When realized gains and losses on investment securities reclassified from AOCI are recognized within
During fiscal year 2025 the income tax on net investment hedges was a benefit of 47 million During fiscal years 2024 and 2023 there were no tax impacts on net investment hedges Refer to Note 7 for additional information
The net change in retirement obligations in other comprehensive income includes amortization of net actuarial losses included in net periodic benefit cost The income tax on the net change in retirement obligations in other comprehensive income before reclassifications during fiscal years 2025 2024 and 2023 resulted in a benefit of 32 million an expense of 79 million and an expense of 6 million respectively During fiscal years 2025 2024 and 2023 the gains and losses on defined benefit and pension items reclassified from AOCI were reduced by income taxes of 3 million 2 million and 9 million respectively When realized net gains and losses on defined benefit and pension items reclassified from AOCI are recognized within
The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income before reclassifications during fiscal years 2025 2024 and 2023 was a benefit of 33 million an expense 103 million and an expense of 56 million respectively Amounts reclassified from AOCI related to cash flow hedges included income taxes of 52 million 66 million and 133 million for fiscal years 2025 2024 and 2023 respectively When realized gains and losses on currency exchange rate contracts reclassified from AOCI are recognized within
The Company and its affiliates are involved in a number of legal actions from time to time involving product liability employment intellectual property and commercial disputes shareholder related matters environmental proceedings tax disputes and governmental proceedings and investigations including those described below With respect to governmental proceedings and investigations like other companies in our industry the Company is subject to extensive regulation by national state and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate As a result interaction with governmental agencies is ongoing The Company s standard practice is to cooperate with regulators and investigators in responding to inquiries With respect to intellectual property disputes the Company is involved in litigation relating to patents trademarks copyrights trade secrets and other intellectual property IP rights and licenses acquisitions or other agreements relating to such rights This litigation includes but is not limited to alleged infringement or misappropriation of IP rights or breach of obligations related to IP rights or other claims asserted by competitors individuals or consistent with a growing trend across technology intensive industries other entities created specifically to fund IP litigation With respect to commercial disputes antitrust and competition issues have gained increased prominence enforcement and private litigation have increased globally and the Company is involved in or at risk for antitrust litigation investigations or enforcement actions regarding a range of commercial activities including challenges to mergers and acquisition transactions joint ventures co development or co marketing arrangements contracting practices distribution agreements and employment agreements The outcomes of legal actions are not within the Company s complete control and may not be known for prolonged periods of time In some actions the enforcement agencies or private claimants seek significant monetary damages and or royalty payments as well as other civil or criminal remedies including injunctions barring or restricting the sale of products that are the subject of the proceeding placing restrictions on competitive strategies or practices or unwinding consummated transactions any or all of which could have a material adverse impact on the Company s consolidated earnings financial position and or cash flows
The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated If the reasonable estimate of a known or probable loss is a range and no amount within the range is a better estimate than any other the minimum amount of the range is accrued If a loss is reasonably possible but not known or probable and may be reasonably estimated the estimated loss or range of loss is disclosed When determining the estimated loss or range of loss significant judgment is required Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery involve unsubstantiated or indeterminate claims for damages potentially involve penalties fines or punitive damages or could result in a change in business practice The Company classifies certain specified litigation charges and gains related to significant legal matters as
in the consolidated statements of income During fiscal years 2025 2024 and 2023 the Company recognized 317 million of certain litigation charges net 149 million of certain litigation charges net and 30 million of certain litigation income net respectively At April 25 2025 and April 26 2024 accrued litigation was approximately 0 4 billion and 0 2 billion respectively The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company s consolidated earnings financial position and or cash flows The Company includes accrued litigation in
on the consolidated balance sheets While it is not possible to predict the outcome for most of the legal matters discussed below the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company s consolidated earnings financial position and or cash flows
The Company is a defendant in patent litigation brought by Colibri Heart Valve LLC Colibri in the U S District Court for the Central District of California Colibri alleges infringement of one patent by the Company s Evolut family of transcatheter aortic valve replacement devices The patent asserted by Colibri has expired On February 8 2023 a jury returned a verdict against the Company for approximately 106 million In July 2023 the Company filed its appeal with the U S Court of Appeals for the Federal Circuit The Company has not recognized an expense in connection with this matter because it does not currently believe a loss is probable
Starting in fiscal year 2020 plaintiffs began filing lawsuits against certain subsidiaries of the Company in U S state and federal courts that allege personal injury from hernia mesh products sold by those subsidiaries As of June 11 2025 the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 9 325 individual plaintiffs and certain plaintiffs law firm
s have advised the Company that they may file additional cases in the future Approximately 6 950 plaintiffs have pending lawsuits in a coordinated proceeding in Massachusetts state court where they have been consolidated before a single judge Approximately 500 plaintiffs have pending lawsuits in a coordinated action in Minnesota state court and there are approximately 1 875 actions coordinated in a federal Multidistrict Litigation in the U S District Court for the District of Massachusetts plus fewer than ten one off cases filed in other courts The pending lawsuits relate almost entirely to hernia mesh products that have not been subject to recalls withdrawals or other adverse regulatory action The Company has not recorded an expense related to damages in connection with these matters because any potential loss is not currently probable and reasonably estimable Additionally the Company is unable to reasonably estimate the range of loss if any that may result from these matters
Starting in fiscal year 2021 plaintiffs began filing lawsuits against the Diabetes operating unit in U S state and federal courts alleging personal injury from Series 600 insulin pumps with allegedly defective clear retainer rings that were subject to field corrective actions in 2019 and 2021 As of May 28 2025 after a number of recent dismissals there are nine lawsuits filed on behalf of 20 individuals Plaintiffs firms previously notified the Company that they may file additional lawsuits in the future on behalf of several thousand additional claimants Most of the filed suits are coordinated in California state court The Company has not recorded an expense related to damages in connection with these matters because any potential loss is not currently probable and reasonably estimable Additionally the Company is unable to reasonably estimate the range of loss if any that may result from these matters
The Company is a defendant in civil antitrust litigation brought by Applied Medical Resources Corporation in the U S District Court for the Central District of California alleging that the Company has engaged in anticompetitive and monopolistic conduct relating to its sales of advanced bipolar devices including under contracts with group purchasing organizations The Company has substantial legal and factual defenses and intends to defend itself vigorously The court recently deferred trial from June 2025 until after it rules on the parties summary judgment motions The Company has not recorded an expense related to damages in connection with this matter because any potential loss is not currently probable and reasonably estimable Additionally the Company is unable to reasonably estimate the range of loss if any that may result from this matter
The Company is a successor to several investigation and cleanup actions at various stages related to environmental remediation matters at a number of sites including in Orrington Maine These projects relate to a variety of activities including removal of solvents metals and other hazardous substances from soil and groundwater The ultimate cost of site cleanup and timing of future cash flows is difficult to predict given uncertainties regarding the extent of the required cleanup the interpretation of applicable laws and regulations and alternative cleanup methods
The Company is also a successor to a party named in a lawsuit filed in the U S District Court for the District of Maine in the early 2000 s by the Natural Resources Defense Council and the Maine People s Alliance relating to mercury contamination of the Penobscot River and Bay and options for remediating such contamination In October 2022 the court issued a final order approving the settlement and the parties are working with consultants on implementation of remedial activities The final court order did not result in a change to the Company s previous accrual for this matter
The Company has regular and ongoing interactions with governmental agencies and its practice is to cooperate with such inquiries In addition from time to time the Company self discloses potential concerns to governmental regulators Like many in the medical device industry or with international operations the Company engages in periodic discussions with the U S Securities and Exchange Commission U S Department of Justice and various authorities in other countries regarding certain activities in different global markets The Company is committed to regularly evaluating and as appropriate strengthening its anti corruption compliance programs and practices Any possible future determination that certain of our operations and activities and or those of our third party distributors are not in compliance with existing laws could result in the imposition of fines penalties and equitable remedies in the United States or in other jurisdictions The Company has not recorded an expense in connection with these matters because any potential loss is not currently probable and reasonably estimable Additionally the Company is unable to reasonably estimate the range of loss if any that may result from these matters
In 2015 payback legislation was enacted in Italy requiring companies selling medical devices to make payments to the Italian state if Italy s medical device expenditures exceed annual regional maximum ceilings The payment amounts are calculated based upon the amount by which the regional ceilings were exceeded for any given year There has been significant scrutiny on the legality and enforceability of the payback law since its inception and litigation challenging the law has been proceeding through the Italian Courts Since the law was enacted the Company has recognized an estimate for the amount of variable consideration but has not made any payments under the payback law In July 2024 two rulings by the Constitutional Court of Italy found that the medical device payback law is constitutional Therefore the Company increased its liability pertaining primarily to certain prior years since 2015 by 90 million during the three months ended July 26 2024 as a reduction to
in the consolidated statements of income As litigation before Italian Courts is still pending final resolution is unknown at this time and it is possible that the amount of the Company s liability could differ from the amount currently accrued
As described in Note 3 the Company is party to various research and development funding arrangements with Blackstone which are subject to certain termination provisions During fiscal year 2025 the parties negotiated a contractual dispute resolution under one of the funding arrangements As a result the Company recognized certain litigation charges in connection with the resolution The Company included this accrued litigation charge in
In March 2009 the IRS issued its audit report on Medtronic Inc for fiscal years 2005 and 2006 Medtronic Inc reached agreement with the IRS on some but not all matters related to these fiscal years The remaining unresolved issue for fiscal years 2005 and 2006 relates to the allocation of income between Medtronic Inc and its wholly owned subsidiary operating in Puerto Rico which is one of the Company s key manufacturing sites The Tax Court reviewed this dispute and in June 2016 issued an opinion with respect to the allocation of income between the parties for fiscal years 2005 and 2006 whereby it generally rejected the IRS s position but also made certain modifications to the Medtronic Inc tax returns as filed In April 2017 the IRS filed a Notice of Appeal to the U S Court of Appeals for the Eighth Circuit regarding the Tax Court opinion The U S Court of Appeals issued its opinion in August 2018 and remanded the case back to the Tax Court for additional factual findings The Tax Court issued its second opinion in August 2022 the IRS filed a Notice of Appeal to the U S Court of Appeals for the Eighth Circuit in September 2023 and Medtronic subsequently filed a cross appeal in October 2023 Oral argument for the Appeal occurred in May 2025
The IRS has issued its audit reports on Medtronic Inc for fiscal years 2007 through 2016 Medtronic Inc and the IRS have reached agreement on all significant issues except for the allocation of income between Medtronic Inc and its wholly owned subsidiary operating in Puerto Rico for the businesses that are the subject of the U S Tax Court matter for fiscal years 2005 and 2006
Covidien LP a wholly owned subsidiary of Medtronic plc has either reached agreement with the IRS or the statute of limitations has lapsed on its U S federal income tax returns through fiscal year 2021 Covidien LP s fiscal year 2023 federal income tax return is currently being audited by the IRS
Although it is not possible to predict the outcome for most of the income tax matters discussed above the Company believes it is possible that charges associated with these matters could have a material adverse impact on the Company s consolidated earnings financial position and or cash flows
In the normal course of business the Company and or its affiliates periodically enter into agreements that require one or more of the Company and or its affiliates to indemnify customers or suppliers for specific risks such as claims for injury or property damage arising as a result of the Company or its affiliates products the negligence of the Company s personnel or claims alleging that the Company s products infringe on third party patents or other intellectual property The Company also offers warranties on various products The Company s maximum exposure under these guarantees is unable to be estimated Historically the Company has not experienced significant losses on these types of guarantees
We also enter into standby letters of credit agreements bank guarantees and surety bonds with financial institutions to support various performance and other obligations as well as ongoing tax matters As of April 25 2025 the aggregated amount outstanding under these instruments was approximately 0 9 billion
The Company has four reportable segments Cardiovascular Portfolio Neuroscience Portfolio Medical Surgical Portfolio and Diabetes Operating Unit The chief operating decision maker CODM is our Chief Executive Officer CEO and has chosen to organize the entity based upon therapy solutions provided by each segment The four reportable segments are strategic businesses that are managed separately as each one develops and manufactures products and provides services oriented toward targeted therapy solutions
The primary products and services from which the Cardiovascular Portfolio segment derives its revenues include products for the diagnosis treatment and management of cardiac rhythm disorders and cardiovascular disease as well as services to diagnose treat and manage heart and vascular related disorders and diseases
The primary products and services from which the Neuroscience Portfolio segment derives its revenues include those focused on neurostimulation therapies and drug delivery systems for the treatment of chronic pain as well as various areas of the spine and brain along with pelvic health and conditions of the ear nose and throat
The primary products and services from which the Medical Surgical Portfolio segment derives its revenues include those focused on diseases of the respiratory system gastrointestinal tract lungs pelvic region obesity and other preventable complications
The primary products from which the Diabetes Operating Unit segment derives its revenues include those focused on diabetes management including insulin pumps continuous glucose monitoring systems and sensors and smart insulin pens
The CODM measures and evaluates segment performance and allocates resources based on net sales and segment operating profit Net sales include end customer revenues from products developed manufactured and distributed by the segments Significant expense categories include cost of products sold excluding amortization of intangible assets research and development expense and selling general and administrative expenses Segment operating profit excludes certain corporate and centralized expenses not allocated to the segments including interest income and expense amortization of intangible assets centralized distribution costs currency impact of remeasurement and hedging recorded in
non operating income or expense items certain corporate charges stock based compensation and other items not allocated to the segments The CODM uses segment operating profit in the budget and forecasting process and to monitor budget and forecast variances versus actual when assessing segment performance and allocating capital resources to each segment
The accounting policies of the segments are the same as those described in Note 1 Certain depreciable assets may be recorded by one segment while the depreciation expense is allocated to another segment The allocation of depreciation expense is based on the proportion of the assets used by each segment The CODM is not regularly provided with expenditures for additions to long lived assets
Net sales are attributed to the country based on the location of the customer taking possession of the products or in which the services are rendered Geographic property plant and equipment are attributed to the country based on the physical location of the assets
The following table presents net sales for fiscal years 2025 2024 and 2023 and property plant and equipment net at April 25 2025 and April 26 2024 for the Company s country of domicile countries with significant concentrations and all other countries
Our management with the participation of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a 15 e under the Securities Exchange Act of 1934 as amended the Exchange Act and changes in the Company s internal control over financial reporting as defined in Rule 13a 15 f under the Exchange Act as of the end of the period covered by this report Based upon that evaluation the Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this annual report our disclosure controls and procedures as defined in Rule 13a 15 e of the Exchange Act are effective
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Exchange Act Rule 13a 15 f Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in
issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO Based on this evaluation management concluded that the Company s internal control over financial reporting was effective as of April 25 2025 The effectiveness of the Company s internal control over financial reporting as of April 25 2025 has been audited by PricewaterhouseCoopers LLP an independent registered public accounting firm as stated in their report which is included in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10 K
During the quarter ended April 25 2025 there were no changes in our internal control over financial reporting as defined in Rules 13a 15 f under the Exchange Act that have materially affected or are reasonably likely to materially affect the Company s internal control over financial reporting
During the quarter ended April 25 2025 none of our directors or officers adopted or terminated a Rule 10b5 1 trading arrangement or a non Rule 10b5 1 trading arrangement as those terms are defined in Item 408 of Regulation S K
As reported in our Quarterly Report on Form 10 Q for the first quarter of fiscal year 2025 Medtronic has engaged in certain activities that it is required to disclose pursuant to Section 13 r 1 D ii of the Securities Exchange Act of 1934 as amended In particular during the first quarter of fiscal year 2025 Medtronic engaged in certain regulatory activities involving Russia s Federal Security Service FSB related to its medical devices that were expressly authorized by the U S Government under applicable economic sanctions regulations
During the first quarter of fiscal year 2025 in the normal course of business and consistent with the OFAC authorizations as in effect at the time Medtronic Russia filed a total of one notification with the FSB as required under local Russian law for the import of medical devices that make use of encryption functionality These activities did not directly result in any revenues or profits for Medtronic Medtronic did not engage in these activities during the second third and fourth quarters of fiscal year 2025 To the extent that notifications with the FSB remain permissible under U S law Medtronic may decide to continue engaging in such activities for the limited purposes of complying with local law requirements in Russia
The sections entitled Proposal 1 Election of Directors Directors and Nominees and Corporate Governance Committees of the Board and Meetings in the Company s Proxy Statement for our 2025 Annual General Meeting of Shareholders which will be filed no later than 120 days after April 25 2025 are incorporated herein by reference
The Company has adopted an insider trading policy which governs the purchase sale and or any other dispositions of our securities by directors officers and employees and other covered persons and is designed to promote compliance with insider trading laws rules and regulations and listing standards applicable to the Company A copy of our insider trading policy is filed with this Annual Report on Form 10 K as Exhibit 19
Set forth below are the names and ages of our Executive Officers of Medtronic as well as information regarding their positions with Medtronic their periods of service in these capacities and their business experiences There are no family relationships among any of the officers named nor is there any arrangement or understanding pursuant to which any person was selected as an officer
age 55 is Chairman and Chief Executive Officer of Medtronic Mr Martha assumed the role of CEO on April 27 2020 and became Chairman of the Board on December 11 2020 He served as President from November 2019 through April 2020 and joined the Board of Directors in November 2019 Previously Mr Martha was Executive Vice President and President Restorative Therapies Group a role he held since August 2015 and he was Senior Vice President of Strategy and Business Development of the Company beginning in January 2015 and of Medtronic Inc beginning in August 2011 Prior thereto he served as Managing Director of Business Development at GE Healthcare from April 2007 to July 2011 General Manager for GE Capital Technology Finance Services from November 2003 to March 2007 Senior Vice President Business Development for GE Capital Vendor Financial Services from February 2002 to October 2003 General Manager for GE Capital Colonial Pacific Leasing from February 2001 to January 2002 and Vice President Business Development for Potomac Federal the GE Capital federal financing investment bank from May 1998 to January 2001
age 63 has been Executive Vice President General Counsel and Secretary of Medtronic since February 2022 Prior to that he held several leadership positions at 3M Company from 2012 to 2022 including Executive Vice President Chief Legal and Policy Officer and Secretary Prior to joining 3M Company Mr Fong served as General Counsel of the U S Department of Homeland Security from 2009 to 2012 Prior to his role with the U S Government he was Chief Legal Officer and Secretary for Cardinal Health Inc from 2005 to 2009
age 51 became Executive Vice President and President of Medtronic s Cardiovascular Portfolio in May 2025 Prior to that role he was Senior Vice President and President of the Cranial Spinal Technologies operating unit since joining Medtronic in 2022 Previously Mr Kiil served as President of Global Orthopaedics at Smith Nephew from 2018 to 2021 and Executive Vice President and President of Global Commercial Operations at NuVasive from 2017 to 2018
has been Executive Vice President and President of Medtronic s Medical Surgical Portfolio and Americas since February 2024 He became Executive Vice President in January 2023 and he served as President of the Surgical Operating Unit from February 2023 to February 2024 Mr Marinaro previously served as Senior Vice President and President of Surgical Robotics and prior thereto as President of the Cardiac Rhythm Management operating unit Mr Marinaro joined Medtronic in 2000 and has led numerous businesses across the company during that time
age 55 has been Executive Vice President and Chief Financial Officer of Medtronic since March 2025 Previously he served as Chief Financial Officer of Renault Group Paris from March 2022 to February 2025 and he was Senior Vice President Deputy
Chief Financial Officer and Group Controller Renault Group and Chief Financial Officer Renault Brand Paris from June 2016 to February 2022 Prior thereto he was Senior Vice President Administration and Finance Europe Nissan Motor Co Ltd Switzerland from 2014 to 2016 and Chief Financial Officer of Energy Management Power Conversion General Electric Paris from 2011 to 2014 He served as Chief Financial Officer GE Oil and Gas Global Services Florence Italy from 2007 to 2011
age 61 is Executive Vice President Enterprise Operations a position he has held since April 2021 Prior to joining Medtronic he was Executive Vice President of U S Supply Chain at Walmart In addition Mr Smith served as Senior Vice President Global Operations at The Goodyear Tire Rubber Company and held leadership roles at ConAgra Foods United Signature Foods VDK Frozen Foods and Quaker Oats
age 60 is Executive Vice President and President of Medtronic s Neuroscience Portfolio Mr Wall previously served as Senior Vice President and President of the Brain Therapies division of Medtronic within the Restorative Therapies Group from March 2016 to November 2019 Prior to that Mr Wall served as Senior Vice President and President of Medtronic s Neurovascular business Prior to joining Medtronic he served as Covidien s Senior Vice President and President of Neurovascular as well as Senior Vice President and President of the International Vascular Therapies business for Covidien Mr Wall also served as Senior Vice President and President International at ev3 Inc From 2000 to 2008 Brett held various marketing and sales positions with ev3 Inc and Micro Therapeutics Inc Mr Wall has also worked at Boston Scientific as Director of Marketing Cardiovascular Asia Pacific and Marketing Manager Japan from September 1995 to September 2000
age 46 has been Senior Vice President Chief Human Resources Officer of Medtronic since June 2023 He served as Vice President Human Resources of Global Operations and Supply Chain from 2021 to 2023 and previously as Vice President Human Resources of the Diabetes operating unit from 2018 to 2021 and the Coronary and Structural Heart division from 2016 to 2018 Mr Walter led Talent Management Organizational Effectiveness and Executive Development from 2015 to 2016 and he served as Senior Director Talent Management and Leadership Development upon joining Medtronic in 2014 Prior thereto he held various leadership roles at Best Buy and Bank of America
The information required by Item 11 will be included in our Proxy Statement for the 2025 Annual General Meeting of Shareholders under the headings Corporate Governance Director Compensation Corporate Governance Committees of the Board and Meetings Compensation Discussion and Analysis Executive Compensation and Compensation and Talent Committee Report and is incorporated herein by reference The Proxy Statement will be filed no later than 120 days after April 25 2025
The information required by Item 12 will be included in our Proxy Statement for the 2025 Annual General Meeting of Shareholders under the headings Share Ownership Information Significant Shareholders Share Ownership Information Beneficial Ownership of Management and Executive Compensation Equity Compensation Plan Information and is incorporated herein by reference The Proxy Statement will be filed no later than 120 days after April 25 2025
The information required by Item 13 will be included in our Proxy Statement for the 2025 Annual General Meeting of Shareholders under the headings Corporate Governance Director Independence and Corporate Governance Related Party Transactions and Other Matters and is incorporated herein by reference The Proxy Statement will be filed no later than 120 days after April 25 2025
The information required by Item 14 will be included in our Proxy Statement for the 2025 Annual General Meeting of Shareholders under the headings Corporate Governance Committees of the Board and Meetings and Audit and Non Audit Fees and is incorporated herein by reference The Proxy Statement will be filed no later than 120 days after April 25 2025
Amended and Restated Memorandum and Articles of Association of Medtronic plc incorporated by reference to Exhibit 3 2 to Medtronic plc s Registration Statement on Form S 3 filed on February 6 2017 File No 333 215895
Form of Indenture between Medtronic Inc and Wells Fargo Bank National Association regarding 2009 offering incorporated by reference to Exhibit 4 1 to Medtronic Inc s Registration Statement on Form S 3 filed on March 9 2009 File No 333 157777
First Supplemental Indenture dated March 12 2009 between Medtronic Inc and Wells Fargo Bank National Association including the Forms of Notes thereof incorporated by reference to Exhibit 4 1 to Medtronic Inc s Current Report on Form 8 K filed on March 12 2009 File No 001 07707
Second Supplemental Indenture dated March 16 2010 between Medtronic Inc and Wells Fargo Bank National Association including the Forms of Notes thereof incorporated by reference to Exhibit 4 1 to Medtronic Inc s Current Report on Form 8 K filed on March 16 2010 File No 001 07707
Third Supplemental Indenture dated March 15 2011 between Medtronic Inc and Wells Fargo Bank National Association including the Forms of Notes thereof incorporated by reference to Exhibit 4 1 to Medtronic Inc s Current report on Form 8 K filed on March 16 2011 File No 001 07707
Fourth Supplemental Indenture dated March 19 2012 between Medtronic Inc and Wells Fargo Bank National Association including the Forms of Notes thereof incorporated by reference to Exhibit 4 2 to Medtronic Inc s Current Report on Form 8 K filed on March 20 2012 File No 001 07707
Fifth Supplemental Indenture dated March 26 2013 between Medtronic Inc and Wells Fargo Bank National Association including the Forms of Notes thereof incorporated by reference to Exhibit 4 1 to Medtronic Inc s Current Report on Form 8 K filed on March 26 2013 File No 001 07707
Sixth Supplemental Indenture dated February 27 2014 between Medtronic Inc and Wells Fargo Bank National Association including the Form of Global Note thereof incorporated by reference to Exhibit 4 2 to Medtronic Inc s Current Report on Form 8 K filed on February 27 2014 File No 001 07707
Seventh Supplemental Indenture dated as of January 26 2015 by and among Medtronic plc Medtronic Inc Medtronic Global Holdings S C A and Wells Fargo Bank National Association incorporated by reference to Exhibit 4 2 to Medtronic plc s Current Report on Form 8 K12B filed on January 27 2015 File No 001 36820
Indenture dated December 10 2014 between Medtronic Inc and Wells Fargo Bank National Association incorporated by reference to Exhibit 4 1 to Medtronic Inc s Current Report on Form 8 K filed with the Commission on December 10 2014 File No 001 07707
First Supplemental Indenture dated December 10 2014 between Medtronic Inc and Wells Fargo Bank National Association including Form of Floating Rate Senior Notes due 2020 Form of 1 500 Senior Notes due 2018 Form of 2 500 Senior Notes due 2020 Form of 3 150 Senior Notes due 2022 Form of 3 500 Senior Notes due 2025 Form of 4 375 Senior Notes due 2035 and Form of 4 625 Senior Notes due 2045 incorporated by reference to Exhibit 4 2 of Medtronic Inc s Current Report on Form 8 K filed with the Commission on December 10 2014 File No 001 07707
Second Supplemental Indenture dated as of January 26 2015 by and among Medtronic plc and Wells Fargo Bank National Association incorporated by reference to Exhibit 4 3 to Medtronic plc s Current Report on Form 8 K12B filed on January 27 2015 File No 001 36820
Third Supplemental Indenture dated as of January 26 2015 by and among Medtronic Global Holdings S C A and Wells Fargo Bank National Association incorporated by reference to Exhibit 4 4 to Medtronic plc s Current Report on Form 8 K12B filed on January 27 2015 File No 001 36820
Fourth Supplemental Indenture to Medtronic Inc Senior Indenture dated as of February 22 2023 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc and Computershare Trust Company N A as successor to Wells Fargo Bank N A as trustee incorporated by reference to Exhibit 4 9 to Medtronic plc s Registration Statement on Form S 3 filed on March 3 2023
Fifth Supplemental Indenture to Medtronic Inc Senior Indenture dated as of June 3 2024 among Medtronic Inc Medtronic plc Medtronic Global Holdings S C A Computershare Trust Company N A as trustee and Elavon Financial Services DAC UK Branch incorporated by reference to Exhibit 4 1 to Medtronic plc s Form 8 K filed on June 3 2024
Indenture dated as of October 22 2007 by and among Covidien International Finance S A Covidien Ltd and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 a to Covidien plc s Current Report on Form 8 K filed on October 22 2007 File No 001 33259
Fourth Supplemental Indenture dated as of October 22 2007 by and among Covidien International Finance S A Covidien Ltd and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 e to Covidien plc s Current Report on Form 8 K filed on October 22 2007 File No 001 33259
Fifth Supplemental Indenture dated as of June 4 2009 by and among Covidien International Finance S A Covidien Ltd Covidien plc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 to Covidien plc s Current Report on Form 8 K12G3 filed on June 5 2009 File No 001 33259
Sixth Supplemental Indenture dated as of June 28 2010 among Covidien International Finance S A Covidien Ltd Covidien plc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 to Covidien plc s Current Report on Form 8 K filed on June 28 2010 File No 001 33259
Seventh Supplemental Indenture dated as of May 30 2012 among Covidien International Finance S A Covidien Ltd Covidien plc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 to Covidien plc s Current Report on Form 8 K filed on May 30 2012 File No 001 33259
Eighth Supplemental Indenture dated as of May 16 2013 among Covidien International Finance S A Covidien Ltd Covidien plc and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 1 to Covidien plc s Current Report on Form 8 K filed on May 16 2013 File No 001 33259
Ninth Supplemental Indenture dated as of January 26 2015 by and among Medtronic plc Medtronic Global Holdings S C A Covidien public limited company Covidien International Finance S A Covidien Ltd and Deutsche Bank Trust Company Americas incorporated by reference to Exhibit 4 5 to Medtronic plc s Current Report on Form 8 K12B filed on January 27 2015 File No 001 36820
Senior Indenture dated as of March 28 2017 by and among Medtronic plc Medtronic Global Holdings S C A Medtronic Inc and Wells Fargo Bank N A incorporated by reference to Exhibit 4 1 to Medtronic plc s Current Report on Form 8 K filed on March 28 2017 File No 001 36820
First Supplemental Indenture dated as of March 28 2017 by and among Medtronic plc Medtronic Global Holdings S C A Medtronic Inc and Wells Fargo Bank N A incorporated by reference to Exhibit 4 2 to Medtronic plc s Current Report on Form 8 K filed on March 28 2017 File No 001 36820
Second Supplemental Indenture dated as of March 7 2019 by and among Medtronic plc Medtronic Global Holdings S C A Medtronic Inc Wells Fargo Bank N A and Elavon Financial Services DAC UK Branch incorporated by reference to Exhibit 4 1 to Medtronic plc s Current Report on Form 8 K filed on March 7 2019 File No 001 36820
Third Supplemental Indenture dated as of July 2 2019 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc Wells Fargo Bank N A as trustee and Elavon Financial Services DAC incorporated by reference to Exhibit 4 1 to Medtronic plc Current Report on Form 8 K filed July 2 2019 File No 001 36820
Fourth Supplemental Indenture dated as of September 29 2020 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc Wells Fargo Bank N A as trustee and Elavon Financial Services DAC as paying agent including the forms of the 2023 Notes the 2025 Notes the 2028 Notes the 2032 Notes the 2040 Notes and the 2050 Notes incorporated by reference to Exhibit 4 1 to Medtronic plc Current Report on Form 8 K filed September 29 2020 File No 001 36820
Fifth Supplemental Indenture dated as of September 21 2022 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc Computershare Trust Company N A as successor to Wells Fargo Bank N A as trustee and Elavon Financial Services DAC as paying agent including the forms of the 2025 Notes the 2028 Notes the 2031 Notes and the 2034 Notes incorporated by reference to Exhibit 4 1 to Medtronic plc s Current Report on Form 8 K filed on September 21 2022 File No 001 36820
Sixth Supplemental Indenture dated as of February 22 2023 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc and Computershare Trust Company N A as successor to Wells Fargo Bank N A as trustee incorporated by reference to Exhibit 4 2 to Medtronic plc s Registration Statement on Form S 3 filed on March 3 2023 File No 333 270272
Seventh Supplemental Indenture dated as of March 30 2023 among Medtronic Global Holdings S C A Medtronic Inc and Medtronic plc and Computershare Trust Company N A as successor to Wells Fargo Bank N A as trustee including the forms of the 2028 Notes and the 2033 Notes incorporated by reference to Exhibit 4 2 to Medtronic plc s Current Report on Form 8 K filed on March 30 2023 File No 001 36820
Amended and Restated Credit Agreement dated as of December 12 2018 by and among Medtronic Global Holdings SCA certain subsidiaries named therein Medtronic Inc Medtronic PLC the lenders from time to time party thereto and Bank of America N A as Administration Agent incorporated by reference to Exhibit 10 1 to Medtronic plc s Current Report on Form 8 K filed on December 13 2018 File No 001 36820
Amendment No 1 and Extension Agreement to the Amended and Restated Credit Agreement dated as of December 12 2019 among Medtronic Global Holdings S C A Medtronic Inc Medtronic PLC the Lenders party thereto and Bank of America N A as Administrative Agent incorporated by reference to Exhibit 10 1 to Medtronic plc s Current Report on Form 10 Q filed on February 28 2020 File No 001 36820
Term Loan Agreement dated as of May 12 2020 among Medtronic Global Holdings S C A Medtronic Inc Medtronic PLC the Lenders party thereto and Mizuho Bank LTD as Administrative Agent incorporated by reference to Exhibit 10 01 to Medtronic plc s Current Report on Form 8 K filed on May 12 2020 File No 001 36820
Term Loan Agreement dated as of May 2 2022 by and among Medtronic Global Holdings S C A Medtronic Inc Medtronic plc and Mizuho Bank Ltd as administrative agent and as lender incorporated by reference to Exhibit 10 1 to Medtronic plc s Current Report on Form 8 K filed on May 2 2022 File No 001 36820
Change of Control Severance Plan Section 16B Officers as amended and restated as of January 26 2015 incorporated by reference to Exhibit 10 14 to Medtronic plc s Current Report on Form 8 K filed on January 27 2015 File No 001 36820
Letter Agreement by and between Medtronic Inc and Ivan K Fong dated November 19 2021 incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q filed on September 1 2022
Letter Agreement by and between Medtronic Inc and Thierry Piéton dated December 24 2024 incorporate by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q filed on February 25 2025
1998 Outside Director Stock Compensation Plan as amended and restated effective as of January 1 2008 incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended January 25 2008 filed on filed on March 4 2008 File No 001 07707
2003 Long Term Incentive Plan as amended and restated effective January 1 2008 incorporated by reference to Exhibit 10 4 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended January 28 2008 filed on March 4 2008 File No 001 07707
Form of Restricted Stock Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended January 28 2005 filed on March 7 2005 File No 001 07707
Form of Restricted Stock Units Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 20 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 29 2005 filed on June 29 2005 File No 001 07707
Form of Restricted Stock Award Agreement under 2003 Long Term Incentive Plan effective June 22 2006 incorporated by reference to Exhibit 10 24 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 28 2006 filed on June 28 2006 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2003 Long Term Incentive Plan effective June 22 2006 incorporated by reference to Exhibit 10 25 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 28 2006 filed on June 28 2006 File No 001 07707
Form of Restricted Stock Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended October 26 2007 filed on December 4 2007 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 4 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended October 26 2007 filed on December 4 2007 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 40 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 25 2008 filed on June 24 2008 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 41 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 25 2008 filed on June 24 2008 File No 001 07707
Israeli Amendment to the 2003 Long Term Incentive Plan incorporated by reference to Exhibit 10 5 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended January 25 2008 filed on March 4 2008 File No 001 07707
2008 Stock Award and Incentive Plan as amended and restated effective August 27 2009 incorporated by reference to Exhibit 10 2 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended October 30 2009 filed on December 9 2009 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 2 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended July 25 2008 filed on September 3 2008 File No 001 07707
Form of Restricted Stock Award Agreement under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended July 25 2008 filed on September 3 2008 File No 001 07707
Form of Restricted Stock Award Agreement under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 4 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended July 25 2008 filed on September 3 2008 File No 001 07707
Form of Restricted Stock Unit Award Agreement under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 5 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended July 25 2008 filed on September 3 2008 File No 001 07707
Terms of Non Employee Director Compensation under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 42 to Medtronic Inc s Annual Report on Form 10 K for the year ended April 27 2012 filed on June 26 2012 File No 001 07707
Form of Non Employee Director Deferred Unit Award Agreement under 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended October 24 2008 filed on December 3 2008 File No 001 07707
Form of Non Employee Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 65 to Medtronic plc s Annual Report on Form 10 K for the year ended April 24 2015 filed on June 23 2015 File No 001 36820
Israeli Amendment to the Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 10 to Medtronic plc s Current Report on Form 8 K filed on January 27 2015 File No 001 36820
Form of Restricted Stock Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 K for the quarter ended July 28 2017 filed on September 1 2017 File No 001 36820
Medtronic plc Amended and Restated 2013 Stock Award and Incentive Plan as amended and restated generally effective December 8 2017 incorporated by reference to Exhibit 10 1 to Medtronic plc s Current Report on Form 8 K filed on December 12 2017 File No 001 36820
Form of Non qualified Stock Option Agreement Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 50 to Medtronic plc s Annual Report on Form 10 K filed June 22 2018 File No 001 36820
Form of Restricted Stock Unit Award Agreement Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 51 to Medtronic plc s Annual Report on Form 10 K filed June 22 2018 File No 001 36820
Form of Restricted Stock Award Agreement Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 52 to Medtronic plc s Annual Report on Form 10 K filed June 22 2018 File No 001 36820
Form of Long Term Performance Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 53 to Medtronic plc s Annual Report on Form 10 K filed June 22 2018 File No 001 36820
Form of Non Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 31 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Performance Share Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended October 30 2020 filed on December 3 2020 File No 001 36820
Form of Non Employee Director Deferred Unit Award Agreement under the 2008 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Quarterly Report on Form 10 Q for the quarter ended October 24 2008 filed on December 3 2008 File No 001 07707
Form of Non Qualified Stock Option Agreement under 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 2 to Medtronic Inc s Current Report on Form 8 K filed on August 27 2013 File No 001 07707
Form of Restricted Stock Unit Award Agreement U S Employees under 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic Inc s Current Report on Form 8 K filed on August 27 2013 File No 001 07707
Form of Restricted Stock Unit Award Agreement Non U S Employees under 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 4 to Medtronic Inc s Current Report on Form 8 K filed on August 27 2013 File No 001 07707
Form of Restricted Stock Unit Award Agreement Time Based under 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 5 to Medtronic Inc s Current Report on Form 8 K filed on August 27 2013 File No 001 07707
Form of Restricted Stock Unit Award Agreement Israeli Employees under 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 8 to Medtronic Inc s Current Report on Form 8 K filed on August 27 2013 File No 001 07707
Form of Non Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 48 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 49 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 50 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 51 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 53 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 54 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 23 2015 filed on February 27 2015 File No 001 36820
Form of Restricted Stock Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 69 to Medtronic plc s Annual Report on Form 10 K for the year ended April 24 2020 filed on June 19 2020 File No 001 36820
Form of Non Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan incorporated by reference to Exhibit 10 70 to Medtronic plc s Annual Report on Form 10 K for the year ended April 24 2020 filed on June 19 2020 File No 001 36820
Medtronic plc Incentive Plan as amended and restated effective January 26 2015 incorporated by reference to Exhibit 10 11 to Medtronic plc s Current Report on Form 8 K filed on January 27 2015 File No 001 36820
Medtronic plc Supplemental Executive Retirement Plan as restated generally effective January 26 2015 incorporated by reference to Exhibit 10 15 to Medtronic plc s Current Report on Form 8 K filed on January 27 2015 File No 001 36820
Medtronic Non Qualified Retirement Plan Supplemental restated November 6 2020 and formerly known as the Supplemental Executive Retirement Plan incorporated by reference to Exhibit 10 3 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended October 30 2020 filed on December 3 2020 File No 001 36820
Medtronic plc Savings and Investment Plan as amended and restated generally effective January 26 2015 incorporated by reference to Exhibit 4 22 to Medtronic plc s Registration Statement on Form S 8 filed on January 28 2015 File No 333 201737
Medtronic plc Puerto Rico Employees Savings and Investment Plan as amended and restated generally effective January 26 2015 incorporated by reference to Exhibit 4 23 to Medtronic plc s Registration Statement on Form S 8 filed on January 28 2015 File No 333 201737
Medtronic plc Capital Accumulation Plan Deferral Program as amended and restated generally effective January 26 2015 incorporated by reference to Exhibit 10 13 to Medtronic plc s Current Report on Form 8 K filed on January 27 2015 File No 001 36820
Capital Accumulation Plan Deferral Program as amended and restated generally effective January 1 2017 incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended October 28 2016 filed on December 5 2016 File No 001 36820
Amended and Restated Covidien Supplemental Savings and Retirement Plan restated November 6 2020 incorporated by reference to Exhibit 10 2 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended October 30 2020 filed on December 3 2020 File No 001 36820
Medtronic Capital Accumulation Plan Deferral Program restated November 6 2020 incorporated by reference to Exhibit 10 4 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended October 30 2020 filed on December 3 2020 File No 001 36820
Amendment No 3 and Extension Agreement to the Amended and Restated Credit Agreement dated as of December 13 2021 by and among Medtronic Global Holdings S C A certain subsidiaries of Medtronic plc from time to time party thereto Medtronic Inc Medtronic plc the lenders from time to time party thereto and Bank of America N A as administrative agent incorporated by reference to Exhibit 10 01 to Medtronic plc s Current Report on Form 8 K filed on December 14 2021 File No 001 36820
Medtronic Capital Accumulation Plan Deferral Program as restated generally effective January 1 2017 Conformed through the Amendment generally effective as of January 1 2022 incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 2 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
Performance Share Unit Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
Non Qualified Stock Option Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 4 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
Restricted Stock Unit Award Agreement for awards vesting 100 on the third anniversary of the grant date 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 5 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
Restricted Stock Unit Award Agreement for awards vesting ratably on the first second third and fourth anniversary of the grant date 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 6 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 28 2022 filed on March 3 2022 File No 001 36820
Amendment No 4 and Extension Agreement to the Amended and Restated Credit Agreement dated as of December 12 2022 incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 27 2023 filed on March 1 2023 File No 001 36820
Annex I to Amendment No 4 and Extension Agreement to the Amended and Restated Credit Agreement dated as of December 12 2022 incorporated by reference to Exhibit 10 2 to Medtronic plc s Quarterly Report on Form 10 Q for the quarter ended January 27 2023 filed on March 1 2023 File No 001 36820
Amendment No 2 and Extension Agreement to the Amended and Restated Credit Agreement dated as of December 12 2020 incorporated by reference to Exhibit 10 85 to Medtronic plc s Annual Report on Form 10 K for the year ended April 28 2023 filed on June 22 2023 File No 001 36820
Medtronic Nonqualified Retirement Plan Supplement dated as of April 28 2023 incorporated by reference to Exhibit 10 86 to Medtronic plc s Annual Report on Form 10 K for the year ended April 28 2023 filed on June 22 2023 File No 001 36820
Performance Share Unit Award Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 1 to Medtronic plc s Quarterly Report on Form 10 Q filed on August 31 2023 File No 001 36820
Restricted Stock Unit Award Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 2 to Medtronic plc s Quarterly Report on Form 10 Q filed on August 31 2023 File No 001 36820
Restricted Stock Unit Award Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 3 to Medtronic plc s Quarterly Report on Form 10 Q filed on August 31 2023 File No 001 36820
Non Qualified Stock Option Agreement 2021 Medtronic plc Long Term Incentive Plan incorporated by reference to Exhibit 10 4 to Medtronic plc s Quarterly Report on Form 10 Q filed on August 31 2023 File No 001 36820
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
Pursuant to the requirements of the Securities Exchange Act of 1934 the report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated

Company Name	Medtronic plc Vist SEC web-site
Category	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS
Trading Symbol	MDT