Medtronic 2015 Annual Report Download - page 67

During fiscal year 2014, we recorded $42 million in operational tax benefits. This included a $23 million benefit associated with
the restoration of tax basis on certain assets for which depreciation and amortization deductions were previously limited and a
$19 million net benefit associated with the resolution of certain foreign and state income tax audits, finalization of certain tax
returns, and changes to uncertain tax position reserves.
See Notes 12 and 16 to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K for additional information.
Liquidity and Capital Resources
Fiscal Year
(dollars in millions) 2015 2014
Working capital $ 21,671 $ 15,651
Current ratio* 3.4:1.0 3.8:1.0
Cash, cash equivalents, and current investments $ 19,480 $ 14,241
Short-term borrowings and long-term debt 36,186 11,928
Net cash position** $ (16,706) $ 2,313
Total shareholder’s equity $ 53,230 $ 19,443
Debt-to-total capital ratio*** 40% 38%
* Current ratio is the ratio of current assets to current liabilities.
** Net cash position is the sum of cash, cash equivalents, and current investments less short-term borrowings and long-term
debt and excludes non-current investments that are not considered readily available to fund current operations.
*** Debt-to-total capital ratio is the ratio of total debt (short-term borrowings and long-term debt) to total capitalization
(total debt and total shareholder’s equity).
As of April 24, 2015, we believe our balance sheet and liquidity provide us with flexibility in the future. We believe our existing
cash and investments, as well as our new $3.500 billion Amended and Restated Revolving Credit Facility dated as of
January 26, 2015, and related $3.500 billion 2015 commercial paper program entered into on January 26, 2015 (no commercial
paper outstanding as of April 24, 2015), will satisfy our foreseeable working capital requirements for at least the next 12
months. We regularly review our capital needs and consider various investing and financing alternatives to support our
requirements. From time to time, we also may consider repayments, redemptions or repurchases for cash of our outstanding
indebtedness, by means of one or more tender offers or otherwise. Subsequent to April 24, 2015, we retired $1.000 billion of
maturing debt using existing cash.
On December 10, 2014, Medtronic, Inc. issued seven tranches of Senior Notes (collectively the 2015 Senior Notes) with an
aggregate face value of $17 billion which are guaranteed by the Company. In addition, on January 26, 2015, the Company
borrowed $3.000 billion for a term of three years under the Term Loan Credit Agreement. The Company used these combined
proceeds to fund the approximately $16 billion cash consideration portion of the January 26, 2015 estimated $50 billion acquisition
of Covidien and to pay certain transaction and financing expenses, and for working capital and general corporate purposes, which
may include repayment of indebtedness. See Note 8 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 the Company’s long-term debt.
Rating for Fiscal Year Ended(1)
April 24, 2015 April 25, 2014
Standard & Poor’s (S&P) Ratings Services
Long-term debt A AA-
Short-term debt A-1 A-1+
Moody’s Investors Service (Moody’s)
Long-term debt A3 A2
Short-term debt P-2 P-1
(1) Agency ratings are subject to change, and there can be no assurance that a ratings 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.
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