Medtronic 2016 Annual Report Download - page 127

Table of Contents
Medtronic plc
Notes to Consolidated Financial Statements (Continued)
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estimated, and the Company has not accrued any liabilities within the consolidated financial statements. Historically, the Company
has not experienced significant losses on these types of indemnifications.
16. Quarterly Financial Data (unaudited)
(in millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year
Net Sales
2016 $ 7,274 $ 7,058 $ 6,934 $ 7,567 $ 28,833
2015 4,273 4,366 4,318 7,304 20,261
Gross Profit
2016 $ 4,818 $ 4,876 $ 4,793 $ 5,204 $ 19,691
2015 3,168 3,224 3,190 4,370 13,952
Net Income (Loss)
2016 $ 820 $ 520 $ 1,095 $ 1,104 $ 3,538
2015 871 828 977 (1) 2,675
Basic Earnings per Share
2016 $ 0.58 $ 0.37 $ 0.78 $ 0.79 2.51
2015 0.88 0.84 0.99 — 2.44
Diluted Earnings per Share
2016 $ 0.57 $ 0.36 $ 0.77 $ 0.78 2.48
2015 0.87 0.83 0.98 — 2.41
The data in the schedule above has been intentionally rounded to the nearest million, and therefore, the quarterly amounts may
not sum to the fiscal year-to-date amounts.
17. Segment and Geographic Information
The Company’s management evaluates performance and allocates resources based on profit and loss from operations before income
taxes and interest expense, net, not including the impact of inventory step-up, the impact of product technology upgrade commitment,
special (gains) charges, net, restructuring charges, net, certain litigation charges, net, acquisition-related items, and certain tax
adjustments. The accounting policies of the reportable segments are the same as those described in the summary of significant
accounting policies in Note 1.
In the fourth quarter of fiscal year 2015, the Company amended the way in which management evaluates performance and allocates
resources due to the Covidien acquisition. As a result, the Company began to operate under four reportable segments and four
operating segments. This change had no impact on the Company’s consolidated results for prior periods presented.
The Company’s Cardiac and Vascular Group consists of three divisions: Cardiac Rhythm & Heart Failure, Coronary & Structural
Heart, and Aortic & Peripheral Vascular. The primary products sold by this operating segment include products for cardiac rhythm
disorders and cardiovascular disease, as well as services to diagnose, treat, and manage heart and vascular-related disorders and
diseases. The products produced by this operating segment require highly-skilled, technical manufacturing processes and are
distributed through direct sales representatives in the U.S. and through direct sales representatives and indirect distributors outside
of the U.S. Further, the primary customers of this operating segment are surgeons and specialists and the regulatory approval
process for the Cardiac and Vascular Group is similar across all components. The Company’s Minimally Invasive Therapies Group
consists of two divisions: Surgical Solutions and Patient Monitoring & Recovery. The primary products sold by this operating
segment include those which enhance patient outcomes through minimally invasive solutions. These products include those for
advanced and general surgical care and patient monitoring, nursing and patient care, and airway and ventilation. Further, the
regulatory approval process for the Minimally Invasive Therapies Group is similar across all components. The Company’s
Restorative Therapies Group consists of four divisions: Spine, Neuromodulation, Surgical Technologies, and Neurovascular. The
primary customers of this operating segment include spinal surgeons, neurosurgeons, and pain specialists. The products sold by
this operating segment are distributed through direct sales representatives in the U.S. and through direct sales representatives and
indirect distributors outside of the U.S. Further, the regulatory approval process for the Restorative Therapies Group is similar