Medtronic 2016 Annual Report Download - page 4

Table of Contents
1
PART I
Item 1. Business
OVERVIEW
Medtronic plc, headquartered in Dublin, Ireland, is among the world's largest medical technology, services and solutions companies
- alleviating pain, restoring health, and extending life for millions of people around the world. Medtronic was founded in 1949
and today serves hospitals, physicians, clinicians, and patients in approximately 160 countries worldwide. We remain committed
to a mission written by our founder 56 years ago 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.”
With innovation and market leadership, we have pioneered advances in medical technology in all of our businesses. Our commitment
to enhance our offerings by developing and acquiring new products, wrap-around programs, and solutions to meet the needs of a
broader set of stakeholders is driven by the following primary strategies:
• Therapy Innovation: Delivering a strong launch cadence of meaningful therapies and procedures.
• Globalization: Addressing the inequity in health care access globally, primarily in emerging markets.
• Economic Value: Becoming a leader in value-based health care by offering new services and solutions to improve
outcomes and efficiencies, lower costs by reducing hospitalizations, improve remote clinical management, and increase
patient engagement.
Our primary customers include hospitals, clinics, third-party health care providers, distributors, and other institutions, including
governmental health care programs and group purchasing organizations (GPOs).
On January 26, 2015 (Acquisition Date), Medtronic completed the acquisition of Covidien plc, a public limited company organized
under the laws of Ireland (Covidien) in a cash and stock transaction valued at $50.0 billion. In connection with the transaction,
Medtronic, Inc., a Minnesota corporation (Medtronic, Inc.), and Covidien were combined under and became subsidiaries of
Medtronic plc. Covidien was a global leader in the development, manufacture and sale of healthcare products for use in clinical
and home settings and had net sales for its fiscal year ended September 26, 2014 of $10.7 billion. On a pro forma basis, as if the
Covidien merger had occurred at the beginning of fiscal year 2014, our combined net sales would have been $28.4 billion for
fiscal year 2015 and $27.4 billion for fiscal year 2014; see Note 2 to the consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report on Form 10-K. The merger with Covidien provides the combined
company with increased financial strength and flexibility and is expected to meaningfully accelerate all three strategies discussed
above.
We reorganized our reporting structure and aligned our segments and the underlying divisions and businesses in fiscal year 2015
due to the acquisition of Covidien. The majority of Covidien’s operations are included in our new Minimally Invasive Therapies
Group. For more information on our segments, please see Note 17 to the consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report on Form 10-K.
We currently function in four operating segments that primarily manufacture and sell device-based medical therapies. Our operating
segments with each of their reported net sales for fiscal year 2016, along with their related divisions, are as follows:
Cardiac and Vascular Group (Fiscal year 2016 net sales of $10.2 billion)
• Cardiac Rhythm & Heart Failure
• Coronary & Structural Heart
• Aortic & Peripheral Vascular
Minimally Invasive Therapies Group (Fiscal year 2016 net sales of $9.6 billion)
• Surgical Solutions
• Patient Monitoring & Recovery
Restorative Therapies Group (Fiscal year 2016 net sales of $7.2 billion)
• Spine
• Neuromodulation
• Surgical Technologies
• Neurovascular