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Table of Contents
Medtronic plc
Notes to Consolidated Financial Statements (Continued)
76
from issuance of the potentially dilutive shares. Potentially dilutive ordinary shares include stock options and other stock-based
awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase
plan.
The table below sets forth the computation of basic and diluted earnings per share:
Fiscal Year
(in millions, except per share data) 2016 2015 2014
Numerator:
Net income attributable to ordinary shareholders $ 3,538 $ 2,675 $ 3,065
Denominator:
Basic – weighted average shares outstanding 1,409.6 1,095.5 1,002.1
Effect of dilutive securities:
Employee stock options 12.2 9.1 7.1
Employee restricted stock units 4.0 4.3 4.3
Other 0.1 0.1 0.1
Diluted – weighted average shares outstanding 1,425.9 1,109.0 1,013.6
Basic earnings per share $ 2.51 $ 2.44 $ 3.06
Diluted earnings per share $ 2.48 $ 2.41 $ 3.02
The calculation of weighted average diluted shares outstanding excludes options to purchase approximately 4 million, 2 million,
and 5 million ordinary shares in fiscal years 2016, 2015, and 2014, respectively, because their effect would be anti-dilutive on the
Company’s earnings per share. Additionally, the calculation of weighted average diluted shares outstanding excludes approximately
20 million and 5 million shares for fiscal years 2016 and 2015 respectively, and does not exclude any shares for fiscal year 2014,
because the performance criteria had not yet been met. The calculation of weighted average diluted shares outstanding excludes
approximately 1 million restricted stock units for each fiscal year 2016, 2015 and 2014, because the performance criteria had not
yet been met.
New Accounting Standards
Recently Adopted
In April 2014, the Financial Accounting Standards Board (FASB) issued amended guidance for reporting discontinued operations.
The amended guidance changes the criteria for determining when the results of operations are to be reported as discontinued
operations and expands the related disclosure requirements. The guidance defines a discontinued operation as a component or
group of components that is disposed of or classified as held for sale, which is a strategic shift that has, or will have, a major effect
on financial position and results of operations. The Company prospectively adopted this accounting guidance in the first quarter
of fiscal year 2016. Its adoption did not have a material impact on the Company's consolidated financial statements.
In September 2015, the FASB issued accounting guidance which eliminates the requirement for an acquirer in a business
combination to restate prior period financial statements for measurement period adjustments. An acquirer in a business combination
is required to report provisional amounts when measurements are incomplete at the end of the reporting period covering the business
combination. Prior to the issuance of the new guidance, an acquirer was required to adjust such provisional amounts by restating
prior period financial statements. Under the new guidance, the acquirer will recognize the measurement-period adjustment in the
period the adjustment is determined. The Company prospectively adopted this accounting guidance in the third quarter of fiscal
year 2016. Its adoption did not have a material impact on the Company's consolidated financial statements.
In November 2015, the FASB issued accounting guidance that requires all deferred tax assets and liabilities, along with any related
valuation allowance, to be classified as noncurrent on the Consolidated Balance Sheets. Current guidance requires the deferred
taxes for each jurisdiction to be presented as a net current asset or liability and net noncurrent asset or liability. As a result of the
new guidance, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not
change the existing requirement that only permits offsetting deferred tax assets and liabilities within a single jurisdiction. Entities
have the option to apply the new guidance prospectively or retrospectively. This accounting guidance is effective for financial
statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. The Company prospectively