Medtronic 2012 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2012 Medtronic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Understanding Our Financial Information
The following discussion and analysis provides information management believes to be relevant to
understanding the financial condition and results of operations of Medtronic, Inc. and its subsidiaries
(Medtronic or the Company, or we, us, or our). You should read this discussion and analysis along with our
consolidated financial statements and related notes thereto as of April 27, 2012 and April 29, 2011 and for
each of the three fiscal years ended April 27, 2012, April 29, 2011, and April 30, 2010.
Beginning in the third quarter of fiscal year 2012, the results of operations, assets, and liabilities of the
Physio-Control business, which were previously presented as a component of the Cardiac and Vascular
Group operating segment, are classified as discontinued operations. All information in the following
management’s discussion and analysis of financial condition and results of operations includes only results
from continuing operations (excluding Physio-Control) for all periods presented, unless otherwise noted.
For further information regarding discontinued operations, see Note 3 to the consolidated financial
statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
Organization of Financial Information Management’s discussion and analysis, presented on
pages 29 to 56 of this report, provides material historical and prospective disclosures designed to enable
investors and other users to assess our financial condition and results of operations.
The consolidated financial statements are presented on pages 60 to 121 of this report, and include the
consolidated statements of earnings, consolidated balance sheets, consolidated statements of shareholders’
equity, consolidated statements of cash flows and the related notes, which are an integral part of the
consolidated financial statements.
Financial Trends Throughout this management’s discussion and analysis, you will read about
transactions or events that materially contribute to or reduce earnings and materially affect financial trends.
We refer to these transactions and events as special charges (such as asset impairments or contributions to
The Medtronic Foundation), restructuring charges, net, certain litigation charges, net, acquisition-related
items, or certain tax adjustments. These charges, or benefits, result from facts and circumstances that vary in
frequency and/or impact to operations. While understanding these charges or benefits is important to
understanding and evaluating financial trends, other transactions or events may also have a material impact
on financial trends. A complete understanding of the special charges, restructuring charges, net, certain
litigation charges, net, acquisition-related items, and certain tax adjustments is necessary in order to estimate
the likelihood that financial trends may continue.
Our fiscal year-end is the last Friday in April, and therefore, the total weeks in a fiscal year can
fluctuate between 52 and 53 weeks. Fiscal years 2012 and 2011 were 52-week years. Fiscal year 2010 was a
53-week year.
Executive Level Overview
We are the global leader in medical technology - alleviating pain, restoring health, and extending life
for millions of people around the world. We develop, manufacture, and market our medical devices in more
than 120 countries. Our primary products include those for cardiac rhythm disorders, cardiovascular disease,
neurological disorders, spinal conditions and musculoskeletal trauma, urological and digestive disorders,
diabetes, and ear, nose, and throat conditions.
We operate under two reportable segments and two operating segments, the Cardiac and Vascular
Group (composed of the Cardiac Rhythm Disease Management (CRDM) and CardioVascular businesses)
and the Restorative Therapies Group (composed of the Spinal, Neuromodulation, Diabetes, and Surgical
Technologies businesses).
Net earnings (including Physio-Control) for the fiscal year ended April 27, 2012 were $3.617 billion, or
$3.41 per diluted share, as compared to net earnings of $3.096 billion, or $2.86 per diluted share for the fiscal
year ended April 29, 2011, representing an increase of 17 percent and 19 percent, respectively. Fiscal year
2012 net earnings included after-tax restructuring charges, net, certain litigation charges, net, and acquisition-
related items that decreased net earnings by an aggregate of $133 million ($189 million pre-tax). Fiscal year
29