Medtronic 2012 Annual Report Download - page 67

Our net cash used in investing activities was $1.815 billion for the fiscal year ended April 29, 2011
compared to $4.759 billion for the prior fiscal year. Cash used for acquisitions increased in comparison to
the prior fiscal year as a result of the fiscal year 2011 acquisitions primarily driven by ATS Medical,
Osteotech, and Ardian. The increase in acquisition spending was more than offset by decreased investing
in marketable securities in fiscal year 2011 which resulted in net sales of $194 million as compared to net
purchases of $3.687 billion in the prior fiscal year. The increased investing in marketable securities in fiscal
year 2010 resulted primarily from investing the proceeds from the $3.000 billion debt issuance.
Financing Activities We had net cash used in financing activities of $1.882 billion for the fiscal year
ended April 27, 2012 compared to net cash used in financing activities of $2.006 billion for the prior fiscal
year. The $124 million decrease in cash used in financing activities was primarily attributable to decreased
payments on long-term debt partially offset by the change in short-term borrowings, net and acquisition-
related contingent consideration in comparison to the prior fiscal year. In addition, our cash returned to
shareholders in the form of dividends and the repurchase of common stock was $352 million higher
compared to fiscal year 2011.
Our net cash used by financing activities was $2.006 billion for the fiscal year ended April 29, 2011
compared to $764 million provided by financing activities for the fiscal year ended April 30, 2010. The
$2.770 billion decrease primarily resulted from the repayments of $2.200 billion of our Senior Convertible
Notes and $400 million of our 2005 Senior Notes in fiscal year 2011. In addition, our cash returned to
shareholders in the form of dividends and the repurchase of common stock was $172 million higher in fiscal
year 2011 compared to the prior fiscal year.
Off-Balance Sheet Arrangements and Long-Term Contractual Obligations
We acquire assets still in development, enter into research and development arrangements, and sponsor
certain clinical trials that often require milestone and/or royalty payments to a third-party, contingent upon
the occurrence of certain future events. Milestone payments may be required contingent upon the successful
achievement of an important point in the development life cycle of a product or upon certain pre-designated
levels of achievement in clinical trials. In addition, if required by the arrangement, we may have to make
royalty payments based on a percentage of sales related to the product under development or in the event
that regulatory approval for marketing is obtained. In situations where we have no ability to influence the
achievement of the milestone or otherwise avoid the payment, we have included those milestone or
minimum royalty payments in the following table. However, the majority of these arrangements give us the
discretion to unilaterally make the decision to stop development of a product or cease progress of a clinical
trial, which would allow us to avoid making the contingent payments. Although we are unlikely to cease
development if a device successfully achieves clinical testing objectives, these payments are not included in
the table of contractual obligations because of the contingent nature of these payments and our ability to
avoid them if we decided to pursue a different path of development or testing. See Note 5 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 contingent consideration.
In the normal course of business, we periodically enter into agreements that require us to indemnify
customers or suppliers for specific risks, such as claims for injury or property damage arising out of our
products or the negligence of our personnel or claims alleging that our products infringe third-party patents
or other intellectual property. Our maximum exposure under these indemnification provisions cannot be
estimated, and we have not accrued any liabilities within our consolidated financial statements or included
any indemnification provisions in our commitments table. Historically, we have not experienced significant
losses on these types of indemnification obligations.
We believe our off-balance sheet arrangements do not have a material current or anticipated future
effect on our consolidated earnings, financial position, or cash flows. Presented below is a summary of
contractual obligations and other minimum commercial commitments as of April 27, 2012. See Notes 9 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 regarding long-term debt and lease obligations,
respectively. Additionally, see Note 14 to the consolidated financial statements in “Item 8. Financial
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