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75732me_10K.indd 36 6/25/13 6:39 PM
Table of Contents
Net Sales
The table below illustrates net sales by product line and operating segment for fiscal years 2013, 2012, and 2011:
Net Sales Net Sales
Fiscal Year Fiscal Year
(dollars in millions) 2013 2012 % Change 2012 2011 % Change
Defibrillation Systems $ 2,773 $ 2,822 (2)% $ 2,822 $ 2,962 (5)%
Pacing Systems 1,906 1,978 (4) 1,978 1,901 4
AF and Other 243 207 17 207 147 41
CARDIAC RHYTHM DISEASE
MANAGEMENT 4,922 5,007 (2) 5,007 5,010 —
CORONARY 1,773 1,598 11 1,598 1,466 9
STRUCTURAL HEART 1,133 1,094 4 1,094 977 12
ENDOVASCULAR 867 783 11 783 666 18
TOTAL CARDIAC AND VASCULAR
GROUP 8,695 8,482 3 8,482 8,119 4
Core Spine 2,603 2,643 (2) 2,643 2,654 —
BMP 528 624 (15) 624 760 (18)
SPINE 3,131 3,267 (4) 3,267 3,414 (4)
NEUROMODULATION 1,812 1,700 7 1,700 1,592 7
DIABETES 1,526 1,481 3 1,481 1,347 10
SURGICAL TECHNOLOGIES 1,426 1,254 14 1,254 1,036 21
TOTAL RESTORATIVE THERAPIES
GROUP 7,895 7,702 3 7,702 7,389 4
TOTAL $ 16,590 $ 16,184 3 $ 16,184 $ 15,508 4
In fiscal years 2013 and 2012, net sales were (unfavorably) favorably impacted by foreign currency translation of $(328) million
and $273 million, respectively. The primary exchange rate movements that impacted our consolidated net sales growth were the
U.S. dollar as compared to the Euro and the Japanese Yen. The impact of foreign currency fluctuations on net sales was not
indicative of the impact on net earnings due to the offsetting foreign currency impact on operating costs and expenses and our
hedging activities. See “Item 7A. Qualitative and Quantitative Disclosures about Market Risk” and Note 9 to the consolidated
financial statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for further
details on foreign currency instruments and our related risk management strategies.
Cardiac and Vascular Group The Cardiac and Vascular Group is composed of the CRDM, Coronary, Structural Heart, and
Endovascular businesses. The Cardiac and Vascular Group’s products include pacemakers, implantable defibrillators, leads and
delivery systems, ablation products, electrophysiology catheters, products for the treatment of atrial fibrillation, information
systems for the management of patients with CRDM devices, coronary and peripheral stents and related delivery systems, therapies
for uncontrolled hypertension, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation
systems, and open heart and coronary bypass grafting surgical products. The Cardiac and Vascular Group net sales for fiscal year
2013 were $8.695 billion, an increase of 3 percent over the prior fiscal year. Foreign currency translation had an unfavorable
impact on net sales of $224 million compared to the prior fiscal year. The Cardiac and Vascular Group’s performance was primarily
a result of strong net sales in Coronary, Endovascular, AF Solutions, and solid growth in Structural Heart, partially offset by
declines in CRDM defibrillation and pacing systems. Additionally, the Cardiac and Vascular Group’s performance was favorably
affected by new products, partially offset by competitive pricing pressures and negative growth of certain markets, particularly
defibrillation and pacing systems. Further, declining growth rates in Western Europe beginning in the third quarter of fiscal year
2013 negatively impacted the Cardiac and Vascular Group's performance. See the more detailed discussion of each business’s
performance below.
CRDM net sales for fiscal year 2013 were $4.922 billion, a decrease of 2 percent over the prior fiscal year. Net sales of our
defibrillation system products declined primarily due to market declines in the U.S. and Western Europe and unfavorable foreign
currency translation. In fiscal year 2012, CRDM net sales were unfavorably affected by a declining U.S. defibrillation systems
market. However, during fiscal year 2013, the U.S. defibrillation systems market showed signs of stabilization. In addition, U.S.
procedure volumes increased slightly in fiscal year 2013, while the rate of pricing declines was fairly consistent with the prior
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