Medtronic 2015 Annual Report Download - page 50

Executive Level Overview
Medtronic is 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 and technologies in approximately
160 countries. Our primary products prior to the Covidien acquisition included those for cardiac rhythm disorders,
cardiovascular disease, neurological disorders, spinal conditions and musculoskeletal trauma, urological and digestive disorders,
and ear, nose, and throat and diabetes conditions. As a result of the Covidien acquisition, our products were expanded to include
advanced and general surgical care and patient care products, including respiratory and monitoring solutions.
Net income for the fiscal year ended April 24, 2015 was $2.675 billion, $2.41 per diluted share, as compared to net income of
$3.065 billion, $3.02 per diluted share, for the fiscal year ended April 25, 2014, representing a decrease of 13 percent and
20 percent, respectively.
The table below illustrates net sales by operating segment for fiscal years 2015 and 2014:
Net Sales
Fiscal Year
(dollars in millions; NM — Not Meaningful) 2015 2014 % Change
Cardiac and Vascular Group $ 9,361 $ 8,847 6%
Minimally Invasive Therapies Group 2,387 — NM(1)
Restorative Therapies Group 6,751 6,501 4
Diabetes Group 1,762 1,657 6
Total Net Sales $ 20,261 $ 17,005 19%
(1) Revenue growth rate versus the prior year is not meaningful, as the Minimally Invasive Therapies Group is a new group
that contains the majority of Covidien’s former operations.
Net sales in fiscal year 2015 were $20.261 billion, an increase of 19 percent from the prior fiscal year. Foreign currency
translation had an unfavorable impact of $666 million on net sales compared to the prior fiscal year. Net sales growth for fiscal
year 2015 was driven by 6 percent growth in our Cardiac and Vascular Group, 4 percent growth in our Restorative Therapies
Group, and 6 percent growth in our Diabetes Group compared to the prior fiscal year and the addition of $2.387 billion of
revenue during the fourth quarter from our Minimally Invasive Therapies Group due to the acquisition of Covidien, which
closed on January 26, 2015. The Cardiac and Vascular Group’s performance was primarily a result of strong net sales in Aortic
and Peripheral with the addition of a portion of Covidien’s Peripheral business, and growth in Cardiac Rhythm & Heart Failure
and Coronary & Structural Heart. The Restorative Therapies Group’s performance was a result of solid growth in Surgical
Technologies and growth in Neuromodulation, partially offset by a decline in Spine. The Diabetes Group’s performance was
due to solid growth in the U.S driven by the ongoing launch of the MiniMed 530G System. Within the Minimally Invasive
Therapies Group, the Surgical Solutions and Patient Monitoring & Recovery divisions contributed $1.293 billion and $1.094
billion of revenue, respectively. See our discussion in the “Net Sales” section of this management’s discussion and analysis for
more information on the results of our operating segments.
Acquisition of Covidien On January 26, 2015, pursuant to the Transaction Agreement, we acquired Covidien to continue in
our mission to create a medical technology and services company with a comprehensive product portfolio and a broad global
reach that is better able to improve healthcare outcomes. Covidien meaningfully accelerates our core strategies of therapy
innovation, globalization and economic value. The transaction was accounted for as a business combination using the
acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized
at their fair values at the Acquisition Date.
For further information regarding the Acquisition, see the section entitled “Acquisition and Investments — Acquisition of
Covidien” contained in “Item 1. Business,” and Note 2 to the consolidated financial statements in “Item 8. Financial Statements
and Supplementary Data” in this Annual Report on Form 10-K. The full text of the Transaction Agreement, was filed as Exhibit
2.1 to our Amendment No. 5 to the Registration Statement on Form S-4 filed with the SEC on November 20, 2014.
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