Medtronic 2016 Annual Report Download - page 42

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Table of Contents
39
GAAP to Non-GAAP Reconciliation The following is a reconciliation of our net sales, operating profit, income from operations
before income taxes, net income, provision for income taxes, and effective tax rate prepared in accordance with U.S. GAAP to
those results after giving effect to adjustments relating to charges or gains that management believes may or may not recur with
similar materiality or impact on net income in future periods. We have provided these non-GAAP financial measures, because we
believe they provide meaningful information regarding our results on a consistent and comparable basis for the periods presented.
Management uses these non-GAAP financial measures to facilitate management's review of the operational performance of the
Company and as a basis for strategic planning. Management believes that the resulting non-GAAP financial measures provide
useful information to investors regarding the underlying business trends and performance of the Company's ongoing operations
and are useful for period over period comparisons of such operations. These non-GAAP financial measures reflect an additional
way of viewing aspects of the Company's operations. Investors should not consider results reflecting non-GAAP financial measures
in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP and are cautioned that
Medtronic may calculate results reflecting non-GAAP financial measures in a manner that is different from other companies.
Refer to the "Cost and Expenses," "Income Taxes," and "Liquidity and Capital Resources" sections of this Management's Discussion
and Analysis for more information on the Non-GAAP Adjustments.
Fiscal year ended April 29, 2016
(in millions) Net Sales Operating
Profit
Income from
Operations
Before Income
Taxes Net Income
Provision
for Income
Taxes (1) Effective
Tax Rate
GAAP $ 28,833 $ 5,291 $ 4,336 $ 3,538 $ 798 18.4%
Non-GAAP Adjustments:
Impact of inventory step-up — 226 226 165 61 27.0
Special charges — 70 70 44 26 37.1
Restructuring charges, net — 299 299 221 78 26.1
Certain litigation charges, net — 26 26 17 9 34.6
Acquisition-related items — 283 283 212 71 25.1
Amortization of intangible assets — 1,931 1,931 1,467 464 24.0
Loss on previously held forward starting
interest rate swaps — — 45 29 16 35.6
Debt tender premium — — 183 118 65 35.5
Certain tax adjustments — — — 417 (417) —
Non-GAAP $ 28,833 $ 8,126 $ 7,399 $ 6,228 $ 1,171 15.8%
(1) The tax effect of each Non-GAAP Adjustment is based on the jurisdictions in which the expense (income) is incurred and the tax laws in
effect for each such jurisdiction.