PR Newswire | Aug 24, 2021 06:45AM EDT

08/24 05:45 CDT

Medtronic Reports First Quarter Fiscal 2022 Financial ResultsStrong Financial Performance on Continued Procedure Volume Recovery and Share Gains from New Product Launches DUBLIN, Aug. 24, 2021

DUBLIN, Aug. 24, 2021 /PRNewswire/ -- Medtronic plc (NYSE:MDT) today announced financial results for its first quarter of fiscal year 2022, which ended July 30, 2021.

Key Highlights

* Revenue of $8.0 Billion Increased 23% Reported and 19% Organic * GAAP Diluted EPS of $0.56; Non-GAAP Diluted EPS of $1.41 * Company Reiterates FY22 Revenue Guidance; Raises Lower End of FY22 EPS Guidance by 5 cents

"FY22 is off to a strong start - Q1 reflects solid execution & continued procedure recovery"Chairman & CEO Geoff Martha

The company reported first quarter worldwide revenue of $7.987 billion, an increase of 23% as reported and 19% on an organic basis, which excludes the $245 million benefit of foreign currency translation. Revenue growth rates have not been adjusted for the negative impact of the extra selling week in the first quarter of last fiscal year. The company's first quarter results reflect a strong recovery from the impact of the COVID-19 pandemic on elective procedures that the company experienced in 2020. Unless otherwise stated, all revenue growth rates in this press release are stated on an organic basis, which excludes the impact of foreign currency translation.

As reported, first quarter GAAP net income and diluted earnings per share (EPS) were $763 million and $0.56, respectively, increases of 57% and 56%, respectively. As detailed in the financial schedules included at the end of this release, first quarter non-GAAP net income and non-GAAP diluted EPS were $1.908 billion and $1.41, respectively, increases of 128% and 127%, respectively.

First quarter U.S. revenue of $4.101 billion represented 51% of company revenue and increased 22%. Non-U.S. developed market revenue of $2.601 billion represented 33% of company revenue and increased 20% as reported and 11% organic. Emerging Markets revenue of $1.286 billion represented 16% of company revenue and increased 31% as reported and 25% organic.

"Fiscal 2022 is off to a strong start with our first quarter results coming in ahead of our expectations, reflecting solid execution and continued procedure volume recovery, with most of our businesses at or above pre-COVID levels," said Geoff Martha, Medtronic chairman and chief executive officer. "In addition, we drove market share gains across a number of our businesses, including three of our largest: Cardiac Rhythm Management, Surgical Innovations, and Cranial & Spinal Technologies. Looking ahead, we have some big opportunities in front of us, with near-term milestones in both our renal denervation and surgical robotics businesses. These opportunities, combined with the broader investments we're making in our pipeline, set us up well to accelerate our top line growth."

Cardiovascular PortfolioThe Cardiovascular Portfolio includes the Cardiac Rhythm & Heart Failure (CRHF), Structural Heart & Aortic (SHA), and Coronary & Peripheral Vascular (CPV) divisions. Cardiovascular first quarter revenue of $2.890 billion increased 19% as reported and 15% organic, driven by low-twenties organic growth in SHA, mid-teens organic growth in CRHF, and high-single digit growth in CPV.

* Cardiac Rhythm & Heart Failure first quarter revenue of $1.483 billion increased 19% as reported and 15% organic. Adjusting for the discontinuation of HVAD(tm) System sales, CRHF revenue increased 19% organic. Cardiac Rhythm Management revenue increased in the high-teens, driven by low-double digit growth in Defibrillation Solutions and low-twenties growth in Cardiac Pacing Therapies, including low-thirties growth in Leadless Pacemakers on the continued global adoption of the Micra(tm) transcatheter pacing system. Cardiac Ablation Solutions revenue increased in the low-thirties on strong adoption of Arctic Front Advance(tm) cryoballoon catheters and consoles. Cardiovascular Diagnostics revenue grew in the low-double digits. * Structural Heart & Aortic first quarter revenue of $787 million increased 26% as reported and 21% organic. Structural Heart grew in the high-thirties, driven by mid-thirties growth in transcatheter aortic valves (TAVR), including high-forties TAVR growth in the United States. Cardiac Surgery increased in the high-teens. Aortic declined in the low-single digits, as the financial impact of the previously announced global recall of the Valiant Navion(tm) thoracic stent graft system offset low-twenties growth in abdominal aortic aneurysm (AAA) stent grafts. * Coronary & Peripheral Vascular first quarter revenue of $620 million increased 11% as reported and 7% organic. Coronary & Renal Denervation (CRDN) declined in the low-single digits, given the impact of previously announced coronary tenders in China. Excluding China, CRDN revenue grew in the high-single digits. Peripheral Vascular Health increased in the low-twenties, with mid-teens growth in IN.PACT(tm) drug-coated balloons and mid-fifties endoVenous growth on strong sales of VenaSeal(tm) and ClosureFast(tm) superficial vein products and Abre(tm) venous stents.

Medical Surgical PortfolioThe Medical Surgical Portfolio includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical Surgical first quarter revenue of $2.322 billion increased 29% as reported and 25% organic, with high-thirties organic growth in SI and mid-single digit organic growth in RGR.

* Surgical Innovations first quarter revenue of $1.554 billion increased 44% as reported and 39% organic. The division had low-forties growth in Vessel Sealing and high-thirties growth in Advanced Stapling, driven by the continued adoption of the company's LigaSure(tm), Sonicision(tm), and Tri-Staple(tm) technologies. Hernia & Wound Management increased in the mid-thirties, with strength in sutures and hernia product lines. * Respiratory, Gastrointestinal & Renal first quarter revenue of $768 million increased 7% as reported and 3% organic. Patient Monitoring increased in the mid-twenties, with mid-thirties growth in the company's Nellcor(tm) pulse oximetry products. Respiratory Interventions decreased in the mid-twenties, with sales of ventilators declining in the low-forties as demand returns to pre-pandemic levels. Gastrointestinal revenue increased in the high-twenties on low-fifties growth in Esophageal & Gastric. Renal Care Solutions increased in the mid-single digits with strong growth in acute therapies.

Neuroscience PortfolioThe Neuroscience Portfolio includes the Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation divisions. Neuroscience first quarter revenue of $2.204 billion increased 29% as reported and 26% organic, with high-thirties growth in Neuromodulation and Specialty Therapies and high-teens growth in CST, all on an organic basis.

* Cranial & Spinal Technologies first quarter revenue of $1.123 billion increased 19% as reported and 17% organic. Spine & Biologics grew in the low-double digits and Neurosurgery increased in the low-twenties, as spine surgeons continue to adopt the Medtronic ecosystem of spine implants and enabling technology, including Mazor(tm) robotics, StealthStation(tm) navigation, O-arm(tm) imaging, and Midas Rex(tm) powered surgical instruments. * Specialty Therapies first quarter revenue of $641 million increased 42% as reported and 37% organic. Neurovascular increased in the high-single digits and ENT increased in the mid-thirties. Pelvic Health increased 134%, driven by continued strong adoption of the InterStim(tm) Micro sacral neuromodulation system. * Neuromodulation first quarter revenue of $440 million increased 40% as reported and 37% organic. Brain Modulation increased in the high-thirties, driven by the launch of the Percept(tm) PC deep brain stimulation system. Pain Therapies increased in the low-forties, with Targeted Drug Delivery revenue more than doubling on the backlog recovery of replacement procedures, and Pain Stim revenue growing in the mid-twenties on strong uptake of Intellis(tm) with DTM(tm) SCS therapy. Interventional grew in the low-twenties.

DiabetesDiabetes first quarter revenue of $572 million increased 2% as reported and declined 3% organic. Diabetes quarterly revenue performance was driven by high-single digit growth in durable pumps, including strong growth in international markets on the continued launch of the MiniMed(tm) 780G system. This was offset by mid-teens declines in U.S. sales of consumables and continuous glucose monitoring (CGM) products.

GuidanceThe company today reiterated its revenue growth guidance and raised the lower end of its EPS guidance range for fiscal year 2022.

The company continues to expect revenue growth in its fiscal year 2022 to approximate 9% on an organic basis. If current exchange rates hold, revenue growth in fiscal year 2022 would be positively affected by approximately $100 to $200 million.

The company increased its fiscal year 2022 diluted non-GAAP EPS guidance from the prior range of $5.60 to $5.75 to the new range of $5.65 to $5.75, including an estimated 5 to 10 cent positive impact from foreign currency exchange versus a 10 to 15 cent positive impact previously.

"We're reiterating our revenue guidance for the year while increasing the lower end of our EPS range on the back of our first quarter results," said Karen Parkhill, Medtronic chief financial officer. "We remain focused on accelerating our long-term revenue growth and generating strong returns for our shareholders. In addition to growing our dividend, we are increasing our investments at the front end of major product launches, growing our R&D spend broadly across the company, and executing disciplined tuck-in acquisitions."

Webcast InformationMedtronic will host a webcast today, August 24, at 8:00 a.m. EDT (7:00 a.m. CDT) to provide information about its businesses for the public, investors, analysts, and news media. This webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at news.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company's prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.

Medtronic plans to report its fiscal year 2022 second, third, and fourth quarter results on November 23, 2021, February 22, 2022, and May 26, 2022, respectively. Confirmation and additional details will be provided closer to the specific event.

Financial SchedulesThe first quarter financial schedules and non-GAAP reconciliations can be viewed below. To view a printable PDF of the financial schedules and non-GAAP reconciliations, click here. To view the first quarter earnings presentation, click here.

MEDTRONIC PLC WORLD WIDE REVENUE^(1) (Unaudited)



FIRST QUARTER^(2)

REPORTED CONSTANT CURRENCY

(in millions) FY22 FY21 GrowthCurrency FY22 Growth Impact^(4)

Cardiovascular^(3) $2,890$2,43318.8%$ 96 $2,79414.8 %

Cardiac Rhythm & Heart Failure 1,483 1,247 18.9 46 1,437 15.2

Structural Heart & Aortic 787 627 25.5 28 759 21.1

Coronary & Peripheral Vascular 620 558 11.1 22 598 7.2

Medical Surgical 2,322 1,801 28.9 77 2,245 24.7

Surgical Innovations 1,554 1,080 43.9 54 1,500 38.9

Respiratory, Gastrointestinal, & Renal768 720 6.7 23 745 3.5

Neuroscience 2,204 1,712 28.7 47 2,157 26.0

Cranial & Spinal Technologies 1,123 944 19.0 19 1,104 16.9

Specialty Therapies 641 453 41.5 19 622 37.3

Neuromodulation 440 314 40.1 10 430 36.9

Diabetes 572 562 1.8 26 546 (2.8)

TOTAL $7,987$6,50722.7%$ 245 $7,74219.0 %

(1) The data in this schedule has been intentionally rounded to the nearestmillion and, therefore, may not sum.

(2) Fiscal year 2021 was a 53-week fiscal year, with the extra week occurringin the first fiscal month of the first quarter. While it is difficult tocalculate the impact of the extra week, the Company estimates the extra weekbenefited the first quarter of fiscal year 2021 revenue by approximately $360to $390 million.

(3) In the fourth quarter of fiscal year 2021, the Company realigned itsdivisions within Cardiovascular. As a result, fiscal year 2021 results havebeen recast to adjust for this realignment.

(4) The currency impact to revenue measures the change in revenue betweencurrent and prior year periods using constant exchange rates.

MEDTRONIC PLC U.S.^(1)(2) REVENUE (Unaudited)



FIRST QUARTER

REPORTED

(in millions) FY22 FY21 Growth

Cardiovascular^(3) $1,420$1,20617.7 %

Cardiac Rhythm & Heart Failure 770 672 14.6

Structural Heart & Aortic 347 274 26.6

Coronary & Peripheral Vascular 303 260 16.5

Medical Surgical 990 722 37.1

Surgical Innovations 620 400 55.0

Respiratory, Gastrointestinal, & Renal370 322 14.9

Neuroscience 1,446 1,136 27.3

Cranial & Spinal Technologies 795 692 14.9

Specialty Therapies 360 242 48.8

Neuromodulation 291 202 44.1

Diabetes 245 287 (14.6)

TOTAL $4,101$3,35122.4 %

(1) U.S. includes the United States and U.S. territories.

(2) The data in this schedule has been intentionally rounded to the nearestmillion and, therefore, may not sum.

(3) In the fourth quarter of fiscal year 2021, the Company realigned itsdivisions within Cardiovascular. As a result, fiscal year 2021 results havebeen recast to adjust for this realignment.

MEDTRONIC PLC WORLD WIDE REVENUE: GEOGRAPHIC ^(1)(2) (Unaudited)



FIRST QUARTER^(3)

REPORTED CONSTANT CURRENCY

(in millions) FY22 FY21 Growth Currency FY22 Growth Impact^(4)

U.S. $1,420$1,20617.7 %$ - $1,42017.7 %

Non-U.S. Developed1,003 853 17.6 72 931 9.1

Emerging Markets 467 374 24.9 24 443 18.4

Cardiovascular 2,890 2,433 18.8 96 2,794 14.8

U.S. 990 722 37.1 - 990 37.1

Non-U.S. Developed869 719 20.9 57 812 12.9

Emerging Markets 463 359 29.0 19 444 23.7

Medical Surgical 2,322 1,801 28.9 77 2,245 24.7

U.S. 1,446 1,136 27.3 - 1,446 27.3

Non-U.S. Developed465 376 23.7 30 435 15.7

Emerging Markets 293 199 47.2 17 276 38.7

Neuroscience 2,204 1,712 28.7 47 2,157 26.0

U.S. 245 287 (14.6) - 245 (14.6)

Non-U.S. Developed263 226 16.4 23 240 6.2

Emerging Markets 63 48 31.3 3 60 25.0

Diabetes 572 562 1.8 26 546 (2.8)

U.S. 4,101 3,351 22.4 - 4,101 22.4

Non-U.S. Developed2,601 2,175 19.6 182 2,419 11.2

Emerging Markets 1,286 981 31.1 63 1,223 24.7

TOTAL $7,987$6,50722.7 %$ 245 $7,74219.0 %

(1) U.S. includes the United States and U.S. territories. Non-U.S. developedmarkets include Japan, Australia, New Zealand, Korea, Canada, and the countriesof Western Europe. Emerging Markets include the countries of the Middle East,Africa, Latin America, Eastern Europe, and the countries of Asia that are notincluded in the non-U.S. developed markets, as previously defined.

(2) The data in this schedule has been intentionally rounded to the nearestmillion and, therefore, may not sum.

(3) Fiscal year 2021 was a 53-week fiscal year, with the extra week occurringin the first fiscal month of the first quarter. While it is difficult tocalculate the impact of the extra week, the Company estimates the extra weekbenefited the first quarter of fiscal year 2021 revenue by approximately $360to $390 million.

(4) The currency impact to revenue measures the change in revenue betweencurrent and prior year periods using constant exchange rates.

MEDTRONIC PLC CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



Three months ended

(in millions, except per share data) July 30, July 31, 2021 2020

Net sales $7,987 $6,507

Costs and expenses:

Cost of products sold 2,598 2,505

Research and development expense 750 621

Selling, general, and administrative expense 2,547 2,417

Amortization of intangible assets 436 440

Restructuring charges, net 11 53

Certain litigation charges, net 26 (88)

Other operating expense (income), net 760 (114)

Operating profit 859 673

Other non-operating income, net (111) (82)

Interest expense 137 171

Income before income taxes 833 584

Income tax provision 64 93

Net income 769 491

Net income attributable to noncontrolling (6) (4) interests

Net income attributable to Medtronic $763 $487

Basic earnings per share $0.57 $0.36

Diluted earnings per share $0.56 $0.36

Basic weighted average shares outstanding 1,344.5 1,341.9

Diluted weighted average shares outstanding 1,356.4 1,350.0

The data in this schedule has been intentionally rounded to the nearestmillion, and, therefore, may not sum.

MEDTRONIC PLC GAAP TO NON-GAAP RECONCILIATIONS^(1) (Unaudited)



Three months ended July 30, 2021

Cost of Gross OperatingIncome Net Income (in millions, except per share data) Net ProductsMargin OperatingProfit Before AttributableDilutedEffective Sales Sold PercentProfit Percent Income to MedtronicEPS Tax Rate Taxes

GAAP $7,987$2,59867.5 %$859 10.8 % $833 $763 $0.567.7 %

Non-GAAP Adjustments:

Restructuring and associated costs (2) - (33) 0.4 81 1.0 81 65 0.05 21.0

Acquisition-related items (3) - (5) 0.1 109 1.4 109 87 0.06 20.2

Certain litigation charges - - - 26 0.3 26 21 0.02 19.2

(Gain)/loss on minority investments (4)- - - - - (31) (29) (0.02)-

Medical device regulations (5) - (11) 0.1 21 0.3 21 17 0.01 19.0

Amortization of intangible assets - - - 436 5.5 436 366 0.27 15.8

MCS impairments / costs (6) - (58) 0.7 726 9.1 726 564 0.42 22.3

Certain tax adjustments, net (7) - - - - - - 53 0.04 -

Non-GAAP $7,987$2,49168.8 %$2,258 28.3 % $2,201$1,908 $1.4113.2 %

Currency impact (245) (56) (0.3) (47) 0.3 (0.03)

Currency Adjusted $7,742$2,43568.5 %$2,211 28.6 % $1.38



Three months ended July 31, 2020

Cost of Gross OperatingIncome Net Income (in millions, except per share data) Net ProductsMargin OperatingProfit Before AttributableDilutedEffective Sales Sold PercentProfit Percent Income to MedtronicEPS Tax Rate Taxes

GAAP $6,507$2,50561.5 %$673 10.3 % $584 $487 $0.3615.9 %

Non-GAAP Adjustments:

Restructuring and associated costs (2) - (27) 0.4 128 2.0 128 106 0.08 17.2

Acquisition-related items (8) - (2) - (95) (1.5) (95) (67) (0.05)29.5

Certain litigation charges - - - (88) (1.4) (88) (70) (0.05)20.5

(Gain)/loss on minority investments (4)- - - - - (10) (10) (0.01)-

Medical device regulations (5) - (10) 0.2 18 0.3 18 16 0.01 11.1

Amortization of intangible assets - - - 440 6.8 440 370 0.27 15.9

Certain tax adjustments, net - - - - - - 4 - -

Non-GAAP $6,507$2,46662.1 %$1,076 16.5 % $977 $836 $0.6214.0 %

See description of non-GAAP financial measures at the end of the earnings pressrelease.

(1) The data in this schedule has been intentionally rounded to the nearestmillion or $0.01 for EPS figures, and, therefore, may not sum.

(2) Associated costs include costs incurred as a direct result of therestructuring program, such as salaries for employees supporting the programand consulting expenses.

(3) The charges primarily include acquisitions of, and certain license paymentsfor, unapproved technology, business combination costs, and changes in fairvalue of contingent consideration.

(4) We exclude unrealized and realized gains and losses on our minorityinvestments as we do not believe that these components of income or expensehave a direct correlation to our ongoing or future business operations.

(5) The charges represent incremental costs of complying with the new EuropeanUnion medical device regulations for previously registered products andprimarily include charges for contractors supporting the project and otherdirect third-party expenses.

(6) The charges relate to the Company's June 3, 2021 decision to stop thedistribution and sale of the Medtronic HVAD System within the MechanicalCirculatory Support Operating Unit (MCS). Medtronic is committed to serving theneeds of the approximately 4,000 patients currently implanted with the HVADSystem. The charges include $515 million of non-cash impairments, primarilyrelated to $409 million of intangible asset impairments, as well as $211million for commitments and obligations in connection with our decision,including customer support obligations, restructuring, and other associatedcosts.

(7) The charges are associated with a change in the company's permanentlyreinvestment assertion on certain historical earnings and the amortization onpreviously established deferred tax assets from intercompany intellectualproperty transactions.

(8) The charges primarily include business combination costs, certain licensepayments for unapproved technology, changes in fair value of contingentconsideration, and a change in amounts accrued for certain contingentliabilities for recent acquisitions.

MEDTRONIC PLC GAAP TO NON-GAAP RECONCILIATIONS^(1) (Unaudited)



Three months ended July 30, 2021

SG&A R&D Other Other SG&A Expense asR&D Expense asOperatingOperating Other Non- (in millions) Net SalesExpense a % of NetExpensea % of NetExpense, Expense, net Operating Sales Sales net as a % of NetIncome, net Sales

GAAP $7,987 $2,54731.9 %$750 9.4 %$760 9.5 % $ (111)

Non-GAAP Adjustments:

Restructuring and associated costs (2) - (37) (0.5) - - - - -

Acquisition-related items (3) - - - (90) (1.1) (14) (0.2) -

Medical device regulations (4) - - - (9) (0.1) - - -

MCS impairments / costs (5) - - - - - (668) (8.4) -

Gain/(loss) on minority investments (6)- - - - - - - 31

Non-GAAP $7,987 $2,51031.4 %$651 8.2 %$78 1.0 % $ (80)

Currency impact (245) (69) 0.1 (7) 0.1 (66) (0.8) 1

Currency Adjusted $7,742 $2,44031.5 %$644 8.3 %$12 0.2 % $ (79)

See description of non-GAAP financial measures at the end of the earnings pressrelease.

(1) The data in this schedule has been intentionally rounded to the nearestmillion, and, therefore, may not sum.

(2) Associated costs include costs incurred as a direct result of therestructuring program, such as salaries for employees supporting the programand consulting expenses.

(3) The charges primarily include acquisitions of, and certain license paymentsfor, unapproved technology, business combination costs, and changes in fairvalue of contingent consideration.

(4) The charges represent incremental costs of complying with the new EuropeanUnion medical device regulations for previously registered products andprimarily include charges for contractors supporting the project and otherdirect third-party expenses.

(5) The charges relate to the Company's June 3, 2021 decision to stop thedistribution and sale of the Medtronic HVAD System within the MechanicalCirculatory Support Operating Unit (MCS). Medtronic is committed to serving theneeds of the approximately 4,000 patients currently implanted with the HVADSystem. The charges include $515 million of non-cash impairments, primarilyrelated to $409 million of intangible asset impairments, as well as $211million for commitments and obligations in connection with our decision,including customer support obligations, restructuring, and other associatedcosts.

(6) We exclude unrealized and realized gains and losses on our minorityinvestments as we do not believe that these components of income or expensehave a direct correlation to our ongoing or future business operations.





MEDTRONIC PLC GAAP TO NON-GAAP RECONCILIATIONS^(1) (Unaudited)



Three months Three months Fiscal year ended ended

(in millions) July 30, 2021July 31, 20202021

Net cash provided by operating activities $1,292 $278 $6,240

Additions to property, plant, and equipment(378) (334) (1,355)

Free Cash Flow (2) $914 $(56) $4,885

See description of non-GAAP financial measures at the end of the earnings pressrelease.

(1) The data in this schedule has been intentionally rounded to the nearestmillion, and, therefore, may not sum.

(2) Free cash flow represents operating cash flows less property, plant, andequipment additions.

MEDTRONIC PLC CONSOLIDATED BALANCE SHEETS (Unaudited)



(in millions) July 30, 2021April 30, 2021

ASSETS

Current assets:

Cash and cash equivalents $3,004 $3,593

Investments 7,591 7,224

Accounts receivable, less allowances and credit losses of $257 and $241, 5,431 5,462 respectively

Inventories, net 4,288 4,313

Other current assets 2,120 1,955

Total current assets 22,434 22,548

Property, plant, and equipment 12,808 12,700

Accumulated depreciation (7,646) (7,479)

Property, plant, and equipment, net 5,162 5,221

Goodwill 41,720 41,961

Other intangible assets, net 16,890 17,740

Tax assets 3,187 3,169

Other assets 2,409 2,443

Total assets $91,802 $93,083

LIABILITIES AND EQUITY

Current liabilities:

Current debt obligations $6 $11

Accounts payable 1,864 2,106

Accrued compensation 1,901 2,482

Accrued income taxes 341 435

Other accrued expenses 3,652 3,475

Total current liabilities 7,764 8,509

Long-term debt 25,958 26,378

Accrued compensation and retirement benefits 1,521 1,557

Accrued income taxes 2,262 2,251

Deferred tax liabilities 1,054 1,028

Other liabilities 1,579 1,756

Total liabilities 40,137 41,481

Commitments and contingencies

Shareholders' equity:

Ordinary shares- par value $0.0001, 2.6 billion shares authorized, 1,344,671,106 and - - 1,345,400,671 shares issued and outstanding, respectively

Additional paid-in capital 26,184 26,319

Retained earnings 28,511 28,594

Accumulated other comprehensive loss (3,209) (3,485)

Total shareholders' equity 51,486 51,428

Noncontrolling interests 178 174

Total equity 51,664 51,602

Total liabilities and equity $91,802 $93,083

The data in this schedule has been intentionally rounded to the nearestmillion, and, therefore, may not sum.

MEDTRONIC PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



Three months ended

(in millions) July 30, 2021July 31, 2020

Operating Activities:

Net income $ 769 $491

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 671 669

Provision for doubtful accounts 15 37

Deferred income taxes (11) 3

Stock-based compensation 69 70

MCS asset impairment and inventory write-down 515 -

Other, net 116 68

Change in operating assets and liabilities, net of acquisitions and divestitures:

Accounts receivable, net (40) (142)

Inventories (75) (235)

Accounts payable and accrued liabilities (416) (541)

Other operating assets and liabilities (321) (142)

Net cash provided by operating activities 1,292 278

Investing Activities:

Additions to property, plant, and equipment (378) (334)

Purchases of investments (2,654) (2,045)

Sales and maturities of investments 2,324 2,403

Other investing activities, net (76) (16)

Net cash provided by (used in) investing activities (784) 8

Financing Activities:

Change in current debt obligations, net - (16)

Proceeds from short-term borrowings (maturities greater than 90 days) - 2,789

Payments on long-term debt (1) (11)

Dividends to shareholders (846) (778)

Issuance of ordinary shares 111 26

Repurchase of ordinary shares (315) -

Other financing activities (4) (51)

Net cash provided by (used in) financing activities (1,055) 1,959

Effect of exchange rate changes on cash and cash equivalents (42) 114

Net change in cash and cash equivalents (589) 2,359

Cash and cash equivalents at beginning of period 3,593 4,140

Cash and cash equivalents at end of period $ 3,004 $6,499



Supplemental Cash Flow Information

Cash paid for:

Income taxes $ 249 $72

Interest 63 72

The data in this schedule has been intentionally rounded to the nearestmillion, and, therefore, may not sum.

About MedtronicMedtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among the world's largest medical technology, services and solutions companies - alleviating pain, restoring health and extending life for millions of people around the world. Medtronic employs more than 90,000 people worldwide, serving physicians, hospitals and patients in more than 150 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.

FORWARD LOOKING STATEMENTSThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties, including risks related to competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of medical products, government regulation and general economic conditions and other risks and uncertainties described in the company's periodic reports on file with the U.S. Securities and Exchange Commission including the most recent Annual Report on Form 10-K of the company, as filed with the U.S. Securities and Exchange Commission. In some cases, you can identify these statements by forward-looking words or expressions, such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "looking ahead," "may," "plan," "possible," "potential," "project," "should," "going to," "will," and similar words or expressions, the negative or plural of such words or expressions and other comparable terminology. Actual results may differ materially from anticipated results. Medtronic does not undertake to update its forward-looking statements or any of the information contained in this press release, including to reflect future events or circumstances.

NON-GAAP FINANCIAL MEASURESThis press release contains financial measures, including adjusted net income, adjusted diluted EPS, and organic revenue, which are considered "non-GAAP" financial measures under applicable SEC rules and regulations. References to quarterly figures increasing, decreasing or remaining flat are in comparison to fiscal year 2021.

Medtronic management believes that non-GAAP financial measures provide information useful to investors in understanding the company's underlying operational performance and trends and to facilitate comparisons with the performance of other companies in the med tech industry. Non-GAAP net income and diluted EPS exclude the effect of certain charges or gains that contribute to or reduce earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate management's review of the operational performance of the company and as a basis for strategic planning. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies. Management strongly encourages investors to review the company's consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial schedules accompanying this press release.

Medtronic calculates forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, forward-looking organic revenue growth guidance excludes the impact of foreign currency fluctuations, as well as significant acquisitions or divestitures. Forward-looking diluted non-GAAP EPS guidance also excludes other potential charges or gains that would be recorded as Non-GAAP Adjustments to earnings during the fiscal year. Medtronic does not attempt to provide reconciliations of forward-looking non-GAAP EPS guidance to projected GAAP EPS guidance because the combined impact and timing of recognition of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.

Contacts:

Erika Winkels Ryan Weispfenning

Public Relations Investor Relations

+1-763-526-8478 +1-763-505-4626

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SOURCE Medtronic plc