Q2FY23 Financial Summary and Strategic Highlights
Appendix: GAAP to non-GAAP reconciliation
(in millions, except per share data)
GAAP
Non-GAAP Adjustments:
Restructuring and associated costs (2)
Acquisition-related items (3)
(Gain)/loss on minority investments (4)
Medical device regulations (5)
Amortization of intangible assets
RCS impairments/costs (6)
Exit of business (7)
Certain tax adjustments, net (8)
Non-GAAP
Currency impact
Currency Adjusted
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS)
(Unaudited)
Three months ended October 28, 2022
See description of non-GAAP financial measures contained in the press release dated November 22, 2022.
Net
Sales
Cost of
Products
Sold
Gross
Margin
Percent
Operating
Profit
Operating
Profit
Income
Before
Net Income
Income
Attributable
Percent
Taxes
to Medtronic
Diluted
EPS
Effective
Tax Rate
$ 7,585 $ 2,535
66.6 % S
1,404
18.5 % $
1,395 $
427
$ 0.32
68.7 %
(3)
དྷེཧཱུཾ།པེ། །སྐྱེ
(21)
0.3
95
1.3
95
76
0.06
20.0
(13)
0.2
2
2
(6)
-
400.0
(11)
(11) (0.01)
0.3
37
0.5
37
30
0.02
18.9
421
5.6
421
356
0.27
15.4
24
0.3
24
24
0.02
4.2
(26)
0.3
37
0.5
37
37
0.03
793
0.60
$ 7,585
457
$ 2,454
150
67.6 % S
2,020
26.6 % $ 1.999
$
1,725
$ 1.30
13.3 %
20
$ 8,042 $ 2,604
67.6 % $ 2,040
(1.2)
25.4%
0.01
$ 1.31
Three months ended October 29, 2021
(1) The data in this schedule has been intentionally rounded to the nearest million or $0.01 for EPS figures, and, therefore, may not sum.
(2) Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting
expenses.
The charges primarily include business combination costs and changes in fair value of contingent consideration.
(4) We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of income or expense have a direct
correlation to our ongoing or future business operations.
(5) The charges represent incremental costs of complying with the new European Union (EU) medical device regulations for previously registered products and
primarily include charges for contractors supporting the project and other direct third-party expenses. We consider these costs to be duplicative of previously
incurred costs and/or one-time costs, which are limited to a specific time period.
(6) The charges predominantly include impairments related to changes in the carrying amount of the disposal group and other associated costs, as a result of the
anticipated sale of half of the Company's Renal Care Solutions (RCS) business related to the May 25, 2022 agreement with DaVita Inc.
(7) The charges relate to the exit of a business and are primarily comprised of inventory write-downs.
(8)
The charge primarily relates to a $764 million reserve adjustment that was a direct result of the U.S. Tax Court opinion, issued on August 18, 2022, on the
previously disclosed litigation regarding the allocation of income between Medtronic, Inc. and its wholly owned subsidiary operating in Puerto Rico.
(9) The charge includes the amortization on previously established deferred tax assets from intercompany intellectual property transactions.
(in millions, except per share data)
GAAP
Non-GAAP Adjustments:
Restructuring and associated costs (2)
Acquisition-related items (3)
Certain litigation charges
(Gain)/loss on minority investments (4)
Medical device regulations (5)
Net
Sales
Cost of
Products
Sold
Gross
Margin
Percent
Operating
Operating Profit
Profit
Income
Before
Net Income
Income
Attributable
Percent
Taxes
to Medtronic
Diluted
EPS
Effective
Tax Rate
$ 7,847 $ 2,497
68.2 % S 1,563
19.9 % $
1,493
$
1,311
$ 0.97
11.8 %
MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS)
(Unaudited)
Amortization of intangible assets
| | | | | |
(31)
0.4
(5)
0.1
(15)
0.2
431
FEཀྱན།མརྒ
1.0
77
62
0.05
19.5
(in millions)
(13)
(0.2)
(13)
(15)
(0.01)
(15.4)
Net cash provided by operating activities
0.4
34
30
0.02
11.8
Additions to property, plant, and equipment
6
6
Free Cash Flow (2)
0.3
24
20
0.01
16.7
5.5
431
361
0.27
See description of non-GAAP financial measures contained in the press release dated November 22, 2022.
16.0
Certain tax adjustments, net (9)
16
0.01
(1) The data in this schedule has been intentionally rounded to the nearest million, and, therefore, may not sum.
Non-GAAP
$ 7,847
$ 2,447
68.8 % S
2,116
27.0 % $
2,052
S
1,792 $ 1.32
12.4 %
(2) Free cash flow represents operating cash flows less property, plant, and equipment additions.
19
Investor Meetings | November 2022
Six months ended
October 28, 2022
Six months ended
October 29, 2021
$
2,005
$
3,061
$
(749)
1,256 $
(649)
2,412
MedtronicView entire presentation