What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-02-27 compared with 2023-11-30 · 144 added, 158 removed, 443 unchanged (41% of the section changed)

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For a full understanding of financial condition and results of operations, you should read this discussion along with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 28, 2023.

In addition, you should read this discussion along with our consolidated financial statements and related notes thereto at and for the three and six months ended October 27, 2023.

In addition, you should read this discussion along with our consolidated financial statements and related notes thereto at and for the three and nine months ended January 26, 2024.

Amounts reported in millions within this quarterly report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding.

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Our primary products include those for cardiac rhythm disorders, cardiovascular disease, advanced and general surgical care, respiratory and monitoring solutions, neurological disorders, spinal conditions and musculoskeletal trauma, urological and digestive disorders, and ear, nose, and throat, and diabetes conditions.

The following is a summary of revenue and diluted earnings per share for the three months ended October 27, 2023 and October 28, 2022, and operating cash flow for the six months ended October 27, 2023 and October 28, 2022:

The following is a summary of revenue and diluted earnings per share for the three months ended January 26, 2024 and January 27, 2023, and operating cash flow for the nine months ended January 26, 2024 and January 27, 2023:

GAAP to Non-GAAP Reconciliations

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended October 27, 2023 and October 28, 2022:

Three months ended October 27, 2023

The tables below present our GAAP to Non-GAAP reconciliations for the three months ended January 26, 2024 and January 27, 2023:

Three months ended January 26, 2024

(in millions, except per share data) Income Before Income Taxes Income

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Acquisition and divestiture-related items (2) 58 6 52 0.04 10.3

Certain litigation charges 65 15 50 0.04 23.1

(Gain)/loss on minority investments (3) 24 — 24 0.02 —

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Non-GAAP $ 2,055 $ 312 $ 1,728 $ 1.30 15.2 %

Three months ended October 28, 2022

Three months ended January 27, 2023

(in millions, except per share data) Income Before Income Taxes Income

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Non-GAAP $ 1,973 $ 239 $ 1,727 $ 1.30 12.1 %

(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.

(1) Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program, consulting expenses, and asset write-offs.

(3) The charges primarily include business combination costs, changes in fair value of contingent consideration, and charges related to the impending separation of the Patient Monitoring and Respiratory Interventions businesses within our Medical Surgical Portfolio.

(2) The charges primarily include business combination costs, changes in fair value of contingent consideration, and charges related to the potential separation of the Patient Monitoring and Respiratory Interventions businesses within our Medical Surgical Portfolio.

(3) 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.

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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 charge primarily relates to the establishment of a valuation allowance against certain net operating losses.

(7) 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.

The tables below present our GAAP to Non-GAAP reconciliations for the six months ended October 27, 2023 and October 28, 2022:

Six months ended October 27, 2023

(5) The net tax benefit primarily relates to a change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.

The tables below present our GAAP to Non-GAAP reconciliations for the nine months ended January 26, 2024 and January 27, 2023:

Nine months ended January 26, 2024

(in millions, except per share data) Income Before Income Taxes Income

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Non-GAAP $ 5,965 $ 954 $ 4,988 $ 3.74 16.0 %

Six months ended October 28, 2022

Nine months ended January 27, 2023

(in millions, except per share data) Income Before Income Taxes Income

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Non-GAAP $ 5,706 $ 736 $ 4,953 $ 3.72 12.9 %

(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.

(1) Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program, consulting expenses, and asset write-offs.

The prior year included non-cash pre-tax impairments, primarily related to goodwill and other associated costs, as a result of the April 1, 2023, sale of half of the Company's Renal Care Solutions (RCS) business.

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We consider these costs to be duplicative of previously incurred costs and/or one-time costs, which are limited to a specific period.

(6) The charge relates to an income tax reserve adjustment associated with the June 1, 2023, Israeli Central-Lod District Court decision, the establishment of a valuation allowance against certain net operating losses and amortization of previously established deferred tax assets from intercompany intellectual property transactions.

(5) The net charge primarily relates to an income tax reserve adjustment associated with the June 1, 2023, Israeli Central-Lod District Court decision and the establishment of a valuation allowance against certain net operating losses which were partially offset by a benefit from the change in a Swiss Cantonal tax rate associated with previously established deferred tax assets from intercompany intellectual property transactions and the step up in tax basis for Swiss Cantonal purposes.

(6) The charges relate to the early redemption of approximately $2.3 billion of debt and were recorded within interest expense, net within the consolidated statements of income.

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GAAP measure) and free cash flow are as follows:

Six months ended

(in millions) October 27, 2023 October 28, 2022

Nine months ended

(in millions) January 26, 2024 January 27, 2023

Net cash provided by operating activities $ 4,010 $ 3,579

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Refer to Note 17 to the consolidated financial statements for additional information regarding the Company's new reporting structure.

The charts below illustrate the percent of net sales by segment for the three months ended October 27, 2023 and October 28, 2022:

The table below illustrates net sales by segment and division for the three and six months ended October 27, 2023 and October 28, 2022:

The charts below illustrate the percent of net sales by segment for the three months ended January 26, 2024 and January 27, 2023:

The table below illustrates net sales by segment and division for the three and nine months ended January 26, 2024 and January 27, 2023:

Three months ended

Six months ended

(in millions) October 27, 2023 October 28, 2022 % Change October 27, 2023 October 28, 2022 % Change

Nine months ended

(in millions) January 26, 2024 January 27, 2023 % Change January 26, 2024 January 27, 2023 % Change

Cardiac Rhythm & Heart Failure $ 1,470 $ 1,419 4 % $ 4,408 $ 4,217 5 %

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Segment and Market Geography

The charts below illustrate the percent of net sales by market geography for the three months ended October 27, 2023 and October 28, 2022:

The table below includes net sales by market geography for each of our segments for the three and six months ended October 27, 2023 and October 28, 2022:

The charts below illustrate the percent of net sales by market geography for the three months ended January 26, 2024 and January 27, 2023:

The table below includes net sales by market geography for each of our segments for the three and nine months ended January 26, 2024 and January 27, 2023:

Developed Markets (2)

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Three months ended Three months ended Three months ended

(in millions) October 27, 2023 October 28, 2022 % Change October 27, 2023 October 28, 2022 % Change October 27, 2023 October 28, 2022 % Change

(in millions) January 26, 2024 January 27, 2023 % Change January 26, 2024 January 27, 2023 % Change January 26, 2024 January 27, 2023 % Change

Cardiovascular $ 1,373 $ 1,363 1 % $ 950 $ 859 11 % $ 607 $ 538 13 %

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Emerging Markets (3)

Six months ended Six months ended Six months ended

(in millions) October 27, 2023 October 28, 2022 % Change October 27, 2023 October 28, 2022 % Change October 27, 2023 October 28, 2022 % Change

Nine months ended Nine months ended Nine months ended

(in millions) January 26, 2024 January 27, 2023 % Change January 26, 2024 January 27, 2023 % Change January 26, 2024 January 27, 2023 % Change

Cardiovascular $ 4,149 $ 4,059 2 % $ 2,818 $ 2,553 10 % $ 1,734 $ 1,607 8 %

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(4) Includes revenue from the divested Renal Care Solutions business and Transition Manufacturing Agreements from previously divested businesses.

The increase in net sales for the three and six months ended October 27, 2023, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most products lines and businesses, including Micra, Transcatheter Aortic Valve replacements (TAVR), Core Spine, Advanced Surgical Technologies, and Diabetes.

The increase in net sales for the three and nine months ended January 26, 2024, as compared to the corresponding period in the prior fiscal year, was driven primarily by growth in most businesses, including Diabetes, Cardiac Surgery, Core Spine, Structural Heart and Cardiac Pacing, as well as strength in international markets.

Looking ahead, a number of macro-economic and geopolitical factors could negatively impact our business, including without limitation:

• Competitive product launches and pricing pressure, geographic macro-economic risks including fluctuations in currency exchange rates, general price inflation, rising interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, replacement cycle challenges, and supply chain challenges from time to time;

• Competitive product launches and pricing pressure, geographic macro-economic risks including fluctuations in currency exchange rates, general price inflation, changes in interest rates, reimbursement challenges, impacts from changes in the mix of our product offerings, delays in product registration approvals, replacement cycle challenges, and supply chain challenges from time to time;

• National and provincial tender pricing for certain products, particularly in China;

• The sanctions and other measures being imposed in response to the Russia-Ukraine conflict are having, and could continue to have impacts on revenue and supply chain.

The financial impact of the conflict in the second quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material, and for the three and six months ended October 27, 2023, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets.

The financial impact of the conflict in the third quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material, and for the three and nine months ended January 26, 2024, the business of the Company in these countries represented less than 1% of the Company's consolidated revenues and assets.

Although the implications of this conflict are difficult to predict at this time, the ongoing conflict may increase pressure on the global economy and supply chains, resulting in increased future volatility risk for our business operations and performance.

• Although the long-term implications of Israel's recent conflict are difficult to predict at this time, the financial impact of the conflict in the second quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material.

For the three and six months ended October 27, 2023, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.

• Although the long-term implications of Israel's recent conflict are difficult to predict at this time, the financial impact of the conflict in the third quarter of fiscal year 2024, including on accounts receivable and inventory reserves, was not material.

For the three and nine months ended January 26, 2024, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.

Cardiovascular

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Cardiovascular also includes Cath Lab Managed Services (CLMS) within the Cardiac Rhythm & Heart Failure division.

Cardiovascular's net sales for the three and six months ended October 27, 2023 were $2.9 billion and $5.8 billion, respectively, an increase of 6 percent for both periods as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily due to strong performance of Micra, TAVR, Cannula, and Perfusion.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended October 27, 2023 and October 28, 2022:

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and six months ended October 27, 2023 increased 5 percent, for both periods as compared to the corresponding periods in the prior fiscal year.

Cardiovascular's net sales for the three and nine months ended January 26, 2024 were $2.9 billion and $8.7 billion, respectively, an increase of 6 percent for both periods as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily due to strong performance of Micra, TAVR, and Perfusion.

The graphs below illustrate the percent of Cardiovascular net sales by division for the three months ended January 26, 2024 and January 27, 2023:

Cardiac Rhythm & Heart Failure (CRHF) net sales for the three and nine months ended January 26, 2024 increased 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was driven by continued adoption of Micra, including the U.S.

launch of Micra AV2 and Micra VR2, and growth from transvenous pacemakers and Arctic Front cryoablation catheters.

Net sales growth was also driven by increases in Cardiovascular Diagnostics led by LINQ II implant growth due to U.S launch of AccuRythm AI 2.0.

Structural Heart & Aortic (SHA) net sales for the three and six months ended October 27, 2023 increased 8 percent and 9 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by growth in TAVR, including the recent U.S.

and Japan launches of Evolut FX TAVR system, and in Cardiac Surgery driven by growth in Cannula and Perfusion particularly in the U.S.

Coronary & Peripheral Vascular (CPV) net sales for the three and six months ended October 27, 2023 increased 5 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The increase in net sales was driven by the launch of the Onyx Frontier, TruStar and TruCor families of drug-eluting stents, as well as growth in guide catheters and drug coated balloons, and performance of our vascular embolization and superficial venous product portfolio, including the VenaSeal system.

launch of Micra AV2 and Micra VR2, and international growth of Arctic Front cryoablation catheters.

Structural Heart & Aortic (SHA) net sales for the three and nine months ended January 26, 2024 increased 11 percent and 10 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was driven by growth in TAVR, including strong growth in Western Europe and Japan from adoption of Evolut FX TAVR system, and in Cardiac Surgery driven by growth in Perfusion particularly in the U.S.

Coronary & Peripheral Vascular (CPV) net sales for the three and nine months ended January 26, 2024 increased 6 percent and 4 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The increase in net sales was driven by growth in guide catheters, balloons, and drug-eluting stents, as well as growth in our Vascular Embolization products.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead, we expect Cardiovascular could be affected by the following:

• Continued growth of our Micra transcatheter pacing system including the recent U.S.

launch of Micra AV2 and Micra VR2 and increasing global penetration.

• Continued growth of our Micra transcatheter pacing system including the U.S.

launch of Micra AV2 and Micra VR2 in the first quarter of fiscal year 2024, and increasing global penetration.

Micra AV2 and Micra VR2 received CE Mark in January 2024.

• Continued acceptance and growth from the Azure XT and Azure S SureScan pacing systems and the 3830 lead.

Azure pacemakers feature Medtronic-exclusive BlueSync technology, which enables automatic, secure wireless remote monitoring with increased device longevity.

Azure pacemakers feature Medtronic-exclusive BlueSync technology, which enables automatic, secure wireless remote

monitoring with increased device longevity.

The 3830 lead, previously labeled for His-bundle pacing, has now been expanded to include left bundle branch area pacing effectively covering all current forms of conduction system pacing.

• Acceptance and growth of Aurora Extravascular ICD.

• Global adoption of Aurora Extravascular ICD.

• Growth of the Cobalt and Crome portfolio of ICDs and CRT-Ds.

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• Continued acceptance and expansion of the LINQ II cardiac monitor with AccuRhythm AI algorithms.

• Continued acceptance, adoption, and growth of our innovative portfolio of products in the electrophysiology (EP) segment, including the Arctic Front cryoablation system, PulseSelect pulse field ablation (PFA), and Affera mapping and navigation system.

The PulseSelect PFA system was approved by the U.S.

FDA in December 2023, and is the first PFA technology to receive U.S.

FDA approval.

• Continued acceptance and growth of the self-expanding CoreValve Evolut transcatheter aortic valve replacement platform.

This includes Evolut PRO which provides enhanced hemodynamics, reliable delivery, enhanced durability, advanced sealing, and Evolut FX, a system designed to improve the overall procedural experience through enhancements in deliverability, implant visibility, and deployment stability.

• Market acceptance and reimbursement for the Symplicity Spyral Multi-Electrode Renal Denervation Catheter.

• Market acceptance and reimbursement for the Symplicity Spyral renal denervation system, also known as the Symplicity blood pressure procedure, for the treatment of hypertension.

The Symplicity blood pressure procedure was approved by the U.S.

FDA in November 2023.

• Continued acceptance and growth of the Onyx Frontier DES platform.

The platform launched in the U.S.

in the first quarter of fiscal year 2023 and in select international countries in the second quarter of fiscal year 2023.

Onyx Frontier is a drug-eluding stent (DES) that introduces an enhanced delivery system and is used for complex percutaneous coronary intervention (PCI).

• Continued acceptance of the VenaSeal Closure System in the U.S.

The VenaSeal Closure System is a unique non-thermal solution to address superficial venous disease that provides improved patient comfort, reduces the recovery time, and eliminates the risk of thermal nerve injury.

• Acceptance and growth of IN.PACT 018 drug-coated balloons (DCB).

The product was launched under limited market release in the first quarter of fiscal year 2023 with full market release in the third quarter of fiscal year 2023.

IN.PACT 018 adds to the existing IN.PACT Admiral DCB portfolio and is used to treat femoropopliteal disease.

• Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline.

Neuroscience's products include various spinal implants, bone graft substitutes, biologic products, image-guided surgery and intra-operative imaging systems, robotic guidance systems used in the robot-assisted spine procedures, and systems that incorporate advanced energy surgical instruments.

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Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy.

Neuroscience’s net sales for the three and six months ended October 27, 2023 were $2.3 billion and $4.5 billion, respectively, an increase of 5 percent for both periods, compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily due to growth in Core Spine and Neurosurgery.

For the six months ended October 27, 2023, the increase was also driven by growth in ENT.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended October 27, 2023 and October 28, 2022:

Cranial and Spinal Technologies (CST) net sales for the three and six months ended October 27, 2023 increased 7 percent and 6 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

Neuroscience’s net sales for the three and nine months ended January 26, 2024 were $2.4 billion and $6.9 billion, respectively, an increase of 5 percent for both periods, compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily due to growth in Spine & Biologics.

For the nine months ended January 26, 2024, the increase was also driven by growth in ENT.

The graphs below illustrate the percent of Neuroscience net sales by division for the three months ended January 26, 2024 and January 27, 2023:

Cranial and Spinal Technologies (CST) net sales for the three and nine months ended January 26, 2024 increased 7 percent for both periods, as compared to the corresponding periods in the prior fiscal year.

The growth for both periods was driven by increased sales of Core Spine products driven by AiBLE spinal ecosystem pull-through.

The net sales increase was also attributable to strong growth of StealthStation Navigation and O-arm Imaging Systems.

Growth for the six months ended October 27, 2023 was also driven by increased sales of Biologics products.

Specialty Therapies (Specialty) net sales for the three and six months ended October 27, 2023 increased 3 percent and 4 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase was also attributable to strong growth of StealthStation Navigation and increased sales of Biologics products.

Specialty Therapies (Specialty) net sales for the three and nine months ended January 26, 2024 increased 4 percent for both periods, as compared to the corresponding periods in the prior fiscal year.

The increase for both periods was driven by growth in ENT and hemorrhagic stroke flow diversion products.

For the three months ended October 27, 2023, the increase was also driven by growth in Pelvic Health.

For the six months ended October 27, 2023, Pelvic Health experienced slight net sales declines due to recent competitive launches.

Neuromodulation (NM) net sales for the three and six months ended October 27, 2023 increased 2 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was driven by growth within Pain Stim and Targeted Drug Delivery, partially offset by a decline in Interventional due to competitive pressure.

The increase for the six months ended October 27, 2023 was also driven by growth in Brain Modulation, primarily in the first quarter of fiscal year 2024.

Neuromodulation (NM) net sales for the three and nine months ended January 26, 2024 increased 1 percent and 2 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was driven by growth within Brain Modulation, including growth from the Western European launch of the Percept RC neurostimulator, as well as Pain Stim growth in the U.S.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Neuroscience could be affected by the following:

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• Continued acceptance and growth of our Percept family of DBS devices with proprietary BrainSense technology for objectifying and personalizing the treatment of Parkinson's Disease, epilepsy, and other movement disorders.

• Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our closed-loop Percept devices with adaptive DBS (aDBS) and Inceptiv Neurostimulator, as well as our hemorrhagic stroke intravascular device, and our next-generation spine enabling technologies.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our closed-loop Percept devices with adaptive DBS (aDBS) and Inceptiv Neurostimulator, as well as our hemorrhagic stroke intravascular device, and our next-generation spine enabling technologies.

Medical Surgical

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The products include those for advanced and general surgical products, surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, hernia mechanical devices, mesh implants, advanced ablation, interventional lung, ventilators, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry.

Medical Surgical's net sales for the three and six months ended October 27, 2023 were $2.1 billion and $4.2 billion, respectively, an increase of 7 percent and 6 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily driven by growth in Advanced Surgical Technologies and in General Surgery Technologies.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended October 27, 2023 and October 28, 2022:

Surgical & Endoscopy (SE) net sales for the three and six months ended October 27, 2023 increased 9 percent and 7 percent, as compared to the corresponding periods in the prior fiscal year.

The increase for both periods was predominantly attributable to growth in Advanced Surgical Technologies, primarily driven by supply expansion, as well as continued growth in GI Genius, Wound Management, and Electrosurgery.

Patient Monitoring & Respiratory Interventions (PMRI) net sales for the three and six months ended October 27, 2023 increased 3 percent for both periods, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was largely due to growth in airways and monitors partially offset by decreases in ventilator sales.

Medical Surgical's net sales for the three and nine months ended January 26, 2024 were $2.1 billion and $6.3 billion, respectively, an increase of 4 percent and 5 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was primarily driven by growth in Advanced Surgical Technologies and General Surgical Technologies.

The graphs below illustrate the percent of Medical Surgical net sales by division for the three months ended January 26, 2024 and January 27, 2023:

Surgical & Endoscopy (SE) net sales for the three and nine months ended January 26, 2024 increased 5 percent and 6 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The increase for the nine months ended January 26, 2024 was also driven by growth in GI Genius and EndoFlip.

Patient Monitoring & Respiratory Interventions (PMRI) net sales for the three and nine months ended January 26, 2024 increased 2 percent and 3 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The net sales increase for both periods was largely due to growth in Nellcor pulse oximetry monitors and airways, partially offset by declines in ventilator sales.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Medical Surgical could be affected by the following:

• The pending separation of the combined Patient Monitoring and Respiratory Interventions businesses from the Medical Surgical Portfolio.

• Acceptance and continued growth of Open-to-MIS (minimally invasive surgery) techniques and tools through our efforts to transition open surgery to MIS.

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An example is our ValleyLab LS10 single channel vessel sealing generator, which is compatible with our line of LigaSure instruments and designed for simplified use and affordability.

• Continued acceptance and growth in patient monitoring and airway management.

Key products in this area include Microstream Capnography, Nellcor pulse oximetry system with OxiMax technology, Shiley tracheostomy and endotracheal tubes, McGRATH MAC video laryngoscopes.

• Acceptance of less invasive standards of care in chronic and colorectal, as well as hepatology products, including products that span the care continuum from diagnostics to therapeutics.

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The Hugo RAS system, which received CE Mark in October 2021, as well as secured additional regulatory approvals outside the U.S., is designed to help reduce unwanted variability, improve patient outcomes, and, by extension, lower per procedure cost.

• Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our Hugo RAS system in the U.S., Signia powered stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.

• Our recent decision to exit our ventilator product line and retain and combine the remaining PMRI businesses into one business unit called Acute Care and Monitoring (ACM).

For the nine months ended January 26, 2024, ventilator product line revenue was $111 million.

The Company expects to record an estimated pre-tax charge of $350 million to $425 million, the majority of which is expected to be recorded in the quarter ending April 26, 2024, primarily related to non-cash impairment of long-lived intangible assets.

The Company will continue to honor existing ventilator contracts to serve the needs of its customers and their patients.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include our Hugo RAS system in the U.S., Signia powered stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.

Diabetes' products include insulin pumps, continuous glucose monitoring (CGM) systems, and consumables.

Diabetes' net sales for the three and six months ended October 27, 2023 were $610 million and $1.2 billion, respectively, an increase of 10 percent and 8 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

Diabetes' net sales for the three and nine months ended January 26, 2024 were $640 million and $1.8 billion, respectively, an increase of 12 percent and 10 percent, respectively, as compared to the corresponding periods in the prior fiscal year.

The increase in net sales for both periods was primarily driven by strong international growth as a result of the continued international expansion of the MiniMed 780G insulin pump system and integrated CGM.

The launch of the MiniMed 780G insulin pump system in the U.S., during the first quarter of fiscal year 2024, also contributed to the growth for the three and six months ended October 27, 2023.

The launch of the MiniMed 780G insulin pump system in the U.S., during the first quarter of fiscal year 2024, also contributed to the growth for the three and nine months ended January 26, 2024.

In addition to the macro-economic and geopolitical factors described in the Executive Level Overview, looking ahead we expect Diabetes could be affected by the following:

• Continued acceptance and growth for the MiniMed 780G insulin pump system, which is powered by SmartGuard technology and features the added benefits of meal detection technology that automatically adjusts and corrects sugar levels every five minutes.

The global adoption of Automated Insulin Delivery (AID) systems has resulted in strong

The global adoption of our Automated Insulin Delivery (AID) systems has resulted in strong

sensor attachment rates.

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FDA in late April 2023.

The MiniMed 780G insulin pump system with Simplera Sync received CE Mark in early January 2024.

• Continued acceptance and growth of the Guardian Connect CGM system, which displays glucose information directly to a smartphone to provide patients access to their glucose levels seamlessly and discretely.

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• Changes in medical reimbursement policies and programs, along with additional payor coverage on insulin pumps.

• Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, including our next-generation sensor Simplera, which has been submitted for approval to the U.S.

• Our ability to meet growing demand for our existing products and to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, including our next-generation sensor Simplera, which has been submitted for approval to the U.S.

FDA and received CE Mark in September 2023.

COSTS AND EXPENSES

The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three and six months ended October 27, 2023 and October 28, 2022:

Cost of Products Sold Cost of products sold for the three and six months ended October 27, 2023 was $2.8 billion and $5.4 billion, respectively, as compared to $2.5 billion and $5.1 billion, respectively, for the corresponding periods in the prior fiscal year.

The increase in cost products sold as a percentage of net sales was primarily attributable to increased labor and direct material manufacturing costs, predominantly due to inflationary pressures and supply constraints from time to time.

The following is a summary of cost of products sold, research and development, and selling, general, and administrative expenses as a percent of net sales for the three and nine months ended January 26, 2024 and January 27, 2023:

Cost of Products Sold Cost of products sold for the three and nine months ended January 26, 2024 was $2.8 billion and $8.2 billion, respectively, as compared to $2.7 billion and $7.7 billion, respectively, for the corresponding periods in the prior fiscal year.

The decrease in cost products sold as a percentage of net sales for the three months ended January 26, 2024 was primarily due to reduced freight costs, volume improvements, and stabilizing of raw material costs.

The increase in cost products sold as a percentage of net sales for the nine months ended January 26, 2024 was primarily attributable to increased labor and direct material manufacturing costs, predominantly due to inflationary pressures and supply constraints from time to time.

Research and Development Expense We remain committed to deliver the best possible experiences for patients, physicians, and caregivers we serve;

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and to expand healthcare access and deliver positive outcomes.

Research and development expense for the three and six months ended October 27, 2023 was $698 million and $1.4 billion, respectively, as compared to $676 million and $1.4 billion, respectively, for the corresponding periods in the prior fiscal year.

Research and development expense for the three and nine months ended January 26, 2024 was $695 million and $2.1 billion, respectively, as compared to $688 million and $2.1 billion, respectively, for the corresponding periods in the prior fiscal year.

Selling, General, and Administrative Expense Our goal is to continue to leverage selling, general, and administrative expense initiatives.

Selling, general, and administrative expense primarily consists of salaries and wages, other administrative costs, such as professional fees and marketing expenses, certain acquisition, divestiture, and separation-related costs, and restructuring expenses.

Selling, general, and administrative expense for the three and six months ended October 27, 2023 was $2.7 billion and $5.3 billion, respectively, as compared to $2.6 billion and $5.2 billion, respectively, for the corresponding periods in the prior fiscal year.

The increase in selling, general, and administrative expense for both periods is primarily due to reduced incentive accruals in the prior year.

Selling, general, and administrative expense for the three and nine months ended January 26, 2024 was $2.7 billion and $8.0 billion, respectively, as compared to $2.6 billion and $7.8 billion, respectively, for the corresponding periods in the prior fiscal year.

The increase in selling, general, and administrative expense for both periods is primarily due to reduced incentive performance in the prior year.

The following is a summary of other costs and expenses (income):

Three months ended Six months ended

(in millions) October 27, 2023 October 28, 2022 October 27, 2023 October 28, 2022

Three months ended Nine months ended

(in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023

Amortization of intangible assets $ 419 $ 431 $ 1,274 $ 1,275

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Certain litigation charges — — 105 —

Other operating income, net (31) (97) (30) (62)

Other operating expense (income), net 17 (125) (13) (187)

Other non-operating income, net (177) (149) (407) (342)

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Amortization of Intangible Assets Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of purchased patents, trademarks, tradenames, customer relationships, purchased technology, and other intangible assets.

Restructuring Charges, Net For the three and six months ended October 27, 2023, restructuring costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

For the three and six months ended October 28, 2022, restructuring charges primarily related to Enterprise Excellence and Simplification restructuring programs, both of which were substantially completed as of the end of fiscal year 2023.

Enterprise Excellence was designed to leverage the Company’s global size and scale to focus on global operations, and functional and commercial optimization, and had total pre-tax charges of $1.8 billion.

Simplification was designed to focus the organization on accelerating innovation, enhancing customer experience, driving revenue growth and winning market share, and had total pre-tax charges of $0.5 billion.

Restructuring Charges, Net For the three and nine months ended January 26, 2024, restructuring costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

For the three and nine months ended January 27, 2023, restructuring charges primarily related to the Enterprise Excellence and Simplification restructuring programs, both of which were substantially completed as of the end of fiscal year 2023.

Enterprise Excellence was designed to leverage the Company’s global size and scale to focus on global operations, and functional and commercial optimization, and had total cumulative pre-tax charges of $1.8 billion.

For additional information about our restructuring programs, refer to Note 5 to the current period's consolidated financial statements.

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For additional information, refer to Note 16 in the current period's consolidated financial statements.

Other Operating Income, Net Other operating income, net primarily includes royalty expense, currency remeasurement and derivative gains and losses, Puerto Rico excise taxes, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and income from funded research and development arrangements.

For the three and six months ended October 27, 2023, the decrease in other operating income, net was driven by the net currency impact of remeasurement expense and our hedging programs, which results in a net gain of $32 million and $29 million, respectively, as compared to a net gain of $138 million and $219 million, respectively, in the corresponding periods in the prior year.

The decrease was partially offset by a decrease of $25 million and $46 million in Puerto Rico Excise Taxes for the three and six months ended October 27, 2023.

Other Operating Expense (Income), Net Other operating expense (income), net primarily includes royalty expense, currency remeasurement and derivative gains and losses, Puerto Rico excise taxes, changes in the fair value of contingent consideration, certain acquisition and divestiture-related items, and income from funded research and development arrangements.

For the three and nine months ended January 26, 2024, the decrease in other operating expense (income), net was driven by the net currency impact of remeasurement expense and our hedging programs, which resulted in a net loss of $12 million and net gain of $16 million, respectively, as compared to a net gain of $132 million and $351 million, respectively, in the corresponding periods in the prior year.

The decrease was partially offset by a decrease of $22 million and $67 million in Puerto Rico Excise Taxes for the three and nine months ended January 26, 2024.

As a result of newly enacted tax legislation in Puerto Rico, the Company is no longer subject to Puerto Rico Excise Tax, but is now subject to a higher withholding tax, which is recorded in income tax provision in the consolidated statements of income.

For the six months ended October 27, 2023, the decrease in other operating income, net was also driven by a decrease in acquisition and divestiture-related expenses, which was primarily attributable to non-cash pre-tax charges of $81 million, primarily related to goodwill, recorded in the prior year as a result of the April 1, 2023 sale of half of the Company's RCS business.

For the nine months ended January 26, 2024, the decrease in other operating expense (income), net was also driven by a decrease in acquisition and divestiture-related expenses, which was primarily attributable to non-cash pre-tax charges of $81 million, primarily related to goodwill, recorded in the prior year as a result of the April 1, 2023 sale of half of the Company's RCS business.

Other Non-Operating Income, Net Other non-operating income, net includes the non-service component of net periodic pension and postretirement benefit cost, investment gains and losses, and interest income.

For the three and six months ended October 27, 2023, the increase in other non-operating income, net is primarily attributable an increase in interest income, partially offset by losses on our minority investment portfolio.

Interest income was $148 million and $259 million for the three and six months ended October 27, 2023, respectively, and $73 million and $128 million for the three and six months ended October 28, 2022, respectively.

Net losses on minority investments were $25 million and $89 million for the three and six months ended October 27, 2023, respectively, as compared to a net gain of $12 million and $15 million for the three and six months ended October 28, 2022, respectively.

For the three and nine months ended January 26, 2024, the increase in other non-operating income, net is primarily attributable an increase in interest income, partially offset by net losses on our minority investment portfolio.

Interest income was $170 million and $429 million for the three and nine months ended January 26, 2024, respectively, and $118 million and $246 million for the three and nine months ended January 27, 2023, respectively.

Net losses on minority investments were $24 million and $113 million for the three and nine months ended January 26, 2024, respectively, as compared to a net gain of $7 million and $22 million for the three and nine months ended January 27, 2023, respectively.

Interest Expense, Net Interest expense, net includes interest incurred on our outstanding borrowings, amortization of debt issuance costs and debt premiums or discounts, amortization of amounts excluded from the effectiveness assessment of certain net investment hedges, and charges recognized in connection with the early redemption of senior notes.

For the three and six months ended October 27, 2023, the increase in interest expense, net was primarily driven by increased interest rates on our global liquidity structures, the impact of higher coupons on Senior Notes issued in the second quarter of fiscal year 2023, and the higher outstanding commercial paper balance.

Partially offsetting the increase for the three and six months was $50 million and $99 million, respectively, in after-tax gains representing amounts excluded from the effectiveness assessment of certain net investment hedges, compared to $27 million and $47 million, respectively, for the corresponding periods in the prior year.

Also partially offsetting the increase in interest expense, net was the $53 million charge incurred as a result of the early redemption of approximately $2.3 billion of senior notes during the six months ended October 28, 2022.

Three months ended Six months ended

(in millions) October 27, 2023 October 28, 2022 October 27, 2023 October 28, 2022

For the three and nine months ended January 26, 2024, the increase in interest expense, net was primarily driven by increased interest rates on our global liquidity structures, the impact of higher coupons on Senior Notes issued in the second quarter of fiscal year 2023, and the higher outstanding commercial paper balance.

Partially offsetting the increase for the three and nine months was $49 million and $148 million, respectively, in after-tax gains representing amounts excluded from the effectiveness assessment of certain net investment hedges, compared to $26 million and $74 million, respectively, for the corresponding periods in the prior year.

Three months ended Nine months ended

(in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023

Income tax provision $ 135 $ 146 $ 936 $ 1,218

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The court determined that there was a deemed taxable transfer of intellectual property.

As a result, the Company recorded a $187 million income tax charge during the six months ended October 27, 2023.

Subsequent to quarter end, the Company filed an appeal with the Supreme Court of Israel.

Our effective tax rate for the three and six months ended October 27, 2023 was 30.6% and 32.0%, respectively, as compared to 68.7% and 44.0% for the three and six months ended October 28, 2022, respectively.

The decrease in our effective tax rate for the three months ended October 27, 2023 primarily relates to the $764 million income tax charge recorded during the three months ended October 28, 2022 related to the U.S.

Tax Court decision, which was partially offset by an increase in Puerto Rico withholding tax rates and the establishment of a valuation allowance on certain net operating losses recorded during the current quarter.

In addition to the items discussed in the current quarter, the decrease in the effective tax rate for the six months ended October 27, 2023 was also attributable to the Ventor court decision noted above.

Our Non-GAAP Nominal Tax Rate for the three and six months ended October 27, 2023 was 16.9% and 16.4%, respectively, as compared to 13.3% for both the three and six months ended October 28, 2022.

The change in our Non-GAAP Nominal Tax Rate was primarily due to an increase in Puerto Rico withholding tax rates and year-over-year changes in operational results by jurisdiction.

An increase in our Non-GAAP Nominal Tax Rate of 1 percent would result in an additional income tax provision for the three and six months ended October 27, 2023 of approximately $20 million and $39 million, respectively.

As a result, the Company recorded a $187 million income tax charge during the nine months ended January 26, 2024.

During the three months ended January 26, 2024, the Company filed an appeal with the Supreme Court of Israel.

Our effective tax rate for the three and nine months ended January 26, 2024 was 9.2% and 23.5%, respectively, as compared to 10.6% and 31.9% for the three and nine months ended January 27, 2023, respectively.

The decrease in our effective tax rate for the three months ended January 26, 2024 primarily relates to a Swiss Cantonal tax rate change on previously recorded deferred tax assets, which was partially offset by an increase in Puerto Rico withholding tax rates and finalization of certain tax returns and statute of limitation lapses for the quarter ended January 27, 2023.

The decrease in the effective tax rate for the nine months ended January 26, 2024 was attributable to the previously highlighted items and the $764 million income tax charge recorded during the nine months ended January 27, 2023 related to the U.S.

Tax Court decision, partially offset by the Ventor court decision noted above and the establishment of a valuation allowance against certain net operating losses.

Our Non-GAAP Nominal Tax Rate for the three and nine months ended January 26, 2024 was 15.2% and 16.0%, respectively, as compared to 12.1% and 12.9% for the three and nine months ended January 27, 2023, respectively The change in our Non-GAAP Nominal Tax Rate was primarily due to an increase in Puerto Rico withholding tax rates, year-over-year changes in operational results by jurisdiction, and a decrease in benefit related to the finalization of certain returns and statute of limitation lapses from the quarter ended January 27, 2023.

An increase in our Non-GAAP Nominal Tax Rate of 1 percent would result in an additional income tax provision for the three and nine months ended January 26, 2024 of approximately $21 million and $60 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of October 27, 2023 provide us with flexibility, and our cash, cash equivalents, and current investments, along with our credit facility and related commercial paper programs will satisfy our foreseeable operating needs.

We are currently in a strong financial position, and we believe our balance sheet and liquidity as of January 26, 2024 provide us with flexibility, and our cash, cash equivalents, and current investments, along with our credit facility and related commercial paper programs will satisfy our foreseeable operating needs.

Our liquidity and capital structure are evaluated regularly within the context of our annual operating and strategic planning processes.

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The following is a summary of cash provided by (used in) operating, investing, and financing activities, the effect of exchange rate changes on cash and cash equivalents, and the net change in cash and cash equivalents:

Six months ended

(in millions) October 27, 2023 October 28, 2022

Nine months ended

(in millions) January 26, 2024 January 27, 2023

Cash provided by (used in):

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Net change in cash and cash equivalents $ 80 $ 808

Operating Activities The $469 million decrease in net cash provided was primarily driven by timing of payments to vendors, as well as an increase in cash paid for taxes, interest, litigation, and restructuring.

The decrease in net cash was partially offset by an increase in cash collected from customers primarily due to an increase in sales.

The increase in cash paid for taxes is due to the payment of transition tax that resulted from U.S.

Tax Reform and an audit related payment made to the Internal Revenue Service.

For more information on litigation and restructuring payments, refer to Note 16 and Note 5, respectively.

Investing Activities The $1.8 billion decrease in cash used was primarily attributable to a decrease in cash paid for acquisitions of $1.8 billion, as compared to the corresponding period in the prior fiscal year.

Financing Activities There was a $2.7 billion increase in net cash used during the six months ended October 27, 2023, as compared to the corresponding period in the prior fiscal year.

Operating Activities The $431 million increase in net cash provided was primarily driven by an increase in cash collected from customers due to an increase in sales.

The increase in net cash was partially offset by timing of payments to vendors, as well as an increase in cash paid for interest and litigation.

For more information on litigation payments, refer to Note 16.

Investing Activities The $1.3 billion decrease in cash used was primarily attributable to a decrease in cash paid for acquisitions of $1.8 billion, partially offset by an increase in net purchases of investments of $195 million, as compared to the corresponding period in the prior fiscal year.

Financing Activities There was a $2.0 billion increase in net cash used during the nine months ended January 26, 2024, as compared to the corresponding period in the prior fiscal year.

In the current period, there was an increase in commercial paper that was issued and outstanding at quarter end of $385 million.

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From time to time, we may repurchase our outstanding debt obligations in the open market or through privately negotiated transactions.

Total debt at October 27, 2023 was $25.1 billion as compared to $24.4 billion at April 28, 2023.

Total debt at January 26, 2024 was $25.2 billion as compared to $24.4 billion at April 28, 2023.

The increase in total debt was driven by commercial paper outstanding of $1.0 billion, offset by fluctuations in exchange rates.

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for an aggregate principal amount of up to ¥300 billion with a term of 364 days.

In May and June 2022, Medtronic Luxco borrowed an aggregate of ¥297 billion, or approximately $2.3 billion, of the term loan, under the Fiscal 2023 Loan Agreement.

In May and June 2022, Medtronic Global Holdings S.C.A.

(Medtronic Luxco) borrowed an aggregate of ¥297 billion, or approximately $2.3 billion, of the term loan, under the Fiscal 2023 Loan Agreement.

The Company used the net proceeds of the borrowings to fund the early redemption of $1.9 billion of Medtronic Inc.

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There is no specific time period associated with these repurchase authorizations.

During the six months ended October 27, 2023, the Company repurchased a total of 4 million shares under this program at an average price of $83.49.

At October 27, 2023, we had approximately $2.0 billion remaining under the share repurchase program authorized by our Board of Directors.

During the nine months ended January 26, 2024, the Company repurchased a total of 6 million shares under this program at an average price of $81.83.

At January 26, 2024, we had approximately $1.9 billion remaining under the share repurchase program authorized by our Board of Directors.

For more information on credit arrangements, refer to Note 7 to the current period's consolidated financial statements and Note 6 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 28, 2023.

Our liquidity sources at October 27, 2023 included $1.3 billion of cash and cash equivalents and $6.4 billion of current investments.

Our liquidity sources at January 26, 2024 included $1.6 billion of cash and cash equivalents and $6.7 billion of current investments.

Additionally, we maintain commercial paper programs and a Credit Facility.

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We maintain multicurrency commercial paper programs for short-term financing, which allow us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion.

At October 27, 2023 and April 28, 2023, we had $1.3 billion and no commercial paper outstanding, respectively.

At January 26, 2024 and April 28, 2023, we had $1.0 billion and no commercial paper outstanding, respectively.

The issuance of commercial paper reduces the amount of credit available under our existing line of credit, as explained below.

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The Credit Facility provides us with the ability to increase our borrowing capacity by an additional $1.0 billion at any time during the term of the agreement.

At October 27, 2023 and April 28, 2023, no amounts were outstanding under the Credit Facility.

At January 26, 2024 and April 28, 2023, no amounts were outstanding under the Credit Facility.

Interest rates on advances of our Credit Facility are determined by a pricing matrix based on our long-term debt ratings assigned by Standard & Poor's Ratings Services (S&P) and Moody's Investors Service (Moody’s).

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Agency Rating (1)

October 27, 2023 April 28, 2023

January 26, 2024 April 28, 2023

Standard & Poor's Ratings Services

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A security rating is not a recommendation to buy, sell or hold securities, and may be subject to revision or withdrawal at any time by the rating agency, and each rating should be evaluated independently of any other rating.

S&P and Moody's long-term debt ratings and short-term debt ratings at October 27, 2023 were unchanged as compared to the ratings at April 28, 2023.

S&P and Moody's long-term debt ratings and short-term debt ratings at January 26, 2024 were unchanged as compared to the ratings at April 28, 2023.

We do not expect the S&P and Moody's ratings to have a significant impact on our liquidity or future flexibility to access additional liquidity given our balance sheet, Credit Facility, and related commercial paper programs.

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We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position, and/or cash flows.

Refer to the Debt and Capital section above for changes in debt obligations during the second quarter of fiscal year 2024;

Refer to the Debt and Capital section above for changes in debt obligations during the third quarter of fiscal year 2024;

there have been no other material changes to our long-term contractual obligations as reported in our most recent Annual Report filed on Form 10-K for the fiscal year ended April 28, 2023.

Ltd Acquisition

On May 25, 2023, the Company entered into a set of definitive agreements to acquire EOFlow Co.

(EOFlow), manufacturer of the EOPatch device – a tubeless, wearable, and fully disposable insulin delivery device.

The acquisition expands the Diabetes segment portfolio of products.

To the extent that all the public shares participate in the tender offer, the total consideration for the acquisition of the shares in EOFlow would be KRW 971 billion, or $716 million, at exchange rates on October 27, 2023.

The acquisition is subject to the satisfaction of the minimum tender condition and certain customary closing conditions, including receipt of required regulatory clearances, the timing of which is currently uncertain.

The Company is aware of litigation between a third party and EOFlow in the U.S.

District Court for the District of Massachusetts and the resulting injunction issued by the court against EOFlow in October 2023.

The Company is not a party to the litigation but is aware of EOFlow’s decision to appeal the court’s ruling.

The Company will continue to monitor the appeals process.

Information regarding acquisitions is included in Note 4 to the current period's consolidated financial statements.

We assess goodwill and indefinite-lived intangible assets for impairment annually in the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired.

There were no impairments of goodwill in the current period as a result of the annual impairment test.

As further described in Note 10, we have certain new operating segments as of the beginning of fiscal year 2024.

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There was no impairment of goodwill as a result of the impairment test.

The goodwill allocation and the tests for impairment of goodwill requires us to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units.

We calculate the excess of each reporting unit's fair value over its carrying amount, including goodwill, utilizing a discounted cash flow analysis.

The test for goodwill is based on future cash flows that require significant judgment with respect to future revenue and expense growth rates and discount rates.

The discount rate applied to the cash flow analysis is based on the weighted average cost of capital (“WACC”) for each reporting unit.

The Company calculates the excess of each reporting unit's fair value over its carrying amount, including goodwill, utilizing a discounted cash flow analysis and revenue and earnings multiples using comparable public company information.

Significant assumptions used in reporting unit fair value measurements include forecasted cash flows, including revenue and expense growth rates, discount rates, and revenue and earnings multiples.

An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.

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We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

As of October 27, 2023, there were no material changes to our critical accounting estimates.

As of January 26, 2024, there were no material changes to our critical accounting estimates.

NEW ACCOUNTING PRONOUNCEMENTS

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(CIFSA Subsidiary Guarantors)

The following tables present summarized results of operations for the six months ended October 27, 2023 and summarized balance sheet information at October 27, 2023 and April 28, 2023 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes.

The following tables present summarized results of operations for the nine months ended January 26, 2024 and summarized balance sheet information at January 26, 2024 and April 28, 2023 for the obligor groups of Medtronic and Medtronic Luxco Senior Notes, and CIFSA Senior Notes.

The obligor group consists of the parent company guarantor, subsidiary issuer, and subsidiary guarantors for the applicable senior notes.

The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuers and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.

The summarized results of operations information for the six months ended October 27, 2023 was as follows:

The summarized results of operations information for the nine months ended January 26, 2024 was as follows:

(in millions) Medtronic & Medtronic Luxco Senior Notes (1)

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Net loss attributable to Medtronic (1,697) (2,216)

The summarized balance sheet information at October 27, 2023 was as follows:

The summarized balance sheet information at January 26, 2024 was as follows:

(in millions) Medtronic & Medtronic Luxco Senior Notes (1)

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Total noncurrent liabilities (6)

59,992 67,136

Noncontrolling interests 204 204

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We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, results of operations, financial condition, and/or cash flows.

These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K.

These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions

described in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis