What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-06-20 compared with 2023-06-22 · 196 added, 247 removed, 414 unchanged (52% of the section changed)

14 unchanged sentences

We believe that non-GAAP financial measures provide information useful to investors in understanding the Company's underlying operational performance and trends and may facilitate comparisons with the performance of other companies in the medical technologies industry.

As presented in the GAAP to Non-GAAP Reconciliations section below, our non-GAAP financial measures exclude the impact of amortization of intangible assets and certain charges or benefits that contribute to or reduce earnings and that may affect financial trends and include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact to our operations in future periods (Non-GAAP Adjustments).

As presented in the GAAP to Non-GAAP Reconciliations section on the following pages, our non-GAAP financial measures exclude the impact of amortization of intangible assets and certain charges or benefits that contribute to or reduce earnings and that may affect financial trends and include certain charges or benefits that result from transactions or events that we believe may or may not recur with similar materiality or impact to our operations in future periods (Non-GAAP Adjustments).

In the event there is a Non-GAAP Adjustment recognized in our operating results, the tax cost or benefit attributable to that item is separately calculated and reported.

3 unchanged sentences

Refer to the “GAAP to Non-GAAP Reconciliations," "Income Taxes," and "Free Cash Flow" sections for reconciliations of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with U.S.

Table of C ontents

EXECUTIVE LEVEL OVERVIEW

10 unchanged sentences

389 66 323 0.24 17.0

Acquisition-related items (2)

110 21 89 0.07 19.1

Divestiture and separation-related items (3)

Acquisition and divestiture-related items (2)

777 113 664 0.50 14.5

Certain litigation charges, net 149 31 118 0.09 20.8

(30) (8) (23) (0.02) 26.7

(Gain)/loss on minority investments (3)

2 unchanged sentences

119 22 97 0.07 18.5

Debt redemption premium and other charges (7)

53 11 42 0.03 20.8

Certain tax adjustments, net (5)

1 unchanged sentence

Non-GAAP $ 8,273 $ 1,327 $ 6,918 $ 5.20 16.0 %

Table of C ontents

Fiscal year ended April 28, 2023

5 unchanged sentences

647 139 507 0.38 21.5

Acquisition-related items (2)

Acquisition and divestiture-related items (6)

345 29 316 0.24 8.4

Certain litigation charges (7)

(30) (8) (23) (0.02) 26.7

(Gain)/loss on minority investments (3)

2 unchanged sentences

150 30 120 0.09 20.0

MCS impairment / costs (9)

Debt redemption premium and other charges (8)

53 11 42 0.03 20.8

2 unchanged sentences

Non-GAAP $ 8,194 $ 1,128 $ 7,045 $ 5.29 13.8 %

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

(2) The charges primarily include business combination costs and changes in fair value of contingent consideration.

(3) The charges predominantly include non-cash pre-tax impairments, primarily related to goodwill, changes in the carrying value of the disposal group, and other associated costs, as a result of the April 1, 2023 sale of half of the Company's Renal Care Solutions (RCS) business;

charges related to the impending separation of the Patient Monitoring and Respiratory Interventions businesses within our Medical Surgical Portfolio in the fourth quarter of fiscal year 2023;

and charges related to an exit of a business which are primarily comprised of inventory write-downs.

(4) Certain litigation includes $35 million income related to the one-time payment received as a result of the Intellectual Property Agreement entered into with Edwards Lifesciences on April 12, 2023.

(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.

(2) The charges predominantly include $439 million of charges related to the February 20, 2024 decision to exit the Company's ventilator product line, which primarily includes long-lived intangible asset impairments and inventory write-downs.

In addition, other charges primarily consist of changes in fair value of contingent consideration and associated costs related to the previously contemplated separation of the PMRI businesses.

(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.

(6) The charges represent estimated incremental costs of complying with the new European Union 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 period.

(4) The charges represent incremental costs of complying with the new European Union 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.

(5) The net charge primarily relates to an income tax reserve adjustment associated with the June 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 predominantly include non-cash pre-tax impairments, primarily related to goodwill, changes in the carrying value of the disposal group, and other associated costs, as a result of the April 2023 sale of half of the Company's Renal Care Solutions (RCS) business;

business combination costs, and associated costs related to the previously contemplated separation of the PMRI businesses.

(7) Certain litigation includes $35 million income related to the one-time payment received as a result of the Intellectual Property Agreement entered into with Edwards Lifesciences in April 2023.

(8) 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.

(9) 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.

Tax Court opinion, issued in August 2022, on the previously disclosed litigation regarding the allocation of income between Medtronic, Inc.

and its wholly owned subsidiary operating in Puerto Rico.

Additional charges relate to the reduction of deferred tax assets due to the disallowance of certain interest deductions and the change in the reporting currency for certain carryover attributes, and the amortization on previously established deferred tax assets from intercompany intellectual property transactions.

(9) The charges relate to the Company’s June 2021 decision to stop the distribution and sale of the Medtronic HVAD System within the Mechanical Circulatory Support Operating Unit (MCS).

The charges included $515 million of non-cash impairments, primarily related to $409 million of intangible asset impairments, as well as $366 million for commitments and obligations in connection with the decision, including patient support obligations, restructuring, and other associated costs.

Medtronic is committed to serving the needs of patients currently implanted with the HVAD System.

(10) The net benefit primarily relates to the deferred tax impact associated with a step up in tax basis for Swiss Cantonal purposes and a change in tax rates on deferred taxes associated with intellectual property, which are partially offset by the amortization on previously established deferred tax assets from intercompany intellectual property transactions and a charge related to a change in the Company's permanent reinvestment assertion on certain historical earnings.

Table of C ontents

Free Cash Flow

10 unchanged sentences

Refer to the Summary of Cash Flows section for drivers of the change in cash provided by operating activities.

Table of C ontents

Segment and Division

Prior period revenue has been recast to reflect the new reporting structure.

The activity of the Company's Renal Care Solutions business and the ventilator product line were moved out of Medical Surgical and into the Other line, and the retained PMRI businesses were combined into one business unit called Acute Care & Monitoring in Medical Surgical.

Refer to Note 19 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 fiscal years 2024 and 2023:

6 unchanged sentences

Cardiovascular 11,831 11,522 3

Surgical Innovations 5,663 6,060 (7)

Respiratory, Gastrointestinal, & Renal 2,770 3,081 (10)

Medical Surgical 8,433 9,141 (8)

Cranial & Spinal Technologies 4,756 4,451 7

2 unchanged sentences

Neuroscience 9,406 8,959 5

Surgical & Endoscopy 6,508 6,152 6

Acute Care & Monitoring 1,908 1,837 4

Medical Surgical 8,417 7,989 5

Diabetes 2,488 2,262 10

Total $ 31,227 $ 31,686 (1) %

Table of C ontents

Reportable segment net sales 32,142 30,731 5

Other operating segment (1)

Total net sales $ 32,364 $ 31,227 4 %

(1) Includes historical operations and ongoing transition agreements from businesses the Company has exited or divested, which primarily includes the Company's ventilator product line and the Renal Care Solutions business.

Segment and Market Geography

10 unchanged sentences

Cardiovascular $ 5,597 $ 5,796 (3) % $ 3,857 $ 3,564 8 % $ 2,377 $ 2,161 10 %

Medical Surgical 3,658 3,862 (5) 3,080 3,373 (9) 1,694 1,905 (11)

Neuroscience 6,305 6,018 5 1,739 1,658 5 1,362 1,283 6

Medical Surgical 3,717 3,549 5 3,049 2,917 5 1,650 1,522 8

Diabetes 852 849 — 1,284 1,106 16 352 307 15

Total $ 16,373 $ 16,135 1 % $ 9,408 $ 10,126 (7) % $ 5,446 $ 5,426 — %

Reportable segment net sales 16,471 16,212 2 9,929 9,245 7 5,742 5,273 9

Other operating segment (4)

91 160 (43) 50 163 (69) 81 172 (53)

Total net sales $ 16,562 $ 16,373 1 % $ 9,979 $ 9,408 6 % $ 5,823 $ 5,446 7 %

includes the United States and U.S.

2 unchanged sentences

developed markets, as defined above.

The decline in net sales for fiscal year 2023 was primarily driven by unfavorable currency impacts, impact of volume-based procurement tenders and COVID-19 resurgence in China, as well as supply chain challenges in certain businesses, particularly in the first quarter of fiscal year 2023.

Currency had an unfavorable impact of $1.2 billion on non-U.S.

developed markets and $262 million on emerging markets.

The decline in net sales was partially offset by growth in certain product lines and businesses, including Micra, Transcatheter Aortic Valve replacements (TAVR), hemorrhagic and ischemic stroke, and ENT, in addition to the $265 million one-time payment received as a result of the Intellectual Property Agreement entered into with Edwards Lifesciences, as further discussed in the Cardiovascular net sales section below.

Table of C ontents

(4) Includes historical operations and ongoing transition agreements from businesses the Company has exited or divested, which primarily includes the Company's ventilator product line and the Renal Care Solutions business.

The increase in net sales for fiscal year 2024 was driven by growth in most businesses, including Surgical, Cranial & Spinal Technologies, Diabetes, and Cardiac Pacing, as well as strength in international markets.

The net sales increase was partially offset by a $265 million one-time payment received in the fourth quarter of fiscal year 2023 as a result of an intellectual property agreement, as further discussed in the Cardiovascular net sales section below.

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, and replacement cycle challenges;

• National and provincial/state tender decisions, including around pricing, for certain products, particularly in China;

• The uncertain and uneven impact of COVID-19 on future procedural volumes, supply constraints including certain electronic components and semiconductors, healthcare staffing in certain regions, and resulting impacts on demand for our products and therapies;

• 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 fiscal year 2023, including on accounts receivable and inventory reserves, was not material, and for fiscal year 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 fiscal year 2024, including on accounts receivable and inventory reserves, was not material.

For fiscal year 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 conflict are difficult to predict at this time, the financial and operational impact of the conflict in fiscal year 2024, including on accounts receivable and inventory reserves, was not material.

As of April 26, 2024, the Company had 6 facilities and approximately 1,500 employees in Israel.

For fiscal year 2024, the business of the Company in Israel represented less than 1% of the Company's consolidated revenues and assets.

Cardiovascular

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators (ICD), leads and delivery systems, electrophysiology catheters, products for the treatment of atrial fibrillation, information systems for the management of patients with Cardiac Rhythm & Heart Failure devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation systems, and open heart and coronary bypass grafting surgical products.

Cardiovascular products include pacemakers, insertable cardiac monitors, cardiac resynchronization therapy devices, implantable cardioverter defibrillators, leads and delivery systems, electrophysiology catheters, products for the treatment of atrial fibrillation, information systems for the management of patients with Cardiac Rhythm & Heart Failure devices, products designed to reduce surgical site infections, coronary and peripheral stents and related delivery systems, balloons and related delivery systems, endovascular stent graft systems, heart valve replacement technologies, cardiac tissue ablation systems, and open heart and coronary bypass grafting surgical products.

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

Cardiovascular net sales for fiscal year 2024 were $11.8 billion, an increase of 3 percent as compared to fiscal year 2023.

The net sales increase was primarily due to the strong performance of Micra, TAVR, and Diagnostics, partially offset by unfavorable currency impact of $569 million and supply chain challenges in certain businesses.

The net sales increase was primarily due to the strong performance of Micra, transcatheter aortic valve replacement (TAVR), and Perfusion.

The charts below illustrate the percent of Cardiovascular net sales by division for fiscal years 2024 and 2023:

Cardiac Rhythm & Heart Failure (CRHF) net sales decreased 1 percent in fiscal year 2023 as compared to fiscal year 2022.

The decrease was driven by Cardiac Ablation Solutions experiencing competitive pressures in Western Europe, as well as the pending volume-based procurement (VBP) tenders in China, offset by continued adoption of Micra AV, TYRX antibacterial envelopes, LINQ II implants, and growth from Arctic Front cryoblation catheters in the U.S.

Table of C ontents

Structural Heart & Aortic (SHA) net sales increased 10 percent in fiscal year 2023 as compared to fiscal year 2022.

The increase was led by growth in transcatheter aortic valve replacement (TAVR), including the U.S.

Results include $265 million of revenue from a one-time payment received as a result of the Intellectual Property Agreement (agreement) entered into with Edwards Lifesciences (Edwards) on April 12, 2023.

As part of this agreement, Edwards will also pay the Company royalty payments tied to future net sales of certain Edwards products.

Net sales growth was negatively impacted by a field corrective action with the Harmony Transcatheter Pulmonary Valve and Delivery Catheter System.

Coronary & Peripheral Vascular (CPV) net sales decreased 3 percent in fiscal year 2023 as compared to fiscal year 2022.

The net sales declines were driven by market procedural volumes in Coronary remaining below pre-COVID levels in several major markets, headwinds related to U.S.

hospital contrast shortages early in fiscal year 2023, and declines in Peripheral Vascular Health due to competitors re-entering the market and supply chain challenges.

Net sales declines were partially offset by strong demand combined with improved product availability of the SpiderFX embolic protection device (EPD) and strong performance of our superficial venous product portfolio, including the VenaSeal system.

Cardiac Rhythm & Heart Failure (CRHF) net sales increased 4 percent in fiscal year 2024 as compared to fiscal year 2023.

The net sales increase was driven by continued adoption of Micra AV2 and Micra VR2 and growth from the launch of the PulseSelect pulsed field ablation (PFA) system and the Aurora extravascular implantable cardioverter defibrillator (EV-ICD) system.

Structural Heart & Aortic (SHA) net sales were flat in fiscal year 2024 as compared to fiscal year 2023.

Net sales were impacted by the $265 million of revenue from a one-time payment received in the fourth quarter of fiscal year 2023 as a result of the intellectual property agreement entered into with Edwards Lifesciences, offset 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 of Perfusion, particularly in the U.S.

Coronary & Peripheral Vascular (CPV) net sales increased 4 percent in fiscal year 2024 as compared to fiscal year 2023.

The net sales increase was driven by growth from guide catheters, balloons, as well as growth in Vascular Embolization products.

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

• Continued growth of our Micra transcatheter pacing system.

Our portfolio consists of Micra VR and Micra AV, which offer leadless pacing therapy to approximately 45 percent of pacemaker patients.

We expect the launch of next generation Micra AV2/VR2 in the first quarter of fiscal year 2024 will continue to support adoption of leadless pacing, as it extends the capability of the Micra portfolio by adding significant battery longevity and programming simplicity.

• Continued acceptance and growth from the Azure XT and 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.

The 3830 lead, previously labeled for His-bundle pacing, has now been expanded to include left bundle branch area pacing.

• Continued global penetration of our Micra transcatheter pacing portfolio.

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

• Global adoption of Aurora Extravascular ICD.

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

1 unchanged sentence

• Continued growth, adoption, and utilization of the TYRX Envelope for implantable devices.

• Continued acceptance and expansion of the LINQ II cardiac monitor.

During the third quarter of fiscal year 2022, we launched two AccuRhythm AI algorithms on the LINQ II platform to significantly reduce false positive alerts for Atrial Fibrillation and pause episodes while retaining sensitivity for true positive detection and reduce clinic workload and burden.

AccuRhythm AI launched in Europe during the first quarter of fiscal year 2023.

• Continued growth of Arctic Front cryoablation for treatment of atrial fibrillation.

• Acceptance and growth of the Affera Mapping/Navigation System and Sphere 9 mapping/ablation catheter.

The system was launched under a limited market release in the fourth quarter of fiscal year 2023 in Western Europe.

• Continued use and acceptance of Reveal LINQ and expansion of the LINQ II cardiac monitor.

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

The PulseSelect PFA system received CE Mark in November 2023 was approved by the U.S.

FDA in December 2023 and was 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.

• Continued expansion and training of field support to increase coverage in the U.S.

centers performing TAVR procedures.

The Evolut FX+ TAVR system maintains the valve performance benefits of the legacy Evolut TAVR platform and is designed to facilitate coronary access.

The system was approved by the U.S.

FDA in March 2024.

• 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 balloon (DCB).

The product was launched in the U.S.

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

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

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

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

Table of C ontents

• Market and competitive pressure on sales of the Abre venous self-expanding stent system.

Abre is designed for the unique challenges of venous disease.

Now backed by 36 months of data, it offers easy deployment and delivers demonstrated endurance, to give patients freedom of movement.

• Our ability to successfully develop, obtain regulatory approval of and commercialize the products within our pipeline, which include, but are not limited to, the Symplicity Spyral Multi-Electrode Renal Denervation Catheter, Pulse Field Ablation, a novel energy source that is non-thermal, and Aurora Extravascular ICD.

• 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.

Neuroscience's products also focus on therapies to treat the diseases of the vasculature in and around the brain, including coils, neurovascular stents, and flow diversion products, as well as products to treat ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention.

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 fiscal year 2024 were $9.4 billion, an increase of 5 percent as compared to fiscal year 2023.

The net sales increase was primarily due to growth in Cranial & Spinal Technologies and ENT.

The graphs below illustrate the percent of Neuroscience net sales by division for fiscal years 2024 and 2023:

Cranial & Spinal Technologies (CST) net sales for fiscal year 2024 increased 7 percent as compared to fiscal year 2023.

The net sales increase was driven by growth of AiBLE spinal ecosystem capital and Core Spine and Biologics product pull-through.

Specialty Therapies (Specialty) net sales for fiscal year 2024 increased 3 percent as compared to fiscal year 2023.

The net sales increase was driven by growth in ENT.

Neuromodulation (NM) net sales for fiscal year 2024 increased 3 percent as compared to fiscal year 2023.

The net sales increase 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 Net Sales section, looking ahead we expect Neuroscience could be affected by the following:

• Continued adoption and growth of our integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm Imaging Systems, and Midas), Mazor robotics, and UNiD Adaptive Spine Intelligence AI-driven technology for surgical planning and personalized spinal implants.

• Market acceptance and continued global adoption of innovative new spine products and procedural solutions within our CST operating unit, such as Catalyft PL, ModuLeX, CD Horizon Voyager System, and our Infinity OCT System, as well as continued growth from Titan spine titanium interbody implants with Nanolock technology.

• Continued growth of Pipeline Embolization Devices, endovascular treatments for large or giant wide-necked brain aneurysms.

• Continued acceptance and growth of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.

• Continued acceptance and growth of our Pelvic Health therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence,

• Continued acceptance and growth of our ENT therapies, including capital equipment sales of the Stealth Station ENT surgical navigation system and intraoperative NIM nerve monitoring system, and the Propel sinus implants used in the treatment of chronic rhinosinusitis.

• Continued acceptance and growth from spinal cord stimulation (SCS) therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.

The Inceptiv closed-loop rechargeable SCS received U.S.

FDA approval in April 2024.

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

• 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 hemorrhagic stroke intravascular device and our next-generation spine enabling technologies.

Medical Surgical

Medical Surgical’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases of the gastrointestinal tract, lungs, pelvic region, kidneys, obesity, and preventable complications.

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, renal care products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry.

Medical Surgical’s net sales for fiscal year 2023 were $8.4 billion, a decrease of 8 percent as compared to fiscal year 2022.

The net sales decrease was primarily driven by unfavorable currency impact of $454 million, provincial volume-based procurement (VBP) stapling tenders in China, and a decline in ventilator sales due to the high COVID-19 demand in the corresponding period in the prior fiscal year.

Supply chain disruptions, particularly in Surgical Innovations, also contributed to the net sales decrease for fiscal year 2023.

Medical Surgical’s products span the entire continuum of patient care from diagnosis to recovery, with a focus on diseases within thoracic, colorectal, gynecology, bariatric, hernia, and preventable complications.

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, airway products, and sensors and monitors for pulse oximetry, capnography, level of consciousness and cerebral oximetry.

Medical Surgical’s net sales for fiscal year 2024 were $8.4 billion, an increase of 5 percent as compared to fiscal year 2023.

The net sales increase was primarily driven by strength across both Surgical & Endoscopy and Acute Care & Monitoring.

The charts below illustrate the percent of Medical Surgical net sales by division for fiscal years 2024 and 2023:

Surgical Innovations net sales for fiscal year 2023 decreased 7 percent as compared to fiscal year 2022.

The net sales decline was led by Advanced Surgical instruments, driven by global supply chain challenges, including resins, semiconductors, and packaging trays, which impacted energy and stapling products, and provincial VBP stapling tenders and COVID-19 lockdowns in China.

These declines were partially offset by growth in Advanced Energy in the fourth quarter of fiscal year 2023.

Respiratory, Gastrointestinal, & Renal (RGR) net sales for fiscal year 2023 decreased 10 percent as compared to fiscal year 2022.

RGR net sales declines were largely due to declines in ventilator demand when compared to the corresponding period in the prior fiscal year as demand dropped below pre-pandemic levels, as well as declines in RCS driven by product availability challenges in the first three quarters of fiscal year 2023, and only two months of sales in the fourth quarter of fiscal year 2023 as a result of the April 1, 2023 contribution of half of the Company's RCS business to form Mozarc Medical.

These declines were partially offset by growth in Gastrointestinal driven by strength in sales of GI Genius.

Table of C ontents

Surgical & Endoscopy (SE) net sales for fiscal year 2024 increased 6 percent as compared to fiscal year 2023.

The net sales increase was predominantly attributable to growth in Advanced Surgical Technologies and General Surgical Technologies, primarily driven by supply expansion, as well as continued growth in Advanced Energy, Wound Management, Electrosurgery, GI Genius, and EndoFlip.

Acute Care & Monitoring (ACM) net sales for fiscal year 2024 increased 4 percent as compared to fiscal year 2023.

The net sales increase was primarily driven by growth in Nellcor pulse oximetry products and McGRATH MAC video laryngoscopes.

In addition to the macro-economic and geopolitical factors described in the Net Sales section, 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.

The Company announced its intention to pursue a separation in October 2022 and expects to complete the separation 18 to 24 months from the announcement date.

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

2 unchanged sentences

• Continued global acceptance and future growth of powered stapling and energy platform.

• Our ability to execute ongoing strategies addressing the competitive pressure of reprocessing vessel sealing disposables and growth of our surgical soft tissue robotics procedures in the U.S.

• Our ability to execute ongoing strategies addressing the near-term pressures to bariatric surgery procedure volumes in the U.S.

from pharmaceuticals, and growth of surgical soft tissue robotics procedures in the U.S.

• Our ability to create markets and drive products and procedures into emerging markets with our high quality and cost-effective surgical products designed for customers in emerging markets.

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.

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

Recently launched products include GI Genius and PillCam capsule endoscopy.

• 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, and 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.

Recently launched products include GI Genius.

• Expanding the use of less invasive treatments and furthering our commitment to improving options for women with abnormal uterine bleeding.

Our expanded and strengthened surgical offerings complement our global gynecology business.

• Global adoption of robotic-assisted surgery and installations of Hugo robotic assisted surgery (RAS) system for urologic, bariatric, gynecologic, and general surgery procedures.

• Global adoption of robotic-assisted surgery and installations of Hugo robotic assisted surgery (RAS) system for urologic, bariatric, gynecologic, hernia, and general surgery procedures.

This includes continued integration and adoption of Touch Surgery Enterprise with the first artificial intelligence powered surgical videos and analytics platform to make it easier to train and discover new techniques within the robotics platform.

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, but are not limited to, our Hugo RAS system in the U.S., Signia power stapling devices, and our next-gen Ligasure and Sonicision vessel sealing devices.

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 fiscal year 2023 were $9.0 billion, an increase of 2 percent as compared to fiscal year 2022.

The net sales increase was primarily due to growth in U.S.

Core Spine, Neurovascular, ENT, and continued supply risk mitigation, partially offset by unfavorable currency impact of $281 million and supply chain challenges in certain businesses.

Table of C ontents

The graphs below illustrate the percent of Neuroscience net sales by division for fiscal years 2023 and 2022:

Cranial & Spinal Technologies (CST) net sales for fiscal year 2023 were flat as compared to fiscal year 2022 as growth within U.S.

Core Spine was offset by net sales declines in Biologics and unfavorable currency impact.

The growth in U.S.

Core Spine products was driven by the continued adoption of the Aible ecosystem of spine products.

The net sales increase was also attributable to strong sales of StealthStation Navigation and Midas Rex powered surgical instruments.

The decline in net sales in Biologics was due to supply chain challenges throughout the year.

Specialty Therapies (Specialty) net sales for fiscal year 2023 increased 9 percent as compared to fiscal year 2022.

The increase was driven by growth in hemorrhagic and ischemic stroke, flow diversion and access delivery products.

The net sales increase was also driven by benefits from the May 2022 acquisition of Intersect ENT.

Neuromodulation (NM) net sales for fiscal year 2023 decreased 2 percent as compared to fiscal year 2022.

The decline in net sales was largely due to declines of Brain Modulation replacement devices and supply chain challenges in Interventional, which has recently seen improvements in product availability.

The decline was partially offset by growth within Pain Stim and to a lesser extent, Targeted Drug Delivery.

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

• Continued adoption and growth of our integrated solutions through the Aible offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm Imaging Systems, and Midas), Mazor robotics, and UNiD Adaptive Spine Intelligence AI-driven technology for surgical planning and personalized spinal implants.

• Continued growth of Pipeline Embolization Devices, endovascular treatments for large or giant wide-necked brain aneurysms.

• Continued acceptance and growth of the Solitaire X revascularization device for treatment of acute ischemic stroke and our React Catheter and Riptide aspiration system.

• Strengthening our position in the ENT market as a result of the May 2022 acquisition of Intersect ENT, a global ENT medical technology leader.

The acquisition expands Neuroscience's portfolio of products used during ENT procedures and combined with the Company's navigation, powered instruments, and existing tissue health products, offers a broader suite of solutions to assist surgeons treating patients who suffer from chronic rhinosinusitis (CRS).

Table of C ontents

• Continued acceptance and growth of our Pelvic Health and ENT therapies, including our InterStim therapy with InterStim X and InterStim II recharge-free neurostimulators and InterStim Micro rechargeable neurostimulator for patients suffering from overactive bladder, (non-obtrusive) urinary retention, and chronic fecal incontinence, and capital equipment sales of the Stealth Station ENT surgical navigation system and intraoperative NIM nerve monitoring system.

• Market acceptance and growth from SCS therapy for treating chronic pain and Diabetic Peripheral Neuropathy (DPN) on the Intellis rechargeable neurostimulator and Vanta recharge-free neurostimulator.

• 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.

• Ongoing obligations under the U.S.

FDA consent decree entered in April 2015 relating to the SynchroMed drug infusion system and the Neuromodulation quality system.

FDA lifted its distribution requirements on our implantable drug pump in October 2017 and its warning letter in November 2017.

• 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.

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

Diabetes' sales for fiscal year 2023 were $2.3 billion, a decrease of 3 percent as compared to fiscal year 2022.

The decrease in net sales was primarily driven by unfavorable currency impact of $133 million and declines in the U.S.

The net sales declines were partially offset by strong international growth primarily driven by the continued international expansion of the MiniMed 780G insulin pump system and integrated CGM.

During April 2023, the U.S.

FDA lifted the warning letter received in December 2021.

• 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., the adoption of AI in Endoscopy, 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' sales for fiscal year 2024 were $2.5 billion, an increase of 10 percent as compared to fiscal year 2023.

The increase in net sales 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 net sales growth.

In addition to the macro-economic and geopolitical factors described in the Net Sales section, 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 level levels every five minutes.

The global adoption of sensor-augmented insulin pump systems has resulted in strong sensor attachment rates.

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

The MiniMed 780G insulin pump system with the Guardian 4 Sensor was approved by the U.S.

FDA in late April 2023.

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

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.

The Guardian Connect CGM system is available on both Apple iOS and Android devices.

2 unchanged sentences

• 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 to the U.S.

Table of C ontents

• 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

1 unchanged sentence

Cost of Products Sold Cost of products sold for fiscal year 2024 was $11.2 billion as compared to $10.7 billion for fiscal year 2023.

The increase in cost of 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 chain challenges, increased freight due to higher fuel costs and expedited shipments for backorders resulting from supply chain challenges, as well as increased inventory reserves.

Fiscal year 2022 included $58 million of inventory write-downs associated with our June 2021 decision to stop the distribution and sale of Medtronic's HVAD System (MCS charges).

Looking forward, our cost of products sold likely will be further negatively impacted by inflation and higher labor and direct material costs.

We continue to focus on reducing our costs of production through supplier management, manufacturing improvements, and optimizing our manufacturing network.

The increase in cost of products sold as a percentage of net sales was primarily attributable to increased labor and direct material manufacturing costs, predominantly due to inflationary pressures, as well as $70 million of inventory write-downs associated with our February 2024 decision to exit our ventilator product line.

For additional information about the ventilator inventory write-down, refer to Note 3 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

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

2 unchanged sentences

and to expand healthcare access and deliver positive outcomes.

Research and development expense for fiscal years 2023 and 2022 was $2.7 billion.

Fiscal year 2022 included $101 million of expense related to acquisitions of, and license payments for, technology not approved by regulators, primarily in our Diabetes segment.

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.

Research and development expense was $2.7 billion for fiscal years 2024 and 2023.

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

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

Selling, general, and administrative expense for fiscal year 2024 was $10.7 billion as compared to $10.4 billion for fiscal year 2023.

The increase in selling, general, and administrative expense as a percentage of net sales was primarily driven by employee travel, and to a lesser extent by lower net sales, partially offset by a reduction in professional services.

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

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

3 unchanged sentences

Certain litigation charges, net 149 (30)

Other operating (income) expense, net (131) 862

Other operating expense (income), net 464 (131)

Other non-operating income, net (412) (515)

Interest expense, net 719 636

Table of C ontents

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

In fiscal years 2023 and 2022, restructuring costs primarily related to Enterprise Excellence and Simplification restructuring programs, both of which were substantially completed as of the end of this fiscal year.

In the fourth quarter of fiscal year 2023, we incurred $0.3 billion of restructuring charges primarily related to employee termination benefits to support cost reduction initiatives.

Restructuring Charges, Net In fiscal year 2024, restructuring costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

In fiscal year 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.

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

In addition, in the fourth quarter of fiscal year 2023, the Company incurred $0.3 billion of restructuring charges primarily related to employee termination benefits to support cost reduction initiatives.

These charges were incremental to charges incurred under our Enterprise Excellence and Simplification programs noted above.

For all programs, employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and voluntary early retirement benefits.

Associated costs primarily include salaries and wages of employees that are fully-dedicated to restructuring programs and consulting fees.

For additional information about our restructuring programs, refer to Note 4 of the consolidated financial statements in "Item 8.

3 unchanged sentences

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Other Operating (Income) Expense, Net Other operating (income) expense, net primarily includes royalty expense, currency remeasurement and derivative gains and losses, Puerto Rico excise taxes, changes in the fair value of contingent consideration, MCS charges, RCS charges, impairment charges, income from funded research and development arrangements, and commitments to the Medtronic Foundation and Medtronic LABS.

The change in other operating (income) expense, net was primarily driven by MCS charges recorded in fiscal year 2022.

The MCS charges of $823 million primarily included $409 million of intangible asset impairments and $366 million for commitments and obligations, including customer support obligations, restructuring, and other associated costs.

Additionally, the change was driven by the net currency impact of remeasurement expense and our hedging programs, which resulted in a net gain of $466 million combined for fiscal year 2023 as compared to a net gain of $70 million for fiscal year 2022.

During fiscal year 2023, the Company also recorded non-cash pre-tax charges of $136 million, primarily related to impairments of goodwill and changes in the carrying value of the disposal group, as a result of the April 1, 2023 sale of half of the Company's RCS business.

Additional information regarding the MCS and RCS charges is described in Note 4 and Note 3, respectively, of the consolidated financial statements in "Item 8.

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, income from funded research and development arrangements, and commitments to the Medtronic Foundation and Medtronic LABS.

The change in other operating expense (income), net was largely driven by an increase in acquisition and divestiture-related expenses in fiscal year 2024.

In fiscal year 2024, there were $369 million of charges related to the Company's decision to exit the ventilator product line in the fourth quarter of fiscal year 2024, which primarily included intangible asset impairments of $295 million and other charges for contract cancellation costs and severance.

Fiscal year 2023 included non-cash charges of $136 million, primarily related to impairments of goodwill and changes in the carrying value of the disposal group, as a result of the April 1, 2023 sale of half of the Company's RCS business.

Also contributing to the increase in acquisition and divestiture related expenses was a change in the fair value of contingent consideration, which resulted in $156 million of expense in fiscal year 2024 as compared to $24 million of income in fiscal year 2023.

The change in other operating expense (income), net was also driven by the net currency impact of remeasurement expense and our hedging programs, which resulted in a net gain of $68 million combined for fiscal year 2024 as compared to a net gain of $465 million for fiscal year 2023, partially offset by a decrease of $94 million in Puerto Rico Excise Taxes.

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.

Fiscal year 2023 also included $70 million in commitments to the Medtronic Foundation and Medtronic LABS.

Additional information regarding the acquisition and divestiture-related charges is described in Note 3 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

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.

The increase in other non-operating income, net for fiscal year 2023 is primarily attributable to an increase in interest income driven by higher returns on investments and an increase in rates on our global liquidity structures.

The decrease in other non-operating income, net for fiscal year 2024 is primarily attributable to an increase in net losses on our minority investment portfolio, partially offset by an increase in interest income driven by higher returns on cash and cash equivalents and investments.

Net losses on minority investments were $308 million for fiscal year 2024 as compared to a net gain of $33 million for fiscal year 2023.

Interest income was $597 million and $386 million for fiscal year 2024 and 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.

The increase in interest expense, net for fiscal year 2023 was primarily due to an increase in rates on our global liquidity structures, the issuance of four tranches of Euro-denominated Senior Notes with an aggregate principal of €3.5 billion in September 2022, and the $53 million charge incurred as a result of the early redemption of approximately $2.3 billion of senior notes during the first quarter of fiscal year 2023.

The Company's commercial paper activity and the issuance of two tranches of USD-denominated Senior Notes with an aggregate principal of $2.0 billion in March 2023 also increased interest expense, net.

Partially offsetting the increase for fiscal year 2023 was $107 million in after-tax unrealized gains representing amounts excluded from the effectiveness assessment of certain net investment hedges, and benefits from foreign exchange rates.

Table of C ontents

The increase in interest expense, net for fiscal year 2024 was primarily driven by increased 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 fiscal year 2024 was $197 million in after-tax unrealized gains representing amounts excluded from the effectiveness assessment of certain net investment hedges as compared to $107 million for fiscal year 2023.

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 first quarter of fiscal year 2023.

(in millions) 2024 2023

6 unchanged sentences

Difference between the effective tax rate and Non-GAAP Nominal Tax Rate (7.4) % (15.7) %

On August 18, 2022, the U.S.

Tax Court (Tax Court) issued its opinion on the previously disclosed litigation regarding the allocation of income between Medtronic, Inc.

and its wholly-owned subsidiary operating in Puerto Rico for fiscal years 2005 and 2006 (Opinion).

While the Opinion rejected the IRS’s position and the Tax Court determined the methodology advanced by Medtronic was appropriate for purposes of determining the intercompany royalty rate between Puerto Rico and the U.S., it determined that the royalty rate should be higher, thereby increasing income allocated to the U.S.

and consequently subject to U.S.

This case relates only to fiscal years 2005 and 2006.

The Opinion remains subject to appeal by either or both parties.

We have assumed the Tax Court findings will be applied for all years following fiscal year 2006.

As a result, the Company recorded a $764 million net tax charge during the three months ended October 28, 2022 to recognize the estimated tax impact of the Tax Court Opinion.

The Israeli Central-Lod District Court issued its decision in Medtronic Ventor Technologies Ltd (Ventor) v.

Kfar Saba Assessing Office in June 2023.

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 fiscal year 2024 and filed an appeal with the Supreme Court of Israel.

Our effective tax rate for fiscal year 2024 was 23.4 percent, as compared to 29.5 percent in fiscal year 2023.

The increase in our effective tax rate primarily relates to the certain tax adjustments discussed below and year-over-year changes in operational results by jurisdiction.

The decrease in our effective tax rate primarily relates to the decrease in certain tax adjustments discussed below which is partially offset by an increase in Puerto Rico withholding taxes and year-over-year changes in operational results by jurisdiction.

Our Non-GAAP Nominal Tax Rate for fiscal year 2024 was 16.0 percent, as compared to 13.8 percent in fiscal year 2023.

The increase in our Non-GAAP Nominal Tax Rate primarily relates to year-over-year changes in operational results by jurisdiction.

The increase in our Non-GAAP Nominal Tax Rate primarily relates to an increase in Puerto Rico withholding taxes and year-over-year changes in operational results by jurisdiction, inclusive of the operational tax costs and benefits discussed below.

During fiscal year 2024, we recognized $19 million of operational tax costs.

The operational tax costs included a $16 million cost from the impact of stock-based compensation, and a $3 million net cost associated with the resolution of certain income tax audits, finalization of certain tax returns, and changes to uncertain tax position reserves.

During fiscal year 2023, we recognized $110 million of operational tax benefits.

The operational tax benefits included an $11 million cost from the impact of stock-based compensation, and a $121 million benefit associated with the resolution of certain income tax audits, finalization of certain tax returns, changes to uncertain tax position reserves, and changes to certain deferred income tax balances.

During fiscal year 2022, we recognized $89 million of operational tax benefits.

The operational tax benefits included a $46 million benefit from excess tax benefits associated with stock-based compensation, and a $43 million net benefit associated with the resolution of certain income tax audits, finalization of certain tax returns, changes to uncertain tax position reserves, and changes to certain deferred income tax balances.

An increase in our Non-GAAP Nominal Tax Rate of one percent would result in an additional income tax provision for fiscal years 2024 and 2023 of approximately $83 million and $82 million, respectively.

1 unchanged sentence

During fiscal year 2024, the net cost from certain tax adjustments of $299 million, recognized in income tax provision in the consolidated statement of income, included the following:

• A cost of $187 million associated with a reserve adjustment related to the Israeli Central-Lod District Court decision with respect to a deemed taxable transfer of intellectual property.

• A cost of $124 million related to a change in valuation allowance on previously recorded net operating losses.

• A benefit of $95 million related to a Swiss Cantonal tax rate change on previously recorded deferred tax assets.

• A cost of $50 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

• A cost of $33 million associated with a change in the Company’s permanent reinvestment assertion on certain historical earnings.

During fiscal year 2023, the net cost from certain tax adjustments of $910 million, recognized in income tax provision in the consolidated statement of income, included the following:

• A net cost of $764 million associated with a 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.

Tax Court opinion, issued in August 2022, on the prior year previously disclosed litigation regarding the allocation of income between Medtronic, Inc.

and its wholly owned subsidiary operating in Puerto Rico.

3 unchanged sentences

• A net cost of $33 million primarily associated with the sale of half of the Company’s RCS business.

During fiscal year 2022, the net benefit from certain tax adjustments of $50 million, recognized in income tax provision in the consolidated statement of income, included the following:

Table of C ontents

• A benefit of $82 million associated with a step up in tax basis for Swiss Cantonal purposes.

• A benefit of $82 million related to a change in tax rates on intangible assets.

• A cost of $47 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

• A cost of $41 million associated with a change in the Company’s permanent reinvestment assertion on certain historical earnings.

• A net cost of $26 million primarily associated with an intercompany sale of assets.

Certain tax adjustments will affect the comparability of our operating results between periods.

1 unchanged sentence

Refer to the "Executive Level Overview" section of this Management's Discussion and Analysis for further discussion of these adjustments.

Subsequent to year-end, on June 1, 2023 the Israeli Central-Lod District Court issued its decision in Medtronic Ventor Technologies Ltd v.

Kfar Saba Assessing Office.

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

At this time, the Company is evaluating the impact of the decision and whether or not it will appeal.

The Company has currently estimated a potential income tax charge, including interest, of approximately $200 million.

The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates.

A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which will be effective for the Company in fiscal year 2025.

The Company is continuing to evaluate the potential impacts of proposed and enacted legislative changes as new guidance becomes available.

There are no impacts of this global minimum tax in the consolidated financial statements for the fiscal year ended April 26, 2024.

LIQUIDITY AND CAPITAL RESOURCES

12 unchanged sentences

Net change in cash and cash equivalents $ (259) $ (2,171)

Operating Activities The $1.3 billion decrease in net cash provided was primarily driven by a decrease in cash collected from customers, an increase in cash paid for income taxes and an increase in spend on inventory.

The decrease in net cash provided was partially offset by timing of payments to vendors.

The decrease in cash collected from customers was primarily related to timing of sales, slower collections and supply chain challenges, as compared to the prior fiscal year.

The increase in cash paid for income taxes was due to estimated income tax payments including a cash deposit associated with the U.S.

Tax Court Opinion, and the increase in spend for inventory was due to inflationary impacts to direct labor and material costs.

For more information about the tax cash deposit paid, refer to Note 13 of the consolidated financial statements in “Item 8.

Operating Activities The $748 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 18 of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Investing Activities The $1.8 billion increase in net cash used was primarily attributable to an increase in cash paid for acquisitions of $1.8 billion as compared to fiscal year 2022.

Investing Activities The $1.1 billion decrease in net cash used was primarily attributable to a decrease in cash paid for acquisitions of $1.7 billion, partially offset by an increase in net purchases of investments of $136 million and cash paid for additions of property, plant, and equipment of $128 million.

For more information on the acquisitions, refer to Note 3 of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Financing Activities The $376 million decrease in net cash used as compared to fiscal year 2022 was primarily driven by a decrease of $1.9 billion in share repurchases, offset by debt transactions.

Financing Activities There was a $510 million decrease in net cash used primarily due to proceeds from commercial paper in the current year and prior year net debt repayments, partially offset by increased share repurchases.

In the current period, there was an increase in commercial paper that was issued and outstanding at year-end of $1.1 billion.

This increase in cash provided by financing activities was offset by an increase in share repurchases of $1.5 billion.

In the fourth quarter of fiscal year 2023, the Company issued two tranches of USD-denominated Senior Notes resulting in cash proceeds of approximately $2.0 billion, net of discounts and issuance costs.

The Company used the net proceeds to repay in full the ¥297 billion Fiscal 2023 Loan Agreement discussed below for $2.3 billion of total consideration.

In the second quarter of fiscal year 2023, the Company issued four tranches of Euro-denominated Senior Notes for approximately

Table of C ontents

$3.4 billion.

The Company used a portion of the net proceeds to repay at maturity €750 million of Medtronic Luxco Senior Notes for $772 million of total consideration in December 2022 and €2.8 billion of Medtronic Luxco Senior Notes for $2.9 billion of total consideration in March 2023.

In the second quarter of fiscal year 2023, the Company issued four tranches of Euro-denominated Senior Notes for approximately $3.4 billion.

The Company used a portion of the net proceeds to repay at maturity €750 million of Medtronic Global Holdings S.C.A

(Medtronic Luxco) Senior Notes for $772 million of total consideration in December 2022 and €2.8 billion of Medtronic Luxco Senior Notes for $2.9 billion of total consideration in March 2023.

In the first quarter of fiscal year 2023, the Company issued short-term borrowings of approximately $2.3 billion under the Fiscal 2023 Loan Agreement and used the proceeds to fund the early redemption of senior notes for total consideration of $2.3 billion.

5 unchanged sentences

Total debt at April 26, 2024 was $25.0 billion, as compared to $24.4 billion at April 28, 2023.

The increase in total debt was driven by issuance of Euro-denominated and USD-denominated Senior Notes, and fluctuations in exchange rates, offset by repayment of Euro-denominated and USD-denominated Senior Notes.

The increase in total debt was driven by commercial paper outstanding of $1.1 billion, partially offset by fluctuations in exchange rates.

In May 2022, we entered into a term loan agreement (Fiscal 2023 Loan Agreement) with Mizuho Bank, Ltd.

9 unchanged sentences

The Company used the net proceeds supplemented by additional cash to repay the ¥297 billion Fiscal 2023 Loan Agreement discussed above for $2.3 billion of total consideration.

Subsequent to year-end, on June 3, 2024, Medtronic Inc.

issued four tranches of EUR-denominated Senior Notes with an aggregate principal of €3.0 billion, with maturities ranging from fiscal year 2030 to 2054, resulting in cash proceeds of approximately $3.2 billion, net of discounts and issuance costs.

In anticipation of the Euro-denominated debt issuance, the Company entered into forward currency exchange rate contracts to manage the exposure to exchange rate movements.

These contracts were settled in conjunction with the issuance of the June 2024 Notes.

We repurchase our ordinary shares on occasion as part of our focus on returning value to our shareholders.

In March 2019, the Company's Board of Directors authorized the repurchase of $6.0 billion of the Company's ordinary shares.

In March 2024, the Company's Board of Directors authorized the repurchase of an incremental $5.0 billion of the Company's ordinary shares.

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

10 unchanged sentences

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 both April 28, 2023 and April 29, 2022, we had no commercial paper outstanding.

At April 26, 2024 and April 28,

2023, we had $1.1 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.

Table of C ontents

We also have a $3.5 billion five-year syndicated credit facility (Credit Facility), which expires in December 2028.

19 unchanged sentences

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.

Table of C ontents

Contractual Obligations and Cash Requirements

29 unchanged sentences

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

(5) Includes the current and non-current portion of our Senior Notes and bank borrowings.

Excludes debt premium and discounts and commercial paper.

(5) Includes the current and non-current portion of our contractual maturities of debt, excluding deferred financing costs and debt discounts, net.

See Note 6 to the consolidated financial statements in “Item 8.

4 unchanged sentences

The transition tax will be paid over an eight-year period and will not accrue interest.

See Note 13 to the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for further information.

In the normal course of business, we periodically enter into agreements that require us to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of our products or the negligence of our personnel or claims alleging that our products infringe third-party patents or other intellectual property.

10 unchanged sentences

In addition, we continue to evaluate our legal entity structure supporting our business operations, and to the extent such evaluation results in a change to our overall business structure, we may be required to accrue for additional tax obligations.

Table of C ontents

Beyond the contractual obligations and other minimum commercial commitments outlined above, we have recurring cash requirements arising from the normal operation of our business that include capital expenditures, research and developments costs, and other operational costs.

1 unchanged sentence

We regularly review our capital needs and consider various investing and financing alternatives to support our requirements.

Ltd Acquisition

Subsequent to fiscal year 2023, 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 $738 million, at exchange rates on May 25, 2023.

The acquisition is expected to close in the second half of calendar year 2023 subject to the satisfaction of the minimum tender condition and certain customary closing conditions, including receipt of required regulatory clearances.

Additional information regarding acquisitions is included in Note 3 of the consolidated financial statements in "Item 8.

ACQUISITIONS AND DISPOSITIONS

Information regarding acquisitions and disposition activity is included in Note 3 of the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" within this Annual Report on Form 10-K.

17 unchanged sentences

The Company records adjustments to rebates and returns reserves as increases or decreases of revenue.

Litigation Contingencies We are involved in a number of legal actions involving product liability, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations.

The outcomes of these legal actions are not completely within our control and may not be known for prolonged periods of time.

In some actions, the enforcement agencies or private claimants seek damages, as well as other civil or criminal remedies (including injunctions barring the sale of products that are the subject of the proceeding), that could require significant expenditures or result in lost revenues or limit our ability to conduct business in the applicable jurisdictions.

involve unsubstantiated or indeterminate claims for damages;

potentially involve penalties, fines, or punitive damages;

or could result in a change in business practice.

The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable, and the amount may be reasonably estimated.

Litigation Contingencies We are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations.

The outcomes of legal actions are not within the Company's complete control and may not be known for prolonged periods of time.

In some actions, the enforcement agencies or private claimants seek damages, as well as other civil or criminal remedies (including injunctions barring the sale of products that are the subject of the proceeding), that could require significant expenditures, result in lost revenues, or limit the Company's ability to conduct business in the applicable jurisdictions.

Estimating probable losses from our litigation and governmental proceedings is inherently difficult, particularly when the matters are in early procedural stages, with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines, or punitive damages, or could result in a change in business practice.

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies when a loss is known or considered probable, and the amount may be reasonably estimated.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed.

Our significant legal proceedings

Table of C ontents

are discussed in Note 18 to the consolidated financial statements in "Item 8.

Our significant legal proceedings are discussed in Note 18 to the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

9 unchanged sentences

Valuation of Intangible Assets and Goodwill When we acquire a business, the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date.

Goodwill is the excess of the purchase price over the estimated fair value of net assets of acquired businesses.

Goodwill is the excess of the purchase price over the estimated fair value of identified net assets of acquired businesses.

Intangible assets primarily include patents, trademarks, tradenames, customer relationships, purchased technology, and in-process research and development.

5 unchanged sentences

We assess the impairment of goodwill at the reporting unit level annually as of the first day of the third quarter and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired.

As a result of our operating segment realignments during the current fiscal year, additional impairment of goodwill tests were performed.

The results of the tests are disclosed in Note 9 to the consolidated financial statements in "Item 8.

Financial Statements and Supplementary Data" in this Annual Report on Form 10-K.

We also test definite-lived intangible assets for impairment when an event occurs or circumstances change that would indicate the carrying amount of the assets or asset group may be impaired.

1 unchanged sentence

Our tests for goodwill and intangible assets are based on future cash flows that require significant judgment with respect to future revenue and expense growth rates, appropriate discount rates, asset groupings, and other assumptions and estimates.

The test for goodwill also utilizes revenue and earnings multiples using comparable public company information.

We use estimates that are consistent with the highest and best use of the assets based on a market participant's view of the assets being evaluated.

3 unchanged sentences

Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Table of C ontents

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

36 unchanged sentences

Total noncurrent assets (4)

11,548 19,246

Total current liabilities (5)

8 unchanged sentences

Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary Guarantors.

Please refer to the guarantee summary above for further details.

Refer to the guarantee summary above for further details.

(3) Includes receivables due from non-guarantor subsidiaries of $14.3 billion and $1.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(4) Includes loans receivable due from non-guarantor subsidiaries of $20 million for Medtronic & Medtronic Luxco Senior Notes.

No loans receivable due from non-guarantor subsidiaries for CIFSA Senior Notes.

(4) Includes loans receivable due from non-guarantor subsidiaries of $5.2 billion and $19.1 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(5) Includes payables due to non-guarantor subsidiaries of $21.8 billion and $42.1 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

(6) Includes loans payable due to non-guarantor subsidiaries of $7.7 billion and $7.7 billion for Medtronic & Medtronic Luxco Senior Notes, and CIFSA Senior Notes, respectively.

Table of C ontents

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-K

Item 7. Management’s Discussion and Analysis