What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-06-20 compared with 2023-06-22 · 337 added, 354 removed, 1580 unchanged (30% of the section changed)

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and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Table of C ontents

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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These reserves are subject to a high degree of estimation and management judgment.

During fiscal year 2023, management recognized an increase of $764 million associated with the August 18, 2022 U.S.

Tax Court (Tax Court) Opinion on the previously disclosed litigation related to 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., the Tax Court 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.

The Company has assumed the Tax Court findings will be applied for all years following fiscal year 2006.

Total reserves relating to uncertain tax positions as of April 26, 2024 were $2.824 billion, of which the Puerto Rico manufacturing reserve makes up a significant portion.

The principal considerations for our determination that performing procedures relating to the income tax reserve for the uncertain tax position related to Puerto Rico manufacturing is a critical audit matter are (i) the significant judgment by management when determining the reserve, including a high degree of estimation uncertainty relative to the unresolved issue with the IRS involving one of the Company’s manufacturing sites;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s measurement of the income tax reserve for the uncertain tax position related to Puerto Rico manufacturing, as the nature of the evidence is often highly subjective;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s measurement of the income tax reserve for the uncertain tax position related to Puerto Rico manufacturing, as the nature of the evidence is often highly subjective.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the recognition of the income tax reserves for uncertain tax positions, as well as controls over measurement of the reserve for the uncertain tax position related to Puerto Rico manufacturing.

These procedures also included, among others (i) testing management’s process for determining the reserve and (ii) evaluating the reasonableness of the measurement of the reserve, including underlying assumptions used in management’s calculations.

Evaluating the reasonableness of the measurement of the reserve included evaluating whether the methodology and assumptions used by the Company were consistent with the Tax Court’s ruling.

Professionals with specialized skill and knowledge were used to assist in evaluating the application of tax laws related to the ruling and the underlying assumptions used in management’s calculations.

These procedures also included, among others (i) testing management’s process for determining the reserve, (ii) evaluating the status and results of the related U.S.

Tax Court case, and (iii) evaluating the consistency of the reserve calculation with the relevant documents related to the U.S.

Tax Court case.

Evaluating the reasonableness of the measurement of the reserve included evaluating whether the methodology and assumptions used by the Company were consistent with the U.S.

Tax Court’s ruling.

/s/ PricewaterhouseCoopers LLP

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We have served as the Company’s auditor since 1963.

Table of C ontents

Medtronic plc

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Certain litigation charges, net 149 ( 30 ) 95

Other operating (income) expense, net ( 131 ) 862 315

Other operating expense (income), net 464 ( 131 ) 862

Operating profit 5,144 5,485 5,752

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The accompanying notes are an integral part of these consolidated financial statements.

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Medtronic plc

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Net income $ 3,705 $ 3,784 $ 5,062

Other comprehensive (loss) income, net of tax:

Unrealized (loss) gain on investment securities ( 49 ) ( 301 ) 92

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on investment securities 46 ( 49 ) ( 301 )

Translation adjustment ( 848 ) ( 240 ) ( 2,086 )

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Net change in retirement obligations 212 32 574

Unrealized (loss) gain on cash flow hedges ( 381 ) 727 ( 519 )

Other comprehensive (loss) income ( 1,234 ) 1,213 83

Unrealized gain (loss) on cash flow hedges 136 ( 381 ) 727

Other comprehensive income (loss) 178 ( 1,234 ) 1,213

Comprehensive income including noncontrolling interests 3,883 2,549 6,274

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The accompanying notes are an integral part of these consolidated financial statements.

Table of C ontents

Medtronic plc

Consolidated Balance Sheets

(in millions) April 28, 2023 April 29, 2022

(in millions, except share amounts) April 26, 2024 April 28, 2023

Current assets:

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Accounts receivable, less allowances and credit losses of $ 173 and $ 176 , respectively

Inventories, net 5,293 4,616

Inventories 5,217 5,293

Other current assets 2,584 2,425

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The accompanying notes are an integral part of these consolidated financial statements.

Table of C ontents

Medtronic plc

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Net income — — — 5,039 — 5,039 22 5,062

Other comprehensive income — — — — 75 75 8 83

Other comprehensive income (loss) — — — — 1,219 1,219 ( 6 ) 1,213

Dividends to shareholders ($ 2.52 per ordinary share)

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Changes to noncontrolling ownership interests — — 1 — — 1 ( 19 ) ( 18 )

Cumulative effect of change in accounting principle — — — ( 24 ) — ( 24 ) — ( 24 )

April 29, 2022 1,331 $ — $ 24,566 $ 30,250 $ ( 2,265 ) $ 52,551 $ 171 $ 52,722

Net income — — — 3,758 — 3,758 26 3,784

Other comprehensive income (loss) — — — — 1,219 1,219 ( 6 ) 1,213

Other comprehensive loss — — — — ( 1,234 ) ( 1,234 ) — ( 1,234 )

Dividends to shareholders ($ 2.72 per ordinary share)

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Net income — — — 3,676 — 3,676 28 3,705

Other comprehensive (loss) income — — — — ( 1,234 ) ( 1,234 ) — ( 1,234 )

Other comprehensive income (loss) — — — — 180 180 ( 2 ) 178

Dividends to shareholders ($ 2.76 per ordinary share)

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The accompanying notes are an integral part of these consolidated financial statements.

Table of C ontents

Medtronic plc

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Loss on debt extinguishment — 53 —

Asset impairment charges — 515 —

Asset impairments and related inventory write-downs 371 — 515

Other, net 573 270 138

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Intercompany transactions and balances have been fully eliminated in consolidation.

Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.

Amounts reported in millions within this annual 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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GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

Estimates are used when accounting for items such as income taxes, contingencies, intangible asset, and liability valuations.

Estimates are used when accounting for items such as income taxes, contingencies, goodwill, intangible asset, equity investment, and liability valuations.

Actual results may or may not differ from those estimates.

Fiscal Year-End The Company utilizes a 52/53-week fiscal year, ending the last Friday in April, for the presentation of its consolidated financial statements and related notes thereto at April 26, 2024 and April 28, 2023 and for each of the three fiscal years ended April 26, 2024 (fiscal year 2024), April 28, 2023 (fiscal year 2023), and April 29, 2022 (fiscal year 2022).

Fiscal year 2021 was a 53-week year, with the extra week having occurred in the first fiscal month of the first quarter.

Cash Equivalents The Company considers highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.

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The classification of marketable debt securities as current or long-term is based on the nature of the securities and the availability for use in current operations consistent with the Company's management of its capital structure and liquidity.

Certain of the Company’s investments in marketable equity securities and other securities are long-term, strategic investments in companies that are in various stages of development and are included in other assets on the consolidated balance sheets.

Certain of the Company’s investments in marketable equity securities and other securities are long-term, strategic investments in companies that are in various stages of development and are primarily included in other assets on the consolidated balance sheets.

Marketable equity securities are recorded at fair value in the consolidated balance sheets.

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At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired.

Equity method investments for which the Company has elected the fair value option are valued using a discounted cash flow methodology, taking into consideration various assumptions including discount rate and all pertinent financial information available related to the investees, including historical financial statements and projected future cash flows.

Equity method investments for which the Company has elected the fair value option are valued using a discounted cash flow methodology, taking into consideration various assumptions including discount rate and all pertinent financial information available related to the investees, including the timing of anticipated product launches, historical financial results, and projections of future cash flows.

Equity investments that do not have readily determinable fair values are measured using the measurement alternative at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

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The difference, if any, between the net asset value and the proceeds, is recognized in earnings.

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

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

The Company assesses goodwill 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.

Impairment testing for goodwill is performed at a reporting unit level.

The test for impairment of goodwill requires the Company to make several estimates related to projected future cash flows to determine the fair value of the goodwill reporting units.

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

Internal operational budgets and long-range strategic plans are used as a basis for the cash flow analysis.

The Company also utilizes assumptions for working capital, capital expenditures, and terminal growth 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.

The test for impairment of goodwill requires the Company to make several estimates related to projected future cash flows and appropriate multiples to determine the fair value of the goodwill reporting units.

Significant assumptions used in the 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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The fair value of an asset group, which includes intangible assets, is estimated by utilizing a discounted cash flow analysis.

Acquired IPR&D represents the fair value assigned to those research and development projects that were acquired in a business combination for which the related products have not received regulatory approval and have no alternative future use.

Acquired IPR&D represents the fair value assigned to those research and development projects that were primarily acquired in a business combination for which the related products have not received regulatory approval and have no alternative future use.

IPR&D is capitalized at its fair value as an indefinite-lived intangible asset, and any development costs incurred after the acquisition are expensed as incurred.

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If the project is not completed or is terminated or abandoned, the Company may have an impairment related to the IPR&D, which is charged to expense.

Indefinite-lived intangible assets are tested for impairment annually in the third quarter of the fiscal year and whenever events or changes in circumstances indicate that the carrying amount may be impaired.

Indefinite-lived intangible assets are tested for impairment annually in the third quarter of the fiscal year, prior to moving to definite-lived, and whenever events or changes in circumstances indicate that the carrying amount may be impaired.

Impairment is calculated as the excess of the asset’s carrying value over its fair value.

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Changes in projected revenues, probabilities of payment, discount rates, and projected payment dates may result in adjustments to the fair value measurements.

Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within other operating (income) expense, net in the consolidated statements of income.

Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within other operating expense (income), net in the consolidated statements of income.

Contingent consideration payments made or received soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows.

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Financial assets that are classified as Level 1 securities include highly liquid government bonds within U.S.

government and agency securities and marketable equity securities for which quoted market prices are available.

government and agency securities, mutual funds, short-term investments, and equity securities for which quoted market prices are available.

In addition, the Company classifies currency forward contracts as Level 1 since they are valued using quoted market prices in active markets which have identical assets or liabilities.

The valuation for most fixed maturity securities are classified as Level 2.

Financial assets that are classified as Level 2 include corporate debt securities, government and agency securities, other asset-backed securities, certificate of deposits, and mortgage-backed securities whose value is determined using inputs that are observable in the market or may be derived principally from, or corroborated by, observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities.

Financial assets that are classified as Level 2 include corporate debt securities, government and agency securities, other asset-backed securities, certificates of deposits, and mortgage-backed securities whose value is determined using inputs that are observable in the market or may be derived principally from, or corroborated by, observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities.

In addition, total return swaps are included in Level 2 as the Company uses inputs other than quoted prices that are observable for the asset.

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Valuation techniques for investments valued using the fair value option are included in the "Investments" section above.

For goodwill, other intangible assets, and IPR&D, inputs used in the fair value analysis fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value.

For goodwill, other

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

intangible assets, and IPR&D, inputs used in the fair value analysis fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value.

Certain investments for which the fair value is measured using the net asset value per share (or its equivalent) practical expedient are excluded from the fair value hierarchy.

Financial assets for which the fair value is measured using the net asset value per share practical expedient include certain debt funds, equity and fixed income commingled trusts, and registered investment companies.

Financial assets for which the fair value is measured using the net asset value per share practical expedient include equity and fixed income commingled trusts, partnership units, and registered investment companies.

Revenue Recognition The Company sells its products through direct sales representatives and independent distributors.

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The Company recognizes revenue when control is transferred to the customer.

For products sold through direct sales representatives and independent distributors, control is transferred upon shipment or upon delivery, based on the contract terms and legal requirements.

For products sold through direct sales representatives and independent distributors, control is typically transferred upon shipment or upon delivery, based on the contract terms and legal requirements.

For consignment inventory, control is transferred when the product is used or implanted.

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Research and development costs also include pre-approval regulatory and clinical trial expenses and license payments for technology not yet approved by regulators.

Contingencies 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.

Contingencies The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions 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.

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See Footnote 13 for more information on the Company's uncertain tax positions and tax policies.

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 fair value of contingent consideration, changes in amounts accrued for certain contingent liabilities for a past acquisition, MCS charges, RCS charges, impairment charges, income from funded research and development arrangements, and commitments to the Medtronic Foundation and Medtronic LABS.

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

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 fair value of contingent consideration, certain

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

acquisition and divestiture-related items, income from funded research and development arrangements, and commitments to the Medtronic Foundation and Medtronic LABS.

Currency Translation Assets and liabilities of non-U.S.

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Elements of the consolidated statements of income are translated at the average monthly currency exchange rates in effect during the period.

Currency transaction gains and losses are included in other operating (income) expense, net in the consolidated statements of income.

Currency transaction gains and losses are included in other operating expense (income), net in the consolidated statements of income.

Stock-Based Compensation The Company measures stock-based compensation expense at the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period, which is generally the vesting period.

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Recently Adopted Accounting Standards

For fiscal year 2023, there were no newly adopted accounting standards that had a material impact to our consolidated financial statements.

The Company's revenues are principally derived from device-based medical therapies and services related to cardiac rhythm disorders, cardiovascular disease, renal disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, chronic pain, urological and digestive disorders, ear, nose, and throat conditions, and diabetes conditions as well as advanced and general surgical care products, respiratory and monitoring solutions, and neurological surgery technologies.

Supplier Finance Programs

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities— Supplier Finance Programs (Subtopic 405-50), which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

The Company adopted this guidance on April 29, 2023.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements .

Not Yet Adopted Accounting Standards

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Improvements to Segment Reporting (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2025 for our annual report and for interim periods starting in fiscal year 2026.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires incremental annual disclosures on income taxes, including rate reconciliations, income taxes paid, and other disclosures.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

The Company's revenues are principally derived from device-based medical therapies and services related to cardiac rhythm disorders, cardiovascular disease, neurological disorders and diseases, spinal conditions and musculoskeletal trauma, chronic pain, urological and digestive disorders, ear, nose, and throat conditions, and diabetes conditions as well as advanced and general surgical care products, respiratory and monitoring solutions, and neurological surgery technologies.

The Company's primary customers include healthcare systems, clinics, third-party healthcare providers, distributors, and other institutions, including governmental healthcare programs and group purchasing organizations.

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 reporting structure.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The table below illustrates net sales by segment and division for fiscal years 2024, 2023, and 2022:

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Cardiovascular 11,831 11,522 11,368

Surgical Innovations 5,663 6,060 5,438

Respiratory, Gastrointestinal, & Renal 2,770 3,081 3,298

Medical Surgical 8,433 9,141 8,737

Cranial & Spinal Technologies 4,756 4,451 4,456

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Neuroscience 9,406 8,959 8,784

Surgical & Endoscopy 6,508 6,152 6,543

Acute Care & Monitoring 1,908 1,837 1,926

Medical Surgical 8,417 7,989 8,469

Diabetes 2,488 2,262 2,338

Total $ 31,227 $ 31,686 $ 30,117

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The table below illustrates net sales by market geography and segment for fiscal years 2023, 2022, and 2021:

Reportable segment net sales 32,142 30,731 30,959

Other operating segment (1)

Total net sales $ 32,364 $ 31,227 $ 31,686

(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.

The table below illustrates net sales by market geography for each segment for fiscal years 2024, 2023, and 2022:

Developed Markets (2)

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Cardiovascular $ 5,597 $ 5,796 $ 5,490 $ 3,857 $ 3,564 $ 3,866 $ 2,377 $ 2,161 $ 2,012

Medical Surgical 3,658 3,862 3,650 3,080 3,373 3,320 1,694 1,905 1,766

Neuroscience 6,305 6,018 5,753 1,739 1,658 1,801 1,362 1,283 1,229

Medical Surgical 3,717 3,549 3,659 3,049 2,917 3,155 1,650 1,522 1,655

Diabetes 852 849 974 1,284 1,106 1,085 352 307 279

Total $ 16,373 $ 16,135 $ 15,526 $ 9,408 $ 10,126 $ 9,815 $ 5,446 $ 5,426 $ 4,777

Reportable segment net sales 16,471 16,212 15,876 9,929 9,245 9,907 5,742 5,273 5,176

Other operating segment (4)

91 160 259 50 163 218 81 172 250

Total net sales $ 16,562 $ 16,373 $ 16,135 $ 9,979 $ 9,408 $ 10,126 $ 5,823 $ 5,446 $ 5,426

includes the United States and U.S.

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developed markets, as defined above.

(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 amount of revenue recognized is reduced by sales rebates and returns.

Adjustments to rebates and returns reserves are recorded as increases or decreases to revenue.

At April 26, 2024, $ 1.0 billion of rebates were classified as other accrued expenses, and $ 574 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheet.

At April 29, 2022, $ 981 million of rebates were classified as other accrued expenses, and $ 548 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheet.

At April 28, 2023, $ 1.1 billion of rebates were classified as other accrued expenses, and $ 555 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheet.

During fiscal year 2024, adjustments to rebate and return reserves recognized in revenue that were included in the rebate and return reserves at the beginning of the period were not material.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Deferred Revenue and Remaining Performance Obligations

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During the fiscal year ended April 26, 2024, the Company recognized $ 324 million of revenue that was included in deferred revenue as of April 28, 2023.

During the fiscal year ended April 28, 2023, the Company recognized $ 240 million of revenue that was included in deferred revenue at April 29, 2022.

Remaining performance obligations include goods and services that have not yet been delivered or provided under existing, noncancellable contracts with minimum purchase commitments.

At April 26, 2024, the estimated revenue expected to be recognized in future periods related to unsatisfied performance obligations for executed contracts with an original duration of one year or more was approximately $ 0.5 billion.

The Company expects to recognize revenue on the majority of these remaining performance obligations over the next three years .

The Company expects to recognize revenue on the majority of these remaining performance obligations over the next two years .

Acquisitions and Dispositions

Acquisition Activity

The Company had acquisitions during fiscal years 2024 and 2023 that were accounted for as business combinations.

The assets and liabilities of businesses acquired were recorded and consolidated on the acquisition date at their respective fair values.

The assets and liabilities of the businesses acquired were recorded and consolidated on the acquisition date at their respective fair values.

Goodwill resulting from business combinations is largely attributable to future, yet to be defined technologies, new customer relationships, existing workforce of the acquired businesses, and synergies expected to arise after the Company's acquisition of these businesses.

The pro forma impact of acquisitions during fiscal years 2023 and 2022 was not significant, either individually or in the aggregate, to the consolidated results of the Company.

The results of operations of acquired businesses have been included in the Company’s consolidated statements of income since the date each business was acquired.

The results of operations of acquired businesses and the pro forma impact of the acquisitions during fiscal years 2024 and 2023 was not significant, either individually or in the aggregate, to the consolidated results of the Company.

Purchase price allocation adjustments for fiscal years 2024 and 2023 business combinations were not significant.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Fiscal Year 2024

The acquisition date fair value of net assets acquired during the fiscal year ended April 26, 2024 was $ 335 million.

Based on preliminary valuations, assets acquired were primarily comprised of $ 131 million of goodwill, $ 150 million of IPR&D, and $ 29 million of technology-based intangible assets with estimated useful lives of 10 years.

For tax purposes, $ 51 million of goodwill is deductible while $ 80 million is not deductible.

The Company recognized $ 30 million of non-cash contingent consideration liabilities in connection with these business combinations during the fiscal year ended April 26, 2024, which are comprised of revenue and product development milestone-based payments.

Fiscal Year 2023

Intersect ENT

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Total consideration, net of cash acquired, for the transaction, in which the Company acquired all outstanding shares of Intersect ENT for $ 28.25 per share, was $ 1.2 billion consisting of $ 1.1 billion of cash and $ 98 million previously held investments in Intersect ENT.

Based upon a preliminary acquisition valuation, the Company acquired $ 615 million of goodwill, $ 635 million of technology-based intangible assets, $ 35 million of customer-related intangible assets, and $ 13 million of tradenames with estimated useful lives of 20 years.

The Company acquired $ 615 million of goodwill, $ 635 million of technology-based intangible assets, $ 35 million of customer-related intangible assets, and $ 13 million of tradenames with estimated useful lives of 20 years.

The goodwill is not deductible for tax purposes.

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Total consideration, net of cash acquired for the transaction, was $ 904 million.

Based upon a preliminary acquisition valuation, the Company acquired $ 660 million of goodwill and $ 300 million of in-process research and development, which was capitalized into intangible assets during the fourth quarter of fiscal year 2023.

The Company acquired $ 660 million of goodwill and $ 300 million of IPR&D, which was capitalized into intangible assets during the fourth quarter of fiscal year 2023.

The goodwill is not deductible for tax purposes.

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Revenue and net loss attributable to Affera since the date of acquisition as well as costs incurred in connection with the acquisition included in the consolidated statements of income were not significant for fiscal year 2023.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The acquisition date fair values of the assets acquired and liabilities assumed were as follows:

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For acquisitions, other than Intersect ENT and Affera, the acquisition date fair value of net assets acquired during fiscal year 2023 was $ 123 million.

Based upon preliminary valuations, assets acquired were primarily comprised of $ 66 million of goodwill and $ 57 million of technology-based intangible assets with estimated useful lives of 16 years.

Assets acquired were primarily comprised of $ 66 million of goodwill and $ 57 million of technology-based intangible assets with estimated useful lives of 16 years.

The goodwill is deductible for tax purposes.

The Company recognized $ 73 million of non-cash contingent consideration liabilities in connection with these acquisitions during fiscal year 2023, which are comprised of revenue and product development milestone-based payments.

Disposal Activity

Ventilator Product Line Exit

On February 20, 2024, the Company announced the decision to exit its ventilator product line and retain and combine the remaining Patient Monitoring and Respiratory Interventions (PMRI) businesses into one business unit called Acute Care and Monitoring (ACM).

In connection with this decision, the Company recorded pre-tax charges of $ 439 million, including $ 369 million recognized within other operating expense (income), net and $ 70 million recognized in cost of products sold in the consolidated statements of income in fiscal year 2024.

The charges included $ 371 million of non-cash impairments and write-downs primarily related to $ 295 million of long-lived intangible asset impairments and $ 70 million of inventory-write downs.

The other charges primarily related to contract cancellation costs and severance.

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

Renal Care Solutions (RCS) Disposition

On May 25, 2022, the Company and DaVita Inc.

(DaVita) entered into a definitive agreement for the Company to sell half of its RCS business, and on April 1, 2023, completed the transaction.

This sale is part of an agreement between Medtronic and DaVita to form a new, independent kidney care-focused medical device company (“Mozarc Medical” or "Mozarc") with equal equity ownership.

At closing, the Company received $ 45 million cash consideration, recorded non-cash contingent consideration receivables valued at $ 195 million, made an additional cash investment of $ 224 million, and retained a 50 % non-controlling equity interest in Mozarc valued at $ 307 million.

For the contingent consideration receivables, the maximum consideration the Company could receive in the future is $ 300 million based on the achievement of certain milestones, as further described below.

The Company recorded non-cash pre-tax charges of $ 136 million in fiscal year 2023, primarily related to impairment of goodwill and changes in the carrying amount of the disposal group, recognized in other operating expense (income), net in the consolidated statements of income.

Refer to Note 9 to the consolidated financial statements for additional information on the goodwill impairment.

Refer to Note 5 to the consolidated financial statements for additional information on the Company’s retained 50 % equity investment in Mozarc as a result of this transaction.

The Company determined that the sale of the RCS business did not meet the criteria to be classified as discontinued operations.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Fiscal Year 2022

The acquisition date fair value of net assets acquired during fiscal year 2022 was $ 125 million, consisting of $ 154 million of assets acquired and $ 29 million of liabilities assumed.

Assets acquired were primarily comprised of $ 50 million of technology-based intangible assets with estimated useful lives ranging from 15 to 16 years, and $ 80 million of goodwill.

The goodwill is not deductible for tax purposes.

The Company recognized $ 31 million of non-cash contingent consideration liabilities in connection with business combinations during fiscal year 2022, which are comprised of revenue and product development milestone-based payments.

Acquired In-Process Research & Development (IPR&D)

IPR&D with no alternative future use acquired outside of a business combination is expensed immediately.

During fiscal year 2023, IPR&D acquired in connection with asset acquisitions was not significant.

During fiscal year 2022, the Company acquired $ 101 million of IPR&D in connection with asset acquisitions of technology not yet approved by regulators, which was recognized in research and development expense in the consolidated statements of income.

Mechanical Circulatory Support (MCS) Business Exit

In June 2021, the Company announced the decision to stop the distribution and sale of the Medtronic HVAD System.

In connection with this decision, the Company recorded pre-tax charges of $ 881 million, including $ 58 million recognized in costs of products sold and $ 823 million recognized within other operating expense (income), net in the consolidated statement of income in fiscal year 2022 .

The charges included $ 515 million of non-cash impairments and write-downs primarily related to $ 409 million of intangible asset impairments and $ 58 million of inventory write-downs.

The Company also recorded charges of $ 366 million for commitments and obligations associated with the decision, which included charges for patient support obligations, restructuring, and other associated costs.

Contingent Consideration

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A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date.

The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized within other operating (income) expense, net in the consolidated statements of income.

The fair value of contingent consideration at April 28, 2023 and April 29, 2022 was $ 206 million and $ 119 million, respectively.

The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized within other operating expense (income), net in the consolidated statements of income.

The fair value of contingent consideration liabilities at April 26, 2024 and April 28, 2023 was $ 149 million and $ 206 million, respectively.

At April 26, 2024, $ 96 million was recorded in other accrued expenses , and $ 53 million was recorded in other liabilities on the consolidated balance sheets.

At April 28, 2023, $ 34 million was reflected in other accrued expenses , and $ 171 million was reflected in other liabilities on the consolidated balance sheets.

The following table provides a reconciliation of the beginning and ending balances of contingent consideration:

The following table provides a reconciliation of the beginning and ending balances of contingent consideration liabilities:

(in millions) 2024 2023

1 unchanged sentence

Purchase price contingent consideration 30 274

Purchase price allocation adjustments — 7

Payments ( 104 ) ( 154 )

10 unchanged sentences

For projected fiscal year of payment, the amount represents the median of the inputs and is not a weighted average.

Renal Care Solutions disposition

On May 25, 2022, the Company and DaVita Inc.

(“DaVita”) entered into a definitive agreement for the Company to sell half of its Renal Care Solutions (RCS) business, and on April 1, 2023, completed the transaction.

This sale is part of an agreement between Medtronic and DaVita to form a new, independent kidney care-focused medical device company (“Mozarc Medical” or "Mozarc") with equal equity

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

RCS was part of the Company’s Medical Surgical portfolio.

At closing, the Company received $ 45 million cash consideration, recorded non-cash contingent consideration receivables valued at $ 195 million due based on the achievement of certain revenue, regulatory, and profitability milestones, and retained a 50 % non-controlling equity interest in Mozarc valued at $ 307 million.

For the contingent consideration receivables, the maximum consideration the Company could receive in the future is $ 300 million based on the achievement of the aforementioned milestones, with potential payouts starting in fiscal year 2025 through 2029.

The Company recorded total non-cash pre-tax charges of $ 136 million in fiscal year 2023, primarily related to impairment of goodwill and changes in the carrying amount of the disposal group, recognized in other operating (income) expense, net in the consolidated statements of income.

Refer to Note 9 to the consolidated financial statements for additional information on the goodwill impairment.

Refer to Note 5 to the consolidated financial statements for additional information on the Company’s retained 50 % equity investment in Mozarc as a result of this transaction.

The Company determined that the sale of the RCS business did not meet the criteria to be classified as discontinued operations.

In connection with the sale of our RCS business as further discussed above, the Company may be entitled to receive additional consideration based on the achievement of certain revenue, regulatory, and profitability milestones, with potential payouts starting in fiscal year 2025 through 2029.

The fair value of the contingent consideration receivable at April 26, 2024 and April 28, 2023 was $ 58 million and $ 195 million, respectively, and was recorded in other assets in the consolidated balance sheet.

The following table provides a reconciliation of the beginning and ending balances of the Level 3 measurement of contingent consideration receivable:

(in millions) 2024 2023

Beginning balance $ 195 $ —

Purchase price contingent consideration — 195

Change in fair value ( 138 ) —

Ending balance $ 58 $ 195

Restructuring Charges

In fiscal years 2023, 2022 and 2021, 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.

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.

In addition, 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.

In fiscal year 2024, the Company incurred $ 389 million of restructuring and associated costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

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 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.

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.

Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated and voluntary early retirement benefits in fiscal year 2023.

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

The following table presents the classification of restructuring costs in the consolidated statements of income:

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Total restructuring and associated costs $ 389 $ 647 $ 335

(1) In fiscal years 2023 and 2021, restructuring charges, net included $ 94 million and $ 97 million, respectively, of incremental defined benefit, defined contribution, and post-retirement related expenses for employees that accepted voluntary early retirement packages.

(1) In fiscal year 2023, restructuring charges, net included $ 94 million of incremental defined benefit, defined contribution, and post-retirement related expenses for employees that accepted voluntary early retirement packages.

Medtronic plc

2 unchanged sentences

(in millions) Employee Termination Benefits (1)

Associated Costs (2)

Write-downs Other

Associated and Other Costs Total

April 29, 2022 $ 81 $ 28 $ 110

6 unchanged sentences

Cash payments ( 292 ) ( 161 ) ( 453 )

Settled non-cash — ( 16 ) ( 16 )

Accrual adjustments (2)

1 unchanged sentence

April 26, 2024 $ 136 $ 11 $ 147

(1) In fiscal years 2023, restructuring charges, net included $ 94 million of incremental defined benefit, defined contribution, and post-retirement related expenses for employees that accepted voluntary early retirement packages.

These costs are not included in the table summarizing restructuring charges above, as they are associated with costs that are accounted for under the pension and post-retirement rules.

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

(2) Accrual adjustments relate to certain employees identified for termination finding other positions within the Company or contract terminations being settled for less than originally estimated.

Mechanical Circulatory Support (MCS)

In June 2021, the Company announced the decision to stop the distribution and sale of the Medtronic HVAD System in light of a growing body of observational clinical comparisons indicating a lower frequency of neurological adverse events and mortality with another circulatory support device available to patients compared to the HVAD system.

In connection with this decision, the Company recorded charges of $ 726 million (MCS charges) within the Cardiovascular segment during the first quarter of fiscal year 2022, including $ 58 million recognized in costs of products sold and $ 668 million recognized within other operating (income) expense, net in the consolidated statement of income .

The charges included $ 515 million of non-cash impairments and write-downs primarily related to $ 409 million of intangible asset impairments and $ 58 million of inventory write-downs.

The Company also recorded charges of $ 211 million for commitments and obligations associated with the decision, which included charges for patient support obligations, restructuring, and other associated costs.

During the fourth quarter of fiscal year 2022, the Company recorded additional charges of $ 155 million within other operating (income) expense, net primarily related to incremental commitments and obligations associated with the exit of the business.

As of April 28, 2023, accruals were recorded in the consolidated balance sheet for these obligations, with $ 84 million reflected in other accrued expenses and $ 88 million recorded in other liabilities .

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Financial Instruments

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government and agency securities 5 — — 5 5 —

Certificates of deposit 10 — — 10 10

Other asset-backed securities 941 2 ( 9 ) 934 934 —

2 unchanged sentences

Total available-for-sale debt securities $ 6,968 $ 7 $ ( 252 ) $ 6,723 $ 6,690 $ 33

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

April 28, 2023

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The amortized cost of debt securities excludes accrued interest, which is reported in other current assets in the consolidated balance sheets.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The following tables present the gross unrealized losses and fair values of the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category at April 26, 2024 and April 28, 2023:

23 unchanged sentences

When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Activity related to the Company’s available-for-sale debt securities portfolio is as follows:

(in millions) April 26, 2024 April 28, 2023 April 29, 2022

Proceeds from sales and maturities $ 7,321 $ 9,611 $ 10,420

Proceeds from sales $ 7,359 $ 7,321 $ 9,611

Gross realized gains 24 10 15

Gross realized losses ( 26 ) ( 43 ) ( 18 )

During the fiscal year ended April 30, 2021, the Company had proceeds from maturities of investments classified as held to maturity of $ 911 million.

The April 28, 2023 balance of available-for-sale debt securities by contractual maturity is shown in the following table.

The contractual maturities of available-for-sale debt securities at April 26, 2024 are shown in the following table.

Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment.

Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

(in millions) April 28, 2023

(in millions) Amortized Cost Fair Value

Due in one year or less $ 1,548 $ 1,534

2 unchanged sentences

Due after ten years 1,019 967

Total debt securities $ 6,449

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Total $ 6,968 $ 6,723

Interest income is recognized in other non-operating income, net , in the consolidated statements of income.

For fiscal years 2024, 2023, and 2022 there was $ 597 million, $ 386 million, and $ 186 million of interest income, respectively.

Equity Securities, Equity Method Investments, and Other Investments

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Equity method investments for which the Company has elected the fair value option are included within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value.

To determine the fair value of these investments, the Company uses a discounted cash flow methodology, taking into consideration various assumptions including discount rate, and all pertinent financial information available related to the investees, including historical financial statements and projected future cash flows.

To determine the fair value of these investments, the Company uses a discounted cash flow methodology, taking into consideration various assumptions including discount rate, and all pertinent financial information available related to the investees, including the timing of anticipated product launches, historical financial results, and projections of future cash flows.

Equity investments that do not have readily determinable fair values, and that are not accounted for via the fair value option, are included within Level 3 of the fair value hierarchy, as they are measured using the measurement alternative at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

The following table summarizes the Company's equity and other investments at April 28, 2023 and April 29, 2022, which are classified as other assets in the consolidated balance sheets:

The following table summarizes the Company's equity and other investments at April 26, 2024 and April 28, 2023, which are classified as primarily other assets in the consolidated balance sheets:

(in millions) April 26, 2024 April 28, 2023

4 unchanged sentences

Total equity and other investments $ 1,282 $ 1,607

Gains and losses on the Company's portfolio of equity and other investment are recognized in other non-operating income , net in the consolidated statements of income.

During the fiscal year ended April 28, 2023, there were $ 56 million of net unrealized gains on equity securities and other investments still held at April 28, 2023.

Gains and losses on the Company's portfolio of equity and other investments are recognized in other non-operating income , net in the consolidated statements of income.

During the fiscal year ended April 26, 2024, there were $ 291 million of net unrealized losses on equity securities and other investments still held at April 26, 2024.

During the fiscal year ended April 28, 2023, there were $ 56 million of net unrealized gains on equity securities and other investments still held at April 28, 2023.

Interest income is recognized in other non-operating income, net , in the consolidated statements of income.

During the fiscal year ended April 28, 2023, there was $ 386 million of interest income.

During the fiscal year ended April 29, 2022, there was $ 186 million of interest income.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Mozarc Medical Investment

On April 1, 2023 the Company sold half of its RCS business to Mozarc, and as a result of the transaction the Company retained a 50 % equity interest in Mozarc.

Please refer to Note 3 to the consolidated financial statements for additional information on this transaction.

As further described in Note 3, on April 1, 2023 the Company sold half of its RCS business to Mozarc, and as a result of the transaction the Company retained a 50 % equity interest in Mozarc.

Although the equity investment provides the Company with the ability to exercise significant influence over Mozarc, the Company has elected the fair value option to account for this equity investment.

1 unchanged sentence

Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period in other non-operating income, net in the consolidated statements of income.

During the fiscal year ended April 26, 2024, the Company recognized a loss of $ 220 million, primarily driven by the timing of anticipated product launches, historical financial results, and projections of future cash flows.

The following table provides a reconciliation of the beginning and ending balances of the Mozarc investment for which the fair value option has been elected:

(in millions) Fiscal Year 2023

(in millions) 2024 2023

Beginning Balance $ 531 $ —

1 unchanged sentence

Additional cash investment — 224

Change in fair value ( 220 ) —

Ending Balance $ 311 $ 531

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Financing Arrangements

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Bank borrowings $ 13 $ 13

0.000 percent three -year 2019 senior notes

0.375 percent four -year 2019 senior notes

0.000 percent two -year 2020 senior notes

Finance lease obligations 6 7

Commercial Paper 1,073 —

Current debt obligations $ 1,092 $ 20

Bank Borrowings Outstanding bank borrowings at April 28, 2023 and April 29, 2022 were not significant.

Commercial Paper On January 26, 2015, Medtronic Global Holdings S.C.A.

3 unchanged sentences

have guaranteed the obligations of Medtronic Luxco under the 2015 CP Program and the 2020 CP Program.

There was no commercial paper outstanding at April 28, 2023 and April 29, 2022.

There was $ 1.1 billion commercial paper outstanding at April 26, 2024.

During fiscal year 2024, the weighted average original maturity of the commercial paper outstanding was approximately 20 days and the weighted average interest rate was 5.45 percent.

There was no commercial paper outstanding at April 28, 2023.

During fiscal year 2023, the weighted average original maturity of the commercial paper outstanding was approximately 22 days and the weighted average interest rate was 4.34 percent.

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

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Interest rates on advances on the Credit Facility are determined by a pricing matrix based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service.

1 unchanged sentence

The Company is in compliance with all covenants related to the Credit Facility.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The Company's long-term debt obligations consisted of the following:

1 unchanged sentence

(in millions, except interest rates) Maturity by Fiscal Year Amount Effective Interest Rate Amount Effective Interest Rate

3.500 percent ten -year 2015 senior notes

2025 $ — — % $ 1,890 3.74 %

0.250 percent six -year 2019 senior notes

6 unchanged sentences

2027 1,606 1.25 1,646 1.25

3.350 percent ten -year 2017 senior notes

2027 — — 368 3.53

4.250 percent five -year 2023 senior notes

48 unchanged sentences

The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company.

The Company is in compliance with all covenants related to the Seniors Notes.

In September 2020, Medtronic Global Holdings S.C.A.

(Medtronic Luxco) issued six tranches of Euro-denominated Senior Notes with an aggregate principal of € 6.3 billion, with maturities ranging from fiscal year 2023 to fiscal year 2051, resulting in cash proceeds of approximately $ 7.2 billion, net of discounts and issuance costs.

The Company used the net proceeds of the offering to fund the early redemption of $ 4.3 billion of Medtronic Inc.

and CIFSA Senior Notes and € 1.5 billion of Medtronic Luxco Senior Notes for $ 6.3 billion of total consideration in October 2020.

Additionally, the Company used the proceeds to repay its € 750 million floating rate senior notes at maturity in March 2021.

The Company recognized a loss on debt extinguishment of $ 308 million in fiscal year 2021, which primarily

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums.

The loss was recognized in interest expense, net in the consolidated statement of income.

The Company is in compliance with all covenants related to the Senior Notes.

In September 2022, Medtronic Luxco issued four tranches of Euro-denominated Senior Notes with an aggregate principal of € 3.5 billion, with maturities ranging from fiscal year 2026 to 2035, resulting in cash proceeds of approximately $ 3.4 billion, net of discounts and issuance costs.

The Company used 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.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

In March 2023, Medtronic Luxco issued two tranches of USD-denominated Senior Notes with an aggregate principal of $ 2.0 billion, with maturities ranging from fiscal year 2028 to 2033, resulting in cash proceeds of approximately $ 2.0 billion, net of discounts and issuance costs.

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

The Euro-denominated debt issued in September 2020 and September 2022 is designated as a net investment hedge of certain of the Company's European operations.

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.

The Euro-denominated debt issued in September 2022 is designated as a net investment hedge of certain of the Company's European operations.

Refer to Note 7 for additional information regarding the net investment hedge.

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Total $ 25,189

For fiscal years 2024, 2023, and 2022, there was $ 916 million, $ 743 million, and $ 553 million of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and charges recognized in connection with the early redemption of senior notes, recognized in interest expense, net in the consolidated statements of income.

Financial Instruments Not Measured at Fair Value

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Cash Flow Hedges

The Company uses foreign currency forward exchange contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.

At inception, foreign currency forward contracts are designated as a cash flow hedge.

The Company uses foreign currency forward and option contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.

At inception, foreign currency forward and option contracts are designated as a cash flow hedge.

Changes in the fair value of these derivatives are reported as a component of accumulated other comprehensive loss until the hedged transaction affects earnings.

11 unchanged sentences

Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge.

During the twelve months ended April 28, 2023, the Company recognized $ 107 million of after-tax unrealized gains related to excluded components in interest expense , net .

During the twelve months ended April 26, 2024 and April 28, 2023, the Company recognized $ 197 million and $ 107 million, respectively, of after-tax unrealized gains related to excluded components in interest expense , net .

The cash flows related to the Company’s derivative instruments designated as net investment hedges are reported as investing activities in the consolidated statements of cash flows.

15 unchanged sentences

These derivative contracts mature in fiscal years 2025 through 2033.

(2) At April 28, 2023, includes € 16.0 billion, or $ 17.6 billion, of outstanding Euro-denominated debt as hedges of a portion our net investment in foreign operations.

(2) At April 26, 2024, includes € 16.0 billion, or $ 17.1 billion, of outstanding Euro-denominated debt designated as hedges of a portion our net investment in foreign operations.

This debt matures in fiscal years 2026 through 2051.

2 unchanged sentences

Gains and Losses on Hedging Instruments and Derivatives not Designated as Hedging Instruments

The amount of the gains and losses on our hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2023, 2022, and 2021 were as follows:

The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2024, 2023, and 2022 were as follows:

(Gain) Loss Recognized in Accumulated Other Comprehensive Income (Gain) Loss Reclassified into Income

2 unchanged sentences

Cash flow hedges

Currency exchange rate contracts $ ( 161 ) $ ( 953 ) $ 519 $ ( 703 ) $ ( 144 ) $ ( 17 ) Other operating (income) expense, net

Currency exchange rate contracts $ ( 416 ) $ ( 161 ) $ ( 953 ) $ ( 312 ) $ ( 703 ) $ ( 144 ) Other operating expense (income), net

Currency exchange rate contracts ( 124 ) ( 79 ) 18 ( 57 ) ( 3 ) 61 Cost of products sold

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(in millions) 2024 2023 2022

Derivatives not designated as hedging instruments

Currency exchange rate contracts $ 31 $ ( 54 ) $ 247 Other operating (income) expense, net

Total return swaps 1 1 ( 81 ) Other operating (income) expense, net

Total $ 32 $ ( 53 ) $ 166

Currency exchange rate contracts $ 136 $ 31 $ ( 54 ) Other operating expense (income), net

Balance Sheet Presentation

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Currency exchange rate contracts 15 17 Other current assets 12 10 Other accrued expenses

Total return swaps — — Other current assets — 20 Other accrued expenses

Total derivatives not designated as hedging instruments 17 46 10 69

Total derivatives $ 659 $ 368 $ 66 $ 236

5 unchanged sentences

Level 1 $ 659 $ 66 $ 368 $ 236

Level 2 — — — 20

Total $ 368 $ 236 $ 695 $ 129

The Company has elected to present the fair value of derivative assets and liabilities within the consolidated balance sheets on a gross basis, even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation.

17 unchanged sentences

Currency exchange rate contracts ( 236 ) 189 — ( 48 )

Total return swaps ( 20 ) — — ( 20 )

( 129 ) 109 — ( 20 )

Total $ 132 $ — $ ( 11 ) $ 121

3 unchanged sentences

The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The Company maintains cash and cash equivalents, investments, and certain other financial instruments (including currency exchange rate and interest rate derivative contracts) with various major financial institutions.

2 unchanged sentences

Under these agreements, either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specific thresholds, thus limiting credit exposure for both parties.

As of April 28, 2023 and April 29, 2022, the Company received net cash collateral of $ 11 million and $ 254 million, respectively, from its counterparties.

As of April 26, 2024 and April 28, 2023, the Company received net cash collateral of $ 101 million and $ 11 million, respectively,

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

from its counterparties.

Cash collateral posted is recorded as a reduction in cash and cash equivalents , with the offset recorded as an increase in other current assets in the consolidated balance sheets.

Cash collateral received is recorded as an increase in cash and cash equivalents with the offset recorded in other accrued expenses in the consolidated balance sheets.

Inventory balances, net of reserves, were as follows:

Inventory balances were as follows:

(in millions) April 26, 2024 April 28, 2023

5 unchanged sentences

The following table presents the changes in the carrying amount of goodwill by segment:

(in millions) Cardiovascular Medical Surgical Neuroscience Diabetes Total

(in millions) Cardiovascular Neuroscience Medical Surgical Diabetes Total

April 29, 2022 $ 7,160 $ 11,132 $ 19,957 $ 2,254 $ 40,502

1 unchanged sentence

Purchase accounting adjustments ( 6 ) 2 — — ( 5 )

Sale of RCS business — — ( 208 ) — ( 208 )

Currency translation and other ( 6 ) ( 30 ) ( 170 ) 1 ( 204 )

2 unchanged sentences

Purchase accounting adjustments ( 5 ) — — — ( 5 )

Sale of RCS business — ( 208 ) — — ( 208 )

Currency translation and other ( 33 ) ( 74 ) ( 458 ) — ( 565 )

April 26, 2024 $ 7,966 $ 11,644 $ 19,121 $ 2,255 $ 40,986

As further described in Note 19, the Company had changes to the operating segments during fiscal year 2024.

As of the beginning of fiscal year 2024, the Medical Surgical portfolio was separated into two operating segments, and each new operating segment was considered a standalone reporting unit as of the beginning of fiscal year 2024.

As a result of this change, the Company allocated all goodwill that was previously assigned to the Medical Surgical reporting unit to the Surgical/Endoscopy reporting unit and the Patient Monitoring/Respiratory Interventions (PMRI) reporting unit using a relative fair value allocation approach.

The effected reporting units were tested for impairment before and after the alignment.

No goodwill impairment was identified in either test as of the beginning of the fiscal year 2024.

Additionally, during the fourth quarter of fiscal year 2024, the Company's operating segments changed again resulting in the two reporting units created in the first quarter to be combined into the Medical Surgical reporting unit.

All goodwill that was previously assigned to the two reporting units was combined into the Medical Surgical reporting unit.

The Company did no t recognize any goodwill impairment charges during fiscal years 2024 or 2022.

As a result of the agreement with DaVita, as disclosed in Note 3, the Company allocated $ 208 million of goodwill to the RCS business that met the criteria to be classified as held for sale during the first quarter of fiscal year 2023 and was subsequently sold on April 1, 2023.

Upon allocation, a goodwill impairment test was performed for the RCS business, and the Company recognized $ 61 million of goodwill impairment charges during fiscal year 2023.

The goodwill impairment charges are recognized in other operating (income) expense, net in the consolidated statements of income.

The Company did no t recognize any goodwill impairment charges during fiscal years 2022 or 2021.

The goodwill impairment charges are recognized in other operating expense (income), net in the consolidated statements of income.

Medtronic plc

12 unchanged sentences

IPR&D $ 385 $ — $ 232 $ —

The Company did no t recognize any definite-lived intangible asset impairment charges during fiscal year 2023.

During fiscal year 2022, the Company recognized $ 409 million of definite-lived intangible asset impairment charges in connection with MCS within the Cardiovascular Portfolio.

During fiscal year 2024, the Company recognized $ 295 million of definite-lived intangible asset impairment charges in connection with the decision to exit its ventilator product line.

The intangible asset impairment charges primarily related to purchased technology, customer-related intangibles, and trade names.

During fiscal year 2022, the Company recognized $ 409 million of definite-lived intangible asset impairment charges in connection with the Company's decision to stop the distribution and sale of the Medtronic HVAD System.

The intangible asset impairment charge primarily related to purchased technology and patents.

Refer to Note 4 Restructuring Charges for additional information on what led to the impairment.

During fiscal year 2021, the Company recognized $ 30 million of definite-lived intangible asset impairment charges in connection with the abandonment of certain intangible assets within the Neuroscience segment.

Definite-lived intangible asset impairment charges are recognized in other operating (income) expense, net in the consolidated statements of income.

The intangible asset impairment charges are recognized in other operating expense (income), net in the consolidated statements of income.

Refer to Note 3 for additional information on what led to the impairments in fiscal year 2024 and 2022.

The Company did no t recognize any definite-lived intangible asset impairment charges during fiscal year 2023.

Indefinite-lived intangible asset impairment charges were not significant for fiscal year 2024, 2023, or 2022.

During fiscal year 2021, the Company recognized $ 45 million of indefinite-lived intangible asset impairment charges related to the abandonment of certain IPR&D projects in the Neuroscience segment.

Indefinite-lived intangible asset impairment charges are recognized in other operating (income) expense, net in the consolidated statements of income.

Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of such clinical trials, delays or failures to obtain required market clearances, other failures to achieve a commercially viable product, or the discontinuation of certain projects, and as a result, may recognize impairment losses in the future.

Amortization Expense

Intangible asset amortization expense was $ 1.7 billion for fiscal years 2023 and 2022 and $ 1.8 billion for fiscal year 2021.

Intangible asset amortization expense was $ 1.7 billion for fiscal years 2024, 2023 and 2022.

Estimated aggregate amortization expense by fiscal year based on the current carrying value and remaining estimated useful lives of definite-lived intangible assets at April 26, 2024, excluding any possible future amortization associated with acquired IPR&D which has not met technological feasibility, is as follows:

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

In March 2024, the Company's Board of Directors authorized an incremental $ 5.0 billion for share repurchases.

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

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The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price, and expected dividends.

Expected volatility is based on a blend of historical volatility and an implied volatility of the Company’s ordinary shares.

Implied volatility is based on market traded options of the Company’s ordinary shares.

The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes model:

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The expense recognized for restricted stock units is equal to the grant date fair value, which is equal to the closing stock price on the date of grant.

Restricted stock units either have a four-year ratable vesting term or cliff vest after three years .

The majority of the Company's restricted stock units either have a four-year ratable vesting term or cliff vest after three years .

Restricted stock units are not considered issued or outstanding ordinary shares of the Company.

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Unrecognized compensation expense related to restricted stock as of April 26, 2024 was $ 361 million and is expected to be recognized over a weighted average period of 2.6 years.

Performance Share Units Beginning in fiscal year 2021, the Company granted performance share units to officers and key employees.

Performance share units typically cliff vest after three years .

Performance Share Units Performance share units typically cliff vest after three years .

The awards include three metrics:

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Granted 1,283 104.78

Vested ( 249 ) 129.49

Performance adjustments (1)

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Unrecognized compensation expense related to performance share units as of April 26, 2024 was $ 89 million and is expected to be recognized over a weighted average period of 1.6 years.

Employees Stock Purchase Plan The Medtronic plc Amended and Restated 2014 Employees Stock Purchase Plan allows participating employees to purchase the Company's ordinary shares at a discount through payroll deductions.

The expense recognized for shares purchased under the Company’s ESPP is equal to the 15 percent discount the employee receives.

Employees Stock Purchase Plan (ESPP) The Company's shareholders approved the Medtronic plc 2024 Employee Stock Purchase Plan (2024 Plan) on October 19, 2023, which provides for a maximum of 30 million ordinary shares to be purchased by participating employees.

The 2024 Plan replaced the Medtronic plc Amended and Restated 2014 Employees Stock Purchase Plan (2014 Plan) starting January 1, 2024.

The 2024 Plan allows participating employees to purchase the Company's ordinary shares at a discount through payroll deductions.

The expense recognized for shares purchased under the Company’s 2014 Plan and 2024 Plan is equal to the 15 percent discount the employee receives.

Employees purchased 3 million shares at an average price of $ 71.10 per share in fiscal year 2024.

At April 28, 2023, approximately 4 million ordinary shares were available for future purchase under the ESPP.

At April 26, 2024, approximately 29 million ordinary shares were available for future purchase under the 2024 Plan.

Medtronic plc

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Deferred tax assets:

Intangible assets $ 2,259 $ 2,334

Net operating loss, capital loss, and credit carryforwards $ 11,775 $ 10,803

Intangible assets 2,858 2,259

Capitalization of research and development 1,255 971

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Inventory 138 135

Deferred revenue 172 37

Lease obligations 157 150

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Outside basis difference of subsidiaries ( 90 ) ( 119 )

Pension and post-retirement benefits ( 45 ) —

Other ( 90 ) ( 80 )

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Due to the number of legal entities and jurisdictions involved, the complexity of the legal entity structure of the Company, and the complexity of the tax laws in the relevant jurisdictions, the Company believes it is not practicable to estimate, within any reasonable range, the amount of additional taxes which may be payable upon distribution of these undistributed earnings.

At April 28, 2023, the Company had approximately $ 43.4 billion of net operating loss carryforwards in certain non-U.S.

At April 26, 2024, the Company had approximately $ 11.3 billion of tax effected net operating loss carryforwards in certain non-U.S.

jurisdictions, of which $ 5.1 billion have no expiration, and the remaining $ 6.2 billion will expire during fiscal years 2025 through 2041.

Included in these net operating loss carryforwards are $ 16.2 billion of net operating losses generated in fiscal year 2008 as a result of the receipt of a favorable tax ruling from certain non-U.S.

taxing authorities;

and $ 17 billion of net operating losses generated during fiscal year 2023 as a result of an intercompany reorganization.

The Company has recorded a full valuation allowance against these net operating losses, as

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

management does not believe that it is more likely than not that these net operating losses will be utilized.

Included in these net operating loss carryforwards are $ 4.0 billion of tax effected net operating losses generated in fiscal year 2008 as a result of the receipt of a favorable tax ruling from certain non-U.S.

taxing authorities;

and $ 5.1 billion of tax effected net operating losses generated during fiscal year 2023 as a result of an intercompany reorganization.

The Company has recorded a full valuation allowance against these net operating losses, as management does not believe that it is more likely than not that these net operating losses will be utilized.

Certain of the remaining non-U.S.

net operating loss carryforwards of $ 2.2 billion have a valuation allowance recorded against the carryforwards, as management does not believe that it is more likely than not that these net operating losses will be utilized.

At April 28, 2023, the Company had $ 545 million of U.S.

At April 26, 2024, the Company had $ 81 million of tax effected U.S.

federal net operating loss carryforwards, of which $ 56 million have no expiration.

The remaining loss carryforwards will expire during fiscal years 2025 through 2036.

state purposes, the Company had $ 1.8 billion of net operating loss carryforwards at April 28, 2023, $ 207 million of which have no expiration.

state purposes, the Company had $ 90 million of tax effected net operating loss carryforwards at April 26, 2024, $ 12 million of which have no expiration.

The remaining U.S.

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The Company has established valuation allowances of $ 13.3 billion and $ 11.3 billion at April 26, 2024 and April 28, 2023, respectively, primarily related to the uncertainty of the utilization of certain deferred tax assets which are primarily comprised of tax loss and credit carryforwards in various jurisdictions.

The increase in the valuation allowance during fiscal year 2023 is primarily related to the generation of certain net losses resulting from an intercompany reorganization.

The increase in the valuation allowance during fiscal year 2024 is primarily related to the finalization of certain tax returns as well as an increase in the Swiss Cantonal tax rate applied to previously recorded deferred tax assets and associated valuation allowances.

These valuation allowances would result in a reduction to the income tax provision in the consolidated statements of income if they are ultimately not required.

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Stock based compensation 0.3 0.2 ( 0.8 )

Interest on uncertain tax positions 0.7 0.5 0.9

Uncertain tax positions and interest 1.3 1.2 0.2

Base erosion anti-abuse tax 0.3 — 0.9

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Certain tax adjustments 6.2 17.0 ( 0.9 )

Legal entity restructuring — — 1.8

tax on foreign earnings 3.5 2.5 2.2

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Effective tax rate 23.4 % 29.5 % 8.3 %

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.

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.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

• 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 benefit 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 the August 18, 2022 U.S.

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This case relates only to fiscal years 2005 and 2006.

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

The Company has assumed the Tax Court findings will be applied for all years following fiscal year 2006.

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• A cost of $ 28 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

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

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

During fiscal year 2021, the net benefit from certain tax adjustments of $ 41 million, recognized in income tax provision in the consolidated statement of income, included the following:

• A net benefit of $ 106 million associated with the resolution of an audit at the IRS Appellate level for fiscal years 2012, 2013, and 2014.

The issues resolved relate to the utilization of certain net operating losses and the allocation of income between Medtronic, Inc.

and its wholly owned subsidiary operating in Puerto Rico for businesses that are not the subject of the U.S.

Tax Court Case for fiscal years 2005 and 2006.

• A net cost of $ 73 million related to a tax basis adjustment of previously established deferred tax assets from intercompany intellectual property transactions.

The cumulative amount of deferred tax benefit previously recognized from intercompany intellectual property transactions and recorded as Certain Tax Adjustments is $ 1.5 billion.

The corresponding deferred tax assets will be amortized over a period of approximately 20 years.

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

• A net cost of $ 25 million associated with an internal restructuring and intercompany sale of assets.

• A benefit of $ 83 million related to the capitalization of certain research and development costs for U.S.

income tax purposes and the establishment of a deferred tax asset at the U.S.

federal statutory tax rate.

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.

Currently, the Company’s operations in Puerto Rico, Singapore, Dominican Republic, Costa Rica, and China have various tax holidays and tax incentive grants.

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The tax incentive grants, unless extended, will expire between fiscal years 2025 and 2049.

The Company’s historical practice has been to renew, extend, or obtain new tax incentive grants upon expiration of existing tax incentive grants.

If the Company is not able to renew, extend, or obtain new tax incentive grants, the expiration of existing tax incentive grants could have a material impact on the Company’s financial results in future periods.

The tax incentive grants which expired during fiscal year 2024 did not have a material impact on the Company's consolidated financial statements.

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.

Medtronic plc

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The Company recognizes interest and penalties related to income tax matters in income tax provision in the consolidated statements of income and records the liability in the current or noncurrent accrued income taxes in the consolidated balance sheets, as appropriate.

During fiscal years 2024, 2023, and 2022, the Company recognized gross interest expense of $ 134 million, $ 86 million, and $ 17 million, respectively, in income tax provision in the consolidated statements of income.

The Company had $ 19 million, $ 61 million, and $ 117 million of accrued gross interest and penalties at April 26, 2024, April 28, 2023, and April 29, 2022, respectively.

During fiscal years 2023, 2022, and 2021, the Company recognized gross interest income of $ 55 million, expense of $ 17 million, and income of $ 44 million, respectively, in income tax provision in the consolidated statements of income.

The Company reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities.

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At April 26, 2024 and April 28, 2023, the funded status of the Company’s benefit plans was $ 484 million overfunded and $ 103 million overfunded, respectively.

During fiscal years 2023 and 2021, the Company offered certain eligible U.S.

employees voluntary early retirement packages, resulting in charges of $ 94 million and $ 97 million, respectively, primarily related to U.S.

During fiscal year 2023, the Company offered certain eligible U.S.

employees voluntary early retirement packages, resulting in charges of $ 94 million, primarily related to U.S.

pension benefits.

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comprehensive loss:

Prior service cost (credit) $ ( 19 ) $ — $ ( 3 ) $ ( 4 )

Prior service (credit) cost $ ( 16 ) $ ( 19 ) $ ( 3 ) $ ( 3 )

Net actuarial loss 534 891 161 76

Ending balance $ 517 $ 873 $ 158 $ 73

(1) Actuarial gains and losses result from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates).

The actuarial gain in fiscal year 2023 and 2022 was primarily related to increases in discount rates.

(1) As of April 24, 2020, the Company announced the freezing of the U.S.

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Employees will continue to earn benefits as required by the Medtronic Retirement Plan until April 30, 2027, after which date benefits will no longer be earned and employees will earn benefits through the Medtronic Savings and Investment Plan.

(2) Actuarial gains and losses result from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates).

The actuarial gains and losses were primarily driven by increases and decreases in discount rates, respectively.

(3) This represents a portion of the total voluntary early retirement package charges for fiscal year 2023 .

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Amortization of prior service cost ( 2 ) — — ( 1 ) ( 1 ) ( 1 )

Amortization of net actuarial loss 20 64 69 2 22 25

Amortization of net actuarial loss (gain) 18 20 64 ( 1 ) 2 22

Settlement and curtailment (gain) loss — — — ( 3 ) 2 ( 10 )

Special termination benefits — 74 — — — —

Net periodic benefit cost $ 89 $ 39 $ 116 $ 26 $ 37 $ 64

Net periodic benefit (credit) cost $ ( 22 ) $ 89 $ 39 $ 18 $ 26 $ 37

Components of net periodic benefit cost other than the service component are recognized in other non-operating income, net in the consolidated statements of income.

The other changes in plan assets and projected benefit obligations recognized in other comprehensive income for fiscal year 2024 are as follows:

1 unchanged sentence

Benefits Non-U.S.

Net actuarial loss (gain) $ 58 $ ( 82 )

Prior service cost (credit) ( 19 ) —

Amortization of prior service credit — 1

Amortization and settlement recognition of actuarial loss ( 20 ) ( 4 )

Net actuarial (gain) loss $ ( 339 ) $ 86

Prior service cost — ( 1 )

Amortization of prior service cost 2 1

Amortization and settlement recognition of actuarial (gain) loss ( 18 ) 3

Effect of exchange rates — ( 3 )

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5.60 % - 7.40 %

4.07 % 3.48 % 3.67 %

Rate of compensation increase 3.90 % 3.90 % 3.90 % - 4.83 %

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Short-term investments:

Valued at the closing price reported in the active markets in which the individual security is traded.

Short-term investments include money market funds.

These investments are valued at the closing price reported in the active markets in which the individual security is traded.

Mutual funds:

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Comprised of investments in fixed income securities held in pooled investment vehicles.

The valuations of fixed income commingled trusts are based on the respective net asset values which are determined by the fund daily at market close.

The net asset values are calculated based on the valuation of the underlying assets which are determined using observable inputs.

The valuations of fixed income commingled trusts are based on the respective net asset values which are determined by the fund, either daily or monthly depending on the investment, at market close.

The net asset values are reported by the investment manager based on the valuation of the underlying assets held by the fund, less its liabilities.

The net asset values are not publicly reported, and funds are valued at the net asset value practical expedient.

Partnership units:

Valued based on the year-end net asset values of the underlying partnerships.

The net asset values of the partnerships are based on the fair values of the underlying investments of the partnerships.

Quoted market prices are used to value the underlying investments of the partnerships, where the partnerships consist of the investment pools which invest primarily in common stocks.

Partnership units include partnerships, private equity investments, and real estate investments.

Partnerships primarily include long/short equity and absolute return strategies.

These investments may be redeemed monthly with notice periods ranging from 45 to 95 days.

At April 28, 2023, there are no funds in the process of liquidation.

Private equity investments consist of common stock and debt instruments of private companies.

For private equity funds, the sum of the unfunded commitments at April 28, 2023 is $ 233 million, and the estimated liquidation period of these funds is expected to be one to 15 years.

Real estate investments consist of illiquid real estate holdings.

These investments have investment and liquidation periods expected to total 3 years to 10 years in aggregate.

At April 28, 2023, there are no real estate investments in the process of liquidation.

Valuation procedures are utilized to arrive at fair value if a quoted market price is not available for a partnership investment.

Partnership units include investment partnerships that provide exposure to long/short equity, absolute return strategies, private equity investments, and real estate investments.

The net asset values are reported by the investment manager based on the valuation of the underlying assets held by the partnerships, less its liabilities.

The net asset values are not publicly reported, and funds are valued at the net asset value practical expedient.

Registered investment companies:

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These policies are a part of the insurance company’s general portfolio and participate in the insurer’s profit-sharing policy on an excess yield basis.

Measurement using net asset value as a practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value.

The methods described above may produce fair values that may not be indicative of net realizable value or reflective of future fair values.

33 unchanged sentences

April 28, 2023

Total realized gains, net 67

Total unrealized gains, net 151

Purchases and sales, net ( 238 )

April 28, 2023

Medtronic plc

14 unchanged sentences

pension benefit assets that are valued using significant unobservable inputs (Level 3) was $ 42 million and $ 44 million as of April 26, 2024 and April 28, 2023, respectively.

The decrease in the fair value of the assets was due to insurance contracts being sold.

There were no transfers into or out of Level 3 for both the U.S.

The Company reviews the fair value hierarchy classification on an annual basis.

During the year, the Company reclassified certain investments in the U.S.

pension plan from Level 3 to investments measured using net asset value as a practical expedient.

Outside of the reclassification, there were no transfers into or out of Level 3 for both the U.S.

pension plans during the fiscal years ended April 26, 2024 and April 28, 2023.

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The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings.

Company contributions to the plans are based on employee contributions and Company performance.

Expense recognized under these plans was $ 390 million, $ 403 million, and $ 495 million in fiscal years 2023, 2022, and 2021, respectively.

Company contributions to the plans are based on employee contributions

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Effective May 1, 2005, the Company froze participation in the original defined benefit pension plan in the U.S.

and implemented two new plans:

an additional defined benefit pension plan, the Personal Pension Account (PPA), and a new defined contribution plan, the Personal Investment Account (PIA).

Employees in the U.S.

hired on or after May 1, 2005 but before January 1, 2016 had the option to participate in either the PPA or the PIA.

Participants in the PPA receive an annual allocation of their salary and bonus on which they will receive an annual guaranteed rate of return, which is based on the ten-year Treasury bond rate.

Participants in the PIA also receive an annual allocation of their salary and bonus;

however, they are allowed to determine how to invest their funds among identified fund alternatives.

The cost associated with the PPA is included in U.S.

Pension Benefits in the tables presented earlier.

The defined contribution cost associated with the PIA was approximately $ 43 million, $ 48 million, and $ 50 million in fiscal years 2023, 2022, and 2021, respectively.

Effective January 1, 2016, the Company froze participation in the existing defined benefit (PPA) and contribution (PIA) pension plans in the U.S.

and implemented a new form of benefit under the existing defined contribution plan for legacy Covidien employees and employees in the U.S.

hired on or after January 1, 2016 or rehired after July 1, 2020.

Participants in the Medtronic Core Contribution (MCC) also receive an annual allocation of their salary and bonus and are allowed to determine how to invest their funds among identified fund alternatives.

The defined contribution cost associated with the MCC was approximately $ 93 million, $ 83 million, and $ 73 million and in fiscal years 2023, 2022, and 2021, respectively.

and Company performance.

Expense recognized under these plans was $ 471 million , $ 390 million, and $ 403 million in fiscal years 2024, 2023, and 2022, respectively.

The Company leases office, manufacturing, and research facilities and warehouses, as well as transportation, data processing, and other equipment.

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Non-current liability Other liabilities 840 869

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for the Company's operating leases at April 28, 2023, April 29, 2022, and April 30, 2021:

April 28, 2023 April 29, 2022 April 30, 2021

Weighted-average remaining lease term 9.1 Years 7.3 Years 7.5 years

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for the Company's operating leases at April 26, 2024 and April 28, 2023:

April 26, 2024 April 28, 2023

Weighted-average remaining lease term 8.8 Years 9.1 Years

Weighted-average discount rate 3.4 % 2.4 %

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The following table summarizes the components of total operating lease cost for fiscal year 2024, 2023, and 2022:

3 unchanged sentences

Total operating lease cost $ 273 $ 273 $ 260

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right-of-use assets obtained in exchange for operating lease liabilities for fiscal year 2024, 2023, and 2022:

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The following table provides changes in accumulated other comprehensive loss (AOCI), net of tax, and by component:

(in millions) Unrealized (Loss) Gain on Investment Securities Cumulative Translation Adjustments Net Investment Hedges Net Change in Retirement Obligations Unrealized (Loss) Gain on Cash Flow Hedges Total Accumulated Other Comprehensive (Loss) Income

(in millions) Unrealized (Loss) Gain on Investment Securities Cumulative Translation Adjustments Net Investment Hedges Net Change in Retirement Obligations Unrealized Gain (Loss) on Cash Flow Hedges Total Accumulated Other Comprehensive (Loss) Income

April 30, 2021 $ 92 $ ( 519 ) $ ( 1,458 ) $ ( 1,347 ) $ ( 253 ) $ ( 3,485 )

11 unchanged sentences

April 26, 2024 $ ( 212 ) $ ( 3,686 ) $ 878 $ ( 529 ) $ 229 $ ( 3,318 )

The income tax on gains and losses on investment securities in other comprehensive income before reclassifications during fiscal years 2023, 2022, and 2021 was a benefit of $ 21 million, a benefit of $ 51 million, and an expense of $ 31 million, respectively.

The income tax on gains and losses on investment securities in other comprehensive income before reclassifications during fiscal years 2024, 2023, and 2022 was an expense of $ 4 million, a benefit of $ 21 million, and a benefit of $ 51 million, respectively.

During fiscal years 2024, 2023, and 2022, realized gains and losses on investment securities reclassified from AOCI were reduced by income taxes of $ 5 million, $ 9 million and $ 1 million, respectively.

1 unchanged sentence

Refer to Note 5 for additional information.

During fiscal years 2023, 2022, and 2021, the income tax on cumulative translation adjustment was a benefit of $ 5 million, a benefit of $ 8 million, and an expense of $ 7 million, respectively.

During fiscal years 2024, 2023, and 2022, the income tax on cumulative translation adjustment was an expense of $ 3 million, a benefit of $ 5 million, and a benefit of $ 8 million, respectively.

During fiscal years 2024, 2023, and 2022, there were no tax impacts on net investment hedges.

5 unchanged sentences

Refer to Note 15 for additional information.

The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income before reclassifications during fiscal years 2023, 2022, and 2021 was an expense of $ 56 million, an expense of $ 152 million, and a benefit of $ 87 million, respectively.

The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income before reclassifications during fiscal years 2024, 2023, and 2022 was an expense of $ 103 million, $ 56 million, and $ 152 million, respectively.

Amounts reclassified from AOCI related to cash flow hedges included income taxes of $ 66 million, $ 133 million, and $ 26 million for fiscal years 2024, 2023, and 2022, respectively.

When realized, gains and losses on currency exchange rate contracts reclassified from AOCI are recognized within other operating (income) expense, net or cost of products sold.

When realized, gains and losses on currency exchange rate contracts reclassified from AOCI are recognized within other operating expense (income), net or cost of products sold.

Refer to Note 7 for additional information.

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

Commitments and Contingencies

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With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate.

As a result, interaction with governmental agencies is

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

As a result, interaction with governmental agencies is ongoing.

The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries.

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Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, 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 classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges, net in the consolidated statements of income.

During fiscal years 2023, 2022, and 2021, the Company recognized a net $ 30 million of certain litigation income and $ 95 million and $ 188 million of certain litigation charges, respectively.

At April 28, 2023 and April 29, 2022, accrued litigation was approximately $ 0.3 billion.

The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges in the consolidated statements of income.

During fiscal years 2024, 2023, and 2022, the Company recognized $ 149 million of certain litigation charges, $ 30 million of certain litigation income, and $ 95 million of certain litigation charges, respectively.

At April 26, 2024 and April 28, 2023, accrued litigation was approximately $ 0.2 billion and $ 0.3 billion, respectively.

The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

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On February 8, 2023, a jury returned a verdict against the Company for approximately $ 106 million.

The Company has strong arguments to appeal the verdict and is pursuing its appeal.

In July 2023, the Company filed its appeal with the U.S.

Court of Appeals for the Federal Circuit.

The Company has not recognized an expense in connection with this matter because it does not currently believe a loss is probable.

Product Liability Matters

Pelvic Mesh Litigation

The Company is currently involved in litigation in various state and federal courts against manufacturers of pelvic mesh products alleging personal injuries resulting from the implantation of those products.

Two subsidiaries of Covidien supplied pelvic mesh products to one of the manufacturers, C.R.

Bard (Bard), named in the litigation.

The litigation includes a federal multi-district litigation in the U.S.

District Court for the Northern District of West Virginia and cases in various state courts and jurisdictions outside the U.S.

Generally, complaints allege design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims.

In fiscal year 2016, Bard paid the Company $ 121 million towards the settlement of 11,000 of these claims.

In May 2017, the agreement with Bard was amended to extend the terms to apply to up to an additional 5,000 claims.

That agreement does not resolve the dispute between the Company and Bard with respect to claims that do not settle, if any.

As part of the agreement, the Company and Bard agreed to dismiss without prejudice their pending litigation with respect to Bard’s obligation to defend and indemnify the Company.

The Company estimates law firms representing approximately 16,200 claimants have asserted or may assert claims involving products

Medtronic plc

Notes to Consolidated Financial Statements (Continued)

manufactured by Covidien’s subsidiaries.

As of June 7, 2023, the Company had reached agreements to settle approximately 15,900 of these claims.

The Company's accrued expenses for this matter are included within accrued litigation as discussed above.

Hernia Mesh Litigation

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state and federal courts that allege personal injury from hernia mesh products sold by those subsidiaries.

As of June 7, 2023, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 7,240 individual plaintiffs, and certain plaintiffs’ law firms have advised the Company that they may file additional cases in the future.

Approximately 6,284 plaintiffs have filed lawsuits in a coordinated proceeding in Massachusetts state court, where they have been consolidated before a single judge.

Approximately 476 plaintiffs have filed lawsuits in a coordinated action in Minnesota state court, and there are approximately 445 actions coordinated in a federal Multidistrict Litigation in the U.S.

District Court for the District of Massachusetts.

As of May 15, 2024, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 8,350 individual plaintiffs, and certain plaintiffs’

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Notes to Consolidated Financial Statements (Continued)

law firms have advised the Company that they may file additional cases in the future.

Approximately 6,700 plaintiffs have pending lawsuits in a coordinated proceeding in Massachusetts state court, where they have been consolidated before a single judge.

Approximately 500 plaintiffs have pending lawsuits in a coordinated action in Minnesota state court, and there are approximately 1,150 actions coordinated in a federal Multidistrict Litigation in the U.S.

District Court for the District of Massachusetts plus six one-off cases filed in other courts.

The pending lawsuits relate almost entirely to hernia mesh products that have not been subject to recalls, withdrawals, or other adverse regulatory action.

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state and federal courts alleging personal injury from Series 600 insulin pumps with allegedly defective clear retainer rings that were subject to field corrective actions in 2019 and 2021.

As of May 30, 2023, 64 individual plaintiffs have filed lawsuits, and certain plaintiffs’ law firms have notified the Company that they may file additional lawsuits in the future on behalf of thousands of additional claimants.

As of May 14, 2024, 27 lawsuits have been filed on behalf of a total of 107 individual plaintiffs, and certain plaintiffs’ law firms have notified the Company that they may file additional lawsuits in the future on behalf of thousands of additional claimants.

Most of the filed suits are coordinated in California state court.

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The Company's accrued expenses for these various environmental proceedings are included within accrued litigation as discussed above.

Anti-Corruption Matters

The Company has regular and ongoing interactions with governmental agencies, and its practice is to cooperate with such inquiries.

In addition, from time to time, the Company self-discloses potential concerns to governmental regulators.

Like many in the medical device industry or with international operations, the Company engages in periodic discussions with the U.S.

Securities and Exchange Commission, U.S.

Department of Justice, and various authorities in China regarding certain activities, including in China.

The Company is committed to regularly evaluating and, as appropriate, strengthening its anti-corruption compliance programs and practices.

Any possible future determination that certain of our operations and activities, and/or those of our third-party distributors, are not in compliance with existing laws could result in the imposition of fines, penalties, and equitable remedies in the United States or in other jurisdictions.

The Company has not recorded an expense in connection with these matters because any potential loss is not currently probable and reasonably estimable.

Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from these matters.

In March 2009, the IRS issued its audit report on Medtronic, Inc.

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Court of Appeals for the Eighth Circuit regarding the Tax Court opinion.

Oral argument for the Appeal occurred in March 2018.

Court of Appeals issued its opinion in August 2018 and remanded the case back to the Tax Court for additional factual findings, which it concluded in June 2021.

The Tax Court issued its opinion on August 18, 2022, and it remains subject to appeal by either or both parties.

At this time, the Company is evaluating whether to file an appeal.

Court of Appeals issued its opinion in August 2018 and remanded the case back to the Tax Court for additional factual findings.

The Tax Court issued its second opinion in August 2022, the IRS filed a Notice of

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Notes to Consolidated Financial Statements (Continued)

Appeal to the U.S.

Court of Appeals for the Eighth Circuit in September 2023, and Medtronic subsequently filed a cross-appeal in October 2023.

The IRS has issued its audit reports on Medtronic, Inc.

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Tax Court matter for fiscal years 2005 and 2006.

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Notes to Consolidated Financial Statements (Continued)

Medtronic, Inc.’s fiscal years 2017, 2018, and 2019 U.S.

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There were no changes to the reportable segments during the fiscal year ended April 26, 2024.

The Company's four principal operating and reportable segments are as follows:

Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio, and Diabetes Operating Unit.

We continue to have four reportable segments:

Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit.

However, there were changes to the operating segments during fiscal year 2024 as a result of how the Chief Operating Decision Maker (CODM) assesses business performance.

During the first quarter of fiscal year 2024, the Medical Surgical Portfolio was separated into two operating segments as a result of the previously contemplated separation of the PMRI businesses, which were previously aggregated based upon similar economic and operating characteristics.

In addition, during the first quarter of fiscal year 2024, there were certain Medical Surgical businesses that were moved to the Other line, which primarily related to wind-down activity of the Company's Renal Care Solutions business that was contributed to Mozarc Medical in April 2023.

Subsequently, as a result of the February 2024 decision to exit the Company's ventilator product line and retain and combine the remaining PMRI businesses into one business unit as further discussed in Note 3, the two operating segments within the Medical Surgical Portfolio were combined into one operating segment, and the Company's ventilator product line, which was in the Medical Surgical Portfolio, was moved to the Other line during the fourth quarter of fiscal year 2024.

Prior period amounts have been recast to reflect the new reporting structure.

The Company's management has chosen to organize the entity based upon therapy solutions provided by each segment.

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The primary products and services from which the Cardiovascular Portfolio segment derives its revenues include products for the diagnosis, treatment, and management of cardiac rhythm disorders and cardiovascular disease, as well as services to diagnose, treat, and manage heart and vascular-related disorders and diseases.

The primary products and services from which the Medical Surgical Portfolio segment derives its revenues include those focused on diseases of the respiratory system, gastrointestinal tract, lungs, pelvic region, kidneys, obesity, and other preventable complications.

The primary products and services from which the Neuroscience Portfolio segment derives its revenues include those focused on neurostimulation therapies and drug delivery systems for the treatment of chronic pain, as well as various areas of the spine and brain, along with pelvic health and conditions of the ear, nose, and throat.

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Notes to Consolidated Financial Statements (Continued)

The primary products from which the Diabetes Operating Unit segment derives its revenues include those focused on diabetes management, including insulin pumps, continuous glucose monitoring systems and sensors, and smart insulin pens.

As of the beginning of fiscal year 2024, the Company realigned the operating segment structure as a result of changes in segment leadership and how the Company makes operating decisions and assesses business performance.

We continue to have four reportable segments:

Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio, and Diabetes Operating Unit;

however, the transition activities from the previously divested businesses in the Medical Surgical Portfolio segment are now in an all other reporting segment.

Segment disclosures are on a performance basis, consistent with internal management reporting.

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The Company's management evaluates the performance of the segments and allocates resources based on net sales and segment operating profit.

Segment operating profit represents income before income taxes, excluding interest income or expense, amortization of intangible assets, centralized distribution costs, non-operating income or expense items, certain corporate charges, and other items not allocated to the segments.

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Notes to Consolidated Financial Statements (Continued)

Segment operating profit represents income before income taxes, excluding interest income or expense, amortization of intangible assets, centralized distribution costs, currency impact of remeasurement and hedging, non-operating income or expense items, certain corporate charges, stock-based compensation, and other items not allocated to the segments.

Prior period amounts have been recast to reallocate certain expenses from segment operating profit to centralized distribution costs to conform to classifications used in the current year as a result in a change to the segment operating profit metric used by the CODM to assess business performance and allocate resources.

The accounting policies of the segments are the same as those described in Note 1.

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Cardiovascular $ 4,474 $ 4,522 $ 4,596

Medical Surgical 2,856 3,572 3,021

Neuroscience 3,940 3,712 3,858

Medical Surgical 3,170 3,048 3,698

Diabetes 394 383 588

Segment operating profit 11,286 12,432 10,632

Reportable segment operating profit 11,979 11,664 12,740

Other operating segment (1)

10 ( 89 ) ( 31 )

Corporate ( 1,784 ) ( 1,763 ) ( 1,724 )

Interest expense ( 719 ) ( 636 ) ( 553 )

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Amortization of intangible assets ( 1,693 ) ( 1,698 ) ( 1,733 )

Corporate ( 1,763 ) ( 1,724 ) ( 1,577 )

Currency 465 70 ( 47 )

Stock-based compensation ( 393 ) ( 355 ) ( 358 )

Centralized distribution costs ( 1,609 ) ( 1,558 ) ( 1,741 )

Restructuring and associated costs ( 389 ) ( 647 ) ( 335 )

Acquisition-related items ( 110 ) 43 15

Divestiture and separation-related items ( 235 ) — —

Acquisition and divestiture-related items ( 777 ) ( 345 ) ( 838 )

Certain litigation charges, net ( 149 ) 30 ( 95 )

Impairment of abandoned intangible assets — — ( 76 )

MCS impairment / costs — ( 881 ) —

IPR&D charges — — ( 101 )

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Income before income taxes $ 4,837 $ 5,364 $ 5,517

(1) Includes the 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.

(2) Includes the net impact of remeasurement and the Company's hedging programs recorded in other operating expense (income), net.

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Notes to Consolidated Financial Statements (Continued)

Total Assets and Depreciation Expense

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Cardiovascular $ 16,128 $ 16,036 $ 199 $ 209 $ 210

Medical Surgical 36,248 36,940 202 200 195

Neuroscience 18,270 18,346 252 267 265

Medical Surgical 33,586 34,926 194 203 186

Diabetes 3,996 3,930 94 80 67

Segments 74,575 72,144 761 746 696

Total reportable segments 71,980 73,238 739 759 728

Other operating segment (1)

547 1,337 — 2 18

Corporate 17,455 16,373 215 238 228

Total $ 89,981 $ 90,948 $ 954 $ 999 $ 974

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Notes to Consolidated Financial Statements (Continued)

Geographic Information

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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-K

Item 8. Financial Statements and Supplementary Data