What changed in this filing

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Item 1. Financial Statements

2025-02-25 compared with 2024-11-26 · 235 added, 176 removed, 778 unchanged (35% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

Three months ended Six months ended

(in millions, except per share data) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions, except per share data) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Net sales $ 8,292 $ 8,089 $ 24,610 $ 23,775

6 unchanged sentences

Certain litigation charges, net 22 — 104 105

Other operating income, net ( 34 ) ( 31 ) ( 33 ) ( 30 )

Other operating (income) expense, net ( 5 ) 17 ( 38 ) ( 13 )

Operating profit 1,646 1,483 4,519 4,091

13 unchanged sentences

Consolidated Statements of Comprehensive Income

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Net income $ 1,303 $ 1,337 $ 3,630 $ 3,045

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on investment securities 35 ( 19 ) 111 ( 38 )

Unrealized (loss) gain on investment securities ( 1 ) 111 110 73

Translation adjustment ( 663 ) 450 ( 444 ) ( 461 )

1 unchanged sentence

Net change in retirement obligations 1 2 3 6

Unrealized (loss) gain on cash flow hedges ( 27 ) 324 ( 93 ) 294

Other comprehensive income 161 295 69 120

Unrealized gain (loss) on cash flow hedges 292 ( 220 ) 200 74

Other comprehensive income (loss) 409 ( 81 ) 478 39

Comprehensive income including noncontrolling interests 1,712 1,257 4,108 3,084

4 unchanged sentences

Consolidated Balance Sheets

(in millions) October 25, 2024 April 26, 2024

(in millions) January 24, 2025 April 26, 2024

Current assets:

61 unchanged sentences

October 25, 2024 1,283 $ — $ 20,824 $ 30,919 $ ( 3,250 ) $ 48,494 $ 222 $ 48,716

Net income — — — 1,294 — 1,294 9 1,303

Other comprehensive income (loss) — — — — 411 411 ( 1 ) 409

Dividends to shareholders ($ 0.70 per ordinary share)

— — — ( 897 ) — ( 897 ) — ( 897 )

Issuance of shares under stock purchase and award plans 3 — 152 — — 152 — 152

Repurchase of ordinary shares ( 2 ) — ( 164 ) — — ( 164 ) — ( 164 )

Stock-based compensation — — 98 — — 98 — 98

Changes to noncontrolling ownership interests — — — — — — ( 2 ) ( 2 )

January 24, 2025 1,283 $ — $ 20,910 $ 31,317 $ ( 2,839 ) $ 49,387 $ 228 $ 49,615

Ordinary Shares Additional Paid-in Capital Retained

21 unchanged sentences

October 27, 2023 1,330 $ — $ 24,580 $ 30,256 $ ( 3,377 ) $ 51,460 $ 187 $ 51,647

Net income — — — 1,322 — 1,322 15 1,337

Other comprehensive (loss) income — — — — ( 82 ) ( 82 ) 1 ( 81 )

Dividends to shareholders ($ 0.69 per ordinary share)

— — — ( 917 ) — ( 917 ) — ( 917 )

Issuance of shares under stock purchase and award plans 1 — 49 — — 49 — 49

Repurchase of ordinary shares ( 2 ) — ( 124 ) — — ( 124 ) — ( 124 )

Stock-based compensation — — 85 — — 85 — 85

January 26, 2024 1,330 $ — $ 24,589 $ 30,661 $ ( 3,459 ) $ 51,792 $ 204 $ 51,996

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Six months ended

(in millions) October 25, 2024 October 27, 2023

Nine months ended

(in millions) January 24, 2025 January 26, 2024

Operating Activities:

55 unchanged sentences

Recently Adopted Accounting Standards

As of October 25, 2024, there have been no newly adopted accounting pronouncements that materially impact our consolidated financial statements .

As of January 24, 2025, there have been no newly adopted accounting pronouncements that materially impact our consolidated financial statements .

Refer to the Company's Annual Report on Form 10-K for the fiscal year ended April 26, 2024 for pronouncements recently adopted.

1 unchanged sentence

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.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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.

3 unchanged sentences

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.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220-40), which requires tabular disclosures disaggregating certain costs and expenses within relevant income statement captions.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2028 for our annual report and for interim periods starting in fiscal year 2029.

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

Medtronic plc

Notes to Consolidated Financial Statements

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

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.

Certain prior period net sales has been recast to conform to the new operating segment structure in the fourth quarter of fiscal year 2024.

Certain prior period net sales have been recast to conform to the new operating segment structure in the fourth quarter of fiscal year 2024.

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

1 unchanged sentence

developed markets and the emerging markets into an international market geography.

Prior period net sales has been recast to conform to the new presentation.

Medtronic plc

Notes to Consolidated Financial Statements

The table below illustrates net sales by segment and division and by market geography for the three and six months ended October 25, 2024 and October 27, 2023.

Prior period net sales have been recast to conform to the new presentation.

The table below illustrates net sales by segment and division and by market geography for the three and nine months ended January 24, 2025 and January 26, 2024.

revenue includes United States and U.S.

1 unchanged sentence

Three months ended

Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Cardiac Rhythm & Heart Failure $ 1,545 $ 1,470 $ 4,659 $ 4,408

12 unchanged sentences

Other operating segment (1)

32 53 106 164

Other adjustments (2)

2 unchanged sentences

International

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Cardiovascular $ 1,405 $ 1,373 $ 1,632 $ 1,556 $ 4,242 $ 4,149 $ 4,904 $ 4,552

10 unchanged sentences

(2) Incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.

Medtronic plc

Notes to Consolidated Financial Statements

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 October 25, 2024, $ 1.0 billion of rebates were classified as other accrued expenses , and $ 639 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheet.

At January 24, 2025, $ 1.0 billion of rebates were classified as other accrued expenses , and $ 625 million of rebates were classified as a reduction of accounts receivable in the consolidated balance sheet.

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.

Medtronic plc

Notes to Consolidated Financial Statements

Deferred Revenue and Remaining Performance Obligations

Deferred revenue at October 25, 2024 and April 26, 2024 was $ 467 million and $ 453 million, respectively.

At October 25, 2024 and April 26, 2024, $ 369 million and $ 352 million was included in other accrued expenses, respectively, and $ 98 million and $ 101 million was included in other liabilities, respectively.

During the six months ended October 25, 2024, the Company recognized $ 196 million of revenue that was included in deferred revenue as of April 26, 2024.

During the six months ended October 27, 2023, the Company recognized $ 216 million of revenue that was included in deferred revenue as of April 28, 2023.

Deferred revenue at January 24, 2025 and April 26, 2024 was $ 462 million and $ 453 million, respectively.

At January 24, 2025 and April 26, 2024, $ 369 million and $ 352 million was included in other accrued expenses, respectively, and $ 93 million and $ 101 million was included in other liabilities, respectively.

During the nine months ended January 24, 2025, the Company recognized $ 251 million of revenue that was included in deferred revenue as of April 26, 2024.

During the nine months ended January 26, 2024, the Company recognized $ 274 million of revenue that was included in deferred revenue as of April 28, 2023.

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

At October 25, 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 $ 0.4 billion.

At January 24, 2025, 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 $ 0.4 billion.

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

1 unchanged sentence

Acquisition Activity

During the three and six months ended October 25, 2024, the Company had no acquisitions that were accounted for as business combinations.

During the fiscal year ended April 26, 2024, the Company had acquisitions that were accounted for as business combinations.

For the three and six months ended October 25, 2024 and the fiscal year ended April 26, 2024, purchase price allocation adjustments were not significant.

During the three and nine months ended January 24, 2025 and the fiscal year ended April 26, 2024, the Company had acquisitions that were accounted for as business combinations.

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 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 were not significant, either individually or in the aggregate, to the consolidated results of the Company for the three and nine months ended January 24, 2025 and the fiscal year ended April 26, 2024.

For the three and nine months ended January 24, 2025 and the fiscal year ended April 26, 2024, purchase price allocation adjustments were not significant.

Fiscal year 2025

The acquisition date fair value of net assets acquired during the three months ended January 24, 2025 was $ 128 million.

Based on preliminary valuations, assets acquired were primarily comprised of $ 108 million of goodwill and $ 50 million of IPR&D.

The goodwill is not deductible for tax purposes.

The Company recognized $ 20 million of non-cash contingent consideration liabilities in connection with the business combination during the three months ended January 24, 2025, which comprised of other milestone-based payments.

Fiscal year 2024

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

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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, net in the consolidated statements of income.

The fair value of contingent consideration liabilities at October 25, 2024 and April 26, 2024 was $ 124 million and $ 149 million, respectively.

At October 25, 2024, $ 77 million was recorded in other accrued expenses , and $ 47 million was recorded in other liabilities in the consolidated balance sheet.

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 liabilities at January 24, 2025 and April 26, 2024 was $ 85 million and $ 149 million, respectively.

At January 24, 2025, $ 34 million was recorded in other accrued expenses , and $ 51 million was recorded in other liabilities in the consolidated balance sheet.

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

Medtronic plc

Notes to Consolidated Financial Statements

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

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Beginning balance $ 124 $ 220 $ 149 $ 206

3 unchanged sentences

Ending balance $ 85 $ 172 $ 85 $ 172

Medtronic plc

Notes to Consolidated Financial Statements

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:

Fair Value at

(in millions) October 25, 2024 Unobservable Input Range Weighted Average (1)

(in millions) January 24, 2025 Unobservable Input Range Weighted Average (1)

Revenue and other performance-based payments $ 56 Discount rate 16.5 % - 28.2 %

7 unchanged sentences

In connection with the sale, 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 2026 through 2029.

The fair value of the contingent consideration receivable at October 25, 2024 and April 26, 2024 was $ 61 million and $ 58 million, and was recorded in other assets in the consolidated balance sheet.

The fair value of the contingent consideration receivable at January 24, 2025 and April 26, 2024 was $ 61 million and $ 58 million, 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:

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Beginning balance $ 61 $ 152 $ 58 $ 195

2 unchanged sentences

Restructuring and Other Costs

Restructuring and associated costs for the three and six months ended October 25, 2024 were $ 46 million and $ 108 million, respectively, as compared to $ 91 million and $ 182 million for the three and six months ended October 27, 2023, respectively.

Restructuring and associated costs for the three and nine months ended January 24, 2025 were $ 46 million and $ 154 million, respectively, as compared to $ 55 million and $ 237 million for the three and nine months ended January 26, 2024, respectively.

Restructuring and associated costs primarily related to employee termination benefits and facility consolidations to support cost reduction initiatives.

1 unchanged sentence

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

Medtronic plc

Notes to Consolidated Financial Statements

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

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Cost of products sold $ 4 $ 12 $ 24 $ 43

2 unchanged sentences

Total restructuring and associated costs $ 46 $ 55 $ 154 $ 237

Medtronic plc

Notes to Consolidated Financial Statements

The following table summarizes the activity for the six months ended October 25, 2024:

The following table summarizes the activity for the nine months ended January 24, 2025:

(in millions) Employee Termination Benefits Associated and Other Costs Total

5 unchanged sentences

( 13 ) — ( 13 )

October 25, 2024 $ 58 $ 13 $ 70

January 24, 2025 $ 61 $ 2 $ 63

(1) Accrual adjustments primarily relate to certain employees identified for termination, finding other positions within the Company.

4 unchanged sentences

The Company holds investments in marketable debt securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis.

The following tables summarize the Company's investments in available-for-sale debt securities by significant investment category and the related consolidated balance sheet classification at October 25, 2024 and April 26, 2024:

October 25, 2024

January 24, 2025

Valuation Balance Sheet Classification

28 unchanged sentences

Notes to Consolidated Financial Statements

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 October 25, 2024 and April 26, 2024:

October 25, 2024

January 24, 2025

Less than 12 months More than 12 months

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Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

There were no transfers into or out of Level 3 during the three and six months ended October 25, 2024 and October 27, 2023.

There were no transfers into or out of Level 3 during the three and nine months ended January 24, 2025 and January 26, 2024.

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.

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

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Proceeds from sales $ 1,890 $ 1,794 $ 6,134 $ 5,114

1 unchanged sentence

Gross realized losses ( 3 ) ( 6 ) ( 16 ) ( 22 )

The contractual maturities of available-for-sale debt securities at October 25, 2024 is shown in the following table.

The contractual maturities of available-for-sale debt securities at January 24, 2025 is 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.

6 unchanged sentences

Total $ 6,815 $ 6,696

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

During the three and six months ended October 25, 2024, there were $ 137 million and $ 249 million of interest income, respectively.

During the three and six months ended October 27, 2023, there was $ 148 million and $ 259 million of interest income, respectively.

Interest income, which includes income on marketable debt securities and the global liquidity structure, is recognized in other non-operating income, net , in the consolidated statements of income.

During the three and nine months ended January 24, 2025, there were $ 114 million and $ 364 million of interest income, respectively.

During the three and nine months ended January 26, 2024, there was $ 170 million and $ 429 million of interest income, respectively.

Medtronic plc

6 unchanged sentences

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 October 25, 2024 and April 26, 2024, which are classified as primarily other assets in the consolidated balance sheets:

(in millions) October 25, 2024 April 26, 2024

The following table summarizes the Company's equity and other investments at January 24, 2025 and April 26, 2024, which are classified as primarily other assets in the consolidated balance sheets:

(in millions) January 24, 2025 April 26, 2024

Investments with readily determinable fair value (marketable equity securities) $ 32 $ 28

3 unchanged sentences

Total equity and other investments $ 1,230 $ 1,282

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 three and six months ended October 25, 2024, there were $ 10 million of net unrealized losses and $ 7 million of net unrealized gains, respectively, on equity securities and other investments still held at October 25, 2024.

During the three and six months ended October 27, 2023, there were $ 7 million and $ 70 million, respectively, of net unrealized losses on equity securities and other investments still held at October 27, 2023.

The table below includes activity related to the Company's portfolio of equity and other investments.

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

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Proceeds from sales $ 27 $ 12 $ 120 $ 28

Gross gains 8 33 100 31

Gross losses ( 4 ) ( 38 ) ( 17 ) ( 111 )

Impairment losses recognized ( 71 ) — ( 116 ) ( 21 )

During the three and nine months ended January 24, 2025, there were $ 2 million of net unrealized losses and $ 5 million of net unrealized gains, respectively, on equity securities and other investments still held at January 24, 2025.

During the three and nine months ended January 26, 2024, there were $ 25 million and $ 95 million of net unrealized losses, respectively, on equity securities and other investments still held at January 26, 2024.

Mozarc Medical Investment

3 unchanged sentences

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 three and six months ended October 25, 2024 and October 27, 2023, the change in fair value was not significant.

During the three and nine months ended January 24, 2025, the change in fair value was not significant.

During the three and nine months ended January 26, 2024, the Company recognized a loss of $ 39 million.

Medtronic plc

Notes to Consolidated Financial Statements

Financing Arrangements

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The aggregate amount outstanding at any time under the commercial paper programs may not exceed the equivalent of $ 3.5 billion.

Commercial paper outstanding at October 25, 2024 was $ 899 million.

During the three and six months ended October 25, 2024, the commercial paper outstanding had a weighted average original maturity of 13 days and 14 days, respectively and a weighted average interest rate of 5.23 percent and 5.34 percent, respectively.

There was no commercial paper outstanding at January 24, 2025.

During the three and nine months ended January 24, 2025, the commercial paper outstanding had a weighted average original maturity of 13 days and 14 days, respectively, and a weighted average interest rate of 4.66 percent and 5.12 percent, respectively.

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

4 unchanged sentences

The Credit Facility includes a multi-currency borrowing feature for certain specified foreign currencies.

At October 25, 2024 and April 26, 2024, no amounts were outstanding under the Credit Facility.

Medtronic plc

Notes to Consolidated Financial Statements

At January 24, 2025 and April 26, 2024, no amounts were outstanding under the Credit Facility.

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 the covenants under the Credit Facility.

Medtronic plc

Notes to Consolidated Financial Statements

Debt Obligations

1 unchanged sentence

(in millions) Maturity by

Fiscal Year October 25, 2024 April 26, 2024

Fiscal Year January 24, 2025 April 26, 2024

Current debt obligations 2025 - 2026 $ 2,622 $ 1,092

51 unchanged sentences

Total long-term debt $ 23,985 $ 23,932

Interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums is recognized in interest expense, net in the consolidated statements of income.

During the three and six months ended October 25, 2024, there was $ 252

Interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structure is recognized in interest expense, net in the consolidated statements of income.

During the three and nine months ended January 24, 2025, there was $ 224 million and $ 693 million, respectively, of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structure.

During the three and nine months ended January 26, 2024, there was $ 237 million and $ 664 million, respectively, of interest expense on outstanding borrowings, including

Medtronic plc

Notes to Consolidated Financial Statements

million and $ 469 million, respectively, of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums.

During the three and six months ended October 27, 2023, there was $ 230 million and $ 427 million, respectively, of interest expense on outstanding borrowings, including amortization of debt issuance costs and debt discounts and premiums.

amortization of debt issuance costs and debt discounts and premiums, and the global liquidity structure.

The Company has outstanding unsecured senior obligations, described as senior notes in the tables above (collectively, the Senior Notes).

6 unchanged sentences

Financial Instruments Not Measured at Fair Value

At October 25, 2024, the estimated fair value of the Company’s Senior Notes was $ 25.3 billion compared to a principal value of $ 27.4 billion.

At January 24, 2025, the estimated fair value of the Company’s Senior Notes was $ 24.4 billion compared to a principal value of $ 26.7 billion.

At April 26, 2024, the estimated fair value was $ 21.2 billion compared to a principal value of $ 24.0 billion.

7 unchanged sentences

At inception, foreign currency forward contracts are designated as fair value hedges.

Changes in the fair value of these derivatives are reported as a component of other operating income, net .

Changes in the fair value of these derivatives are reported as a component of other operating (income) expense, net .

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 three and six months ended October 25, 2024, after-tax unrealized losses related to included components in other operating income, net were not significant.

During the three and six months ended October 25, 2024, amounts related to excluded components that are amortized in interest expense, net over the life of the hedging instrument were not significant.

During the three and nine months ended January 24, 2025, amounts related to excluded components that are amortized in interest expense, net over the life of the hedging instrument were not significant.

Cash flows related to the Company's derivative instruments designated as fair value hedges are reported as financing activities in the consolidated statements of cash flows.

8 unchanged sentences

The Company's cash flow hedges will mature within the subsequent three-year period.

At October 25, 2024 and April 26, 2024, the Company had $ 139 million and $ 229 million in after-tax unrealized gains, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss .

The Company expects that $ 108 million of after-tax net unrealized gains at October 25, 2024 will be recognized in the consolidated statements of income over the next 12 months.

At January 24, 2025 and April 26, 2024, the Company had $ 432 million and $ 229 million in after-tax unrealized gains, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss .

The Company expects that $ 289 million of after-tax net unrealized gains at January 24, 2025 will be recognized in the consolidated statements of income over the next 12 months.

Net Investment Hedges

1 unchanged sentence

The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts.

Medtronic plc

Notes to Consolidated Financial Statements

For instruments that are designated as net investment hedges, the gains or losses are reported as a component of accumulated other comprehensive loss .

The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary.

Medtronic plc

Notes to Consolidated Financial Statements

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 three and six months ended October 25, 2024, the Company recognized $ 47 million and $ 98 million, respectively, in after-tax unrealized gains representing excluded components in interest expense, net .

During the three and six months ended October 27, 2023, the Company recognized $ 50 million and $ 99 million, respectively, in after-tax unrealized gains representing excluded components in interest expense, net .

During the three and nine months ended January 24, 2025, the Company recognized $ 50 million and $ 148 million, respectively, in after-tax unrealized gains representing excluded components in interest expense, net .

During the three and nine months ended January 26, 2024, the Company recognized $ 49 million and $ 148 million, respectively, in after-tax unrealized gains representing 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.

6 unchanged sentences

The following table presents the contractual amounts of the Company's outstanding instruments:

(in billions) Designation October 25, 2024 April 26, 2024

(in billions) Designation January 24, 2025 April 26, 2024

Currency exchange rate contracts (1)

6 unchanged sentences

Currency exchange rate contracts Undesignated 4.6 5.9

(1) At October 25, 2024, includes derivative contracts with a notional value of € 1.0 billion, or $ 1.1 billion, designated as hedges of a portion of our fixed-rate debt obligations.

(2) At October 25, 2024, includes derivative contracts with a notional value of € 5.0 billion, or $ 5.4 billion, designated as hedges of a portion of our net investment in certain European operations and derivative contracts with a notional value of ¥ 322.2 billion, or $ 2.1 billion, designated as hedges of a portion of our net investment in certain Japanese operations.

(1) At January 24, 2025, includes derivative contracts with a notional value of € 1.0 billion, or $ 1.0 billion, designated as hedges of a portion of our fixed-rate debt obligations.

(2) At January 24, 2025, includes derivative contracts with a notional value of € 6.0 billion, or $ 6.3 billion, designated as hedges of a portion of our net investment in certain European operations and derivative contracts with a notional value of ¥ 322.2 billion, or $ 2.1 billion, designated as hedges of a portion of our net investment in certain Japanese operations.

These derivative contracts mature in fiscal years 2025 through 2033.

(3) At October 25, 2024, includes € 18.0 billion, or $ 19.4 billion, of outstanding Euro-denominated debt designated as hedges of a portion of our net investment in foreign operations.

(3) At January 24, 2025, includes € 18.0 billion, or $ 18.8 billion, of outstanding Euro-denominated debt designated as hedges of a portion of our net investment in foreign operations.

This debt matures in fiscal years 2026 through 2054.

2 unchanged sentences

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

The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for the three and six months ended October 25, 2024 and October 27, 2023 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 the three and nine months ended January 24, 2025 and January 26, 2024 were as follows:

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

Three months ended Six months ended Three months ended Six months ended Location of (Gain) Loss in Income Statement

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended Three months ended Nine months ended Location of (Gain) Loss in Income Statement

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Fair value hedges

Currency exchange rate contracts $ — $ — $ ( 1 ) $ — $ 38 $ — $ 42 $ — Other operating (income) expense, net

Cash flow hedges

Currency exchange rate contracts $ — $ ( 394 ) $ 42 $ ( 398 ) $ ( 3 ) $ ( 75 ) $ ( 39 ) $ ( 125 ) Other operating income, net

Currency exchange rate contracts ( 346 ) 136 ( 303 ) ( 263 ) ( 49 ) ( 83 ) ( 88 ) ( 209 ) Other operating (income) expense, net

Currency exchange rate contracts ( 55 ) 23 ( 55 ) ( 85 ) ( 17 ) ( 20 ) ( 56 ) ( 39 ) Cost of products sold

3 unchanged sentences

Total $ ( 1,209 ) $ 584 $ ( 996 ) $ ( 696 ) $ ( 28 ) $ ( 103 ) $ ( 102 ) $ ( 248 )

The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three and six months ended October 25, 2024 and October 27, 2023 were as follows:

The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three and nine months ended January 24, 2025 and January 26, 2024 were as follows:

(Gain) Loss Recognized in Income

Three months ended Six months ended Location of (Gain) Loss in Income Statement

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Currency exchange rate contracts $ ( 35 ) $ 94 $ ( 45 ) $ 92 Other operating income, net

Three months ended Nine months ended Location of (Gain) Loss in Income Statement

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Currency exchange rate contracts $ 65 $ ( 9 ) $ 60 $ 83 Other operating (income) expense, net

Balance Sheet Presentation

The following table summarizes the balance sheet classification and fair value of derivative instruments included in the consolidated balance sheets at October 25, 2024 and April 26, 2024.

The following table summarizes the balance sheet classification and fair value of derivative instruments included in the consolidated balance sheets at January 24, 2025 and April 26, 2024.

The fair value amounts are presented on a gross basis, and are segregated between derivatives that are designated and qualify as hedging instruments and those that are not designated and do not qualify as hedging instruments, and are further segregated by type of contract within those two categories.

Fair Value - Assets Fair Value - Liabilities

(in millions) October 25, 2024 April 26, 2024 Balance Sheet Classification October 25, 2024 April 26, 2024 Balance Sheet Classification

(in millions) January 24, 2025 April 26, 2024 Balance Sheet Classification January 24, 2025 April 26, 2024 Balance Sheet Classification

Derivatives designated as hedging instruments

10 unchanged sentences

The following table provides information by level for the derivative assets and liabilities that are measured at fair value on a recurring basis.

October 25, 2024 April 26, 2024

January 24, 2025 April 26, 2024

(in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities

6 unchanged sentences

Derivatives not subject to master netting arrangements are not eligible for net presentation.

October 25, 2024

January 24, 2025

Gross Amount Not Offset on the Balance Sheet

16 unchanged sentences

Inventory balances were as follows:

(in millions) October 25, 2024 April 26, 2024

(in millions) January 24, 2025 April 26, 2024

Finished goods $ 3,740 $ 3,668

8 unchanged sentences

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

Goodwill as a result of acquisitions — — 108 — 108

Purchase accounting adjustments 2 — — — 2

Currency translation and other ( 38 ) ( 34 ) ( 204 ) — ( 277 )

October 25, 2024 $ 7,970 $ 11,668 $ 19,268 $ 2,255 $ 41,161

January 24, 2025 $ 7,929 $ 11,611 $ 19,025 $ 2,254 $ 40,819

As further described in Note 17, the Company had changes to the operating segments and goodwill reporting units during the fourth quarter of fiscal year 2024.

For further information on the reporting unit changes, refer to Note 9 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 26, 2024.

No goodwill impairment was recognized during the three and six months ended October 25, 2024 and October 27, 2023.

The Company assesses goodwill for impairment annually as of the first day of the third quarter of the fiscal year and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired.

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

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

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

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

A change in any of these estimates and assumptions could produce a different fair value, which could have a material impact on the Company's results of operations.

No goodwill impairment was recognized during the three and nine months ended January 24, 2025 and January 26, 2024.

The following table presents the gross carrying amount and accumulated amortization of intangible assets:

October 25, 2024 April 26, 2024

January 24, 2025 April 26, 2024

(in millions) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

7 unchanged sentences

IPR&D $ 284 $ — $ 385 $ —

The Company did not recognize any definite-lived intangible asset impairment charges during the three and six months ended October 25, 2024 and October 27, 2023.

The Company did not recognize any indefinite-lived intangible asset impairment charges during the three and six months ended October 25, 2024.

Indefinite-lived intangible asset impairment charges were not significant for the three and six months ended October 27, 2023.

The Company did not recognize any definite-lived intangible asset impairment charges during the three and nine months ended January 24, 2025 and January 26, 2024.

The Company did not recognize any indefinite-lived intangible asset impairment charges during the three months ended January 24, 2025 and January 26, 2024, and during the nine months ended January 24, 2025.

Indefinite-lived intangible asset impairment charges were not significant for the nine months ended January 26, 2024.

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 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.

Medtronic plc

Notes to Consolidated Financial Statements

Amortization Expense

Intangible asset amortization expense for the three months ended October 25, 2024 and October 27, 2023 was $ 413 million and $ 425 million, respectively.

Intangible asset amortization expense for the six months ended October 25, 2024 and October 27, 2023 was $ 827 million and $ 855 million, respectively.

Estimated aggregate amortization expense by fiscal year based on the carrying value of definite-lived intangible assets at October 25, 2024, excluding any possible future amortization associated with acquired IPR&D which has not yet met technological feasibility, is as follows:

Intangible asset amortization expense for the three months ended January 24, 2025 and January 26, 2024 was $ 416 million and $ 419 million, respectively.

Intangible asset amortization expense for the nine months ended January 24, 2025 and January 26, 2024 was $ 1.2 billion and $ 1.3 billion, respectively.

Estimated aggregate amortization expense by fiscal year based on the carrying value of definite-lived intangible assets at January 24, 2025, excluding any possible future amortization associated with acquired IPR&D which has not yet met technological feasibility, is as follows:

(in millions) Amortization Expense

Remaining 2025 $ 414

Medtronic plc

Notes to 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.

6 unchanged sentences

As a result, the Company recorded a $ 187 million income tax charge during the first quarter of fiscal year 2024 and has filed an appeal with the Supreme Court of Israel.

The Company's effective tax rate for the three and six months ended October 25, 2024 was 18.0 % and 17.7 %, respectively, as compared to 30.6 % and 32.0 % for the three and six months ended October 27, 2023, respectively.

The decrease in the effective tax rate for the three months ended October 25, 2024, primarily relates to the establishment of a valuation allowance on certain net operating losses recorded during the three months ended October 27, 2023, which was partially offset by the implementation of the Pillar Two global minimum tax.

In addition to the items discussed in the current quarter, the decrease in the effective tax rate for the six months ended October 25, 2024 was also attributable to an income tax reserve adjustment made during the six months ended October 27, 2023 associated with the Ventor court decision noted above.

At October 25, 2024 and April 26, 2024, the Company's gross unrecognized tax benefits were $ 2.9 billion and $ 2.8 billion, respectively.

In addition, the Company had accrued gross interest and penalties of $ 45 million at October 25, 2024.

The Company's effective tax rate for the three and nine months ended January 24, 2025 was 15.4 % and 16.9 %, respectively, as compared to 9.2 % and 23.5 % for the three and nine months ended January 26, 2024, respectively.

The increase in the effective tax rate for the three months ended January 24, 2025 primarily relates to a Swiss Cantonal tax rate change on previously recorded deferred tax assets during the three months ended January 26, 2024, and the implementation of the Pillar Two global minimum tax.

The decrease in the effective tax rate for the nine months ended January 24, 2025 was primarily attributable to the establishment of a valuation allowance on certain net operating losses and an income tax reserve adjustment made during the nine months ended January 26, 2024 associated with the Ventor court decision noted above, which was partially offset by the Swiss Cantonal tax rate change on previously recorded deferred tax assets and the implementation of the Pillar Two global minimum tax noted above.

At January 24, 2025 and April 26, 2024, the Company's gross unrecognized tax benefits were $ 2.9 billion and $ 2.8 billion, respectively.

In addition, the Company had accrued gross interest and penalties of $ 63 million at January 24, 2025.

If all of the Company’s unrecognized tax benefits were recognized, approximately $ 2.7 billion would impact the Company’s effective tax rate.

At October 25, 2024 and April 26, 2024, the amount of the Company's gross unrecognized tax benefits, net of cash advance, recorded as a noncurrent liability within accrued income taxes on the consolidated balance sheets was $ 1.9 billion and $ 1.8 billion, respectively.

At January 24, 2025 and April 26, 2024, the amount of the Company's gross unrecognized tax benefits, net of cash advance, recorded as a noncurrent liability within accrued income taxes on the consolidated balance sheets was $ 1.9 billion and $ 1.8 billion, respectively.

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

4 unchanged sentences

Potentially dilutive ordinary shares include stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan.

Medtronic plc

Notes to Consolidated Financial Statements

The table below sets forth the computation of basic and diluted earnings per share:

Three months ended Six months ended

(in millions, except per share data) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions, except per share data) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Net income attributable to ordinary shareholders $ 1,294 $ 1,322 $ 3,606 $ 3,022

7 unchanged sentences

Diluted earnings per share $ 1.01 $ 0.99 $ 2.79 $ 2.27

Medtronic plc

Notes to Consolidated Financial Statements

The calculation of weighted average diluted shares outstanding excludes options to purchase approximately 28 million and 27 million ordinary shares for the three and six months ended October 25, 2024, respectively, and 31 million and 27 million ordinary shares for the three and six months ended October 27, 2023, respectively, because their effect would have been anti-dilutive on the Company’s earnings per share.

The calculation of weighted average diluted shares outstanding excludes options to purchase approximately 26 million and 27 million ordinary shares for the three and nine months ended January 24, 2025, respectively, and 29 million and 28 million ordinary shares for the three and nine months ended January 26, 2024, respectively, because their effect would have been anti-dilutive on the Company’s earnings per share.

Stock-Based Compensation

The following table presents the components and classification of stock-based compensation expense for stock options, restricted stock, performance share units, and employee stock purchase plan shares recognized for the three and six months ended October 25, 2024 and October 27, 2023:

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

The following table presents the components and classification of stock-based compensation expense for stock options, restricted stock, performance share units, and employee stock purchase plan shares recognized for the three and nine months ended January 24, 2025 and January 26, 2024:

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Stock options $ 13 $ 15 $ 55 $ 61

9 unchanged sentences

Total stock-based compensation expense, net of tax $ 81 $ 70 $ 285 $ 253

Medtronic plc

Notes to Consolidated Financial Statements

Retirement Benefit Plans

1 unchanged sentence

employees and many employees outside the U.S.

The net periodic benefit cost of the defined benefit pension plans included the following components for the three and six months ended October 25, 2024 and October 27, 2023:

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

The net periodic benefit cost of the defined benefit pension plans included the following components for the three and nine months ended January 24, 2025 and January 26, 2024:

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Service cost $ 13 $ 15 $ 11 $ 10 $ 39 $ 45 $ 33 $ 30

4 unchanged sentences

Net periodic (credit) benefit cost $ ( 7 ) $ ( 6 ) $ 7 $ 5 $ ( 21 ) $ ( 18 ) $ 22 $ 15

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

Medtronic plc

Notes to Consolidated Financial Statements

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

Accumulated Other Comprehensive Loss

5 unchanged sentences

Other comprehensive income (loss) 110 ( 443 ) 610 3 200 479

October 25, 2024 $ ( 101 ) $ ( 3,468 ) $ 708 $ ( 529 ) $ 139 $ ( 3,250 )

January 24, 2025 $ ( 102 ) $ ( 4,129 ) $ 1,488 $ ( 527 ) $ 432 $ ( 2,839 )

(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

3 unchanged sentences

Other comprehensive income (loss) 73 ( 461 ) 348 6 74 39

October 27, 2023 $ ( 296 ) $ ( 3,748 ) $ 1,016 $ ( 737 ) $ 387 $ ( 3,377 )

The income tax on gains and losses on investment securities in other comprehensive income before reclassifications during the six months ended October 25, 2024 and October 27, 2023, was an expense of $ 19 million and a benefit of $ 8 million, respectively.

During the six months ended October 25, 2024 and October 27, 2023, realized gains and losses on investment securities reclassified from AOCI were reduced by income taxes of $ 2 million and $ 3 million, respectively.

January 26, 2024 $ ( 185 ) $ ( 3,300 ) $ 593 $ ( 735 ) $ 167 $ ( 3,459 )

The income tax on gains and losses on investment securities in other comprehensive income before reclassifications during the nine months ended January 24, 2025 and January 26, 2024, was an expense of $ 19 million and $ 9 million, respectively.

During the nine months ended January 24, 2025 and January 26, 2024, realized gains and losses on investment securities reclassified from AOCI were reduced by income taxes of $ 2 million and $ 4 million, respectively.

When realized, gains and losses on investment securities reclassified from AOCI are recognized within other non-operating income, net .

Refer to Note 6 to the consolidated financial statements for additional information.

For the six months ended October 25, 2024 and October 27, 2023, there was no income tax on cumulative translation adjustments.

The income tax on net investment hedges in other comprehensive income before reclassifications during the six months ended October 25, 2024 was a benefit of $ 1 million.

During the six months ended October 27, 2023, there were no tax impacts on net investment hedges.

During the nine months ended January 24, 2025, the income tax on cumulative translation adjustments was a benefit of $ 3 million.

During the nine months ended January 26, 2024, there was no income tax on cumulative translation adjustments.

Medtronic plc

Notes to Consolidated Financial Statements

The income tax on net investment hedges in other comprehensive income before reclassifications during the nine months ended January 24, 2025 was an expense of $ 28 million.

During the nine months ended January 26, 2024, there were no tax impacts on net investment hedges.

Refer to Note 8 to the consolidated financial statements for additional information.

The net change in retirement obligations in other comprehensive income includes amortization of net actuarial losses included in net periodic benefit cost.

During the six months ended October 25, 2024 and October 27, 2023, there were no tax impacts on retirement obligations.

During the six months ended October 25, 2024 and October 27, 2023, the gains and losses on defined benefit and pension items reclassified from AOCI were reduced by income taxes of $ 1 million and $ 2 million, respectively.

During the nine months ended January 24, 2025 and January 26, 2024, there were no tax impacts on retirement obligations.

During the nine months ended January 24, 2025 and January 26, 2024, the gains and losses on defined benefit and pension items reclassified from AOCI were reduced by income taxes of $ 2 million.

When realized, net gains and losses on defined benefit and pension items reclassified from AOCI are recognized within other non-operating income, net .

Refer to Note 14 to the consolidated financial statements for additional information.

The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income before reclassifications during the six months ended October 25, 2024 and October 27, 2023, was a benefit of $ 5 million and expense of $ 103 million, respectively.

During the six months ended October 25, 2024 and October 27, 2023, gains and losses on cash flow hedges reclassified from AOCI were reduced by income taxes of $ 22 million and $ 34 million, respectively.

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

The income tax on unrealized gains and losses on cash flow hedges in other comprehensive income before reclassifications during the nine months ended January 24, 2025 and January 26, 2024, was an expense of $ 51 million and $ 75 million, respectively.

During the nine months ended January 24, 2025 and January 26, 2024, gains and losses on cash flow hedges reclassified from AOCI were reduced by income taxes of $ 36 million and $ 48 million, 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.

Refer to Note 8 to the consolidated financial statements for additional information.

2 unchanged sentences

The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, including those described below.

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

Medtronic plc

Notes to Consolidated Financial Statements

States and in other jurisdictions in which the Company and its affiliates operate.

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.

With respect to intellectual property disputes, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements relating to such rights.

This litigation includes, but is not limited to, alleged infringement or misappropriation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or, consistent with a growing trend across technology-intensive industries, other entities created specifically to fund IP litigation.

With respect to commercial disputes, antitrust and competition issues have gained increased prominence, enforcement and private litigation have increased globally, and the Company is involved in or at risk for antitrust litigation, investigations or enforcement actions regarding a range of commercial activities, including challenges to mergers and acquisition transactions, joint ventures, co-development or co-marketing arrangements, contracting practices, distribution agreements and employment agreements.

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

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

In some actions, the enforcement agencies or private claimants seek significant monetary damages and/or royalty payments, as well as other civil or criminal remedies (including injunctions barring or restricting the sale of products that are the subject of the proceeding, placing restrictions on competitive strategies or practices, or unwinding consummated transactions), any or all of which could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

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.

4 unchanged sentences

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.

The Company recognized no certain litigation charges and $ 81 million of certain litigation charges during the three and six months ended October 25, 2024, respectively, whereas the Company recognized $ 65 million and $ 105 million of certain litigation charges during the three and six months ended October 27, 2023, respectively.

At October 25, 2024 and April 26, 2024, accrued litigation was approximately $ 0.2 billion.

The Company recognized $ 22 million and $ 104 million of certain litigation charges during the three and nine months ended January 24, 2025, respectively, whereas the Company recognized no certain litigation charges and $ 105 million of certain litigation charges during the three and nine months ended January 26, 2024, respectively.

At January 24, 2025 and April 26, 2024, accrued litigation was approximately $ 0.2 billion.

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.

1 unchanged sentence

While it is not possible to predict the outcome for most of the legal matters discussed below, the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

Medtronic plc

Notes to Consolidated Financial Statements

Intellectual Property Matters

At any given time, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements relating to such rights.

While the outcome of these litigation matters is inherently uncertain, it is possible that the results of such litigation could require the Company to pay significant monetary damages and/or royalty payments, and negatively impact the Company's ability to sell current or future products, which could have a material adverse impact on the Company's business, results of operations, financial condition, and cash flows.

The Company is a defendant in patent litigation brought by Colibri Heart Valve LLC (Colibri) in the U.S.

10 unchanged sentences

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

As of October 30, 2024, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 8,800 individual plaintiffs, and certain plaintiffs’ law firms have advised the Company that they may file additional cases in the future.

As of January 22, 2025, the Company and certain of its subsidiaries have been named as defendants in lawsuits filed on behalf of approximately 8,950 individual plaintiffs, and certain plaintiffs’ law firms have advised the Company that they may file additional cases in the future.

Approximately 6,900 plaintiffs have pending lawsuits in a coordinated proceeding in Massachusetts state court, where they have been consolidated before a single judge.

4 unchanged sentences

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

Medtronic plc

Notes to Consolidated Financial Statements

Diabetes Pump Retainer Ring Litigation

1 unchanged sentence

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 November 4, 2024, after a number of recent dismissals of individual plaintiffs, there are 23 lawsuits filed on behalf of 76 individuals.

Plaintiffs’ firms previously notified the Company that they may file additional lawsuits in the future on behalf of thousands of additional claimants.

As of January 28, 2025, after a number of recent dismissals, there are 15 lawsuits filed on behalf of 35 individuals.

Plaintiffs’ firms previously notified the Company that they may file additional lawsuits in the future on behalf of several thousand additional claimants.

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

1 unchanged sentence

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

Antitrust Matters

Applied Medical

The Company is a defendant in civil antitrust litigation brought by Applied Medical Resources Corporation in the U.S.

District Court for the Central District of California, alleging that the Company has engaged in anticompetitive and monopolistic conduct relating to its sales of advanced bipolar devices, including under contracts with group purchasing organizations.

The Company has substantial legal and factual defenses and intends to defend itself vigorously.

The matter is currently scheduled for jury trial in June 2025.

The Company has not recorded an expense related to damages in connection with this matter 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 this matter.

Environmental Proceedings

7 unchanged sentences

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

Medtronic plc

Notes to Consolidated Financial Statements

Anti-Corruption Matters

3 unchanged sentences

Securities and Exchange Commission, U.S.

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

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

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

20 unchanged sentences

In April 2017, the IRS filed a Notice of Appeal to the U.S.

Court of Appeals

Medtronic plc

Notes to Consolidated Financial Statements

for the Eighth Circuit regarding the Tax Court opinion.

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

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

13 unchanged sentences

Refer to Note 11 for additional discussion of income taxes.

Medtronic plc

Notes to Consolidated Financial Statements

In the normal course of business, the Company and/or its affiliates periodically enter into agreements that require one or more of the Company and/or its affiliates to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising as a result of the Company or its affiliates’ products, the negligence of the Company's personnel, or claims alleging that the Company's products infringe on third-party patents or other intellectual property.

11 unchanged sentences

The allocation of depreciation expense is based on the proportion of the assets used by each segment.

There have been no changes to reportable segments during the quarter ended October 25, 2024.

There have been no changes to reportable segments during the three and nine months ended January 24, 2025.

We continue to have four reportable segments:

6 unchanged sentences

Segment Operating Profit

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Cardiovascular $ 1,205 $ 1,090 $ 3,494 $ 3,298

18 unchanged sentences

(1) Includes the historical operations and ongoing transition agreements from businesses the Company has exited or divested.

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

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

(3) Incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015.

1 unchanged sentence

Net sales are attributed to the country based on the location of the customer taking possession of the products or in which the services are rendered.

The following table presents net sales for the three and six months ended October 25, 2024 and October 27, 2023 for the Company's country of domicile, countries with significant concentrations, and all other countries:

Three months ended Six months ended

(in millions) October 25, 2024 October 27, 2023 October 25, 2024 October 27, 2023

The following table presents net sales for the three and nine months ended January 24, 2025 and January 26, 2024 for the Company's country of domicile, countries with significant concentrations, and all other countries:

Three months ended Nine months ended

(in millions) January 24, 2025 January 26, 2024 January 24, 2025 January 26, 2024

Ireland $ 28 $ 27 $ 86 $ 86

4 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements