Medtronic plc Files 10-Q for Period Ending January 26, 2024

TL;DR

<b>Medtronic plc filed its Q3 FY2024 10-Q report, detailing financial performance and corporate structure.</b>

AI Summary

Medtronic plc (MDT) filed a Quarterly Report (10-Q) with the SEC on February 27, 2024. Medtronic plc filed a 10-Q report for the period ending January 26, 2024. The filing covers the third quarter of fiscal year 2024. The company's fiscal year ends on April 26th. Medtronic plc is listed under the SIC code 3845 for Electromedical & Electrotherapeutic Apparatus. The filing includes details on various senior notes with maturity dates ranging from 2025 to 2050.

Why It Matters

For investors and stakeholders tracking Medtronic plc, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial data, crucial for assessing Medtronic's performance and making informed investment decisions. The detailed breakdown of debt instruments, including various senior notes, offers insight into the company's capital structure and financial obligations.

Risk Assessment

Risk Level: medium — Medtronic plc shows moderate risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report. However, the sheer volume of debt instruments mentioned suggests a complex financial structure that warrants careful review for potential risks.

Analyst Insight

Review the detailed financial statements and debt disclosures within the 10-Q to understand Medtronic's current financial health and debt management strategies.

Key Numbers

• 2024-01-26 — Report Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-02-27 — Filing Date (FILED AS OF DATE)
• 0426 — Fiscal Year End (FISCAL YEAR END)
• 2025 — Earliest Senior Note Maturity (mdt:SeniorNotes2019Due2025Member)
• 2050 — Latest Senior Note Maturity (mdt:SeniorNotes2020Due2050Member)

Key Players & Entities

• Medtronic plc (company) — CONFORMED NAME
• Medtronic Ltd (company) — FORMER COMPANY
• Medtronic Holdings Ltd (company) — FORMER COMPANY
• Kalani I Ltd (company) — FORMER COMPANY
• 3845 (category) — STANDARD INDUSTRIAL CLASSIFICATION

FAQ

Industry Context

Medtronic operates in the electromedical and electrotherapeutic apparatus industry, a sector focused on medical devices that use electrical energy for diagnosis or treatment.

Regulatory Implications

As a publicly traded company, Medtronic is subject to SEC regulations, including the requirement to file quarterly reports (10-Q) to ensure transparency and provide timely financial information to investors.

What Investors Should Do

1. Analyze the consolidated balance sheets for changes in assets, liabilities, and equity.
2. Review the consolidated statements of operations for revenue and net income trends.
3. Examine the disclosures related to debt and financing arrangements.

Key Dates

• 2024-01-26: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-02-27: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial 10-Q filing provided for analysis. Comparative data from a previous filing is not available in this extract.

Key Financial Figures

• $0.0001 — registered Ordinary shares, par value $0.0001 per share MDT New York Stock Exchange
• $0 — ,327,822,539 ordinary shares, par value $0.0001, of the registrant were outstandin

Filing Documents

• mdt-20240126.htm (10-Q) — 2350KB
• mdt-2024q310qxex311.htm (EX-31.1) — 10KB
• mdt-2024q310qxex312.htm (EX-31.2) — 10KB
• mdt-2024q310qxex321.htm (EX-32.1) — 5KB
• mdt-2024q310qxex322.htm (EX-32.2) — 5KB
• mdt-20240126_g1.jpg (GRAPHIC) — 55KB
• mdt-20240126_g10.jpg (GRAPHIC) — 42KB
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• mdt-20240126_g8.jpg (GRAPHIC) — 42KB
• mdt-20240126_g9.jpg (GRAPHIC) — 42KB
• 0001613103-24-000011.txt (&nbsp;) — 14366KB
• mdt-20240126.xsd (EX-101.SCH) — 70KB
• mdt-20240126_cal.xml (EX-101.CAL) — 112KB
• mdt-20240126_def.xml (EX-101.DEF) — 441KB
• mdt-20240126_lab.xml (EX-101.LAB) — 872KB
• mdt-20240126_pre.xml (EX-101.PRE) — 606KB
• mdt-20240126_htm.xml (XML) — 2470KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Medtronic plc Consolidated Statements of Income (Unaudited) Three months ended Nine months ended (in millions, except per share data) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 Net sales $ 8,089 $ 7,727 $ 23,775 $ 22,682 Costs and expenses: Cost of products sold, excluding amortization of intangible assets 2,782 2,689 8,172 7,740 Research and development expense 695 688 2,060 2,055 Selling, general, and administrative expense 2,673 2,615 7,971 7,799 Amortization of intangible assets 419 431 1,274 1,275 Restructuring charges, net 20 38 114 81 Certain litigation charges — — 105 — Other operating expense (income), net 17 ( 125 ) ( 13 ) ( 187 ) Operating profit 1,483 1,392 4,091 3,920 Other non-operating income, net ( 177 ) ( 149 ) ( 407 ) ( 342 ) Interest expense, net 188 167 517 449 Income before income taxes 1,472 1,375 3,982 3,813 Income tax provision 135 146 936 1,218 Net income 1,337 1,229 3,045 2,595 Net income attributable to noncontrolling interests ( 15 ) ( 6 ) ( 23 ) ( 17 ) Net income attributable to Medtronic $ 1,322 $ 1,222 $ 3,022 $ 2,579 Basic earnings per share $ 0.99 $ 0.92 $ 2.27 $ 1.94 Diluted earnings per share $ 0.99 $ 0.92 $ 2.27 $ 1.94 Basic weighted average shares outstanding 1,329.7 1,330.2 1,330.1 1,329.6 Diluted weighted average shares outstanding 1,331.7 1,332.0 1,332.4 1,332.8 The accompanying notes are an integral part of these consolidated financial statements . 1 Medtronic plc Consolidated Statements of Comprehensive Income (Unaudited) Three months ended Nine months ended (in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 Net income $ 1,337 $ 1,229 $ 3,045 $ 2,595 Other comprehensive income (loss), net of tax: Unrealized gain (loss) on investment securities 111 107 73 ( 76 ) Translation adjustment 450 1,689 ( 461 ) ( 20 ) Net investment hedge ( 424 ) ( 1,858 ) 348 ( 449 ) Net change in retirement obligations 2 ( 2

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements of Medtronic plc and its subsidiaries (Medtronic plc, Medtronic, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the consolidated financial statements include all the adjustments necessary for a fair statement in conformity with U.S. GAAP. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. The accompanying unaudited consolidated financial statements include the accounts of Medtronic plc, its wholly-owned subsidiaries, entities for which the Company has a controlling financial interest, and variable interest entities for which the Company is the primary beneficiary. Intercompany transactions and balances have been eliminated in consolidation. Amounts reported in millions within this quarterly report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in millions due to rounding. Additionally, certain columns and rows within tables may not sum due to rounding. The accompanying unaudited consolidated financial statements and related notes should be

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The table below illustrates net sales by segment and division for the three and nine months ended January 26, 2024 and January 27, 2023: Three months ended Nine months ended (in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 Cardiac Rhythm & Heart Failure $ 1,470 $ 1,419 $ 4,408 $ 4,217 Structural Heart & Aortic 843 760 2,475 2,259 Coronary & Peripheral Vascular 616 581 1,818 1,744 Cardiovascular 2,929 2,760 8,702 8,219 Cranial & Spinal Technologies 1,204 1,128 3,465 3,253 Specialty Therapies 726 699 2,126 2,052 Neuromodulation 425 420 1,270 1,244 Neuroscience 2,355 2,248 6,861 6,549 Surgical & Endoscopy 1,616 1,546 4,803 4,514 Patient Monitoring & Respiratory Interventions 532 522 1,526 1,489 Medical Surgical 2,148 2,068 6,329 6,003 Diabetes 640 570 1,829 1,667 Other (1) 17 81 54 243 Total $ 8,089 $ 7,727 $ 23,775 $ 22,682 (1) Includes revenue from the divested Renal Care Solutions business and Transition Manufacturing Agreements from previously divested businesses. The table below illustrates net sales by market geography for each segment for the three and nine months ended January 26, 2024 and January 27, 2023: U.S. (1) Non-U.S. Developed Markets (2) Emerging Markets (3) Three months ended Three months ended Three months ended (in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 Cardiovascular $ 1,373 $ 1,363 $ 950 $ 859 $ 607 $ 538 Neuroscience 1,556 1,507 442 401 357 341 Medical Surgical 960 959 758 725 429 384 Diabetes 224 215 322 274 94 80 Other (4) 7 17 2 36 8 28 Total $ 4,120 $ 4,062 $ 2,473 $ 2,294 $ 1,495 $ 1,371 U.S. (1) Non-U.S. Developed Markets (2) Emerging Markets (3) Nine months ended Nine months ended Nine months ended (in millions) January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 January 26, 2024 January 27, 2023 Cardiovascular $ 4,149

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) 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 January 26, 2024, $ 1.1 billion of rebates were classified as other accrued expenses , and $ 575 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. Deferred Revenue and Remaining Performance Obligations Deferred revenue at January 26, 2024 and April 28, 2023 was $ 447 million and $ 405 million, respectively. At January 26, 2024 and April 28, 2023, $ 350 million and $ 314 million was included in other accrued expenses, respectively, and $ 97 million and $ 91 million was included in other liabilities, respectively. 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 January 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 . 4. Acquisitions and Dispositions During the nine months ended January 26, 2024 and January 27, 2023, 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 acquisitio

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Affera, Inc. On August 30, 2022, the Company acquired Affera, Inc. (Affera) a privately-held company focused on the development of cardiac mapping and navigation systems and catheter-based cardiac ablation technologies. The acquisition expands the Cardiovascular segment suite of advanced cardiac ablation products and accessories, including its first cardiac mapping and navigation platform. Total consideration, net of cash acquired for the transaction, was $ 904 million. 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 goodwill is not deductible for tax purposes. The Company recognized $ 201 million of contingent consideration liabilities in connection with the acquisition, which are comprised of product development milestone-based payments. 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 the three and nine months ended January 27, 2023. The acquisition date fair values of the assets acquired and liabilities assumed were as follows: (in millions) Intersect ENT Affera Cash and cash equivalents $ 39 $ 66 Inventory 32 — Goodwill 615 660 Other intangible assets 683 300 Other assets 40 1 Total assets acquired 1,408 1,027 Current liabilities 63 2 Deferred tax liabilities 51 53 Other liabilities 18 1 Total liabilities assumed 131 56 Net assets acquired $ 1,277 $ 970 Other acquisitions For acquisitions, other than Intersect ENT and Affera, the acquisition date fair value of net assets acquired during the nine months ended January 27, 2023 was $ 123 million. Assets acquired were primarily comprised of $ 66 million of goodwill and $ 57 million of technology-based intangible assets with estima

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View this 10-Q filing on SEC EDGAR