Medtronic Annual Report 2022

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FY2022 Annual Report · Medtronic

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Annual
Report

Fiscal Year 2022

2022 LETTER TO SHAREHOLDERS

Geoff Martha
Chairman & CEO

Oct. 10, 2022

Dear Shareholders,

For decades, the Medtronic Mission has been carried out by tens of thousands of employees around the world. Alleviating
pain, restoring health, and extending life remains our core purpose, and despite FY22 headwinds, our people remained
resolute in their commitment to our enduring Mission.

Our origin story is one of collaboration between an engineer and a physician, and our 95,000+ employees continue to
embody the innovative spirit of our founders. I would be remiss if I didn’t begin with heartfelt thanks for their tireless work on
behalf of our partners, customers, and patients.

The Medtronic Board of Directors and Executive Committee are actively engaged in strategic oversight, including tracking
our progress against long-term goals, and they deserve special thanks for their guidance, focus, and support as we move
forward.

A YEAR OF PURPOSEFUL PROGRESS, DESPITE UNCERTAINTIES

FY22 has been a year of uncertainties, with inflation, global supply chain challenges, a potential recession, and continued
ripple effects from the pandemic impacting the global economy.

But our business – the business of delivering life-saving healthcare technology – is vitally important in good times and in bad.
As the growing and aging human population increases, technology becomes even more important in addressing healthcare
needs. And each year, advancements in materials and data science – many of which are shaped by legions of Medtronic
technical experts and scientists – truly transform what technology can do for healthcare.

Our place at the nexus of healthcare and technology – coupled with our depth of expertise, diversified businesses, robust
pipeline, strong balance sheet, and, most importantly, our visionary Mission – means we are well-positioned to achieve our
ambition of being the global healthcare technology leader.

REFLECTING ON A DYNAMIC YEAR

The Mission guided us through another tumultuous year, keeping us focused on our continued transformation and helping
us better serve the needs of our customers and patients.

Coming into FY22, we were feeling optimistic – the height of the pandemic seemed to be behind us, vaccines were on the
rise, hospital volume and elective surgeries were growing, and it felt like the world would soon return to ‘normal.’ But it
turned out to be a tough year, with COVID variants and healthcare worker shortages impacting procedure volumes, pipeline
setbacks, and supply chain challenges.

FY22 revenue of $31.7 billion increased 5% as reported and organic, which excludes the $75 million negative impact of
foreign currency translation. Non-GAAP net income and diluted EPS were $7.5 billion and $5.55, respectively, both increases
of 26%. FY22 cash flow from operations of $7.3 billion increased 18%, and free cash flow of $6 billion increased 22%,
representing strong free cash flow conversion of 80 percent.

Providing solid returns to our shareholders is critical, and we returned $5.5 billion in FY22 through our dividends and net
share repurchase. Medtronic is an S&P Dividend Aristocrat, having increased our dividend for 45 years now – an important
component of the total value we generate. This past year we paid $3.4 billion in dividends, and we’re supplementing
through opportunistic share repurchase, particularly in periods where we see price dislocation. In fact, we repurchased over
$2.5 billion of our stock in FY22.

ACCELERATING GROWTH WITH A ROBUST PIPELINE

Despite the adversity we faced, we made solid progress, and we are making significant changes to how we do business to
ensure sustainable, forward movement in FY23 and beyond.

Changes to our Operating Model increased our competitive outlook, as evidenced by a record number of product
approvals – some of which came faster than expected this year. More than 230 clinical trials were conducted, and we
received more than 200 regulatory approvals in the U.S., Europe, Japan, and China. The most robust product pipeline in our
history has been fed by decades of creativity, passion, and collaboration from our global teams.

Progress on major future growth drivers

To make progress toward becoming the global healthcare technology leader, we must continually innovate and reinvest in
our pipeline to be more competitive across more therapies.

A vast opportunity to transform the patient experience in heart valve surgery is in front of us, due to significant developments
in our transcatheter valve replacement business. We’re launching and developing aortic valve products to continue
leading in this important market, and we are seeing forward momentum in mitral valve replacement clinical studies which
represent a coming revolution for our Structural Heart business.

In Cardiac Ablation Solutions, we’ve emerged as a technology leader, continually re-engineering how ablation procedures
are done. We’ve strengthened our competitive position in this critically important medtech market, building a
comprehensive suite of products and solutions to equip clinicians with all the tools they need to optimize atrial fibrillation
care.

Regulatory approvals and the limited market release of the HugoTM Robotic-Assisted Surgery System continued, with
positive feedback from surgeons across indications and geographies. Supply chain and manufacturing speed bumps
impacted production, but we’re addressing the issues and scaling manufacturing. While we were disappointed in the
revenue push-out for this important program, we’re optimizing the customer experience by integrating instruments, and
remain confident we are poised to drive growth and meaningfully expand the soft-tissue robotics market for years to come.

We are pleased with feedback and continued international market adoption of our MiniMedTM 780G insulin pump and
Guardian 4TM sensor. We’ve made substantial progress in meeting our observation and warning letter commitments and
continue to regularly communicate with the FDA. The strong reception of these diabetes products in international markets
reinforce our optimism for the impact they will have on our business when they are made available in the U.S.

We continue to systematically build supporting evidence for our renal denervation procedure to treat hypertension.
Though we couldn’t end our SPYRAL HTN ON-MED pilot study early, data were published and presented at key conferences
showing those receiving RDN spent significantly more time in target blood pressure range, adding to our robust body of
evidence. Based on the clinical data presented to date, we anticipate that demand will be high across a large global market,
and we continue to be optimistic about this opportunity — one that we expect to lead.

Doubling down on data and AI

Our commitment to digitization, data and AI remains strong. Due to continued investments to develop and support data-
enabled products and services, we’ve started to see returns from our focus in this space. Just three of our AI-enabled
technologies that made a difference in FY22 include:
(cid:2) LINQ II™ insertable cardiac monitor (ICM) with AccuRhythmTM AI, designed to continually learn and improve diagnostics

for abnormal heart rhythms.

(cid:2) GI GeniusTM Intelligent endoscopy module, the first device that uses real-time AI to assist clinicians in detecting lesions,

such as polyps or suspected tumors, during a colonoscopy.

(cid:2) UniDTM Adaptive Spine Intelligence (ASI) makes spine surgery more predictable and repeatable, powered by predictive
modeling and sophisticated algorithms that measure and digitally reconstruct a patient’s spine to its optimal profile,
enabling clinicians to deliver more predictable outcomes.

Now is the time to harness the power of 5G, edge computing, AI and machine learning and create personalized, closed loop
care for patients. We created a cross-functional Enterprise Data Strategy program, led by members of our Executive
Committee, to enhance the patient and customer experience that will drive growth and create new revenue sources. We’ll
continue investing in global digital innovation programs to further accelerate our growth.

INVESTING IN THE FUTURE

Medtronic is first and foremost a technology company, and we focused heavily on improving the pace of innovation this
year. To supplement our organic product pipeline and portfolio that will drive higher topline growth and create value, we
announced $2.1 billion on mergers and acquisitions in FY22.

We’re methodically building care ecosystems that will significantly improve patient outcomes, while also driving value and
deepening relationships with our customers. Affera, one of the four acquisitions announced in FY22 (closed in August 2022)

is a strong example – our Cardiac Ablation Solutions (CAS) pipeline now includes differentiated mapping and navigation
capabilities. We’ve assembled a number of technologies to build our leadership in CAS, including acquiring Acutus
Medical’s left-heart access portfolio, which includes essential technology needed for the estimated 800,000 transseptal
crossings performed annually during electrophysiology (EP) and structural heart procedures.

Continuing investments in R&D

Our balance sheet remains strong, and we continue to allocate our capital to investments that we expect will generate solid
future growth and shareholder returns. Organic investment in R&D was $2.7 billion in FY22 – an all-time high in our history.
We’re investing heavily in programs especially targeted for faster growing medtech markets, or where we have an
opportunity to create new markets. The investments we’re making will play a key role in accelerating our top-line growth.

Fostering technical expertise and training

Investing in innovation and training centers helps us lay the foundation needed to fully leverage our size and breadth as we
stoke our growth engine. Medtronic Technology Development Centers (TDCs) serve the entire enterprise in highly
specialized areas of technical expertise, including implantable biopolymers, battery technology, and implantable AI
miniaturization platforms.

Additionally, to support technological development and clinical training at a regional level, we’re investing in Medtronic
Innovation Centers around the world. One such center in Chengdu, China, which was completed in June 2021, offers clinical
training in minimally invasive surgery, cardiovascular health, renal care, spine, orthopedics, and neurosurgery.

Accelerating patient access and equity

In the past year, Medtronic therapies improved the lives of more than 76 million people – that’s more than 2 people every
second – yet many communities around the world still lack access to essential healthcare. We use data and technology to
address this global crisis of health inequity, streamlining detection, diagnosis, and treatment to fill the gap between the
number of people who need care and the number of practitioners who can provide it. This democratizes healthcare and
enables healthcare workers to reach more patients with a more personalized approach, while increasing accessibility around
the world. In FY22, we dedicated more than $69 million to healthcare capacity training, reaching 350,000+ global medical
professionals delivering quality care in their communities.

Medtronic LABS is an independent, Medtronic-funded nonprofit organization that uses technology to accelerate healthcare
access for underserved communities around the world. With a focus on noncommunicable diseases like hypertension and
diabetes, LABS combines digital technology, field operations, and partnerships to work toward its mission of expanding
access to care for patients, families, and communities around the world. Since its inception, LABS has screened close to
1.2 million patients, trained over 3,000 community health workers, and improved over 40,000 lives.

PROGRESS ON OUR TRANSFORMATION

Our long-term value creation strategy, built in close partnership and oversight of our Board of Directors, sets Medtronic up
to both leverage our size and scale, while empowering Operating Units to move with speed and agility – all to emphasize
and accelerate innovation and growth. Our Operating Model transformation, which empowers the OUs to manage their
product lines and make strategic decisions that benefit their customers, is starting to take hold.

Organizational transformation is hard, but the reality is, we can’t ever stop evolving. We will always look for ways to better
serve our customers and achieve our Mission. We are continually evaluating our business, structure, market conditions, and
ways to position ourselves for success.

Portfolio optimization

Aligned with Tenet 2 of our Mission, we’re focusing our efforts where we “display maximum strength and ability,” and
reducing our footprint in lower growth and lower margin businesses. To aid this continuing effort, we’ve assembled a team
that is 100% focused on our integrations and divestitures.

In May, for example, we announced our intent to form a new, independent kidney care-focused company in partnership with
DaVita Inc. The new company will merge our capabilities as a healthcare technology leader with DaVita’s deep expertise and
breadth as a comprehensive kidney care provider.

We continue to work on additional portfolio moves, with the goal of creating a portfolio where we have distinct expertise,
synergies across the company, and ultimately, sustained higher growth.

Enhancing operational excellence: Quality and Global Operations/Supply Chain

Central to our transformation are two key components that impact all corners of the company: patient safety and quality, and
global operations and supply chain. Enhancing both areas is imperative.

iii

Patient safety, quality, and reliability are paramount to our Mission, and the issues we’ve seen in recent years are
unacceptable. We are diligently executing our robust Patient Safety and Quality Improvement Plan (PSQIP) to remediate and
sustainably improve our quality system. This includes developments in meeting our observation and warning letter
commitments for Diabetes, and improvements in leading and lagging indicators overall. Work remains for us to be
considered the unsurpassed leader in quality and reliability, as our Mission calls on us to be – and I know that we will
succeed.

Like other companies around the world, Medtronic felt the impact of global supply chain challenges. But the pandemic
exposed weaknesses across our operations, which added urgency to our plans for improvements. Our Global Operations
and Supply Chain (GOSC) team is hard at work building a more resilient end-to-end supply chain that better leverages our
size, scope, and scale. We’re building capabilities and focusing on safety, quality, customer service, cost and waste
reduction, and talent retention. When completed, the GOSC transformation will generate significant savings in the coming
years and be a competitive advantage for the company. I’m confident our supply chain will become best-in-class within the
medtech industry.

Environmental sustainability

In the fall of 2021, we announced our ambition to achieve net zero emissions across our value chain by FY45. In FY22 alone,
we reduced our operational greenhouse gas emissions intensity by 35% compared to our FY20 baseline, and this important
work will continue.

We also teamed up with the National Academy of Medicine’s Grand Challenge on Climate Change and the United Kingdom
National Health Service. Together, we’ll work with organizations to build resiliency and minimize the carbon footprint of
healthcare systems around the world.

OUR PEOPLE – OUR COMPETITIVE ADVANTAGE

Innovation is a people-powered business. We continue to invest in our people as an investment in our future, and to fulfill
Tenet 5 of our Mission, which calls on us to foster a workplace that enables all employees to thrive. High levels of employee
engagement are known to promote retention, foster customer loyalty and improve business performance and stakeholder
value. Each year, our Organizational Health Survey measures key drivers of employee engagement, and in FY22 we saw
world-class levels of Engagement, Inclusion, and Ethics. It is validating and encouraging to see these results, but there’s
always more work to be done to remain an employer of choice.

Our employees continue to lean into our Operating Model and embrace our culture, the Medtronic Mindset. Throughout the
ups and downs of FY22, they’ve focused on the Mission and delivered on our commitments with drive, resilience, and
creativity, and I’m honored and humbled to be part of this team.

Inclusion, diversity, and equity across all levels

ID&E is a business priority that enables a competitive advantage, because we believe that converging backgrounds and life
experiences bring diverse perspectives that are needed to fuel innovation. We are building a workforce that reflects our
communities at all levels, and diversity in leadership is key to this strategy. In FY22, women held 42% of manager-and-above
positions globally, and people from ethnically diverse groups held 27% of manager-and-above positions in the U.S., which is
strong progress toward our FY26 goals of 45% and 30%, respectively. We are proud to have earned several external
accolades recognizing our progress.

The importance of ID&E is apparent at all levels of the organization, with related goals included for all employee
performance reviews in FY22. Medtronic leaders understand their role, too – we introduced a “leader led” model to enhance
our ID&E efforts by strengthening accountability and linking compensation and advancement incentives to these goals for
executive leadership in FY22.

To better align our incentives with our renewed culture and the competitive talent market, we’ve updated our incentive
structure to reward differentiated performance in the areas of financial performance, market share growth, quality, and ID&E
goals. Leaders in each business group are responsible for ID&E priorities, and our Board is helping to oversee short- and
long-term progress against standardized measurements.

Fortifying company leadership with outside-in perspectives

Fresh perspectives beget new ideas, so we deepened our bench of external talent, adding leaders with new skills and
capabilities to ensure we can compete and win as we pursue new markets and technologies. We’ve added to our executive
ranks several respected, world-class leaders with deep domain expertise, a wealth of global knowledge and proven track
records of navigating complex environments to advance the business. These leaders have made a great impact already,
infusing our leadership team with new energy, experience, and expertise to help accelerate our transformation.

We’ve applied a similar approach in adding new directors with diverse points of view to fully leverage the power of our
Board of Directors. Their oversight and collective thinking guide us on our biggest initiatives and strategic bets, including
exploring new therapies and areas like digitization and AI.

ADVANCING THE MISSION TO REACH OUR BOLD AMBITION

Two years ago, we set out to affirm our standing as the global healthcare technology leader. Changes to our Operating
Model, culture, and incentives – combined with exciting catalysts from our pipeline that will redefine the way healthcare is
delivered for millions – position us to deliver a higher level of sustainable growth.

Despite unprecedented challenges we’ve faced, we’re seeing strong signs of progress as the work continues. Though
headwinds remain, I’m confident in our ability to accelerate and sustain our growth profile over the long-term, to grow at or
above our markets, and as we do so, create consistent value for our stakeholders. We’re keenly focused on improving capital
deployment and portfolio management, with a deep commitment to creating higher, more consistent shareholder value.

Medtronic is a technology company with a purpose. For me, it’s an honor to stand alongside my colleagues and a true
privilege to be part of such important work. We’re fueling a durable value creation engine that will enable us to fully
capitalize on the trends and opportunities at the intersection of healthcare and technology. With the Mission as our enduring
north star, we’re taking the organization to the next level in service to more patients in more places around the world – which
is a truly extraordinary place to be.

Sincerely,

Geoff Martha
Chairman & CEO

Reconciliation of Non-GAAP Financial Measures

The Shareholder Letter set forth in this Annual Report includes financial measures that are not prepared in accordance with
U.S. generally accepted accounting principles (U.S. GAAP). Management believes that such non-GAAP financial measures
provide useful information to investors regarding the underlying business trends and performance of Medtronic’s ongoing
operations. Investors should consider non-GAAP measures set forth in the Shareholder Letter to be in addition to, and not a
substitute for, financial performance measures prepared in accordance with U.S. GAAP. In addition, such non-GAAP financial
measures may not be the same as, or similar to, measures presented by other companies. Reconciliations of the non-GAAP
financial measures referenced in the Shareholder Letter to the most directly comparable GAAP financial measures are
included in the following financial schedules.

MEDTRONIC PLC
WORLD WIDE REVENUE(1)
(Unaudited)

(in millions)

Cardiovascular

Cardiac Rhythm & Heart Failure

Structural Heart & Aortic

Coronary & Peripheral Vascular

Medical Surgical

Surgical Innovations

Respiratory, Gastrointestinal, & Renal

Neuroscience

Cranial & Spinal Technologies

Specialty Therapies

Neuromodulation

Diabetes

TOTAL

YEAR-TO-DATE(2)

REPORTED

CONSTANT CURRENCY

FY22

FY21

Growth

Currency
Impact(3)

FY22 Growth

11,423

10,772

6.0%

(32)

11,455

6.3%

5,908

3,055

2,460

9,141

6,060

3,081

8,784

4,456

2,592

1,735

2,338

5,584

2,834

2,354

8,737

5,438

3,298

8,195

4,288

2,307

1,601

5.8

7.8

4.5

4.6

11.4

(6.6)

7.2

3.9

12.4

8.4

2,413

(3.1)

(19)

(12)

(1)

(44)

(31)

(13)

(7)

(2)

5,927

3,067

2,461

9,185

6,091

3,094

8,781

4,463

2,579

1,737

2,340

31,686

30,117

5.2%

(75)

31,761

6.1

8.2

4.5

5.1

12.0

(6.2)

7.2

4.1

11.8

8.5

(3.0)

5.5%

(1) The data in this schedule has been intentionally rounded to the nearest million and, therefore, may not sum.
(2) Fiscal year 2021 was a 53-week fiscal year with the extra week occurring in the first fiscal month of the first quarter and is included in

reported prior year-to-date results. While it is difficult to calculate the impact of the extra week, the Company estimates the extra week
benefited fiscal year 2021 year-to-date revenue by approximately $360 to $390 million.

(3) The currency impact to revenue measures the change in revenue between current and prior year periods using constant exchange rates.

MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS(2)
(Unaudited)

(in millions, except per share data) Net Sales

Cost of
Products
Sold

Gross
Margin
Percent

Fiscal year ended April 29, 2022
Income
Before
Income
Taxes

Operating
Profit
Percent

Operating
Profit

Net Income
attributable
to Medtronic

Diluted
EPS

Effective
Tax Rate

GAAP

$ 31,686 $

10,145

68.0% $

5,752

18.2% $ 5,517

$5,039 $

3.73

8.3%

Non-GAAP Adjustments:

Restructuring and associated
costs (3)

Acquisition-related items (1) (4)

Certain litigation charges

(Gain)/loss on minority
investments (5)

Medical device regulations (6)

Amortization of intangible
assets

MCS impairment / costs (7)

Certain tax adjustments, net (8)

Prior to recasting IPR&D
charges

Impact of recast IPR&D
charges (1)

Non-GAAP (1)

Currency impact

—

(117)

(19)

—

0.4

0.1

—

(55)

0.2

—

(58)

—

0.2

—

335

—

102

1,733

881

—

1.1

0.2

0.3

—

0.3

5.5

2.8

—

335

(12)

102

1,733

881

—

281

0.21

0.02

0.06

(9)

(0.01)

0.06

1,467

661

1.09

0.49

(50)

(0.04)

16.1

48.3

17.9

—

15.7

15.3

25.0

—

$ 31,686 $

9,897

68.8% $

8,957

28.3% $ 8,710

$7,583 $

5.61

12.7%

—

(101)

(0.3)

(101)

(78)

(0.06)

22.8

$ 31,686 $

9,897

68.8% $

8,856

27.9% $ 8,609

$7,505 $

5.55

12.6%

131

(0.4)

(157)

(0.5)

Currency Adjusted

$ 31,761 $ 10,028

68.4% $ 8,699

27.4%

(in millions, except per share data) Net Sales

Cost of
Products
Sold

Gross
Margin
Percent

Fiscal year ended April 30, 2021
Income
Before
Income
Taxes

Operating
Profit
Percent

Operating
Profit

(0.10)

5.45

Net Income
attributable
to Medtronic

Diluted
EPS

Effective
Tax Rate

GAAP

$ 30,117 $ 10,483

65.2% $ 4,484

14.9% $ 3,895

$ 3,606 $

2.66

6.8%

Non-GAAP Adjustments:

Restructuring and associated
costs (3)

Acquisition-related items (1) (4)

Certain litigation charges

(Gain)/loss on minority
investments (5)

Impairment charges (9)

Medical device regulations (6)

Debt tender premium and
other charges (10)

Amortization of intangible
assets

Certain tax adjustments, net (11)

—

(128)

(15)

—

0.4

—

(45)

0.1

—

617

(15)

118

—

2.0

—

0.4

—

0.3

617

(15)

118

(61)

489

0.36

20.7

—

126.7

0.07

19.5

(57)

(0.04)

0.05

—

10.5

18.1

—

308

248

0.18

19.5

1,783

—

5.9

—

1,783

—

1,500

1.11

15.9

(41)

(0.03)

—

Non-GAAP (1)

$ 30,117 $ 10,295

65.8% $ 7,146

23.7% $ 6,804

$ 5,980 $

4.42

11.8%

(1) Starting with the quarter ended April 29, 2022, the Company will no longer adjust non-GAAP financial measures for certain license

payments for, or acquisitions of, technology not approved by regulators due to recent industry guidance from the U.S. Securities and
Exchange Commission. Historical non-GAAP financial measures presented in our earnings release have been recast for comparability.

vii

The impact of this change for the fiscal year ended April 29, 2022 is a decrease in non-GAAP net income and diluted EPS of $78 million
and $0.06, respectively. The impact of this change for the fiscal year ended April 30, 2021 is a decrease in non-GAAP net income and
diluted EPS of $25 million and $0.02.

(2) The data in this schedule has been intentionally rounded to the nearest million or $0.01 for EPS figures, and, therefore, may not sum.
(3) Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the

program and consulting expenses.

(4) The charges primarily include business combination costs, changes in fair value of contingent consideration, and specifically for the

fiscal year ended April 30, 2021 changes in amounts accrued for certain contingent liabilities for recent acquisitions.

(5) We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of

income or expense have a direct correlation to our ongoing or future business operations.

(6) The charges represent estimated incremental costs of complying with the new European Union medical device regulations for

previously registered products and primarily include charges for contractors supporting the project and other direct third-party
expenses, which are expected to be substantially complete by the end of fiscal year 2023.

(7) The charges relate to the Company’s June 2021 decision to stop the distribution and sale of the Medtronic HVAD System within the

Mechanical Circulatory Support Operating Unit (MCS). The charges included $515 million of non-cash impairments, primarily related to
$409 million of intangible asset impairments, as well as $366 million for commitments and obligations in connection with the decision,
including patient support obligations, restructuring, and other associated costs. Medtronic is committed to serving the needs of the
approximately 3,500 patients currently implanted with the HVAD System.

(8) The net benefit primarily relates to the deferred tax impact associated with a step up in tax basis for Swiss Cantonal purposes and a

change in tax rates on deferred taxes associated with intellectual property, which are partially offset by the amortization on previously
established deferred tax assets from intercompany intellectual property transactions and a charge related to a change in the Company’s
permanent reinvestment assertion on certain historical earnings.

(9) The charges relate to the abandonment of certain intangible assets in our Neuroscience segment.
(10) The charges relate to the early redemption of approximately $6.0 billion of debt.
(11) The net benefit primarily relates to the finalization of an audit at the IRS Appellate level for fiscal years 2012 through 2014 and the

capitalization of certain research and development costs for U.S. income tax purposes, which are partially offset by the impact of an
intercompany sale of assets, and a tax basis adjustment and amortization of previously established deferred tax assets from
intercompany intellectual property transactions.

MEDTRONIC PLC
GAAP TO NON-GAAP RECONCILIATIONS(1)
(Unaudited)

(in millions)

Net cash provided by operating activities

Additions to property, plant, and equipment

Free Cash Flow (2)

2022

7,346

(1,368)

5,978

2021

6,240

(1,355)

4,885

(1) The data in this schedule has been intentionally rounded to the nearest million, and, therefore, may not sum.
(2) Free cash flow represents operating cash flows less property, plant, and equipment additions.

viii

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.
For the fiscal year ended April 29, 2022.
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the transition period from __________ to__________
Commission File No. 1-36820

(State or other jurisdiction of incorporation or organization)

Ireland

98-1183488
(I.R.S. Employer Identification No.)

Medtronic plc

(Exact name of registrant as specified in its charter)

20 On Hatch, Lower Hatch Street Dublin 2, Ireland
(Address of principal executive offices)
+353 1 438-1700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol
MDT
MDT/22B
MDT/23B
MDT/23C
MDT/25
MDT/25A
MDT/27
MDT/28
MDT/31
MDT/31A
MDT/32
MDT/39A
MDT/39B
MDT/40A
MDT/49
MDT/50

Title of each class
Ordinary shares, par value $0.0001 per share
0.00% Senior Notes due 2022
0.375% Senior Notes due 2023
0.000% Senior Notes due 2023
0.25% Senior Notes due 2025
0.000% Senior Notes due 2025
1.125% Senior Notes due 2027
0.375% Senior Notes due 2028
1.625% Senior Notes due 2031
1.00% Senior Notes due 2031
0.750% Senior Notes due 2032
2.250% Senior Notes due 2039
1.50% Senior Notes due 2039
1.375% Senior Notes due 2040
1.75% Senior Notes due 2049
1.625% Senior Notes due 2050

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:
None

Indicate by check mark
(cid:129) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Yes

Act.

(cid:129) Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the

Exchange Act.

(cid:129) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.

(cid:129) Indicate by check mark whether the registrant has submitted electronically every Interactive Data File
required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files).

(cid:129) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer

Emerging growth company

Smaller reporting company

Non-accelerated filer

Accelerated filer

(cid:129) If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

(cid:129) Indicate by check mark whether the registrant has filed a report on and attestation to its management’s
assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report.

(cid:129) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Aggregate market value of voting and non-voting common equity of Medtronic plc held by non-affiliates of the registrant as of
October 29, 2021, based on the closing price of $119.86 as reported on the New York Stock Exchange: approximately $161.2 billion.
Number of Ordinary Shares outstanding on June 20, 2022: 1,328,709,310

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for its 2022 Annual General Meeting are incorporated by reference into Part III hereof.

TABLE OF CONTENTS

Item

PART I

1A.

1B.

PART II

7A.

9A.

9B.

PART III

10.

11.

12.

13.

14.

PART IV

15.

16.

Description

Page

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

Market for Medtronic’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

(Reserved) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . .39

Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . . . . . . . .60

Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . .111

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111

112

Directors, Executive Officers, and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters . . .114

Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . . . . .114

Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115

Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122

115

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, and other written reports
of Medtronic plc, organized under the laws of Ireland
(together with its consolidated subsidiaries, Medtronic, the
Company, or we, us, or our), and oral statements made by
or with the approval of one of the Company’s executive
officers from time to time, may include “forward-looking”
statements. All statements other than statements of
historical fact contained in this Annual Report on Form
10-K, including statements regarding our future results of
operations and financial position, business strategy and
plans, objectives of management for future operations and
current expectations or forecasts of future results, are
forward-looking statements. These statements involve
known and unknown risks, uncertainties, and other
important factors that may cause our actual results,
performance, or achievements to be materially different
from any future results, performance, or achievements
expressed or implied by the forward-looking statements.
Our forward-looking statements may include statements
related to our growth and growth strategies, developments
in the markets for our products, therapies and services,
financial results, product development launches and
effectiveness, research and development strategy,
regulatory approvals, competitive strengths, the potential
or anticipated direct or indirect impact of COVID-19
(“COVID-19” or the “pandemic”) on our business, results of
operations and/or financial condition, restructuring and
cost-saving initiatives, intellectual property rights, litigation
and tax matters, governmental proceedings and
investigations, mergers and acquisitions, divestitures,
market acceptance of our products, therapies and services,
accounting estimates, financing activities, ongoing
contractual obligations, working capital adequacy, value of
our investments, our effective tax rate, our expected
returns to shareholders, and sales efforts. In some cases,
such statements may be identified by the use of
terminology such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “forecast,” “intend,” “looking ahead,”
“may,” “plan,” “possible,” “potential,” “project,” “should,”
“will,” and similar words or expressions. Forward-looking
statements in this Annual Report include, but are not
limited to, statements regarding: our ability to drive long-
term shareholder value; development and future launches
of products and continued or future acceptance of
products, therapies and services in our segments;
expected timing for completion of research studies relating
to our products; market positioning and performance of
our products, including stabilization of certain product
markets; divestitures and the potential benefits thereof; the
costs and benefits of integrating previous acquisitions;
anticipated timing for United States (U.S.) Food and Drug
Administration (U.S. FDA) and non-U.S. regulatory approval
of new products; increased presence in new markets,
including markets outside the U.S.; changes in the market
and our market share; acquisitions and investment
initiatives, including the timing of regulatory approvals as
well as integration of acquired companies into our

operations; the resolution of tax matters; the effectiveness
of our development activities in reducing patient care costs
and hospital stay lengths; our approach towards cost
containment; our expectations regarding healthcare costs,
including potential changes to reimbursement policies and
pricing pressures; our expectations regarding changes to
patient standards of care; our ability to identify and
maintain successful business partnerships; the elimination
of certain positions or costs related to restructuring
initiatives; outcomes in our litigation matters and
governmental proceedings and investigations; general
economic conditions; the adequacy of available working
capital and our working capital needs; our payment of
dividends and redemption of shares; the continued
strength of our balance sheet and liquidity; our accounts
receivable exposure; and the potential impact of our
compliance with governmental regulations and accounting
guidance.

We have based these forward-looking statements largely
on our current expectations and projections about future
events and financial trends that we believe may affect our
business, results of operations, financial condition, and
cash flows. These forward-looking statements speak only
as of the date of this Annual Report on Form 10-K and are
subject to a number of risks, uncertainties and assumptions
described in the “Risk Factors” section and elsewhere in
this Annual Report on Form 10-K. Because forward-looking
statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified, you
should not rely on these forward-looking statements as
predictions of future events. One must carefully consider
forward-looking statements and understand that such
forward-looking statements are inherently subject to risks
and uncertainties, some of which cannot be predicted or
quantified, and involve a variety of risks and uncertainties,
known and unknown, including, among others, those
discussed in the sections entitled “Government Regulation”
within “Item 1. Business” and “Item 1A. Risk Factors” in this
Annual Report on Form 10-K, as well as those related to:
(cid:2) competition in the medical device industry;
(cid:2) delays in regulatory approvals;
(cid:2) the global COVID-19 pandemic, including new

COVID-19 variants that may emerge, as well as potential
impacts of the pandemic on healthcare staffing levels;

(cid:2) reduction or interruption in our supply;
(cid:2) failure to complete or achieve the intended benefits of

acquisitions or divestitures;
(cid:2) adverse regulatory action;
(cid:2) laws and governmental regulations;
(cid:2) litigation results;
(cid:2) quality problems;
(cid:2) healthcare policy changes;
(cid:2) cybersecurity incidents;

MEDTRONIC PLC 2022 Form 10-K 11

(cid:2) international operations, including the impact of armed

conflicts;

(cid:2) self-insurance;
(cid:2) commercial insurance;
(cid:2) changes in applicable tax rates;
(cid:2) positions taken by taxing authorities;
(cid:2) decreasing selling prices and pricing pressure;
(cid:2) liquidity shortfalls;
(cid:2) fluctuations in currency exchange rates;
(cid:2) inflation; or
(cid:2) disruption of our current plans and operations.

Consequently, no forward-looking statement may be
guaranteed, and actual results may vary materially from
those projected in the forward-looking statements. We
intend to take advantage of the Safe Harbor provisions of
the Private Securities Litigation Reform Act of 1995
regarding our forward-looking statements and are
including this sentence for the express purpose of enabling
us to use the protections of the safe harbor with respect to
all forward-looking statements. While we may elect to
update these forward-looking statements at some point in
the future, whether as a result of any new information,
future events, or otherwise, we have no current intention of
doing so except to the extent required by applicable law.

12 MEDTRONIC PLC 2022 Form 10-K

PART I

Item 1. Business

76
Million+
Patients
Served

150+
Countries in
Which We
Operate

95,000+
Employees

49,000+
Patents

$2.7
Billion
Research and
Development
Spend

Medtronic plc, headquartered in Dublin, Ireland, is the
leading global healthcare technology company. Medtronic
was founded in 1949 and today serves healthcare systems,
physicians, clinicians, and patients in more than 150
countries worldwide. We remain committed to a mission
written by our founder in 1960 that directs us “to contribute
to human welfare by the application of biomedical
engineering in the research, design, manufacture, and sale
of products to alleviate pain, restore health, and extend
life.”

Our Mission – to alleviate pain, restore health, and extend
life – empowers insight-driven care and better outcomes
for our world. We remain committed to being recognized
as a company of dedication, honesty, integrity, and service.
Building on this strong foundation, we are embracing our
role as a healthcare technology leader and evolving our
business strategy in four key areas:

(cid:2) Leveraging our pipeline to win market share: The

combination of our good end markets, recent product
launches and robust pipeline is expected to continue
accelerating our growth over both the near-and long-
term. We aim to bring inventive and disruptive
technology to large healthcare opportunities which
enables us to better meet patient needs. Patients around
the world deserve access to our life-saving products, and
we are driven to use our local presence and scale to
increase the adoption of our products and services in
markets around the globe.

(cid:2) Serving more patients by accelerating innovation driven

growth and delivering shareholder value: We listen to our
patients and customers to better understand the
challenges they face. From the patient journey, to
creating agile partnerships that produce novel solutions,
to making it easier for our customers to deploy our
therapies – everything we do is anchored in deep insight,
and creates simpler, superior experiences.

(cid:2) Creating and disrupting markets with our technology:

We are confident in our ability to maximize new
technology, artificial intelligence (AI), and data and
analytics to tailor therapies in real-time, facilitating
remote monitoring and care delivery that conveniently
manages conditions, and creates new standards of care.

(cid:2) Empowering our operating units to be more nimble and
more competitive: Our operating model, which was
effective February 2021, simplified our organization to
accelerate decision making, improve commercial
execution, and more effectively leverage the scale of our
company.

We have four operating and reportable segments that
primarily develop, manufacture, distribute, and sell device-
based medical therapies and services: the Cardiovascular
Portfolio, the Medical Surgical Portfolio, the Neuroscience
Portfolio, and the Diabetes Operating Unit. For more
information regarding our segments, please see Note 19 to
the consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report
on Form 10-K.

MEDTRONIC PLC 2022 Form 10-K 13

PART I
Item 1 Business

CARDIOVASCULAR PORTFOLIO
The Cardiovascular Portfolio is made up of the Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, and Coronary &
Peripheral Vascular divisions. The primary medical specialists who use our Cardiovascular products include
electrophysiologists, implanting cardiologists, heart failure specialists, cardiovascular, cardiothoracic, and vascular surgeons,
and interventional cardiologists and radiologists.

MicraTM Transcatheter
Pacing Systems

LINQ IITM Insertable
Cardiac Monitor

Arctic Front Advance
ProTM Cryoballoon

CoreValveTM
EvolutTM PRO+

Resolute OnyxTM

Cardiac Rhythm & Heart Failure

Our Cardiac Rhythm & Heart Failure division includes the
following Operating Units: Cardiac Rhythm Management;
Cardiac Ablation Solutions; and Cardiovascular Diagnostics
and Services. The division develops, manufactures, and
markets products for the diagnosis, treatment, and
management of heart rhythm disorders and heart failure.
Our products include implantable devices, leads and
delivery systems, products for the treatment of atrial
fibrillation (AF), products designed to reduce surgical site
infections, information systems for the management of
patients with Cardiac Rhythm & Heart Failure devices, and
an integrated health solutions business. Principal products
and services offered include:

(cid:2) Implantable cardiac pacemakers including the Azure MRI
SureScan, Adapta, Advisa MRI SureScan, and the Micra
Transcatheter Pacing System. The Micra Transcatheter
Pacing System, which is leadless and does not have a
subcutaneous device pocket like a conventional
pacemaker, includes the Micra VR device and the Micra
AV device. Both of these pacemakers treats patients with
atrioventricular block.

(cid:2) Implantable cardioverter defibrillators (ICDs), including
the Visia AF MRI SureScan, Evera MRI SureScan, Primo
MRI, and the Cobalt and Crome portfolio of BlueSync-
enabled ICDs, as well as defibrillator leads, including the
Sprint Quattro Secure lead.

(cid:2) Implantable cardiac resynchronization therapy devices
(CRT-Ds and CRT-Ps) including the Claria/Amplia/
Compia family of MRI Quad CRT-D SureScan systems
and the Cobalt and Crome portfolio of BlueSync-
enabled CRT-Ds, as well as the Percepta/Serena/Solara
family of MRI Quad CRT-P SureScan systems.

(cid:2) Cardiac ablation products including the Arctic Front
Advanced Cardiac cryoablation System, designed for
pulmonary vein isolation in the treatment of patients with
paroxysmal and persistent AF, as well as the
DiamondTemp Ablation system, which is the first U.S.
FDA-approved, temperature controlled, irrigated
radiofrequency ablation system.

(cid:2) Insertable cardiac monitoring systems, including the

Reveal LINQ and LINQ II. These devices are for patients
who experience infrequent symptoms such as dizziness,
palpitation, syncope (fainting) and chest pain, which may
indicate a cardiac arrhythmia that requires long-term
monitoring or ongoing management. The LINQ II device
offers improved device longevity, unmatched accuracy
and a streamlined workflow with AccuRhythm AI
algorithms to reduce clinic workload and data burden.

(cid:2) TYRX products, including the Cardiac and Neuro

Absorbable Antibacterial Envelopes, which are designed
to stabilize electronic implantable devices and help
prevent infection associated with implantable
pacemakers, and defibrillators.

(cid:2) Remote monitoring services and patient-centered
software to enable efficient care coordination and
specialized telehealth nurse support as well as services
related to hospital operational efficiency.

(cid:2) Medtronic stopped the distribution and sale of the HVAD
System on June 3, 2021. We continue a support program
for patients with HVAD devices, and for caregivers and
healthcare professionals who participate in their care.

Structural Heart & Aortic

Our Structural Heart & Aortic division includes the
following Operating Units: Structural Heart & Aortic and
Cardiac Surgery. The division includes therapies to treat
heart valve disorders and aortic disease. Our devices
include products for the repair and replacement of heart
valves, perfusion systems, positioning and stabilization
systems for beating heart revascularization surgery,
surgical ablation products, and comprehensive line of
products and therapies to treat aortic disease, such as
aneurysms, dissections, and transections. Principal
products offered include:

(cid:2) CoreValve family of aortic valves, including the Evolut R,
Evolut PRO, and Evolut PRO+ systems for transcatheter
aortic valve replacement.

(cid:2) Surgical valve replacement and repair products for

damaged or diseased heart valves, including both tissue

14 MEDTRONIC PLC 2022 Form 10-K

PART I
Item 1 Business

and mechanical valves; blood-handling products that
form a circulatory support system to maintain and
monitor blood circulation and coagulation status, oxygen
supply, and body temperature during arrested heart
surgery; and surgical ablation systems and positioning
and stabilization technologies.

(cid:2) Endovascular stent grafts and accessories, including the

Endurant II Stent Graft System for the treatment of
abdominal aortic aneurysms, the Valiant Captivia Thoracic
Stent Graft System for thoracic endovascular aortic repair
procedures, and the Heli-FX EndoAnchor System.

(cid:2) Transcatheter Pulmonary Valves, including Harmony TPV

and Delivery Catheter System and Melody TPV/
Ensemble II Delivery System.

Coronary & Peripheral Vascular

Our Coronary & Peripheral Vascular division includes the
following Operating Units: Coronary & Renal Denervation
and Peripheral Vascular Health. The division is comprised
of a comprehensive line of products and therapies to treat

coronary artery disease as well as peripheral vascular
disease and venous disease. Our products include
coronary stents and related delivery systems, including a
broad line of balloon angioplasty catheters, guide
catheters, guide wires, diagnostic catheters, and
accessories, peripheral drug coated balloons, stent and
angioplasty systems, carotid embolic protection systems
for the treatment of vascular disease outside the heart, and
products for superficial and deep venous disease. Principal
products offered include:

(cid:2) Percutaneous Coronary Intervention products including
our Resolute Onyx drug-eluting stent, Euphora balloons,
and Launcher guide catheters.

(cid:2) Percutaneous angioplasty balloons including the

IN.PACT family of drug-coated balloons, vascular stents
including the Abre venous stent, directional atherectomy
products including the HawkOne directional
atherectomy system, and other procedure support tools.

(cid:2) Products to treat superficial venous diseases in the lower
extremities including the ClosureFast radiofrequency
ablation system and the VenaSeal Closure System.

MEDICAL SURGICAL PORTFOLIO
The Medical Surgical Portfolio is made up of the Surgical Innovations and Respiratory, Gastrointestinal, & Renal divisions.
Products and therapies of this group are used primarily by healthcare systems, physicians’ offices, ambulatory care centers, and
other alternate site healthcare providers. While less frequent, some products and therapies are also used in home settings.

SonicisionTM Curved Jaw
Cordless Ultrasonic
Dissection System

NellcorTM Pulse
Oximeter

HugoTM RAS System

Puritan BennettTM
980 Ventilator

GI GeniusTM Intelligent
Endoscopy Module

Surgical Innovations

Our Surgical Innovations division includes the following
Operating Units: Surgical Innovations and Surgical
Robotics. The division develops, manufactures, and
markets advanced and general surgical products, including
surgical stapling devices, vessel sealing instruments,
wound closure, electrosurgery products, surgical artificial
intelligence (AI) and robotic-assisted surgery products,
hernia mechanical devices, mesh implants, gynecology
products, lung health and visualization, and therapies to
treat diseases and conditions that are typically, but not
exclusively, addressed by surgeons. Principal products and
services offered include:

(cid:2) Advanced stapling and energy products, including the
Tri-Staple technology platform for endoscopic stapling,
including the Endo GIA reloads and reinforced reloads
with Tri-Staple Technology and the Endo GIA ultra
universal stapler; the Signia Powered Stapling System;
the LigaSure Exact Dissector and L-Hook Laparoscopic
Sealer/Divider; and the Sonicision curved jaw cordless
ultrasonic dissection system.

(cid:2) Electrosurgical hardware and instruments, including the
Valleylab FT10 energy platform, and the Force TriVerse
electrosurgical pencils.

(cid:2) Robotic and digital surgery technologies including, the

Hugo robotic-assisted surgery (RAS) system designed for
a broad range of soft-tissue procedures and Touch
Surgery Enterprise, the first AI-powered surgical video
management solution for the operating room.

(cid:2) Products designed for the treatment of hernias,

including the AbsorbaTack absorbable mesh fixation
device for hernia repair, the Symbotex composite mesh
for surgical laparoscopic and open ventral hernia repair,
and Parietex ProGrip, a self-gripping, biocompatible
solution for inguinal hernias.

Respiratory, Gastrointestinal, & Renal

Our Respiratory, Gastrointestinal, & Renal division includes
the following Operating Units: Respiratory Interventions,
Patient Monitoring, Gastrointestinal, and Renal Care
Solutions. The division develops, manufactures, and

MEDTRONIC PLC 2022 Form 10-K 15

PART I
Item 1 Business

markets products in the emerging fields of minimally
invasive gastrointestinal and hepatologic diagnostics and
therapies, patient monitoring, respiratory interventions
including airway management and ventilation therapies,
and for the treatment of renal disease. Principal products
and services offered include:

(cid:2) Gastrointestinal and endoscopy products, including the

PillCam capsule endoscopy systems, the Bravo
calibration-free reflux testing systems, the EndoFLIP
imaging systems, the Emprint ablation system with
Thermosphere Technology, the ManoScan Bravo system,
the Barrx platform through ablation with the Barrx 360
Express catheter, the GI Genius intelligent endoscopy
module, the Cool-tip radiofrequency ablation system,
and the HET Bipolar System.

(cid:2) Airway, ventilation, and inhalation therapies products,
including the Puritan Bennett 980 and 840 ventilators,
the Newport e360 and HT70 ventilators, the TaperGuard

Evac tube, Shiley Endotracheal Tubes, Shiley
Tracheostomy Tubes, McGRATH MAC video
laryngoscopes, and DAR Filters.

(cid:2) Products focused on patient monitoring, including

Nellcor pulse oximetry monitors and sensors,
Microstream capnography monitors, Bispectral Index
(BIS) brain monitoring technology, INVOS cerebral/
somatic oximetry systems, Vital Sync remote monitoring,
and WarmTouch convective warming.

(cid:2) Products providing solutions for the treatment of renal
disease, including Palindrome, Mahurkar and Mahurkar
Elite Dialysis Access Catheters for renal therapy, Argyle
peritoneal dialysis catheters, Carpediem dialysis
machines for pediatric patients, Amplya dialysis
machines for acute patients, and other products
designed for use in treatment of both acute and chronic
renal failure conditions.

NEUROSCIENCE PORTFOLIO
The Neuroscience Portfolio is made up of the Cranial & Spinal Technologies, Specialty Therapies, and Neuromodulation
divisions. The primary medical specialists who use the products of this group include spinal surgeons, neurosurgeons,
neurologists, pain management specialists, anesthesiologists, orthopedic surgeons, urologists, urogynecologists,
interventional radiologists, and ear, nose, and throat specialists.

Mazor X StealthTM Edition

Midas RexTM MR8TM High-
Speed Drill System

InterStimTM Micro

PipelineTM VANTAGE
Embolization Device
with Shield TechnologyTM

PerceptTM PC DBS System

Cranial & Spinal Technologies

Our Cranial & Spinal Technologies division and Operating
Unit develops, manufactures, and markets an integrated
portfolio of devices and therapies for surgical technologies
designed to improve the precision and workflow of neuro
procedures, and a comprehensive line of medical devices
and implants used in the treatment of the spine and
musculoskeletal system. The division also provides biologic
solutions for the orthopedic and dental markets and offers
unique and highly differentiated imaging, navigation,
power instruments, nerve monitoring, and robotic
guidance systems used in spine and cranial procedures.
Principal products and services offered include:

(cid:2) Neurosurgery products, including platform technologies,
implant therapies, and advanced energy products. This
includes our StealthStation S8 Navigation System, Stealth
Autoguide cranial robotic guidance platform, O-arm
Imaging System, Mazor X robotic guidance systems used
in robot-assisted spine procedures, and our Midas Rex
Surgical Drills, including our MR8 high-speed drill
system. This group of products also includes our
cerebrospinal fluid (CSF) Management Portfolio,
Visualase MRI-guided laser ablation, Aquamantys

Sealers, and our PEAK Surgery System used in tissue
dissection that consists of the PEAK PlasmaBlade and
PULSAR Generator.

(cid:2) Products to treat a variety of conditions affecting the
spine, including degenerative disc disease, spinal
deformity, spinal tumors, fractures of the spine, and
stenosis. These products include our CD HORIZON
SOLERA system, T2 STRATOSPHERE, and CLYDESDALE
interbody spacers. These products also include titanium
interbody implants and surface technologies, such as our
Adaptix interbody system and the Titan Interbody Fusion
Device with NanoLOCK technology.

(cid:2) Products that facilitate less invasive thoracolumbar
surgeries, including the CD HORIZON SOLERA
VOYAGER Percutaneous Fixation System.

(cid:2) Products to treat conditions in the cervical region of the

spine, including the ZEVO Anterior Cervical Plate
System, the INFINITY OCT System, and PRESTIGE LP
Cervical Artificial Discs.

(cid:2) Biologic solutions products, including our INFUSE Bone
Graft (InductOs in the European Union (E.U.)), which
contains a recombinant human bone morphogenetic

16 MEDTRONIC PLC 2022 Form 10-K

PART I
Item 1 Business

protein, rhBMP-2, for certain spinal, trauma, and oral
maxillofacial applications.

Neuromodulation

(cid:2) Demineralized Bone Matrix products, including

MAGNIFUSE, GRAFTON/GRAFTON PLUS, and the
MASTERGRAFT family of synthetic bone graft products –
Matrix, Putty, and Granules.

Specialty Therapies

Our Specialty Therapies division includes the following
Operating Units: Neurovascular; Ear, Nose, and Throat (ENT);
and Pelvic Health. The division develops, manufactures, and
markets products and therapies to treat diseases of ENT,
patients afflicted with acute ischemic and hemorrhagic stroke,
and help control the systems of overactive bladder,
(non-obstructive) urinary retention, and chronic fecal
incontinence. Principal products and services offered include:

(cid:2) Pelvic health products, including our InterStim X,

InterStim Micro, and InterStim II neurostimulators, and
InterStim SureScan MRI leads, to help control the
systems of overactive bladder, (non-obstructive) urinary
retention, and chronic fecal incontinence. Our NURO
System delivers Percutaneous Tibial Neuromodulation
therapy to treat overactive bladder and associated
symptoms of urinary urgency, urinary frequency, and
urge incontinence.

(cid:2) ENT products, including the Straightshot M5

Microdebrider Handpiece, the IPC system, NIM Nerve
Monitoring Systems, FUSION Compact and StealthStation
ENT Navigation System, as well as products for hearing
restoration and obstructive sleep apnea.

(cid:2) Neurovascular products to treat diseases of the vasculature
in and around the brain. This includes coils, neurovascular
stent retrievers, and flow diversion products, as well as
access and delivery products to support procedures.
Products also include the Pipeline Flex Embolization
Devices, endovascular treatments for large or giant wide-
necked brain aneurysms, the portfolio of Solitaire
revascularization devices for treatment of acute ischemic
stroke, the Riptide Aspiration System, the Onyx Liquid
Embolic System, and a portfolio of associated access
catheters including our React aspiration catheters also for
the treatment of acute ischemic stroke.

Our Neuromodulation division and Operating Unit
develops, manufactures, and markets spinal cord
stimulation systems, implantable drug infusion systems for
chronic pain, as well as interventional products. Principal
products and services offered include:

(cid:2) Spinal cord stimulation products, including rechargeable
and non-rechargeable devices and a large selection of
leads used to treat chronic back and/or limb pain and
chronic pain resulting from diabetic peripheral
neuropathy. This includes the Intellis Spinal Cord
Stimulation System, with AdaptiveStim and SureScan MRI
Technology, DTM (differential target multiplexed)
proprietary waveform, the Evolve workflow algorithm,
and Snapshot reporting. Products also include our
RestoreSensor (rechargeable) SureScan MRI
neurostimulation system with its proprietary
AdaptiveStim technology.

(cid:2) Brain modulation products, including those for the
treatment of the disabling symptoms of Parkinson’s
disease, essential tremor, refractory epilepsy, severe,
treatment-resistant obsessive-compulsive disorder
(approved under a Humanitarian Device Exemption
(HDE) in the U.S.), and chronic, intractable primary
dystonia (approved under a HDE in the U.S.). Specifically,
this includes our family of Activa Neurostimulators,
including Activa SC (single-channel primary cell battery),
Activa PC (dual channel primary cell battery), and Activa
RC (dual channel rechargeable battery). This also
includes our Percept PC Neurostimulator DBS system
with BrainSense technology.

(cid:2) Implantable drug infusion systems, including our

SynchroMed II Implantable Infusion System, that deliver
small quantities of drug directly into the intrathecal
space surrounding the spinal cord.

(cid:2) Interventional products, including the Kyphon Balloon,

the Kyphon V, and Kyphon Assist systems and the
OsteoCool RF Tumor ablation system.

(cid:2) The Accurian nerve ablation system, which conducts

radio frequency ablation of nerve tissues.

DIABETES OPERATING UNIT
The Diabetes Operating Unit develops, manufactures, and markets products and services for the management of Type 1 and
Type 2 diabetes. The primary medical specialists who use and/or prescribe our Diabetes products are endocrinologists and
primary care physicians.

MiniMedTM 780G Insulin
Pump System

GuardianTM Sensor 4

InPenTM

GuardianTM Connect
CGM System

Extended Infusion
Set

MEDTRONIC PLC 2022 Form 10-K 17

PART I
Item 1 Business

Principal products and services offered include:

(cid:2) Insulin pumps and consumables, including the MiniMed
770G system and MiniMed 780G system, which are all
powered by SmartGuard technology. The MiniMed 770G
system provides smartphone and Bluetooth connectivity,
continuously delivers background insulin, monitors sugar
levels, and an expanded age indication to ages two and
up. The MiniMed 780G enhances the insulin pump
systems by including automatic correction boluses and
an adjustable glucose target down to 100 mg/dl.

(cid:2) Continuous glucose monitoring (CGM) systems and
sensors, including the Guardian Connect smart CGM

HUMAN CAPITAL

system, the Guardian Sensor 3, and the Guardian Sensor
4, are products worn by patients capturing glucose data
to reveal patterns and potential problems, such as
hyperglycemic and hypoglycemic episodes.

(cid:2) The InPen smart insulin pen system that combines a

reusable Bluetooth-enabled insulin pen with an intuitive
mobile app that helps users administer the appropriate
insulin dose. The InPen application integrates with our
CGM data to provide real-time CGM readings alongside
insulin dose information.

(cid:2) Consumables and supplies, including infusion sets.

Medtronic Workforce Overview

Workforce Compensation

Medtronic’s employees deliver on our Mission every day.
We empower insight-driven care, experiences that put
people first, and better outcomes for our world. In
everything we do, we are engineering the extraordinary.
We strive to be the employer of choice for the best and
brightest global talent, where employees can grow and
develop fulfilling careers. We aspire to create a truly
inclusive, diverse, and equitable workplace that fosters
innovation and creativity, and where every employee feels
a sense of belonging and well-being. Medtronic has
95,000+ full-time employees, of which forty-four percent
are based in the U.S. or Puerto Rico.

Inclusion, Diversity & Equity

We believe that improving health for people from all walks
of life depends on our ability to unleash the creative power
of our diverse global employees. By breaking down
barriers to Inclusion, Diversity and Equity (ID&E), we open
doors for everyone, driving progress and prosperity
around the world. As of the end of fiscal year 2022,
38 percent of our U.S. workforce is ethnically diverse;
women comprise 50 percent of our global workforce; and
42 percent of our manager and above employees are
women. Additionally, Medtronic employee resource
groups (ERGs) are employee-led affinity groups that
provide career development and networking opportunities
for members and strengthen ties between employees of
many different backgrounds, cultures, and interests. In
fiscal year 2022, there were 12 ERGs and Diversity
Networks across 75 countries with more than 34,000
members.

Pay Equity

For fiscal year 2022, in the United States we have achieved
100% pay equity for gender for the third consecutive year
and 100% pay equity for ethnically diverse employees.
Globally we have achieved 99% pay equity for gender. We
are actively working to close any remaining pay gaps by
continuing to expand the annual pay equity analyses for
each country we operate in.

Our compensation framework is designed to celebrate the
value and contributions of our employees. We are
committed to transparent communications on
compensation. Our competitive approach to
compensation reflects industry benchmarks and local
market standards. Our programs include annual and long-
term incentives that provide the means to share in the
Company’s success. To attract the best leaders, we offer
competitive benefits and cash and equity incentives. We
reward high-performing employees with an ownership
stake in the company through restricted stock, and all
employees have the opportunity to purchase stock at a
significant discount.

Learning & Development

The skills and dedication of our employees drive our
business performance. Our comprehensive professional
development programs empower our people to build
rewarding careers and help us attract world-class talent.
Our suite of professional development programs ensures
that our employees, regardless of level, location, language
or learning preferences, have access to opportunities to
develop and grow. Our investment in employee
development has contributed to more than 30 percent of
our open roles being filled with internal employees.

In fiscal year 2022, we began our shift away from degree
requirements to focus on skills-based certification for
certain roles within Medtronic. Additionally, as members of
the Multiple Pathways Initiative, we have used a skill –
based approach to offering opportunities to expanded
pools of external talent that have previously been held
back due to lack of access to undergraduate education.
Internally, employees can now participate through MAPS
(Medtronic Advancement Pathways and Skill-building) in
undergraduate courses from top-tier universities to
enhance or obtain new skills, at no cost to the employee.
Our change in approach has opened up opportunities for
employees who have been otherwise restricted from
career advancement due to degree requirements.

18 MEDTRONIC PLC 2022 Form 10-K

Employee Engagement and Culture

Through our organizational health survey, we gain valuable
insight into the Medtronic employee experience and
identify areas where we can improve in four key priority
areas: 1) Employee Engagement, 2) Inclusion, 3)
Innovation, and 4) Ethics. In our most recent survey ending
in the fourth quarter of fiscal year 2022, more than
77 percent of our employees responded. Medtronic
carefully reviews and implements actions based on
employee feedback in order to partner and create an
inclusive, innovative and supportive environment.

To enable our transformation to be the global healthcare
technology leader, we introduced a reinvigorated and
revived culture. The Medtronic Mindset builds on our core
values of integrity, quality, inclusion and collaboration. It
urges us to act boldly, compete to win, move with speed
and decisiveness, foster belonging, and deliver results…
the right way. Our renewed culture helps us meet the
needs of our patients and customers, and ensures our
Mission endures for many years to come.

Health & Safety

As a large, global employer, it is our responsibility to
maintain a safe workplace and support the well-being of
our employees. Throughout the COVID-19 pandemic, we
have placed a high priority on employee health, providing
comprehensive benefits, accommodations and resources
to support our workforce through this challenging time.
During fiscal year 2022, we offered on-site vaccinations to
our employees, enabling a vaccination rate of nearly 90%

CORPORATE SUSTAINABILITY GOALS

We see possibilities to further increase our positive impact
in the world. We have identified three focus areas for our
environmental, social, and governance (ESG) efforts to
drive measurable impact on issues including: protecting
our planet, accelerating access to healthcare technology,
and advancing ID&E. In early fiscal year 2022, we set new
performance targets across the following areas: Patient
Safety & Product Quality; Inclusion, Diversity & Equity;

PART I
Item 1 Business

for our U.S. and Puerto Rico – based workforce. To help
limit exposure to the virus, we acted to ensure employees
in business-critical functions who cannot work from home
were protected, including those in research and
development, quality, manufacturing, distribution, and
sales. Personal protective equipment, increased sanitation,
social distancing guidance, and facility updates (one-way
hallways, cafeteria partitions and extra sinks) were
provided to protect our employees.

Medtronic has a comprehensive approach to providing
robust support for our employees and their families not
only during the pandemic, but also in natural disasters, civil
unrest and war, bereavement, and other challenging
events. Along with other programs, the Medtronic
Employee Assistance Program and the Medtronic
Employee Emergency Assistance Fund have historically
supported employees and their families when faced with
difficult times by providing a variety of services such as
mental health, safety, and financial resources and support
at no cost. These programs have proven invaluable in
navigating our employees through unique challenge,
including in fiscal year 2022. The Medtronic Employee
Emergency Assistance Fund is supported by donations
from employees and the Medtronic Foundation, and over
the last five years has provided over $6 million in grants to
employees experiencing unexpected events creating a
financial hardship.

For more information on Human Capital Management at
Medtronic, please refer to our 2021 Integrated
Performance Report(1) as well as Medtronic’s 2021 Global
Inclusion, Diversity and Equity Report(1) available on our
company website.

Climate Stewardship; Product Stewardship; and Access &
Innovation. More information about our ESG focus areas,
including progress we have made to date toward achieving
them, is included in our Integrated Performance Report.(1)

(1) The contents of our Integrated Performance Report

and our Global Inclusion, Diversity, and Equity Report
are referenced for general information only and are
not incorporated by reference in the Form 10-K.

OTHER FACTORS IMPACTING OUR OPERATIONS

COVID-19 Pandemic

The global COVID-19 pandemic, together with the
preventative and precautionary measures taken by
businesses, communities, and governments, has impacted,
and may continue to impact significant aspects of our
Company and business, including future procedural
volumes, supply constraints, healthcare staffing, worker
absenteeism with our customers, suppliers, and in our own
operations and field teams, and resulting impacts on
demand for our products and therapies. See “Item 1A. Risk
Factors” in this Annual Report on Form 10-K.

Research and Development

The markets in which we participate are subject to rapid
technological advances. Constant improvement of existing
products and introduction of new products is necessary to
maintain market leadership. Our research and
development (R&D) efforts are directed toward
maintaining or achieving technological leadership in each
of the markets we serve to help ensure that patients using
our devices and therapies receive the most advanced and
effective treatment possible. We remain committed to

MEDTRONIC PLC 2022 Form 10-K 19

PART I
Item 1 Business

developing technological enhancements and new
indications for existing products, and less invasive and new
technologies for new and emerging markets to address
unmet patient needs. That commitment leads to our
initiation and participation in hundreds of clinical trials
each fiscal year as the demand for clinical and economic
evidence remains high. Furthermore, our development
activities are intended to help reduce patient care costs
and the length of hospital stays in the future. We have not
engaged in significant customer or government-sponsored
research.

Our R&D activities include improving existing products and
therapies, expanding their indications and applications for
use, developing new therapies and procedures, and
entering into arrangements with third parties to fund the
development of certain technologies. We continue to focus
on optimizing innovation, improving our R&D productivity,
driving growth in emerging markets, generating clinical
evidence, and assessing our R&D programs based on their
ability to address unmet clinical needs, produce better
patient outcomes, and create new standards of care.

Intellectual Property

We rely on a combination of patents, trademarks,
tradenames, copyrights, trade secrets, and agreements
(non-disclosure and non-competition agreements) to
protect our business and proprietary technology. In
addition, we have entered into exclusive and non-exclusive
licenses relating to a wide array of third-party technologies.
In the aggregate, these intellectual property assets and
licenses are of material importance to our business;
however, we believe that no single intellectual property
asset or license is material in relation to any segment of our
business or to our business as a whole.

We operate in an industry characterized by extensive
patent litigation. Patent litigation may result in significant
damage awards and injunctions that could prevent the
manufacture and sale of affected products or result in
significant royalty payments in order to continue selling the
products. At any given time, we are involved as both a
plaintiff and a defendant in a number of patent
infringement actions, the outcomes of which may not be
known for prolonged periods of time.

Sales and Distribution

We sell our medical devices and therapies through a
combination of direct sales representatives and
independent distributors globally. Additionally, a portion
of the Company’s revenue is generated from consignment
inventory maintained at hospitals. Our medical supply
products are used primarily in hospitals, surgical centers,
and alternate care facilities, such as home care and long-
term care facilities, and are marketed to materials
managers, group purchasing organizations (GPOs) and
integrated delivery networks (IDNs). We often negotiate
with GPOs and IDNs, which enter into supply contracts for
the benefit of their member facilities. Our four largest

20 MEDTRONIC PLC 2022 Form 10-K

markets are the U.S., Western Europe, China, and Japan.
Emerging markets are an area of increasing focus and
opportunity, as we believe they remain under-penetrated.

Our marketing and sales strategy is focused on rapid, cost-
effective delivery of high-quality products to a diverse
group of customers worldwide. To achieve this objective,
our marketing and sales teams are organized around
physician specialties. This focus enables us to develop
highly knowledgeable and dedicated sales representatives
who are able to foster strong relationships with physicians
and other customers and enhance our ability to cross-sell
complementary products.

We are not dependent on any single customer for more
than 10 percent of our total net sales.

Competition, Industry, and Cost
Containment

We compete in both the therapeutic and diagnostic
medical markets in more than 150 countries throughout
the world. These markets are characterized by rapid
change resulting from technological advances and
scientific discoveries. Our product lines face a mix of
competitors ranging from large manufacturers with
multiple business lines to small manufacturers offering a
limited selection of products. In addition, we face
competition from providers of other medical therapies,
such as pharmaceutical companies.

Major shifts in industry market share have occurred in
connection with product problems, physician advisories,
safety alerts, results of clinical trials to support superiority
claims, and publications about our products, reflecting the
importance of product quality, product efficacy and quality
systems in the medical device industry. In the current
environment of managed care, economically motivated
customers, consolidation among healthcare providers,
increased competition, declining reimbursement rates, and
national and provincial tender pricing, competitively priced
product offerings are essential to our business. In order to
continue to compete effectively, we must continue to
create or acquire advanced technology, incorporate this
technology into proprietary products, obtain regulatory
approvals in a timely manner, maintain high-quality
manufacturing processes, and successfully market these
products.

Government and private sector initiatives to limit the
growth of healthcare costs, including price regulation,
competitive pricing, bidding and tender mechanics,
coverage and payment policies, comparative effectiveness
of therapies, technology assessments and managed-care
arrangements, are continuing in many countries where we
do business, including the U.S. These initiatives put
increased emphasis on the delivery of more cost-effective
medical devices and therapies. Government programs,
including Medicare and Medicaid, private healthcare
insurance and managed-care plans have attempted to
control costs by limiting the amount of reimbursement they

will pay for particular procedures or treatments, tying
reimbursement to outcomes, shifting to population health
management, and other mechanisms. Hospitals, which
purchase our technology, are also seeking to reduce costs
through a variety of mechanisms, including, for example,
centralized purchasing, and in some cases, limiting the
number of vendors that may participate in the purchasing
program. Hospitals are also aligning interests with
physicians through employment and other arrangements,
such as gainsharing, where a hospital agrees with
physicians to share any realized cost savings resulting from
changes in practice patterns such as device
standardization. This has created an increased level of
price sensitivity among customers for our products.

Production and Availability of Raw Materials
We manufacture products at manufacturing facilities
located in various countries throughout the world. We
purchase many of the components and raw materials used
in manufacturing our products from numerous suppliers in
various countries. Certain components and raw materials
are available only from a sole supplier. We work closely
with our suppliers to help ensure continuity of supply while
maintaining high quality and reliability. Generally, we have
been able to obtain adequate supplies of such raw
materials and components. However, due to the U.S. FDA’s
manufacturing requirements, we may not be able to
quickly establish additional or replacement sources for
certain components or materials if we experience a sudden
or unexpected reduction or interruption in supply and are
unable to develop alternative sources.

For additional information related to our manufacturing
facilities refer to “Item 2. Properties” in this Annual Report
on Form 10-K.

Government Regulation
Our operations and products are subject to extensive
regulation by numerous government agencies, including
the U.S. FDA, European regulatory authorities such as the
Medicines and Healthcare Products Regulatory Agency in
the United Kingdom Republic of Ireland and the Federal
Institute for Drugs and Medical Devices in Germany, the
China National Medical Product Administration (NMPA),
and other government agencies inside and outside the U.S.
To varying degrees, each of these agencies requires us to
comply with laws and regulations governing the
development, testing, manufacturing, labeling, marketing,
distribution and post-marketing surveillance of our
products. Our business is also affected by patient and data
privacy laws and government payer cost containment
initiatives, as well as environmental health and safety laws
and regulations.

Product Approval and Monitoring
Many countries where we sell medical devices subject such
medical devices and technologies to their own approval
and other regulatory requirements regarding performance,
safety, and quality of our products. Authorization to
commercially distribute a new medical device in the U.S. is
generally obtained in one of two primary ways. The first,

PART I
Item 1 Business

known as pre-market notification or the 510(k) process,
requires us to demonstrate that our medical device is
substantially equivalent to a legally marketed medical
device. The second, more rigorous process, known as
pre-market approval, requires us to independently
demonstrate that a medical device is safe and effective for
its intended use. This process is generally much more time-
consuming and expensive than the 510(k) process.

In the E.U., a single regulatory approval process exists, and
conformity with the legal requirements is represented by
the CE Mark. To obtain a CE Mark, defined products must
meet minimum standards of performance, safety, and
quality (i.e., the essential requirements), and then,
according to their classification, comply with one or more
of a selection of conformity assessment routes. The
competent authorities of the E.U. countries separately
regulate the clinical research for medical devices and the
market surveillance of products once they are placed on
the market. A new Medical Device Regulation was
published by the E.U. in 2017 which imposes significant
additional pre-market and post-market requirements (EU
MDR). The regulation provided an implementation period
and became effective on May 26, 2021. Medical devices
marketed in the E.U. will require certification according to
these new requirements, except that devices with valid CE
certificates, issued pursuant to the Medical Device
Directives before May 2020, can be placed on the market
until May 2024.

The global regulatory environment is increasingly stringent
and unpredictable. While harmonization of global
regulations has been pursued, requirements continue to
differ significantly among countries. We expect this global
regulatory environment will continue to evolve, which
could impact the cost, the time needed to approve, and
ultimately, our ability to maintain existing approvals or
obtain future approvals for our products. Regulations of the
U.S. FDA and other regulatory agencies in and outside the
U.S. impose extensive compliance and monitoring
obligations on our business. These agencies review our
design and manufacturing practices, labeling, record
keeping, and manufacturers’ required reports of adverse
experiences and other information to identify potential
problems with marketed medical devices. We are also
subject to periodic inspections for compliance with
applicable quality system regulations, which govern the
methods used in, and the facilities and controls used for,
the design, manufacture, packaging, and servicing of
finished medical devices intended for human use. In
addition, the U.S. FDA and other regulatory bodies, both in
and outside the U.S. (including the Federal Trade
Commission, the Office of the Inspector General of the
Department of Health and Human Services, the U.S.
Department of Justice, and various state Attorneys
General), monitor the promotion and advertising of our
products. Any adverse regulatory action, depending on its
magnitude, may limit our ability to effectively market and
sell our products, limit our ability to obtain future
pre-market approvals or result in a substantial modification
to our business practices and operations. For additional

MEDTRONIC PLC 2022 Form 10-K 21

PART I
Item 1 Business

information, see “Item 1A. Risk Factors” We are subject to
extensive and complex laws and governmental regulations
and any adverse regulatory action may materially adversely
affect our financial condition and business operations.

Trade Regulations
The movement of products, services, and investment
across borders subjects us to extensive trade regulations. A
variety of laws and regulations in the countries in which we
transact business apply to the sale, shipment and provision
of goods, services and technology across borders. These
laws and regulations govern, among other things, our
import, export and other business activities. We are also
subject to the risk that these laws and regulations could
change in a way that would expose us to additional costs,
penalties or liabilities. Some governments also impose
economic sanctions against certain countries, persons or
entities. In addition to our need to comply with such
regulations in connection with our direct activities, we also
sell and provide goods, technology and services to agents,
representatives and distributors who may export such
items to customers and end-users. If we, or the third parties
through which we do business, are not in compliance with
applicable import, export control or economic sanctions
laws and regulations, we may be subject to civil or criminal
enforcement action, and varying degrees of liability. Such
actions may disrupt or delay sales of our products or
services or result in restrictions on our distribution and
sales of products or services that may materially impact our
business.

Anti-Boycott Laws
Under U.S. laws and regulations, U.S. companies and their
subsidiaries and affiliates outside the U.S. are prohibited
from participating or agreeing to participate in
unsanctioned foreign boycotts in connection with certain
business activities, including the sale, purchase, transfer,
shipping or financing of goods or services within the U.S.
or between the U.S. and countries outside of the U.S. If we,
or certain third parties through which we sell or provide
goods or services, violate anti-boycott laws and
regulations, we may be subject to civil or criminal
enforcement action and varying degrees of liability.

Data Privacy and Security Laws and Regulations
As a business with a significant global footprint,
compliance with evolving regulations and standards in
data privacy and cybersecurity has resulted, and may
continue to result, in increased costs, new compliance
challenges, and the threat of increased regulatory
enforcement activity. Our business relies on the secure
electronic transmission, storage and hosting of sensitive
information, including personal information, protected
health information, financial information, intellectual
property and other sensitive information related to our
customers and workforce.

Our global operational footprint comes with the obligation
for compliance and adherence to individual data security,

22 MEDTRONIC PLC 2022 Form 10-K

confidentiality and breach notification laws at the State
Level, Federal Level, and International Level. Examples of
those laws include the Health Insurance and Portability Act
of 1996 (HIPAA), as amended, and the Health Information
Technology for Economic and Clinical Health Act of 2009
(HITECH) in the U.S., the Global Data Protection Regulation
(GDPR) within the European Union, and various other
country specific requirements around the world.

Because the laws and regulations continue to expand,
differ from jurisdiction to jurisdiction, and are subject to
evolving (and at times inconsistent) governmental
interpretation, compliance with these laws and regulations
may require significant additional cost expenditures or
changes in products or business that increase competition
or reduce revenue. Noncompliance could result in the
imposition of fines, penalties, or orders to stop
noncompliant activities, or withdrawal of non-compliant
products from a market.

Regulations Governing Reimbursement

The delivery of our devices is subject to regulation by the
U.S. Department of Health and Human Services (HHS) and
comparable state and non-U.S. agencies responsible for
reimbursement and regulation of healthcare items and
services. U.S. laws and regulations are imposed primarily in
connection with federally funded healthcare programs,
such as the Medicare and Medicaid programs, as well as
the government’s interest in regulating the quality and cost
of healthcare. Other governments also impose regulations
in connection with their healthcare reimbursement
programs and the delivery of healthcare items and
services.

U.S. federal healthcare laws apply when we or customers
submit claims for items or services that are reimbursed
under federally-funded healthcare programs, including
laws related to kickbacks, false claims, self-referrals or
other healthcare fraud. There are often similar state false
claims, anti-kickback, and anti-self-referral and insurance
laws that apply to state Medicaid and other healthcare
programs and private third-party payers. In addition, as a
manufacturer of U.S. FDA-approved devices reimbursable
by federal healthcare programs, we are subject to the
Physician Payments Sunshine Act, which requires us to
annually report certain payments and other transfers of
value we make to U.S.-licensed physicians or U.S. teaching
hospitals. Any failure to comply with these laws and
regulations could subject us or our officers and employees
to criminal and civil financial penalties.

Implementation of legislative or regulatory reforms to
reimbursement systems, or adverse decisions relating to
our products by administrators of these systems in
coverage or reimbursement, could significantly reduce
reimbursement or result in the denial of coverage, which
could have an impact on the acceptance of and demand
for our products and the prices that our customers are
willing to pay for them.

Environmental Health and Safety Laws

We are also subject to various environmental health and
safety laws and regulations both within and outside the
U.S. Like other companies in our industry, our
manufacturing and other operations involve the use and
transportation of substances regulated under
environmental health and safety laws including those
related to the transportation of hazardous materials.

Available Information

We maintain a website at www.medtronic.com. Our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended
(Exchange Act) are made available under the “Our
Company – Investors” caption and “Financials – SEC Filings”
subcaption of our website as soon as reasonably
practicable after we electronically file them with, or furnish
them to, the Securities and Exchange Commission (SEC).

Information relating to our corporate governance,
including our Principles of Corporate Governance, Code of

Item 1A. Risk Factors

Investing in our securities involves a variety of risks and
uncertainties, known and unknown, including, among
others, those discussed below. Each of the following risks
should be carefully considered, together with all the other
information included in this Annual Report on Form 10-K,
including our consolidated financial statements and the
related notes and in our other filings with the SEC.
Furthermore, additional risks and uncertainty not presently
known to us or that we currently believe to be immaterial
may also adversely affect our business. Our business,
results of operations, financial condition, and cash flow and
prospects could be materially and adversely affected by
any of these risks or uncertainties.

Business and Operational Risks

We operate in a highly competitive industry
and we may be unable to compete
effectively.

We compete in both the therapeutic and diagnostic
medical markets in more than 150 countries throughout
the world. These markets are characterized by rapid
change resulting from technological advances and
scientific discoveries. In the product lines in which we
compete, we face a range of competitors from large
companies with multiple business lines to small,
specialized manufacturers that offer a limited selection of
niche products. Development by other companies of new
or improved products, processes, technologies, or the

PART I
Item 1A Risk Factors

Conduct (including our Code of Ethics for Senior Financial
Officers and any related amendments or waivers), Code of
Business Conduct and Ethics for Members of the Board of
Directors, and information concerning our executive
officers, directors and Board committees (including
committee charters) is available through our website at
www.medtronic.com under the “Our Company –
Governance” caption. Information relating to transactions
in Medtronic securities by directors and officers is available
through our website at www.medtronic.com under the
“Our Company – Investors” caption and the “Financials –
SEC Filings” subcaption.

Our website and the information contained on or
connected to our website are not incorporated by
reference into this Form 10-K.

The SEC maintains a website that contains reports, proxy
and information statements, and other information
regarding issuers, including the Company, that file
electronically with the SEC. The public may obtain any
documents that we file with the SEC at http://www.sec.gov.
We file annual reports, quarterly reports, proxy statements,
and other documents with the SEC under the Exchange Act.

introduction of reprocessed products or generic versions
when our proprietary products lose their patent protection
may make our existing or planned products less
competitive. In addition, we face competition from
providers of alternative medical therapies, such as
pharmaceutical companies.

We believe our ability to compete depends upon many
factors both within and beyond our control, including:

(cid:2) product performance and reliability,

(cid:2) product technology and innovation,

(cid:2) product quality and safety,

(cid:2) breadth of product lines,

(cid:2) product support services,

(cid:2) customer support,

(cid:2) cost-effectiveness and price,

(cid:2) reimbursement approval from healthcare insurance

providers, and

(cid:2) changes to the regulatory environment.

Competition may increase as additional companies enter
our markets or modify their existing products to compete
directly with ours. In addition, academic institutions,
governmental agencies and other public and private
research organizations also may conduct research, seek
patent protection and establish collaborative arrangements
for discovery, research, clinical development and

MEDTRONIC PLC 2022 Form 10-K 23

PART I
Item 1A Risk Factors

marketing of products similar to ours. These companies
and institutions compete with us in recruiting and retaining
qualified scientific and management personnel, as well as
in acquiring necessary product technologies. From time to
time we have lost, and may in the future lose, market share
in connection with product problems, physician advisories,
safety alerts and publications about our products, which
highlights the importance of product quality, product
efficacy and quality systems to our business. In the current
environment of managed care, consolidation among
healthcare providers, increased competition, declining
reimbursement rates, and national and provincial tender
pricing, as recently experienced in China, competitively
priced product offerings are essential to our success.
Further, our continued growth and success depend on our
ability to develop, acquire and market new and
differentiated products, technologies and intellectual
property, and as a result we also face competition for
marketing, distribution, and collaborative development
agreements, establishing relationships with academic and
research institutions and licenses to intellectual property. In
order to continue to compete effectively, we must continue
to create, invest in or acquire advanced technology,
incorporate this technology into our proprietary products,
obtain regulatory approvals in a timely manner, and
manufacture and successfully market our products. Given
these factors, we cannot guarantee that we will be able to
compete effectively or continue our level of success.

The ongoing global COVID-19 pandemic
has had, and may continue to have, an
adverse effect on certain aspects of our
business, results of operations, financial
condition and cash flows. The nature and
extent of future impacts are highly uncertain
and unpredictable.

Our global operations and interactions with healthcare
systems, providers and patients around the world expose
us to risks associated with public health crises, including
epidemics and pandemics such as COVID-19. In particular,
the continuing preventative and precautionary measures
that we and other businesses, communities, and
governments have taken to mitigate the spread of the
disease has led to restrictions on, disruptions in, and other
related impacts on business and personal activities,
including reduced customer demand for certain of our
products and has resulted in many of our employees
working remotely. We expect medical procedure rates to
continue to vary by therapy and country, and could be
impacted by regional COVID-19 case volumes, healthcare
system staffing shortages, patient’s willingness to schedule
deferrable procedures, travel restrictions, transportation
limitations, quarantine restrictions, vaccine and booster
immunization rates, and new COVID-19 variants. While
COVID-19 case volumes appear to be decreasing in the
U.S and certain other countries as a result of higher
vaccination rates, the global COVID-19 outlook remains
uncertain as new variants emerge.

24 MEDTRONIC PLC 2022 Form 10-K

Together with the preventative and precautionary
measures being taken, as well as the corresponding need
to adapt to new and improved methods of conducting
business, such as increased remote monitoring, COVID-19
is having, and may continue to have, an adverse impact on
certain aspects of our Company and business, including
the demand for and supply of certain of our products,
operations, supply chains and distribution systems, impacts
or delays to product development milestones, clinical
trials, or regulatory clearances and approval timing, and
our ability to generate cash flow, and may have an adverse
impact on our ability to access capital. Some of our
products are more sensitive to reductions in deferrable
and emergent medical procedures, and, as hospital
systems prioritize treatment of COVID-19 patients and
otherwise comply with government guidelines, certain
medical procedures have been and may continue to be
suspended or postponed. It is not possible to predict the
timing of deferrable medical procedures and, to the extent
individuals and hospital systems de-prioritize, delay or
cancel these procedures, or if unemployment or loss of
insurance coverage adversely impacts an individual’s
ability to pay for our products and services, our business,
results of operations, financial condition, and cash flows
could continue to be negatively affected. Further, the
COVID-19 pandemic has strained hospital systems around
the world, resulting in adverse financial impacts to those
systems that could result in reduced future expenditures
for certain capital equipment and other products and
services we provide, as well as potential disruption of
product launches of our recently approved products.

A number of our global suppliers, vendors, and distributors
have been adversely affected by the COVID-19 pandemic,
including employee absenteeism. These impacts could
impair our ability to move our products through
distribution channels to end customers, and any such delay
or shortage in the supply of components or materials may
result in our inability to satisfy consumer demand for
certain of our products in a timely manner or at all, which
could harm our reputation, future sales and profitability.

COVID-19 has impacted and may further impact the global
economy and capital markets, including by negatively
impacting demand for a number of our products, access to
capital markets (including the commercial paper market),
foreign currency exchange rates, and interest rates, each of
which may adversely impact our business and liquidity. We
could experience loss of sales and profits due to delayed
payments or insolvency of healthcare professionals,
hospitals and other customers, suppliers and vendors
facing liquidity issues. As a result, we may be compelled to
take additional measures to preserve our cash flow.

COVID-19 could adversely impact our ability to retain key
employees and the continued service and availability of
skilled personnel necessary to run our complex productions
and operations, including our executive officers and other
key members of our management team.

While the impact of COVID-19 has had, and may continue
to have, an adverse effect on our business, results of

operations, financial condition and cash flows, the nature
and extent of such impact is highly uncertain and
unpredictable, as we cannot predict with confidence the
duration of the pandemic.

Reduction or interruption in supply or other
manufacturing difficulties may adversely
affect our manufacturing operations and
related product sales.

The manufacture of our products requires the timely
delivery of a sufficient amount of quality components and
materials and is highly exacting and complex, due in part to
strict regulatory requirements. We manufacture the majority
of our products and procure important third-party services,
such as sterilization services, at numerous facilities
worldwide. We purchase many of the components, raw
materials and services needed to manufacture these
products from numerous suppliers in various countries. We
seek to maintain continuity of supply by use of multiple
options for sourcing where possible. We have generally
been able to obtain adequate supplies of such raw
materials, components and services, although global
shortages of certain components such as semiconductors
and resins have recently caused, and may in the future
cause, disruptions to our product manufacturing supply
chain. In addition, for reasons of quality assurance, cost
effectiveness, or availability, certain components, raw
materials and services needed to manufacture our products
are obtained from a sole supplier. Although we work closely
with our suppliers to try to ensure continuity of supply while
maintaining high quality and reliability, the supply of these
components, raw materials and services may be interrupted
or insufficient. In addition, due to the stringent regulations
and requirements of regulatory agencies, including the U.S.
FDA, regarding the manufacture of our products, we may
not be able to quickly establish additional or replacement
sources. Additionally, many regulatory agencies are
imposing regulatory requirements on safe use of chemicals
and their potential impact on health and the environment
which also may impact supply constraints. Furthermore, the
prices of commodities and other materials used in our
products, which are often volatile and outside of our
control, could adversely impact our supply. We use resins,
other petroleum-based materials and pulp as raw materials
in some of our products, and the prices of oil and gas also
significantly affect our costs for freight and utilities. A
reduction or interruption in supply, and an inability to
develop alternative sources for such supply, could
adversely affect our ability to manufacture our products in a
timely or cost-effective manner and could result in lost sales.

Other disruptions in the manufacturing process or product
sales and fulfillment systems for any reason, including
equipment malfunction, failure to follow specific protocols
and procedures, supplier facility shut-downs, defective raw
materials, natural disasters such as hurricanes, tornadoes,
earthquakes, or wildfires, property damage or facility
closures from riots or public protests, and other
environmental factors and the impact of epidemics or

PART I
Item 1A Risk Factors

pandemics, such as the COVID-19 pandemic, and actions
by businesses, communities and governments in response,
could lead to launch delays, product shortage,
unanticipated costs, lost revenues and damage to our
reputation. For example, in the past we have experienced a
global information technology systems interruption that
affected our customer ordering, distribution, and
manufacturing processes, and we have been adversely
impacted by, and may continue to be adversely impacted
by, the global COVID-19 pandemic and the responses of
governments and of our partners, including suppliers,
manufacturers, distributors and other businesses.
Furthermore, any failure to identify and address
manufacturing problems prior to the release of products to
our customers could result in quality or safety issues.

In addition, many of our products require sterilization
before sale and several of our key products are
manufactured or sterilized at a particular facility, with limited
alternate facilities. If an event occurs that results in damage
to or closure of one or more of such facilities, such as the
Illinois Environmental Protection Agency’s decision to close
a supplier’s sterilization facility in February 2019, we may be
unable to manufacture or sterilize the relevant products to
the required quality specifications or at all. Because of the
time required to approve and license a manufacturing or
sterilization facility, a third-party may not be available on a
timely basis to replace production capacity in the event
manufacturing or sterilization capacity is lost.

Our research and development efforts rely
upon investments and investment
collaborations, and we cannot guarantee
that any previous or future investments or
investment collaborations will be successful.

Our Mission is to provide a broad range of therapies to
restore patients to fuller, healthier lives, which requires a
wide variety of technologies, products and capabilities.
The rapid pace of technological development in the
medical industry and the specialized expertise required in
different areas of medicine make it difficult for one
company alone to develop a broad portfolio of
technological solutions. In addition to internally generated
growth through our research and development efforts,
historically we have relied, and expect to continue to rely,
upon investments and investment collaborations to
provide us access to new technologies both in areas
served by our existing businesses as well as in new areas.

We expect to make future investments where we believe
that we can stimulate the development or acquisition of
new technologies and products to further our strategic
objectives and strengthen our existing businesses.
Investments and investment collaborations in and with
medical technology companies are inherently risky, and we
cannot guarantee that any of our previous or future
investments or investment collaborations will be successful
or will not materially adversely affect our business, results of
operations, financial condition and cash flows.

MEDTRONIC PLC 2022 Form 10-K 25

PART I
Item 1A Risk Factors

The continuing development of many of our
products depends upon us maintaining strong
relationships with healthcare professionals.

If we fail to maintain our working relationships with
healthcare professionals, many of our products may not be
developed and marketed in line with the needs and
expectations of the professionals who use and support our
products, which could cause a decline in our earnings and
profitability. The research, development, marketing and sales
of many of our new and improved products depends on our
maintaining working relationships with healthcare
professionals. We rely on these professionals to provide us
with considerable knowledge and experience regarding the
development, marketing and sale of our products. Physicians
assist us as researchers, marketing and product consultants,
inventors and public speakers. In addition, as a result of the
COVID-19 pandemic, our access to these professionals has
been limited at times, and travel restrictions, shutdowns and
similar measures have impacted our ability to maintain these
relationships, thereby affecting our ability to develop, market
and sell new and improved products. If we are unable to
maintain strong relationships with these professionals, the
development and marketing of our products could suffer,
which could have a material adverse effect on our business,
results of operations, financial condition, and cash flows.

We have debt obligations that create risk.

We are required to use a portion of our operating cash flow to
pay interest or principal on our outstanding indebtedness
instead of for other corporate purposes, including funding
future expansion of our business. We may also incur
additional indebtedness in the future to supplement our
existing liquidity and cash generated from operations to
satisfy our needs for working capital and capital expenditures,
to pursue growth initiatives, and to make returns of capital to
shareholders. At the time we incur such additional
indebtedness, or refinance or restructure existing
indebtedness, we may be unable to obtain capital market
financing with similar terms and currency denomination, or at
all, which could have a material adverse effect on our business
and results of operations. At any time, the value of our debt
outstanding will fluctuate based on several factors including
foreign currency exchange rate and interest rate movements.

Failure to integrate acquired businesses into
our operations successfully, as well as liabilities
or claims relating to such acquired businesses,
could adversely affect our business.

As part of our strategy to develop and identify new products
and technologies, we have made several significant
acquisitions in recent years, and may make additional
acquisitions in the future. Our integration of the operations of
acquired businesses requires significant efforts, including the
coordination of information technologies, research and
development, sales and marketing, operations,
manufacturing, and finance. These efforts result in additional

26 MEDTRONIC PLC 2022 Form 10-K

expenses and involve significant amounts of management’s
time that cannot then be dedicated to other projects. Our
failure to manage and coordinate the growth of acquired
companies successfully could also have an adverse impact on
our business. Further, acquired businesses may have
liabilities, or be subject to claims, litigation or investigations
that we did not anticipate or which exceed our estimates at
the time of the acquisition. In addition, we cannot be certain
that the businesses we acquire will become profitable or
remain so. Factors that will affect the success of our
acquisitions include:

(cid:2) the presence or absence of adequate internal controls
and/or significant fraud in the financial systems of
acquired companies,

(cid:2) our ability or inability to integrate information

technology systems of acquired companies in a secure
and reliable manner,

(cid:2) liabilities, claims, litigation, investigations, or other

adverse developments relating to acquired businesses
or the business practices of acquired companies,
including investigations by governmental entities,
potential FCPA or product liability claims or other
unanticipated liabilities,

(cid:2) any decrease in customer loyalty and product orders

caused by dissatisfaction with the combined companies’
product lines and sales and marketing practices,
including price increases,

(cid:2) our ability to retain key employees, and

(cid:2) the ability to achieve synergies among acquired

companies, such as increasing sales of the integrated
company’s products, achieving cost savings, and
effectively combining technologies to develop new
products.

We also could experience negative effects on our business,
results of operations, financial condition, and cash flows
from acquisition-related charges, amortization of intangible
assets and asset impairment charges.

Legal and Regulatory Risks

We are subject to extensive and complex
laws and governmental regulations and any
adverse regulatory action may materially
adversely affect our financial condition and
business operations.

Our medical devices and technologies, as well as our
business activities, are subject to a complex set of
regulations and rigorous enforcement, including by the
U.S. FDA, U.S. Department of Justice, Health and Human
Services-Office of the Inspector General, and numerous
other federal, state, and non-U.S. governmental authorities.
To varying degrees, each of these agencies requires us to
comply with laws and regulations governing the
development, testing, manufacturing, labeling, marketing

and distribution of our products. As a part of the regulatory
process of obtaining marketing clearance for new products
and new indications for existing products, we conduct and
participate in numerous clinical trials with a variety of study
designs, patient populations, and trial endpoints.
Unfavorable clinical data from existing or future clinical
trials may adversely impact our ability to obtain product
approvals, our position in, and share of, the markets in
which we participate, and our business, results of
operations, financial condition, and cash flows. We cannot
guarantee that we will be able to obtain or maintain
marketing clearance for our new products or
enhancements or modifications to existing products, and
the failure to maintain approvals or obtain approval or
clearance could have a material adverse effect on our
business, results of operations, financial condition and cash
flows. Even if we are able to obtain approval or clearance, it
may:

(cid:2) take a significant amount of time,

(cid:2) require the expenditure of substantial resources,

(cid:2) involve stringent clinical and pre-clinical testing, as well

as increased post-market surveillance,

(cid:2) involve modifications, repairs or replacements of our

products, and

(cid:2) limit the proposed uses of our products.

Both before and after a product is commercially released,
we have ongoing responsibilities under the U.S. FDA and
other applicable non-U.S. government agency regulations.
For instance, many of our facilities and procedures and
those of our suppliers are also subject to periodic
inspections by the U.S. FDA to determine compliance with
applicable regulations. The results of these inspections can
include inspectional observations on the U.S. FDA’s
Form-483, warning letters, or other forms of enforcement.
If the U.S. FDA were to conclude that we are not in
compliance with applicable laws or regulations, or that any
of our medical products are ineffective or pose an
unreasonable health risk, the U.S. FDA could ban such
medical products, detain or seize adulterated or
misbranded medical products, order a recall, repair,
replacement, or refund of such products, refuse to grant
pending pre-market approval applications or require
certificates of non-U.S governments for exports, and/or
require us to notify health professionals and others that the
devices present unreasonable risks of substantial harm to
the public health. The U.S. FDA and other non-U.S.
government agencies may also assess civil or criminal
penalties against us, our officers or employees and impose
operating restrictions on a company-wide basis. The U.S.
FDA may also recommend prosecution to the U.S.
Department of Justice. Any adverse regulatory action,
depending on its magnitude, may restrict us from
effectively marketing and selling our products and limit our
ability to obtain future pre-market clearances or approvals,
and could result in a substantial modification to our
business practices and operations. Furthermore, we
occasionally receive subpoenas or other requests for

PART I
Item 1A Risk Factors

information from state and federal governmental agencies,
and while these investigations typically relate primarily to
financial arrangements with healthcare providers,
regulatory compliance and product promotional practices,
we cannot predict the timing, outcome or impact of any
such investigations. Any adverse outcome in one or more
of these investigations could include the commencement
of civil and/or criminal proceedings, substantial fines,
penalties, and/or administrative remedies, including
exclusion from government reimbursement programs and/
or entry into Corporate Integrity Agreements (CIAs) with
governmental agencies. In addition, resolution of any of
these matters could involve the imposition of additional,
costly compliance obligations. These potential
consequences, as well as any adverse outcome from
government investigations, could have a material adverse
effect on our business, results of operations, financial
condition, and cash flows.

In addition, the U.S. FDA has taken the position that device
manufacturers are prohibited from promoting their
products other than for the uses and indications set forth in
the approved product labeling, and any failure to comply
could subject us to significant civil or criminal exposure,
administrative obligations and costs, and/or other potential
penalties from, and/or agreements with, the federal
government.

Governmental regulations in the U.S. and outside the U.S.
are constantly changing and may become increasingly
stringent. In the European Union, for example, the Medical
Device Regulation which became effective in May 2021
includes significant additional pre-market and post-market
requirements. Penalties for regulatory non-compliance
could be severe, including fines and revocation or
suspension of a company’s business license, mandatory
price reductions and criminal sanctions. The development
and implementation of future laws and regulations may
have a material adverse effect on us.

Our failure to comply with laws and
regulations relating to reimbursement of
healthcare goods and services may subject
us to penalties and adversely impact our
reputation, business, results of operations,
financial condition and cash flows.

Our devices, products and therapies are purchased
principally by hospitals or physicians that typically bill
various third-party payers, such as governmental
healthcare programs (e.g., Medicare, Medicaid and
comparable non-U.S. programs), private insurance plans
and managed care plans, for the healthcare services
provided to their patients. The ability of our customers to
obtain appropriate reimbursement for products and
services from third-party payers is critical because it affects
which products customers purchase and the prices they
are willing to pay. As a result, our devices, products and
therapies are subject to regulation regarding quality and

MEDTRONIC PLC 2022 Form 10-K 27

PART I
Item 1A Risk Factors

cost by HHS, including the Centers for Medicare &
Medicaid Services (CMS), as well as comparable state and
non-U.S. agencies responsible for reimbursement and
regulation of health are goods and services, including laws
and regulations related to kickbacks, false claims, self-
referrals and healthcare fraud. Many states have similar
laws that apply to reimbursement by state Medicaid and
other funded programs as well as in some cases to all
payers. In certain circumstances, insurance companies
attempt to bring a private cause of action against a
manufacturer for causing false claims. In addition, as a
manufacturer of U.S. FDA-approved devices reimbursable
by federal healthcare programs, we are subject to the
Physician Payments Sunshine Act, which requires us to
annually report certain payments and other transfers of
value we make to U.S.-licensed physicians or U.S. teaching
hospitals. Any failure to comply with these laws and
regulations could subject us or our officers and employees
to criminal and civil financial penalties.

We are also subject to risks relating to changes in
government and private medical reimbursement programs
and policies, and changes in legal regulatory requirements
in the U.S. and around the world. Implementation of further
legislative or administrative reforms to these
reimbursement systems, or adverse decisions relating to
coverage of or reimbursement for our products by
administrators of these systems, could have an impact on
the acceptance of and demand for our products and the
prices that our customers are willing to pay for them.

We are substantially dependent on patent
and other proprietary rights and failing to
protect such rights or to be successful in
litigation related to our rights or the rights of
others may result in our payment of
significant monetary damages and/or
royalty payments, negatively impacting our
ability to sell current or future products.

We are substantially dependent on patent and other
proprietary rights and rely on a combination of patents,
trademarks, tradenames, copyrights, trade secrets, and
agreements (such as employee, non-disclosure and
non-competition agreements) to protect our business and
proprietary intellectual property. We also operate in an
industry characterized by extensive patent litigation. Patent
litigation can result in significant damage awards and
injunctions that could prevent our manufacture and sale of
affected products or require us to pay significant royalties
in order to continue to manufacture or sell affected
products. At any given time, we are generally involved as
both a plaintiff and a defendant in a number of patent
infringement actions, the outcomes of which may not be
known for prolonged periods of time. While it is not
possible to predict the outcome of patent litigation, it is
possible that the results of such litigation could require us
to pay significant monetary damages and/or royalty
payments, negatively impact our ability to sell current or

28 MEDTRONIC PLC 2022 Form 10-K

future products, or that enforcement actions to protect our
patent and proprietary rights against others could be
unsuccessful, any of which could have a material adverse
impact on our business, results of operations, financial
condition, and cash flows. In addition, any public
announcements related to litigation or administrative
proceedings initiated or threatened against us could cause
our stock price to decline.

While we intend to defend against any threats to our
intellectual property, our patents, trademarks, tradenames,
copyrights, trade secrets or agreements (such as
employee, non-disclosure and non-competition
agreements) may not adequately protect our intellectual
property. Further, pending patent applications may not
result in patents being issued to us, patents issued to or
licensed by us may be challenged or circumvented by
competitors and such patents may be found invalid,
unenforceable or too limited in scope to protect our
technology or provide us with any competitive advantage.
In addition, our patents will expire over time, our ability to
protect novel business models is uncertain, and
infringement may go undetected. Third parties could
obtain patents that may require us to negotiate licenses to
conduct our business, and such licenses may not be
available on reasonable terms or at all. In addition, license
agreements could be terminated. We also rely on
non-disclosure and non-competition agreements with
certain employees, consultants and other parties to
protect, in part, trade secrets and other proprietary rights.
We cannot be certain that these agreements will not be
breached, that we will have adequate remedies for any
breach, that others will not independently develop
substantially equivalent proprietary information, or that
third parties will not otherwise gain access to our trade
secrets or proprietary knowledge.

In addition, the laws of certain countries in which we
market or manufacture some of our products do not
protect our intellectual property rights to the same extent
as the laws of the U.S., which could make it easier for
competitors to capture market position. Competitors also
may harm our sales by designing products that
substantially mirror the capabilities of our products or
technology without infringing our intellectual property
rights. If we are unable to protect our intellectual property
in these countries, it could have a material adverse effect
on our business, results of operations, financial condition,
and cash flows.

Quality problems could lead to recalls or
safety alerts, product liability claims,
reputational harm, adverse verdicts or costly
settlements, and could have a material
adverse effect on our business, results of
operations, financial condition and cash
flows.

Quality is extremely important to us and our customers due
to the impact on patients, and the serious and potentially

costly consequences of adverse product performance. Our
business exposes us to potential product liability risks that
are inherent in the design, manufacture, and marketing of
medical devices. In addition, many of our products are
often used in intensive care settings with seriously ill
patients and some of the medical devices we manufacture
and sell are designed to be implanted in the human body
for long periods of time or indefinitely. Component failures,
manufacturing nonconformances, design defects, off-label
use, or inadequate disclosure of product-related risks or
product-related information with respect to our products, if
they were to occur, could result in an unsafe condition or
injury to, or death of, a patient. These problems could lead
to recall of, or issuance of a safety alert relating to, our
products, and could result in product liability claims and
lawsuits, including class actions, which could ultimately
result, in certain cases, in the removal from the body of such
products and claims regarding costs associated therewith.
Due to the strong name recognition of the Medtronic
brand, a material adverse event involving one of our
products could result in diminished market acceptance and
demand for all products within that brand, and could harm
our reputation and ability to market products in the future.
Further, we may be exposed to additional potential product
liability risks related to products designed, manufactured
and/or marketed in response to the COVID-19 pandemic,
and unpredictable or accelerated changes in demand for
certain of our products in connection with COVID-19 and its
related impacts could impact development and production
of products and services and could increase the risk of
regulatory enforcement actions, product defects or related
claims, as well as adversely impact our customer
relationships and reputation.

Strong product quality is critical to the success of our
goods and services. If we fall short of these standards and
our products are the subject of recalls or safety alerts, our
reputation could be damaged, we could lose customers
and our revenue and results of operations could decline.
Our success also can depend on our ability to manufacture
to exact specification precision-engineered components,
subassemblies and finished devices from multiple
materials. If our components fail to meet these standards
or fail to adapt to evolving standards, our reputation,
competitive advantage and market share could be harmed.
In certain situations, we may undertake a voluntary recall of
products or temporarily shut down production lines based
on performance relative to our own internal safety and
quality monitoring and testing data.

Any of the foregoing problems, including future product
liability claims or recalls, regardless of their ultimate
outcome, could harm our reputation and have a material
adverse effect on our business, results of operations,
financial condition and cash flows.

Healthcare policy changes may have a
material adverse effect on us.

In response to perceived increases in healthcare costs in
recent years, there have been and continue to be actions

PART I
Item 1A Risk Factors

and proposals by several governments, regulators and
third-party payers globally, including the U.S. federal and
state governments, to control these costs and, more
generally, to reform healthcare systems. Certain of these
actions and proposals, among other things, limit the prices
we are able to charge for our products or the amounts of
reimbursement available for our products and could limit
the acceptance and availability of our products. These
actions and proposals could have a material adverse effect
on our business, results of operations, financial condition
and cash flows.

We rely on the proper function, security and
availability of our information technology
systems and data, as well as those of third
parties throughout our global supply chain,
to operate our business, and a breach,
cyber-attack or other disruption to these
systems or data could materially and
adversely affect our business, results of
operations, financial condition, cash flows,
reputation or competitive position.
We are increasingly dependent on sophisticated
information technology systems to operate our business.
That technology includes systems that could be used to
process, transmit and store sensitive data. Additionally,
many of our products and services include integrated
software and information technology that collects data
regarding patients or connects to other internal systems.
One of the most prevalent attacks on large organizations
has been ransomware which can have a devastating impact
on an organization’s operations. We have invested in
ransomware readiness in the pursuit of both prevention
and rapid response to a ransomware event. Like all
organizations, we routinely experience attempted
interference with the integrity of, and interruptions in, our
technology systems via events such as cyber-attacks,
malicious intrusions, or other breakdowns. The
consequences could mean data breaches, interference
with the integrity of our products and data, compromise of
intellectual property or other proprietary information, or
other significant disruptions. Furthermore, we rely on third-
party vendors to supply and/or support certain aspects of
our information technology systems and resulting
products. As we have seen with recent “Supply Chain
Attacks,” these third-party systems could also become
vulnerable to cyber-attack, malicious intrusions,
breakdowns, interference, or other significant disruptions,
and may contain defects in design or manufacture or other
problems that could result in system disruption or
compromise the information security of our own systems.
The Russia-Ukraine conflict may increase cybersecurity risks
on a global basis. Lastly, we continue to grow in part
through new business acquisitions and, as a result, may
face risks associated with defects and vulnerabilities in their
systems, or difficulties or other breakdowns or disruptions
in connection with the integration of the acquisitions into
our information technology systems.

MEDTRONIC PLC 2022 Form 10-K 29

PART I
Item 1A Risk Factors

Our worldwide operations mean that we are subject to
laws and regulations, including data protection and
cybersecurity laws and regulations, in many jurisdictions.
The variety of U.S. and international privacy and
cybersecurity laws and regulations impacting our
operations are described in “Item 1. Business” – Other
Factors Impacting Our Operations – Data Privacy and
Security Laws and Regulations. Any data security breaches,
cyber-attacks, malicious intrusions or significant disruptions
could result in actions by regulatory bodies and/or civil
litigation, any of which could materially and adversely
affect our business, results of operations, financial
condition, cash flows, reputation, or competitive position.

In addition, our information technology systems require an
ongoing commitment of significant resources to maintain,
protect, and enhance existing systems and develop new
systems. This enables us to keep pace with continuing
changes in information processing technology, evolving legal
and regulatory standards, the increasing need to protect
patient and customer information, changes in the techniques
used to obtain unauthorized access to data and information
systems, and the information technology needs associated
with our changing products and services. There can be no
assurance that our extensive efforts (including, but not limited
to, consolidating, protecting, upgrading, and expanding our
systems and capabilities, continuing to build security into the
design of our products, and developing new systems to keep
pace with continuing changes in information processing
technology) will be successful or that additional systems
issues will not arise in the future.

If our information technology systems, products or services
or sensitive data are compromised, there are many
consequences that could result. Consequences include,
but are not limited to patients or employees being
exposed to financial or medical identity theft or suffer a
loss of product functionality, losing existing customers or
have difficulty attracting new customers, experiencing
difficulty preventing, detecting, and controlling fraud,
being exposed to the loss or misuse of confidential
information, having disputes with customers, physicians,
and other healthcare professionals, suffering regulatory
sanctions or penalties under federal laws, state laws, or the
laws of other jurisdictions, experiencing increases in
operating expenses or an impairment in our ability to
conduct our operations, incurring expenses or losing
revenues as a result of a data privacy breach, product
failure, information technology outages or disruptions, or
suffering other adverse consequences including lawsuits or
other legal action and damage to our reputation.

The failure to comply with anti-corruption
laws could materially adversely affect our
business and result in civil and/or criminal
sanctions.

The U.S. Foreign Corrupt Practices Act (FCPA), the Irish
Criminal Justice (Corruption Offences) Act 2018, and
similar anti-corruption laws in other jurisdictions generally

30 MEDTRONIC PLC 2022 Form 10-K

prohibit companies and their intermediaries from making
improper payments to government officials for the
purpose of obtaining or retaining business. Because of the
predominance of government-administered healthcare
systems in many jurisdictions around the world, many of
our customer relationships outside of the U.S. are with
governmental entities and are therefore potentially subject
to such laws. We also participate in public-private
partnerships and other commercial and policy
arrangements with governments around the globe.

Global enforcement of anti-corruption laws has increased
in recent years, including investigations and enforcement
proceedings leading to assessment of significant fines and
penalties against companies and individuals. Our
international operations create a risk of unauthorized
payments or offers of payments by one of our employees,
consultants, sales agents, or distributors. We maintain
policies and programs to implement safeguards to educate
our employees and agents on these legal requirements,
and to prevent and prohibit improper practices. However,
existing safeguards and any future improvements may not
always be effective, and our employees, consultants, sales
agents or distributors may engage in conduct for which we
could be held responsible. In addition, regulators could
seek to hold us liable for conduct committed by companies
in which we invest or that we acquire. Any alleged or actual
violations of these regulations may subject us to
government scrutiny, criminal or civil sanctions and other
liabilities, including exclusion from government
contracting, and could disrupt our business, adversely
affect our reputation and result in a material adverse effect
on our business, results of operations, financial condition
and cash flows.

Laws and regulations governing
international business operations could
adversely impact our business.

The U.S. Department of the Treasury’s Office of Foreign
Assets Control (OFAC) and the U.S. Commerce
Department’s Bureau of Industry and Security (BIS)
administer certain laws and regulations that restrict U.S.
persons and, in some instances, non-U.S. persons, in
conducting activities, transacting business with, or making
investments in, certain countries, governments, entities and
individuals subject to U.S. economic sanctions or export
restrictions. Our international operations subject us to
these laws and regulations, which are complex, restrict our
business dealings with certain countries, governments,
entities, and individuals, and are constantly changing.
Further restrictions may be enacted, amended, enforced or
interpreted in a manner that materially impacts our
operations.

From time to time, certain of our subsidiaries have limited
business dealings in countries subject to comprehensive
sanctions, including Iran, Syria, Cuba and the region of
Crimea. Certain of our subsidiaries sell medical devices,
and may provide related services, to distributors and other
purchasing bodies in such countries. These business

dealings represent an insignificant amount of our
consolidated revenues and income, but expose us to a
heightened risk of violating applicable sanctions
regulations. Violations of these regulations are punishable
by civil penalties, including fines, denial of export
privileges, injunctions, asset seizures, debarment from
government contracts and revocations or restrictions of
licenses, as well as criminal fines and imprisonment. We
have established policies and procedures designed to
assist with our compliance with such laws and regulations.
However, there can be no assurance that our policies and
procedures will prevent us from violating these regulations
in every transaction in which we may engage, and such a
violation could adversely affect our reputation, business,
results of operations, financial condition, and cash flows.

Climate change, or legal, regulatory or
market measures to address climate change
may materially adversely affect our financial
condition and business operations.

Climate change resulting from increased concentrations of
carbon dioxide and other greenhouse gases in the
atmosphere presents risks to our current and future
operations from natural disasters and extreme weather
conditions, such as hurricanes, tornadoes, earthquakes,
wildfires or flooding. Such extreme weather conditions and
other conditions caused by or related to climate change
could increase our operational costs, pose physical risks to
our facilities and adversely impact our supply chain,
including: manufacturing and distribution networks, the
availability and cost of raw materials and components,
energy supply, transportation, or other inputs necessary for
the operation of our business. The impacts of climate
change on global water resources may result in water
scarcity, which could impact our ability to access sufficient
quantities of water in certain locations and result in
increased costs. Concerns over climate change could have
an impact on customer demand for our products and result
in new legal or regulatory requirements designed to
mitigate the effects of climate change on the environment.
Although it is difficult to predict and adequately prepare to
meet the challenges to our business posed by climate
change, if new laws or regulations are more stringent than
current legal or regulatory requirements, we may
experience increased compliance burdens and costs to
meet the regulatory obligations as well as adverse impacts
on raw material sourcing, manufacturing operations and
the distribution of our products.

We are subject to environmental laws and
regulations and the risk of environmental
liabilities, violations and litigation.

We are subject to environmental, health, and safety laws, and
regulations concerning, among other things, the generation,
handling, transportation, and disposal of hazardous
substances or wastes, the remediation of hazardous
substances or materials at various sites, and emissions or

PART I
Item 1A Risk Factors

discharges into the land, air or water. We are further subject
to numerous, laws and regulations concerning, among other
things, chemical constituents in medical products and
end-of-life disposal and take-back programs for medical
devices. Our operations and those of certain third-party
suppliers involve the use of substances subject to these laws
and regulations, primarily those used in manufacturing and
sterilization processes. If we or our suppliers violate these
environmental laws and regulations, facilities could be shut
down and violators could be fined, or otherwise sanctioned.
New laws and regulations, violations of these laws or
regulations, stricter enforcement of existing requirements, or
the discovery of previously unknown contamination could
require us to incur costs or could become the basis for new
or increased liabilities that could be material.

Our insurance program may not be
adequate to cover future losses.

We have elected to self-insure most of our insurable risks
across the Company, and we made this decision based on
cost and availability factors in the insurance marketplace.
We manage and maintain a portion of our self-insured
program through a wholly-owned captive insurance
company. We continue to maintain a directors and officers
liability insurance policy with third-party insurers that
provides coverage for the directors and officers of the
Company. We continue to monitor the insurance
marketplace to evaluate the value of obtaining insurance
coverage for other categories of losses in the future.
Although we believe, based on historical loss trends, that
our self-insurance program accruals and our existing
insurance coverage will be adequate to cover future losses,
historical trends may not be indicative of future losses. The
absence of third-party insurance coverage for other
categories of losses increases our exposure to
unanticipated claims and these losses could have a
material adverse impact on our business, results of
operations, financial condition and cash flows.

Changes in tax laws or exposure to additional
income tax liabilities could have a material
impact on our business, results of operations,
financial condition and cash flows.

We are subject to income taxes, as well as non-income
based taxes, in the U.S., Ireland, and various other
jurisdictions in which we operate. The tax laws in the U.S.,
Ireland and other countries in which we and our affiliates
do business could change on a prospective or retroactive
basis, and any such changes could materially adversely
affect our business and our effective tax rate. For example,
on December 22, 2017, the U.S. enacted comprehensive
tax legislation, commonly referred to as the Tax Cuts and
Jobs Act (the “Tax Act”), which resulted in a significant
charge to tax expense during our fiscal year 2018
associated with U.S. taxation of accumulated foreign
earnings as well as the requirement to revalue U.S.
deferred tax assets and liabilities resulting from the

MEDTRONIC PLC 2022 Form 10-K 31

PART I
Item 1A Risk Factors

reduction in the U.S. corporate tax rate. In addition, the
Biden Administration has provided a framework for
proposed U.S. tax law changes, which if enacted could
have a material impact on our business, results of
operations, financial condition, and cash flows.

In October 2021, the Organization for Economic
Cooperation and Development (OECD) secured
agreement from 136 countries to push forward with
proposals to fundamentally rewrite International Tax rules
which if enacted by these countries, will likely impact the
amount of tax multinationals such as Medtronic pay in the
future. During 2022 and 2023 more details on these
proposals will be released and various consultations will
take place. The OECD has set a timeline for the
implementation of these proposals in 2023 but may end up
being deferred to a later date.

The aggressive nature of the timeline set by the OECD may
mean that all implications for business may not have been
fully worked through or fully understood before rules are
finalized. We continue to monitor the implications
potentially resulting from this guidance. This action
together with other legislative changes in many countries
on the mandatory sharing of company information
(financial and operational) with taxing authorities on a local
and global basis under various information sharing
initiatives, could lead to disagreements between
jurisdictions associated with the proper allocation of profits
between such jurisdictions.

We are subject to ongoing tax audits in the various
jurisdictions in which we operate. Tax authorities may
disagree with certain positions we have taken and assess
additional taxes. We regularly assess the likely outcomes of
these audits in order to determine the appropriateness of
our tax provision. However, there can be no assurance that
we will accurately predict the outcomes of these audits,
and the actual outcomes of these audits could have a
material impact on our business, results of operations,
financial condition, and cash flows.

We have recorded reserves for potential payments of tax to
various tax authorities related to uncertain tax positions.
However, the calculation of such tax liabilities involves the
application of complex tax laws, regulations and treaties
(where applicable) in many jurisdictions. Therefore, any
dispute with a tax authority may result in a payment that is
significantly different from current estimates. If payment of
these amounts ultimately proves to be less than the recorded
amounts, the reversal of the liabilities generally would result
in tax benefits being recognized in the period when we
determine the liabilities are no longer necessary. If our
estimate of tax liabilities proves to be less than the amount
for which it is ultimately liable, we would incur additional
charges, and such charges could have a material adverse
effect on our business, results of operations, financial
condition, and cash flows.

32 MEDTRONIC PLC 2022 Form 10-K

The Medtronic, Inc. tax court proceeding
outcome could have a material adverse
impact on our financial condition.

In March 2009, the IRS issued its audit report for Medtronic
Inc. for fiscal years 2005 and 2006. Medtronic, Inc. reached
agreements with the IRS on some, but not all matters
related to these fiscal years. The remaining unresolved
issue for fiscal years 2005 and 2006 relates to the allocation
of income between Medtronic, Inc. and its wholly-owned
subsidiary operating in Puerto Rico, which is one of our key
manufacturing sites. An adverse outcome in this matter
could materially and adversely affect our business, results
of operations, financial condition, and cash flows. See Note
18 to the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.

Future potential changes to the U.S. tax laws
could result in us being treated as a U.S.
corporation for U.S. federal tax purposes, and
the IRS may not agree with the conclusion that
we should be treated as a foreign corporation
for U.S federal income tax purposes.

Because Medtronic plc is organized under the laws of
Ireland, we would generally be classified as a foreign
corporation under the general rule that a corporation is
considered tax resident in the jurisdiction of its organization
or incorporation for U.S. federal income tax purposes. Even
so, the IRS may assert that we should be treated as a U.S.
corporation (and, therefore, a U.S. tax resident) for U.S.
federal income tax purposes pursuant to Section 7874 of
the U.S. Internal Revenue Code of 1986, as amended (the
Code). In addition, a retroactive change to U.S. tax laws in
this area could change this classification. If we were to be
treated as a U.S. corporation for federal tax purposes, we
could be subject to substantially greater U.S. tax liability
than currently contemplated as a non-U.S. corporation.

Legislative or other governmental action
relating to the denial of U.S. federal or state
governmental contracts to U.S. companies
that redomicile abroad could adversely
affect our business.

Various U.S. federal and state legislative proposals that
would deny governmental contracts to U.S. companies that
move their corporate location abroad may affect us. We
are unable to predict the likelihood that, or final form in
which, any such proposed legislation might become law,
the nature of the regulations that may be promulgated
under any future legislative enactments, or the effect such
enactments and increased regulatory scrutiny may have on
our business.

PART I
Item 1A Risk Factors

Risks Relating to Our Jurisdiction of Incorporation

We are incorporated in Ireland, and Irish law
differs from the laws in effect in the U.S. and
may afford less protection to holders of our
securities.
Our shareholders may have more difficulty protecting their
interests than would shareholders of a corporation
incorporated in a jurisdiction of the United States. It may
not be possible to enforce court judgments obtained in the
U.S. against us in Ireland based on the civil liability
provisions of the U.S. federal or state securities laws. In
addition, there is some uncertainty as to whether the courts
of Ireland would recognize or enforce judgments of U.S.
courts obtained against us or our directors or officers
based on the civil liabilities provisions of the U.S. federal or
state securities laws or hear actions against us or those
persons based on those laws. We have been advised that
the U.S. currently does not have a treaty with Ireland
providing for the reciprocal recognition and enforcement
of judgments in civil and commercial matters. Therefore, a
final judgment for the payment of money rendered by any
U.S. federal or state court based on civil liability, whether or
not based solely on U.S. federal or state securities laws,
would not automatically be enforceable in Ireland.

As an Irish company, we are governed by the Irish
Companies Act 2014, which differs in some material
respects from laws generally applicable to U.S.
corporations and shareholders, including, among others,
differences relating to interested director and officer
transactions and shareholder lawsuits. Likewise, the duties
of directors and officers of an Irish company generally are
owed to the company only. Shareholders of Irish
companies generally do not have a personal right of action
against directors or officers of the company and may
exercise such rights of action on behalf of the company
only in limited circumstances. Accordingly, holders of our
securities may have more difficulty protecting their
interests than would holders of securities of a corporation
incorporated in the U.S.

As an Irish public limited company, certain
capital structure decisions require
shareholder approval, which may limit
Medtronic’s flexibility to manage its capital
structure.
Under Irish law, our authorized share capital can be
increased by an ordinary resolution of our shareholders
and the directors may issue new ordinary or preferred
shares, without shareholder approval, once authorized to
do so by our articles of association or by an ordinary
resolution of our shareholders. Additionally, subject to
specified exceptions, Irish law grants statutory preemption
rights to existing shareholders where shares are being
issued for cash consideration but allows shareholders to
disapply such statutory preemption rights either in our
articles of association or by way of special resolution. Such

disapplication can either be generally applicable or be in
respect of a particular allotment of shares. Accordingly, at
our 2021 Annual General Meeting, our Shareholders
authorized our Board of Directors to issue up to 33% of our
issued ordinary shares and further authorized our Board of
Directors to issue up to 10% of such shares for cash without
first offering them to our existing shareholders (provided
that with respect to 5% of such shares, such allotment is to
be used for the purposes of a specified capital investment).
Both of these authorizations will expire on June 9, 2023,
unless renewed by shareholders for a further period. We
anticipate seeking new authorizations at our 2022 Annual
General Meeting and in subsequent years. We cannot
provide any assurance that these authorizations will always
be approved, which could limit our ability to issue equity
and thereby adversely affect the holders of our securities.

A transfer of our shares, other than ones
effected by means of the transfer of book-
entry interests in the Depository Trust
Company, may be subject to Irish stamp
duty.

Transfers of our shares effected by means of the transfer of
book entry interests in the Depository Trust Company
(DTC) will not be subject to Irish stamp duty. However, if a
shareholder holds our shares directly rather than
beneficially through DTC, any transfer of shares could be
subject to Irish stamp duty (currently at the rate of 1% of
the higher of the price paid or the market value of the
shares acquired). Payment of Irish stamp duty is generally a
legal obligation of the transferee. The potential for stamp
duty could adversely affect the price of shares.

In certain limited circumstances, dividends
we pay may be subject to Irish dividend
withholding tax and dividends received by
Irish residents and certain other
shareholders may be subject to Irish income
tax.

In certain limited circumstances, dividend withholding tax
(currently at a rate of 25%) may arise in respect of
dividends paid on our shares. A number of exemptions
from dividend withholding tax exist such that shareholders
resident in the U.S. and other specified countries that have
a tax treaty with Ireland may be entitled to exemptions
from dividend withholding tax.

Shareholders resident in the U.S. that hold their shares
through DTC will not be subject to dividend withholding
tax, provided the addresses of the beneficial owners of
such shares in the records of the brokers holding such
shares are recorded as being in the U.S. (and such brokers
have further transmitted the relevant information to a
qualifying intermediary appointed by us). However, other

MEDTRONIC PLC 2022 Form 10-K 33

PART I
Item 1A Risk Factors

shareholders may be subject to dividend withholding tax,
which could adversely affect the price of their shares.

Shareholders entitled to an exemption from Irish dividend
withholding tax on dividends received from us will not be
subject to Irish income tax in respect of those dividends
unless they have some connection with Ireland other than
their shareholding in our Company (for example, they are
resident in Ireland). Shareholders who are not resident nor
ordinarily resident in Ireland, but who receive dividends
subject to Irish dividend withholding tax, will generally
have no further liability to Irish income tax on those
dividends.

Economic and Industry Risks

Changes in the prices of our goods and
services and/or inflationary costs may have a
material adverse effect on our business,
results of operations, financial condition and
cash flows.

We have experienced, and may continue to experience,
decreasing prices for certain of our goods and services
due to pricing pressure from managed care organizations
and other third-party payers on our customers, increased
market power of our customers as the medical device
industry consolidates and increased competition among
medical engineering and manufacturing services
providers. We have also recently experienced, and may
continue to experience, rising costs due to inflation. If the
prices for our goods and services change or inflation
continues to rise, we may be unable to sufficiently reduce
our expenses or offset rising costs through increased
prices to customers. As a result, our business, results of
operations, financial condition and cash flows may be
adversely affected.

We are subject to a variety of risks
associated with global operations that could
adversely affect our profitability and
operating results.

We develop, manufacture, distribute and sell our products
globally. We intend to continue to expand our operations
and to pursue growth opportunities outside the U.S.,
especially in emerging markets. Operations in different
countries including emerging markets could expose us to
additional and greater risks and potential costs, including:

(cid:2) fluctuations in currency exchange rates,

(cid:2) healthcare reform legislation,

(cid:2) the need to comply with different regulatory regimes
worldwide that are subject to change and that could
restrict our ability to manufacture and sell our products,

34 MEDTRONIC PLC 2022 Form 10-K

Our shares received by means of a gift or
inheritance could be subject to Irish capital
acquisitions tax.

Irish capital acquisitions tax (CAT) could apply to a gift or
inheritance of our shares irrespective of the place of
residence, ordinary residence or domicile of the parties.
This is because our shares will be regarded as property
situated in Ireland. The person who receives the gift or
inheritance has primary liability for CAT. Gifts and
inheritances passing between spouses are exempt from
CAT. Children currently have a tax-free threshold of
€335,000 in respect of taxable gifts or inheritances
received from their parents. Irish Revenue typically updates
the amount of this tax-free threshold on an annual basis.

(cid:2) local product preferences and product requirements,

(cid:2) longer-term receivables than are typical in the U.S.,

(cid:2) trade protection measures, tariffs and other border
taxes, and import or export licensing requirements,

(cid:2) less intellectual property protection in some countries

outside the U.S. than exists in the U.S.,

(cid:2) different labor regulations and workforce instability,

(cid:2) political and economic instability, including as a result of

wars and insurrections,

(cid:2) the expiration and non-renewal of foreign tax rulings

and/or grants,

(cid:2) potentially negative consequences from changes in or

interpretations of tax laws, and

(cid:2) economic instability and inflation, recession or interest

rate fluctuations.

The ongoing global economic competition and trade
tensions between the U.S. and China present risk to
Medtronic. Although we have been able to mitigate some of
the impact on Medtronic from increased duties imposed by
both sides (through petitioning both governments for tariff
exclusions and other mitigations), the risk remains of
additional tariffs and other kinds of restrictions. Tariff
exclusions awarded to Medtronic by the U.S. Government
require periodic renewal, and policies for granting exclusions
could shift. The U.S. and China could impose other types of
restrictions such as limitations on government procurement
or technology export restrictions, which could affect
Medtronic’s access to the markets. China comprises
approximately eight percent of our total revenues.

The Russia-Ukraine conflict and resulting sanctions and
export restrictions are creating barriers to doing business
in Russia and adversely impacting global supply chains.
While we have no manufacturing, distribution or direct
material suppliers in the region, we are closely monitoring
the potential raw material/sub-tier supplier impact in both

Russia and Ukraine. Materials like palladium and neon,
which are both dependent on Russia supply, are part of
broader semiconductor shortages in industry. Additional
sanctions, export restrictions, and potential
countermeasures within Russia may lead to greater
uncertainty and geopolitical shifts in Asia that could cause
additional adverse impacts on global supply chains and
our business, results of operations, financial condition and
cash flows.

More generally, several governments including the U.S.
have raised the possibility of policies to induce “re-shoring”
of supply chains, less reliance on imported supplies, and
greater national production. Examples include potential
“Buy America” requirements in the U.S. If such steps
triggered retaliation in other markets restricting access to
foreign products in purchases by their government-owned
healthcare systems, the result could be a significant impact
on Medtronic.

Other significant changes or disruptions to international
trade arrangements, such as termination or modifications
of other existing trade agreements, may adversely affect
our business, results of operations, financial condition and
cash flows. In addition, a significant amount of our trade
receivables are with national healthcare systems in many
countries. Repayment of these receivables is dependent
upon the political and financial stability of those countries.
In light of these global economic fluctuations, we continue
to monitor the creditworthiness of customers. Failure to
receive payment of all or a significant portion of these
receivables could adversely affect our business, results of
operations, financial condition and cash flows.

The COVID-19 pandemic, and the responses of business
and governments to the pandemic, have at times resulted
in reduced availability of air transport, port closures,
increased border controls or closures, increased
transportation costs and increased security threats to our
supply chain, and countries may continue to close borders,
impose prolonged quarantines, and further restrict travel
and other activities. Our business could be adversely
impacted if we are unable to successfully manage these
and other risks of global operations.

Finally, changes in currency exchange rates may impact the
reported value of our revenues, expenses, and cash flows.
We cannot predict changes in currency exchange rates, the
impact of exchange rate changes, nor the degree to which
we will be able to manage the impact of currency
exchange rate changes.

PART I
Item 1 B Unresolved Staff Comments

Consolidation in the healthcare industry
could have an adverse effect on our
revenues and results of operations.

Many healthcare industry companies, including healthcare
systems, distributors, manufacturers, providers, and
insurers, are consolidating or have formed strategic
alliances. As the healthcare industry consolidates,
competition to provide goods and services to industry
participants will become more intense. Further, this
consolidation creates larger enterprises with greater
negotiating power, which they can use to negotiate price
concessions. If we must reduce our prices because of
industry consolidation, or if we lose customers as a result of
consolidation, our business, results of operations, financial
condition, and cash flows could be adversely affected.

Healthcare industry cost-containment
measures could result in reduced sales of
our medical devices and medical device
components.

Most of our customers, and the healthcare providers to
whom our customers supply medical devices, rely on third-
party payers, including government programs and private
health insurance plans, to reimburse some or all of the cost
of the procedures in which medical devices that
incorporate components we manufacture or assemble are
used. The continuing efforts of governmental authorities,
insurance companies and other payers of healthcare costs
to contain or reduce these costs could lead to patients
being unable to obtain approval for payment from these
third-party payers. If third-party payer payment approval
cannot be obtained by patients, sales of finished medical
devices that include our components may decline
significantly and our customers may reduce or eliminate
purchases of our components. The cost-containment
measures that healthcare providers are instituting, both in
the U.S. and outside of the U.S., could harm our ability to
operate profitably. For example, managed care
organizations have successfully negotiated volume
discounts for pharmaceuticals, and GPOs and IDNs have
also concentrated purchasing decisions for some
customers, which has led to downward pricing pressure for
medical device companies, including us.

Item 1B. Unresolved Staff Comments

None.

MEDTRONIC PLC 2022 Form 10-K 35

PART I
Item 2 Properties

Item 2. Properties

Medtronic’s principal executive office is located in Ireland and is leased by the Company, while its main operational offices
are located in the Minneapolis, Minnesota metropolitan area and are owned by the Company.

The Company’s total manufacturing and research space is approximately 9.6 million square feet. Approximately 37 percent
of the manufacturing or research facilities are owned by Medtronic and the remaining balance is leased. The following is a
summary of the Company’s largest manufacturing facilities by location:

Location Country or State

Connecticut

Puerto Rico

Mexico

China

Minnesota

Italy

Ireland

Dominican Republic

Arizona

Switzerland

France

Colorado

Florida

California

Square Feet (in thousands)

1,138

811

762

735

623

485

446

304

294

283

268

259

255

210

Medtronic also maintains sales and administrative offices in the U.S. at five locations in five states and outside the U.S. at 129
locations in 62 countries. A majority of these locations are leased. The Company is using substantially all of its currently
available productive space to develop, manufacture, and market its products. The Company’s facilities are well-maintained,
suitable for their respective uses, and adequate for current needs.

Item 3.

Legal Proceedings

In accordance with Item 103 of Regulation S-K, we have adopted a $1 million disclosure threshold for proceedings under
environmental laws to which a governmental authority is a party, as we believe matters under this threshold are not material
to the Company. A discussion of the Company’s legal proceedings and other loss contingencies are described in Note 18 to
the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on
Form 10-K.

Item 4. Mine Safety Disclosures

Not applicable.

36 MEDTRONIC PLC 2022 Form 10-K

PART II

Item 5. Market for Medtronic’s Common Equity, Related

Shareholder Matters, and Issuer Purchases of Equity
Securities

The Company’s ordinary shares are listed on the New York Stock Exchange under the symbol “MDT.”

The following table provides information about the shares repurchased by the Company during the fourth quarter of fiscal year 2022:

Fiscal Period

Purchased Average Price Paid per Share

Total Number
of Shares

Total Number of Shares
Purchased as a Part of
Publicly Announced
Program

Maximum Approximate
Dollar Value of Shares
that may yet be Purchased
Under the Program

1/29/2022-2/25/2022

2/26/2022-4/1/2022

4/2/2022-4/29/2022

Total

1,130,750

6,141,716

5,627,112

12,899,578

103.16

107.85

110.47

108.58

1,130,750

6,141,716

5,627,112

12,899,578

4,234,214,099

3,571,839,180

2,950,215,113

In March 2019, the Company’s Board of Directors authorized
the repurchase of $6.0 billion of the Company’s ordinary
shares. There is no specific time-period associated with these
repurchase authorizations. For additional discussion, see
Note 11 to the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this Annual
Report on Form 10-K.

On June 20, 2022, there were approximately 22,372
shareholders of record of the Company’s ordinary shares.
Ordinary cash dividends declared and paid totaled $0.63 per
share for each quarter of fiscal year 2022 and $0.58 per share
for each quarter of fiscal year 2021. On May 26, 2022, the
Company announced an increase in Medtronic’s cash
dividends for the first quarter of fiscal year 2023, raising the
amount to $0.68 per share.

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total shareholder return on Medtronic’s ordinary shares with the cumulative
total shareholder return on the Standard & Poor’s (S&P) 500 Index and the S&P 500 Health Care Equipment Index for the last
five fiscal years. The graph assumes that $100 was invested at market close on April 24, 2017 in Medtronic’s ordinary shares,
the S&P 500 Index, and the S&P 500 Health Care Equipment Index and that all dividends were reinvested.

$300

$250

$200

$150

100

$100

100

$50

100

120
114

100

141
128

110

161

128
126

213

189
172

199

190

140

April 2017

April 2018

April 2019

April 2020

April 2021

April 2022

Medtronic plc

S&P 500 Health Care Equipment Index

S&P 500 Index

MEDTRONIC PLC 2022 Form 10-K 37

PART II
Item 5 Market for Medtronic’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities

Company/Index

Medtronic plc

S&P 500 Index

S&P 500 Health Care Equipment Index

April 2017

April 2018

April 2019

April 2020

April 2021

April 2022

100.00

100.06

109.91

127.67

172.10

140.27

100.00

114.20

120.35

128.28

141.25

126.28

160.75

189.28

213.16

189.68

198.87

For information on the Company’s equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Shareholder Matters” in this Annual Report on Form 10-K.

IRISH RESTRICTIONS ON IMPORT AND EXPORT OF CAPITAL

Except as indicated below, there are no restrictions on
non-residents of Ireland dealing in Irish domestic
securities, which includes ordinary shares of Irish
companies. Except as indicated below, dividends and
redemption proceeds also continue to be freely
transferable to non-resident holders of such securities. The
Financial Transfers Act, 1992 provides that the Irish
Minister for Finance can make provision for the restriction
of financial transfers between Ireland and other countries.
For the purposes of this Act, “financial transfers” include all
transfers which would be movements of capital or
payments within the meaning of the treaties governing the
E.U. if they had been made between Member States of the
E.U. This Act and underlying E.U. regulations provide for
the restriction of financial transfers to certain countries,
organizations, and people including the Al-Qaeda network

and the Taliban, Afghanistan, Belarus, Burma (Myanmar),
Democratic People’s Republic of Korea, Democratic
Republic of Congo, Iran, Iraq, Ivory Coast, Lebanon,
Liberia, Libya, Republic of Guinea, Russia, Somalia, Sudan,
Syria, Tunisia, certain persons and groups in Ukraine and
Zimbabwe.

Any transfer of, or payment in respect of, a share or interest
in a share involving the government of any country that is
currently the subject of United Nations or E.U. sanctions,
any person or body controlled by any of the foregoing, or
by any person acting on behalf of the foregoing, may be
subject to restrictions pursuant to such sanctions as
implemented into Irish law.

IRISH TAXES APPLICABLE TO U.S. HOLDERS

Dividends paid by Medtronic will generally be subject to
Irish dividend withholding tax (currently at a rate of 25
percent) unless an exemption applies.

Dividends paid to U.S. residents will not be subject to Irish
dividend withholding tax provided that:

(cid:2) in the case of a beneficial owner of Medtronic shares
held in the Depository Trust Company (DTC), the
address of the beneficial owner in the records of his or
her broker is in the United States and this information is
provided by the broker to the Company’s qualifying
intermediary; or

(cid:2) in the case of a record owner, the record owner has

provided to the Company’s transfer agent a valid U.S.
Certification of Residence (Form 6166) or valid Irish
Non-Resident Form V2.

Irish income tax may also arise with respect to dividends
paid on Medtronic’s ordinary shares. A U.S. resident who
meets one of the exemptions from dividend withholding
tax described above and who does not hold Medtronic
shares through a branch or agency in Ireland through
which a trade is carried on generally will not have any Irish
income tax liability on a dividend paid by Medtronic. In
addition, if a U.S. shareholder is subject to the dividend
withholding tax, the withholding payment discharges any
Irish income tax liability, provided the shareholder
furnishes to the Irish Revenue authorities a statement of the
dividend withholding tax imposed.

While the U.S./Ireland Double Tax Treaty contains
provisions regarding withholding, due to the wide scope of
the exemptions from dividend withholding tax available
under Irish domestic law, it would generally be
unnecessary for a U.S. resident shareholder to rely on the
treaty provisions.

Item 6. Reserved

38 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management’s Discussion and Analysis of Financial

Condition and Results of Operations

UNDERSTANDING OUR FINANCIAL INFORMATION

The following discussion and analysis provides information
management believes to be relevant to understanding the
financial condition and results of operations of the
Company. The discussion focuses on our financial results
for the fiscal year ended April 29, 2022 (fiscal year 2022)
and the fiscal year ended April 30, 2021 (fiscal year 2021).
A discussion on our results of operations for fiscal year
2021 as compared to the year ended April 24, 2020 (fiscal
year 2020) is included in Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results
of Operations” of our Annual Report on Form 10-K for the
year ended April 30, 2021, filed with the SEC on June 25,
2021, and is incorporated by reference into this Form 10-K.
You should read this discussion and analysis along with our
consolidated financial statements and related notes
thereto at April 29, 2022 and April 30, 2021 and for fiscal
years 2022, 2021, and 2020, which are presented within
“Item 8. Financial Statements and Supplementary Data” in
this Annual Report on Form 10-K. 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. Additionally, certain columns and
rows within tables may not sum due to rounding.

Financial Trends

Throughout this Management’s Discussion and Analysis,
we present certain financial measures that facilitate
management’s review of the operational performance of
the Company and as a basis for strategic planning;
however, such financial measures are not presented in our
financial statements prepared in accordance with
accounting principles generally accepted in the United
States (U.S.) (U.S. GAAP). These financial measures are
considered “non-GAAP financial measures” and are
intended to supplement, and should not be considered as

EXECUTIVE LEVEL OVERVIEW

The global healthcare system is continuing to respond to
the unprecedented challenge posed by the COVID-19
pandemic (“COVID-19” or the “pandemic”). Most of our
businesses were affected by a decline in global procedural
volumes during fiscal year 2021, particularly in the first and
second quarters. During fiscal year 2022, the pandemic, to
a lesser extent, continued to affect most of our businesses,
including the most recent COVID-19 lockdown in China
which began in late March. In addition to the pandemic,
our business faced the impacts of healthcare system
staffing shortages on procedural volumes and significant
supply chain disruptions in certain businesses

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

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

In the event there is a Non-GAAP Adjustment recognized in
our operating results, the tax cost or benefit attributable to
that item is separately calculated and reported. Because
the effective rate can be significantly impacted by the
Non-GAAP Adjustments that take place during the period,
we often refer to our tax rate using both the effective rate
and the non-GAAP nominal tax rate (Non-GAAP Nominal
Tax Rate). The Non-GAAP Nominal Tax Rate is calculated as
the income tax provision, adjusted for the impact of
Non-GAAP Adjustments, as a percentage of income before
income taxes, excluding Non-GAAP Adjustments.

Free cash flow is a non-GAAP financial measure calculated
by subtracting property, plant, and equipment additions
from operating cash flows.

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

particularly in the fourth quarter of fiscal year 2022. We
cannot predict with confidence the duration and severity of
the pandemic and its impact on global procedure volumes.
We expect medical procedure rates may continue to vary
by therapy and country and to be impacted by regional
COVID-19 case volumes, vaccine and booster
immunization rates, and new COVID-19 variants.
Additionally, we cannot predict the impact healthcare
system staffing shortages will have on procedural volumes,
and the impact supply chain disruptions will have on the
business.

MEDTRONIC PLC 2022 Form 10-K 39

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a summary of revenue, diluted earnings per share, and cash flow for fiscal years 2022 and 2021:

REVENUE

(in billions)

DILUTED EPS

GAAP

Non-GAAP

$31.7

$30.1

$5.55

$3.73

$2.66

OPERATING
CASH FLOW

(in billions)

$4.42

$7.3

$6.2

Fiscal year 2022 Fiscal year 2021

Fiscal year 2022

Fiscal year 2021

Fiscal year 2022 Fiscal year 2021

$31.7B

GAAP

$3.73

GAAP

$5.55

Non-GAAP

$7.3B

GAAP

Revenue increased due to the recovery of
global procedure volumes from the downturn
experienced in the first and second quarters
of fiscal year 2021 as a result of the COVID-19
pandemic. The net sales increase was partially
offset by supply chain challenges, particularly
in the fourth quarter of fiscal year 2022, as well
as the impact of COVID-19 experienced in
fiscal year 2022, particularly in the U.S. and
China.

Diluted EPS increased $1.07
or 40% primarily due to the
increase in revenue,
decreases in cost of
products sold (see non-
GAAP section) and interest
expense due to the $308
million debt premium in
fiscal year 2021, partially
offset by $881 million of
MCS charges in fiscal year
2022.

Non-GAAP Diluted EPS
increased $1.13 or 26%
primarily due to the increase in
revenue as well as a decrease
in cost of products sold due to
higher COVID-19 costs and
charges associated with field
corrective actions in the prior
year.

Operating cash flow increased $1.1 billion
primarily driven by an increase in cash
collected from customers as a result of the
recovery in revenue along with a decrease in
cash paid for taxes partially offset by an
increase in cash paid to employees due to
higher annual incentive payouts for prior
year performance.

GAAP to Non-GAAP Reconciliations

Starting with the quarter ended April 29, 2022, the Company will no longer adjust non-GAAP financial measures for certain
license payments for, or acquisitions of, technology not approved by regulators due to recent industry guidance from the
U.S. Securities and Exchange Commission. Historical non-GAAP financial measures presented in this Annual Report on
Form 10-K have been recast for comparability.

The tables below present reconciliations of our Non-GAAP financial measures to the most directly comparable financial
measures prepared in accordance with U.S. GAAP for fiscal years 2022 and 2021.

(in millions, except per share data)

GAAP

Non-GAAP Adjustments:

Restructuring and associated costs(1)

Acquisition-related items(2)

Certain litigation charges

(Gain)/loss on minority investments(3)

Medical device regulations(4)

Amortization of intangible assets

MCS impairment / costs(5)

Certain tax adjustments, net(6)

Income Before
Income Taxes

Fiscal year ended April 29, 2022

Income Tax
Provision
(Benefit)

Net Income
Attributable to
Medtronic

Diluted EPS

Effective Tax
Rate

5,517

456

5,039

3.73

8.3%

335

(43)

(12)

102

1,733

881

—

266

220

281

(48)

(9)

1,467

661

(50)

0.21

(0.04)

0.06

(0.01)

0.06

1.09

0.49

(0.04)

5.55

16.1

(11.6)

17.9

—

15.7

15.3

25.0

—

12.6%

Non-GAAP

8,609

1,084

7,505

40 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Fiscal year ended April 30, 2021

Income Before
Income Taxes

Income Tax
(Benefit)
Provision

Net Income
Attributable to
Medtronic

Diluted EPS

Effective Tax
Rate

3,895

265

3,606

2.66

6.8%

617

(15)

118

(61)

308

1,783

—

128

(20)

—

283

802

489

(57)

248

1,500

(41)

5,980

0.36

—

0.07

(0.04)

0.05

0.18

1.11

(0.03)

4.42

20.7

126.7

19.5

—

10.5

18.1

19.5

15.9

—

11.8%

(in millions, except per share data)

GAAP

Non-GAAP Adjustments:

Restructuring and associated costs(1)

Acquisition-related items(2)

Certain litigation charges

(Gain)/loss on minority investments(3)

Impairment charges(7)

Medical device regulations(4)

Debt tender premium and other

charges(8)

Amortization of intangible assets

Certain tax adjustments, net(9)

Non-GAAP

6,804

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

program and consulting expenses.

(2) The charges primarily include business combination costs, changes in fair value of contingent consideration, specifically for the fiscal

year ended April 30, 2021, changes in amounts accrued for certain contingent liabilities for a past acquisition.

(3) We exclude unrealized and realized gains and losses on our minority investments as we do not believe that these components of

income or expense have a direct correlation to our ongoing or future business operations.

(4) The charges represent estimated incremental costs of complying with the new European Union medical device regulations for

(5) The charges relate to the Company’s June 2021 decision to stop the distribution and sale of the Medtronic HVAD System within the

Mechanical Circulatory Support Operating Unit (MCS). The charges included $515 million of non-cash impairments, primarily related
to $409 million of intangible asset impairments, as well as $366 million for commitments and obligations in connection with the
decision, including patient support obligations, restructuring, and other associated costs. Medtronic is committed to serving the needs
of the approximately 3,500 patients currently implanted with the HVAD System.

(6) The net benefit primarily relates to the deferred tax impact associated with a step up in tax basis for Swiss Cantonal purposes and a

change in tax rates on deferred taxes associated with intellectual property, which are partially offset by the amortization on previously
established deferred tax assets from intercompany intellectual property transactions and a charge related to a change in the
Company’s permanent reinvestment assertion on certain historical earnings.

(7) The charges relate to the abandonment of certain intangible assets in our Neuroscience segment.
(8) The charges relate to the early redemption of approximately $6.0 billion of debt.
(9) The net benefit primarily relates to the finalization of an audit at the IRS Appellate level for fiscal years 2012 through 2014 and the

Free Cash Flow

Free cash flow, a non-GAAP financial measure, is calculated by subtracting additions to property, plant, and equipment from
net cash provided by operating activities. Management uses this non-GAAP financial measure, in addition to U.S. GAAP
financial measures, to evaluate our operating results. Free cash flow should be considered supplemental to, and not a
substitute for, our reported financial results prepared in accordance with U.S. GAAP. Reconciliations between net cash
provided by operating activities (the most comparable U.S. GAAP measure) and free cash flow are as follows:

(in millions)

Net cash provided by operating activities

Additions to property, plant, and equipment

Free cash flow

Fiscal Year

2022

7,346

(1,368)

5,978

2021

6,240

(1,355)

4,885

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

MEDTRONIC PLC 2022 Form 10-K 41

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

NET SALES

Segment and Division

The charts below illustrate the percent of net sales by segment for fiscal years 2022 and 2021:

Fiscal Year 2022

Diabetes
7%

Fiscal Year 2021

Diabetes
8%

28%

36%

Cardiovascular

Neuroscience

27%

36%

Cardiovascular

Neuroscience

29%

Medical Surgical

29%

Medical Surgical

The table below includes net sales by segment and division for fiscal years 2022 and 2021:

(in millions)

Cardiac Rhythm & Heart Failure

Structural Heart & Aortic

Coronary & Peripheral Vascular

Cardiovascular

Surgical Innovations

Respiratory, Gastrointestinal, & Renal

Medical Surgical

Cranial & Spinal Technologies

Specialty Therapies

Neuromodulation

Neuroscience

Diabetes

Total

Net Sales by Fiscal Year

2022

5,908

3,055

2,460

11,423

6,060

3,081

9,141

4,456

2,592

1,735

8,784

2,338

2021

5,584

2,834

2,354

10,772

5,438

3,298

8,737

4,288

2,307

1,601

8,195

2,413

31,686

30,117

Percent Change

(7)

(3)

Segment and Market Geography

The charts below illustrate the percent of net sales by market geography for fiscal years 2022 and 2021:

Fiscal Year 2022

Emerging
Markets

17%

32%

51%

U.S.

Non-U.S.
Developed
Markets

Fiscal Year 2021

Emerging
Markets

16%

33%

52%

U.S.

Non-U.S.
Developed
Markets

42 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below includes net sales by market geography for each of our segments for fiscal years 2022 and 2021:

(in millions)

Fiscal Year
2022

U.S.(1)

Fiscal Year

2021 % Change

Non-U.S. Developed Markets(2)

Emerging Markets(3)

Fiscal Year
2022

Fiscal Year

2021 % Change

Fiscal Year
2022

Fiscal Year

2021 % Change

Cardiovascular

5,545 $

Medical Surgical

Neuroscience

Diabetes

Total

3,862

5,753

974

5,248

3,650

5,456

1,171

6% $

3,866 $

(17)

3,373

1,801

1,085

3,752

3,320

1,724

1,019

3% $

2,012 $

1,905

1,229

279

1,773

1,766

1,015

222

13%

$ 16,135 $ 15,526

4% $ 10,126 $

9,815

3% $

5,426 $

4,777

14%

(1) U.S. includes the United States and U.S. territories.
(2) Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries of Western Europe.
(3) Emerging markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not

included in the non-U.S. developed markets, as defined above.

The increase in net sales for fiscal year 2022 was primarily
due to the recovery of global procedure volumes from the
downturn experienced in the first and second quarters of
fiscal year 2021 as a result of the COVID-19 pandemic. The
net sales increase was partially offset by supply chain
challenges, particularly in the fourth quarter of fiscal year
2022, as well as the impact of COVID-19 experienced in
fiscal year 2022, particularly in the U.S. and China. For fiscal
year 2022, currency had an unfavorable impact of
$107 million on non-U.S. developed markets and a
favorable impact of $33 million on emerging markets.

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

(cid:2) The uncertain and uneven impact of COVID-19 on future
procedural volumes, supply constraints including certain
electronic components and semiconductors, healthcare
staffing, worker absenteeism with our customers,
suppliers, and in our own operations and field teams,
and resulting impacts on demand for our products and
therapies;

(cid:2) The potential impact that sanctions and other measures

being imposed in response to the Russia-Ukraine conflict
could have on revenue and supply chain. The financial
impact of the conflict in the fourth quarter of fiscal year
2022, including on accounts receivable and inventory
reserves, was not material and for the fiscal year ended
April 29, 2022, the business of the Company in these
countries represented less than 1% of the Company’s
consolidated revenues and assets. Although the
implications of this conflict are difficult to predict at this
time, the ongoing conflict may increase pressure on the
global economy and supply chains, resulting in
increased future volatility risk for our business operations
and performance.

(cid:2) Competitive product launches and pricing pressure,
geographic macro-economic risks including general
price inflation, rising interest rates, reimbursement
challenges, impacts from changes in the mix of our
product offerings, delays in product registration
approvals, replacement cycle challenges, and
fluctuations in currency exchange rates; and

(cid:2) National and provincial tender pricing for certain

products, particularly in China.

Cardiovascular

Cardiovascular products include pacemakers, insertable
cardiac monitors, cardiac resynchronization therapy
devices, implantable cardioverter defibrillators (ICD), leads
and delivery systems, electrophysiology catheters,
products for the treatment of atrial fibrillation, information
systems for the management of patients with Cardiac
Rhythm & Heart Failure devices, products designed to
reduce surgical site infections, coronary and peripheral
stents and related delivery systems, balloons and related
delivery systems, endovascular stent graft systems, heart
valve replacement technologies, cardiac tissue ablation
systems, and open heart and coronary bypass grafting
surgical products. Cardiovascular also includes Care
Management Services and Cath Lab Managed Services
(CLMS) within the Cardiac Rhythm & Heart Failure division.
Cardiovascular net sales for fiscal year 2022 were
$11.4 billion, an increase of 6 percent as compared to fiscal
year 2021. Currency had an unfavorable impact on net
sales for fiscal year 2022 of $32 million. The net sales
increase was primarily due to the recovery of global
procedure volumes from the declines experienced in fiscal
year 2021 along with growth from recent product launches,
partially offset by global supply chain disruptions and
declines in China due to recent COVID-19 lockdowns.

MEDTRONIC PLC 2022 Form 10-K 43

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The charts below illustrate the percent of Cardiovascular net sales by division for fiscal years 2022 and 2021:

Fiscal Year 2022

Fiscal Year 2021

CPV

21%

27%

SHA

52%

CRHF

CPV

22%

26%

SHA

52%

CRHF

Cardiac Rhythm & Heart Failure (CRHF) net sales increased
6 percent in fiscal year 2022 as compared to fiscal year
2021. The increase was led by Cardiac Rhythm
Management with growth in TYRX antibacterial envelopes,
CRT-Ds, and cardiac pacing therapies due to Micra and
transvenous pacemakers. Cardiac Ablation Solutions also
led growth with strong sales of Arctic Front cryoablation
systems. The net sales growth was partially offset by a
decline of Medtronic HVAD System net sales as a result of
our June 2021 decision to stop the distribution and sale of
the system. The net sales for the Medtronic HVAD system
for fiscal year 2021 was $141 million.

Structural Heart & Aortic (SHA) net sales increased 8 percent
in fiscal year 2022 as compared to fiscal year 2021. The
increase was led by growth in transcatheter aortic valve
replacement (TAVR) net sales as a result of continued
adoption of the CoreValve Evolut. Cardiac Surgery also
contributed to the net increase in sales as a result of broad
growth across the business, particularly from strong sales of
Extra-Corporeal Life Support (ECLS) devices. These increases
were partially offset by declines within Aortic caused by field
corrective actions (FCA) and COVID-19 challenges. The most
notable field corrective actions were for the Valiant Navion
Thoracic Stent Graft System FCA issued in the fourth quarter
of fiscal year 2021 and the Endurant II/IIs Stent Graft Systems
FCA issued in the third quarter of fiscal year 2022.

Coronary & Peripheral Vascular (CPV) net sales increased
5 percent in fiscal year 2022 as compared to fiscal year
2021. The increase was led by growth in Peripheral
Vascular Health driven by strong performance of the
recently launched Abre venous self-expanding stent
system for Deep Venous disease, as well as our superficial
venous product portfolio, including the VenaSeal and
ClosureFast systems. The increase was partially offset by
declines in Coronary as well as Atherectomy products due
to impacts of COVID-19 on procedural volumes.

In addition to the macro-economic and geopolitical factors
described in the Executive Level Overview, looking ahead,
we expect Cardiovascular could be affected by the
following:
(cid:2) Continued growth of our Micra transcatheter pacing

system. The Micra AV launched in Japan in November
2021 and received approval in China in May 2022. Micra
AV expands the Micra target population from 15 percent
to 45 percent of pacemaker patients.

(cid:2) Continued acceptance and growth from the Azure XT
and S SureScan pacing systems. Azure pacemakers
feature Medtronic-exclusive BlueSync technology, which
enables automatic, secure wireless remote monitoring
with increased device longevity.

(cid:2) Growth of the Cobalt and Crome portfolio of ICDs and

CRT-Ds.

(cid:2) Continued acceptance and expansion of the Claria MRI
CRT-D system with AdaptivCRT and compatibility with
TriageHF technology.

(cid:2) Continued acceptance and expansion of the LINQ II

cardiac monitor. Supply for the LINQ II cardiac monitor is
improving as we continue to ramp our wafer scale
manufacturing. During the third quarter of fiscal year
2022, we launched two AccuRhythm AI algorithms on the
LINQ II platform to significantly reduce false positive
alerts for Atrial Fibrillation and Pause while retaining
sensitivity for true positive detection, and reduce clinic
workload and burden.

(cid:2) Growth of the CRT-P quadripolar pacing system.
(cid:2) Continued growth, adoption, and utilization of the TYRX

Envelope for implantable devices.

(cid:2) Continued acceptance and market expansion of Arctic
Front cryoablation for treatment of atrial fibrillation. In
June 2021, the Arctic Front cryoablation system received
a first line therapy designation from the U.S. FDA for the
treatment of atrial fibrillation.

(cid:2) Continued acceptance and growth of the self-expanding
CoreValve Evolut transcatheter aortic valve replacement
platform into intermediate risk indication globally and for
the treatment of patients determined to be at low risk
with surgery.

(cid:2) Continued expansion and training of field support to

increase coverage in the U.S. centers performing TAVR
procedures.

(cid:2) Continued acceptance and growth from Evolut PRO,

which provides industry-leading hemodynamics, reliable
delivery, enhanced durability versus SAVR procedures at
5 years, and advanced sealing with an excellent safety
profile. In August 2021, the U.S. FDA approved the Evolut
FX TAVR, a system enhancement designed to improve
the overall procedural experience through enhancements
in deliverability, implant visibility and deployment
stability. During the third quarter of fiscal year 2022,
Evolut PRO received NMPA approval within China.

44 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

(cid:2) Continued acceptance and growth from the VenaSeal

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

(cid:2) Continued acceptance and growth of the Abre venous

self-expanding stent system in the U.S. as well as
pressure from competitors re-entering the market. Abre
is designed for the unique challenges of venous disease.
It offers easy deployment, to let physicians focus on their
patient, and delivers demonstrated endurance, to give
patients freedom of movement.

(cid:2) Our voluntary recall of the Valiant Navion Thoracic Stent
Graft System and our ability to ramp production of our
previous generation product, the Valiant Captivia
Thoracic Stent Graft System. We are currently ramping
production of the Valiant Captivia Thoracic Stent Graft
System and plan to reach full production capacity in the
first quarter of fiscal year 2023.

(cid:2) Our June 2021 decision to stop the distribution and sale

of the Medtronic HVAD System.

(cid:2) Our ability to successfully develop, obtain regulatory

approval of and commercialize the products within our
pipeline, which include, but are not limited to, the
Symplicity Spyral Multi-Electrode Renal Denervation

Catheter, Pulse Field Ablation, a novel energy source
that is non-thermal, Aurora Extravascular ICD and
transcatheter mitral and tricuspid therapy products led
by our Intrepid system.

Medical Surgical

Medical Surgical’s products span the entire continuum of
patient care from diagnosis to recovery, with a focus on
diseases of the gastrointestinal tract, lungs, pelvic region,
kidneys, obesity, and preventable complications. The
products include those for advanced and general surgical
products, surgical stapling devices, vessel sealing
instruments, wound closure, electrosurgery products,
hernia mechanical devices, mesh implants, advanced
ablation, interventional lung, ventilators, airway products,
renal care products, and sensors and monitors for pulse
oximetry, capnography, level of consciousness and
cerebral oximetry. Medical Surgical’s net sales for fiscal
year 2022 were $9.1 billion, an increase of 5 percent as
compared to fiscal year 2021. Currency had an unfavorable
impact on net sales of $44 million for fiscal year 2022. The
net sales increase was primarily due to the recovery of
global procedure volumes from the declines experienced
in fiscal year 2021 partially offset by global supply chain
disruptions and declines in China due to recent COVID-19
lockdowns.

The charts below illustrate the percent of Medical Surgical net sales by division for fiscal years 2022 and 2021:

Fiscal Year 2022

Fiscal Year 2021

RGR

34%

66%

RGR

38%

62%

Surgical Innovations (SI) net sales for fiscal year 2022
increased 11 percent as compared to fiscal year 2021. Net
sales growth was led by Advanced Surgical instruments,
driven by the continued adoption of the Company’s
LigaSure, Sonicision, and Tri-Staple technologies, and
Hernia and Wound Management. The increase was partially
offset by declines in the fourth quarter of fiscal year 2022
resulting from global supply chain challenges, including
resins, semiconductors, and packaging trays, which
impacted energy and stapling products.

Respiratory, Gastrointestinal, & Renal (RGR) net sales for fiscal
year 2022 decreased 7 percent as compared to fiscal year
2021. RGR net sales declines were largely due to declines in
ventilator demands when compared fiscal year 2021 as
demand returned to pre-pandemic levels in the fourth
quarter of fiscal year 2022. These declines were partially
offset by growth in Patient Monitoring, led by the Nellcor
pulse oximetry sensors and the Bispectral Index (BIS) sensors,
Gastrointestinal, driven by the esophageal product portfolio,
as well as growth in Renal Care Solutions.

In addition to the macro-economic and geopolitical factors
described in the Executive Level Overview, looking ahead
we expect Medical Surgical could be affected by the
following:
(cid:2) Continued acceptance and future growth of

Open-to-MIS techniques and tools supported by our
efforts to transition open surgery to MIS (minimally
invasive surgery). The Open-to-MIS initiative focuses on
furthering our presence in and working to optimize open
surgery globally, while capturing the market opportunity
that exists in transitioning open procedures to MIS,
whether through traditional MIS, or advanced
technologies, including robotics.

(cid:2) Continued acceptance and future growth of powered

stapling and energy platform.

(cid:2) Our ability to execute ongoing strategies in order to

address the competitive pressure of reprocessing of our
vessel sealing disposables and growth of surgical soft
tissue robotics procedures in the U.S.

MEDTRONIC PLC 2022 Form 10-K 45

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Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

(cid:2) Our ability to create markets and drive products and

procedures into emerging markets. We have high quality
and cost-effective surgical products designed for
customers in emerging markets such as the ValleyLab
LS10 single channel vessel sealing generator, which is
compatible with our line of LigaSure instruments and
designed for simplified use and affordability.
(cid:2) Continued elevation of the standard of care for

respiratory compromise, a progressive condition
impacting a patient’s ability to breathe effectively, which
leverages our market leading MicroStream capnography
technology.

(cid:2) Continued acceptance and growth in patient monitoring,
airway, and ventilation management. Key products in this
area include the Puritan Bennett 980 ventilator,
Microstream Capnography, Nellcor pulse oximetry system
with OxiMax technology, Shiley tracheostomy and
endotracheal tubes, McGRATH MAC video laryngoscopes,
SonarMed Airway Monitoring System for the NICU, and the
Nellcor Oxysoft pulse oximetry system for neonatal and
adult critical care patients, which received U.S. FDA
clearance during the fourth quarter of fiscal year 2022.

(cid:2) Continued future growth internationally for the Hugo
robotic assisted surgery (RAS) system for urologic,
bariatric, gynecologic, and general surgery procedures
as well as for our easy-to-access Touch Surgery
Enterprise surgical video system. The Hugo RAS system,
which received CE Mark in October 2021 as well as
secured additional regulatory approvals in the third and
fourth quarters of fiscal year 2022, is designed to help
reduce unwanted variability, improve patient outcomes,
and by extension, lower per procedure cost.

(cid:2) The pending contribution of our Renal Care Solutions
business as a result of the May 25, 2022 definitive
agreement with DaVita Inc. Refer to the “Subsequent
Events” section of this Management’s Discussion and
Analysis for additional information on the divestiture.
(cid:2) Our ability to successfully develop, obtain regulatory

approval of and commercialize the products within our
pipeline, which include, but are not limited to, our Hugo
RAS system in the U.S., our NextGen McGrath MAC
video laryngoscopes, Signia power stapling devices, and
our Ligasure and Sonicision vessel sealing devices.

(cid:2) Continued and future acceptance of less invasive

Neuroscience

standards of care in Gastrointestinal and Hepatology
products, including the areas of GI Diagnostic and
Therapeutic product lines. Recently launched products
include the PillCam COLON capsule endoscopy, the
Barrx platform through ablation with the Barrx 360
Express catheter, Endoflip imaging systems, Bravo
Calibration-free reflux testing, and the Emprint ablation
system with Thermosphere Technology, which maintains
predictable spherical ablation zones throughout
procedures reducing procedure time and cost.

(cid:2) Continued and future acceptance of Interventional Lung
Solutions. Products include our Illumisite navigation
platform, combined with our portfolio of biopsy tools
including the Arcpoint pulmonary needle, and to access
lesions outside the airway, the CrossCountry
transbronchial access tool. This comprehensive portfolio
gives the power to display position and access lung
nodules in the periphery of the lungs, in a minimally
invasive approach to accessing difficult-to-reach areas of
the lung, which may aid in the diagnosis of lung cancer.

(cid:2) Expanding the use of less invasive treatments and

furthering our commitment to improving options for
women with abnormal uterine bleeding. Our expanded
and strengthened surgical offerings are expected to
complement our global gynecology business.

Neuroscience’s products include various spinal implants,
bone graft substitutes, biologic products, image-guided
surgery and intra-operative imaging systems, robotic
guidance systems used in the robot-assisted spine
procedures, and systems that incorporate advanced
energy surgical instruments. Neuroscience’s products also
focus on the treatment of overactive bladder, urinary
retention, fecal incontinence, as well as products to treat
ear, nose, and throat (ENT), and therapies to treat the
diseases of the vasculature in and around the brain,
including coils, neurovascular stents and flow diversion
products. Neuroscience also manufactures products
related to implantable neurostimulation therapies and
drug delivery systems for the treatment of chronic pain,
movement disorders, and epilepsy. Neuroscience’s net
sales for fiscal year 2022 were $8.8 billion, an increase of
7 percent as compared to fiscal year 2021. Currency had a
favorable impact on net sales for fiscal year 2022 of
$3 million. The net sales increase was primarily due to the
recovery of global procedure volumes from the declines
experienced in fiscal year 2021, partially offset by global
supply chain disruptions and declines in China due to
COVID-19 lockdowns and reduced sales in advance of
potential national volume-based pricing (VBP) tenders.

46 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The graphs below illustrate the percent of Neuroscience net sales by division for fiscal years 2022 and 2021:

Fiscal Year 2022

Fiscal Year 2021

NM
20%

29%

51%

CST

NM
20%

28%

52%

CST

Specialty

Cranial & Spinal Technologies (CST) net sales for fiscal year
2022 increased 4 percent as compared to fiscal year 2021.
Net sales growth was primarily driven by Neurosurgery
with strong sales of the Midas Rex powered surgical
instruments and StealthStation Navigation and O-arm
Imaging System. Growth in CST also occurred in Spine and
Biologics due to the recovery of global procedural volumes
in the U.S., Japan, and Western Europe compared to the
prior fiscal year. This growth was partially offset by recent
reduced sales in China in advance of potential national VBP
tender in Spine.

Specialty Therapies (Specialty) net sales for fiscal year 2022
increased 12 percent as compared to fiscal year 2021. Net
sales growth was primarily driven by strength in Pelvic
Health, ENT, and Neurovascular. Pelvic Health’s growth was
led by sales of the recently launched InterStim Micro
neurostimulator and SureScan MRI leads. ENT growth was
driven by the sales of StealthStation ENT Navigation
System despite continued supply constraints in
disposables, which are recovering. Neurovascular’s growth
was led by sales of flow diversion, hemorrhagic stroke, and
liquid embolic products.

Neuromodulation (NM) net sales for fiscal year 2022
increased 8 percent as compared to fiscal year 2021. Sales
growth occurred in both Pain Therapies and Brain
Modulation and reflected a recovery in procedural
volumes. Net sales growth was driven by strong
performance of the Percept PC deep brain stimulation
(DBS) device with BrainSense technology in Brain
Modulation.

In addition to the macro-economic and geopolitical factors
described in the Executive Level Overview, looking ahead
we expect Neuroscience could be affected by the following:
(cid:2) Continued growth from Enabling Technologies,

including StealthStation Navigation and O-arm Imaging
Systems, Midas Rex Powered Surgical Instruments, and
ENT Navigation and Power Systems, as well as
acceptance of the Stealth Autoguide cranial robotic
guidance platform.

(cid:2) Continued sales of Mazor robotic units and associated
market adoption of robot-assisted spine procedures,
including the Mazor X Stealth, our integrated robotics and
navigation platform.

(cid:2) Continued growth from spine titanium interbody

implants.

(cid:2) Continued adoption of our integrated solutions through
the Surgical Synergy strategy, which integrates our spinal
implants with enabling technologies such as imaging,
navigation, power instruments, nerve monitoring, and
Mazor robotics, as well as AI-driven surgical planning,
personalized spinal implants, and robot-assisted surgery
due to Medicrea technologies, acquired in fiscal year
2021.

(cid:2) Market acceptance and continued global adoption of

innovative new spine products and procedural solutions
within our CST division such as our Infinity OCT System
and Prestige LP cervical disc system.

(cid:2) Growth in the broader vertebral compression fracture

(VCF) and adjacent markets as we continue to pursue the
development of other therapies to treat more patients
with VCF, including continued success of both the
Kyphon V vertebroplasty system and the Osteocool RF
Spinal Tumor ablation system.

(cid:2) Continued acceptance and growth of our ENT and Pelvic
Health therapies within our Specialty Therapies division,
including our InterStim therapy with InterStim II,
InterStim Micro and InterStim X neurostimulators for the
treatment of the symptoms of overactive bladder, urinary
retention, and bowel incontinence, and capital
equipment sales of the Stealth Station ENT surgical
navigation system and intraoperative NIM nerve
monitoring system.

(cid:2) Continued acceptance and growth of the Solitaire FR

revascularization device for treatment of acute ischemic
stroke and the Pipeline Embolization Devices,
endovascular treatments for large or giant wide-necked
brain aneurysms.

(cid:2) Continued acceptance of our React Catheter and Riptide

aspiration system, along with our next-generation
Solitaire revascularization device.

(cid:2) Market acceptance and continued global adoption of
our Intellis spinal cord stimulator, DTM proprietary
waveform, Evolve workflow algorithm, and Snapshot
reporting to treat chronic pain in major markets around
the world.

(cid:2) Continued acceptance and growth of our Percept PC
DBS device with BrainSense technology, including its
treatment of Parkinson’s Disease, epilepsy, and other
movement disorders.

MEDTRONIC PLC 2022 Form 10-K 47

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

(cid:2) Market acceptance and growth from SCS therapy for

treating Diabetic Peripheral Neuropathy (DPN) on Intellis
rechargeable neurostimulator and Vanta recharge-free
neurostimulator which received U.S. FDA approval in
January 2022.

(cid:2) Ongoing obligations under the U.S. FDA consent decree
entered in April 2015 relating to the SynchroMed drug
infusion system and the Neuromodulation quality system.
The U.S. FDA lifted its distribution requirements on our
implantable drug pump in October 2017 and its warning
letter in November 2017.

(cid:2) Our ability to successfully develop, obtain regulatory

approval of and commercialize the products within our
pipeline, which include, but are not limited to, our
closed-loop Percept PC and RC devices with adaptive
DBS (aDBS), our hemorrhagic stroke intravascular
device, and our next-generation spine enabling
technologies.

Diabetes

Diabetes’ products include insulin pumps, continuous
glucose monitoring (CGM) systems, consumables, and
smart insulin pen systems. Diabetes’ sales for fiscal year
2022 were $2.3 billion, a decrease of 3 percent as
compared to fiscal year 2021. Currency had an unfavorable
impact on net sales for fiscal year 2022 of $2 million.
Diabetes’ net sales decline for fiscal year 2022 was
primarily attributable to declines in the U.S. partially offset
by growth in the MiniMed 780G insulin pump system and
integrated CGM in the international markets.

In addition to the macro-economic and geopolitical factors
described in the Executive Level Overview, looking ahead
we expect Diabetes could be affected by the following:
(cid:2) Patient demand for the MiniMed 770G insulin pump

system, which launched in the U.S. in November 2020
and in Japan in January 2022. The system is powered by
SmartGuard technology and features the added benefits
of smartphone connectivity and an expanded age
indication to children as young as age two.

(cid:2) Continued growth internationally for the MiniMed 780G
insulin pump system. The MiniMed 780G system was
approved in the E.U. in June 2020 and has launched in
over 40 countries on four continents outside the U.S. The
global adoption of sensor-augmented insulin pump
systems has resulted in strong sensor attachment rates.

(cid:2) Continued acceptance and growth of the Guardian

Connect CGM system which displays glucose
information directly to a smartphone to help ensure
patients have access to their glucose levels seamlessly
and discretely. The Guardian Connect CGM system is
available on both Apple iOS and Android devices.
(cid:2) Strengthening our position in the diabetes market as a
result of the September 2020 acquisition of Companion
Medical. Companion Medical offered a U.S. FDA cleared
InPen smart pen system that combines the freedom of a
reusable Bluetooth pen with the intelligence of an
intuitive mobile application that helps users administer
the appropriate insulin dose. During the third quarter of
fiscal year 2021, we integrated our CGM data into the
InPen application, which allows users to have their
Medtronic CGM readings in real-time alongside insulin
dose information, all in one view.

(cid:2) Continued pump and CGM competition in an expanding

global market.

(cid:2) Changes in medical reimbursement policies and

programs, along with additional payor coverage on
insulin pumps.

(cid:2) Resolution of findings contained in a December 2021
U.S. FDA warning letter relating to the MiniMed 600
series insulin pump and a remote controller device for
MiniMed 508 and Paradigm pumps. We are currently
working with the U.S. FDA to resolve the findings. The
existence of the warning letter may limit our ability to
launch certain new Diabetes products in the U.S. prior to
resolution of the findings.

(cid:2) Our ability to successfully develop, obtain regulatory

approval of and commercialize the products within our
pipeline, which include, but are not limited to, our
MiniMed 780G insulin pump and the Guardian 4 sensor,
which have been submitted to the U.S. FDA.

48 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

COSTS AND EXPENSES
The following is a summary of cost of products sold, research and development, and selling, general, and administrative
expenses as a percent of net sales:

32.0%

34.8%

32.5% 33.7%

8.7%

8.3%

Cost of products sold

Research and development expense Selling, general, and administrative

expense

Fiscal year 2022

Fiscal year 2021

Cost of Products Sold

We continue to focus on reducing our costs of production
through supplier management, manufacturing
improvements, and optimizing our manufacturing network.
Cost of products sold for fiscal year 2022 was $10.1 billion as
compared to $10.5 billion for fiscal year 2021. The decrease
in cost of products sold as a percentage of net sales was
largely due to the conditions of the pandemic during fiscal
year 2021, which resulted in recognizing a portion of our
fixed overhead costs as period expenses, increases in our
reserves in our excess and obsolete inventory, as well as
negative impact from mix, as products in higher demand had
lower gross margins. The decrease was also attributable to
charges from field correction actions in the prior year. Fiscal
year 2022 included $58 million of inventory write-downs
associated with our June 2021 decision to stop the
distribution and sale of Medtronic’s HVAD System (MCS
charges). Looking forward, our cost of products sold likely
will be further negatively impacted by inflation and higher
labor and direct material costs.

Research and Development Expense

We remain committed to deliver the best possible
experiences for every patient, physician, and caregiver we
serve; to create technologies that expand what’s possible
across the entire human body to transform lives; to turn data

and insights into real action to serve real patient needs,
dramatically improving care; and to expand healthcare
access and deliver positive outcomes that go far beyond our
products. Research and development expense for fiscal year
2022 was $2.7 billion as compared to $2.5 billion for fiscal
year 2021. Fiscal year 2022 included $101 million of
acquisitions of, and license payments for, technology not
approved by regulators, primarily in our Diabetes segment.

Selling, General, and Administrative
Expense

Our goal is to continue to leverage selling, general, and
administrative expense initiatives. Selling, general, and
administrative expense primarily consists of salaries and
wages, other administrative costs, such as professional fees
and marketing expenses, and certain acquisition and
restructuring expenses. Selling, general, and administrative
expense for fiscal year 2022 was $10.3 billion as compared
to $10.1 billion for fiscal year 2021. The decrease in selling,
general, and administrative expense as a percentage of net
sales was primarily driven by net sales growth as a result of
the recovery of procedural volumes partially offset by
increases in employee travel as compared to the
corresponding period in the prior year when travel was
limited.

MEDTRONIC PLC 2022 Form 10-K 49

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

(in millions)

Amortization of intangible assets

Restructuring charges, net

Certain litigation charges

Other operating expense, net

Other non-operating income, net

Interest expense

Fiscal Year

2022

2021

$ 1,733

$ 1,783

862

(318)

553

293

118

315

(336)

925

Amortization of Intangible Assets

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

Restructuring Charges, Net

Enterprise Excellence

In the third quarter of fiscal year 2018, we announced a
multi-year global Enterprise Excellence Program designed
to drive long-term business growth and sustainable
efficiency. Further program details are described in Note 4
of the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.

For fiscal years 2022 and 2021, the Company recognized
net charges of $259 million and $349 million, respectively,
including $31 million and $52 million, respectively within
restructuring charges, net in the consolidated statements of
income which were primarily comprised of employee
termination benefits. For fiscal years 2022 and 2021,
charges also included costs incurred as a direct result of
the restructuring program, such as salaries for employees
supporting the program and consulting, including
$116 million and $128 million, respectively, recognized
within cost of products sold, and $112 million and
$169 million, respectively, recognized within selling,
general, and administrative expense in the consolidated
statements of income.

Simplification

In the first quarter of fiscal year 2021, we initiated our
Simplification restructuring program designed to make the
Company a more nimble and competitive organization.
Further program details are described in Note 4 of the

consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report
on Form 10-K.

Since inception, the Company has incurred pre-tax exit and
disposal costs and other costs, across all segments, of
$349 million in connection with the Simplification program.
In total, the Company estimates it will recognize
approximately $450 million of exit and disposal costs and
other costs related to the Simplification program by the
end of fiscal year 2023.

For fiscal years 2022 and 2021, the Company recognized
net charges of $82 million and $268 million, respectively,
including $35 million and $241 million, respectively, within
restructuring charges, net in the consolidated statements of
income which were primarily comprised of employee
termination benefits. For fiscal years 2022 and 2021,
charges also included costs incurred as a direct result of
the restructuring program, such as salaries for employees
supporting the program and consulting, including
$45 million and $27 million, respectively, recognized within
selling, general, and administrative expense in the
consolidated statements of income. The net charges for
fiscal year 2021 included $97 million of incremental
defined benefit pension and post-retirement related
expenses for employees that accepted voluntary early
retirement packages.

Certain Litigation Charges

We classify specified certain litigation charges and gains
related to significant legal matters as certain litigation
charges in the consolidated statements of income. For
additional information, refer to Note 18 of the consolidated
financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.

Other Operating Expense, Net

Other operating expense, net primarily includes royalty
income and expense, currency remeasurement and
derivative gains and losses, Puerto Rico excise taxes,
changes in the fair value of contingent consideration,
changes in amounts accrued for certain contingent
liabilities for a past acquisition, MCS charges, impairment
charges, and income from funded research and
development arrangements.

50 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

The increase in other operating expense, net was primarily
driven by MCS charges recorded in fiscal year 2022. The
charges of $823 million primarily included $409 million of
intangible asset impairments and $366 million for
commitments and obligations, including customer support
obligations, restructuring, and other associated costs. The
increase was partially offset by changes in fair value of
contingent consideration, which resulted in $103 million of
income for fiscal year 2022 as compared to $36 million of
expense in fiscal year 2021. The net currency impact of
remeasurement expense and our hedging programs also
partially offset the increase with $70 million of income in
fiscal year 2022 and $47 million of expense in fiscal year
2021. Finally, contributing to the change was a
$132 million gain related to amounts accrued for certain
contingent liabilities for a past acquisition and $76 million
of impairment charges related to the abandonment of
certain intangible assets, both in fiscal year 2021.
Additional information regarding the MCS charges is
described in Note 4 of the consolidated financial
statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.

Other Non-Operating Income, Net

Other non-operating income, net includes the non-service
component of net periodic pension and postretirement

benefit cost, investment gains and losses, and interest
income. The decrease in other non-operating income, net
for fiscal year 2022 is driven by our equity method and
minority investments portfolio offset by an increase in
income from the non-service component of net periodic
pension and postretirement benefit cost. Gains on equity
method and minority investments were $30 million and
$61 million for fiscal year 2022 and 2021, respectively, and
income related to the non-service component of net
periodic pension and postretirement benefits were
$107 million and $86 million, respectively.

Interest Expense

Interest expense includes interest incurred on our
outstanding borrowings, amortization of debt issuance
costs and debt premiums or discounts, amortization of
gains or losses on terminated or de-designated interest
rate derivative instruments, and charges recognized in
connection with the tender and early redemption of senior
notes. The decrease in interest expense for fiscal year 2022
was primarily due to the $308 million charge incurred as a
result of the early redemption of approximately $6.0 billion
of debt during fiscal year 2021.

INCOME TAXES

(in millions)

Income tax provision (benefit)

Income before income taxes

Effective tax rate

Non-GAAP income tax provision

Non-GAAP income before income taxes

Non-GAAP Nominal Tax Rate

Difference between the effective tax rate and Non-GAAP Nominal Tax Rate

Fiscal Year

2022

456

5,517

8.3%

2021

265

3,895

6.8%

$ 1,084

802

8,609

12.6%

4.3%

6,804

11.8%

5.0%

Many of the countries we operate in have statutory tax
rates lower than our U.S. statutory rate, thereby resulting in
an overall effective tax rate less than the U.S. statutory rate
of 21.0 percent. A significant portion of our earnings are
generated from operations in Puerto Rico, Switzerland, and
Ireland. The statutory tax rates for these jurisdictions range
from 12.5 percent to 37.5 percent. Our earnings in Puerto
Rico are subject to certain tax incentive grants which
provide for tax rates lower than the country’s statutory tax
rates. Unless our tax incentive grants are extended, they
will expire between fiscal years 2023 and 2034. The tax
incentive grants, which expired during fiscal year 2022, did
not have a material impact on our financial results. See
Note 13 to the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K for additional information.

Our effective tax rate for fiscal year 2022 was 8.3 percent,
as compared to 6.8 percent in fiscal year 2021. Our
Non-GAAP Nominal Tax Rate for fiscal year 2022 was
12.6 percent, as compared to 11.8 percent in fiscal year
2021. The increase in both the effective tax rate and the
Non-GAAP Nominal Tax Rate was primarily due to year-
over-year changes in operational results by jurisdiction.

During fiscal year 2022, we recognized $89 million of
operational tax benefits. The operational tax benefits
included a $46 million benefit from excess tax benefits
associated with stock-based compensation, and a
$43 million net benefit associated with the resolution of
certain income tax audits, finalization of certain tax returns,
changes to uncertain tax position reserves, and changes to
certain deferred income tax balances.

MEDTRONIC PLC 2022 Form 10-K 51

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

During fiscal year 2021, we recognized $51 million of
operational tax benefits, which included a $46 million
benefit from excess tax benefits associated with stock-
based compensation.

An increase in our Non-GAAP Nominal Tax Rate of one
percent would result in an additional income tax provision
for fiscal years 2022 and 2021 of approximately $86 million
and $68 million, respectively.

Certain Tax Adjustments

During fiscal year 2022, the net benefit from certain tax
adjustments of $50 million, recognized in income tax
provision (benefit) in the consolidated statement of
income, included the following:
(cid:2) A benefit of $82 million associated with a step up in tax

basis for Swiss Cantonal purposes.

(cid:2) A benefit of $82 million related to a change in tax rates

on intangible assets.

(cid:2) A cost of $47 million associated with the amortization of
the previously established deferred tax assets from
intercompany intellectual property transactions.
(cid:2) A cost of $41 million associated with a change in the

Company’s permanent reinvestment assertion on certain
historical earnings.

(cid:2) 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 (benefit) in the consolidated statement of
income, included the following:
(cid:2) 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.

(cid:2) 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.

(cid:2) A cost of $50 million associated with the amortization of
the previously established deferred tax assets from
intercompany intellectual property transactions.
(cid:2) A net cost of $25 million associated with an internal

restructuring and intercompany sale of assets.

(cid:2) 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.

Certain tax adjustments will affect the comparability of our
operating results between periods. Therefore, we consider
these Non-GAAP Adjustments. Refer to the “Executive
Level Overview” section of this Management’s Discussion
and Analysis for further discussion of these adjustments.

LIQUIDITY AND CAPITAL RESOURCES

We are currently in a strong financial position, and we
believe our balance sheet and liquidity as of April 29, 2022
provide us with flexibility, and our cash, cash equivalents,
and current investments, along with our credit facility and
related commercial paper programs will satisfy our
foreseeable operating needs.

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

planning processes. We consider the liquidity necessary to
fund our operations, which includes working capital needs,
investments in research and development, property, plant,
and equipment, and other operating costs. We also
consider capital allocation alternatives that balance
returning value to shareholders through dividends and
share repurchases, satisfying maturing debt, and acquiring
businesses and technology.

52 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Summary of Cash Flows

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

(in millions)

Cash provided by (used in):

Operating activities

Investing activities

Financing activities

Effect of exchange rate changes on cash and cash equivalents

Net change in cash and cash equivalents

Fiscal Year

2022

2021

7,346

6,240

(1,659)

(5,336)

(231)

(2,866)

(4,136)

215

121

(547)

Operating Activities

Debt and Capital

The $1.1 billion increase in net cash provided was primarily
driven by an increase in cash collected from customers
along with a decrease in cash paid for income taxes. The
increase in net cash provided was partially offset by an
increase in cash paid to employees. The increase in cash
collected from customers was primarily related to
COVID-19 driving decreased sales in the fourth quarter of
fiscal year 2020 and first quarter of fiscal year 2021. The
decrease in cash paid for income taxes was primarily due
to increased estimated federal tax payments and tax
payments associated with IRS audit settlements in fiscal
year 2021. Cash paid to employees increased due to
higher annual incentive plan payouts compared to the
prior fiscal year.

Investing Activities

The $1.2 billion decrease in net cash used was primarily
attributable to a decrease in cash paid for acquisitions of
$903 million, as well as a decrease of net purchases of
investments of $273 million as compared to fiscal year
2021.

Financing Activities

The $1.2 billion increase in net cash used was largely the
result of the increase of share repurchases of $1.9 billion.
The increase in net cash used was offset by a decrease in
short-term borrowings of $311 million. For fiscal year 2021,
financing cash flows were impacted by the Mizuho Bank
term loan under which we borrowed ¥300 billion in the first
quarter of fiscal year 2021, which was subsequently repaid
in the fourth quarter of fiscal year 2021. Fiscal year 2021
financing cash flows were also impacted by the issuance of
$7.2 billion of Euro-denominated senior notes offset by the
early redemption of $6.0 billion of senior notes for
$6.3 billion of total consideration, and repayment of an
additional $911 million of Euro-denominated senior notes.
For more information on the Mizuho Bank term loan, and
issuances and redemptions of senior notes, refer to Note 6
of the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.

Our capital structure consists of equity and interest-bearing
debt. We primarily utilize unsecured senior debt
obligations to meet our financing needs and, to a lesser
extent, bank borrowings. From time to time, we may
repurchase our outstanding debt obligations in the open
market or through privately negotiated transactions.

Total debt at April 29, 2022 was $24.1 billion, as compared
to $26.4 billion at April 30, 2021. The decrease in total
debt was driven by fluctuations in exchange rates as it
pertains to our Euro-denominated senior notes.

Subsequent to fiscal year 2022, on May 2, 2022, we
entered into a term loan agreement (Fiscal 2023 Loan
Agreement) with Mizuho Bank, Ltd. for an aggregate
principal amount of up to ¥300 billion with a term of 364
days. In May and June 2022, Medtronic Luxco borrowed an
aggregate of ¥297 billion, or approximately $2.3 billion, of
the term loan, under the Fiscal 2023 Loan Agreement. The
Company used the net proceeds of the borrowings to fund
the early redemption of $1.9 billion of Medtronic Inc.
Senior Notes for $1.9 billion of total consideration, and
$368 million of Medtronic Luxco Senior Notes for
$376 million of total consideration. The Company will
recognize a total loss on debt extinguishment of
$53 million in the quarter ended July 29, 2022, which
primarily includes cash premiums and accelerated
amortization of deferred financing costs and debt
discounts and premiums. The loss will be recognized in
interest expense in the consolidated statements of income.

We repurchase our ordinary shares on occasion as part of
our focus on returning value to our shareholders. In March
2019, the Company’s Board of Directors authorized the
repurchase of $6.0 billion of the Company’s ordinary
shares. There is no specific time period associated with
these repurchase authorizations. During fiscal years 2022
and 2021, we repurchased a total of 22 million and
4 million shares, respectively, under these programs at an
average price of $113.11 and $126.80, respectively. At
April 29, 2022, we had approximately $3.0 billion
remaining under the share repurchase program authorized
by our Board of Directors.

MEDTRONIC PLC 2022 Form 10-K 53

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

For more information on credit arrangements, see Note 6
of the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.

Liquidity

Our liquidity sources at April 29, 2022 included $3.7 billion
of cash and cash equivalents and $6.9 billion of current
investments. Additionally, we maintain commercial paper
programs and a Credit Facility.

Our investments primarily include available-for-sale debt
securities, including U.S. and non-U.S. government and
agency securities, corporate debt securities, mortgage-
backed securities, certificates of deposit, and other asset-
backed securities. See Note 5 to the consolidated financial
statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K
for additional information regarding fair value
measurements.

We maintain multicurrency commercial paper programs for
short-term financing, which allow us to issue unsecured
commercial paper notes on a private placement basis up

to a maximum aggregate amount outstanding at any time
of $3.5 billion. At both April 29, 2022 and April 30, 2021,
we had no commercial paper outstanding. The issuance of
commercial paper reduces the amount of credit available
under our existing line of credit, as explained below.

We also have a $3.5 billion five-year syndicated credit
facility (Credit Facility), which expires in December 2026. At
each anniversary date of the Credit Facility, we can request
a one-year extension of the maturity date. The Credit
Facility provides backup funding for the commercial paper
programs and may also be used for general corporate
purposes. The Credit Facility provides us with the ability to
increase our borrowing capacity by an additional
$1.0 billion at any time during the term of the agreement.
At April 29, 2022 and April 30, 2021, no amounts were
outstanding under the Credit Facility.

Interest rates on advances of our Credit Facility are
determined by a pricing matrix based on our long-term
debt ratings assigned by Standard & Poor’s Ratings
Services (S&P) and Moody’s Investors Service (Moody’s).
Facility fees are payable on the Credit Facility and are
determined in the same manner as the interest rates. We
are in compliance with all covenants related to the Credit
Facility.

The following table is a summary of our S&P and Moody’s long-term debt ratings and short-term debt ratings:

Standard & Poor’s Ratings Services

Long-term debt

Short-term debt

Moody’s Investors Service

Long-term debt

Short-term debt

Agency Rating (1)
April 29, 2022 April 30, 2021

A-1

P-2

A-1

P-2

(1) Agency ratings are subject to change, and there may be no assurance that an agency will continue to provide ratings and/or maintain

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

S&P and Moody’s long-term debt ratings and short-term
debt ratings at April 29, 2022 were unchanged as
compared to the ratings at April 30, 2021. We do not
expect the S&P and Moody’s ratings to have a significant
impact on our liquidity or future flexibility to access
additional liquidity given our balance sheet, Credit Facility,
and related commercial paper programs.

Contractual Obligations and Cash
Requirements

We have future contractual obligations and other minimum
commercial commitments that are entered into in the
normal course of business, some of which are recorded in
our consolidated balance sheet. We believe our
off-balance sheet arrangements do not have a material
current or anticipated future effect on our consolidated
earnings, financial position, and/or cash flows.

54 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Presented below is a summary of our off-balance sheet contractual obligations and other minimum commercial
commitments at April 29, 2022, as well as long-term contractual obligations reflected in the balance sheet at April 29, 2022.

(in millions)

Total

2023

Maturity by Fiscal Year
2025

2024

2026

2027 Thereafter

Contractual obligations related to off-balance
sheet arrangements:

Commitments to fund minority investments,
milestone payments, and royalty obligations(1)

Interest payments(2)

Other(3)

Contractual obligations reflected in the balance
sheet(4):

233

6,902

995

466

445

460

235

460

121

394

391

4,732

Debt obligations(5)

Operating leases

Contingent consideration(6)

Tax obligations(7)

$ 24,275

$ 3,744

$ 1,895

$ 2,133

$ 1,969

$ 14,528

976

119

1,496

213

176

164

330

130

440

103

550

—

284

—

(1) Includes commitments related to the funding of minority investments, estimated milestone payments, and royalty obligations. While it

is not certain if and/or when payments will be made, the maturity dates included in the table reflect our best estimates.

(2) Includes the contractual interest payments on our outstanding debt and excludes the impacts of debt premium and discount

amortization. See Note 6 to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K for additional information on our debt agreements.

(3) Includes inventory purchase commitments, research and development, and other arrangements that are legally binding and specify

minimum purchase quantities or spending amounts. These purchase commitments do not exceed our projected requirements and are
in the normal course of business. Excludes open purchase orders with a remaining term of less than one year.

(4) Excludes defined benefit plan obligations, guarantee obligations, uncertain tax positions, non-current tax liabilities, and litigation

settlements for which we cannot make a reliable estimate of the period of cash settlement. For further information, see Notes 13, 15, and
18 to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

(5) Includes the current and non-current portion of our Senior Notes and bank borrowings. Excludes debt premium and discount,

unamortized gains from terminated interest rate swap agreements, and commercial paper. See Notes 6 and 7 to the consolidated
financial statements in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional
information on our debt agreements and interest rate swap agreements, respectively.

(6) Includes the fair value of our current and non-current portions of contingent consideration. While it is not certain if and/or when

payments will be made, the maturity dates included in this table reflect our best estimates.

(7) Represents the tax obligations associated with the transition tax that resulted from U.S. Tax Reform. The transition tax will be paid over
an eight-year period and will not accrue interest. See Note 13 to the consolidated financial statements in “Item 8. Financial Statements
and Supplementary Data” in this Annual Report on Form 10-K for further information.

In the normal course of business, we periodically enter into
agreements that require us to indemnify customers or
suppliers for specific risks, such as claims for injury or
property damage arising as a result of our products or the
negligence of our personnel or claims alleging that our
products infringe third-party patents or other intellectual
property. Our maximum exposure under these
indemnification provisions is unable to be estimated, and
we have not accrued any liabilities within our consolidated
financial statements or included any indemnification
provisions in the table above. Historically, we have not
experienced significant losses on these types of
indemnification agreements.

Note 18 to the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K provides information
regarding amounts we have accrued related to legal
matters. In accordance with U.S. GAAP, we record a liability
in our consolidated financial statements for these matters
when a loss is known or considered probable and the
amount can be reasonably estimated. Actual settlements

may be different than estimated and could have a material
effect on our consolidated earnings, financial position,
and/or cash flows.

We record tax liabilities in our consolidated financial
statements for amounts that we expect to repatriate from
subsidiaries (to the extent the repatriation would be
subject to tax); however, no tax liabilities are recorded for
amounts we consider to be permanently reinvested. We
expect to have access to the majority of our cash flows in
the future. In addition, we continue to evaluate our legal
entity structure supporting our business operations, and to
the extent such evaluation results in a change to our overall
business structure, we may be required to accrue for
additional tax obligations.

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

MEDTRONIC PLC 2022 Form 10-K 55

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

We believe our balance sheet and liquidity provide us with
flexibility, and our cash, cash equivalents, current
investments, Credit Facility and related commercial paper
programs as well as our ability to generate operating cash
flows will satisfy our current and future contractual
obligations and cash requirements. We regularly review
our capital needs and consider various investing and
financing alternatives to support our requirements.

ACQUISITIONS

Affera, Inc. Pending Acquisition

On January 10, 2022, Medtronic and Affera, Inc. (Affera)
entered into a definitive agreement in which Medtronic will
acquire Affera for $925 million, including up to
$250 million of contingent consideration related to certain
technical and regulatory milestones. The acquisition is
pending clearance of anti-trust filings and other closing
conditions.

Intersect ENT Acquisition

Subsequent to fiscal year 2022, on May 13, 2022, the
Company acquired Intersect ENT. Total consideration for
the transaction was approximately $1.2 billion to acquire all
outstanding shares of Intersect ENT for $28.25 per share.

Additional information regarding acquisitions is included in
Note 3 of the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” within this
Annual Report on Form 10-K.

SUBSEQUENT EVENTS

On May 25, 2022, the Company and DaVita Inc. (“DaVita”)
entered into a definitive agreement with the intent to form
a new, independent kidney care-focused medical device
company (“NewCo”) with equal equity ownership. The
transaction is expected to close in calendar year 2023,
subject to customary regulatory approvals and closing
conditions. We are contributing our entire Renal Care
Solutions business (“RCS”) to NewCo. RCS is part of the
Respiratory, Gastrointestinal, and Renal division in our
Medical Surgical portfolio, and had revenue of $325 million
in fiscal year 2022. We expect to record a non-cash pre-tax
impairment of long-lived assets of $60 million to
$90 million in the quarter ending July 29, 2022 related to
goodwill.

CRITICAL ACCOUNTING ESTIMATES

We have used various accounting policies to prepare the
consolidated financial statements in accordance with U.S.
GAAP. Our significant accounting policies are disclosed in
Note 1 to the consolidated financial statements in “Item 8.
Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.

The preparation of the consolidated financial statements, in
conformity with U.S. GAAP, requires us to use judgment in
making estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, and expenses.
These estimates reflect our best judgment about economic
and market conditions and the potential effects on the
valuation and/or carrying value of assets and liabilities
based upon relevant information available. We base our
estimates on historical experience and on various
assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for
making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.

Our critical accounting estimates include the following:

Litigation Contingencies

We are involved in a number of legal actions involving
product liability, intellectual property and commercial
disputes, shareholder related matters, environmental
proceedings, tax disputes, and governmental proceedings
and investigations. The outcomes of these legal actions are
not completely within our control and may not be known
for prolonged periods of time. In some actions, the
enforcement agencies or private claimants seek damages,
as well as other civil or criminal remedies (including
injunctions barring the sale of products that are the subject
of the proceeding), that could require significant
expenditures or result in lost revenues or limit our ability to
conduct business in the applicable jurisdictions. Estimating
probable losses from our litigation and governmental
proceedings is inherently difficult, particularly when the
matters are in early procedural stages, with incomplete
scientific facts or legal discovery; involve unsubstantiated
or indeterminate claims for damages; potentially involve
penalties, fines, or punitive damages; or could result in a
change in business practice. The Company records a
liability in the consolidated financial statements for loss
contingencies when a loss is known or considered
probable, and the amount may be reasonably estimated. If
the reasonable estimate of a known or probable loss is a
range, and no amount within the range is a better estimate
than any other, the minimum amount of the range is
accrued. If a loss is reasonably possible but not known or
probable, and may be reasonably estimated, the estimated
loss or range of loss is disclosed. Our significant legal
proceedings are discussed in Note 18 to the consolidated
financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.

Income Tax Reserves

We establish reserves when, despite our belief that our tax
return positions are fully supportable, we believe that
certain positions are likely to be challenged and that we
may or may not prevail. Under U.S. GAAP, if we determine
that a tax position is more likely than not of being sustained
upon audit, based solely on the technical merits of the
position, we recognize the benefit. We measure the benefit

56 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

by determining the amount that is greater than 50 percent
likely of being realized upon settlement. We presume that
all tax positions will be examined by a taxing authority with
full knowledge of all relevant information. The calculation
of our tax liabilities involves dealing with uncertainties in
the application of complex tax regulations in a multitude of
jurisdictions across our global operations. We regularly
monitor our tax positions and tax liabilities. We reevaluate
the technical merits of our tax positions and recognize an
uncertain tax benefit, or derecognize a previously recorded
tax benefit, when there is (i) a completion of a tax audit,
(ii) effective settlement of an issue, (iii) a change in
applicable tax law including a tax case or legislative
guidance, or (iv) the expiration of the applicable statute of
limitations. Significant judgment is required in accounting
for tax reserves. Although we believe that we have
adequately provided for liabilities resulting from tax
assessments by taxing authorities, positions taken by these
tax authorities could have a material impact on our
effective tax rate, consolidated earnings, financial position
and/or cash flows.

Valuation of Intangible Assets and Goodwill

When we acquire a business, the assets acquired and
liabilities assumed are recorded at their respective fair
values at the acquisition date. Goodwill is the excess of the
purchase price over the estimated fair value of net assets of
acquired businesses. Intangible assets primarily include
patents, trademarks, tradenames, customer relationships,
purchased technology, and in-process research and
development. Determining the fair value of intangible
assets acquired as part of a business combination requires
us to make significant estimates. These estimates include
the amount and timing of projected future cash flows of
each project or technology, the discount rate used to

discount those cash flows to present value, and the
assessment of the asset’s life cycle. The estimates could be
impacted by legal, technical, regulatory, economic, and
competitive risks.

The test for impairment of goodwill requires us to make
several estimates related to projected future cash flows to
determine the fair value of the goodwill reporting units.
Our estimates associated with the goodwill impairment test
are considered critical due to the amount of goodwill
recorded on our consolidated balance sheets and the
judgment required in determining fair value. We assess the
impairment of goodwill at the reporting unit level annually
as of the first day of the third quarter and whenever an
event occurs or circumstances change that would indicate
that the carrying amount may be impaired.

We also test definite-lived intangible assets for impairment
when an event occurs or circumstances change that would
indicate the carrying amount of the assets or asset group
may be impaired. We assess the impairment of indefinite-
lived intangible assets annually in the third quarter and
whenever an event occurs or circumstances change that
would indicate that the carrying amount may be impaired.

Our tests for goodwill and intangible assets are based on
future cash flows that require significant judgment with
respect to future revenue and expense growth rates,
appropriate discount rates, asset groupings, and other
assumptions and estimates. We use estimates that are
consistent with the highest and best use of the assets
based on a market participant’s view of the assets being
evaluated. Actual results may differ from our estimates due
to a number of factors including, among others, changes in
competitive conditions, timing of regulatory approval,
results of clinical trials, changes in worldwide economic
conditions, and fluctuations in currency exchange rates.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is
included in Note 1 to the consolidated financial statements

in “Item 8. Financial Statements and Supplementary Data”
in this Annual Report on Form 10-K.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Medtronic plc and Medtronic Global Holdings S.C.A.
(Medtronic Luxco), a wholly-owned subsidiary guarantor,
each have provided full and unconditional guarantees of
the obligations of Medtronic, Inc., a wholly-owned
subsidiary issuer, under the Senior Notes (Medtronic
Senior Notes) and full and unconditional guarantees of the
obligations of Covidien International Finance S.A. (CIFSA),
a wholly-owned subsidiary issuer, under the Senior Notes
(CIFSA Senior Notes). The guarantees of the CIFSA Senior
Notes are in addition to the guarantees of the CIFSA Senior
Notes by Covidien Ltd. and Covidien Group Holdings Ltd.,
both of which are wholly-owned subsidiary guarantors of

the CIFSA Senior Notes. Medtronic plc and Medtronic, Inc.
each have provided a full and unconditional guarantee of
the obligations of Medtronic Luxco under the Senior Notes
(Medtronic Luxco Senior Notes). The following is a
summary of these guarantees:

Guarantees of Medtronic Senior Notes
(cid:2) Parent Company Guarantor - Medtronic plc

(cid:2) Subsidiary Issuer - Medtronic, Inc.

(cid:2) Subsidiary Guarantor - Medtronic Luxco

MEDTRONIC PLC 2022 Form 10-K 57

PART II
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Guarantees of Medtronic Luxco Senior
Notes
(cid:2) Parent Company Guarantor - Medtronic plc

(cid:2) Subsidiary Issuer - Medtronic Luxco

(cid:2) Subsidiary Guarantor - Medtronic, Inc.

Guarantees of CIFSA Senior Notes
(cid:2) Parent Company Guarantor - Medtronic plc

(cid:2) Subsidiary Issuer - CIFSA

(cid:2) Subsidiary Guarantors - Medtronic Luxco, Covidien Ltd.,
and Covidien Group Holdings Ltd. (CIFSA Subsidiary
Guarantors)

The following tables present summarized financial
information for the fiscal year ended April 29, 2022 for the
obligor groups of Medtronic and Medtronic Luxco Senior
Notes, and CIFSA Senior Notes. The obligor group consists
of the parent company guarantor, subsidiary issuer, and
subsidiary guarantors for the applicable senior notes. The
summarized financial information is presented after
elimination of (i) intercompany transactions and balances
among the guarantors and issuers and (ii) equity in
earnings from and investments in any subsidiary that is a
non-guarantor or issuer.

The summarized results of operations information for the fiscal year ended April 29, 2022 was as follows:

(in millions)

Net sales

Operating profit

Loss before income taxes

Net loss attributable to Medtronic

Medtronic & Medtronic
Luxco Senior Notes (1)

CIFSA Senior Notes (2)

$2,063

469

(518)

(529)

—

(5)

(974)

(1,005)

The summarized balance sheet information for the fiscal year ended April 29, 2022 was as follows:

(in millions)

Total current assets(3)

Total noncurrent assets(4)

Total current liabilities(5)

Total noncurrent liabilities(6)

Noncontrolling interests

Medtronic & Medtronic
Luxco Senior Notes (1)

CIFSA Senior Notes (2)

$20,767

12,099

32,647

50,542

171

$ 6,881

8,293

24,302

60,292

171

(1) The Medtronic Senior Notes and Medtronic Luxco Senior Notes obligor group consists of the following entities: Medtronic plc,

Medtronic Luxco, and Medtronic, Inc. Refer to the guarantee summary above for further details.

(2) The CIFSA Senior Notes obligor group consists of the following entities: Medtronic plc, Medtronic Luxco, CIFSA, and CIFSA Subsidiary

Guarantors. Please refer to the guarantee summary above for further details.

(3) Includes receivables due from non-guarantor subsidiaries of $20.2 billion and $6.9 billion for Medtronic & Medtronic Luxco Senior

Notes, and CIFSA Senior Notes, respectively.

(4) Includes loans receivable due from non-guarantor subsidiaries of $6.5 billion and $8.3 billion for Medtronic & Medtronic Luxco Senior

Notes, and CIFSA Senior Notes, respectively.

(5) Includes payables due to non-guarantor subsidiaries of $26.4 billion and $20.2 billion for Medtronic & Medtronic Luxco Senior Notes,

and CIFSA Senior Notes, respectively.

(6) Includes loans payable due to non-guarantor subsidiaries of $29.0 billion and $46.4 billion for Medtronic & Medtronic Luxco Senior

Notes, and CIFSA Senior Notes, respectively.

58 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 7A Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market
Risk

CURRENCY EXCHANGE RATE RISK

Due to the global nature of our operations, we are
exposed to currency exchange rate changes, which may
cause fluctuations in earnings and cash flows. Fluctuations
in the currency exchange rates of currency exposures that
are unhedged, such as in certain emerging markets, may
result in future earnings and cash flow volatility. The gross
notional amount of all currency exchange rate derivative
instruments outstanding at April 29, 2022 and April 30,
2021 was $13.8 billion and $14.7 billion, respectively. At
April 29, 2022, these contracts were in a net unrealized
gain position of $586 million. Additional information

(in millions)

10% appreciation in the U.S. dollar

10% depreciation in the U.S. dollar

regarding our currency exchange rate derivative
instruments is included in Note 7 to the consolidated
financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.

A sensitivity analysis of changes in the fair value of all
currency exchange rate derivative contracts at April 29,
2022 and April 30, 2021 indicates that, if the U.S. dollar
uniformly strengthened/weakened by 10 percent against
all currencies, it would have the following impact on the fair
value of these contracts:

April 29, 2022

Increase (decrease)
April 30, 2021

903

(903)

995

(995)

Any gains and losses on the fair value of derivative
contracts would generally be offset by gains and losses on

the underlying transactions. These offsetting gains and
losses are not reflected in the above analysis.

INTEREST RATE RISK

We are subject to interest rate risk on our short-term
investments and our borrowings. We manage interest rate
risk in the aggregate, while focusing on our immediate and
intermediate liquidity needs. Our debt portfolio at April 29,
2022 was comprised of debt predominantly denominated
in U.S. dollars and Euros, of which substantially all is fixed
rate debt. We are also exposed to interest rate changes

affecting our investments in interest rate sensitive
instruments, which include our marketable debt securities.

A sensitivity analysis of the impact on our interest rate-
sensitive financial instruments of a hypothetical 10 basis
point change in interest rates, as compared to interest
rates at April 29, 2022 and April 30, 2021, would have the
following impact on the fair value of these instruments:

(in millions)

10 basis point increase in interest rates

10 basis point decrease in interest rates

April 29, 2022

Increase (decrease)
April 30, 2021

(53)

(21)

For a discussion of current market conditions and the
impact on our financial condition and results of operations,
see the “Liquidity” section of the Management’s Discussion
and Analysis in “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations”

in this Annual Report on Form 10-K. For additional
discussion of market risk, see Notes 5 and 7 to the
consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report
on Form 10-K.

MEDTRONIC PLC 2022 Form 10-K 59

PART II
Item 8 Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Medtronic
plc

Opinions on the Financial Statements and
Internal Control over Financial Reporting

We have audited the accompanying consolidated balance
sheets of Medtronic plc and its subsidiaries (the
“Company”) as of April 29, 2022 and April 30, 2021, and
the related consolidated statements of income, of
comprehensive income, of equity and of cash flows for
each of the three years in the period ended April 29, 2022,
including the related notes and schedule of valuation and
qualifying accounts for each of the three years in the
period ended April 29, 2022 appearing under Item 15(a)(1)
(collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal
control over financial reporting as of April 29, 2022, based
on criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of the Company as of April 29, 2022 and
April 30, 2021, and the results of its operations and its cash
flows for each of the three years in the period ended
April 29, 2022 in conformity with accounting principles
generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting
as of April 29, 2022, based on criteria established in
Internal Control—Integrated Framework (2013) issued by
the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial
statements, the Company changed the manner in which it
accounts for leases in fiscal year 2020.

Basis for Opinions

The Company’s management is responsible for these
consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its
assessment of the effectiveness of internal control over
financial reporting, included in Management’s Annual
Report on Internal Control Over Financial Reporting
appearing under Item 9A. Our responsibility is to express
opinions on the Company’s consolidated financial
statements and on the Company’s internal control over
financial reporting based on our audits. We are a public
accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and

are required to be independent with respect to the
Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about
whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and
whether effective internal control over financial reporting
was maintained in all material respects.

Our audits of the consolidated financial statements
included performing procedures to assess the risks of
material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included
obtaining an understanding of internal control over
financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such
other procedures as we considered necessary in the
circumstances. We believe that our audits provide a
reasonable basis for our opinions.

Definition and Limitations of Internal Control
over Financial Reporting

A company’s internal control over financial reporting is a
process designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.
A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are
being made only in accordance with authorizations of
management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or

60 MEDTRONIC PLC 2022 Form 10-K

disposition of the company’s assets that could have a
material effect on the financial statements.

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

Critical Audit Matters

The critical audit matter communicated below is a matter
arising from the current period audit of the consolidated
financial statements that was communicated or required to
be communicated to the audit committee and that
(i) relates to accounts or disclosures that are material to the
consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Income Tax Reserve for the Uncertain Tax Position Related
to Puerto Rico Manufacturing

As described in Notes 13 and 18 to the consolidated
financial statements, management records reserves for
uncertain tax positions related to unresolved matters with
the Internal Revenue Service (IRS) and other taxing
authorities. A remaining unresolved issue with the IRS,
relates to the allocation of income between Medtronic, Inc.
and its wholly-owned subsidiary operating in Puerto Rico,
which is one of the Company’s manufacturing sites. These
reserves are subject to a high degree of estimation and
management judgment. Total reserves relating to
uncertain tax positions as of April 29, 2022 were

PART II
Item 8 Financial Statements and Supplementary Data

effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in
conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

$1.661 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 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. This in turn led to a high
degree of auditor judgment, effort, and subjectivity in
performing procedures and evaluating audit evidence to
support management’s accurate 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 reserves. These
procedures also included, among others (i) testing
management’s process for determining the reserve for the
uncertain tax position, (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 tax court case.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota
June 23, 2022

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

MEDTRONIC PLC 2022 Form 10-K 61

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc
Consolidated Statements of Income

(in millions, except per share data)

Net sales

Costs and expenses:

Cost of products sold, excluding amortization of intangible assets

Research and development expense

Selling, general, and administrative expense

Amortization of intangible assets

Restructuring charges, net

Certain litigation charges

Other operating expense, net

Operating profit

Other non-operating income, net

Interest expense

Income before income taxes

Income tax provision (benefit)

Net income

Net income attributable to noncontrolling interests

Net income attributable to Medtronic

Basic earnings per share

Diluted earnings per share

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

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

Fiscal Year

2022

2021

2020

31,686

30,117

28,913

10,145

2,746

10,292

1,733

862

5,752

(318)

553

5,517

456

5,062

(22)

5,039

3.75

3.73

10,483

2,493

10,148

1,783

293

118

315

4,484

(336)

925

3,895

265

3,630

(24)

3,606

2.68

2.66

9,424

2,331

10,109

1,756

118

313

4,791

(356)

1,092

4,055

(751)

4,806

(17)

4,789

3.57

3.54

1,342.4

1,351.4

1,344.9

1,354.0

1,340.7

1,351.1

62 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc
Consolidated Statements of Comprehensive Income

(in millions)

Net income

Other comprehensive income (loss), net of tax:

Unrealized (loss) gain on investment securities

Translation adjustment

Net investment hedge

Net change in retirement obligations

Unrealized (loss) gain on cash flow hedges

Other comprehensive income (loss)

Comprehensive income including noncontrolling interests

Comprehensive income attributable to noncontrolling interests

Fiscal Year
2021

2022

5,062 $

3,630

(301)

(2,086)

2,299

574

727

1,213

6,274

(16)

1,699

(1,694)

505

(519)

3,713

(32)

2020

4,806

(829)

405

(544)

(851)

3,955

(15)

Comprehensive income attributable to Medtronic

6,258 $

3,681

3,940

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

MEDTRONIC PLC 2022 Form 10-K 63

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc
Consolidated Balance Sheets

(in millions)

ASSETS

Current assets:

Cash and cash equivalents

Investments

Accounts receivable, less allowances and credit losses of $230 and $241, respectively

Inventories, net

Other current assets

Total current assets

Property, plant, and equipment, net

Goodwill

Other intangible assets, net

Tax assets

Other assets

Total assets

LIABILITIES AND EQUITY

Current liabilities:

Current debt obligations

Accounts payable

Accrued compensation

Accrued income taxes

Other accrued expenses

Total current liabilities

Long-term debt

Accrued compensation and retirement benefits

Accrued income taxes

Deferred tax liabilities

Other liabilities

Total liabilities

Commitments and contingencies (Notes 3, 16, and 18)

Shareholders’ equity:

Ordinary shares – par value $0.0001, 2.6 billion shares authorized, 1,330,743,395 and 1,345,400,671
shares issued and outstanding, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Total shareholders’ equity

Noncontrolling interests

Total equity

Total liabilities and equity

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

64 MEDTRONIC PLC 2022 Form 10-K

April 29, 2022 April 30, 2021

3,714

6,859

5,551

4,616

2,318

3,593

7,224

5,462

4,313

1,955

23,059

22,548

5,413

40,502

15,595

3,403

3,008

5,221

41,961

17,740

3,169

2,443

90,981

93,083

3,742

2,276

2,121

704

3,551

12,394

20,372

1,113

2,087

884

1,410

2,106

2,482

435

3,475

8,509

26,378

1,557

2,251

1,028

1,756

38,260

41,481

—

24,566

30,250

(2,265)

52,551

171

52,722

—

26,319

28,594

(3,485)

51,428

174

51,602

90,981

93,083

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc
Consolidated Statements of Equity

(in millions, except per share data)

Number

Par Value

Ordinary Shares

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total

Shareholders’ Noncontrolling
Interests

Equity

Total
Equity

April 26, 2019

Net income

Other comprehensive loss

Dividends to shareholders
($2.16 per ordinary share)

Issuance of shares under stock
purchase and award plans

Repurchase of ordinary shares

Stock-based compensation

Changes to noncontrolling
ownership interests

Cumulative effect of change in
accounting principle(1)

April 24, 2020

Net income

Other comprehensive income

Dividends to shareholders
($2.32 per ordinary share)

Issuance of shares under stock
purchase and award plans

Repurchase of ordinary shares

Stock-based compensation

Changes to noncontrolling
ownership interests

Cumulative effect of change in
accounting principle(1)

April 30, 2021

Net income

Other comprehensive income

Dividends to shareholders
($2.52 per ordinary share)

Issuance of shares under stock
purchase and award plans

1,341

— $ 26,532 $ 26,270

(2,711) $

50,091 $

121 $50,212

—

(12)

—

4,789

—

(2,894)

564

(1,228)

297

—

(33)

—

(849)

—

4,789

(849)

(2,894)

564

(1,228)

297

—

(33)

(2)

4,806

(851)

—

(1)

—

(2,894)

564

(1,228)

297

(1)

(33)

1,341

— $ 26,165 $ 28,132

(3,560) $

50,737 $

135 $50,872

—

(4)

—

382

(559)

344

(13)

3,606

—

(3,120)

—

(24)

—

3,606

(3,120)

382

(559)

344

(13)

(24)

3,630

—

(3,120)

382

(559)

344

(6)

(24)

1,345

— $ 26,319 $ 28,594

(3,485) $

51,428 $

174 $51,602

—

5,039

—

(3,383)

329

(2,442)

359

—

1,219

—

5,039

1,219

(3,383)

329

(2,442)

359

(6)

5,062

1,213

—

(3,383)

329

(2,442)

359

(19)

(18)

Repurchase of ordinary shares

(21)

Stock-based compensation

Changes to noncontrolling
ownership interests

—

April 29, 2022

1,331

— $ 24,566 $ 30,250

(2,265) $

52,551 $

171 $52,722

(1) See Note 1 to the consolidated financial statements for discussion regarding the adoption of accounting standards during fiscal year

2021 and fiscal year 2020.

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

MEDTRONIC PLC 2022 Form 10-K 65

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc
Consolidated Statements of Cash Flows

(in millions)

Operating Activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Provision for credit losses

Deferred income taxes

Stock-based compensation

Loss on debt extinguishment

Asset impairment charges

Other, net

Change in operating assets and liabilities, net of acquisitions and divestitures:

Accounts receivable, net

Inventories, net

Accounts payable and accrued liabilities

Other operating assets and liabilities

Net cash provided by operating activities

Investing Activities:

Acquisitions, net of cash acquired

Additions to property, plant, and equipment

Purchases of investments

Sales and maturities of investments

Other investing activities, net

Net cash used in investing activities

Financing Activities:

Change in current debt obligations, net

Proceeds from short-term borrowings (maturities greater than 90 days)

Repayments from short-term borrowings (maturities greater than 90 days)

Issuance of long-term debt

Payments on long-term debt

Dividends to shareholders

Issuance of ordinary shares

Repurchase of ordinary shares

Other financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental Cash Flow Information

Cash paid for:

Income taxes

Interest

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

66 MEDTRONIC PLC 2022 Form 10-K

Fiscal Year
2021

2022

2020

5,062

3,630 $

4,806

2,707

(604)

359

—

515

138

(477)

(560)

213

(65)

2,702

128

(422)

344

308

—

251

2,663

(1,315)

297

406

—

217

(761)

1,291

531

(549)

(577)

(44)

(609)

7,346

6,240

7,234

(91)

(1,368)

(9,882)

9,692

(10)

(1,659)

—

(1)

(3,383)

429

(2,544)

163

(5,336)

(231)

121

3,593

(994)

(488)

(1,355)

(1,213)

(11,808)

(11,039)

11,345

9,574

(54)

(37)

(2,866)

(3,203)

(311)

2,789

(2,853)

7,172

(7,367)

(3,120)

474

(652)

(268)

(17)

—

5,568

(6,110)

(2,894)

662

(1,326)

(81)

(4,136)

(4,198)

215

(547)

4,140

(86)

(253)

4,393

4,140

3,714

3,593 $

996

540

1,250 $

582

878

643

PART II
Item 8 Financial Statements and Supplementary Data

Medtronic plc

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Nature of Operations

Medtronic plc (Medtronic or the Company) is the leading
global healthcare technology company – alleviating pain,
restoring health, and extending life for millions of people
around the world. The Company provides innovative
products and therapies to serve healthcare systems,
physicians, clinicians, and patients. Medtronic was founded
in 1949 and is headquartered in Dublin, Ireland.

Principles of Consolidation

The 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 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. Additionally, certain columns and rows within
tables may not sum due to rounding.

Use of Estimates

The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted
in the United States (U.S.) (U.S. 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.
Actual results may or may not differ from those estimates.

COVID-19 has had, and may continue to have, an adverse
effect on our business, results of operations, financial
condition, and cash flows, and its future impacts remain
uncertain and unpredictable. The Company has
considered the disruptions caused by COVID-19 and has
assessed the potential impact on certain accounting
estimates including, but not limited to, the allowance for
doubtful accounts, inventory reserves, return reserves, the
valuation of goodwill, intangible assets, other long-lived
assets, investments and contingent consideration, as of
April 29, 2022 and through the date of this report. There
was not a material impact to accounting estimates

associated with the Company’s consolidated financial
statements as of and for each of the three fiscal years
ended April 29, 2022, April 30, 2021, and April 24, 2020.

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 29,
2022 and April 30, 2021 and for each of the three fiscal
years ended April 29, 2022 (fiscal year 2022), April 30,
2021 (fiscal year 2021), and April 24, 2020 (fiscal year
2020). 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. These investments are
carried at cost, which approximates fair value.

Investments

The Company invests in marketable debt and equity
securities, investments that do not have readily
determinable fair values, and investments accounted for
under the equity method.

Marketable debt securities are classified and accounted for
as available-for-sale. These investments are recorded at fair
value in the consolidated balance sheets. The change in
fair value for available-for-sale securities is recorded, net of
taxes, as a component of accumulated other
comprehensive loss on the consolidated balance sheets.
The Company determines the appropriate classification of
its investments in marketable debt securities at the time of
purchase and reevaluates such determinations at each
balance sheet date. 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. Marketable equity securities
are recorded at fair value in the consolidated balance

MEDTRONIC PLC 2022 Form 10-K 67

PART II
Item 8 Financial Statements and Supplementary Data

sheets. The change in fair value of marketable equity
securities is recognized within other non-operating income,
net in the consolidated statements of income. At each
reporting period, the Company makes a qualitative
assessment considering impairment indicators to evaluate
whether the investment is impaired. Equity securities
accounted for under the equity method are initially
recorded at the amount of the Company’s investment and
are adjusted each period for the Company’s share of the
investee’s income or loss and dividends paid. Securities
accounted for under the equity method are reviewed
quarterly for changes in circumstance or the occurrence of
events that suggest other than temporary impairment has
occurred.

Accounts Receivable and Allowance for
Doubtful Accounts and Credit Losses

The Company grants credit to customers in the normal
course of business and maintains an allowance for doubtful
accounts for potential credit losses. When evaluating
allowances for doubtful accounts, the Company considers
various factors, including historical experience and
customer-specific information. Uncollectible accounts are
written-off against the allowance when it is deemed that a
customer account is uncollectible.

Inventories

Inventories are stated at the lower of cost or net realizable
value, with cost determined on a first-in, first-out basis. The
Company reduces the carrying value of inventories for
items that are potentially excess, obsolete, or slow-moving
based on changes in customer demand, technology
developments, or other economic factors.

Property, Plant, and Equipment

Property, plant, and equipment is stated at cost and
depreciated over the useful lives of the assets using the
straight-line method. Additions and improvements that
extend the lives of the assets are capitalized, while
expenditures for repairs and maintenance are expensed as
incurred. The Company assesses property, plant, and
equipment for impairment whenever events or changes in
circumstances indicate that the carrying amount of
property, plant, and equipment asset groupings may not
be recoverable. The cost of interest that is incurred in
connection with significant ongoing construction projects
is capitalized using a weighted average interest rate. These
costs are included in property, plant, and equipment and
amortized over the useful life of the related asset. Upon
retirement or disposal of property, plant, and equipment,
the costs and related amounts of accumulated
depreciation or amortization are eliminated from the asset
and accumulated depreciation accounts. The difference, if
any, between the net asset value and the proceeds, is
recognized in earnings.

68 MEDTRONIC PLC 2022 Form 10-K

Goodwill and Intangible Assets

Goodwill is the excess of the purchase price over the
estimated fair value of 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.
An impairment is recognized when the carrying amount of
the reporting unit’s net assets exceeds the estimated fair
value of the reporting unit.

Intangible assets include patents, trademarks, tradenames,
customer relationships, purchased technology, and
in-process research and development (IPR&D). Intangible
assets with a definite life are amortized on a straight-line
basis with estimated useful lives typically ranging from
three to 20 years. Amortization is recognized within
amortization of intangible assets in the consolidated
statements of income. Intangible assets with a definite life
are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount of an
intangible asset (asset group) may not be recoverable.
When events or changes in circumstances indicate that the
carrying amount of an intangible asset may not be
recoverable, the Company calculates the excess of an
intangible asset’s carrying value over its undiscounted
future cash flows. If the carrying value is not recoverable,
an impairment is recognized based on the amount by
which the carrying value exceeds the fair value. The fair
value of an intangible asset (asset group) 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. 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. The fair value of IPR&D is determined by
estimating the future cash flows of each project and
discounting the net cash flows back to their present values.
Upon achieving regulatory approval or commercial viability
for the related product, the indefinite-lived intangible asset
is accounted for as a definite-lived asset and is amortized
on a straight-line basis over the estimated useful life. 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. Impairment is calculated as the excess of
the asset’s carrying value over its fair value. Fair value is
generally determined using a discounted future cash flow
analysis. IPR&D with no alternative future use acquired
outside of a business combination is expensed
immediately.

Contingent Consideration

Certain of the Company’s business combinations involve
potential payment of future consideration that is
contingent upon the achievement of certain product
development milestones and/or contingent on the
acquired business reaching certain performance
milestones. The Company records contingent
consideration at fair value at the date of acquisition based
on the consideration expected to be transferred, estimated
as the probability-weighted future cash flows, discounted
back to present value. The fair value of contingent
consideration is measured using projected payment dates,
discount rates, probabilities of payment, and projected
revenues (for revenue-based considerations). Projected
revenues are based on the Company’s most recent internal
operational budgets and long-range strategic plans. The
discount rate used is determined at the time of
measurement in accordance with accepted valuation
methodologies. 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
expense, net in the consolidated statements of income.
Contingent consideration payments made soon after the
acquisition date are classified as investing activities in the
consolidated statements of cash flows. Contingent
consideration payments not made soon after the
acquisition date that are related to the acquisition date fair
value are reported as financing activities in the
consolidated statements of cash flows, and amounts paid
in excess of the original acquisition date fair value are
reported as operating activities in the consolidated
statements of cash flows.

Self-Insurance

The Company self-insures the majority of its insurable risks,
including medical and dental costs, disability coverage,
physical loss to property, business interruptions, workers’
compensation, comprehensive general, and product
liability. Insurance coverage is obtained for risks required
to be insured by law or contract. The Company uses claims
data and historical experience, as applicable, to estimate
liabilities associated with the exposures that the Company
has self-insured.

PART II
Item 8 Financial Statements and Supplementary Data

Retirement Benefit Plan Assumptions

The Company sponsors various retirement benefit plans,
including defined benefit pension plans, post-retirement
medical plans, defined contribution savings plans, and
termination indemnity plans, covering substantially all U.S.
employees and many employees outside the U.S. See Note
15 for assumptions used in determining pension and post-
retirement benefit costs and liabilities.

Derivatives

The Company recognizes all derivative financial
instruments in its consolidated financial statements at fair
value in accordance with authoritative guidance on
derivatives and hedging, and presents assets and liabilities
associated with derivative financial instruments on a gross
basis in the consolidated financial statements. For
derivative instruments that are designated and qualify as
hedging instruments, the hedging instrument must be
designated as a fair value hedge or a cash flow hedge,
based upon the exposure being hedged. See Note 7 for
more information on the Company’s derivative instruments
and hedging programs.

Fair Value Measurements

The Company follows the authoritative guidance on fair
value measurements and disclosures with respect to assets
and liabilities that are measured at fair value on both a
recurring and nonrecurring basis. Fair value is defined as
the exit price, or the amount that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants as of the
measurement date. The authoritative guidance also
establishes a hierarchy for inputs used in measuring fair
value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available.
Observable inputs are inputs market participants would
use in valuing the asset or liability, based on market data
obtained from sources independent of the Company.
Unobservable inputs are inputs that reflect the Company’s
assumptions about the factors market participants would
use in valuing the asset or liability developed based upon
the best information available in the circumstances. The
categorization of financial assets and financial liabilities
within the valuation hierarchy is based upon the lowest
level of input that is significant to the fair value
measurement. The hierarchy is broken down into three
levels defined as follows:
(cid:2) Level 1 - Inputs are quoted prices in active markets for

identical assets or liabilities.

(cid:2) Level 2 - Inputs include quoted prices for similar assets

or liabilities in active markets, quoted prices for identical
or similar assets or liabilities in markets that are not
active, and inputs (other than quoted prices) that are
observable for the asset or liability, either directly or
indirectly.

(cid:2) Level 3 - Inputs are unobservable for the asset or liability.

MEDTRONIC PLC 2022 Form 10-K 69

PART II
Item 8 Financial Statements and Supplementary Data

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. 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, debt funds, 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. The Level 2
derivative instruments are primarily valued using standard
calculations and models that use readily observable market
data as their basis.

Financial assets are considered Level 3 when their fair
values are determined using pricing models, discounted
cash flow methodologies, or similar techniques, and at
least one significant model assumption or input is
unobservable. Financial assets that are classified as Level 3
include certain investment securities for which there is
limited market activity such that the determination of fair
value requires significant judgment or estimation, and
auction rate securities. With the exception of auction rate
securities, these securities are valued using third-party
pricing sources that incorporate transaction details such as
contractual terms, maturity, timing, and amount of
expected future cash flows, as well as assumptions about
liquidity and credit valuation adjustments by market
participants. The fair value of auction rate securities is
estimated by the Company using a discounted cash flow
model, which incorporates significant unobservable inputs.
The significant unobservable inputs used in the fair value
measurement of the Company’s auction rate securities are
years to principal recovery and the illiquidity premium that
is incorporated into the discount rate. 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.

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.

70 MEDTRONIC PLC 2022 Form 10-K

Revenue Recognition

The Company sells its products through direct sales
representatives and independent distributors. Additionally,
a portion of the Company’s revenue is generated from
consignment inventory maintained at hospitals. 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 consignment
inventory, control is transferred when the product is used
or implanted. Payment terms vary depending on the
country of sale, type of customer, and type of product.

If a contract contains more than one performance
obligation, the transaction price is allocated to each
performance obligation based on relative standalone
selling price. Shipping and handling is treated as a
fulfillment activity rather than a promised service, and
therefore, is not considered a performance obligation.
Taxes assessed by a governmental authority that are both
imposed on, and concurrent with, a specific revenue
producing transaction and collected by the Company from
customers (for example, sales, use, value added, and some
excise taxes) are not included in revenue. For contracts that
have an original duration of one year or less, the Company
uses the practical expedient applicable to such contracts
and does not adjust the transaction price for the time value
of money.

The amount of revenue recognized reflects sales rebates
and returns, which are estimated based on sales terms,
historical experience, and trend analysis. In estimating
rebates, the Company considers the lag time between the
point of sale and the payment of the rebate claim, the
stated rebate rates, and other relevant information. The
Company records adjustments to rebates and returns
reserves as increases or decreases of revenue.

The Company records a deferred revenue liability if a
customer pays consideration before the Company transfers
a good or service to the customer. Deferred revenue
primarily represents remote monitoring services and
equipment maintenance, for which consideration is
received at the same time as consideration for the device
or equipment. Revenue related to remote monitoring
services and equipment maintenance is recognized over
the service period as time elapses.

Shipping and Handling

Shipping and handling costs incurred to physically move
product from the Company’s premises to the customer’s
premises are recognized in selling, general, and
administrative expense in the consolidated statements of
income and were $354 million, $308 million, and
$347 million in fiscal years 2022, 2021, and 2020,
respectively. Other shipping and handling costs incurred to
store, move, and prepare products for shipment are
recognized in cost of products sold in the consolidated
statements of income.

Research and Development

Other Non-Operating Income, Net

PART II
Item 8 Financial Statements and Supplementary Data

Research and development costs are expensed when
incurred. Research and development costs include costs of
research, engineering, and technical activities to develop a
new product or service or make significant improvement to
an existing product or manufacturing process. Research
and development costs also include pre-approval
regulatory and clinical trial expenses.

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. If the reasonable estimate of a
known or probable loss is a range, and no amount within
the range is a better estimate than any other, the minimum
amount of the range is accrued. If a loss is reasonably
possible but not known or probable, and may be
reasonably estimated, the estimated loss or range of loss is
disclosed.

Income Taxes

The Company has deferred taxes that arise as a result of
the different treatment of transactions for U.S. GAAP and
income tax accounting, known as temporary differences.
The Company records the tax effect of these temporary
differences as deferred tax assets and deferred tax
liabilities. Deferred tax assets generally represent items
that may be used as a tax deduction or credit in a tax return
in future years for which the Company has already
recognized the tax benefit in the consolidated statements
of income. The Company establishes valuation allowances
for deferred tax assets when the amount of expected future
taxable income is not likely to support the use of the
deduction or credit. Deferred tax liabilities generally
represent tax expense for which payment has been
deferred or expense has already been taken as a
deduction on the Company’s tax return but has not yet
been recognized as an expense in the consolidated
statements of income. See Footnote 13 for more
information on the Company’s uncertain tax positions and
tax policies.

Other Operating Expense, Net

Other operating expense, net primarily includes royalty
income and 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, charges related to the June 2021 decision
to stop the distribution and sale of Medtronic’s HVAD
System within the Mechanical Circulatory Support
Operating Unit (MCS) (MCS charges), impairment charges,
and income from funded research and development
arrangements.

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.

Currency Translation

Assets and liabilities of non-U.S. dollar functional currency
entities are translated to U.S. dollars at period-end
exchange rates, and the currency impacts arising from the
translation of the assets and liabilities are recorded as a
cumulative translation adjustment, a component of
accumulated other comprehensive loss, on the
consolidated balance sheets. 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 expense, 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. The amount of stock-based compensation expense
recognized during a period is based on the portion of the
awards that are expected to vest. The Company estimates
pre-vesting forfeitures at the time of grant and revises the
estimates in subsequent periods.

Recently Adopted Accounting Standards

Current Expected Credit Losses

In June 2016, the Financial Accounting Standards Board
(FASB) issued guidance changing the methodology to be
used to measure credit losses for certain financial
instruments and financial assets, including trade
receivables. The new methodology requires the
recognition of an allowance that reflects the current
estimate of credit losses expected to be incurred over the
life of the financial asset. The Company adopted this
guidance using the modified retrospective method in the
first quarter of fiscal year 2021. The adoption of this
guidance did not have a material impact to the Company’s
consolidated financial statements.

Leases

In February 2016, the FASB issued guidance which
requires lessees to recognize right-of-use assets and lease
liabilities on the balance sheet. This guidance also requires
additional qualitative and quantitative lease related
disclosures in the notes to the consolidated financial
statements. The Company adopted this guidance using the
modified retrospective method in the first quarter of fiscal
year 2020.

MEDTRONIC PLC 2022 Form 10-K 71

PART II
Item 8 Financial Statements and Supplementary Data

During the implementation, the Company elected the
package of practical expedients available under the
transition guidance that allowed an entity not to reassess
whether any expired or existing contracts are or contain
leases, the classification for any expired or existing leases
or any initial direct costs for existing leases. Further, the
Company made accounting policy elections to not apply
the recognition requirements to short-term leases and to
account for lease and nonlease components as a single
lease component.

2. Revenue

The adoption of this guidance resulted in the recognition
of right-of-use assets and lease liabilities in an amount of
approximately $1.0 billion, an immaterial cumulative-effect
adjustment to retained earnings as of April 27, 2019, and
expansion of lease related disclosures. The adoption of this
guidance did not have a material impact on the Company’s
consolidated statements of income or consolidated
statements of cash flows.

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. 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.

The table below illustrates net sales by segment and division for fiscal years 2022, 2021, and 2020:

(in millions)

Cardiac Rhythm & Heart Failure

Structural Heart & Aortic

Coronary & Peripheral Vascular

Cardiovascular

Surgical Innovations

Respiratory, Gastrointestinal, & Renal

Medical Surgical

Cranial & Spinal Technologies

Specialty Therapies

Neuromodulation

Neuroscience

Diabetes

Total

Net Sales by Fiscal Year

2022

2021

5,908

5,584

3,055

2,460

2,834

2,354

2020

5,141

2,842

2,486

11,423

10,772

10,468

6,060

3,081

9,141

4,456

2,592

1,735

8,784

2,338

5,438

3,298

8,737

4,288

2,307

1,601

8,195

2,413

5,513

2,839

8,352

4,082

2,147

1,497

7,725

2,368

$ 31,686

$ 30,117 $ 28,913

The table below includes net sales by market geography and segment for fiscal years 2022, 2021, and 2020:

(in millions)

Fiscal Year
2022

U.S.(1)
Fiscal Year
2021

Fiscal Year
2020

Non-U.S. Developed Markets(2)
Fiscal Year
2021

Fiscal Year
2022

Fiscal Year
2020

Emerging Markets(3)
Fiscal Year
2021

Fiscal Year
2022

Fiscal Year
2020

Cardiovascular

5,545 $

5,248 $

5,062

3,866

3,752

3,519

2,012

1,773

1,887

Medical
Surgical

Neuroscience

Diabetes

Total

3,862

5,753

974

3,650

5,456

1,171

3,532

5,122

1,204

3,373

1,801

1,085

3,320

1,724

1,019

3,169

1,659

940

1,905

1,229

279

1,766

1,015

222

1,651

945

224

$ 16,135 $ 15,526 $ 14,919

$ 10,126

$ 9,815

$ 9,287

$ 5,426

$ 4,777

$ 4,707

(1) U.S. includes the United States and U.S. territories.

(2) Non-U.S. developed markets include Japan, Australia, New Zealand, Korea, Canada, and the countries of Western Europe.

(3) Emerging markets include the countries of the Middle East, Africa, Latin America, Eastern Europe, and the countries of Asia that are not

included in the non-U.S. developed markets, as defined above.

72 MEDTRONIC PLC 2022 Form 10-K

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 30, 2021, $906 million
of rebates were classified as other accrued expenses, and
$485 million of rebates were classified as a reduction of
accounts receivable in the consolidated balance sheet.
During fiscal year 2022, 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.

Deferred Revenue and Remaining
Performance Obligations

Deferred revenue at April 29, 2022 and April 30, 2021 was
$399 million and $368 million, respectively. At April 29,

Acquisitions

The Company had acquisitions during fiscal years 2022
and 2021 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. 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 2022 and 2021
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. Purchase price
allocation adjustments for fiscal years 2022 and 2021
business combinations were not significant.

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. Based upon preliminary valuations, 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 contingent
consideration liabilities in connection with business
combinations during fiscal year 2022, which are comprised
of revenue and regulatory milestone-based payments.

Fiscal Year 2021

PART II
Item 8 Financial Statements and Supplementary Data

2022 and April 30, 2021, $305 million and $276 million was
included in other accrued expenses, respectively, and
$94 million and $93 million was included in other liabilities,
respectively. During the fiscal year ended April 29, 2022,
the Company recognized $243 million of revenue that was
included in deferred revenue as of April 30, 2021.

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 29, 2022, 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 $925 million. The Company
expects to recognize revenue on the majority of these
remaining performance obligations over the next three
years.

assumed. Based upon final valuations, assets acquired
were primarily comprised of $417 million of technology-
based intangible assets and $13 million of customer-
related intangible assets with estimated useful lives
ranging from 8 to 15 years, and $816 million of goodwill.
The goodwill is not deductible for tax purposes. The
Company recognized $253 million of contingent
consideration liabilities in connection with business
combinations during fiscal year 2021, which are comprised
of revenue and regulatory milestone-based payments.
Additionally, the Company recognized a gain of
$132 million related to a change in amounts accrued for
certain contingent liabilities from a past acquisition. The
benefit was recognized in other operating expense, net in
the consolidated statements of income as the purchase
accounting was finalized in fiscal year 2020.

Subsequent Acquisitions

Subsequent to fiscal year 2022, on May 13, 2022, the
Company’s Neuroscience segment acquired Intersect ENT,
a global ear, nose, and throat (ENT) medical technology
leader. The acquisition expands Medtronic’s portfolio of
products used during ENT procedures and, combined with
the Company’s navigation, powered instruments, and
existing tissue health products, will offer a broader suite of
solutions to assist surgeons treating patients who suffer
from chronic rhinosinusitis (CRS). Total consideration for
the transaction, in which the Company acquired all
outstanding shares of Intersect ENT for $28.25 per share,
was approximately $1.2 billion. The transaction will be
accounted for as a business combination using the
acquisition method of accounting. This requires, among
other things, that assets acquired and liabilities assumed
be recognized at their fair values as of the acquisition date.

The acquisition date fair value of net assets acquired
during fiscal year 2021 was $1.2 billion, consisting of
$1.4 billion of assets acquired and $161 million of liabilities

Due to the limited amount of time since the acquisition
date and the significant limitations on access to Intersect
ENT information prior to the acquisition date the

MEDTRONIC PLC 2022 Form 10-K 73

PART II
Item 8 Financial Statements and Supplementary Data

preliminary acquisition valuation for the business
combination is incomplete at this time. As a result, the
Company is unable to provide the amounts recognized as
of the acquisition date for the major classes of assets
acquired and liabilities assumed, including the information
required for valuation of intangible assets and goodwill.
We will include such disclosures in our Form 10-Q for the
quarter ending July 29, 2022.

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 2022, the Company acquired $101 million of
IPR&D in connection with asset acquisitions of technology
not approved by regulators, which was recognized in
research and development expense in the consolidated
statements of income. During fiscal year 2021, IPR&D
acquired in connection with asset acquisitions was not
significant.

Contingent Consideration

The fair value of contingent consideration at April 29, 2022
and April 30, 2021 was $119 million and $270 million,
respectively. At April 29, 2022, $35 million was recorded in
other accrued expenses, and $84 million was recorded in
other liabilities on the consolidated balance sheets. At
April 30, 2021, $78 million was reflected in other accrued
expenses, and $192 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:

(in millions)

Beginning Balance

Purchase price contingent consideration

Purchase price allocation adjustments

Payments

Change in fair value

Ending Balance

Fiscal Year

2022

270

(86)

(103)

119

2021

280

253

—

(299)

270

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

(in millions)

Revenue and other performance-based payments

Product development and other milestone-based
payments

Fair Value at
April 29,
2022

Unobservable Input

Range

Discount rate

11.2%-27.2%

104

Probability of payment

100%

Projected fiscal year of payment

2023-2027

Discount rate

5.5%

Probability of payment

100%

Projected fiscal year of payment

2023-2024

Weighted
Average (1)

14.6%

100%

2025

5.5%

100%

2024

(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected fiscal year of

payment, the amount represents the median of the inputs and is not a weighted average.

74 MEDTRONIC PLC 2022 Form 10-K

Restructuring Charges

4.
Enterprise Excellence

In the third quarter of fiscal year 2018, the Company
announced its Enterprise Excellence restructuring
program, which was designed to leverage the Company’s
global size and scale, as well as enhance the customer and
employee experience, with a focus on three objectives:
global operations, functional optimization, and commercial
optimization.

Since inception, the Company has incurred pre-tax exit and
disposal costs and other costs, across all segments, of
$1.6 billion in connection with the Enterprise Excellence
program. In total, the Company estimates it will recognize
approximately $1.8 billion of exit and disposal costs and
other costs related to the program by the end of fiscal year
2023. The remaining charges are costs associated with the
restructuring program, such as salaries and benefits for
employees supporting the program, including program
management and transition teams, and strategic and
operational consulting services related to the three
objectives of the program. These charges are recognized
within restructuring charges, net, cost of products sold, and
selling, general, and administrative expense in the
consolidated statements of income.

For fiscal years 2022, 2021 and 2020, the Company
recognized net charges of $259 million, $349 million, and
$441 million, respectively, of which $116 million,
$128 million, and $155 million, respectively, were
recognized within cost of products sold, and $112 million,
$169 million, and $168 million, respectively, were
recognized within selling, general, and administrative
expense in the consolidated statements of income.

PART II
Item 8 Financial Statements and Supplementary Data

Simplification

In the first quarter of fiscal year 2021, the Company initiated
the Simplification restructuring program, designed to make
the Company a more nimble and competitive organization
focused on accelerating innovation, enhancing the
customer experience, driving revenue growth, and winning
market share, while also more efficiently and effectively
leveraging the enterprise scale.

Since inception, the Company has incurred pre-tax exit and
disposal costs and other costs, across all segments, of
$349 million in connection with the program. In total, the
Company estimates it will recognize approximately
$450 million of exit and disposal costs and other costs related
to the Simplification program by the end of fiscal year 2023.
The remaining charges are costs associated with the
restructuring program, such as salaries for employees
supporting the program and consulting expenses. These
charges are recognized within restructuring charges, net, cost
of products sold, and selling, general, and administrative
expense in the consolidated statements of income.

For fiscal years 2022 and 2021, the Company recognized
net charges of $82 million and $268 million, respectively,
of which $45 million and $27 million were recognized
within selling, general, and administrative expense in the
consolidated statements of income. The net charges for
fiscal year 2021 included $97 million of incremental
defined benefit pension and post-retirement related
expenses for employees that accepted voluntary early
retirement packages and are not included in the table
below, as they are associated with costs that are accounted
for under the pension and post-retirement rules. See
Note 15 for further discussion on these charges.

The following table summarizes the activity related to the restructuring programs noted above for fiscal years 2022, 2021,
and 2020:

(in millions)

April 26, 2019

Charges

Cash payments

Settled non-cash

Accrual adjustments(2)

April 24, 2020

Charges

Cash payments

Accrual adjustments(2)

April 30, 2021

Charges

Cash payments

Accrual adjustments(2)

April 29, 2022

Employee
Termination Benefits

Associated
Costs(1)

Asset
Write-downs

Other
Costs

101

129

(128)

—

(13)

213

(162)

(17)

123

(109)

(13)

— $

12 $

300

(290)

—

322

(319)

—

274

(269)

—

(24)

—

(9)

—

(8)

(5)

(2)

—

— $

1 $

Total

122

462

(427)

(24)

(21)

112

539

(486)

(19)

146

354

(378)

(13)

110

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

program and consulting expenses.

(2) 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.

MEDTRONIC PLC 2022 Form 10-K 75

PART II
Item 8 Financial Statements and Supplementary Data

Mechanical Circulatory Support (MCS)

On June 3, 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 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

Financial Instruments

Debt Securities

$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 expense, net primarily
related to incremental commitments and obligations
associated with the exit of the business. As of April 29,
2022, accruals were recorded in the consolidated balance
sheet for these obligations, with $82 million reflected in
other accrued expenses and $152 million recorded in other
liabilities. Medtronic remains committed to serving the
needs of the approximately 3,500 patients currently
implanted with the HVAD system.

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 April 29, 2022 and
April 30, 2021:

(in millions)

Level 1:

April 29, 2022

Valuation

Cost

Unrealized
Gains

Unrealized
Losses

Balance Sheet
Classification

Fair Value

Investments Other Assets

U.S. government and agency securities

533

Level 2:

Corporate debt securities

U.S. government and agency securities

Mortgage-backed securities

Non-U.S. government and agency

securities

Certificates of deposit

Other asset-backed securities

Total Level 2

Level 3:

Auction rate securities

4,457

910

592

567

6,563

Total available-for-sale debt securities

$ 7,131

—

(15)

518

(140)

(41)

(35)

—

(11)

(227)

4,321

869

558

556

6,341

4,321

869

558

556

6,341

(3)

—

$ (245)

6,893

6,859

—

76 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

April 30, 2021

Valuation

Cost

Unrealized
Gains

Unrealized
Losses

Balance Sheet
Classification

Fair Value

Investments Other Assets

(in millions)

Level 1:

U.S. government and agency securities

505

(3)

528

Level 2:

Corporate debt securities

4,557

U.S. government and agency securities

Mortgage-backed securities

Non-U.S. government and agency

securities

Certificates of deposit

Other asset-backed securities

Debt funds

Total Level 2

Level 3:

810

645

534

103

—

(13)

(7)

(16)

—

(1)

—

4,647

804

650

537

804

650

537

6,603

129

(36)

6,696

Auction rate securities

—

(3)

—

Total available-for-sale debt securities

$ 7,144

155

$ (42)

7,257

7,224

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

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 29, 2022 and April 30, 2021:

(in millions)

April 29, 2022

Less than 12 months

More than 12 months

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

U.S. government and agency securities

—

Corporate debt securities

Mortgage-backed securities

Other asset-backed securities

Auction rate securities

Total

(in millions)

Corporate debt securities

Mortgage-backed securities

Other asset-backed securities

Auction rate securities

Total

222

—

(1)

—

945

2,993

507

526

(56)

(139)

(35)

(11)

(3)

222

(1)

5,004

(244)

April 30, 2021

Less than 12 months

More than 12 months

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

—

3,209

650

531

946

(10)

4,423

(32)

U.S. government and agency securities

946

(10)

—

(13)

(16)

(1)

(3)

The Company reviews the fair value hierarchy classification
on a quarterly basis. 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 fiscal years

ended April 29, 2022 and April 30, 2021. 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 2022 Form 10-K 77

PART II
Item 8 Financial Statements and Supplementary Data

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

(in millions)

April 29, 2022

April 30, 2021

April 24, 2020

Proceeds from sales and maturities

9,611

10,420

9,559

Gross realized gains

Gross realized losses

(18)

(14)

(22)

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 29, 2022 balance of available-for-sale debt
securities by contractual maturity 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. 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)

Due in one year or less

Due after one year through five years

Due after five years through ten years

Due after ten years

Total debt securities

April 29, 2022

1,501

3,465

1,271

656

6,893

Equity Securities, Equity Method
Investments, and Other Investments

The Company holds investments in equity securities with
readily determinable fair values, equity investments without
readily determinable fair values, investments accounted for
under the equity method, and other investments. Equity
securities with readily determinable fair values are included
in Level 1 of the fair value hierarchy, as they are measured

using quoted market prices. Equity method investments
and investments without readily determinable fair values
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 all pertinent financial information
available related to the investees, including financial
statements, market participant valuations from recent and
proposed equity offerings, and other third-party data.

The following table summarizes the Company’s equity and other investments at April 29, 2022 and April 30, 2021, which are
classified as other assets in the consolidated balance sheets:

(in millions)

Investments with readily determinable fair value (marketable equity securities)

Investments without readily determinable fair values

Equity method and other investments

Total equity and other investments

April 29, 2022

April 30, 2021

732

881

537

687

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.

(in millions)

Proceeds from sales

Gross gains

Gross losses

Impairment losses recognized

April 29, 2022

April 30, 2021

April 24, 2020

(52)

(17)

(3)

(4)

(30)

(4)

During the fiscal year ended April 29, 2022, there were
$8 million of net unrealized gains on equity securities and
other investments still held at April 29, 2022. During the

fiscal year ended April 30, 2021, there were $63 million of
net unrealized gains on equity securities and other
investments still held at April 30, 2021.

78 MEDTRONIC PLC 2022 Form 10-K

Financing Arrangements
6.
Current debt obligations consisted of the following:

(in millions)

Bank borrowings

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

Current debt obligations

PART II
Item 8 Financial Statements and Supplementary Data

April 29, 2022

April 30, 2021

798

1,596

1,330

—

3,742

Bank Borrowings

Line of Credit

Outstanding bank borrowings at April 29, 2022 and
April 30, 2021 were not significant.

Commercial Paper

On January 26, 2015, Medtronic Global Holdings S.C.A.
(Medtronic Luxco), an entity organized under the laws of
Luxembourg, entered into various agreements pursuant to
which Medtronic Luxco may issue United States Dollar-
denominated unsecured commercial paper notes (the
2015 CP Program) on a private placement basis, and on
January 31, 2020 Medtronic Luxco entered into various
agreements pursuant to which Medtronic Luxco may issue
Euro-denominated unsecured commercial paper notes
(the 2020 CP Program) on a private placement basis. The
Maximum aggregate amount outstanding at any time
under the 2015 CP Program and the 2020 CP Program
together may not exceed the equivalent of $3.5 billion. The
Company and Medtronic, Inc. 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 29,
2022 and April 30, 2021, or during fiscal year 2021. During
fiscal year 2022, the weighted average original maturity of
the commercial paper outstanding was approximately
fifteen days and the weighted average interest rate was
0.70 percent. The issuance of commercial paper reduces
the amount of credit available under the Company’s
existing credit facility, defined below.

On December 12, 2021, Medtronic Luxco, as borrower,
entered into an amendment to its amended and restated
credit agreement (Credit Facility), by and among
Medtronic, Medtronic, Inc., Medtronic Luxco, the lenders
from time to time party thereto, and Bank of America, N.A.,
as administrative agent and issuing bank, extending the
maturity date of the Credit Facility to December 2026 and
removing the cap on the number of extension options
available.

The Credit Facility provides for a $3.5 billion five-year
unsecured revolving credit facility (Credit Facility). At each
anniversary date of the Credit Facility we can request a
one-year extension of the maturity date. The Credit Facility
provides the Company with the ability to increase its
borrowing capacity by an additional $1.0 billion at any time
during the term of the agreement. The Company and
Medtronic, Inc. have guaranteed the obligations of the
borrowers under the Credit Facility, and Medtronic Luxco
will also guarantee the obligations of any designated
borrower. The Credit Facility includes a multi-currency
borrowing feature for certain specified foreign currencies.
At April 29, 2022 and April 30, 2021, 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. Facility
fees are payable on the Credit Facility and are determined
in the same manner as the interest rates. The Company is
in compliance with all covenants related to the Credit
Facility.

MEDTRONIC PLC 2022 Form 10-K 79

PART II
Item 8 Financial Statements and Supplementary Data

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

(in millions, except interest rates)

April 29, 2022

Maturity by
Fiscal Year

Amount

Effective
Interest Rate

April 30, 2021

Amount

Effective
Interest Rate

0.000 percent three-year 2019 senior notes

2023

0.375 percent four-year 2019 senior notes

0.000 percent two-year 2020 senior notes

3.500 percent ten-year 2015 senior notes

0.250 percent six-year 2019 senior notes

0.000 percent five-year 2020 senior notes

1.125 percent eight-year 2019 senior notes

3.350 percent ten-year 2017 senior notes

0.375 percent eight-year 2020 senior notes

1.625 percent twelve-year 2019 senior notes

1.000 percent twelve-year 2019 senior notes

0.750 percent twelve-year 2020 senior notes

4.375 percent twenty-year 2015 senior notes

6.550 percent thirty-year 2007 CIFSA senior notes

2.250 percent twenty-year 2019 senior notes

6.500 percent thirty-year 2009 senior notes

1.500 percent twenty-year 2019 senior notes

5.550 percent thirty-year 2010 senior notes

1.375 percent twenty-year 2020 senior notes

4.500 percent thirty-year 2012 senior notes

4.000 percent thirty-year 2013 senior notes

4.625 percent thirty-year 2014 senior notes

4.625 percent thirty-year 2015 senior notes

1.750 percent thirty-year 2019 senior notes

1.625 percent thirty-year 2020 senior notes

Finance lease obligations

Debt discount, net

Deferred financing costs

Long-term debt

Senior Notes

2023

2025

2026

2027

2029

2031

2032

2033

2035

2038

2039

2040

2041

2042

2043

2044

2045

2050

2051

2023-2035

2023-2051

The Company has outstanding unsecured senior
obligations, described as senior notes in the tables above
(collectively, the Senior Notes). 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 June 2019, Medtronic Luxco issued six tranches of Euro-
denominated Senior Notes with an aggregate principal of
€5.0 billion, with maturities ranging from fiscal year 2021 to
fiscal year 2050, resulting in cash proceeds of
approximately $5.6 billion, net of discounts and issuance
costs. The Company used the net proceeds of the offering
to fund the cash tender offer and early redemption of
$5.2 billion of Medtronic Inc., CIFSA, and Medtronic Luxco
Senior Notes for $5.6 billion of total consideration. The

80 MEDTRONIC PLC 2022 Form 10-K

—

1,890

1,064

1,596

368

1,064

1,932

253

1,064

158

1,064

224

1,064

105

305

127

1,813

1,064

(52)

(109)

—% $

—

3.74

0.45

0.25

1.26

3.53

0.52

1.75

1.06

0.81

4.47

4.67

2.35

6.56

1.59

5.58

1.47

4.54

4.09

4.67

4.69

1.88

1.76

9.15

—

907

1,813

1,511

1,890

1,209

1,813

368

1,209

1,932

253

1,209

158

1,209

224

1,209

105

305

127

1,813

1,209

(75)

(125)

0.08%

0.55

0.12

3.74

0.43

0.22

1.24

3.53

0.51

1.74

1.05

0.81

4.47

4.67

2.34

6.56

1.58

5.58

1.46

4.54

4.09

4.67

4.69

1.87

1.75

9.29

—

20,372

26,378

Company recognized a loss on debt extinguishment of
$413 million in fiscal year 2020, which primarily included
cash premiums and accelerated amortization of deferred
financing costs and debt discounts and premiums. The loss
was recognized in interest expense in the consolidated
statement of income.

In September 2020, Medtronic Global Holdings S.C.A.
(Medtronic Luxco) issued an additional 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 included cash premiums and accelerated
amortization of deferred financing costs and debt
discounts and premiums. The loss was recognized in
interest expense in the consolidated statement of income.

The Euro-denominated debt issued in June 2019 and
September 2020 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.

Term Loan Agreements

On May 12, 2020, Medtronic Luxco entered into a term
loan agreement (Fiscal 2021 Loan Agreement) by and
among Medtronic Luxco, Medtronic plc, Medtronic, Inc.,
and Mizuho Bank, Ltd. as administrative agent and as
lender. The Fiscal 2021 Loan Agreement provided an
unsecured term loan in an aggregate principal amount of
up to ¥300 billion, with a term of six months and the option
to extend for an additional six months at Medtronic Luxco’s
option. On May 13, 2020, Medtronic Luxco borrowed the
entire amount of the term loan under the Fiscal 2021 Loan
Agreement. The Japanese Yen-denominated debt was
designated as a net investment hedge for certain of the
Company’s Japanese operations. Borrowings under the
Fiscal 2021 Loan Agreement carried interest at the TIBOR
Rate (as defined in the Fiscal 2021 Loan Agreement) plus a
margin of 0.50% per annum. Medtronic plc and Medtronic,
Inc. guaranteed the obligations of Medtronic Luxco under
the Fiscal 2021 Loan Agreement. On November 12, 2020,

PART II
Item 8 Financial Statements and Supplementary Data

the Company exercised its option to extend the term loan
for an additional six months. During the fourth quarter of
fiscal year 2021, the Company de-designated the
Yen-denominated debt as a net investment hedge and
repaid the term loan in full, including interest.

Subsequent to fiscal year 2022, on May 2, 2022, Medtronic
Luxco entered into a term loan agreement (Fiscal 2023
Loan Agreement) by and among Medtronic Luxco,
Medtronic plc, Medtronic, Inc., and Mizuho Bank, Ltd. as
administrative agent and as lender. The Fiscal 2023 Loan
Agreement provides an unsecured term loan in an
aggregate principal amount of up to ¥300 billion with a
term of 364 days. Borrowings under the Fiscal 2023 Loan
Agreement bear interest at the TIBOR Rate (as defined in
the Fiscal 2023 Loan Agreement) plus a margin of 0.40%
per annum. Medtronic plc and Medtronic, Inc. have
guaranteed the obligations of Medtronic Luxco under the
Fiscal 2023 Loan Agreement. In May and June 2022,
Medtronic Luxco borrowed an aggregate of ¥297 billion,
or approximately $2.3 billion, of the term loan, under the
Fiscal 2023 Loan Agreement. The Company used the net
proceeds of the borrowings to fund the early redemption
of $1.9 billion of Medtronic Inc.’s 3.500% Senior Notes due
2025 for $1.9 billion of total consideration, and
$368 million of Medtronic Luxco’s 3.350% Senior Notes
due 2027 for $376 million of total consideration. The
Company will recognize a total loss on debt
extinguishment of $53 million in the quarter ended July 29,
2022, which primarily includes cash premiums and
accelerated amortization of deferred financing costs and
debt discounts and premiums. The loss will be recognized
in interest expense in the consolidated statements of
income.

Contractual maturities of debt for the next five fiscal years and thereafter, excluding deferred financing costs and debt
discount, net, are as follows:

(in millions)

2023

2024

2025

2026

2027

Thereafter

Total

3,744

1,895

2,133

1,969

14,528

24,275

Financial Instruments Not Measured at Fair
Value

At April 29, 2022, the estimated fair value of the
Company’s Senior Notes was $22.9 billion compared to a
principal value of $24.2 billion. At April 30, 2021 the
estimated fair value was $28.6 billion compared to a

principal value of $26.5 billion. The fair value was
estimated using quoted market prices for the publicly
registered Senior Notes, which are classified as Level 2
within the fair value hierarchy. The fair values and principal
values consider the terms of the related debt and exclude
the impacts of debt discounts and hedging activity.

MEDTRONIC PLC 2022 Form 10-K 81

PART II
Item 8 Financial Statements and Supplementary Data

Cash Flow Hedges

7. Derivatives and Currency Exchange Risk Management
The Company uses operational and economic hedges,
including currency exchange rate derivative contracts and
interest rate derivative instruments, to manage the impact
of currency exchange and interest rate changes on
earnings and cash flows. In addition, the Company uses
cross currency interest rate swaps to manage currency risk
related to certain debt. In order to minimize earnings and
cash flow volatility resulting from currency exchange rate
changes, the Company enters into derivative instruments,
principally forward currency exchange rate contracts.
These contracts are designed to hedge anticipated foreign
currency transactions and changes in the value of specific
assets and liabilities. At inception of the contract, the
derivative is designated as either a freestanding derivative
or a cash flow hedge. Currencies of our derivative
instruments include the Euro, Japanese Yen, Chinese Yuan,
and others. The Company does not enter into currency
exchange rate derivative contracts for speculative
purposes. The gross notional amount of all currency
exchange rate derivative instruments outstanding was
$13.8 billion and $14.7 billion at April 29, 2022 and
April 30, 2021, respectively.

The Company also uses derivative and non-derivative
instruments to manage the impact of currency exchange
rate changes on net investments in foreign currency-
denominated operations. The information that follows
explains the various types of derivatives and financial
instruments used by the Company, reasons the Company
uses such instruments, and the impact such instruments
have on the Company’s consolidated balance sheets and
statements of income.

Freestanding Derivative Contracts

Freestanding derivative contracts are primarily used to
offset the Company’s exposure to the change in value of
specific foreign-currency-denominated assets and
liabilities, and to offset variability of cash flows associated
with forecasted transactions denominated in foreign
currencies. The gross notional amount of the Company’s
freestanding currency exchange rate contracts
outstanding at April 29, 2022 and April 30, 2021 was
$4.9 billion and $5.7 billion, respectively. The Company’s
freestanding currency exchange rate contracts are not
designated as hedges, and therefore, changes in the value
of these contracts are recognized in earnings, thereby
offsetting the current earnings effect of the related change
in value of foreign-currency-denominated assets,
liabilities, and cash flows.

The Company also uses total return swaps to hedge the
liability of a non-qualified, deferred compensation plan.
The gross notional amount of the Company’s total return
swaps outstanding at April 29, 2022 and April 30, 2021 was
$226 million and $243 million, respectively. The
Company’s total return swaps are not designated as
hedges, and therefore, changes in the value of these
instruments are recognized in earnings. The cash flows

82 MEDTRONIC PLC 2022 Form 10-K

related to the Company’s freestanding derivative contracts
are reported as operating or financing activities,
depending on the nature of the underlying hedged item, in
the consolidated statements of cash flows.

Forward contracts designated as cash flow hedges are
designed to hedge the variability of cash flows associated
with forecasted transactions denominated in a foreign
currency that will take place in the future. The gross
notional amount of these contracts, designated as cash
flow hedges, outstanding at April 29, 2022 and April 30,
2021 was $8.8 billion and $9.0 billion, respectively, and will
mature within the subsequent three-year period. For
derivative instruments that are designated and qualify as a
cash flow hedge, the gain or loss on the derivative
instrument is reported as a component of accumulated
other comprehensive loss. The gain or loss on the
derivative instrument is reclassified into earnings and is
included in other operating expense, net or cost of
products sold in the consolidated statements of income in
the same period or periods during which the hedged
transaction affects earnings. Amounts excluded from the
measurement of hedge effectiveness are recognized in
earnings in the current period. The cash flows related to all
of the Company’s derivative instruments designated as
cash flow hedges are reported as operating activities in the
consolidated statements of cash flows. No components of
the hedge contracts were excluded in the measurement of
hedge effectiveness, and no forward contracts designated
as cash flow hedges were derecognized or discontinued
during fiscal years 2022, 2021, or 2020.

At April 29, 2022 and April 30, 2021, the Company had
$474 million in after-tax unrealized gains and $253 million
in after-tax unrealized losses, respectively, associated with
cash flow hedging instruments recorded in accumulated
other comprehensive loss. The Company expects that
$368 million of after-tax net unrealized gains at April 29,
2022 will be recognized in the consolidated statements of
income over the next 12 months.

Net Investment Hedges

The Company has designated Euro-denominated debt as a
net investment hedge of certain of its European operations
to manage the exposure to currency and exchange rate
movements for foreign currency-denominated net
investments in foreign operations. At April 29, 2022, the
Company had €16.0 billion, or $17.0 billion, of outstanding
Euro-denominated debt designated as a hedge of its net
investment in certain of its European operations, which will
mature in fiscal year 2023 through fiscal year 2051.

In February 2021, the Company de-designated ¥300 billion
of outstanding Yen-denominated debt previously
designated as a net investment hedge and concurrently
entered into freestanding forward derivative contracts with

PART II
Item 8 Financial Statements and Supplementary Data

a total notional value of ¥300 billion, or approximately
$2.9 billion. These forward contracts were not designated
as hedges. The Company used the proceeds from these
forward derivative contracts to repay the ¥300 billion of
Yen-denominated debt in conjunction with the maturity of
these forward contracts in March and April of 2021.

For instruments that are designated and qualify 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. Amounts excluded from the assessment of
effectiveness are recognized in other operating 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.

At April 29, 2022 and April 30, 2021, the Company had
$841 million in after-tax unrealized gains and $1.5 billion in
after-tax unrealized losses associated with net investment
hedges recorded in accumulated other comprehensive
loss, respectively. The Company does not expect any of the
after-tax unrealized gains at April 29, 2022 to be
recognized in the consolidated statements of income over
the next 12 months.

The Company did not recognize any gains or losses during
fiscal years 2022, 2021, or 2020 on instruments that no
longer qualify as net investment hedges.

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 2022, 2021, and 2020 were as follows:

(Gain) Loss Recognized in
Accumulated Other
Comprehensive Income
Fiscal Year

(Gain) Loss Reclassified
into Income
Fiscal Year

2022

2021

2020

2022

2021

2020

Location of (Gain) Loss in
Income Statement

(in millions)

Cash flow hedges

Currency exchange rate contracts

(953) $

519 $ (397)

$ (144) $ (17) $ (335) Other operating expense, net

Currency exchange rate contracts

Net investment hedges

(2,299)

108

1,694

—

(405)

—

— Cost of products sold

(9) Other operating expense, net

Total

$ (3,234) $ 2,321 $ (802) $ (83) $ (2) $ (344)

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 for fiscal years 2022, 2021, and 2020
were as follows:

(in millions)

Derivatives not designated as hedging
instruments

Currency exchange rate contracts

Total return swaps

Total

(Gain) Loss Recognized in Income
Fiscal Year
2021

2022

2020 Location of (Gain) Loss in Income Statement

(54)

247

(133)

Other operating expense, net

(81)

Other operating expense, net

(53)

166 $

(126)

MEDTRONIC PLC 2022 Form 10-K 83

PART II
Item 8 Financial Statements and Supplementary Data

Balance Sheet Presentation

The following tables summarize the balance sheet classification and fair value of derivative instruments included in the
consolidated balance sheets at April 29, 2022 and April 30, 2021. 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.

(in millions)

Derivatives designated as hedging
instruments

Fair Value - Assets

Fair Value - Liabilities

April 29,
2022

April 30,
2021

Balance Sheet
Classification

April 29,
2022

April 30,
2021

Balance Sheet
Classification

Currency exchange rate contracts

481 $

49 Other current assets

43 $

190 Other accrued expenses

Currency exchange rate contracts

Total derivatives designated as
hedging instruments

Derivatives not designated as hedging
instruments

Currency exchange rate contracts

Total return swaps

Total derivatives not designated
as hedging instruments

168

649

—

22 Other assets

14 Other current assets

18 Other current assets

94 Other liabilities

285

11 Other accrued expenses

— Other accrued expenses

Total derivatives

695 $

102

129 $

296

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

(in millions)

Derivative assets

Derivative liabilities

April 29, 2022

Level 1

Level 2

April 30, 2021
Level 1

Level 2

695

109

—

85 $

296

—

84 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

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. The cash
flows related to collateral posted and received are
reported gross as investing and financing activities,
respectively, in the consolidated statements of cash flows.

The following tables provide information as if the Company
had elected to offset the asset and liability balances of
derivative instruments, netted in accordance with various
criteria as stipulated by the terms of the master netting
arrangements with each of the counterparties. Derivatives
not subject to master netting arrangements are not eligible
for net presentation.

(in millions)

Derivative assets:

Currency exchange rate contracts

Derivative liabilities:

Currency exchange rate contracts

Total return swaps

Total

(in millions)

Derivative assets:

Currency exchange rate contracts

Total return swaps

Derivative liabilities:

Currency exchange rate contracts

Total

April 29, 2022

Gross Amount Not Offset on the
Balance Sheet

Gross Amount of
Recognized
Assets
(Liabilities)

Financial
Instruments

Cash
Collateral
(Received)
Posted

Net
Amount

695

(109)

(254)

332

(109)

(20)

(129)

566

109

—

109

—

(20)

—

(254)

312

April 30, 2021

Gross Amount Not Offset on the
Balance Sheet

Gross Amount of
Recognized
Assets
(Liabilities)

Financial
Instruments

Cash
Collateral
(Received)
Posted

Net Amount

102

(296)

(194)

(83)

—

(83)

—

(167)

(148)

Concentrations of Credit Risk

Financial instruments, which potentially subject the
Company to significant concentrations of credit risk,
consist principally of interest-bearing investments, forward
exchange derivative contracts, and trade accounts
receivable. Global concentrations of credit risk with respect
to trade accounts receivable are limited due to the large
number of customers and their dispersion across many
geographic areas. The Company monitors the
creditworthiness of its customers to which it grants credit
terms in the normal course of business.

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. The Company performs periodic evaluations of

the relative credit standings of these financial institutions
and limits the amount of credit exposure with any one
institution. In addition, the Company has collateral credit
agreements with its primary derivatives counterparties.
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 29, 2022, the Company received net cash collateral of
$254 million from its counterparties. As of April 30, 2021,
the Company posted net cash collateral of $46 million to 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.

MEDTRONIC PLC 2022 Form 10-K 85

PART II
Item 8 Financial Statements and Supplementary Data

Inventories

Inventory balances, net of reserves, were as follows:

(in millions)

Finished goods

Work-in-process

Raw materials

Total

April 29, 2022

April 30, 2021

3,070

2,906

682

864

611

796

4,616

4,313

Goodwill and Other Intangible Assets

Goodwill

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

(in millions)

April 24, 2020

Goodwill as a result of acquisitions

Purchase accounting adjustments

Currency translation and other

April 30, 2021

Goodwill as a result of acquisitions

Purchase accounting adjustments

Currency translation and other

Cardiovascular Medical Surgical

Neuroscience

Diabetes

Total

6,831

20,176

10,920

1,914

39,841

248

(2)

132

7,209

(125)

(5)

1,012

21,195

—

(1,241)

210

167

11,300

(196)

346

(4)

2,257

—

(2)

(1)

816

(8)

1,312

41,961

(1,563)

April 29, 2022

7,160 $

19,957 $

11,132 $

2,254 $ 40,502

The Company did not recognize any goodwill impairments during fiscal years 2022, 2021, or 2020.

Intangible Assets

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

(in millions)

Definite-lived:

Customer-related

Purchased technology and patents

Trademarks and tradenames

Other

Total

Indefinite-lived:

IPR&D

April 29, 2022

April 30, 2021

Gross Carrying
Amount

Accumulated
Amortization

Gross Carrying
Amount

Accumulated
Amortization

16,953

(7,005)

17,036

10,802

473

28,308

293

(5,667)

(266)

(69)

11,286

475

(13,006)

28,879

—

394

(6,058)

(5,156)

(251)

(68)

(11,533)

—

86 MEDTRONIC PLC 2022 Form 10-K

During fiscal year 2022, the Company recognized
$409 million of definite-lived intangible asset impairment
charges in connection with MCS within the Cardiovascular
Portfolio. 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 charges in connection with the
abandonment of certain intangible assets within the
Neuroscience segment. During fiscal year 2020, the
Company recognized $37 million of definite-lived
intangible asset charges, including $33 million and
$4 million recognized in connection with business exits in
the Neuroscience and Cardiovascular segments,
respectively. Definite-lived intangible asset charges are
recognized in other operating expense, net in the
consolidated statements of income.

Indefinite-lived intangible asset impairment charges were
not significant for fiscal year 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. During fiscal year 2020, the
Company recognized $35 million of indefinite-lived

(in millions)

2023

2024

2025

2026

2027

PART II
Item 8 Financial Statements and Supplementary Data

intangible asset impairment charges, including $25 million
relating to a partial impairment of an IPR&D project within
the Neuroscience segment and $10 million in connection
with the discontinuation of an IPR&D project within the
Cardiovascular segment. Indefinite-lived intangible asset
impairment charges are recognized in other operating
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 year 2022 and $1.8 billion for fiscal years 2021 and
2020. 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 29, 2022, excluding any possible future amortization
associated with acquired IPR&D which has not met
technological feasibility, is as follows:

Amortization
Expense

1,659

1,624

1,602

1,588

1,564

10.

Property, Plant, and Equipment

Property, plant, and equipment balances and corresponding estimated useful lives were as follows:

(in millions)

Equipment

Computer software

Land and land improvements

Buildings and leasehold improvements

Construction in progress

Property, plant, and equipment

Less: Accumulated depreciation

Property, plant, and equipment, net

Estimated Useful Lives
(in years)

Generally 2-7, up to 15

Up to 5

Up to 20

Up to 40

—

April 29, 2022

April 30, 2021

6,489

2,617

170

2,351

1,737

13,365

(7,952)

5,413

6,308

2,346

178

2,370

1,498

12,700

(7,479)

5,221

Depreciation expense of $974 million, $919 million, and $907 million was recognized in fiscal years 2022, 2021, and 2020,
respectively.

MEDTRONIC PLC 2022 Form 10-K 87

PART II
Item 8 Financial Statements and Supplementary Data

11.

Shareholders’ Equity

Share Capital

Dividends

Medtronic plc is authorized to issue 2.6 billion Ordinary
Shares, $0.0001 par value; 40 thousand Euro Deferred
Shares, €1.00 par value; 127.5 million Preferred Shares,
$0.20 par value; and 500 thousand A Preferred Shares,
$1.00 par value.

Euro Deferred Shares

The authorized share capital of the Company includes
40 thousand Euro Deferred Shares, with a par value of
€1.00 per share. At April 29, 2022, no Euro Deferred
Shares were issued or outstanding.

Preferred Shares

The authorized share capital of the Company includes
127.5 million of Preferred Shares, with a par value of $0.20
per share. At April 29, 2022, no Preferred Shares were
issued or outstanding.

A Preferred Shares

The authorized share capital of the Company includes
500 thousand A Preferred Shares, with a par value of $1.00
per share. During the third quarter of fiscal year 2022 the
Company redeemed the previously outstanding 1,872 A
Preferred Shares for $0.075 million. At April 29, 2022, no A
Preferred Shares were outstanding.

12. Stock Purchase and Award Plans

The timing, declaration, and payment of future dividends
to holders of the Company’s ordinary shares falls within the
discretion of the Company’s Board of Directors and
depends upon many factors, including the statutory
requirements of Irish law, the Company’s earnings and
financial condition, the capital requirements of the
Company’s businesses, industry practice and any other
factors the Board of Directors deems relevant.

Ordinary Share Repurchase Program

Shares are repurchased on occasion to support the
Company’s stock-based compensation programs and to
return capital to shareholders. During fiscal years 2022 and
2021, the Company repurchased approximately 22 million
and 4 million shares, respectively, at an average price of
$113.11 and $126.80, respectively.

In March 2019, the Company’s Board of Directors
authorized $6.0 billion for repurchase of the Company’s
ordinary shares. There is no specific time-period associated
with these repurchase authorizations. At April 29, 2022, the
Company had used $3.0 billion of the $6.0 billion
authorized under the repurchase program, leaving
approximately $3.0 billion available for future repurchases.
The Company accounts for repurchases of ordinary shares
using the par value method and shares repurchased are
cancelled.

In fiscal year 2022, the Company granted stock awards
under the Medtronic plc 2013 Plan (2013 Plan) and the
2021 Medtronic plc Long Term Incentive Plan (2021 Plan).
The 2021 Plan was approved by the Company’s
shareholders on December 9, 2021, and provides for a
maximum of 115 million ordinary shares to be issued, in
addition to the 14 million ordinary shares previously

approved for issuance under the 2013 Plan. The 2021 Plan
provides for the grant of non-qualified and incentive stock
options, stock appreciation rights, restricted stock,
restricted stock units, performance awards, and other stock
and cash-based awards. At April 29, 2022, there were
approximately 127 million shares available for future grants
under the 2021 Plan.

88 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

Stock-Based Compensation Expense

The following table presents the components and classification of stock-based compensation expense recognized for stock
options, restricted stock, performance share units, and employee stock purchase plan (ESPP) in fiscal years 2022, 2021, and
2020:

(in millions)

Stock options

Restricted stock

Performance share units

Employee stock purchase plan

Total stock-based compensation expense

Cost of products sold

Research and development expense

Selling, general, and administrative expense

Total stock-based compensation expense

Income tax benefits

Fiscal Year

2022

2021

2020

184

359

283

359

(62)

185

344

272

344

(59)

205

—

297

233

297

(51)

246

Total stock-based compensation expense, net of tax

297

285

Stock Options

Options are granted at the exercise price, which is equal to
the closing price of the Company’s ordinary shares on the
grant date. The majority of the Company’s options are
non-qualified options with a 10-year life and a 4-year
ratable vesting term. The Company uses the Black-Scholes
option pricing model (Black-Scholes model) to determine

the fair value of stock options at the grant date. 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.

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

Weighted average fair value of options granted

Assumptions used:

Expected life (years)

Risk-free interest rate

Volatility

Dividend yield

The following table summarizes stock option activity during fiscal year 2022:

Fiscal Year

2022

$ 22.83

2021

16.15

2020

15.49

6.0

0.90%

23.04%

1.95%

6.0

0.33%

24.17%

2.36%

6.1

1.88%

17.97%

2.09%

Outstanding at April 30, 2021

Granted

Exercised

Expired/Forfeited

Outstanding at April 29, 2022

Expected to vest at April 29, 2022

Exercisable at April 29, 2022

Options
(in thousands)

Wtd. Avg.
Exercise
Price

27,972

84.38

4,153

(3,222)

(641)

28,263

8,818

18,804

129.03

70.52

107.42

92.00

110.27

82.62

Wtd. Avg.
Remaining
Contractual
Term
(in years)

Aggregate
Intrinsic Value
(in millions)

5.5

8.4

4.0

450

414

MEDTRONIC PLC 2022 Form 10-K 89

PART II
Item 8 Financial Statements and Supplementary Data

The following table summarizes the total cash received from the issuance of new shares upon stock option award exercises,
the total intrinsic value of options exercised, and the related tax benefit during fiscal years 2022, 2021, and 2020:

(in millions)

Cash proceeds from options exercised

Intrinsic value of options exercised

Tax benefit related to options exercised

Fiscal Year

2022

209

174

2021

277

205

2020

484

349

Unrecognized compensation expense related to outstanding stock options at April 29, 2022 was $90 million and is expected
to be recognized over a weighted average period of 2.5 years.

Restricted Stock

Restricted stock units are expensed over the vesting period
and are subject to forfeiture if employment terminates
prior to the lapse of the restrictions. 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 4-year
ratable vesting term or cliff vest after three years. The

Company also grants shares of performance-based
restricted stock units that typically cliff vest after three years
only if the Company has also achieved certain performance
objectives. Performance awards are expensed over the
performance period based on the probability of achieving
the performance objectives. Restricted stock units are not
considered issued or outstanding ordinary shares of the
Company. Dividend equivalent units are accumulated on
restricted stock units during the vesting period.

The following table summarizes restricted stock activity during fiscal year 2022:

Nonvested at April 30, 2021

Granted

Vested

Forfeited

Nonvested at April 29, 2022

Units
(in thousands)

5,980

1,935

(2,089)

(456)

5,370

Wtd. Avg.
Grant
Price

97.66

127.47

93.05

107.53

108.92

The following table summarizes the weighted-average grant date fair value of restricted stock granted, total fair value of
restricted stock vested and related tax benefit during fiscal years 2022, 2021, and 2020:

(in millions, except per share data)

Weighted-average grant-date fair value per restricted stock

Fair value of restricted stock vested

Tax benefit related to restricted stock vested

Fiscal Year

2022

127.47

194

2021

99.48

280

2020

103.52

242

Unrecognized compensation expense related to restricted stock as of April 29, 2022 was $316 million and is expected to be
recognized over a weighted average period of 2.5 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.
The awards include three metrics: relative total shareholder
return (rTSR), revenue growth, and return on investor capital
(ROIC). rTSR is considered a market condition metric, and
the expense is determined at the grant date and will not be
adjusted even if the market condition is not met. Revenue
growth and ROIC are considered performance metrics, and
the expense is recorded over the performance period,
which will be reassessed each reporting period based on
the probability of achieving the various performance
conditions. The number of shares earned at the end of the

three-year period will vary, based on only actual
performance, from 0% to 200% of the target number of
performance share units granted. Performance share units
are subject to forfeiture if employment terminates prior to
the lapse of the restrictions. Performance share units are not
considered issued or outstanding ordinary shares of the
Company. Dividend equivalent units are accumulated on
performance share units for each component of the award
during the vesting period.

The Company calculates the fair value of the performance
share units for each component individually. The fair value
of the rTSR metric will be determined using the Monte
Carlo valuation model. The fair value of the revenue growth
and ROIC metrics are equal to the closing stock price on
the grant date.

90 MEDTRONIC PLC 2022 Form 10-K

The following table summarizes performance share unit activity during fiscal year 2022:

PART II
Item 8 Financial Statements and Supplementary Data

Nonvested at April 30, 2021

Granted

Forfeited

Nonvested at April 29, 2022

Units
(in thousands)

828

831

(78)

1,581

Wtd. Avg.
Grant
Price

$ 129.05

149.16

138.31

138.95

The following table summarizes the weighted-average grant date fair value of performance share units granted, total fair
value of performance share units vested and related tax benefit during fiscal year 2022 and 2021:

(in millions, except per share data)

Weighted-average grant-date fair value per performance share units

Fair value of performance share units vested

Tax benefit related to performance share units vested

Unrecognized compensation expense related to
performance share units as of April 29, 2022 was
$84 million and is expected to be recognized over a
weighted average period of 1.9 years.

Employees Stock Purchase Plan

The Medtronic plc Amended and Restated 2014
Employees Stock Purchase Plan allows participating

Fiscal Year

2022

2021

149.16

129.04

—

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 purchased 2 million shares at an
average price of $98.75 per share in fiscal year 2022. At
April 29, 2022, approximately 7 million ordinary shares
were available for future purchase under the ESPP.

Income Taxes

13.
The income tax provision (benefit) is based on income before income taxes reported for financial statement purposes. The
components of income before income taxes, based on tax jurisdiction, are as follows:

(in millions)

U.S.

International

Income before income taxes

The income tax provision (benefit) consists of the following:

(in millions)

Current tax expense:

U.S.

International

Total current tax expense

Deferred tax (benefit) expense:

U.S.

International

Net deferred tax benefit

Income tax provision (benefit)

Fiscal Year

2022

436

5,081

5,517

2021

(358)

4,253

3,895

2020

466

3,589

4,055

2022

467

599

1,066

(402)

(209)

(611)

456

Fiscal Year

2021

2020

287

439

726

(625)

165

(461)

265

151

375

526

(138)

(1,139)

(1,277)

(751)

MEDTRONIC PLC 2022 Form 10-K 91

PART II
Item 8 Financial Statements and Supplementary Data

Tax assets (liabilities), shown before jurisdictional netting of deferred tax assets (liabilities), are comprised of the following:

(in millions)

Deferred tax assets:

Intangible assets

Net operating loss, capital loss, and credit carryforwards

Capitalization of research and development

Other accrued liabilities

Accrued compensation

Pension and post-retirement benefits

Stock-based compensation

Inventory

Lease obligations

Federal and state benefit on uncertain tax positions

Interest limitation

Other

Gross deferred tax assets

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Intangible assets

Realized loss on derivative financial instruments

Right of use leases

Unrealized gain on available-for-sale securities and derivative financial instruments

Accumulated depreciation

Outside basis difference of subsidiaries

Other

Total deferred tax liabilities

Prepaid income taxes

Income tax receivables

Tax assets, net

Reported as (after valuation allowance and jurisdictional netting):

Other current assets

Tax assets

Deferred tax liabilities

Tax assets, net

(1) Certain prior year amounts have been reclassified to conform to current year presentation

April 29, 2022

April 30, 2021(1)

2,334

5,982

1,536

6,114

597

483

332

146

386

374

408

442

411

234

132

164

106

352

336

10,998

(6,583)

4,415

10,290

(5,822)

4,468

(1,488)

(1,856)

(66)

(89)

—

(121)

(129)

(70)

(1,963)

474

358

3,284

765

3,403

(884)

3,284

(75)

(102)

(16)

(151)

(101)

(81)

(2,382)

458

353

2,897

756

3,169

(1,028)

2,897

92 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

No deferred taxes have been provided on the
approximately $79.3 billion and $74.2 billion of
undistributed earnings of the Company’s subsidiaries at
April 29, 2022 and April 30, 2021, respectively, since these
earnings have been, and under current plans will continue
to be, permanently reinvested in these subsidiaries. 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 29, 2022, the Company had approximately
$25.4 billion of net operating loss carryforwards in certain
non-U.S. jurisdictions, of which $20.0 billion have no
expiration, and the remaining $5.4 billion will expire during
fiscal years 2023 through 2042. Included in these net
operating loss carryforwards are $18.6 billion of net
operating losses related to a subsidiary of the Company,
substantially all of which were recorded in fiscal year 2008
as a result of the receipt of a favorable tax ruling from
certain non-U.S. taxing authorities. 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 $6.8 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 29, 2022, the Company had $222 million of U.S.
federal net operating loss carryforwards, of which
$47 million have no expiration. The remaining loss
carryforwards will expire during fiscal years 2023 through
2036. For U.S. state purposes, the Company had
$1.4 billion of net operating loss carryforwards at April 29,
2022, $72 million of which have no expiration. The
remaining U.S. state loss carryforwards will expire during
fiscal years 2023 through 2042.

At April 29, 2022, the Company also had $254 million of
tax credits available to reduce future income taxes payable,
of which $120 million have no expiration. The remaining
credits will expire during fiscal years 2023 through 2042.

The Company has established valuation allowances of
$6.6 billion and $5.8 billion at April 29, 2022 and April 30,
2021, 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 2022 is primarily related to the
step up in tax basis for Swiss Cantonal purposes, the
generation of certain net operating losses and the effects
of currency fluctuations. 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.

The Company’s effective income tax rate varied from the U.S. federal statutory tax rate as follows:

U.S. federal statutory tax rate

Increase (decrease) in tax rate resulting from:

U.S. state taxes, net of federal tax benefit

Research and development credit

Puerto Rico excise tax

International

Stock based compensation

Interest on uncertain tax positions

Base erosion anti-abuse tax

Foreign derived intangible income benefit

Certain tax adjustments

Legal entity restructuring

U.S. tax on foreign earnings

Other, net

Effective tax rate

2022

21.0%

Fiscal Year
2021

21.0%

0.2

(1.3)

(1.1)

(11.2)

(0.8)

0.5

0.9

(1.0)

(0.9)

—

2.2

(0.2)

8.3%

(1.1)

(2.3)

(2.0)

(12.6)

(0.8)

0.9

0.5

(1.9)

(1.0)

1.8

3.4

0.9

2020

21.0%

0.5

(2.1)

(1.5)

(10.0)

(1.5)

1.3

2.6

(1.2)

(30.8)

—

2.8

0.4

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

(cid:2) A benefit of $82 million associated with a step up in tax

basis for Swiss Cantonal purposes.

(cid:2) A benefit of $82 million related to a change in tax rates

on intangible assets.

(cid:2) A cost of $47 million associated with the amortization of
the previously established deferred tax assets from
intercompany intellectual property transactions.

MEDTRONIC PLC 2022 Form 10-K 93

6.8%

(18.5)%

PART II
Item 8 Financial Statements and Supplementary Data

(cid:2) A cost of $41 million associated with a change in the

Company’s permanent reinvestment assertion on certain
historical earnings.

(cid:2) 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 (benefit) in the consolidated statement of
income, included the following:

(cid:2) 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.

(cid:2) 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.

(cid:2) A cost of $50 million associated with the amortization of
the previously established deferred tax assets from
intercompany intellectual property transactions.

(cid:2) A net cost of $25 million associated with an internal

restructuring and intercompany sale of assets.

(cid:2) 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.

During fiscal year 2020, the net benefit from certain tax
adjustments of $1.2 billion, recognized in income tax
provision (benefit) in the consolidated statement of
income, included the following:

(cid:2) A net benefit of $63 million related to the finalization of
certain state tax impacts from U.S. Tax Reform, and the
issuance of certain final U.S. Treasury Regulations
associated with U.S. Tax Reform. The primary impact of
these regulations resulted in the Company
re-establishing its permanently reinvested assertion on

certain foreign earnings and reversing the previously
accrued tax liability. This benefit was partially offset by
additional tax associated with a previously executed
internal reorganization of certain foreign subsidiaries.

(cid:2) A benefit of $252 million related to tax legislative
changes in Switzerland, which abolished certain
preferential tax regimes the Company benefited from
and replaced them with a new set of internationally
accepted measures. The legislation provided for higher
effective tax rates but allowed for a transitional period
whereby an amortizable asset was created for Swiss
federal income tax purposes that will be amortized and
deducted over a 10-year period.

(cid:2) A benefit of $658 million related to the release of a

valuation allowance previously recorded against certain
net operating losses. Luxembourg enacted tax
legislation during the year requiring the Company to
reassess the realizability of certain net operating losses.
The Company evaluated both the positive and negative
evidence and released valuation allowance equal to the
expected benefit from the utilization of certain net
operating losses in connection with a planned
intercompany sale of intellectual property.

(cid:2) A benefit of $269 million associated with the

intercompany sale of intellectual property and the
establishment of a deferred tax asset.

Currently, the Company’s operations in Puerto Rico,
Singapore, Dominican Republic, Costa Rica, and China
have various tax holidays and tax incentive grants. The tax
reductions as compared to the local statutory rate
favorably impacted earnings by $248 million, $301 million,
and $231 million in fiscal years 2022, 2021, and 2020,
respectively, and diluted earnings per share by $0.18,
$0.22, and $0.17, in fiscal years 2022, 2021, and 2020,
respectively. The tax holidays are conditional upon the
Company meeting certain thresholds required under
statutory law. The tax incentive grants, unless extended,
will expire between fiscal years 2023 and 2034. 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 2022 did not have a material impact on the
Company’s consolidated financial statements.

94 MEDTRONIC PLC 2022 Form 10-K

The Company had $1.7 billion, $1.7 billion, and $1.9 billion of gross unrecognized tax benefits at April 29, 2022, April 30,
2021, and April 24, 2020, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits for
fiscal years 2022, 2021, and 2020 is as follows:

PART II
Item 8 Financial Statements and Supplementary Data

(in millions)

Gross unrecognized tax benefits at beginning of fiscal year

2022

1,668

Fiscal Year
2021

1,862

Gross increases:

Prior year tax positions

Current year tax positions

Gross decreases:

Prior year tax positions

Settlements

Statute of limitation lapses

Gross unrecognized tax benefits at end of fiscal year

Cash advance paid to taxing authorities

Gross unrecognized tax benefits at end of fiscal year,
net of cash advance

If all of the Company’s unrecognized tax benefits at
April 29, 2022, April 30, 2021, and April 24, 2020 were
recognized, $1.6 billion, $1.6 billion, and $1.8 billion would
impact the Company’s effective tax rate, respectively.
Although the Company believes that it has adequately
provided for liabilities resulting from tax assessments by
taxing authorities, positions taken by these tax authorities
could have a material impact on the Company’s effective
tax rate in future periods. The Company has recorded
gross unrecognized tax benefits, net of cash advance, of
$787 million as a noncurrent liability. The Company
estimates that within the next 12 months it is reasonably
possible that its uncertain tax positions excluding interest,
could decrease by as much as $15 million, net as a result of
statute of limitation lapses.

The Company recognizes interest and penalties related to
income tax matters in income tax provision (benefit) 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. The
Company had $117 million, $99 million, and $225 million

2020

1,836

(9)

(5)

(27)

1,862

(859)

(29)

(8)

(11)

1,661

(859)

(106)

(216)

(21)

1,668

(859)

802

809

1,003

of accrued gross interest and penalties at April 29, 2022,
April 30, 2021, and April 24, 2020, respectively. During
fiscal years 2022, 2021, and 2020, the Company
recognized gross interest expense of $17 million, income
of $44 million, and expense of $53 million, respectively, in
income tax provision (benefit) in the consolidated
statements of income.

The Company reserves for uncertain tax positions related
to unresolved matters with the IRS and other taxing
authorities. These reserves are subject to a high degree of
estimation and management judgment. Resolution of these
significant unresolved matters, or positions taken by the
IRS or other tax authorities during future tax audits, could
have a material impact on the Company’s financial results
in future periods. The Company continues to believe that
its reserves for uncertain tax positions are appropriate and
that it has meritorious defenses for its tax filings and will
vigorously defend them during the audit process,
appellate process, and through litigation in courts, as
necessary.

MEDTRONIC PLC 2022 Form 10-K 95

PART II
Item 8 Financial Statements and Supplementary Data

The major tax jurisdictions where the Company conducts business which remain subject to examination are as follows:

Jurisdiction

United States - federal and state

Australia

Brazil

Canada

China

Costa Rica

Dominican Republic

France

Germany

India

Ireland

Israel

Italy

Japan

Korea

Luxembourg

Mexico

Puerto Rico

Singapore

Switzerland

United Kingdom

Earliest Year Open

2005

2018

2017

2013

2015

2018

2019

2014

2002

2012

2010

2005

2018

2017

2011

2016

2010

2017

See Note 18 for additional information regarding the status of current tax audits and proceedings.

Earnings Per Share

14.
Basic earnings per share is computed based on the
weighted average number of ordinary shares outstanding.
Diluted earnings per share is computed based on the
weighted number of ordinary shares outstanding,
increased by the number of additional shares that would
have been outstanding had the potentially dilutive ordinary
shares been issued, and reduced by the number of shares

the Company could have repurchased with the proceeds
from issuance of the potentially dilutive shares. 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.

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

(in millions, except per share data)

Numerator:

Fiscal Year

2022

2021

2020

Net income attributable to ordinary shareholders

5,039

3,606 $

4,789

Denominator:

Basic – weighted average shares outstanding

1,342.4

1,344.9

1,340.7

Effect of dilutive securities:

Employee stock options

Employee restricted stock units

Other

Diluted – weighted average shares outstanding

Basic earnings per share

Diluted earnings per share

96 MEDTRONIC PLC 2022 Form 10-K

6.6

1.6

0.8

6.6

2.1

0.5

7.2

2.8

0.4

1,351.4

1,354.0

1,351.1

3.75

3.73

2.68 $

2.66 $

3.57

3.54

PART II
Item 8 Financial Statements and Supplementary Data

The calculation of weighted average diluted shares outstanding excludes options to purchase approximately 5 million
ordinary shares in fiscal year 2022 and 4 million ordinary shares in fiscal years 2021 and 2020 because their effect would
have been anti-dilutive on the Company’s earnings per share.

15.

Retirement Benefit Plans

The Company sponsors various retirement benefit plans,
including defined benefit pension plans, post-retirement
medical plans, defined contribution savings plans, and
termination indemnity plans, covering substantially all U.S.
employees and many employees outside the U.S. The net
expense related to these plans was $459 million,
$668 million, and $467 million in fiscal years 2022, 2021,
and 2020, respectively.

In the U.S., the Company maintains qualified pension plans
designed to provide guaranteed minimum retirement
benefits to all eligible U.S. participants. Pension coverage
for non-U.S. employees is provided, to the extent deemed
appropriate, through separate plans. In addition to the
benefits provided under the qualified pension plan,
retirement benefits associated with wages in excess of the
IRS allowable limits are provided to certain employees
under a non-qualified plan. U.S. and Puerto Rico
employees are also eligible to receive a medical benefit
component, in addition to normal retirement benefits,
through the Company’s post-retirement benefits.

At April 29, 2022 and April 30, 2021, the funded status of
the Company’s benefit plans was $74 million overfunded
and $705 million underfunded, respectively.

During fiscal year 2021, as part of the Simplification
restructuring program, the Company offered certain
eligible U.S. employees voluntary early retirement
packages, resulting in incremental expense of $97 million
recognized. Of this amount, $73 million related to U.S.
pension benefits, $11 million related to defined
contribution plans, $11 million related to U.S. post-
retirement benefits, and $2 million related to cash
payments and administrative fees. See Note 4 for
additional information on the Simplification restructuring
program.

As of April 24, 2020, the Company announced the freezing
of U.S. pension benefits beginning in 2027. Employees will
continue to earn benefits as required by the plan until
April 30, 2027, after which date benefits will no longer be
earned and employees will earn benefits under a new
defined contribution structure. The Company recognized
curtailment benefits of $94 million in fiscal year 2020 as a
result of this change.

MEDTRONIC PLC 2022 Form 10-K 97

PART II
Item 8 Financial Statements and Supplementary Data

Defined Benefit Pension Plans

The change in benefit obligation and funded status of the Company’s U.S. and Non-U.S. pension benefits are as follows:

(in millions)

Accumulated benefit obligation at end of year:

Change in projected benefit obligation:

Projected benefit obligation at beginning of year

Service cost

Interest cost

Employee contributions

Plan curtailments and settlements

Actuarial (gain) loss(1)

Benefits paid

Special termination benefits

Currency exchange rate changes and other

Projected benefit obligation at end of year

Change in plan assets:

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contributions

Employee contributions

Plan settlements

Benefits paid

Currency exchange rate changes and other

Fair value of plan assets at end of year

Funded status at end of year:

Fair value of plan assets

Benefit obligations

Over (under) funded status of the plans

Recognized asset (liability)

Amounts recognized on the consolidated
balance sheets consist of:

Non-current assets

Current liabilities

Non-current liabilities

Recognized asset (liability)

Amounts recognized in accumulated other
comprehensive loss:

Prior service cost (credit)

Net actuarial loss

Ending balance

U.S. Pension Benefits
Fiscal Year

Non-U.S. Pension Benefits
Fiscal Year

2022

3,396

3,979

102

—

(513)

(141)

—

2021

3,786 $

2022

1,638

3,723 $

2,294

106

109

—

(129)

—

(11)

(394)

(48)

—

(203)

2021

2,035

2,024

(4)

(41)

—

200

3,526

3,979 $

1,740

2,294

3,660

2,982 $

1,900

1,404

—

(141)

—

715

—

(129)

—

(12)

(1)

(48)

(188)

232

149

(4)

(41)

149

3,559

3,660 $

1,732

1,900

3,559

3,660 $

1,732

3,526

3,979

(319)

1,740

(8)

(319) $

(8) $

313

110

240

(21)

(259)

(20)

(408)

(6)

(242)

(319) $

(8) $

—

— $

(4)

854

1,220

161

854

1,220 $

157

1,900

2,294

(394)

(6)

(436)

(394)

(6)

530

524

(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 2022 was primarily related to increases in discount rates. The actuarial loss in fiscal year 2021 was
primarily related to decreases in discount rates.

98 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 8 Financial Statements and Supplementary Data

In certain countries outside the U.S., fully funding pension plans is not a common practice, as funding provides no income
tax benefit. Consequently, certain pension plans were partially funded at April 29, 2022 and April 30, 2021. U.S. and non-U.S.
pension plans with accumulated benefit obligations in excess of plan assets consist of the following:

(in millions)

Accumulated benefit obligation

Projected benefit obligation

Plan assets at fair value

Fiscal Year

2022

830

880

356

U.S. and non-U.S. pension plans with projected benefit obligations in excess of plan assets consist of the following:

(in millions)

Projected benefit obligation

Plan assets at fair value

The net periodic benefit cost of the plans includes the following components:

Fiscal Year

2022

907

379

2021

5,089

5,198

4,561

2021

5,921

5,159

(in millions)

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net actuarial loss

Settlement and curtailment (gain) loss

Special termination benefits

U.S. Pension Benefits
Fiscal Year
2021

2022

2020

Non-U.S. Pension Benefits
Fiscal Year
2021

2022

2020

102

(226)

—

106

109

(242)

—

106 $

126

(225)

—

(64)

(1)

(10)

—

(59)

(1)

—

(58)

(1)

—

Net periodic benefit cost

116

64 $

The other changes in plan assets and projected benefit obligations recognized in other comprehensive income for fiscal year
2022 are as follows:

(in millions)

Net actuarial gain

Amortization of prior service credit

Amortization and settlement recognition of actuarial loss

Effect of exchange rates

Total recognized in other comprehensive income

Total recognized in net periodic benefit cost and other comprehensive income

(328) $

U.S. Pension
Benefits

Non-U.S.
Pension
Benefits

(303) $

(317)

—

(64)

—

(367)

(22)

(29)

(367)

(331)

MEDTRONIC PLC 2022 Form 10-K 99

PART II
Item 8 Financial Statements and Supplementary Data

The actuarial assumptions are as follows:

Critical assumptions – projected benefit
obligation:

U.S. Pension Benefits
Fiscal Year
2021

2022

2020

Non-U.S. Pension Benefits
Fiscal Year
2021

2022

2020

Discount rate

4.23%-4.48% 2.80%-3.50% 3.10%-3.70% 0.60%-25.40% 0.30%-13.30% 0.30%-13.30%

Rate of compensation increase

4.83%

3.90%

2.70%

2.90%

2.91%

Critical assumptions – net periodic benefit
cost:

Discount rate – benefit obligation

2.80%-3.46% 3.10%-3.70% 3.90%-4.30% 0.25%-12.80% 0.30%-13.90% 0.40%-13.90%

Discount rate – service cost

Discount rate – interest cost

Expected return on plan assets

Rate of compensation increase

2.50%-3.51% 2.60%-3.90% 3.70%-4.00% 0.24%-12.80% 0.30%-13.90% 0.40%-13.90%

2.08%-2.87% 2.80%-3.20% 3.50%-4.30% 0.08%-12.80% 0.30%-13.90% 0.40%-13.90%

5.60%-7.40%

3.90%-4.83%

7.50%

3.90%

7.90%

3.90%

3.67%

2.90%

3.78%

2.91%

4.19%

2.87%

The Company utilizes a full yield curve approach
methodology to estimate the service and interest cost
components of net periodic pension cost and net periodic
post-retirement benefit cost for the Company’s pension
and other post-retirement benefits. The full yield curve
approach applies specific spot rates along the yield curve
to their underlying projected cash flows in estimation of the
cost components. The current yield curves represent high
quality, long-term fixed income instruments.

The expected long-term rate of return on plan assets
assumptions are determined using a building block
approach, considering historical averages and real returns
of each asset class. In certain countries, where historical
returns are not meaningful, consideration is given to local
market expectations of long-term returns.

Retirement Benefit Plan Investment Strategy

The Company sponsors trusts that hold the assets for U.S.
pension plans and other U.S. post-retirement benefit plans,
primarily retiree medical benefits. For investment
purposes, the Medtronic U.S. pension and other U.S. post-
retirement benefit plans employ similar investment
strategies with different asset allocation targets.

The Company has a Qualified Plan Committee (the Plan
Committee) that sets investment guidelines for U.S.
pension plans and other U.S. post-retirement benefit plans
with the assistance of external consultants. These

guidelines are established based on market conditions, risk
tolerance, funding requirements, and expected benefit
payments. The Plan Committee also oversees the
investment allocation process, selects the investment
managers, and monitors asset performance. As pension
liabilities are long-term in nature, the Company employs a
long-term total return approach to maximize the long-term
rate of return on plan assets for a prudent level of risk. An
annual analysis on the risk versus the return of the
investment portfolio is conducted to justify the expected
long-term rate of return assumption.

The investment portfolios contain a diversified allocation of
investment categories, including equities, fixed income
securities, hedge funds, and private equity. Securities are
also diversified in terms of domestic and international,
short- and long-term, growth and value styles, large cap
and small cap stocks, and active and passive management.

Outside the U.S., pension plan assets are typically managed
by decentralized fiduciary committees. There is significant
variation in policy asset allocation from country to country.
Local regulations, funding rules, and financial and tax
considerations are part of the funding and investment
allocation process in each country. The weighted average
target asset allocations at April 29, 2022 for the plans are
41% equity securities, 33% debt securities, and 26% other.

The plans did not hold any investments in the Company’s
ordinary shares at April 29, 2022 or April 30, 2021.

The Company’s U.S. plans target asset allocations at April 29, 2022, compared to the U.S. plans actual asset allocations at
April 29, 2022 and April 30, 2021 by asset category, are as follows:

U.S. Plans

Asset Category:

Equity securities

Debt securities

Other

Total

100 MEDTRONIC PLC 2022 Form 10-K

Target Allocation
April 29, 2022

Actual Allocation

April 29, 2022

April 30, 2021

34%

100%

36%

100%

39%

100%

Strong performance on equity securities during the fiscal
year resulted in asset allocations different than targets.
Management expects to move the allocations closer to
target over the intermediate term.

Retirement Benefit Plan Asset Fair Values

The following is a description of the valuation
methodologies used for retirement benefit plan assets
measured at fair value:

Short-term investments: Valued at the closing price
reported in the active markets in which the individual
security is traded.

Mutual funds: Comprised of investments in equity and
fixed income securities held in pooled investment vehicles.
The valuations of mutual funds 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 net asset values
are publicly reported.

Equity commingled trusts: Comprised of investments in
equity securities held in pooled investment vehicles. The
valuations of equity 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 net
asset values are not publicly reported, and funds are
valued at the net asset value practical expedient.

Fixed income commingled trusts: 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 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 asset investments. Partnerships
primarily include long/short equity and absolute return

PART II
Item 8 Financial Statements and Supplementary Data

strategies. These investments may be redeemed monthly
with notice periods ranging from 45 to 95 days. At April 29,
2022, 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 29,
2022 is $204 million, and the estimated liquidation period
of these funds is expected to be one to 15 years. Real asset
investments consist of commodities, derivatives, Real
Estate Investment Trusts, and illiquid real estate holdings.
These investments have redemption and liquidation
periods ranging from 30 days to 10 years. At April 29,
2022, 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.

Registered investment companies: Valued at net asset
values which are not publicly reported. The net asset
values are calculated based on the valuation of the
underlying assets. The underlying assets are valued at the
quoted market prices of shares held by the plan at
year-end in the active market on which the individual
securities are traded.

Insurance contracts: Comprised of investments in
collective (group) insurance contracts, consisting of
individual insurance policies. The policyholder is the
employer, and each member is the owner/beneficiary of
their individual insurance policy. 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.

The methods described above may produce fair values
that may not be indicative of net realizable value or
reflective of future fair values. Furthermore, while the
Company believes its valuation methodologies are
appropriate and consistent with other market participants,
the use of different methodologies or assumptions to
determine fair value of certain financial instruments could
result in a different fair value measurement at the reporting
date.

The following tables provide information by level for the
retirement benefit plan assets that are measured at fair
value, as defined by U.S. GAAP. Certain investments for
which the fair value is measured using the net asset value
per share (or its equivalent) practical expedient are not
presented within the fair value hierarchy. The fair value
amounts presented for these investments are intended to
permit reconciliation to the total fair value of plan assets at
April 29, 2022 and April 30, 2021.

MEDTRONIC PLC 2022 Form 10-K 101

PART II
Item 8 Financial Statements and Supplementary Data

U.S. Pension Benefits

(in millions)

Short-term investments

Mutual funds

Equity commingled trusts

Fixed income commingled trusts

Partnership units

(in millions)

Short-term investments

Mutual funds

Equity commingled trusts

Fixed income commingled trusts

Partnership units

3,559 $

197

— $

Fair Value at
April 29, 2022

73 $

125

1,281

1,069

1,011

Fair Value at
April 30, 2021

232 $

1,420

1,050

860

Fair Value Measurements
Using Inputs Considered as

Level 1

Level 2

Level 3

Investments
Measured at Net
Asset Value

125

—

— $

—

1,011

—

1,281

1,069

—

2,350

Fair Value Measurements
Using Inputs Considered as

Level 1

Level 2

Level 3

Investments
Measured at Net
Asset Value

232

—

— $

—

860

—

1,420

1,050

—

2,470

3,660 $

331

— $

The following tables provide a reconciliation of the beginning and ending balances of U.S. pension benefit assets measured
at fair value that used significant unobservable inputs (Level 3):

(in millions)

April 24, 2020

Total realized gains, net

Total unrealized gains, net

Purchases and sales, net

April 30, 2021

Total realized gains, net

Total unrealized gains, net

Purchases and sales, net

April 29, 2022

Non-U.S. Pension Benefits

(in millions)

Registered investment companies

Insurance contracts

(in millions)

Registered investment companies

Insurance contracts

102 MEDTRONIC PLC 2022 Form 10-K

Partnership
Units

625

139

860

1,011

Fair Value at
April 29, 2022

1,689

1,732

Fair Value at
April 30, 2021

1,850

1,900

Fair Value Measurements
Using Inputs Considered as

Level 1

Level 2

Level 3

Investments
Measured at Net
Asset Value

—

1,689

—

1,689

Fair Value Measurements
Using Inputs Considered as

Level 1

Level 2

Level 3

Investments
Measured at Net
Asset Value

—

1,850

—

1,850

PART II
Item 8 Financial Statements and Supplementary Data

Non-U.S. pension benefit assets that are valued using
significant unobservable inputs (Level 3) was $43 million
and $49 million as of April 29, 2022 and April 30, 2021,
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. and non-U.S. pension plans during the fiscal years
ended April 29, 2022 and April 30, 2021.

Retirement Benefit Plan Funding

It is the Company’s policy to fund retirement costs within
the limits of allowable tax deductions. During fiscal year
2022, the Company made discretionary contributions of

approximately $24 million to the U.S. pension plan.
Internationally, the Company contributed approximately
$70 million for pension benefits during fiscal year 2022.
The Company anticipates that it will make contributions of
$21 million and $52 million to its U.S. pension benefit plans
and non-U.S. pension benefit plans, respectively, in fiscal
year 2023. Based on the guidelines under the U.S.
Employee Retirement Income Security Act of 1974 and the
various guidelines which govern the plans outside the U.S.,
the majority of anticipated fiscal year 2023 contributions
will be discretionary. The Company believes that pension
assets, returns on invested pension assets, and Company
contributions will be able to meet its pension and other
post-retirement obligations in the future.

Retiree benefit payments, which reflect expected future service, are anticipated to be paid as follows:

(in millions)
Fiscal Year

2023

2024

2025

2026

2027

2028 – 2032

Total

Post-retirement Benefit Plans

The net periodic benefit cost associated with the
Company’s post-retirement benefit plans was income of
$20 million, $6 million, and $15 million in fiscal years 2022,
2021, and 2020, respectively. The Company’s projected
benefit obligation for all post-retirement benefit plans was
$276 million and $337 million at April 29, 2022 and
April 30, 2021, respectively. The Company’s fair value of
plan assets for all post-retirement benefit plans was
$325 million and $345 million at April 29, 2022 and
April 30, 2021, respectively. The post-retirement benefit
plan assets at both April 29, 2022 and April 30, 2021
primarily comprised of equity and fixed commingled trusts,
consistent with the U.S. retirement benefit plan assets
outlined in the fair value leveling tables above.

Defined Contribution Savings Plans

The Company has defined contribution savings plans that
cover substantially all U.S. employees and certain non-U.S.
employees. 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 $403 million,
$495 million, and $376 million in fiscal years 2022, 2021,
and 2020, respectively.

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

U.S. Pension Benefits

Non-U.S. Pension Benefits

Gross Payments

150

160

172

182

193

1,110

1,966

367

666

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 $48 million, $50 million, and $52 million in
fiscal years 2022, 2021, and 2020, 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 $83 million, $73 million, and $66 million and
in fiscal years 2022, 2021, and 2020, respectively.

MEDTRONIC PLC 2022 Form 10-K 103

PART II
Item 8 Financial Statements and Supplementary Data

16. Leases
The Company leases office, manufacturing, and research
facilities and warehouses, as well as transportation, data
processing, and other equipment. The Company
determines whether a contract is a lease or contains a lease
at inception date. Upon commencement, the Company
recognizes a right-of-use asset and lease liability.
Right-of-use assets represent the Company’s right to use
the underlying asset for the lease term. Lease liabilities are
the Company’s obligation to make the lease payments
arising from a lease. As the Company’s leases typically do
not provide an implicit rate, the Company’s lease liabilities
are measured on a discounted basis using the Company’s
incremental borrowing rate. Lease terms used in the
recognition of right-of-use assets and lease liabilities
include only options to extend the lease that are
reasonably certain to be exercised. Additionally, lease
terms underlying the right-of-use assets and lease liabilities
consider terminations that are reasonably certain to be
executed.

The Company’s lease agreements include leases that have
both lease and associated nonlease components. The
Company has elected to account for lease components
and the associated nonlease components as a single lease

component. The consolidated balance sheets do not
include recognized assets or liabilities for leases that, at the
commencement date, have a term of twelve months or less
and do not include an option to purchase the underlying
asset that is reasonably certain to be exercised. The
Company recognizes such leases in the consolidated
statements of income on a straight-line basis over the lease
term. Additionally, the Company recognizes variable lease
payments not included in its lease liabilities in the period in
which the obligation for those payments is incurred.
Variable lease payments for fiscal year 2022, 2021, and
2020 were not material.

The Company’s lease agreements include leases
accounted for as operating leases and those accounted for
as finance leases. The right-of-use assets, lease liabilities,
lease costs, cash flows, and lease maturities associated with
the Company’s finance leases were not material to the
consolidated financial statements at April 29, 2022 or
April 30, 2021 or for fiscal year 2022, 2021 and 2020.
Finance lease right-of-use assets are included in property,
plant, and equipment, net, and finance lease liabilities are
included in current debt obligations and long-term debt on
the consolidated balance sheets.

The following table summarizes the balance sheet classification of the Company’s operating leases and amounts of the
right-of-use assets and lease liabilities at April 29, 2022 and April 30, 2021:

(in millions)

Right-of-use assets

Current liability

Non-current liability

Balance Sheet
Classification

April 29, 2022

April 30, 2021

Other assets

Other accrued expenses

Other liabilities

854

167

703

998

186

829

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate for the
Company’s operating leases at April 29, 2022, April 30, 2021, and April 24, 2020:

Weighted-average remaining lease term

Weighted-average discount rate

April 29, 2022

April 30, 2021

April 24, 2020

7.3 Years

7.5 years

7.2 years

2.0%

2.3%

3.0%

The following table summarizes the components of total operating lease cost for fiscal year 2022, 2021, and 2020:

(in millions)

Operating lease cost

Short-term lease cost

Total operating lease cost

Fiscal Year
2021

2022

195

216

2020

223

260

251

269

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 2022, 2021, and 2020:

(in millions)

Fiscal Year
2021

2022

Cash paid for amounts included in the measurement of operating lease liabilities

174

Right-of-use assets obtained in exchange for operating lease liabilities

216

230

2020

221

174

104 MEDTRONIC PLC 2022 Form 10-K

The following table summarizes the maturities of the Company’s operating leases at April 29, 2022:

PART II
Item 8 Financial Statements and Supplementary Data

(in millions)
Fiscal Year

2023

2024

2025

2026

2027

Thereafter

Total expected lease payments

Less: Imputed interest

Total lease liability

Operating
Leases

213

164

130

103

284

976

(105)

871

The Company makes certain products available to
customers under lease arrangements, including
arrangements whereby equipment is placed with
customers who then purchase consumable products to
accompany the use of the equipment. Income arising from
arrangements where the Company is the lessor is
recognized within net sales in the consolidated statements

of income and the Company’s net investments in sales-type
leases are included in other current assets and other assets
in the consolidated balance sheets. Lessor income and the
related assets and lease maturities were not material to the
consolidated financial statements at or for the fiscal year
ended April 29, 2022 and April 30, 2021.

17. Accumulated Other Comprehensive Loss
The following table provides changes in AOCI, net of tax and by component:

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

(45) $

(1,383) $

(169) $

(1,308) $

194

(2,711)

(in millions)

April 26, 2019

Other comprehensive income
(loss) before reclassifications

Reclassifications

Other comprehensive income (loss)

April 24, 2020

Other comprehensive income
(loss) before reclassifications

Reclassifications

Other comprehensive income (loss)

April 30, 2021

Other comprehensive income
(loss) before reclassifications

Reclassifications

Other comprehensive income (loss)

—

(304)

(301)

(827)

—

(827)

(2,210)

1,691

—

1,691

(519)

(2,080)

—

(2,080)

405

—

405

236

(1,694)

—

(1,694)

(1,458)

2,299

—

2,299

(596)

(544)

(1,852)

432

505

(1,347)

514

574

309

(237)

266

(541)

(519)

(253)

781

(54)

727

474

(666)

(183)

(849)

(3,560)

(20)

(3,485)

1,210

1,219

(2,265)

April 29, 2022

(209) $

(2,599) $

841 $

(773) $

The income tax on gains and losses on investment
securities in other comprehensive income before
reclassifications during fiscal years 2022, 2021, and 2020
was a benefit of $51 million, an expense of $31 million and
a benefit of $13 million, respectively. During fiscal years
2022, 2021, and 2020, realized gains and losses on
investment securities reclassified from AOCI were reduced
by income taxes of $1 million, $2 million and $3 million,

respectively. When realized, gains and losses on
investment securities reclassified from AOCI are
recognized within other non-operating income, net. Refer
to Note 5 for additional information.

During fiscal years 2022, 2021, and 2020, the income tax
on cumulative translation adjustment was a benefit of
$8 million, an expense of $7 million, and a benefit of
$9 million, respectively.

MEDTRONIC PLC 2022 Form 10-K 105

PART II
Item 8 Financial Statements and Supplementary Data

During fiscal years 2022, 2021, and 2020, there were no tax
impacts on net investment hedges. Refer to Note 7 for
additional information.

defined benefit and pension items reclassified from AOCI
are recognized within other non-operating income, net.
Refer to Note 15 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. The
income tax on the net change in retirement obligations in
other comprehensive income before reclassifications
during fiscal years 2022, 2021, and 2020 resulted in an
expense of $134 million and $115 million, and a benefit of
$159 million, respectively. During fiscal years 2022, 2021,
and 2020, the gains and losses on defined benefit and
pension items reclassified from AOCI were reduced by
income taxes of $20 million, $16 million, and $12 million,
respectively. When realized, net gains and losses on

The income tax on unrealized gains and losses on cash flow
hedges in other comprehensive income before
reclassifications during fiscal years 2022, 2021, and 2020
was an expense of $152 million, a benefit of $87 million,
and an expense of $88 million, respectively. Amounts
reclassified from AOCI related to cash flow hedges
included income taxes of $26 million, $14 million, and
$80 million for fiscal years 2022, 2021, and 2020,
respectively. When realized, gains and losses on currency
exchange rate contracts reclassified from AOCI are
recognized within other operating expense, net or cost of
products sold. Refer to Note 7 for additional information.

18. Commitments and Contingencies

Legal Matters

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 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. 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.

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

106 MEDTRONIC PLC 2022 Form 10-K

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 in the consolidated statements of
income. During fiscal years 2022, 2021, and 2020, the
Company recognized $95 million, $118 million, and
$313 million, respectively, of additional certain litigation
charges. At April 29, 2022 and April 30, 2021, total accrued
litigation charges were approximately $0.3 billion and
$0.4 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. The Company includes accrued
litigation in other accrued expenses and other liabilities on
the consolidated balance sheets. 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.

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 manufactured by Covidien’s subsidiaries. As of
June 1, 2022, 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

Starting in fiscal year 2020, plaintiffs began filing lawsuits
against certain subsidiaries of the Company in U.S. state
and federal courts alleging personal injury from hernia
mesh products sold by those subsidiaries. The majority of
the pending cases are in Massachusetts state court, where
they have been consolidated before a single judge. As of
June 6, 2022, subsidiaries of the Company have been
named as defendants in lawsuits filed on behalf of
approximately 5,900 individual plaintiffs, and certain
plaintiffs’ law firms have advised the Company that they
may file additional cases in the future. On June 6, 2022, the
Judicial Panel on Multidistrict Litigation transferred 83
actions involving the Company’s hernia mesh to a federal
Multidistrict Litigation in the U.S. District Court for the
District of Massachusetts for pretrial proceedings. The
pending lawsuits relate almost entirely to hernia mesh
products that have not been subject to recalls, withdrawals,
or other adverse regulatory action. The Company has not
recorded an expense related to damages 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.

Environmental Proceedings

The Company is involved in various stages of investigation
and cleanup related to environmental remediation matters
at a number of sites. These projects relate to a variety of
activities, including removal of solvents, metals and other
hazardous substances from soil and groundwater. The
ultimate cost of site cleanup and timing of future cash flows
is difficult to predict given uncertainties regarding the extent
of the required cleanup, the interpretation of applicable laws
and regulations, and alternative cleanup methods.

The Company is a successor to a company which owned
and operated a chemical manufacturing facility in
Orrington, Maine from 1967 until 1982, and is responsible

PART II
Item 8 Financial Statements and Supplementary Data

for the costs of completing an environmental site
investigation as required by the Maine Department of
Environmental Protection (MDEP). MDEP served a
compliance order on Mallinckrodt LLC and U.S. Surgical
Corporation, subsidiaries of Covidien, in December 2008,
which included a directive to remove a significant volume
of soils at the site. After a hearing on the compliance order
before the Maine Board of Environmental Protection
(Maine Board) to challenge the terms of the compliance
order, the Maine Board modified the MDEP order and
issued a final order requiring removal of two landfills,
capping of the remaining three landfills, installation of a
groundwater extraction system and long-term monitoring
of the site and the three remaining landfills. The Company
has proceeded with remediation in accordance with the
MDEP order as modified by the Maine Board order.

Since the early 2000s, the Company or its predecessors
have also been involved in a lawsuit filed in the U.S. District
Court for the District of Maine by the Natural Resources
Defense Council and the Maine People’s Alliance. Plaintiffs
sought an injunction requiring the Company’s predecessor
to conduct extensive studies of mercury contamination of
the Penobscot River and Bay and options for remediating
such contamination, and to perform appropriate remedial
activities, if necessary.

Following a trial in March 2002, the court held that
conditions in the Penobscot River and Bay may pose an
imminent and substantial endangerment and that the
Company’s predecessor was liable for the cost of
performing a study of the River and Bay. Following a
second trial in June 2014, the court ordered that further
engineering study and engineering design work was
needed to determine the nature and extent of remediation
in the Penobscot River and Bay. The court also appointed
an engineering firm to conduct such studies and issue a
report on potential remediation alternatives. In connection
with these proceedings, reports have been produced
including a variety of cost estimates for a variety of
potential remedial options. In March 2021, the parties
notified the court that they had agreed on a settlement in
principle of all issues in this matter. Finalization of the
proposed settlement remains subject to court approval.

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

Income Taxes

In March 2009, the IRS issued its audit report on Medtronic,
Inc. for fiscal years 2005 and 2006. Medtronic, Inc. reached
agreement with the IRS on some, but not all matters related
to these fiscal years. The remaining unresolved issue for
fiscal years 2005 and 2006 relates to the allocation of
income between Medtronic, Inc. and its wholly-owned
subsidiary operating in Puerto Rico, which is one of the
Company’s key manufacturing sites. The U.S. Tax Court
reviewed this dispute, and in June 2016, issued an opinion
with respect to the allocation of income between the
parties for fiscal years 2005 and 2006. The Tax Court

MEDTRONIC PLC 2022 Form 10-K 107

PART II
Item 8 Financial Statements and Supplementary Data

generally rejected the IRS’s position, but also made certain
modifications to the Medtronic, Inc. tax returns as filed. In
April 2017, the IRS filed a Notice of Appeal to the U.S.
Court of Appeals for the Eighth Circuit regarding the Tax
Court opinion. Oral argument for the Appeal occurred in
March 2018. The 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 trial relating
to the issues remanded by the Court of Appeals concluded
during June 2021. The parties are awaiting the Tax Court
decision, which will remain subject to appeal by either
party upon its issuance.

The IRS has issued its audit reports on Medtronic, Inc. for
fiscal years 2007 through 2016. Medtronic, Inc. and the IRS
have reached agreement on all significant issues except for
the allocation of income between Medtronic, Inc. and its
wholly-owned subsidiary operating in Puerto Rico for the
businesses that are the subject of the U.S. Tax Court matter
for fiscal years 2005 and 2006.

Medtronic, Inc.’s fiscal years 2017, 2018, and 2019 U.S.
federal income tax returns are currently being audited by
the IRS.

Covidien LP (a wholly owned subsidiary of Medtronic plc)
has either reached agreement with the IRS or the statute of
limitations has lapsed on its U.S. federal income tax returns
through fiscal year 2018.

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

Refer to Note 13 for additional discussion of income taxes.

Guarantees

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. The Company also offers
warranties on various products. The Company’s maximum
exposure under these guarantees is unable to be
estimated. Historically, the Company has not experienced
significant losses on these types of guarantees.

The Company believes the ultimate resolution of the above
guarantees is not expected to have a material effect on the
Company’s consolidated earnings, financial position,
and/or cash flows.

19. Segment and Geographic Information
There were no changes to the reportable segments during
the fiscal year ended April 29, 2022. The Company’s four
principal operating and reportable segments are as
follows: Cardiovascular Portfolio, Neuroscience Portfolio,
Medical Surgical Portfolio, and Diabetes Operating Unit.

The Company’s management has chosen to organize the
entity based upon therapy solutions provided by each
segment. The four principal segments are strategic
businesses that are managed separately, as each one
develops and manufactures products and provides
services oriented toward targeted therapy solutions.

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, renal system, 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

108 MEDTRONIC PLC 2022 Form 10-K

pelvic health and conditions of the ear, nose, and throat.

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, smart insulin
pens, and insulin pump consumables.

Segment disclosures are on a performance basis,
consistent with internal management reporting. Net sales
of the Company’s segments include end-customer
revenues from the sale of products the segment develops,
manufactures, and distributes. Refer to Note 2 for
discussion on net sales by segment. There are certain
corporate and centralized expenses that are not allocated
to the segments. 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 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.

The accounting policies of the segments are the same as
those described in Note 1. Certain depreciable assets may
be recorded by one segment, while the depreciation
expense is allocated to another segment. The allocation of
depreciation expense is based on the proportion of the
assets used by each segment.

Segment Operating Profit

(in millions)

Cardiovascular

Medical Surgical

Neuroscience

Diabetes

Segment operating profit

Interest expense

Other non-operating income, net

Amortization of intangible assets

Corporate

Centralized distribution costs

Restructuring and associated costs

Acquisition-related items

Certain litigation charges

Impairment charges

MCS impairment / costs

IPR&D charges

Exit of businesses

Debt tender premium and other charges

Medical device regulations

Contribution to Medtronic Foundation

Income before income taxes

PART II
Item 8 Financial Statements and Supplementary Data

2022

4,512

3,572

3,765

583

12,432

(553)

318

(1,733)

(1,724)

(1,752)

(335)

(95)

—

(881)

(101)

—

(102)

—

Fiscal Year

2021

3,850

3,021

3,162

598

10,632

(925)

336

(1,783)

(1,577)

(1,877)

(617)

(118)

(76)

—

(31)

—

(83)

—

2020

3,719

3,044

2,915

546

10,224

(1,092)

356

(1,756)

(1,239)

(1,420)

(441)

(66)

(313)

—

(25)

(52)

(48)

(80)

5,517

3,895

4,055

Total Assets and Depreciation Expense

(in millions)

Cardiovascular

Medical Surgical

Neuroscience

Diabetes

Segments

Corporate

Total

Total Assets

Depreciation Expense

April 29, 2022

April 30, 2021

2022

2021

2020

14,490

15,027

36,940

16,917

3,797

72,144

18,837

39,319

17,151

3,671

75,168

17,915

214

200

265

746

228

212

195

236

696

223

210

194

233

675

232

90,981

93,083

974

919

907

MEDTRONIC PLC 2022 Form 10-K 109

PART II
Item 8 Financial Statements and Supplementary Data

Geographic Information

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. Geographic property, plant, and equipment are attributed to the country based on the physical
location of the assets.

The following table presents net sales for fiscal years 2022, 2021, and 2020, and property, plant, and equipment, net at
April 29, 2022 and April 30, 2021 for the Company’s country of domicile, countries with significant concentrations, and all
other countries:

(in millions)

Ireland

United States

Rest of world

Total other countries, excluding Ireland

2022

101

16,135

15,450

31,585

Net sales

2021

100

15,526

14,491

30,017

2020

14,919

13,909

28,828

Property, plant, and equipment, net
April 30, 2021

April 29, 2022

177

3,821

1,415

5,236

170

3,688

1,363

5,051

Total

31,686

30,117

28,913

5,413

5,221

No single customer represented over 10 percent of the Company’s consolidated net sales in fiscal years 2022, 2021, or
2020.

20. Subsequent Events
On May 25, 2022, the Company and DaVita Inc. (“DaVita”)
entered into a definitive agreement with the intent to form
a new, independent kidney care-focused medical device
company (“NewCo”) with equal equity ownership. The
transaction is expected to close in calendar year 2023,
subject to customary regulatory approvals and closing

conditions. Medtronic is contributing its entire Renal Care
Solutions business (“RCS”) to NewCo. RCS is part of the
Respiratory, Gastrointestinal, and Renal division in the
Company’s Medical Surgical portfolio, and had revenue of
$325 million in fiscal year 2022.

110 MEDTRONIC PLC 2022 Form 10-K

PART II
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures
Our management, with the participation of our Chief
Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act)) and changes in the
Company’s internal control over financial reporting (as

defined in Rule 13a-15(f) under the Exchange Act) as of the
end of the period covered by this report. Based upon that
evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of the period
covered by this annual report, our disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Exchange
Act) are effective.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and
maintaining adequate internal control over financial
reporting for the Company (as defined in Exchange Act
Rule 13a-15(f)). Management conducted an evaluation of
the effectiveness of internal control over financial reporting
based on the framework in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Based on this evaluation, management concluded that the

Company’s internal control over financial reporting was
effective as of April 29, 2022. The effectiveness of the
Company’s internal control over financial reporting as of
April 29, 2022 has been audited by
PricewaterhouseCoopers LLP, an independent registered
public accounting firm, as stated in their report which is
included in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

During the quarter ended April 29, 2022, there were no
changes in our internal control over financial reporting (as
defined in Rules 13a-15(f) under the Exchange Act) that
have materially affected, or are reasonably likely to

materially affect, the Company’s internal control over
financial reporting. The Company has not experienced any
material impacts to its internal controls over financial
reporting despite the COVID-19 pandemic.

Item 9B. Other Information

As reported in our Quarterly Reports on Form 10-Q for the
first three quarters of fiscal year 2022, Medtronic has
engaged in certain activities that it is required to disclose
pursuant to Section 13(r)(1)(D)(ii) of the Securities
Exchange Act of 1934, as amended. In particular, during
the first three quarters of fiscal year 2022, Medtronic
engaged in certain regulatory activities involving Russia’s
Federal Security Service (“FSB”) related to its medical
devices that were expressly authorized by the U.S.
Government under applicable economic sanctions
regulations.

During the first three quarters of fiscal year 2022, in the
normal course of business and consistent with the OFAC
authorizations as in effect at the time, Medtronic Russia
filed a total of nine notifications with the FSB, as required
under local Russian law for the import of medical devices
that make use of encryption functionality. These activities
did not directly result in any revenues or profits for
Medtronic. Medtronic did not engage in these activities
during the fourth quarter of fiscal year 2022. To the extent
that notifications with the FSB remain permissible under
U.S. law, Medtronic may decide to continue engaging in
such activities for the limited purposes of complying with
local law requirements in Russia.

MEDTRONIC PLC 2022 Form 10-K 111

PART III

Part III of this Annual Report on Form 10-K incorporates information by reference from the Company’s 2022 definitive proxy
statement, which will be filed no later than 120 days after April 29, 2022.

Item 10. Directors, Executive Officers, and Corporate

Governance

The sections entitled “Proposal 1 — Election of Directors —
Directors and Nominees,” “Corporate Governance —
Committees of the Board and Meetings,” and “Share
Ownership Information — Delinquent Section 16(a) Report”
in the Company’s Proxy Statement for our 2022 Annual
General Meeting of Shareholders, which will be filed no
later than 120 days after April 29, 2022, are incorporated
herein by reference.

Set forth below are the names and ages of our Executive
Officers of Medtronic, as well as information regarding
their positions with Medtronic, their periods of service in
these capacities, and their business experiences. There are
no family relationships among any of the officers named,
nor is there any arrangement or understanding pursuant to
which any person was selected as an officer.

The following table shows the name, age, and position as of April 29, 2022 of each of our Executive Officers:

Name

Geoffrey S. Martha

Ivan K. Fong

Karen L. Parkhill

Carol A. Surface

Robert ten Hoedt

Robert J. White

John Liddicoat, M.D.

Sean Salmon

Brett Wall

Age

Chairman and Chief Executive Officer

Position with the Company

Executive Vice President, General Counsel and Corporate Secretary of the
Company

Executive Vice President and Chief Financial Officer

Executive Vice President and Chief Human Resources Officer

Executive Vice President and President, EMEA Region, President, APAC
Region

Executive Vice President and President, Medical Surgical Portfolio

Executive Vice President and President, Americas Region

Executive Vice President and President, Diabetes Operating Unit, President,
Cardiovascular Portfolio

Executive Vice President and President, Neuroscience Portfolio

Geoffrey S. Martha, age 52, is Chairman of the Board of
Directors and Chief Executive Officer of Medtronic. Geoff
assumed the role of CEO on April 27, 2020 and became
Chairman of the Board on December 11, 2020. Prior to his
role as Chairman and CEO, he served as President of
Medtronic from November 2019 through April 2020 and
joined the Board of Directors in November 2019.
Previously, Mr. Martha served as Executive Vice President
and President, Restorative Therapies Group, a role he held
since August 2015. Mr. Martha previously served as Senior
Vice President of Strategy and Business Development of
the Company beginning in January 2015 and of Medtronic,
Inc. beginning in August 2011. Prior to that, he served as
Managing Director of Business Development at GE
Healthcare from April 2007 to July 2011; General Manager
for GE Capital Technology Finance Services from
November 2003 to March 2007; Senior Vice President,

Business Development for GE Capital Vendor Financial
Services from February 2002 to October 2003; General
Manager for GE Capital Colonial Pacific Leasing from
February 2001 to January 2002; and Vice President,
Business Development for Potomac Federal, the GE
Capital federal financing investment bank from May 1998
to January 2001.

Ivan K. Fong, age 60, has been Executive Vice President,
General Counsel and Corporate Secretary of the Company
since February 2022. Prior to that, he held several
leadership positions at 3M Company from 2012 to 2022,
including Executive Vice President, Chief Legal and Policy
Officer and Secretary. Prior to joining 3M Company,
Mr. Fong served as General Counsel of the U.S.
Department of Homeland Security from 2009 to 2012. Prior
to his role with the U.S. Government, he was Chief Legal

112 MEDTRONIC PLC 2022 Form 10-K

PART III
Item 11 Executive Compensation

Officer and Secretary for Cardinal Health, Inc from 2005 to
2009. Mr. Fong currently serves on the Board of Cboe
Global Markets.

Covidien. He also held various leadership positions at GE
Healthcare and IBM. Mr. White is also a current member of
the Board of Directors of Smith & Nephew plc.

Karen L. Parkhill, age 56, joined the Company as
Executive Vice President and Chief Financial Officer in June
2016. From 2011 to 2016, Ms. Parkhill served as Vice
Chairman and Chief Financial Officer of Comerica
Incorporated. Ms. Parkhill was a member of Comerica’s
Management Executive Committee and the Comerica Bank
Board of Directors. Prior to joining Comerica, Ms. Parkhill
worked for J.P. Morgan Chase & Co. in various capacities
from 1992 to 2011, including serving as Chief Financial
Officer of the Commercial Banking business from 2007 to
2011. Ms. Parkhill is also a current member of the Board of
Directors for American Express.

Carol A. Surface, age 56, has been Executive Vice
President and Chief Human Resources Officer of the
Company since January 2015 and of Medtronic, Inc. since
September 2013. Prior to that, she was the Executive Vice
President and Chief Human Resources Officer at Best Buy
Co., Inc. from March 2010 to September 2013, and held a
series of HR leadership roles at PepsiCo Inc., from May
2000 to March 2010.

Robert ten Hoedt, age 61, has been Executive Vice
President and President, EMEA Region of the Company
since January 2015 and of Medtronic, Inc. since May 2014,
as well as President, APAC Region starting March 2022.
Prior to that, he was Senior Vice President and President,
EMEA and Canada from 2009 to 2014; Vice President
CardioVascular Europe and Central Asia from 2006 to
2009; Vice President and General Manager, Vitatron from
1999 to 2006; Gastro-Uro leader from 1994 to 1999; and
Marketing Manager, Neurological from 1991 to 1994.

Robert J. White, age 59, is Executive Vice President and
President, Medical Surgical Portfolio. Since 2017, Mr. White
has served as Executive Vice President and Group
President of the Minimally Invasive Therapies Group of
Medtronic. Prior to that, he was Senior Vice President and
President, Asia Pacific from January 2015 to December
2017. He had served as President, Emerging Markets,
President, Respiratory and Monitoring Solutions and Vice
President and General Manager of Patient Monitoring at

John Liddicoat, M.D., age 58, was named Executive Vice
President and President, Americas Region in September
2018. Dr. Liddicoat joined Medtronic in 2006 as Vice
President of Atrial Fibrillation Technologies. In December
of 2006, Dr. Liddicoat was named Vice President and
General Manager of the Structural Heart Disease Business.
Beginning in August 2014, Dr. Liddicoat served as Senior
Vice President and President, Cardiac Rhythm and Heart
Failure.

Sean Salmon, age 57, has been Executive Vice President
and Group President, Diabetes Group of the company
since October 2019, and also assumed the role of
Executive Vice President and President, Cardiovascular
Portfolio in January 2021. Mr. Salmon previously served as
Senior Vice President and President of Coronary and
Structural Heart Business within the Cardiac and Vascular
Group of the Company beginning in July 2014. Mr. Salmon
is a seasoned leader who has been with Medtronic since
2004 and spent the past 16 years in increasingly senior
levels of management. Prior to joining Medtronic,
Mr. Salmon worked at CR Bard and Johnson & Johnson.

Brett Wall, age 57, is Executive Vice President and
President of Medtronic’s Neuroscience Portfolio. Mr. Wall
previously served as Senior Vice President and President of
the Brain Therapies division of Medtronic within the
Restorative Therapies Group from March 2016 to
November 2019. Prior to that, Mr. Wall served as SVP and
President of Medtronic’s Neurovascular business. Prior to
joining Medtronic, he served as Covidien’s SVP and
President of Neurovascular as well as Senior Vice President
and President of the International Vascular Therapies
business for Covidien. Mr. Wall also served as Senior Vice
President and President, International at ev3, Inc. From
2000 to 2008, Brett held various marketing and sales
positions with ev3, Inc. and Micro Therapeutics, Inc.
Mr. Wall has also worked at Boston Scientific as Director of
Marketing, Cardiovascular, Asia Pacifica and Marketing
Manager, Japan, from September 1995 to September
2000.

Item 11. Executive Compensation

The sections entitled “Corporate Governance — Director
Compensation,” “Corporate Governance — Committees of
the Board and Meetings,” “Compensation Discussion and
Analysis,” and “Executive Compensation” in Medtronic’s
Proxy Statement for the Company’s 2022 Annual General
Meeting of Shareholders, which will be filed no later than

120 days after April 29, 2022, are incorporated herein by
reference. The section entitled “Compensation Committee
Report” in Medtronic’s Proxy Statement for the Company’s
2022 Annual General Meeting of Shareholders, which will
be filed no later than 120 days after April 29, 2022, is
furnished herein by reference.

MEDTRONIC PLC 2022 Form 10-K 113

PART III
Item 12 Certain Relationships and Related Transactions, and Director Independence

Item 12. Security Ownership of Certain Beneficial Owners and

Management and Related Shareholder Matters

The sections entitled “Share Ownership Information – Significant Shareholders,” “Share Ownership Information – Beneficial
Ownership of Management,” and “Executive Compensation — Equity Compensation Plan Information” in Medtronic’s Proxy
Statement for the Company’s 2022 Annual General Meeting of Shareholders, which will be filed no later than 120 days after
April 29, 2022, are incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and

Director Independence

The sections entitled “Corporate Governance — Director Independence” and “Corporate Governance — Related Party
Transactions and Other Matters” in Medtronic’s Proxy Statement for the Company’s 2022 Annual General Meeting of
Shareholders, which will be filed no later than 120 days after April 29, 2022, are incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

The sections entitled “Corporate Governance — Committees of the Board and Meetings” and “Audit and Non-Audit Fees” in
Medtronic’s Proxy Statement for the Company’s 2022 Annual General Meeting of Shareholders, which will be filed no later
than 120 days after April 29, 2022, are incorporated herein by reference.

114 MEDTRONIC PLC 2022 Form 10-K

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. Financial Statement Schedules
Schedule II. Valuation and Qualifying Accounts — years ended April 29, 2022, April 30, 2021, and April 24, 2020.

MEDTRONIC PLC AND SUBSIDIARIES
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

(in millions)

Allowance for doubtful accounts:

Balance at
Beginning of
Fiscal Year

Additions

Deductions

Charges to
Income

Charges to
Other Accounts

Other Changes
(Debit) Credit

Balance at End of
Fiscal Year

Fiscal year ended April 29, 2022

241

Fiscal year ended April 30, 2021

Fiscal year ended April 24, 2020

208

190

128

Inventory reserve:

Fiscal year ended April 29, 2022

629

156

Fiscal year ended April 30, 2021

Fiscal year ended April 24, 2020

544

521

483

282

—

$ (69)(a)

230

(95)(a)

(81)(a)

241

208

$(157)(b)

628

(398)(b)

(259)(b)

629

544

Deferred tax valuation allowance:

Fiscal year ended April 29, 2022

5,822

884

$ (19)(e)

$(103)(d)

6,583

Fiscal year ended April 30, 2021

Fiscal year ended April 24, 2020

5,482

6,300

342

119

170 (e)

(172)(d)

5,822

(6)(c)

(744)(d)

(187)(e)

5,482

(a) Primarily consists of uncollectible accounts written off, less recoveries.
(b) Primarily reflects utilization of the inventory reserve.
(c) Reflects the impact from acquisitions and amounts recognized in accumulated other comprehensive income/loss.
(d) Primarily reflects carryover attribute utilization and expiration.
(e) Primarily reflects the effects of currency fluctuations.

All other schedules are omitted because they are not applicable or the required information is shown in the financial
statements or notes thereto.

MEDTRONIC PLC 2022 Form 10-K 115

PART IV
Item 15 Exhibits and Financial Statement Schedules

Exhibits

Exhibit No. Description

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

Certificate of Incorporation of Medtronic plc (incorporated by reference to Exhibit 3.1 to Medtronic plc’s Current Report on
Form 8-K, filed on January 27, 2015, File No. 001-36820).

Amended and Restated Memorandum and Articles of Association of Medtronic plc (incorporated by reference to Exhibit 3.2
to Medtronic plc’s Registration Statement on Form S-3, filed on February 6, 2017, File No. 333-215895).

Form of Indenture between Medtronic, Inc. and Wells Fargo Bank, National Association regarding 2009 offering
(incorporated by reference to Exhibit 4.1 to Medtronic, Inc.’s Registration Statement on Form S-3, filed on March 9, 2009,
File No. 333-157777).

First Supplemental Indenture, dated March 12, 2009, between Medtronic, Inc. and Wells Fargo Bank, National Association
(including the Forms of Notes thereof) (incorporated by reference to Exhibit 4.1 to Medtronic, Inc.’s Current Report on
Form 8-K, filed on March 12, 2009, File No. 001-07707).

Second Supplemental Indenture, dated March 16, 2010, between Medtronic, Inc. and Wells Fargo Bank, National
Association (including the Forms of Notes thereof) (incorporated by reference to Exhibit 4.1 to Medtronic, Inc.’s Current
Report on Form 8-K, filed on March 16, 2010, File No. 001-07707).

Third Supplemental Indenture, dated March 15, 2011, between Medtronic, Inc. and Wells Fargo Bank, National Association
(including the Forms of Notes thereof) (incorporated by reference to Exhibit 4.1 to Medtronic, Inc.’s Current report on
Form 8-K, filed on March 16, 2011, File No. 001-07707).

Fourth Supplemental Indenture, dated March 19, 2012, between Medtronic, Inc. and Wells Fargo Bank, National
Association (including the Forms of Notes thereof) (incorporated by reference to Exhibit 4.2 to Medtronic, Inc.’s Current
Report on Form 8-K, filed on March 20, 2012, File No. 001-07707).

Fifth Supplemental Indenture, dated March 26, 2013, between Medtronic, Inc. and Wells Fargo Bank, National Association
(including the Forms of Notes thereof) (incorporated by reference to Exhibit 4.1 to Medtronic, Inc.’s Current Report on
Form 8-K, filed on March 26, 2013, File No. 001-07707).

Sixth Supplemental Indenture, dated February 27, 2014, between Medtronic, Inc. and Wells Fargo Bank, National
Association (including the Form of Global Note thereof) (incorporated by reference to Exhibit 4.2 to Medtronic, Inc.’s
Current Report on Form 8-K, filed on February 27, 2014, File No. 001-07707).

Seventh Supplemental Indenture, dated as of January 26, 2015, by and among Medtronic plc, Medtronic, Inc., Medtronic
Global Holdings S.C.A. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.2 to Medtronic
plc’s Current Report on Form 8-K12B, filed on January 27, 2015, File No. 001-36820).

Indenture, dated December 10, 2014, between Medtronic, Inc. and Wells Fargo Bank, National Association (incorporated
by reference to Exhibit 4.1 to Medtronic, Inc.’s Current Report on Form 8-K filed with the Commission on December 10,
2014, File No. 001-07707).

First Supplemental Indenture, dated December 10, 2014, between Medtronic, Inc. and Wells Fargo Bank, National
Association (including Form of Floating Rate Senior Notes due 2020, Form of 1.500% Senior Notes due 2018, Form of
2.500% Senior Notes due 2020, Form of 3.150% Senior Notes due 2022, Form of 3.500% Senior Notes due 2025, Form of
4.375% Senior Notes due 2035 and Form of 4.625% Senior Notes due 2045) (incorporated by reference to Exhibit 4.2 of
Medtronic, Inc.’s Current Report on Form 8-K filed with the Commission on December 10, 2014, File No. 001-07707).

Second Supplemental Indenture, dated as of January 26, 2015, by and among Medtronic plc and Wells Fargo Bank,
National Association (incorporated by reference to Exhibit 4.3 to Medtronic plc’s Current Report on Form 8-K12B, filed on
January 27, 2015, File No. 001-36820).

Third Supplemental Indenture, dated as of January 26, 2015, by and among Medtronic Global Holdings S.C.A. and Wells
Fargo Bank, National Association (incorporated by reference to Exhibit 4.4 to Medtronic plc’s Current Report on
Form 8-K12B, filed on January 27, 2015, File No. 001-36820).

Indenture, dated as of October 22, 2007, by and among Covidien International Finance S.A., Covidien Ltd. and Deutsche
Bank Trust Company Americas (incorporated by reference to Exhibit 4.1(a) to Covidien plc’s Current Report on Form 8-K
filed on October 22, 2007, File No. 001-33259).

Fourth Supplemental Indenture, dated as of October 22, 2007, by and among Covidien International Finance S.A., Covidien
Ltd. and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1(e) to Covidien plc’s Current
Report on Form 8-K filed on October 22, 2007, File No. 001-33259).

Fifth Supplemental Indenture, dated as of June 4, 2009, by and among Covidien International Finance S.A., Covidien Ltd.,
Covidien plc and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to Covidien plc’s
Current Report on Form 8-K12G3 filed on June 5, 2009, File No. 001-33259).

Sixth Supplemental Indenture, dated as of June 28, 2010, among Covidien International Finance S.A., Covidien Ltd.,
Covidien plc and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to Covidien plc’s
Current Report on Form 8-K filed on June 28, 2010, File No. 001-33259).

Seventh Supplemental Indenture, dated as of May 30, 2012, among Covidien International Finance S.A., Covidien Ltd.,
Covidien plc and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to Covidien plc’s
Current Report on Form 8-K filed on May 30, 2012, File No. 001-33259).

116 MEDTRONIC PLC 2022 Form 10-K

PART IV
Item 15 Exhibits and Financial Statement Schedules

Exhibit No. Description

4.18

4.19

4.20

4.21

4.22

4.23

4.24

#4.25

10.1

10.2

10.3

10.4

10.5

*10.6

*10.7

*10.8

*10.9

*10.10

*10.11

*10.12

*10.13

Eighth Supplemental Indenture, dated as of May 16, 2013, among Covidien International Finance S.A., Covidien Ltd.,
Covidien plc and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to Covidien plc’s
Current Report on Form 8-K filed on May 16, 2013, File No. 001-33259).

Ninth Supplemental Indenture, dated as of January 26, 2015, by and among Medtronic plc, Medtronic Global Holdings
S.C.A., Covidien public limited company, Covidien International Finance S.A., Covidien Ltd. and Deutsche Bank Trust
Company Americas (incorporated by reference to Exhibit 4.5 to Medtronic plc’s Current Report on Form 8-K12B, filed on
January 27, 2015, File No. 001-36820).

Senior Indenture, dated as of March 28, 2017, by and among Medtronic plc, Medtronic Global Holdings S.C.A., Medtronic,
Inc., and Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 4.1 to Medtronic plc’s Current Report on Form 8-K,
filed on March 28, 2017, File No. 001-36820).

First Supplemental Indenture, dated as of March 28, 2017, by and among Medtronic plc, Medtronic Global Holdings S.C.A.,
Medtronic, Inc., and Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 4.2 to Medtronic plc’s Current Report on
Form 8-K, filed on March 28, 2017, File No. 001-36820).

Second Supplemental Indenture, dated as of March 7, 2019, by and among Medtronic plc, Medtronic Global Holdings
S.C.A., Medtronic, Inc., Wells Fargo Bank, N.A., and Elavon Financial Services DAC, UK Branch (incorporated by reference to
Exhibit 4.1 to Medtronic plc’s Current Report on Form 8-K, filed on March 7, 2019, File No. 001-36820).

Third Supplemental Indenture, dated as of July 2, 2019, among Medtronic Global Holdings S.C.A., Medtronic, Inc. and
Medtronic plc, Wells Fargo Bank, N.A., as trustee, and Elavon Financial Services DAC (incorporated by reference to
Exhibit 4.1 to Medtronic plc’ Current Report on Form 8-K, filed July 2, 2019, File No. 001-36820).

Fourth Supplemental Indenture, dated as of September 29, 2020, among Medtronic Global Holdings S.C.A., Medtronic, Inc.
and Medtronic plc, Wells Fargo Bank, N.A., as trustee, and Elavon Financial Services DAC, as paying agent (including the
forms of the 2023 Notes, the 2025 Notes, the 2028 Notes, the 2032 Notes, the 2040 Notes and the 2050 Notes)
(incorporated by reference to Exhibit 4.1 to Medtronic plc’ Current Report on Form 8-K, filed September 29, 2020, File
No. 001-36820).

Description of Registrant’s Securities.

Amended and Restated Credit Agreement, dated as of December 12, 2018, by and among Medtronic Global Holdings,
SCA, certain subsidiaries named therein, Medtronic, Inc., Medtronic PLC, the lenders from time to time party thereto, and
Bank of America, N.A. as Administration Agent (incorporated by reference to Exhibit 10.1 to Medtronic plc’s Current Report
on Form 8-K, filed on December 13, 2018, File No. 001-36820).

Amendment No. 1 and Extension Agreement to the Amended and Restated Credit Agreement, dated as of December 12,
2019, among Medtronic Global Holdings S.C.A., Medtronic, Inc., Medtronic PLC, the Lenders party thereto and Bank of
America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Medtronic plc’s Current Report on
Form 10-Q, filed on February 28, 2020, File No. 001-36820).

Term Loan Agreement, dated as of May 12, 2020, among Medtronic Global Holdings S.C.A., Medtronic, Inc., Medtronic
PLC, the Lenders party thereto and Mizuho Bank, LTD., as Administrative Agent (incorporated by reference to Exhibit 10.1 to
Medtronic plc’s Current Report on Form 8-K, filed on May 12, 2020, File No. 001-36820).

Form of Deed of Indemnification (incorporated by reference to Exhibit 10.1 to Medtronic plc’s Current Report on
Form 8-K12B, filed on January 27, 2015, File No. 001-36820).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 to Medtronic plc’s Current Report on
Form 8-K12B, filed on January 27, 2015, File No. 001-36820).

Change of Control Severance Plan—Section 16B Officers (as amended and restated as of January 26, 2015) (incorporated by
reference to Exhibit 10.14 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).
Letter Agreement by and between Medtronic, Inc. and Carol Surface dated August 22, 2013 (incorporated by reference to
Exhibit 10.44 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 25, 2014, filed on June 20, 2014, File
No. 001-07707).

Letter Agreement by and between Medtronic, Inc. and Bradley E. Lerman dated May 2, 2014 (incorporated by reference to
Exhibit 10.4 of Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2014, filed on August 29,
2014, File No. 001-07707).

Letter Agreement by and between Medtronic, Inc. and Karen Parkhill dated May 2, 2016 (incorporated by reference to
Exhibit 10.1 to Medtronic, plc’s Current Report on Form 8-K, filed on May 4, 2016, File No. 001-36820).

Office of Chairman and Chief Executive Officer Letter Agreement (incorporated by reference to Exhibit 10.1 to Medtronic
plc’s Quarterly Report on Form 10-Q, filed on December 3, 2019, File No. 001-36820).

Form of Offer Letter Amendment (incorporated by reference to Exhibit 10.25 to Medtronic plc’s Quarterly Report on
Form 10-Q for the quarter ended January 23, 2015, filed on February 27, 2015, File No. 001-36820).

1998 Outside Director Stock Compensation Plan (as amended and restated effective as of January 1, 2008) (incorporated by
reference to Exhibit 10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended January 25, 2008, filed
on, filed on March 4, 2008, File No. 001-07707).

Amendment to the 1998 Outside Director Stock Compensation Plan (incorporated by reference to Exhibit 10.2 to Medtronic
plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

MEDTRONIC PLC 2022 Form 10-K 117

PART IV
Item 15 Exhibits and Financial Statement Schedules

Exhibit No. Description

*10.14

*10.15

*10.16

*10.17

*10.18

*10.19

*10.20

*10.21

*10.22

*10.23

*10.24

*10.25

*10.26

*10.27

*10.28

*10.29

*10.30

*10.31

*10.32

*10.33

*10.34

2003 Long-Term Incentive Plan (as amended and restated effective January 1, 2008) (incorporated by reference to Exhibit
10.4 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2008, filed on March 4, 2008, File
No. 001-07707).

Amendment to the 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 to Medtronic plc’s Current
Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Form of Restricted Stock Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2005, filed on March 7, 2005, File
No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2003 Long-Term Incentive Plan (four year vesting) (incorporated by
reference to Exhibit 10.1 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2005, filed
on March 7, 2005, File No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2003 Long-Term Incentive Plan (immediate vesting) (incorporated
by reference to Exhibit 10.2 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2005,
filed on March 7, 2005, File No. 001-07707).

Form of Restricted Stock Units Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.20 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 29, 2005, filed on June 29, 2005, File
No. 001-07707).

Form of Performance Share Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.21 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 29, 2005, filed on June 29, 2005, File
No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2003 Long-Term Incentive Plan effective June 22, 2006
(incorporated by reference to Exhibit 10.23 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 28,
2006, filed on June 28, 2006, File No. 001-07707).

Form of Restricted Stock Award Agreement under 2003 Long-Term Incentive Plan effective June 22, 2006 (incorporated by
reference to Exhibit 10.24 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 28, 2006, filed on
June 28, 2006, File No. 001-07707).

Form of Restricted Stock Unit Award Agreement under 2003 Long-Term Incentive Plan effective June 22, 2006
(incorporated by reference to Exhibit 10.25 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 28,
2006, filed on June 28, 2006, File No. 001-07707).

Form of Performance Award Agreement under 2003 Long-Term Incentive Plan effective June 22, 2006 (incorporated by
reference to Exhibit 10.26 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 28, 2006, filed on
June 28, 2006, File No. 001-07707).

Form of Restricted Stock Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 26, 2007, filed on December 4,
2007, File No. 001-07707).

Form of Restricted Stock Unit Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.4 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 26, 2007, filed on December 4,
2007, File No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.39 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 25, 2008, filed on June 24, 2008, File
No. 001-07707).

Form of Restricted Stock Unit Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.40 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 25, 2008, filed on June 24, 2008, File
No. 001-07707).

Form of Restricted Stock Unit Award Agreement under 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.41 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 25, 2008, filed on June 24, 2008, File
No. 001-07707).

Israeli Amendment to the 2003 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to Medtronic, Inc.’s
Quarterly Report on Form 10-Q for the quarter ended January 25, 2008, filed on March 4, 2008, File No. 001-07707).

2008 Stock Award and Incentive Plan (as amended and restated effective August 27, 2009) (incorporated by reference to
Exhibit 10.2 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2009, filed on
December 9, 2009, File No. 001-07707).

Amendment to the 2008 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10.4 to Medtronic plc’s
Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Form of Restricted Stock Unit Award Agreement under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.2 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2008, filed on September 3,
2008, File No. 001-07707).

Form of Restricted Stock Award Agreement under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2008, filed on September 3,
2008, File No. 001-07707).

118 MEDTRONIC PLC 2022 Form 10-K

PART IV
Item 15 Exhibits and Financial Statement Schedules

Exhibit No. Description

*10.35

*10.36

*10.37

*10.38

*10.39

*10.40

*10.41

*10.42

*10.43

*10.44

*10.45

*10.46

*10.47

*10.48

*10.49

*10.50

*10.51

*10.52

*10.53

*10.54

*10.55

*10.56

Form of Restricted Stock Award Agreement under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.4 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2008, filed on September 3,
2008, File No. 001-07707).

Form of Restricted Stock Unit Award Agreement under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.5 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2008, filed on September 3,
2008, File No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.6 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended July 25, 2008, filed on September 3,
2008, File No. 001-07707).

Terms of Non-Employee Director Compensation under 2008 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.42 to Medtronic, Inc.’s Annual Report on Form 10-K for the year ended April 27, 2012, filed on June 26, 2012, File
No. 001-07707).

Form of Non-Employee Director Initial Option Agreement under 2008 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 10.1 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 24, 2008, filed
on December 3, 2008, File No. 001-07707).

Form of Non-Employee Director Annual Option Agreement under 2008 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 10.2 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 24, 2008, filed
on December 3, 2008, File No. 001-07707).

Form of Non-Employee Director Deferred Unit Award Agreement under 2008 Stock Award and Incentive Plan (incorporated
by reference to Exhibit 10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 24, 2008,
filed on December 3, 2008, File No. 001-07707).

Form of Non-Employee Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and
Incentive Plan (incorporated by reference to Exhibit 10.65 to Medtronic plc’s Annual Report on Form 10-K for the year
ended April 24, 2015, filed on June 23, 2015, File No. 001-36820).

Israeli Amendment to the Amended and Restated 2013 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.10 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Form of Restricted Stock Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.1 to Medtronic plc’s Quarterly Report on Form 10-K for the quarter ended July 28,
2017, filed on September 1, 2017, File No. 001-36820).

Medtronic plc Amended and Restated 2013 Stock Award and Incentive Plan (as amended and restated generally effective
December 8, 2017) (incorporated by reference to Exhibit 10.1 to Medtronic plc’s Current Report on Form 8-K, filed on
December 12, 2017, File No. 001-36820).

Form of Non-qualified Stock Option Agreement Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.50 to Medtronic plc’s Annual Report on Form 10-K, filed June 22, 2018, File
No. 001-36820).

Form of Restricted Stock Unit Award Agreement Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.51 to Medtronic plc’s Annual Report on Form 10-K, filed June 22, 2018, File
No. 001-36820).

Form of Restricted Stock Award Agreement Amended and Restated 2013 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 10.52 to Medtronic plc’s Annual Report on Form 10-K, filed June 22, 2018, File No. 001-36820)

Form of Long Term Performance Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.53 to Medtronic plc’s Annual Report on Form 10-K, filed June 22, 2018, File
No. 001-36820).

Form of Non-Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.31 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Performance Share Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.1 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
October 30, 2020, filed on December 3, 2020, File No. 001-36820).

Form of Non-Employee Director Deferred Unit Award Agreement under the 2008 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.3 to Medtronic, Inc.’s Quarterly Report on Form 10-Q for the quarter ended
October 24, 2008, filed on December 3, 2008, File No. 001-07707).

Form of Non-Qualified Stock Option Agreement under 2013 Stock Award and Incentive Plan (incorporated by reference to
Exhibit 10.2 to Medtronic, Inc.’s Current Report on Form 8-K, filed on August 27, 2013, File No. 001-07707).

Form of Restricted Stock Unit Award Agreement (U.S. Employees) under 2013 Stock Award and Incentive Plan (incorporated
by reference to Exhibit 10.3 to Medtronic, Inc.’s Current Report on Form 8-K, filed on August 27, 2013, File No. 001-07707).

Form of Restricted Stock Unit Award Agreement (Non-U.S. Employees) under 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.4 to Medtronic, Inc.’s Current Report on Form 8-K, filed on August 27, 2013, File
No. 001-07707).

Form of Restricted Stock Unit Award Agreement (Time-Based) under 2013 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 10.5 to Medtronic, Inc.’s Current Report on Form 8-K, filed on August 27, 2013, File No. 001-07707).

MEDTRONIC PLC 2022 Form 10-K 119

PART IV
Item 15 Exhibits and Financial Statement Schedules

Exhibit No. Description

*10.57

*10.58

*10.59

*10.60

*10.61

*10.62

*10.63

*10.64

*10.65

*10.66

*10.67

*10.68

*10.69

*10.70

*10.71

*10.72

*10.73

*10.74

*10.75

10.76

Form of Restricted Stock Unit Award Agreement (Israeli-Employees) under 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.8 to Medtronic, Inc.’s Current Report on Form 8-K, filed on August 27, 2013, File
No. 001-07707).

Form of Non-Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.48 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.49 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.50 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.51 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan (incorporated by
reference to Exhibit 10.53 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended January 23, 2015, filed
on February 27, 2015, File No. 001-36820).

Form of Restricted Stock Unit Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.54 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended
January 23, 2015, filed on February 27, 2015, File No. 001-36820).

Form of Restricted Stock Award Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.69 to Medtronic plc’s Annual Report on Form 10-K for the year ended April 24,
2020, filed on June 19, 2020, File No. 001-36820).

Form of Non-Qualified Stock Option Agreement under Amended and Restated 2013 Stock Award and Incentive Plan
(incorporated by reference to Exhibit 10.70 to Medtronic plc’s Annual Report on Form 10-K for the year ended April 24,
2020, filed on June 19, 2020, File No. 001-36820).

Medtronic plc 2014 Amended and Restated Employees Stock Purchase Plan (incorporated by reference to Exhibit 10.8 to
Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Medtronic plc Incentive Plan (as amended and restated effective January 26, 2015) (incorporated by reference to
Exhibit 10.11 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Medtronic plc Supplemental Executive Retirement Plan (as restated generally effective January 26, 2015) (incorporated by
reference to Exhibit 10.15 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File No. 001-36820).

Medtronic Non-Qualified Retirement Plan Supplemental (restated November 6, 2020, and formerly known as the
Supplemental Executive Retirement Plan) (incorporated by reference to Exhibit 10.3 to Medtronic plc’s Quarterly Report on
Form 10-Q for the quarter ended October 30, 2020, filed on December 3, 2020, File No. 001-36820).

Medtronic plc Savings and Investment Plan (as amended and restated generally effective January 26, 2015) (incorporated
by reference to Exhibit 4.22 to Medtronic plc’s Registration Statement on Form S-8 filed on January 28, 2015, File
No. 333-201737).

Medtronic plc Puerto Rico Employees’ Savings and Investment Plan (as amended and restated generally effective
January 26, 2015) (incorporated by reference to Exhibit 4.23 to Medtronic plc’s Registration Statement on Form S-8 filed on
January 28, 2015, File No. 333-201737).
Medtronic plc Capital Accumulation Plan Deferral Program (as amended and restated generally effective January 26, 2015)
(incorporated by reference to Exhibit 10.13 to Medtronic plc’s Current Report on Form 8-K, filed on January 27, 2015, File
No. 001-36820).

Capital Accumulation Plan Deferral Program (as amended and restated generally effective January 1, 2017) (incorporated
by reference to Exhibit 10.1 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended October 28, 2016, filed
on December 5, 2016, File No. 001-36820).

Amended and Restated Covidien Supplemental Savings and Retirement Plan (restated November 6, 2020) (incorporated by
reference to Exhibit 10.2 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2020, filed
on December 3, 2020, File No. 001-36820).

Medtronic Capital Accumulation Plan Deferral Program (restated November 6, 2020) (incorporated by reference to Exhibit
10.4 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2020, filed on December 3, 2020,
File No. 001-36820).

Amendment No. 3 and Extension Agreement to the Amended and Restated Credit Agreement, dated as of December 13,
2021, by and among Medtronic Global Holdings S.C.A., certain subsidiaries of Medtronic plc from time to time party
thereto, Medtronic, Inc., Medtronic plc, the lenders from time to time party thereto and Bank of America N.A., as
administrative agent. (incorporated by reference to Exhibit 10.01 to Medtronic plc’s Current Report on Form 8-K, filed on
December 14, 2021, File No. 001-36820).

120 MEDTRONIC PLC 2022 Form 10-K

PART IV
Item 16 Form 10-K Summary

Exhibit No. Description

*10.77

*10.78

*10.79

*10.80

*10.81

*10.82

#21

#22

#23

#24

#31.1
#31.2

#32.1

#32.2

Medtronic Capital Accumulation Plan Deferral Program (as restated generally effective January 1, 2017) (Conformed
through the Amendment generally effective as of January 1, 2022) (incorporated by reference to Exhibit 10.1 to Medtronic
plc’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2022, filed on March 3, 2022, File No. 001-36820).

2021 Medtronic plc Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to Medtronic plc’s Quarterly Report
on Form 10-Q for the quarter ended January 28, 2022, filed on March 3, 2022, File No. 001-36820).

Performance Share Unit Agreement 2021 Medtronic plc Long Term Incentive Plan (incorporated by reference to Exhibit 10.3
to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2022, filed on March 3, 2022, File
No. 001-36820).

Non-Qualified Stock Option Agreement 2021 Medtronic plc Long Term Incentive Plan (incorporated by reference to Exhibit
10.4 to Medtronic plc’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2022, filed on March 3, 2022, File
No. 001-36820).

Restricted Stock Unit Award Agreement for awards vesting 100% on the third anniversary of the grant date—2021 Medtronic
plc Long Term Incentive Plan (incorporated by reference to Exhibit 10.5 to Medtronic plc’s Quarterly Report on Form 10-Q
for the quarter ended January 28, 2022, filed on March 3, 2022, File No. 001-36820).

Restricted Stock Unit Award Agreement for awards vesting ratably on the first, second, third, and fourth anniversary of the
grant date—2021 Medtronic plc Long Term Incentive Plan (incorporated by reference to Exhibit 10.6 to Medtronic plc’s
Quarterly Report on Form 10-Q for the quarter ended January 28, 2022, filed on March 3, 2022, File No. 001-36820).

List of Subsidiaries of Medtronic plc.

List of Senior Notes, Issuers and Guarantors.

Consent of Independent Registered Public Accounting Firm.

Power of Attorney.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

#101.SCH

XBRL Taxonomy Extension Schema Document

#101.CAL

#101.DEF

#101.LAB

#101.PRE

#104

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Exhibits that are management contracts or compensatory plans or arrangements.

# Filed herewith

Item 16. Form 10-K Summary

Registrants may voluntarily include a summary of information required by Form 10-K under this Item 16. The Company has
not elected to include such summary information.

MEDTRONIC PLC 2022 Form 10-K 121

PART IV
Item 16 Form 10-K Summary

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: June 23, 2022

Medtronic plc

By:

/s/ Geoffrey S. Martha

Geoffrey S. Martha

Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: June 23, 2022

Medtronic plc

By:

/s/ Geoffrey S. Martha

Geoffrey S. Martha
Chairman and Chief Executive Officer

(Principal Executive Officer)

By:

/s/ Karen L. Parkhill

Karen L. Parkhill
Executive Vice President and
Chief Financial Officer

(Principal Financial Officer)

By:

/s/ Jennifer M. Kirk

Jennifer M. Kirk
Global Controller and
Chief Accounting Officer
(Principal Accounting Officer)

Directors

Richard H. Anderson*
Craig Arnold*
Scott C. Donnelly*
Andrea J. Goldsmith, PH.D.*
Randall J. Hogan,*
Kevin E. Lofton*
Geoffrey S. Martha
Elizabeth G. Nabel, M.D.*
Denise M. O’Leary*
Kendall J. Powell*

*Ivan K. Fong, by signing his name hereto, does hereby sign this document on behalf of each of the above named directors of the registrant
pursuant to powers of attorney duly executed by such persons.

Dated: June 23, 2022

By:

/s/ Ivan K. Fong

Ivan K. Fong

122 MEDTRONIC PLC 2022 Form 10-K

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710 Medtronic Parkway
Minneapolis, MN 55432-5604
USA
Tel: (763) 514-4000
Fax: (763) 514-4879