SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
Entire Document
 



GAAP to Non-GAAP Reconciliation We provide non-GAAP financial measures to facilitate review of our operational performance and as a basis for strategic planning. Management believes that in order to properly understand its short-term and long-term financial trends, including period over period comparisons of the company’s operations, investors may find it useful to exclude the effect of certain charges or gains that contribute to or reduce earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods. Refer to our discussion in the "Costs and Expenses" and "Income Taxes" sections of this Management's Discussion and Analysis for more information on the Non-GAAP Adjustments. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP, and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies.
The tables below present our GAAP to Non-GAAP reconciliations for the three months ended July 28, 2017 and July 29, 2016:
 
Three months ended July 28, 2017
(in millions)
Income Before Provision for Income Taxes
 
Diluted EPS (1)
 
Provision for Income Taxes (2)
 
Effective Tax Rate
GAAP
$
1,195

 
$
0.74

 
$
186

 
15.6
%
Non-GAAP Adjustments:
 
 
 
 
 
 
 
Restructuring charges, net
14

 
0.01

 
2


14.3

Acquisition-related items
53

 
0.03

 
14


26.4

Divestiture-related items
48

 
0.03

 
8

 
16.7

Amortization of intangible assets
454

 
0.27

 
80


17.6

Certain tax adjustments

 
0.04

 
(60
)


Non-GAAP
$
1,764

 
$
1.12

 
$
230


13.0
%
 
 
 
 
 
 
 
 
 
Three months ended July 29, 2016
(in millions)
Income Before Provision for Income Taxes
 
Diluted EPS(1)
 
Provision for Income Taxes (2)
 
Effective Tax Rate
GAAP
$
988

 
$
0.66

 
$
59

 
6.0
%
Non-GAAP Adjustments:
 
 
 
 
 
 
 
Restructuring charges, net
104

 
0.06

 
25

 
24.0

Certain litigation charges
82

 
0.04

 
30

 
36.6

Acquisition-related items
52

 
0.03

 
13

 
25.0

Amortization of intangible assets
487

 
0.27

 
111

 
22.8

Certain tax adjustments

 
(0.02
)
 
31

 

Non-GAAP
$
1,713

 
$
1.03

 
$
269

 
15.7
%
(1)
The data in this schedule has been intentionally rounded to the nearest $0.01 and, therefore, may not sum.
(2)
The tax effect of each Non-GAAP Adjustment is based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction.

GAAP diluted EPS and Non-GAAP diluted EPS for the first quarter of fiscal year 2018 were $0.74 and $1.12 per diluted share, respectively, as compared to $0.66 and $1.03 per diluted share, respectively, for the first quarter in the prior fiscal year, representing an increase of 12% and 9%, respectively. A key contributor to the growth in GAAP diluted EPS and Non-GAAP diluted EPS was solid operating margin expansion due to the continued execution on our cost savings initiatives, including cost synergies from the Covidien acquisition, strategic sourcing initiatives, global footprint optimization, and the expansion of share services and centers of excellence. GAAP diluted EPS and Non-GAAP diluted EPS growth was also driven by revenue growth in emerging markets and non-U.S. developed markets, most notably in Latin America, China, and the Middle East. The growth year-over-year reflects the strength of our underlying businesses and stable growth of our markets, as well as the diversification benefit of our groups and regions.

48

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