SEC Filings

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


Summary of Cash Flows
 
Three months ended
(in millions)
July 28, 2017
 
July 29, 2016
Cash provided by (used in):
 

 
 

Operating activities
$
737

 
$
1,550

Investing activities
83

 
(284
)
Financing activities
(1,141
)
 
(1,160
)
Effect of exchange rate changes on cash and cash equivalents
45

 
78

Net change in cash and cash equivalents
$
(276
)
 
$
184

Operating Activities The $813 million decrease in net cash provided was primarily driven by an increase in cash paid for income taxes of $302 million, an increase in certain litigation payments of $102 million, net cash outflows for collateral related to our currency exchange rate derivative instruments, and a decrease in cash collected from customers. The increase in cash paid for income taxes was primarily a result of settlement payments for U.S federal income taxes for fiscal years 2012 to 2014 as well as audit settlements outside of the U.S. during the three months ended July 28, 2017. We did not make any significant settlement payments during the three months ended July 29, 2016. The decrease in cash collected from customers is partially attributable to delays in billing and collections stemming from the SAP outage during the three months ended July 28, 2017. For more information on collateral received/posted and contingencies, see Notes 8 and 16, respectively, to the current period's consolidated financial statements.
Investing Activities The $367 million increase in net cash provided was primarily attributable to higher net sales of investments of $296 million and a decrease in capital expenditures of $52 million.
Financing Activities The $19 million decrease in net cash used is primarily attributable to a decrease in share repurchases of $530 million partially offset by a reduction of commercial paper borrowings of $357 million.
Free Cash Flow
Free cash flow, a non-GAAP financial measure, is calculated by subtracting property, plant, and equipment additions from operating cash flows. 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:
 
Three months ended
(in millions)
July 28, 2017
 
July 29, 2016
Net cash provided by operating activities
$
737

 
$
1,550

Net cash used in investing activities
83

 
(284
)
Net cash used in financing activities
(1,141
)
 
(1,160
)
 
 
 
 
Net cash provided by operating activities
$
737

 
$
1,550

Additions to property, plant, and equipment
(278
)
 
(330
)
Free cash flow
$
459

 
$
1,220

 
 
 
 
Dividends to shareholders
$
625

 
$
599

Repurchase of ordinary shares
1,233

 
1,763

Issuances of ordinary shares
(143
)
 
(214
)
Return to shareholders
$
1,715

 
$
2,148

Return of operating cash flow percentage
233
%
 
139
%
Return of free cash flow percentage
374
%
 
176
%

61

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