Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Medtronic 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. Medtronic 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 Medtronic has already recognized the tax benefit in the consolidated statements of income. Medtronic 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 Medtronic’s tax return but has not yet been recognized as an expense in the consolidated statements of income.

Source: 10-K (filing date: 2019-06-21).

Medtronic PLC, income tax expense (benefit), continuing operations

USD $ in millions

	12 months ended	Apr 26, 2019		Apr 27, 2018		Apr 28, 2017		Apr 29, 2016		Apr 24, 2015		Apr 25, 2014
	U.S.
	International
	Current tax expense
	U.S.
	International
	Deferred tax expense (benefit)
	Income tax provision

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Item	Description	The company
Current tax expense	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Medtronic PLC’s current tax expense increased from 2017 to 2018 but then declined significantly from 2018 to 2019.
Deferred tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Medtronic PLC’s deferred tax expense (benefit) declined from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Income tax provision	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Medtronic PLC’s income tax provision increased from 2017 to 2018 but then declined significantly from 2018 to 2019.

Medtronic PLC, effective income tax rate (EITR) reconciliation

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	U.S. federal statutory tax rate
	U.S. state taxes, net of federal tax benefit
	Research and development credit
	Puerto Rico Excise Tax
	International
	Stock based compensation
	Other, net
	Divestiture related
	Certain tax adjustments
	U.S. tax on foreign earnings
	Increase (decrease) in tax rate
	Effective tax rate, before U.S. Tax Reform
	U.S. Tax Reform
	Effective tax rate

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Item	Description	The company
Effective tax rate, before U.S. Tax Reform	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Medtronic PLC’s effective tax rate, before U.S. Tax Reform declined from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Medtronic PLC, components of deferred tax assets and liabilities

USD $ in millions

		Apr 26, 2019		Apr 27, 2018		Apr 28, 2017		Apr 29, 2016		Apr 24, 2015		Apr 25, 2014
	Net operating loss, capital loss, and credit carryforwards
	Other accrued liabilities
	Accrued compensation
	Pension and post-retirement benefits
	Stock-based compensation
	Other
	Inventory
	Federal and state benefit on uncertain tax positions
	Interest limitation
	Unrealized loss on available-for-sale securities and derivative financial instruments
	Gross deferred tax assets
	Valuation allowance
	Deferred tax assets
	Intangible assets
	Basis impairment
	Realized loss on derivative financial instruments
	Other
	Accumulated depreciation
	Unrealized gain on available-for-sale securities and derivative financial instruments
	Outside basis difference of subsidiaries
	Deferred tax liabilities
	Prepaid income taxes
	Income tax receivables
	Tax assets (liabilities), net

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Medtronic PLC’s gross deferred tax assets declined from 2017 to 2018 and from 2018 to 2019.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Medtronic PLC’s deferred tax assets declined from 2017 to 2018 but then slightly increased from 2018 to 2019.
Tax assets (liabilities), net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Medtronic PLC’s tax assets (liabilities), net increased from 2017 to 2018 and from 2018 to 2019.

Medtronic PLC, deferred tax assets and liabilities, classification

USD $ in millions

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	Tax assets (included in Other current assets)
	Tax assets
	Current deferred tax liabilities
	Noncurrent deferred tax liabilities
	Deferred tax liabilities (included in Noncurrent liabilities held for sale)

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Item	Description	The company
Tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Medtronic PLC’s tax assets declined from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Noncurrent deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Medtronic PLC’s noncurrent deferred tax liabilities declined from 2017 to 2018 and from 2018 to 2019.

Medtronic PLC, adjustments to financial data

USD $ in millions

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Shareholders’ Equity
	Shareholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Shareholders’ equity (adjusted)
	Adjustment to Net Income Attributable To Medtronic
	Net income attributable to Medtronic (as reported)
	Add: Deferred income tax expense (benefit)
	Net income attributable to Medtronic (adjusted)

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Medtronic PLC, Financial Data: Reported vs. Adjusted

Medtronic PLC, adjusted ratios

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Medtronic PLC’s adjusted current ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Medtronic PLC’s adjusted net profit margin deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Medtronic PLC’s adjusted total asset turnover improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Medtronic PLC’s adjusted financial leverage declined from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Medtronic PLC’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Medtronic PLC’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Medtronic PLC, Ratios: Reported vs. Adjusted

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Medtronic PLC’s adjusted current ratio improved from 2017 to 2018 and from 2018 to 2019.

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Medtronic
	Net sales
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Medtronic
	Net sales
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ Net profit margin = 100 × Net income attributable to Medtronic ÷ Net sales
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income attributable to Medtronic ÷ Net sales
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Medtronic PLC’s adjusted net profit margin deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Net sales
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Net sales
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Medtronic PLC’s adjusted total asset turnover improved from 2017 to 2018 and from 2018 to 2019.

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Total assets
	Shareholders’ equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted total assets
	Adjusted shareholders’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Medtronic PLC’s adjusted financial leverage declined from 2017 to 2018 and from 2018 to 2019.

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Medtronic
	Shareholders’ equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Medtronic
	Adjusted shareholders’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ ROE = 100 × Net income attributable to Medtronic ÷ Shareholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income attributable to Medtronic ÷ Adjusted shareholders’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Medtronic PLC’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

		Apr 26, 2019	Apr 27, 2018	Apr 28, 2017	Apr 29, 2016	Apr 24, 2015	Apr 25, 2014
	As Reported
	Selected Financial Data (USD $ in millions)
	Net income attributable to Medtronic
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net income attributable to Medtronic
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23), 10-K (filing date: 2014-06-20).

2019 Calculations

¹ ROA = 100 × Net income attributable to Medtronic ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income attributable to Medtronic ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Medtronic PLC’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

	Medtronic PLC	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Medtronic PLC (MDT)

Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Medtronic PLC, Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Medtronic PLC, Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)