BERNSTEIN

33 ANNUAL
RD
STRATEGIC
DECISIONS
CONFERENCE
JUNE 2, 2017

OMAR ISHRAK
CHAIRMAN & CEO
FORWARD LOOKING STATEMENT
This presentation contains forward-looking statements which provide current expectations or forecasts, including those
relating to market and sales growth, growth strategies, financial results, use of capital, product development and
introduction, partnerships, regulatory matters, restructuring initiatives, mergers/acquisitions/divestitures and related
effects, accounting estimates, working capital adequacy, competitive strengths and sales efforts. They are based on
current assumptions and expectations that involve uncertainties or risks. These uncertainties and risks include, but are not
limited to, those described in the filings we make with the U.S. Securities and Exchange Commission (SEC). Actual results
may differ materially from anticipated results. Forward-looking statements are made as of today's date, and we undertake
no duty to update them or any of the information contained in this presentation.

Financial Data
Certain information in this presentation includes calculations or figures that have been prepared internally and have not
been reviewed or audited by our independent registered public accounting firm. Use of different methods for preparing,
calculating or presenting information may lead to differences and such differences may be material. This presentation
contains financial measures and guidance, including free cash flow figures (defined as operating cash flows less property,
plant and equipment additions), revenue, margin and growth rates on a constant currency, constant week basis, and
adjusted EPS, all of which are considered non-GAAP financial measures under applicable SEC rules and regulations. We
believe these non-GAAP measures provide a useful way to evaluate our underlying performance. Medtronic calculates
forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be
included in GAAP financial measures. For instance, forward-looking revenue growth and EPS projections exclude the
impact of foreign currency exchange fluctuations. Forward-looking non-GAAP EPS guidance also excludes other potential
charges or gains that would be recorded as non-GAAP adjustments to earnings during the fiscal year, such as amortization
of intangible assets and acquisition-related, certain tax and litigation, and restructuring charges or gains. Medtronic does
not attempt to provide reconciliations of forward-looking non-GAAP EPS guidance to projected GAAP EPS guidance
because the combined impact and timing of recognition of these potential charges or gains is inherently uncertain and
difficult to predict, and is unavailable without unreasonable efforts. In addition, we believe such reconciliations would imply
a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on
GAAP measures of financial performance. Detail concerning how all non-GAAP measures are calculated, including all GAAP
to non-GAAP reconciliations, are provided in the Appendix to this presentation.

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MISSION
TENET 1

Medtronic is a technology company and

one that is dedicated to improving patient outcomes

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BROAD AND DIVERSE MEDICAL TECHNOLOGY
DIVERSIFICATION ACROSS BUSINESS UNITS & GEOGRAPHIES

BUSINESS UNIT DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION

Innovation to Address
Multiple Disease States & Conditions
Cardiac and Vascular Group Minimally Invasive
Therapies Group

FY17:
$29.7B
FY17:
$29.7B

Diabetes Group Restorative

Therapies Group

U.S. Non-U.S. Developed Emerging Markets

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FOCUSED LONG-TERM COMMITMENTS DRIVING SHAREHOLDER VALUE
EXECUTING ON A BROAD, SUSTAINABLE GROWTH PLATFORM

Robust product portfolio and leading

market share across disease states
MID-SINGLE
REVENUE Broad geographic diversity DIGIT
CONSTANT CURRENCY
GROWTH Value-based healthcare leader REVENUE GROWTH
70 million patients served in FY17

Covidien synergies on track for a

minimum of $850M by FY18
EPS
LEVERAGE
Driving operating margin improvement
over longer-term beyond Covidien
DOUBLE-DIGIT
CONSTANT CURRENCY
synergies EPS GROWTH

Purposeful capital deployment

CAPITAL
Substantial cash returns to shareholders
ALLOCATION and disciplined reinvestment >50 PERCENT
FREE CASH FLOW RETURNED
TO SHAREHOLDERS

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CORE SET OF UNIVERSAL HEALTHCARE NEEDS
HAS EXPANDED BEYOND CLINICAL OUTCOMES ALONE

Improve clinical Expand Optimize costs

outcomes access and efficiencies

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STRATEGY TO CAPTURE HEALTHCARE GROWTH OPPORTUNITIES

HEALTHCARE NEEDS GROWTH STRATEGIES

Therapy
Innovation VALUE-BASED
Improve Clinical
HEALTHCARE
Outcomes PRINCIPLES
Globalization GOVERN OUR
Expand Access GROWTH
STRATEGIES
Optimize Cost &
Efficiency
Economic
Value

Expected to Sustain Consistent, Mid-Single Digit Growth

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THERAPY INNOVATION

DEVELOP NEW
THERAPIES AND
COMPLEMENTARY
OFFERINGS TO
ADDRESS UNMET
CLINICAL NEEDS,
EXPAND PENETRATION,
AND CREATE VALUE

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 FULL PIPELINE SUSTAINS NEW THERAPIES GROWTH

LVAD Destination OLIF iPro 3

Therapy Approval (US) indication expansion
Surgical Guardian Connect with
Azure Pacemaker (US) Robotics System Refresh Synergy TLIF Guardian Sensor 3 (US)
(Voyager 5.5 / Titanium Cages)
Avalus Surgical Valve MiniMed 670G (OUS)
FY18 LigaSure L-Hook Intellis
Vessel Sealer / Divider Spinal Cord Stimulator Sugar.IQ with Watson (US)
Resolute ONYXTM (Japan)
Capnostream 35 InductOs
TAVR Intermediate Risk Portable Respiratory (re-launch EU) MiniMed 670G (US)
Hybrid Closed Loop System
indication expansion (US) Monitor

CoreValve Resolute
Evolut PRO ONYXTM (US) StealthStationTM
MiniMed 670G
3rd genTAVR valve next gen DES S8 Customer Training
Launch
3T MRITM ICD (Japan) LigaSure Solera Fenestrated
Vessel Sealing Screw US
Micra Leadless Pacemaker (US) (Indication Expansion)
Instruments
LAUNCHING Visia AF MRI (Japan)
Axium Prime Guardian Connect with
Enhanced Enlite Sensor (OUS)
CoreValve Evolut R (Japan)
SigniaTM Stealth-Midas
HawkOne (6F) (EU)
Powered Stapler Rialto SI Fusion System
CoreValve MiniMed 630G (US) with
Evolut R 34mm Elevate / Voyager Enlite CGM sensor
TAVR valve Valleylab FT10
Energy Platform MAZOR Robotics
Visia AF MRI (US) Partnership

CVG MITG RTG Diabetes

Note: Relative positioning of products on pipeline is not intended to signify relative approval / launch timing.

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TECHNOLOGY PLATFORMS FOR THE FUTURE

Leadless CRM Transcatheter LVAD Systems Stroke Therapies Neuro-

Mitral Valves stimulation
Advancement
s

Advanced Surgical Tools Capsule Endoscopy Closed Looped CGM in

and Robotics Solutions System for Diabetes Standard Use
Management

For patients to realize the full value of these exciting new therapies,
Economic Value as well as Clinical Value must be developed

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GLOBALIZATION

DEVELOP
TAILORED
SOLUTIONS
TO EXPAND
ACCESS
FOR ALL

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UNLOCKING THE EMERGING MARKET OPPORTUNITY

TRADITIONAL
Large Opportunity Today in MARKET
Premium Segment DEVELOPMENT

Existing technology Education & Training

Distribution Reach

+
Out-of-pocket
payment or
reimbursement PREMIUM

1
established Longer-Term
Opportunity in Value
Comparable margins and Underserved
to developed VALUE Segments CHANNEL

STRATEGIC GROWTH DRIVERS

markets
OPTIMIZATION

UNDERSERVED
2
PUBLIC
PARTNERSHIPS

The penetration of existing therapies into

emerging markets represents
3
PRIVATE
the single largest opportunity in MedTech PARTNERSHIPS

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 UNLOCKING THE EMERGING MARKET OPPORTUNITY
MEDTRONICS DIFFERENTIATED STRATEGIES

PRIVATE PARTNERSHIPS
CHANNEL OPTIMIZATION

PUBLIC PARTNERSHIPS
PARTNERSHIP MODEL CHANGE

ABRAAJ STRATEGIC PARTNERSHIP

CHINA INDIA RUSSIA SOLE SOURCE SUPPLIER:
CORONARY STENTS &
DISTRIBUTOR TRANSITIONS BALOONS FOR ACS

TURKEY SAUDI
ARABIA CHINA CHENGDU: INDIA AND SEA MANAGED SERVICES
DIABETES & DIALYSIS

PANAMA SLOVAKIA
ACCOUNT-BY-ACCOUNT TRANSITIONS

BRAZIL

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 UNLOCKING THE EMERGING MARKET OPPORTUNITY
CONSISTENT DOUBLE-DIGIT GROWTH ACROSS DIVERSIFIED MARKETS

Medtronic Emerging Market Revenue Diversified Emerging Market Revenue

Low-Double FY17
Digit3
Low-Double
4.0 Digit3 India
COV
Other Asia
Revenue
~5%
FY17: ~5%
Added2
3.0 ~$4B Central &
12%1 Eastern EU
~10%
14%1
Billions ($)

17%1 Greater
2.0 20%1 China
19%1 Latin ~40%
America
1.0 ~20%

22% 21% 14% 11% 23% 43% 7%

Reptd Reptd Reptd Reptd Reptd Reptd Reptd
Middle East &
0.0 Africa
FY11 FY12 FY13 FY14 FY15 FY16 FY17 ~20%

1. Growth on a constant currency basis

2. FY15 emerging markets revenue reflects partial year (FQ4) Covidien contribution. FY16 includes Covidien for full-year
3. Growth on a constant currency, constant week basis. 33rd Annual Bernstein Strategic Decisions Conference | June 2, 2017 | 14
ECONOMIC VALUE &
VALUE-BASED HEALTHCARE

DEVELOP NEW
INTEGRATED
HEALTH SOLUTIONS
AND BUSINESS
MODELS
TO WIN IN A
VALUE-BASED
HEALTHCARE
ENVIRONMENT

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SERVICES AND SOLUTIONS: DRIVING ANNUITY REVENUE
CLMS & ORMS ENABLING FUTURE VALUE-BASED HEALTHCARE

CATH LAB &

OPERATING ROOM
MANAGED SERVICES
Managing cath labs and operating rooms STRONG GROWTH IN
in hospitals around the world MANAGED SERVICE ACCOUNTS
Long-term growth partnership with 140
providers Operating Rooms (ORMS)
120
Incremental device revenue by Cath Labs (CLMS)

# of Contracts
expanding patient access 100

Driving annuity revenue growth with long- 80 NGC

Acquired
term contracts 60
Annualizing at ~$120M in service 40
revenue
20
Global scale and broadening product
0
offerings
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Proven results for providers: FY2015 FY2016 FY2017
25-35% increase in lab capacity
Enhanced operational efficiency
Contain and manage costs

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FOCUSED ON EMERGING VALUE-BASED HEALTHCARE
MEDTRONIC SIGNATURE PROGRAMS

THERAPY EPISODIC CHRONIC CARE

1 2 3
OPTIMIZERS BUNDLES MANAGEMENT
TYRX Infection Control Orthopedic Solutions Diabetes

Respiratory Compromise CABG Obesity

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DRIVING
SHAREHOLDER VALUE

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DELIVERING MARGIN EXPANSION
GOING BEYOND COVIDIEN SYNERGIES

Covidien Utilizing systems and

Synergies structures at scale across
the enterprise to drive
margin expansion

Operating Margin On track to deliver minimum of

COGS Reduction $850M in COV synergies
Expansion
COV synergies catalyst for long
tail of leverage opportunities
beyond FY18

G&A Leverage

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DELIVERING ON COVIDIEN SYNERGIES AND BEYOND
FY16-FY18: ON TRACK FOR A MINIMUM OF $850M IN COST SAVINGS

FY16 FY17 FY18E FY19 FY21+

~ $600M+
$250-275M
Leverage / Cost Savings Opportunities
beyond Covidien Synergies through FY21

Shared supplier
rationalization
Sourcing ~$300M
Freight reductions through
common contracts
Value engineering
& make vs. buy
Strategic sourcing initiatives: global supply
base, cost modeling, value engineering

CVG ~$60M
PV integration
Supply Chain
Optimization ~$65M
Integrated transportation and
Plant Network
Optimization ~$5M
Manufacturing and distribution center
operating leverage enabled by lean
logistics & dist. center footprint
techniques
Benefits
Harmonization
~($50)-(70)M
Global footprint optimization: manufacturing,
distribution centers, admin sites

Non-Operations Facilities ~$100M

Consolidation of >100 facilities globally
(sales offices, corporate offices, back offices)
End-to-end integrated supply chain

Enabling Functions
~$240M
Elimination of redundant
Functional Delivery Model
Evolution ~$130M
Service delivery optimization:
Functional delivery model transformation
roles / expenses Centers of excel. / shared serv. Expansion of shared services

Common ERP System (SAP) ~$10M Systems integration & automation

Against Savings Goal: Completed In Progress

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FOREIGN EXCHANGE EXPECTED TO MODERATE INTO FY18

Annual FX Impact / Guidance

Revenue
Operating Margin Improvement Masked by
Foreign Exchange Headwinds 2.0
1.5
1.0 +$75M
Delivering strong, constant currency $175M2

Billions ($)
0.5
3.0% operating margin improvement 0.0
FY16: ~100 bps improvement1 FY17: ~100 bps improvement1 (0.5) ($34M)
2.0% (1.0)
(1.5)
1 ($1.5B)
1.0% (2.0)
FY16 FY17 FY18E
0.0% 0%

1
EPS
-1.0% FY16 FY17 FY18E
FY16: ~(20) bps decline FY17: ~(10) bps decline $0.00
($0.05)2
FX has significantly diluted operational performance
-2.0% ($0.10)
($0.10)2
($0.20) ~($0.17)
Non-GAAP Non-GAAP Constant Currency ($0.30)

($0.40)

($0.50) ($0.47)

1. Approximation based on a constant currency, constant week basis.

2. As of Q4FY17 earnings call.
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rd
PURPOSEFUL CAPITAL DEPLOYMENT PLAN
FOCUSED ON SHAREHOLDER RETURNS AND DISCIPLINED REINVESTMENT

Dividends
Free Cash Flow
Returns to
Shareholders
Share Repurchases

Debt Paydown
Targeting A Credit Profile

Reinvestment
Balance Sheet
Tuck-In M&A /
Cash Investments

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 GENERATING SIGNIFICANT FREE CASH FLOW
GROWTH ROUGHLY IN LINE WITH EARNINGS OVER MULTI-YEAR PERIOD

Free Cash Flow

6.0 $5.6B Accessible cash mix increased

significantly (from ~35% to ~55%)
with Covidien transaction
Important to view free cash flow
$4.2B growth over multi-year period
4.0
Billions ($)

Extraordinary items (or lack thereof)

can significantly impact growth in a
given year

Current growth affected by

restructuring and other expenses
2.0 associated with the Covidien
transaction

Management focused on driving

working capital improvements
0.0
FY16 FY17

Free cash flow (FCF) defined as operating cash flow, less capital expenditures

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 39 YEARS OF INCREASING DIVIDEND
DIVIDEND EXPECTED TO GROW IN-LINE WITH EARNINGS GROWTH
$2.00 50%
Dividend Payout Ratio now ~40%1
$1.75 Dividend up +13% in FY17 45%

$1.50 Recent
Large 40%
Dividend per Share

Increases
$1.25

Payout Ratio
35%
$1.00
30%
$0.75
25%
$0.50
Dividend Payout Ratio1
$0.25 20%
Dividend per Share
$0.00 15%
FY78
FY79
FY80
FY81
FY82
FY83
FY84
FY85
FY86
FY87
FY88
FY89
FY90
FY91
FY92
FY93
FY94
FY95
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
18% Dividend Per Share CAGR over 39 Year History
Member of S&P 500 Dividend Aristocrats
1. On a non-GAAP basis. Calculated as annual dividend per share divided by prior year non-GAAP earnings per share.

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STRONG TRACK RECORD OF RETURNING CAPITAL TO SHAREHOLDERS
PURPOSEFULLY SUPPLEMENTING DIVIDEND WITH SHARE REPURCHASE
Payout Ratio1 includes
contribution from $5B
100%
Total Payout Ratio1 Since FY12 incremental share
repurchase commitment

Net Share Repurchases

80%
Dividends
86%

60%
72%
65%
58%
53% 55%
40%

20%

0%
FY12 FY13 FY14 FY15 FY16 FY17
1. Payout ratio calculated as dividends plus net share repurchases divided by adjusted net income.

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DISCIPLINED PLATFORM FOR STRATEGIC M&A
STRONG ACQUISITION TRACK RECORD
M&A Focus M&A Guidelines
Minimally
Cardiac & Restorative
Invasive Diabetes
Vascular Therapies Minimal to no

Therapies
net EPS dilution
for tuck-ins
Therapy Innovation: Build around core customer groups

Globalization: Value segment expansion; business model Clear financial

value proposition
innovation

Economic Value: Integrated health solutions across care Mid-teens risk-

adjusted return
hurdle
continuum

Building M&A and Strategic Investments Track Record

FY17:
Closed 5 tuck-in
acquisitions and
several strategic
FY15 FY16 FY17 investments,
totaling ~$1.5B
OsteoCoolTM

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PT CARE / DVT / NI DIVESTITURE TO CARDINAL HEALTH
STRATEGIC PORTFOLIO MANAGEMENT; POSITIONED TO DRIVE GROWTH

~$6B asset sale to Cardinal Health

Divesting businesses that are lower

growth/lower margin

Enables investment over the long-term in

higher returning internal and external
opportunities aligned with our growth
strategies

Immediate positive impact to revenue

growth and margins with modest near-
term dilution

Improves the sustainability of our growth

commitments

Use of proceeds consistent with our

stated capital allocation strategy

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PORTFOLIO MANAGEMENT
STRONG CROSS GROUP SYNERGIES

CRHF Surgical Solutions Spine Intensive Insulin

SCA Arrhythmia Spinal Deformity Management
Thoracic GYN Bariatric
Heart Failure AF Degenerative Spinal Type 1
Colorectal General Surgery Conditions
Coronary and Non-Intensive
Lung / Gastrointestinal Diabetes Therapies
Focused Structural Heart Cancer Brain
Divisions CAD Hypertension Stroke Pre-Diabetes
Heart Disease Patient Monitoring
& Recovery Movement Disorders Type 2
Aortic & Peripheral Respiratory &
Monitoring Pain Diabetes Service &
Vascular Solutions
Aortic & Venous Disease Chronic and Cancer Pain
Renal Care Integrated Care
CAD PAD Solutions Specialty Therapies Solutions

Groups CVG MITG RTG Diabetes

Comorbidity

Integrated Technology

Corporate Clinical / Regulatory Expertise

Synergies Sales to Large Entities (Governments / Providers)

Global Manufacturing / Operations / Distribution

Corporate Infrastructure

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FOCUSED LONG-TERM COMMITMENTS DRIVING SHAREHOLDER VALUE
EXECUTING ON A BROAD, SUSTAINABLE GROWTH PLATFORM

Robust product portfolio and leading

market share across disease states
MID-SINGLE
REVENUE Broad geographic diversity DIGIT
CONSTANT CURRENCY
GROWTH Value-based healthcare leader REVENUE GROWTH
70 million patients served in FY17

Covidien synergies on track for a

minimum of $850M by FY18
EPS
LEVERAGE
Driving operating margin improvement
over longer-term beyond Covidien
DOUBLE-DIGIT
CONSTANT CURRENCY
synergies EPS GROWTH

Purposeful capital deployment

CAPITAL
Substantial cash returns to shareholders
ALLOCATION and disciplined reinvestment >50 PERCENT
FREE CASH FLOW RETURNED
TO SHAREHOLDERS

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APPENDIX
NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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NON-GAAP RECONCILIATIONS

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