585055AM8

• Competition from large firms, niche manufacturers, GLP-1 drugs, and shifts to ASCs could erode market share and pricing power, especially where government volume-based procurement mandates steep discounts.
• Supply chain is vulnerable to sole-source dependencies, sterilization capacity constraints, and shortages of semiconductors or resins, while new chemical regulations (EtO, PFAS) may further constrain supply.
• Extensive FDA and global regulations create ongoing compliance risk; adverse inspections, warning letters, or failure to secure timely approvals could restrict sales and require costly remediation.
• The separation of the Diabetes Business via the MiniMed IPO introduces execution, cost, and market risks, with Medtronic retaining ~90% ownership and no assurance of completing further steps on planned terms.
• An adverse outcome in the long-running IRS dispute over income allocation with the Puerto Rico subsidiary could materially harm financial condition, following a 2025 appellate remand to Tax Court.
• Quality problems, product liability claims, or cybersecurity breaches—including AI-amplified attacks—could cause recalls, reputational damage, and significant financial loss.

Medtronic's principal executive office is located in Ireland and is owned 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 10.2 million square feet. Approximately 41 percent of the manufacturing and research facilities are owned by Medtronic and the remaining balance is leased. The Company’s largest manufacturing facilities are located in the U.S., Mexico, Puerto Rico, China, Ireland, Dominican Republic, Switzerland, Italy, and France. Many of these facilities serve more than one of our divisions and also perform research activities. Medtronic also maintains sales and administrative offices outside the U.S. at approximately 110 locations in over 60 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.

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.

• Total net sales increased 8% to $36.4 billion, with Cardiovascular up 12% on strong Cardiac Rhythm & Heart Failure growth and Diabetes up 13% on international MiniMed 780G adoption.
• GAAP diluted EPS rose to $3.73 from $3.61, while non-GAAP diluted EPS increased to $5.53 from $5.49, reflecting adjustments for amortization, restructuring, and litigation.
• Cost of products sold as a percentage of net sales increased, primarily due to $185 million in higher tariffs and duties and $84 million in asset write-offs.
• Operating cash flow increased to $7.3 billion, and free cash flow rose to $5.4 billion, supported by higher customer collections.
• The company estimates a pre-tax net tariff impact of $250 million for fiscal year 2027 and plans to complete the separation of its Diabetes Business within the next fiscal year.
• Medtronic issued €1.5 billion in new Euro-denominated Senior Notes and repaid €2.5 billion, ending the year with total debt of $28.0 billion.

• Currency exposure arises from global operations, with unhedged emerging-market currencies potentially causing earnings and cash flow volatility.
• Gross notional of outstanding currency derivatives was $20.3B at April 24, 2026, down from $23.6B a year earlier, with a net unrealized gain of $135M.
• A uniform 10% strengthening or weakening of the U.S. dollar against all currencies would change the fair value of currency derivatives by approximately $1.7B, offset by underlying transaction gains/losses.
• Interest rate risk stems from short-term investments and borrowings; the debt portfolio is primarily fixed-rate and denominated in U.S. dollars and Euros.
• A hypothetical 50-basis-point shift in interest rates would change the fair value of interest-rate-sensitive instruments by $91M at April 24, 2026, versus $74M a year earlier.

• PricewaterhouseCoopers LLP issued an unqualified opinion on the consolidated financial statements for the fiscal year ended April 24, 2026, and on the effectiveness of internal control over financial reporting.
• The audit identified a critical audit matter involving the high degree of estimation uncertainty in the income tax reserve for an uncertain tax position related to a Puerto Rico manufacturing subsidiary.
• Total reserves for uncertain tax positions were $2.951 billion as of April 24, 2026, with the Puerto Rico manufacturing reserve making up a significant portion.
• The auditor's procedures for the critical matter included evaluating the consistency of the reserve calculation with the relevant U.S. Tax Court case documents and rulings.
• The auditor has served as the Company's auditor since 1963.