The Company had acquisitions during fiscal years 2025 and 2024 that were accounted for as business combinations. The assets and liabilities of the businesses acquired were recorded and consolidated on the acquisition date at their respective fair values. Goodwill resulting from business combinations is largely attributable to future, yet to be defined technologies, new customer relationships, existing workforce of the acquired businesses, and synergies expected to arise after the Company's acquisition of these businesses. The results of operations of acquired businesses have been included in the Company’s consolidated statements of income since the date each business was acquired. The results of operations of acquired businesses and the pro forma impact of the acquisitions during fiscal years 2025 and 2024 was not significant, either individually or in the aggregate, to the consolidated results of the Company. Purchase price allocation adjustments for fiscal years 2025 and 2024 business combinations were not significant.

The acquisition date fair value of net assets acquired during fiscal year 2025 was $128 million, consisting of $159 million of assets acquired and $31 million of liabilities assumed. Based on preliminary valuations, assets acquired were primarily comprised of $108 million of goodwill and $50 million of IPR&D. The goodwill is not deductible for tax purposes. The Company recognized $20 million of non-cash contingent consideration liabilities in connection with these business combinations during fiscal year 2025, which comprised of other milestone-based payments.

The acquisition date fair value of net assets acquired during fiscal year 2024 was $335 million, consisting of $338 million of assets acquired and $3 million of liabilities assumed. Assets acquired were primarily comprised of $131 million of goodwill, $150 million of IPR&D, and $29 million of technology-based intangible assets with estimated useful lives of 10 years. For tax purposes, $51 million of goodwill is deductible while $80 million is not deductible. The IPR&D was placed into service as a definite-lived intangible asset during the second quarter of fiscal year 2025. The Company recognized $30 million of non-cash contingent consideration liabilities in connection with these business combinations during fiscal year 2024, which are comprised of revenue and product development milestone-based payments.

In February 2024, the Company announced the decision to exit its ventilator product line and retain and combine the remaining Patient Monitoring and Respiratory Interventions (PMRI) businesses into one business unit called Acute Care and Monitoring (ACM). In connection with this decision, the Company recorded pre-tax charges of $439 million, including $369 million recognized within other operating (income) expense, net and $70 million recognized in cost of products sold in the consolidated statements of income in fiscal year 2024. The charges included $371 million of non-cash impairments and write-downs primarily related to $295 million of long-lived asset impairments to write-down the value of related intangible assets to zero and $70 million of inventory-write downs. The other charges primarily related to contract cancellation costs and severance. The Company will continue to honor existing ventilator contracts to serve the needs of its customers and their patients.

In May 2022, the Company and DaVita Inc. (DaVita) entered into a definitive agreement for the Company to sell half of its RCS business, and on April 1, 2023, completed the transaction. This sale was part of an agreement between Medtronic and DaVita to form a new, independent kidney care-focused medical device company (“Mozarc Medical” or "Mozarc") with equal equity ownership. At closing, the Company received $45 million cash consideration, recorded non-cash contingent consideration receivables valued at $195 million, made an additional cash investment of $224 million, and retained a 50% non-controlling equity interest in Mozarc valued at $307 million. For the contingent consideration receivables, the maximum consideration the Company could receive in the future is $300 million based on the achievement of certain milestones, as further described below. The Company recorded non-cash pre-tax charges of $136 million in fiscal year 2023, primarily related to impairment of goodwill and changes in the carrying amount of the disposal group, recognized in other operating (income) expense, net in the consolidated statements of income. Refer to Note 9 to the consolidated financial statements for additional information on the goodwill impairment. Refer to Note 5 to the consolidated financial statements for additional information on the Company’s retained 50% equity investment in Mozarc as a result of this transaction.

Certain of the Company’s business combinations involve potential payment of future consideration that is contingent upon the achievement of certain product development milestones and/or contingent on the acquired business reaching certain performance milestones. A liability is recorded for the estimated fair value of the contingent consideration on the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period, and the change in fair value is recognized within other operating (income) expense, net in the consolidated statements of income.

The fair value of contingent consideration liabilities at April 25, 2025 and April 26, 2024 was $81 million and $149 million, respectively. At April 25, 2025, $31 million was recorded in other accrued expenses, and $50 million was recorded in other liabilities on the consolidated balance sheets. At April 26, 2024, $96 million was reflected in other accrued expenses, and $53 million was reflected in other liabilities on the consolidated balance sheets.


(in millions)	Fair Value at April 25, 2025		Unobservable Input	Range	Weighted Average (1)
Revenue and other performance-based payments	$	54	Discount rate	16.5% - 28.2%	23.1%
			Projected fiscal year of payment	2026 - 2029	2027
Product development and other milestone-based payments	$	27	Discount rate	5.5%	5.5%
			Projected fiscal year of payment	2026 - 2028	2027

In connection with the sale of our RCS business as further discussed above, the Company may be entitled to receive additional consideration based on the achievement of certain revenue, regulatory, and profitability milestones, with potential payouts starting in fiscal year 2026 through 2029. The fair value of the contingent consideration receivable at April 25, 2025 and April 26, 2024 was $13 million and $58 million, respectively, and was recorded in other assets in the consolidated balance sheet.

The Company has entered into various arrangements with affiliates of Blackstone Life Sciences Advisors L.L.C. (collectively, "Blackstone") to receive funding related to the development of certain products within the Cardiovascular Portfolio and Diabetes Operating Unit. As there is substantive and genuine transfer of risk to Blackstone, the development funding is recognized by Medtronic as an obligation to perform contractual services. The Company recognizes the funding as income within other operating (income) expense, net as the research and development costs are incurred and funding payments become due. Under these arrangements, the Company recognized income of $181 million, $174 million, and $202 million in fiscal years 2025, 2024, and 2023, respectively. As of April 25, 2025, the Company is eligible to receive additional funding of $391 million under these arrangements.

Following potential U.S. regulatory approval and commercial launch of each product covered by the Blackstone agreements, Blackstone will be eligible to receive a combination of fixed regulatory and commercial milestone payments up to $1.2 billion and royalties based on percent of sales of such products. Under certain termination provisions, the Company's payment obligation will survive, and in certain termination circumstances, a payment to Blackstone of a multiple of the funded amounts may be required. At the time of executing these contracts, the occurrence of such circumstances was deemed to be remote.