Covidien plc - FORM 8-K - EX-99.1 - COVIDIEN REVISED FINANCIAL STATEMENTS - May 17, 2013

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Exhibit 99.1
Covidien plc
Consolidated Statement of Income
Quarter Ended March 29, 2013
(dollars in millions, except per share data)
 
 
 
 
 
 
 
GAAP
 
Reclass to Discontinued Operations(1)
 
Adjusted for Discontinued Operations(2) (3)
Net sales
$
3,103

 
$
(573
)
 
$
2,530

Cost of goods sold
1,316

 
(314
)
 
1,002

Gross profit
1,787

 
(259
)
 
1,528

Selling, general and administrative expenses
968

 
(138
)
 
830

Research and development expenses
162

 
(40
)
 
122

Restructuring charges, net
61

 
(7
)
 
54

Operating income
596

 
(74
)
 
522

Interest expense
(50
)
 
(1
)
 
(51
)
Interest income
3

 
(1
)
 
2

Other income, net
16

 
1

 
17

Income from continuing operations before income taxes
565

 
(75
)
 
490

Income tax expense
124

 
(14
)
 
110

Income from continuing operations
441

 
(61
)
 
380

(Loss) income from discontinued operations, net of income taxes
(2
)
 
61

 
59

Net income
$
439

 
$
—

 
$
439

 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
Income from continuing operations
$
0.93

 
$
(0.13
)
 
$
0.80

Income from discontinued operations
—

 
0.13

 
0.13

Net income
0.93

 
—

 
0.93

Diluted earnings per share:
 
 
 
 
 
Income from continuing operations
$
0.93

 
$
(0.13
)
 
$
0.80

Income from discontinued operations
—

 
0.13

 
0.12

Net income
0.92

 
—

 
0.92

Weighted-average number of shares outstanding (in millions):
 
 
 
 
Basic
471

 
471

 
471

Diluted
476

 
476

 
476

 
 
 
 
 
 
(1) Represents the expected impact on our GAAP results of reclassifying our Pharmaceuticals segment to discontinued operations. We expect this business to be included in discontinued operations beginning with the third quarter of fiscal 2013.
 
(2)  As discussed in note 1, we expect our Pharmaceuticals segment to be included in discontinued operations beginning with the third quarter of fiscal 2013, at which time we expect these amounts to become our new GAAP results.
 
 
 
 
 
 
(3)  Amortization expense of intangible assets is included in the following income statement captions in the amounts shown:
Cost of goods sold
 
 
 
 
$
40

Selling, general and administrative expenses
 
 
 
 
16

 
 
 
 
 
$
56





Covidien plc
Non-GAAP Reconciliation
(dollars in millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended March 29, 2013
 
Sales
 
Gross profit
 
Gross margin percent
 
Operating income
 
Operating margin percent
 
 Income from continuing operations before income taxes
 
Income from continuing operations (1)
 
Diluted earnings per share from continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
$
3,103

 
$
1,787

 
57.6
%
 
$
596

 
19.2
%
 
$
565

 
$
441

 
$
0.93

Reclass to discontinued operations (2)
(573
)
 
(259
)
 
45.2

 
(74
)
 
12.9

 
(75
)
 
(61
)
 
(0.13
)
Adjusted for discontinued operations (3)
2,530

 
1,528

 
60.4

 
522

 
20.6

 
490

 
380

 
0.80

Non-GAAP adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring and related charges, net (4)
—

 
1

 
 
 
55

 
 
 
55

 
38

 
0.08

Transaction costs (5)
—

 
—

 
 
 
(6
)
 
 
 
(14
)
 
(13
)
 
(0.03
)
Tax matters (6)
—

 
—

 
 
 
—

 
 
 
—

 
40

 
0.08

Non-GAAP, revised for discontinued operations
2,530

 
1,529

 
60.4

 
571

 
22.6

 
531

 
445

 
0.93

Non-GAAP, as previously presented
3,103

 
1,788

 
57.6

 
688

 
22.2

 
649

 
535

 
1.12

Non-GAAP impact of discontinued operations (7)
$
(573
)
 
$
(259
)
 
45.2

 
$
(117
)
 
20.4

 
$
(118
)
 
$
(90
)
 
(0.19
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  Adjustments are tax effected at the applicable local statutory tax rates.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2)  Represents the expected impact on our GAAP results of reclassifying our Pharmaceuticals segment to discontinued operations. We expect this business to be included in discontinued operations beginning with the third quarter of fiscal 2013.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3)  As discussed in note 2, we expect our Pharmaceuticals segment to be included in discontinued operations beginning with the third quarter of fiscal 2013, at which time we expect these amounts to become our new GAAP results.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(4)  Amount includes accelerated depreciation, which is included in cost of goods sold.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(5)  Includes acquisition-related costs, $6 million of which relates to an adjustment to contingent consideration and is included in selling, general and administrative expenses and $8 million of which relates to a gain on the sale of our non-controlling interest in CV Ingenuity and is included in other income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6)  Includes $47 million of tax expense generated in connection with the restructuring of legal entities in advance of the separation of our Pharmaceuticals business, partially offset by $7 million related to the fiscal 2012 portion of the retroactive re-enactment of the U.S. research and development tax credit.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(7)  Represents the impact on our previously presented non-GAAP amounts of reclassifying our Pharmaceuticals segment to discontinued operations.



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