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Financing Arrangements | 12 Months Ended
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Apr. 24, 2020
Debt Disclosure [Abstract] |
Financing Arrangements | Financing Arrangements Current debt obligations consisted of the following:
(in millions) | April 24, 2020 |  | April 26, 2019
Bank borrowings | $ | 325 |  |  | $ | 332 |
0.000 percent two-year 2019 senior notes | 1,631 |  |  | — |
Floating rate two-year 2019 senior notes | 815 |  |  | — |
Floating rate five-year 2015 senior notes | — |  |  | 500 |
Finance lease obligations | 5 |  |  | 6 |
Current debt obligations | $ | 2,776 |  |  | $ | 838 |
Bank Borrowings Outstanding bank borrowings at April 24, 2020 were short-term advances primarily to non-U.S. subsidiaries under credit agreements with various banks. Bank borrowings consist primarily of borrowings in Japanese Yen at an interest rate of 0.21%, and these borrowings are a natural hedge of currency and exchange rate risk. Commercial Paper On January 26, 2015, Medtronic Global Holdings S.C.A. (Medtronic Luxco), an entity organized under the laws of Luxembourg, entered into various agreements pursuant to which Medtronic Luxco may issue United States Dollar-denominated unsecured commercial paper notes (the 2015 CP Program) on a private placement basis, and on January 31, 2020 Medtronic Luxco entered into various agreements pursuant to which Medtronic Luxco may issue Euro-denominated unsecured commercial paper notes (the 2020 CP Program) on a private placement basis. The Maximum aggregate amount outstanding at any time under the 2015 CP Program and the 2020 CP Program together may not exceed the equivalent of $3.5 billion. The Company and Medtronic, Inc. have guaranteed the obligations of Medtronic Luxco under the 2015 CP Program and the 2020 CP Program. There was no commercial paper outstanding at April 24, 2020 and April 26, 2019. During fiscal years 2020 and 2019, the weighted average original maturity of the commercial paper outstanding was approximately 7 days and 27 days, respectively, and the weighted average interest rate was 2.31 percent and 2.12 percent, respectively. The issuance of commercial paper reduces the amount of credit available under the Company's existing credit facility, defined below. Line of Credit On December 12, 2019, Medtronic Luxco, as borrower, entered into an amendment to its amended and restated credit agreement (Credit Facility), by and among Medtronic, Medtronic, Inc., Medtronic Luxco, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent and issuing bank, extending the maturity date of the Credit Facility to December 2024. The Credit Facility provides for a $3.5 billion five-year unsecured revolving credit facility (Credit Facility). At each anniversary date of the Credit Facility, but not more than twice prior to the maturity date, the Company could also request a one-year extension of the maturity date. The Credit Facility provides the Company with the ability to increase its borrowing capacity by an additional $1.0 billion at any time during the term of the agreement. The Company and Medtronic, Inc. have guaranteed the obligations of the borrowers under the Credit Facility, and Medtronic Luxco will also guarantee the obligations of any designated borrower. The Credit Facility includes a multi-currency borrowing feature for certain specified foreign currencies. At April 24, 2020 and April 26, 2019, no amounts were outstanding under the Credit Facility. Interest rates on advances on the Credit Facility are determined by a pricing matrix based on the Company’s long-term debt ratings, assigned by Standard & Poor’s Ratings Services and Moody’s Investors Service. Facility fees are payable on the Credit Facility and are determined in the same manner as the interest rates. The Credit Facility also contains customary covenants, all of which the Company remained in compliance with at April 24, 2020. Long-term debt consisted of the following:
|  |  | April 24, 2020 |  |  |  | April 26, 2019 |  |
(in millions, except interest rates) | Maturity by Fiscal Year |  | Amount |  | Effective Interest Rate |  | Amount |  | Effective Interest Rate
0.000 percent two-year 2019 senior notes | 2021 |  | $ | — |  |  | — | % |  | $ | 1,681 |  |  | 0.22 | %
Floating rate two-year 2019 senior notes | 2021 |  | — |  |  | — |  |  | 560 |  |  | 0.05 |
4.125 percent ten-year 2011 senior notes | 2021 |  | — |  |  | — |  |  | 500 |  |  | 4.21 |
3.150 percent seven-year 2015 senior notes | 2022 |  | 1,534 |  |  | 3.29 |  |  | 2,500 |  |  | 3.29 |
3.125 percent ten-year 2012 senior notes | 2022 |  | — |  |  | — |  |  | 675 |  |  | 3.21 |
3.200 percent ten-year 2012 CIFSA senior notes | 2023 |  | 650 |  |  | 2.72 |  |  | 650 |  |  | 2.72 |
0.375 percent four-year 2019 senior notes | 2023 |  | 1,631 |  |  | 0.56 |  |  | 1,681 |  |  | 0.56 |
2.750 percent ten-year 2013 senior notes | 2023 |  | 530 |  |  | 3.25 |  |  | 530 |  |  | 3.25 |
0.000 percent four-year 2019 senior notes | 2023 |  | 815 |  |  | 0.09 |  |  | — |  |  | — |
2.950 percent ten-year 2013 CIFSA senior notes | 2024 |  | 310 |  |  | 2.71 |  |  | 310 |  |  | 2.71 |
3.625 percent ten-year 2014 senior notes | 2024 |  | 432 |  |  | 3.61 |  |  | 850 |  |  | 3.61 |
3.500 percent ten-year 2015 senior notes | 2025 |  | 2,700 |  |  | 3.74 |  |  | 4,000 |  |  | 3.74 |
0.250 percent seven-year 2019 senior notes | 2026 |  | 1,087 |  |  | 0.44 |  |  | — |  |  | — |
1.125 percent eight-year 2019 senior notes | 2027 |  | 1,631 |  |  | 1.25 |  |  | 1,681 |  |  | 1.25 |
3.350 percent ten-year 2017 senior notes | 2027 |  | 368 |  |  | 3.53 |  |  | 850 |  |  | 3.53 |
1.625 percent twelve-year 2019 senior notes | 2031 |  | 1,087 |  |  | 1.75 |  |  | 1,121 |  |  | 1.75 |
1.000 percent thirteen-year 2019 senior notes | 2032 |  | 1,087 |  |  | 1.06 |  |  | — |  |  | — |
4.375 percent twenty-year 2015 senior notes | 2035 |  | 1,932 |  |  | 4.47 |  |  | 2,382 |  |  | 4.47 |
6.550 percent thirty-year 2007 CIFSA senior notes | 2038 |  | 253 |  |  | 4.68 |  |  | 284 |  |  | 4.68 |
2.250 percent twenty-year 2019 senior notes | 2039 |  | 1,087 |  |  | 2.34 |  |  | 1,121 |  |  | 2.34 |
6.500 percent thirty-year 2009 senior notes | 2039 |  | 158 |  |  | 6.56 |  |  | 183 |  |  | 6.56 |
5.550 percent thirty-year 2010 senior notes | 2040 |  | 224 |  |  | 5.58 |  |  | 306 |  |  | 5.58 |
1.500 percent twenty-year 2019 senior notes | 2040 |  | 1,087 |  |  | 1.58 |  |  | — |  |  | — |
4.500 percent thirty-year 2012 senior notes | 2042 |  | 105 |  |  | 4.54 |  |  | 129 |  |  | 4.54 |
4.000 percent thirty-year 2013 senior notes | 2043 |  | 305 |  |  | 4.10 |  |  | 325 |  |  | 4.10 |
4.625 percent thirty-year 2014 senior notes | 2044 |  | 127 |  |  | 4.67 |  |  | 177 |  |  | 4.67 |
4.625 percent thirty-year 2015 senior notes | 2045 |  | 1,813 |  |  | 4.67 |  |  | 1,963 |  |  | 4.69 |
1.750 percent thirty-year 2019 senior notes | 2050 |  | 1,087 |  |  | 1.87 |  |  | — |  |  | — |
Bank borrowings | 2021 - 2022 |  | 55 |  |  | 2.11 |  |  | 83 |  |  | 1.94 |
Debt (discount) premium, net | 2021 - 2050 |  | (15) |  |  | — |  |  | 29 |  |  | — |
Finance lease obligations | 2021 - 2035 |  | 45 |  |  | 8.93 |  |  | 10 |  |  | 6.39 |
Interest rate swaps | N/A |  | — |  |  | — |  |  | 9 |  |  | — |
Deferred financing costs | 2021 - 2050 |  | (104) |  |  | — |  |  | (104) |  |  | — |
Long-term debt |  |  | $ | 22,021 |  |  |  |  | $ | 24,486 |  |  |
Senior Notes The Company has outstanding unsecured senior obligations, described as senior notes in the tables above (collectively, the Senior Notes). The Senior Notes rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indentures under which the Senior Notes were issued contain customary covenants, all of which the Company remained in compliance with at April 24, 2020. The Company used the net proceeds from the sale of the Senior Notes primarily for general corporate purposes, which includes the repayment of other indebtedness of the Company. In March 2019, Medtronic Luxco issued six tranches of Euro-denominated Senior Notes with an aggregate principal of €7.0 billion, with maturities ranging from fiscal year 2021 to fiscal year 2039, resulting in cash proceeds of approximately $7.8 billion, net of discounts and issuance costs. The issuance included €500 million of floating rate Senior Notes due in fiscal year 2021, €1.5 billion of 0.000 percent Senior Notes due in fiscal year 2021, €1.5 billion of 0.375 percent Senior Notes due in fiscal year 2023, €1.5 billion of 1.125 percent Senior Notes due in fiscal year 2027, €1.0 billion of 1.625 percent Senior Notes due in fiscal year 2031, and €1.0 billion of 2.250 percent Senior Notes due in fiscal year 2039. The Company used a portion of the net proceeds of the offering to fund the cash tender offer and early redemption of $6.4 billion of Medtronic Inc. and CIFSA senior notes for $6.9 billion of total consideration in March 2019. The Company recognized a loss on debt extinguishment of $485 million, which primarily included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums. The loss on debt extinguishment was recognized in interest expense in the consolidated statements of income. In June 2019, Medtronic Luxco issued six tranches of Euro-denominated Senior Notes with an aggregate principal of €5.0 billion, with maturities ranging from fiscal year 2021 to fiscal year 2050, resulting in cash proceeds of approximately $5.6 billion, net of discounts and issuance costs. The issuance included €250 million of floating rate Senior Notes due in fiscal year 2021, €750 million of 0.000 percent Senior Notes due in fiscal year 2023, €1.0 billion of 0.250 percent Senior Notes due in fiscal year 2026, €1.0 billion of 1.000 percent Senior Notes due in fiscal year 2032, €1.0 billion of 1.500 percent Senior Notes due in fiscal year 2040, and €1.0 billion of 1.750 percent Senior Notes due in fiscal year 2050. The Company used the net proceeds of the offering to fund the cash tender offer and early redemption of $4.6 billion of Medtronic Inc., CIFSA, and Medtronic Luxco Senior Notes for $5.0 billion of total consideration in July 2019. The Company recognized a loss on debt extinguishment of $413 million, which primarily included cash premiums and accelerated amortization of deferred financing costs and debt discounts and premiums. The loss on debt extinguishment also includes a $16 million charge for the early redemption premium for $533 million of senior notes which were redeemed in August 2019. The loss on debt extinguishment was recognized in interest expense in the consolidated statements of income. Also in March 2020, the Company redeemed its floating rate five-year 2015 senior notes at maturity for $500 million. At April 26, 2019, the Company had interest rate swap agreements designated as fair value hedges of certain underlying fixed-rate obligations, including the Company’s $500 million 4.125 percent 2011 Senior Notes and $675 million 3.125 percent 2012 Senior Notes. Refer to Note 8 for additional information regarding the interest rate swap agreements. At April 24, 2020 the Company had no interest rate swaps outstanding designated as fair value hedges, as the Company terminated previously held swaps in connection with the tender and early redemption of the underlying senior notes during the first quarter of fiscal year 2020. Contractual maturities of debt for the next five fiscal years and thereafter, excluding deferred financing costs and debt discount, net, are as follows:
(in millions) |
2021 | $ | 2,776 |
2022 | 1,594 |
2023 | 3,630 |
2024 | 746 |
2025 | 2,704 |
Thereafter | 13,466 |
Total debt | 24,916 |
Less: Current debt obligations | 2,776 |
Long-term debt | $ | 22,140 |
Subsequent to fiscal year 2020, on May 12, 2020, Medtronic Luxco entered into a Term Loan Agreement by and among Medtronic Luxco, Medtronic plc, Medtronic, Inc., and Mizuho Bank, Ltd. as administrative agent and as lender. The Loan Agreement provides an unsecured term loan in an aggregate principal amount of up to ¥300 billion, or approximately $2.8 billion, with a term of six months, which may be extended for an additional six months at Medtronic Luxco’s option. Borrowings under the Loan Agreement will bear interest at the TIBOR Rate (as defined in the Loan Agreement) plus a margin of 0.50% per annum. Medtronic plc and Medtronic, Inc. have guaranteed the obligations of Medtrconic Luxco under the Loan Agreement. On May 13, 2020, Medtronic Luxco borrowed the entire amount of the term loan under the Loan Agreement. Financial Instruments Not Measured at Fair Value At April 24, 2020, the estimated fair value of the Company’s Senior Notes was $27.1 billion compared to a principal value of $24.5 billion. At April 26, 2019 the estimated fair value was $26.2 billion compared to a principal value of $25.0 billion. The fair value was estimated using quoted market prices for the publicly registered Senior Notes, which are classified as Level 2 within the fair value hierarchy. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts and hedging activity.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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