Covidien Reports Fourth-Quarter and Fiscal 2012 Results

  Covidien Reports Fourth-Quarter and Fiscal 2012 Results

  *Fourth-quarter and fiscal 2012 results negatively impacted by extra
    selling week in 2011 and unfavorable foreign exchange rate movement
  *Fourth-quarter net sales down 3% (flat excluding foreign exchange rate
    movement); Medical Devices sales down 1% (up 2% excluding foreign exchange
    rate movement)
  *Fourth-quarter diluted GAAP earnings per share from continuing operations
    were $0.96; excluding specified items, adjusted diluted earnings per share
    from continuing operations were $1.02
  *Fiscal 2012 diluted GAAP earnings per share from continuing operations
    were $3.92; excluding specified items, adjusted diluted earnings per share
    from continuing operations were $4.26, up 7%

Business Wire

DUBLIN -- November 09, 2012

Covidien plc (NYSE: COV) today reported results for the fourth quarter of
fiscal 2012 (July - September 2012). Fourth-quarter net sales of $3.00 billion
were 3% lower than the $3.08 billion reported in the fourth quarter last year.
The reported quarterly sales growth rate reflected unfavorable foreign
exchange rate movement, which decreased the rate by about three percentage
points, and the inclusion of an extra selling week in the fourth quarter of
2011, which reduced the rate by seven to eight percentage points.

Fourth-quarter 2012 gross margin of 55.6% declined 0.9 percentage points from
the 56.5% of the prior-year period. On an adjusted basis, excluding the
specified items shown on the attached quarterly Non-GAAP reconciliations
table, fourth-quarter 2012 gross margin of 56.5% was 0.2 percentage points
below that of a year ago. The decline was largely due to unfavorable foreign
exchange rate movement, partially offset by positive business mix and
manufacturing cost reduction activities.

Selling, general and administrative expenses for the fourth quarter of 2012
were slightly lower than those of the comparable quarter of the year before,
reflecting the additional week and higher legal charges in the year-ago
period. Research and development (R&D) expense in the fourth quarter of 2012
represented 5.1% of net sales, versus 5.4% of sales in the fourth quarter a
year ago.

In the fourth quarter of 2012, the Company reported operating income of $552
million, versus $596 million in the same period the year before.
Fourth-quarter 2012 adjusted operating income, excluding specified items on
the attached table, was $635 million, compared with $685 million in the prior
year. Fourth-quarter 2012 adjusted operating income, excluding the specified
items, represented 21.2% of sales, versus 22.3% of sales in the year-ago
period.

The fourth-quarter 2012 effective tax rate was 9.2%, versus an effective tax
rate of 19.7% in the fourth quarter of 2011. The fourth-quarter 2012 adjusted
tax rate, excluding specified items on the attached table, was 17.3%, versus
18.2% in the fourth quarter last year.

Diluted GAAP earnings per share from continuing operations were $0.96 in the
fourth quarter of 2012, versus $0.93 per share in the comparable quarter of
2011. Fourth-quarter 2012 adjusted diluted earnings per share, excluding
specified items on the attached table, were $1.02, versus $1.08 a year
earlier.

For fiscal 2012, net sales of $11.85 billion were 2% above the $11.57 billion
in the previous year. The fiscal 2012 sales growth rate was reduced by two
percentage points due to unfavorable foreign exchange rate movement, and by
another approximately two percentage points attributable to the inclusion of
an extra selling week in fiscal 2011.

The Company reported operating income of $2.41 billion in fiscal 2012, versus
$2.38 billion a year ago. Fiscal 2012 adjusted operating income, excluding the
specified items on the attached table, was $2.67 billion, versus $2.57 billion
in the previous year. Fiscal 2012 adjusted operating income, excluding
specified items, represented 22.5% of sales, versus 22.2% last year.

The effective tax rate was 15.4% for fiscal 2012, versus an effective tax rate
of 15.0% in 2011. Excluding the specified items on the attached table, the
adjusted tax rate for 2012 was 17.3%, versus 18.3% in 2011.

Fiscal 2012 diluted GAAP earnings per share from continuing operations were
$3.92, versus $3.79 in 2011. Excluding the specified items on the attached
table, adjusted diluted earnings per share from continuing operations were
$4.26 in fiscal 2012, versus $3.97 last year, a 7% increase.

“We delivered a solid performance in the fourth quarter, finishing 2012 in
line with our expectations. Reported results were restrained by the strength
of the U.S. dollar against most foreign currencies and by the anomaly of an
extra selling week in the fourth quarter of 2011,” said José E. Almeida,
Chairman, President and CEO. “In Medical Devices, our largest business
segment, we continued to generate above-market growth, paced by new offerings
that included the Sonicision™ cordless ultrasonic dissection device,
Solitaire™ FR revascularization device and the Pipeline^® embolization device.

“We made significant progress reshaping our portfolio in 2012. We announced
the spinoff of the Pharmaceuticals business, while adding more than $4 billion
in new market opportunities through acquisitions that offer excellent growth
prospects,” Mr. Almeida added. “We ramped up R&D investment, launched over 25
new products and implemented a number of productivity initiatives to fund
future growth. We again delivered outstanding sales gains in emerging markets,
as we begin to reap the benefits of multi-year investments to expand our sales
and marketing presence in these fast-growing regions.

“Looking to fiscal 2013, we remain comfortable with the sales and operating
margin guidance we issued in September. Despite the headwinds of today’s
market environment and the U.S. medical device tax, we are confident that our
robust pipeline of new products, attractive investment opportunities and
capital flexibility will enable us to meet marketplace challenges and deliver
good organic growth.”

BUSINESS SEGMENT RESULTS

Medical Devices sales of $2.06 billion in the fourth quarter were 1% lower
than the $2.09 billion in the comparable quarter of last year. Operational
sales growth in the quarter was 2%, as foreign exchange rate movement reduced
the quarterly sales growth rate by three percentage points. As stated earlier,
sales were also negatively impacted by the extra selling week in the year-ago
period. Operationally, fourth-quarter sales in Endomechanical were below those
of a year ago. Strong gains for our innovative Tri-Staple™ reloads were more
than offset by lower sales of surgical instruments, reflecting price pressures
and the impact of the Duet TRS™ recall. In Soft Tissue Repair, higher mesh and
biosurgery sales countered a decline for mechanical fixation products, which
continue to face marketplace headwinds. Energy registered another double-digit
quarterly sales advance, largely due to the continued strong performance of
vessel sealing products. In Oximetry & Monitoring, operational sales were
above those of last year’s fourth quarter, aided by higher sales of sensors
and monitors. Airway & Ventilation sales were also ahead of the year-ago
quarter, chiefly reflecting a double-digit increase for ventilators. Vascular
products posted a sales gain, paced by exceptional growth for neurovascular
products.

For fiscal 2012, Medical Devices sales rose 4% to $8.11 billion from $7.83
billion a year ago, led by higher sales of Vascular and Energy products.
Foreign exchange rate movement lowered the sales growth rate by two percentage
points.

Pharmaceuticals sales of $502 million in the fourth quarter were down 1% from
last year’s fourth-quarter sales of $507 million. Operational sales growth in
the quarter was 2%, as foreign exchange rate movement reduced the quarterly
sales growth rate by three percentage points. Pharmaceuticals results were
also negatively impacted by the extra selling week in the year-ago period.
Sales of Specialty Pharmaceuticals climbed sharply from those of a year ago,
primarily due to the strong performance of EXALGO^® (hydromorphone HCl).
Operationally, sales of Active Pharmaceutical Ingredients were above those of
the fourth quarter of 2011, led by higher sales of peptides. Sales of Contrast
Products in the quarter were below those of the year before, chiefly due to
continued weakness in the United States, particularly for devices. Quarterly
sales of Radiopharmaceuticals declined, compared with the prior-year period,
reflecting lower sales in the Unites States and Europe.

For fiscal 2012, Pharmaceuticals sales advanced 2% to $2.00 billion from $1.97
billion a year ago. The growth was largely attributable to a 16% increase for
Specialty Pharmaceuticals. Foreign exchange rate movement lowered the sales
growth rate by one percentage point.

Medical Supplies fourth-quarter sales of $439 million fell 9% from $481
million in the comparable quarter of 2011, due to broad-based declines in all
four product lines primarily reflecting the extra selling week in the year-ago
period.

For fiscal 2012, sales of Medical Supplies, at $1.74 billion, were 2% below
the $1.78 billion of 2011, reflecting lower sales of SharpSafety™ and OEM
products. Foreign exchange rate movement lowered the sales growth rate by one
percentage point.

In the fourth quarter of 2012, Covidien purchased approximately 9.6 million
ordinary shares under its previously announced share buyback program.

ABOUT COVIDIEN

Covidien is a leading global healthcare products company that creates
innovative medical solutions for better patient outcomes and delivers value
through clinical leadership and excellence. Covidien manufactures, distributes
and services a diverse range of industry-leading product lines in three
segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2012
revenue of $11.9 billion, Covidien has 43,000 employees worldwide in 70
countries, and its products are sold in over 140 countries. Please visit
www.covidien.com to learn more about our business.

CONFERENCE CALL AND WEBCAST

The Company will hold a conference call for investors today, beginning at 8:30
a.m. ET. This call can be accessed three ways:

  *At Covidien’s website: http://investor.covidien.com
  *By telephone: For both “listen-only” participants and those participants
    who wish to take part in the question-and-answer portion of the call, the
    telephone dial-in number in the U.S. is 800-295-4740. For participants
    outside the U.S., the dial-in number is 617-614-3925. The access code for
    all callers is 60514263.
  *Through an audio replay: A replay of the conference call will be available
    beginning at 11:30 a.m. on November 9, 2012, and ending at 5:00 p.m. on
    November 16, 2012. The dial-in number for U.S. participants is
    888-286-8010. For participants outside the U.S., the replay dial-in number
    is 617-801-6888. The replay access code for all callers is 67017254.

NON-GAAP FINANCIAL MEASURES

This press release contains financial measures, including operational growth,
adjusted gross margin, adjusted operating income, adjusted earnings per share
and adjusted operating margin, which are considered “non-GAAP” financial
measures under applicable Securities & Exchange Commission rules and
regulations.

These non-GAAP financial measures should be considered supplemental to and not
a substitute for financial information prepared in accordance with generally
accepted accounting principles. The Company’s definition of these non-GAAP
measures may differ from similarly titled measures used by others.

The non-GAAP financial measures used in this press release adjust for
specified items that can be highly variable or difficult to predict. The
Company generally uses these non-GAAP financial measures to facilitate
management’s financial and operational decision-making, including evaluation
of Covidien’s historical operating results, comparison to competitors’
operating results and determination of management incentive compensation.
These non-GAAP financial measures reflect an additional way of viewing aspects
of the Company’s operations that, when viewed with GAAP results and the
reconciliations to corresponding GAAP financial measures, may provide a more
complete understanding of factors and trends affecting Covidien's business.

Because non-GAAP financial measures exclude the effect of items that will
increase or decrease the Company’s reported results of operations, management
strongly encourages investors to review the Company’s consolidated financial
statements and publicly filed reports in their entirety. A reconciliation of
the non-GAAP financial measures to the most directly comparable GAAP financial
measures is included in the tables accompanying this release.

FORWARD-LOOKING STATEMENTS

Any statements contained in this communication that do not describe historical
facts may constitute forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Any forward-looking
statements contained herein are based on our management's current beliefs and
expectations, but are subject to a number of risks, uncertainties and changes
in circumstances, which may cause actual results or Company actions to differ
materially from what is expressed or implied by these statements. The factors
that could cause actual future results to differ materially from current
expectations include, but are not limited to, our ability to effectively
introduce and market new products or keep pace with advances in technology,
the reimbursement practices of a small number of large public and private
insurers, cost-containment efforts of customers, purchasing groups,
third-party payors and governmental organizations, intellectual property
rights disputes, complex and costly regulation, including healthcare fraud and
abuse regulations and the Foreign Corrupt Practices Act, manufacturing or
supply chain problems or disruptions, rising commodity costs, recalls or
safety alerts and negative publicity relating to Covidien or its products,
product liability losses and other litigation liability, divestitures of some
of our businesses or product lines, our ability to execute strategic
acquisitions of, investments in or alliances with other companies and
businesses, competition, risks associated with doing business outside of the
United States, foreign currency exchange rates and environmental remediation
costs. These and other factors are identified and described in more detail in
our Annual Report on Form 10-K for the fiscal year ended September 30, 2011,
and in subsequent filings with the SEC. We disclaim any obligation to update
these forward-looking statements other than as required by law.

                                                              
Covidien plc
Consolidated Statements of Income
Quarters Ended September 28, 2012 and September 30, 2011
(dollars in millions, except per share data)
                  
                                                                     
                     Quarter          Percent       Quarter          Percent
                     Ended            of            Ended            of
                     September                      September
                     28, 2012         Net Sales     30, 2011         Net Sales
                     ^(1)                           ^(1)
                                                                     
Net sales            $  3,001         100.0  %      $  3,078         100.0  %
Cost of goods        1,333           44.4          1,338           43.5
sold ^(2)
Gross profit         1,668            55.6          1,740            56.5
                                                                     
Selling, general
and                  929              31.0          938              30.5
administrative
expenses ^(2)
Research and
development          153              5.1           167              5.4
expenses
Restructuring        34              1.1           39              1.3
charges, net
Operating income     552              18.4          596              19.4
                                                                     
Interest expense     (51       )      (1.7   )      (50       )      (1.6   )
Interest income      3                0.1           5                0.2
Other income,        7               0.2           22              0.7
net
                                                                     
Income from
continuing
operations           511              17.0          573              18.6
before income
taxes
                                                                     
Income tax           47              1.6           113             3.7
expense
Income from
continuing           464              15.5          460              14.9
operations
                                                                     
Loss from
discontinued         (3        )      (0.1   )      (9        )      (0.3   )
operations, net
of income taxes
Net income           $  461          15.4          $  451          14.7
                                                                     
Basic earnings
per share:
Income from
continuing           $  0.97                        $  0.94
operations
Loss from
discontinued         (0.01     )                    (0.02     )
operations
Net income           0.96                           0.92
                                                                     
Diluted earnings
per share:
Income from
continuing           $  0.96                        $  0.93
operations
Loss from
discontinued         (0.01     )                    (0.02     )
operations
Net income           0.95                           0.92
                                                                     
Weighted-average number of shares
outstanding (in millions):
Basic                477                            488
Diluted              483                            493

                                                                     
^(1) Fourth quarter 2012 includes 13 weeks and fourth quarter 2011 includes 14
weeks.
                                                                     
^(2) Amortization expense of intangible assets is included in the following
income statement captions in the amounts shown:
                                                                     
Cost of goods        $  46                          $  40
sold
Selling, general
and                  16                            12        
administrative
expenses
                     $  62                         $  52     

                                                                                                    
Covidien plc
Non-GAAP Reconciliations
Quarters Ended September 28, 2012 and September 30, 2011
(dollars in millions, except per share data)
                                                                                                                      
                    Quarter Ended September 28, 2012 ^(1)
                                                                                        Income                        Diluted
                                                                                        from           Income         earnings
                                  Gross         Gross       Operating     Operating     continuing     from           per share
                    Sales         profit        margin      income        margin        operations     continuing     from
                                                percent                   percent       before         operations     continuing
                                                                                        income         ^(2)           operations
                                                                                        taxes
                                                                                                                      
GAAP                $ 3,001       $ 1,668       55.6  %     $  552        18.4   %      $  511         $  464         $  0.96
Adjustments:
Impairments         —             15                        18                          18             12             0.02
^(3)
Restructuring
and related         —             2                         36                          36             29             0.06
charges, net
^(4)
Separation          —             —                         15                          15             13             0.03
costs ^(5)
Transaction         —             12                        14                          14             10             0.02
costs ^(6)
Tax matters         —            —                        —                          —             (37     )      (0.08    )
^(7)
As adjusted         $ 3,001      $ 1,697      56.5        $  635       21.2          $  594        $  491        1.02
                                                                                                                      
                                                                                                                      
                    Quarter Ended September 30, 2011 ^(1)
                                                                                        Income
                                                                                        from                          Diluted
                                                                                        continuing     Income         earnings
                                  Gross         Gross       Operating     Operating     operations     from           per share
                    Sales         profit        margin      income        margin        before         continuing     from
                                                percent                   percent       income         operations     continuing
                                                                                        taxes          ^(2)           operations

                                                                                        
                                                                                                                      
GAAP                $ 3,078       $ 1,740       56.5  %     $  596        19.4   %      $  573         $  460         $  0.93
Adjustments:
Restructuring
and related         —             4                         43                          43             30             0.06
charges, net
^(8)
Legal
charges, net        —             —                         46                          46             29             0.06
^(9)
Impact of tax
sharing             —             —                         —                           (12     )      (12     )      (0.02    )
agreement
^(10)
Tax matters         —            —                        —                          —             25            0.05
^(11)
As adjusted         $ 3,078      $ 1,744      56.7        $  685       22.3          $  650        $  532        1.08
                                                                                                                      

                                                                                                                      
^(1) Fourth quarter 2012 includes 13 weeks and fourth quarter 2011 includes 14 weeks.
                                                                                                                      
^(2) Adjustments are tax effected at the applicable local statutory tax rates.
                                                                                                                      
^(3) Represents impairment charges resulting from the write-off of inventory and capital equipment associated with the
discontinuance of our Duet TRS^TM Universal Straight and Articulating Single-Use Loading Units, $15 million of which is included
in cost of goods sold and the remaining $3 million of which is included in selling, general and administrative expenses.
                                                                                                                      
^(4) Includes $34 million in restructuring charges, net and $2 million of restructuring-related accelerated depreciation
included in cost of goods sold.
                                                                                                                      
^(5) Represents costs incurred related to the separation of our Pharmaceuticals segment, which are included in selling, general
and administrative expenses.
                                                                                                                      
^(6) Represents acquisition-related costs, of which $12 million relates to the sale of acquired inventory that had been written
up to fair value upon acquisition and is included in cost of goods sold and $2 million of which relates to transaction costs
that are included in selling, general and administrative expenses.
                                                                                                                      
^(7) Represents the tax benefit resulting from tax planning initiatives that were implemented during the fourth quarter of
fiscal 2012.
                                                                                                                      
^(8) Includes $39 million in restructuring charges, net and $4 million of restructuring-related accelerated depreciation
included in cost of goods sold.
                                                                                                                      
^(9) Relates to our indemnification obligations for certain claims pertaining to all known pending and estimated future pelvic
mesh product liability cases, net of insurance recoveries, which is included in selling, general and administrative expenses.
                                                                                                                      
^(10) Represents the non-interest portion of the impact of our tax sharing agreement with Tyco International and TE Connectivity
included in other income, net.
                                                                                                                      
^(11) Relates primarily to settlements reached with certain non-U.S. taxing authorities.

                                                               
Covidien plc
Segment and Geographical Sales
Quarters Ended September 28, 2012 and September 30, 2011
(dollars in millions)
                                                                           
                      Quarter Ended ^(1)
                      September     September     Percent     Currency     Operational
                      28,           30,           change      impact       growth ^(2)
                      2012          2011
                                                                           
Medical Devices
United States         $ 932         $ 921         1    %      —    %       1     %
Non-U.S.              1,128        1,169        (4   )      (7   )       3
                      $ 2,060       $ 2,090       (1   )      (3   )       2
                                                                           
Pharmaceuticals
United States         $ 344         $ 332         4    %      —    %       4     %
Non-U.S.              158          175          (10  )      (8   )       (2    )
                      $ 502         $ 507         (1   )      (3   )       2
                                                                           
Medical
Supplies
United States         $ 392         $ 425         (8   )%     —    %       (8    )%
Non-U.S.              47           56           (16  )      (9   )       (7    )
                      $ 439         $ 481         (9   )      (1   )       (8    )
                                                                           
Covidien plc
United States         $ 1,668       $ 1,678       (1   )%     —    %       (1    )%
Non-U.S.              1,333        1,400        (5   )      (7   )       2
                      $ 3,001       $ 3,078       (3   )      (3   )       —
                                                                           
                                                                           
                                                                           
^(1) Fourth quarter 2012 includes 13 weeks and fourth quarter 2011 includes 14 weeks.
                                                                           
^(2) Operational growth, a non-GAAP financial measure, measures the change in sales
between current and prior year periods using a constant currency, the exchange rate in
effect during the applicable prior year period. See description of non-GAAP financial
measures contained in this release.

                                                                   
Covidien plc
Select Product Line Sales
Quarters Ended September 28, 2012 and September 30, 2011
(dollars in millions)
                                                                              
                         Quarter Ended ^(1)
                         September     September     Percent     Currency     Operational
                         28,           30,           change      impact       growth ^(2)
                         2012          2011
                                                                              
Medical Devices
Endomechanical           $   578       $   624       (7   )%     (4   )%      (3    )%
Instruments
Soft Tissue Repair       216           230           (6   )      (5   )       (1    )
Products
Energy Devices           336           316           6           (4   )       10
Oximetry &               230           226           2           (2   )       4
Monitoring Products
Airway & Ventilation     193           198           (3   )      (5   )       2
Products
Vascular Products        407           393           4           (1   )       5
                                                                              
Pharmaceuticals
Specialty                $   152       $   137       11   %      —    %       11    %
Pharmaceuticals
Active
Pharmaceutical           107           104           3           (1   )       4
Ingredients
Contrast Products        133           144           (8   )      (5   )       (3    )
Radiopharmaceuticals     110           122           (10  )      (4   )       (6    )
                                                                              
                                                                              
                                                                              
^(1) Fourth quarter 2012 includes 13 weeks and fourth quarter 2011 includes 14 weeks.
                                                                              
^(2) Operational growth, a non-GAAP financial measure, measures the change in sales
between current and prior year periods using a constant currency, the exchange rate in
effect during the applicable prior year period. See description of non-GAAP financial
measures contained in this release.

                                                             
Covidien plc
Consolidated Statements of Income
Fiscal Years Ended September 28, 2012 and September 30, 2011
(dollars in millions, except per share data)
                                                                       
                                                                       
                        Fiscal Year       Percent       Fiscal         Percent
                        Ended             of            Year Ended     of
                        September 28,                   September      Net
                        2012^(1)          Net Sales     30,            Sales
                                                        2011^(1)
                                                                       
Net sales               $  11,852         100.0  %      $ 11,574       100.0 %
Cost of goods           5,038            42.5          4,996         43.2
sold ^(2)
Gross profit            6,814             57.5          6,578          56.8
                                                                       
Selling, general
and                     3,686             31.1          3,538          30.6
administrative
expenses ^(2)
Research and
development             623               5.3           554            4.8
expenses
Restructuring           91                0.8           122            1.1
charges, net
Shareholder             —                —             (11      )     (0.1  )
settlement income
Operating income        2,414             20.4          2,375          20.5
                                                                       
Interest expense        (206       )      (1.7   )      (203     )     (1.8  )
Interest income         16                0.1           22             0.2
Other income, net       25               0.2           22            0.2
                                                                       
Income from
continuing              2,249             19.0          2,216          19.1
operations before
income taxes
                                                                       
Income tax              347              2.9           333           2.9
expense
Income from
continuing              1,902             16.0          1,883          16.3
operations
                                                                       
Income (loss)
from discontinued       3                —             (15      )     (0.1  )
operations, net
of income taxes
Net income              $  1,905         16.1          $ 1,868       16.1
                                                                       
Basic earnings
per share:
Income from
continuing              $  3.96                         $ 3.82
operations
Income (loss)
from discontinued       0.01                            (0.03    )
operations
Net income              3.96                            3.79
                                                                       
Diluted earnings
per share:
Income from
continuing              $  3.92                         $ 3.79
operations
Income (loss)
from discontinued       0.01                            (0.03    )
operations
Net income              3.92                            3.76
                                                                       
Weighted-average
number of shares
outstanding (in
millions):
Basic                   481                             493
Diluted                 486                             497

                                                                       
^(1) Fiscal 2012 includes 52 weeks and fiscal 2011 includes 53 weeks.
                                                                       
^(2) Amortization expense of intangible assets is included in the following
income statement captions in the amounts shown:
                                                                       
Cost of goods           $  169                          $ 154
sold
Selling, general
and                     55                             48       
administrative
expenses
                        $  224                         $ 202    

                                                                                                    
Covidien plc
Non-GAAP Reconciliations
Fiscal Years Ended September 28, 2012 and September 30, 2011
(dollars in millions, except per share data)
                                                                                                                     
                  Fiscal Year Ended September 28, 2012 ^(1)
                                                                                       Income                        Diluted
                                                                                       from           Income         earnings
                                 Gross         Gross       Operating     Operating     continuing     from           per share
                  Sales          profit        margin      income        margin        operations     continuing     from
                                               percent                   percent       before         operations     continuing
                                                                                       income         ^(2)           operations
                                                                                       taxes
                                                                                                                     
GAAP              $ 11,852       $ 6,814       57.5  %     $ 2,414       20.4   %      $  2,249       $  1,902       $  3.92
Adjustments:
Impairments       —              15                        18                          18             12             0.03
^(3)
Restructuring
and related       —              13                        104                         104            77             0.16
charges, net
^(4)
Legal charges     —              —                         47                          47             35             0.07
^(5)
Separation        —              —                         36                          36             31             0.06
costs ^(6)
Transaction       —              17                        49                          43             30             0.06
costs ^(7)
Loss on
retirement of     —              —                         —                           9              9              0.02
debt ^(8)
Impact of tax
sharing           —              —                         —                           (4       )     (4       )     (0.01    )
agreement
^(9)
Tax matters       —             —                        —                          —             (24      )     (0.05    )
^(10)
As adjusted       $ 11,852      $ 6,859      57.9        $ 2,668      22.5          $  2,502      $  2,068      4.26
                                                                                                                     
                                                                                                                     
                  Fiscal Year Ended September 30, 2011 ^(1)
                                                                                       Income                        Diluted
                                                                                       from           Income         earnings
                                 Gross         Gross       Operating     Operating     continuing     from           per share
                  Sales          profit        margin      income        margin        operations     continuing     from
                                               percent                   percent       before         operations     continuing
                                                                                       income         ^(2)           operations
                                                                                       taxes
                                                                                                                     
GAAP              $ 11,574       $ 6,578       56.8  %     $ 2,375       20.5   %      $  2,216       $  1,883       $  3.79
Adjustments:
Inventory         —              32                        32                          32             20             0.04
charges ^(11)
Restructuring
and related       —              4                         126                         126            90             0.18
charges, net
^(12)
Legal
charges, net      —              —                         46                          46             29             0.06
^(5)
Shareholder
settlement        —              —                         (11     )                   (11      )     (11      )     (0.02    )
income ^(13)
Impact of tax
sharing           —              —                         —                           6              6              0.01
agreement
^(9)
Tax matters       —             —                        —                          —             (43      )     (0.09    )
^(14)
As adjusted       $ 11,574      $ 6,614      57.1        $ 2,568      22.2          $  2,415      $  1,974      3.97
                                                                                                                     

                                                                                                                     
^(1) Fiscal 2012 includes 52 weeks and fiscal 2011 includes 53 weeks.
                                                                                                                     
^(2) Adjustments are tax effected at the applicable local statutory tax rates.
                                                                                                                     
^(3) Represents impairment charges resulting from the write-off of inventory and capital equipment associated with the
discontinuance of our Duet TRS^TM Universal Straight and Articulating Single-Use Loading Units, $15 million of which is
included in cost of goods sold and the remaining $3 million of which is included in selling, general and administrative
expenses.
                                                                                                                     
^(4) Includes $91 million in restructuring charges, net and $13 million of restructuring-related accelerated depreciation
included in cost of goods sold.
                                                                                                                     
^(5) Relates to our indemnification obligations for certain claims pertaining to all known pending and estimated future pelvic
mesh product liability cases, net of insurance recoveries, which is included in selling, general and administrative expenses.
                                                                                                                     
^(6) Represents costs incurred related to the separation of our Pharmaceuticals segment, which are included in selling, general
and administrative expenses.
                                                                                                                     
^(7) Includes acquisition-related costs, of which $20 million relates to transaction costs that are included in selling,
general and administrative expenses; $17 million of which relates to the sale of acquired inventory that had been written up to
fair value upon acquisition and is included in cost of goods sold; and $12 million of which relates a license agreement and is
included in research and development expenses. Also includes a $6 million gain on the sale of our non-controlling interest in
superDimension, which is included in other income, net.
                                                                                                                     
^(8) Represents the loss on the retirement of debt included in other income, net, which resulted from the early redemption of
certain senior notes.
                                                                                                                     
^(9) Represents the non-interest portion of the impact of our tax sharing agreement with Tyco International and TE Connectivity
included in other income, net.
                                                                                                                     
^(10) Relates primarily to the tax benefit resulting from tax planning initiatives, partially offset by settlements reached
with certain non-U.S. taxing authorities.
                                                                                                                     
^(11) Represents acquisition-related costs related to the sale of acquired ev3 inventory that had been written up to fair value
upon acquisition and is included in cost of goods sold.
                                                                                                                     
^(12) Includes $122 million in restructuring charges, net and $4 million of restructuring-related accelerated depreciation
included in cost of goods sold.
                                                                                                                     
^(13) Represents income resulting from the reversal of our portion of the remaining reserves that had been established to
settle Tyco International's securities cases, which have all been resolved.
                                                                                                                     
^(14) Primarily relates to a settlement reached with certain non-U.S. taxing authorities and, to a lesser extent, the release
of certain U.S. and non-U.S. uncertain tax positions as a result of statute expirations.

                                                                 
Covidien plc
Segment and Geographical Sales
Fiscal Years Ended September 28, 2012 and September 30, 2011
(dollars in millions)
                                                                                         
                      Fiscal Year Ended ^ (1)
                      September      September      Percent     Currency     Operational
                      28,            30,            change      impact       growth ^(2) 
                      2012           2011
                                                                                         
Medical Devices       
United States         $ 3,683        $ 3,483        6    %      —    %       6           %
Non-U.S.              4,428         4,346         2           (3   )       5
                      $ 8,111        $ 7,829        4           (2   )       6
                                                                                         
Pharmaceuticals
United States         $ 1,346        $ 1,288        5    %      —    %       5           %
Non-U.S.              655           679           (4   )      (5   )       1
                      $ 2,001        $ 1,967        2           (1   )       3
                                                                                         
Medical
Supplies
United States         $ 1,543        $ 1,560        (1   )%     —    %       (1          )%
Non-U.S.              197           218           (10  )      (7   )       (3          )
                      $ 1,740        $ 1,778        (2   )      (1   )       (1          )
                                                                                         
Covidien plc
United States         $ 6,572        $ 6,331        4    %      —    %       4           %
Non-U.S.              5,280         5,243         1           (3   )       4
                      $ 11,852       $ 11,574       2           (2   )       4
                                                                                         
                                                                                         
                                                                                         
^(1) Fiscal 2012 includes 52 weeks and fiscal 2011 includes 53 weeks.
                                                                                         
^(2) Operational growth, a non-GAAP financial measure, measures the change in sales between
current and prior year periods using a constant currency, the exchange rate in effect
during the applicable prior year period. See description of non-GAAP financial measures
contained in this release.

                                                                    
Covidien plc
Select Product Line Sales
Fiscal Years Ended September 28, 2012 and September 30, 2011
(dollars in millions)
                                                                                
                           Fiscal Year Ended ^ (1)
                           September     September     Percent     Currency     Operational
                           28,           30,           change      impact       growth ^(2)
                           2012          2011
                                                                                
Medical Devices
Endomechanical             $  2,336      $  2,342      —    %      (2   )%      2      %
Instruments
Soft Tissue Repair         882           900           (2   )      (3   )       1
Products
Energy Devices             1,305         1,170         12          (2   )       14
Oximetry &                 867           853           2           (1   )       3
Monitoring Products
Airway & Ventilation       743           752           (1   )      (2   )       1
Products
Vascular Products          1,602         1,426         12          (1   )       13
                                                                                
Pharmaceuticals
Specialty                  $  573        $  494        16   %      —    %       16     %
Pharmaceuticals
Active
Pharmaceutical             433           416           4           (1   )       5
Ingredients
Contrast Products          542           598           (9   )      (3   )       (6     )
Radiopharmaceuticals       453           459           (1   )      (2   )       1
                                                                                
                                                                                
                                                                                
^(1) Fiscal 2012 includes 52 weeks and fiscal 2011 includes 53 weeks.
                                                                                
^(2) Operational growth, a non-GAAP financial measure, measures the change in sales between
current and prior year periods using a constant currency, the exchange rate in effect
during the applicable prior year period. See description of non-GAAP financial measures
contained in this release.

Contact:

Covidien plc
Eric Kraus, 508-261-8305
Senior Vice President
Corporate Communications
eric.kraus@covidien.com
or
Coleman Lannum, CFA, 508-452-4343
Vice President
Investor Relations
cole.lannum@covidien.com
or
Bruce Farmer, 508-452-4372
Vice President
Public Relations
bruce.farmer@covidien.com
or
Todd Carpenter, 508-452-4363
Director
Investor Relations
todd.carpenter@covidien.com
 
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