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Medtronic CEO Omar Ishrak Discusses Q4 2014 Earnings Results

In spine, we are expecting a number of new cervical and interbody product launches, the ongoing adoption of surgical synergy, as well as continued stability in BMP and improvement in BKP. The RestoreSensor, SureScan MRI in neuromodulation, and new capital products in surgical technologies should also deliver growth performances in FY15.

In diabetes, the continued rollout of the MiniMed 530G system in the U.S. and expected launch of the MiniMed 640G in Europe should result in another year of strong growth. It is worth noting that we are working collaboratively with the FDA to accelerate the U.S. timeline of our next generation insulin pump system, and we are optimistic that we can bring this new technology to the market sooner than previously anticipated. We are mutually committed to advancing access to this important technology with all of the requisite patient safety requirements being met, and we truly appreciate the agency’s focus in this area.

Finally, last week, I appointed Hooman Hakami to lead our diabetes group. Hooman is an outstanding leader, has a track record of driving growth, and I’m confident that he will work to strengthen our core insulin pump and CGM franchises, as well as realize the tremendous growth opportunities in the type 2 market and in overall international expansion.

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In our second growth vector, which is increasing the penetration of our existing therapies in emerging markets, we should see momentum continue through not only our traditional market development activities, but also new business model innovation in the areas of channel optimization and broader partnerships with governments and private providers. We expect our emerging market growth to accelerate in FY15 and contribute 150 to 200 basis points to our overall growth.

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Our third growth vector, which is creating value based services and solutions, is also expected to deliver incremental growth in the coming year, with a contribution in the range of 40 to 60 basis points. We are expecting Cardiocom and Cath lab managed services, which are reported in our CRDM results, to more than double in size in FY15.

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Looking at our growth vectors, it is not unreasonable to expect a revenue growth acceleration of 50 to 150 basis points over what we delivered in FY14. However, given the dynamic nature of our marketplace, we feel that our revenue outlook of 3% to 5% is balanced and realistic. Ultimately, our goal is to build a business that is diverse and robust enough to absorb challenges, while still delivering on our baseline expectations, something that we feel we’re beginning to do.

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At our analyst meeting in a couple of weeks, we will share in detail with you how we intend to deliver on our baseline goals. We will lay out for you our full pipeline of innovative therapies across all of our businesses, discuss the efforts we are making to develop and grow in emerging markets, and explain our innovative new business models and partnerships that we believe will help shape the future healthcare landscape. In addition, we will present a detailed look at our financials and update you on the progress we’re making on our important product cost reduction and working capital initiatives.

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