Good morning. My name is Carol, I will be your operator today. At this time, I would like to welcome everyone to the Medtronic Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, we will have a question-and-answer session. [Operator Instructions]. At this time I would like to turn the call over to Ryan Weispfenning, Vice President, Investor Relations.

Thank you. Good morning and welcome to Medtronic’s fourth quarter conference call and webcast. During the next hour, Omar Ishrak, Medtronic Chairman and Chief Executive Officer; and Karen Parkhill, Medtronic Chief Financial Officer, will provide comments on the results of our fourth quarter and fiscal year 2019, which ended on April 26, 2019. After our prepared remarks, we will be happy to take your questions. First, a few logistical comments. Earlier this morning we issued a press release containing our financial statements and the revenue by division summary. We also issued an earnings presentation that provides additional details on our performance and outlook. During today's earnings call, many of the statements made may be considered forward-looking statements and actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause actual results to differ is contained in our periodic reports and other filings that we make with the SEC, and we do not undertake to update any forward-looking statements. In addition, the reconciliations of any non-GAAP financial measures are available on our website, investorrelations.medtronic.com. References to organic revenue growth excludes the impact of material acquisitions, divestitures, and currency. References to pro forma exclude the impact of material divestitures. Unless we say otherwise quarterly rates and ranges are given on a constant currency basis which compares to the fourth quarter of fiscal year 2018 after adjusting for currency. Unless we say otherwise annual rates and ranges are given on a comparable constant currency basis which compares to fiscal year 2018 after adjusting for currency and the fiscal year 2018 divestiture of the patient care, DVT, and nutritional insufficiency business. All of these adjustment details can be found in the reconciliation tables included with our earnings press release. Finally, our EPS guidance does not include any charges or gains that would be reported as non-GAAP adjustments to earnings during the fiscal year. With that, I'm now pleased to turn the call over to Medtronic Chairman and Chief Executive Officer, Omar Ishrak. Omar.

Thank you, Ryan, and thank you to everyone for joining us. This morning, we reported a solid finish to a strong fiscal year for Medtronic. We delivered revenue growth, operating margin, and EPS all ahead of Street expectations. Q4 revenue grew 3.6% organic, with outperformance in RTG and MITG offsetting challenges in CVG and difficult comparisons in Diabetes. In addition, Emerging Markets continued to be a big driver, growing 12%. Our adjusted operating margin expanded 140 basis points, including currency, reflecting our entire organization’s focus on Enterprise Excellence. On the bottom line, we grew adjusted diluted EPS 8.5%, or 9.2% at constant currency. For the full fiscal year 2019, revenue, EPS, and free cash flow all came in above the guidance ranges we set at the beginning of the year as we executed against our commitments. Revenue of $30.6 billion grew 5.5% organically. Adjusted diluted EPS grew 10% on a comparable, constant currency basis and 11.5% pro-forma. Free cash flow of $5.9 billion grew 62%, much faster than earnings, reflecting the focus of our entire organization on improving this important metric. Last June at our Investor Day, we set a target to improve our free cash flow conversion to 80% over the next two to three years, and we achieved it in just one year. FY 2019 free cash flow conversion was 83%, notably above our peer average. In FY 2019, we invested our capital into future growth platforms, with a focus on returns, while at the same time increasing our returns to shareholders through share repurchases and a rising dividend. In Q4, we overcame significant challenges and relied upon the diversification of our business to deliver another quarter of solid top- and bottom-line results. Let’s discuss some of the more important drivers of our performance, starting with our Restorative Therapies Group, which had another very strong quarter, growing 6.5%. The launch of the Mazor X Stealth navigated robotic system is off to a strong start and building momentum. We sold 26 systems this quarter, increasing our spine robotic market share to more than 70%, with an installed base that is now more than three and a half times that of our closest competitor. While Mazor sales are driving Brain Therapies growth, we believe they are also a good leading indicator of future growth in our Spine division, as customers that are purchasing our Mazor system are also choosing to increase their share of Medtronic spine implants. In fact in Q4, over 80% of our Mazor systems were sold to customers who chose to enter into combined capital and implant contracts, and the percentage of Mazor robotic cases that use our Medtronic spine implants continued to climb, exceeding 60% in Q4, a double digit increase from Q3. When you combine our Spine division sales with the sales of our capital equipment from our Brain Therapies division used in Spine surgery, our Spine division grew 5.6%, with the U.S. Core Spine business growing 11%. This is how our competitors report, and a strong indication that our enabling technologies robotics, navigation, imaging, and powered surgical instruments will help increase sales of spine implants. In RTG, I’d also highlight Neurovascular and Pain Therapies. In Neurovascular, our market-leading stroke portfolio continues to perform extremely well with double-digit growth in stent retrievers, flow diverters, coils, and neuro access products. In Pain Therapies, we continued to gain market share despite the market’s recent slowdown. Our Pain Stim business achieved a number one share position in Q4 for the first time in two and a half years, driven by our differentiated Intellis system, with its Evolve workflow algorithm and Snapshot reporting. In MITG, we grew 5.1%, driven by strength in Advanced Stapling and Advanced Energy. This is an impressive performance, as the Surgical Innovations business overcame challenges resulting from the shutdown of a major sterilization supplier’s facility. I just cannot say enough about how our teams stepped up and successfully managed this issue, quickly identifying alternative suppliers and rerouting our supply chain to get inventory to the right place at the right time. We expect to be back to full sterilization capacity late in Q1. In CVG, we grew 1.1% as we faced challenges in drug-coated balloons and LVADs as well as CRM replacement devices given where we are in our replacement cycle. At the same time, multiple product lines showed exceptional strength in the quarter with high-teens growth from our Reveal LINQ insertable loop recorder, and mid-teens growth from both our Micra transcatheter pacing system and our Arctic Front AF ablation catheters. We also continued strong, double-digit growth in our TAVR franchise. Our TYRX antiinfection product grew in the high-twenties, and we saw a notable pick-up in its utilization following the WRAP-IT data presentation at the American College of Cardiology meeting in March. In Diabetes, we grew 0.6%, an anomaly given difficult prior year comparisons that we described on our last earnings call. Despite the challenging comparisons, Diabetes delivered mid-teens growth in international markets and our fourth consecutive quarter of triple-digit growth in standalone CGM. Looking ahead, we expect Diabetes growth to reaccelerate in the first quarter and to be accretive to total company growth in FY 2020. At the ADA conference in June, we plan on hosting an investor meeting where we will update you on the progress of our pipeline and an exciting series of product launches we have planned over the next 24 months. Now, turning to Emerging Markets, our performance continues to be strong, growing 12% this quarter, and representing 16% of Medtronic revenue. Our strength was diversified across all four groups and across multiple geographies, with China growing 13%, South Asia by 22%, and Southeast Asia by 20%. In addition, Middle East & Africa grew 13% and both Eastern Europe and Latin America grew 8%. Our strategies of public and private partnerships, optimizing the distribution channel, and in some markets localization of R&D and manufacturing are driving growth and differentiating Medtronic. Overall, it was another solid quarter despite the noted headwinds, and a really strong year for Medtronic. But as we look forward, we’re even more excited about what lies ahead, as the investments we’ve been making in our pipeline begin to pay off with accelerating revenue growth, and ultimately, value creation for our shareholders. We expect our top line to accelerate over the course of FY 2020 and into FY 2021, driven by the anniversary of recent headwinds, combined with major products that are launching now or will launch over the next 12 months. It’s worth highlighting some of these near-term launches. I’ll start with CVG. In our TAVR business, we are expecting low risk indication expansion in the U.S., as well as launches of our next-generation TAVR valve, the Evolut Pro Plus. We intend to launch this valve across all sizes, including a large, 34 millimeter valve. In CRHF, two of the biggest launches we have in FY 2020 are number one, our Reveal LINQ 2.0 insertable cardiac monitor and number two, our Micra AV transcatheter pacing system. LINQ 2 will feature Bluetooth connectivity, five year battery longevity, enhanced sensing specificity, and the ability to monitor new physiological parameters. Micra AV, which is one of the most disruptive products in our pipeline, is expected to launch around fiscal year end. It will enable us to access and disrupt over 55% of the eligible pacemaker market, up from 16% today. In MITG, we continue to make great progress with our soft tissue robotics program, and we’re now preparing for our initial launch in FY 2020, consistent with our commentary over the last several quarters. Our initial launch activities will occur outside the U.S. and support our clinical and regulatory strategies in geographies around the globe. I know everyone is anxious to see the robot, and for competitive reasons, we’ve obviously kept this program close to the vest. The good news is that we plan to host an analyst event this Fall to show the robot. We’re in the process of working on dates, and as soon as we get everything confirmed, we’ll be sure to send the analysts an invitation. In RTG, as I mentioned earlier, the launch of the Mazor X Stealth is off to a great start, and we expect this will continue to drive growth in our Neurosurgery business, along with creating demand for our Core Spine implants. In Neurosurgery, we are preparing for the launch of the Midas Rex MR8 drill platform in the first half of FY 2020, and we expect its differentiated features to drive share growth. In Neurovascular, we just launched our next generation stent retriever, Solitaire X, and our React 071 aspiration catheter, advancing our leadership in the treatment of ischemic stroke. In Pain Therapies, we expect the full launch in FY 2020 of our Accurian nerve ablation platform. In Diabetes, we expect to file for a non-adjunctive indication for our CGM sensor in early FY 2020, thereby allowing us access to the U.S. Medicare market for the 670G. In addition, in FY 2020 we expect to launch the MiniMed 780G, our Advanced Hybrid Closed-Loop System with Bluetooth connectivity. The 780G will feature next-generation algorithms designed to improve time-in-range to over 80%. The system will reduce the burden of carb counting, enable remote monitoring as well as remote software downloads, and include several key enhancements to our CareLink system. What all this means for the company as a whole is that we expect our growth rate to accelerate over the course of FY 2020, with the second half growing faster than the first, as we one, anniversary recent headwinds, and two, bring these innovative products to market over the next several quarters. Moreover, we expect our top line momentum to build heading into FY 2021, as we get the increasing benefit of the FY 2020 product launches that I just mentioned, as well as the benefit of several products that we expect to launch early next fiscal year, such as: our Percept deep brain stimulation system, the very first deep brain stimulator with sensing capabilities; our DiamondTemp focal ablation catheter system, which will initially launch in Europe; and our Interstim Micra 3cc MRI-compatible sacral nerve stimulation system, which is fully rechargeable and 80% smaller than our current, market-leading device. While there isn’t enough time today to go through the longer-term pipeline, with all of these products launching, the takeaway that I want you to have is that each of our four groups has the potential to see accelerating growth in FY 2021. Let me now ask Karen to take you through a discussion of our fourth quarter financials. Karen? Karen L. Parkhill: Thank you. As Omar mentioned we delivered fourth quarter organic revenue growth of 3.6% and EPS growth of 8.5%. For the full year our adjusted operating margin expanded 120 basis points including 50 basis points on a constant currency basis and in line with the guidance we gave at the beginning of the year. We remain focused on our enterprise excellence programs better leveraging our size and scale and driving improved effectiveness and efficiency across the company. This past year in particular the benefits of the program are most evident in SG&A where we drove 40 basis points of improvement. Our fourth quarter adjusted operating margin was 31.5%, an improvement of 140 basis points or 50 basis points on a constant currency basis. In addition to driving expansion by executing on our enterprise excellence program we also absorbed the unplanned expense of China tariff as well as a negative 20 basis point impact on our operating margin from the sterilization issue with purposeful cost control throughout the company. In the fourth quarter we successfully executed a 7 billion euro debt offering and used the proceeds to reduce U.S. dollar denominated debt. The new euro issuance carries a weighted average coupon rate of 7/8% lowering the effective interest rate on our long-term debt portfolio and providing savings for the company for years to come. Our adjusted nominal tax rate was 14.1% for the quarter and 13.6% for the year in line with the expectations we said on the third quarter call. Excluding the non-recurring tax benefits we received in fiscal year 2019 our adjusted nominal tax rate would have been approximately 14.75%. Perhaps most exciting is our annual free cash flow at $5.9 billion, a significant improvement over the $3.6 billion we generated last year and well above our guidance and expectations. All of our colleagues have made improving free cash flow a priority and this focus is yielding strong results enabling us to achieve our conversion goals well ahead of the schedule I gave you at our Investor Day in June. Going forward, you can expect our free cash flow to grow largely in line with earnings as we continue to target an 80% conversion rate above our peer average over our long range plan. Before I move to guidance, I want to reiterate our commitment to balanced capital deployment. We continued to invest in future growth through disciplined investment in R&D, along with tuck-in acquisitions like Mazor and Epix, among others. And, we remain committed to returning a minimum of 50% of our annual free cash flow to our shareholders. In fact in fiscal 2019, we returned $4.6 billion, 78% of the free cash we generated to our shareholders through both dividends and net share repurchase. Our total shareholder payout for the year was 65% on adjusted net earnings. Now, turning to our guidance for fiscal year 2020. As a starting point, we expect organic revenue growth to be 4% plus or minus. While the impact of currency is fluid, if recent exchange rates hold, foreign currency would have a negative impact on full year revenue of approximately 1% to 1.5%. By business group, we expect MITG to grow 4.5% to 5%, RTG to grow 4% to 4.5%, Diabetes to grow 6% to 8%, and CVG to grow 2%, plus or minus, all on an organic basis. We expect our first quarter growth rate to be lower than normal on the heels of a better than expected fourth quarter, transitory headwinds from the sterilization shutdown in MITG, and a slowdown in our Peripheral business from paclitaxel-coated balloons. Given these, we expect organic revenue growth in the first quarter to be in the range of 2% to 2.5%, with currency having a negative impact of 2.1% to 2.6% at recent rates. By business group, MITG and RTG are expected to grow 3% to 3.5%, CVG looks flat, and Diabetes is expected to grow 5%, plus or minus, all on an organic basis. From there, we expect our revenue growth to accelerate over the course of the year, with constant currency growth closer to 4% in the second quarter, and north of 4% in the second half. We expect to continue to drive margin expansion of approximately 40 basis points on a constant currency basis, driven by our Enterprise Excellence initiatives. For modeling purposes, we would assume a modest improvement in the first half of the year, given lower revenue growth and a slight FX headwind, with increasing improvement in the second half. We expect our tax rate to increase from 13.6% last year to 16% to 16.5% in fiscal year 2020, given the changes associated with U.S. tax reform that we discussed previously. Of course, we remain focused on optimizing our underlying operating tax rate over time under these new regulations. With respect to earnings, we expect non-GAAP diluted EPS in the range of $5.44 to $5.50, which includes a negative $0.10 impact of currency at recent rates. For the first quarter, we expect a $1.17 to $1.19, including a $0.04 currency headwind at recent rates. After delivering on each of our commitments in fiscal year 2019, I couldn’t be more excited about fiscal year 20 and beyond. As Omar outlined, we expect our revenue growth to accelerate over the course of the year as we anniversary recent headwinds and launch a series of major products. And, we expect this momentum to build into fiscal year 2021, with each of our four groups having the potential to see accelerating growth next fiscal year. Now I will return the call back to Omar.

Thanks, Karen. Before we go to Q&A, I’d like to acknowledge our 90,000 Medtronic employees who work tirelessly and are dedicated to fulfilling the Medtronic Mission in alleviating pain, restoring health, and extending life for so many around the world. In fiscal 2019, our employees together with our physician partners, served over 75 million patients or more than two patients every second. Let’s now move to Q&A. In addition to Karen, our four group presidents, Mike Coyle, Bob White, Geoff Martha, and Hooman Hakami, are also here to answer your questions. We want to try to get to as many questions as possible, so please help us by limiting yourself to one question, and if necessary, a related follow-up.

[Operator Instructions]. Our first question this morning comes from Bob Hopkins from Bank of America. Please go ahead.

Hi, thank you and good morning. Congrats on a strong finish to the year. I just wanted to kind of ask a little bit about some of the revenue forecast that you're making, so two very quick things; one, given your first quarter guidance of about 2 to 2.5, can you just walk us through in as much detail as you're willing to provide some of the incremental headwinds that you're seeing in Q1 or that you're forecasting in Q1 versus the 3.6% growth that you put up in Q4? And then I'll just go ahead and ask a quick follow-up right here, you know this is a question for Mike, just wondering if you could comment on TAVR and what you're seeing since the presentation of the data at ACC because the TAVR number looked maybe a smidge lighter than we were thinking so those are the two questions, thanks for taking them?

Karen, you want to take the… Karen L. Parkhill: Sure, thanks Bob, appreciate the question. So, in the first quarter we have guided to 2% to 2.5%, and as you know the fourth quarter came in a little better than we expected. Recall that we had guided around 3% for the quarter and we came in at 3.6%. So given the strong finish to the fiscal year it's likely that we'll see a little bit of softness in the first quarter. We also have the lingering effect of the sterilization issue in MITG. We did use our inventory on hand to help mitigate that in the fourth quarter and now we have less on hand as we move into Q1. We expect the sterilization issue to be behind us as we said at the end of the quarter but will face some slowdown in revenue given that probably to the tune of about 20 million to 30 million which is about 100 bps of MITG growth there. And then, as you know, Q1 will be the first quarter, the full impact of the DCB issue following the uncertainty of the FDA announcement in June. That could be another $20 million to $30 million headwind in CVG and about 100 basis points of CVG growth. But as we noted on the call we do expect our growth to accelerate over the course of the year as we anniversary various headwinds and we introduce our strong pipeline. I'll let Mike answer the TAVR question. Michael J. Coyle: Yeah Bob thanks for the question. We were quite pleased with the TAVR number. I think the overall growth rate for both -- the global growth rate was around 11%, U.S. growth rate around 12%, and we were very much in line with that. The announcements at ACC obviously were for low risk and there have been no low risk approvals yet. And of course there's no reimbursement for products that are unapproved. So, we didn't see a marked increase in penetration of that group that will follow after the FDA does the actual approvals of the expanded indication for use. But I would point out that a year ago we were much more active in terms of opening up new accounts which carries with it stocking that would have -- could have more revenue in the prior year number. So, implant growth rates for us were more in the mid-teens rate in the U.S. So, we're very pleased with obviously the momentum in the business and especially with the potential to further grow it in the low-risk patient population.

Great, thank you.

Thanks Bob. Next question please Carol.

Our next question comes from David Lewis from Morgan Stanley. Please go ahead.

Hi, good morning. Just one for Karen and one for Hooman here. So Karen, I wondered if you could help us with earnings per share for 2020, other income was a significant driver of EBIT in 2019, we also had a very significant debt restructuring. So, as you think about 2020, can you just sort of help us understand our assumptions what they should be as it relates to other income and more specifically, actually interest expense because to us the earnings guidance looks a little conservative, so any help there will be very helpful? Karen L. Parkhill: Sure, thanks for the question David. So, on other income, it was a little strong this quarter, and we had a significant strength in it from just the currency and our hedging program. But we also did have other royalty expense come in better, and as we focused on driving improved royalty income where we can, you're seeing that play out and that should continue. In terms of the debt restructuring, we were obviously pleased with the euro debt offering in our U.S. debt tender, and going forward you should expect around 200 million to 210 million a quarter in interest expense from us.

Okay, that's very helpful. And then just, Hooman a quick question on diabetes. I think, in the recent months, there's been sort of this emerging concern that the industry is changing very rapidly just given reimbursement, regulatory, and various technology changes. I just wondered if you could help us understand how is Medtronic positioned over the next one to two years from a share perspective in both your pump and CGMS business, and do you think an independent diabetes business would allow you to adapt or grow more quickly? Thanks so much.

Sure, thanks David, let me actually take the second one first. We get a lot of benefits from being part of Medtronic. The scale and breadth of the company we leverage every single day with respect to things like wafer scale technology that we're doing with CVG. As we think about global expansion, we leverage our regulatory resources and relationships around the world so there's tremendous benefit and I think that helps us drive the growth that we need. Now with respect to the competitive positioning and all of that, for all that's been said and written about the competition and its impact on us let me just maybe give you a few data points with respect to how we finished. First our installed base in FY 2019 grew by mid single digits. This is true globally as well as in the United States. In addition our patient retention rates were in line with historical rates globally and as we think about FY 2020 we see a lot of things to be excited about, international that you heard from the commentary is going to be and continue to be a big portion of our growth. This is about 45% of our global revenue and it's growing in the mid teens and we expect it to grow in the mid teens. And the other dynamic that we outlined at the Analyst Day is the CGM penetration and the CGM growth of our installed base as well as standalone CGM growth which had four consecutive quarters of triple digit growth. You put all of those things together David we feel really good about our ability to be accretive to overall Medtronic in FY 2020 and that's even before we talk about the pipeline that we will share with you at ADA which is incredibly exciting and will bring a whole host of new innovation over the next 24 months.

Thanks David, can we take the next question please Carol.

Our next question comes from Vijay Kumar from Evercore ISI. Please go ahead.

Hey guys, congrats on a nice quarter here. Two quick ones for me one product and one maybe on the guidance here. On the product side Omar you know the robot at the Analyst Day this is new information to this, there had been some concerns maybe this could get pushed out. I'm just curious on is this now the preview of the robot, does that mean we could see a launch of the robot end of the year, some really nice Mazor X number so is that sort of a preclude to what we could see on the surgical robotics side in terms of RAM? And then on the guidance front Karen you mentioned tax headwinds, are the tax regulations finalized and if they are finalized when we think about fiscal 2021 are there any tax planning new structures that you could put in place to offset some of this as we look forward for 2021? Thank you.

Okay, let me start on the robot and I will let Bob also comment on it. First of all you'll see the actual robots when we invite you, that is the product that we intend to commercialize. And I think our commitment for an FY 2020 launch is delayed [ph] as I mentioned in the commentary. But let me just say a little bit about the comparison of the Mazor X, as you know Mazor X is a different robot. But this methodology of combining our high value consumables which in the Mazor case are actually are tools as well as the spinal implants. In commercial packaging with the capital equipment is a big differentiator for Medtronic and I can tell you that Bob's team is all over this looking at the experiences that we are getting with the Mazor X launch and will translate them. And this is not just the commercial framework, it's how we structure the sales force with the training and whole variety of other areas. So, I don’t know, Bob do you want to add anything.

No, perfect Omar. Vijay, again thanks for the question. We are excited about where we are at with the program. We look forward to learn a lot more this fall when we hold the Analyst Day for you. For obvious reasons we're not going to go into the details of our global launch, and which countries and when. But consistent with Omar said, and consistent with what we said in the past we are preparing for an FY 2020 launch. Karen L. Parkhill: And Vijay in terms of the guidance on the tax headwinds the final regulations are not yet out so it is not final. We will obviously be focused on optimizing our tax rate over time and we've been working on that already. And so you've seen our guide in taxes move from a range of 16.7 to the lower end of that range 16 to 16.5. And of course once the regulations are final we will be focused on continuing to optimize where we can. In terms of FY 2021 our hope is that we can improve from there but we'll see. And if you just think about the guidance that we've given with the tax rate headwind, tax is about $0.20 a headwind on our year. We've offset some of that with the debt offering that we did, call it about $0.08 and we've got the $0.10 headwind on FX. So when you look at all of that together, if you look at our adjusted EPS growth it would be about 8% to 9%.

Thank you guys.

Thanks Vijay. Next question please Carol.

Our next question comes from Robbie Marcus from JP Morgan. Please go ahead.

Great and again congrats. Either maybe for Karen or Omar if you could just talk about some of the product launches into fiscal 2020 and then fiscal 2021, did that give you confidence in accelerating growth throughout the course of this year and also I think it's great to hear accelerating growth in fiscal 2021 as we sit here over a year out from that. What are the products that gives you confidence?

Well there's a whole series of them and I'll go through them because they're all contributing and they're all exciting. First the low risk indication on the TAVR plus they have a little pro launch which gives you a launch of [indiscernible] sheets, that's in FY 2020. Together with that the LINQ 2 which we're really excited about with more accuracy, with more physiological parameters as well as Bluetooth connectivity. That sensitivity like straight up in FY 2020. And then in RTG you have the recurrent RF ablation system in the [indiscernible] MRI. I mean these are continuous innovation products that we think will make a difference and then back to CVG actually the Micra AV which will have an October submission and we expect sometime late in the year sales to start, will also have a carryover into FY 2021 on a strong basis. And then last but not the least diabetes which we expect the 780 to launch towards the end of the year as well as the non-adjective [ph] labeling which will allow us greater market access and that will happen much sooner in the year. So, those are things that we can talk about like right now in FY 2020 and all of these will in many ways carry on into FY 2021. But there are specific ones and I will repeat the Micra AV because that'll have a full year benefit and that's a big disruptive program for FY 2021. But also the DiamondTemp RF ablation catheter that comes out of CVG and then RTG has all series of products. You know the DBS percept product from neuro modulation which is the first product of sensing that will be launched in FY 2021. In addition to that in terms of health the interest in Micra which we will launch again early in FY 2021 maybe towards the end of FY 2020. And the diabetes will have continued roll out of the 780G which will have significant benefits which are mentioned in the commentary. And again RTG the soft tissue robotics which I just talked about will launch in FY20 but the full benefit of that we will start to see in FY 2021. So that's a lot of products and I'm telling you I didn't even mention all of them. There are some in staplers and other areas in neurovascular, and so there is a whole series of products that continue our momentum in CRHF. So, we're pretty excited and the pipeline here is solid. These are solid products, many of them very close to launching and others close to approval. So we're really excited about this. Karen L. Parkhill: And Robbie our pipeline is the most exciting but I would just remind you too that particularly in CVG we have some anniversary of some headwinds that will help us with the growth acceleration as well. We had the accounting change in our services and solutions business in Q2 which is one anniversary. We'll anniversary the loss of our MCS share loss in Q3 and then we'll have a partial anniversary of the drug coated balloon issue in Q4.

That's really helpful. And maybe Karen just a follow-up for you, appreciate all the commentary on the operating margin progression through the year. Is there any help you can give us on maybe gross margin versus operating margin and how currency might flow through that line item? Thanks. Karen L. Parkhill: Thanks for the question. On gross margin, the gross margin as you know can be impacted by our product mix. And so you haven't seen at least in FY 2019 expansion in gross margin. We've driven the expansion in operating margin and SG&A. While our enterprise excellence program is designed to offset the pressure that we have in pricing and mix there could be some years where we see expansion in gross margin but I wouldn't count on a lot there. In terms of FX we do have an FX headwind next year and that should show up some in the gross margin line.

Great, thank you Robbie. Can we go to the next question please Carol.

Our next question comes from Joanne Wuensch from BMO Capital Markets. Please go ahead.

Thank you for taking the question, can you hear me okay.

Yes we can, go ahead Joanne.

Wonderful, I have two questions, the spinal cord stimulation market could you please give us an update on your view of that, I think you mentioned that you believe that Medtronic grew faster than the market in the quarter? And then my second question has to do with the paclitaxel panel that's upcoming, what do you think we should expect out of that? Thank you.

Okay, thanks Joanne. I will let Geoff take the spinal cord question and then over to Mike. Geoffrey S. Martha: Yeah, so Joanne, how are you doing. On the spinal cord stimulation market it is a little bit down, flash to even down last quarter. But we did -- and Intellis is performing strong relative to the competitors. We are getting great feedback on the battery, the recharge speed, and how long the charge lasts, and the outcomes we're getting from the overall workflow which will be published in the Vectors [ph] trial and the Vector study. So we're getting a great feedback and we've picked up by our estimates about two points a share year-over-year and we're back to the number one share position which is first time in two and half years. So we're feeling good. Now the overall market like I said I wish it were growing faster. It has slowed and we have a couple thoughts on that. I mean one is that we see a lot of technology that's been -- we are on the back-end I would say of a nice wave of technology, innovation, and clinical indication expansion and we are in the back end of that. And then there are -- I wouldn't say there's new payer policies out there but there is increased payer scrutiny that we're seeing really primarily driven by the performance of our competitors devices that is as far as the market. Michael J. Coyle: And then on the question of the paclitaxel, obviously we are looking forward to that opportunity to broaden the discussion of the data that's available on paclitaxel product. Obviously we have full visibility to our own data and are very confident in the performance of our admiral product because we have over 1800 patients worth of data that has been carefully followed. So from my perspective the discussion to date has really focused on the three PMA submissions from Medtronic -- and I think there's a much broader set of data to be looked at in all cases it is more favorable from our perspective. First, there's additional follow up that capture patients who wants to follow up in the data that we have been doing and it's certainly been helpful to the overall numbers for the submissions on the PMA data which will be presented at the session. In addition we have other data sets, the Japan randomized controlled study of 100 patients that basically not only showed no statistical difference in death rates between PCP and balloons but also showed a numerical higher rate in the PTA arm. And then we'll also be submitting data from the impact deep study which is in the critical and ischemia group which is a study that was sized very similar to the FFA study at the FDA referenced 358 patients and followed after five years. And in fact there we saw a higher death rate associated with the PTA arm then the DCB arm is five years. So these additional data sets we think will be helpful. They are also data sets that we would expect to see from patient net analysis that they are doing as well as we think there will be interesting data from claims analysis that should be helpful. Of course we don't have visibility to all of the other company's data. So we'll only see those when we get to the actual panel itself but everything we have seen has us even more comfortable than we were in the beginning in terms of the safety of these products and they are profoundly efficacious for limiting reinterventions in the patient group. So we go into the meetings, we believe the data is very strong but it's important to understand that no studies have been sized to answer the question of mortality in this patient group and so it's going to be important to us that we look at the risk benefit of these datasets and as I said everything we've seen from our own data sets which are the largest in the industry make us very confident.

Thank you very much and good quarter.

Thank you Joanne. Next question please Carol.

Our next question comes from Matt Taylor from UBS. Please go ahead.

Thank you for taking the questions. I just had one follow up on the paclitaxel question, I wanted to understand if you had a view on PCR statement that came out this week, it seems relatively favorable. If you could talk about how much of a headwind is baked into your guidance or maybe if things go well in June, how much of that you think could come back?

So, we were pleased to see the PCR statement, it certainly was a more encouraging or let's say softer statement than FDA had made basically pointing out the limitations as a matter of analysis data that has been shown. And reinforcing the efficacious nature of these products in terms of improving patient outcomes. So, they were clearly more balanced in their view than we have seen in the FDA discussions. Now obviously we'll see more data coming in and we'll have to weigh that. In terms of how we have provided guidance we're basically assuming that what FDA has stated is going to remain for the entire balance of the year and obviously we've seen how the market has reacted to that and so we just extrapolated that out through the rest of the year. So if FDA were to become more favorable in their commentary obviously that could have improve outcomes. But right now our guidance would assume there will be no change coming out of it.

Thank you. And then just wanted to ask one question on neuro. So, the neurovascular growth is very strong, could you talk about some of the components of that and whether you're seeing a stronger market there, are there any product launches that help you this quarter? Michael J. Coyle: Sure, first of all in neurovascular we have -- Medtronic we have a broad portfolio playing in every segment and that is our strategy and we're in number one positions in both ischemic and overall hemorrhagic. And we've recently refreshed that entire portfolio. Nobody else can say this but it's a very strong market, we're very well positioned across every segment. Now what's driving our growth in the near term is first of all entering the aspiration market, we have already launched the 068 and now the 071. Riptide systems are catheters and we've got, we're getting really, really positive feedback on both. The 068 started out a little slow because we had to make some adjustments to. We had soft launch, made some adjustments to the product and now it's picking up. The 071 hit the ground running, we're getting great feedback, and we estimate that we're somewhere around 15% of this market already, well ahead of our plans in the aspiration segment, well ahead of our plans. We see ourselves getting to 25% by the end of the fiscal year and we think we will eventually get to 50% of this aspiration market. And on top of that we just launched our next gen stent retriever to maintain and extend our lead in that segment. So those are some of the things that are driving it. And I think the other big drivers is the global nature. We're just growing very fast in China and so the fact that we're global is also helping especially in China. So it is a global and broad refresh product portfolio.

Thank you, great color, thanks.

Thanks Matt, next question please.

Our next question comes from Kristen Stewart from Barclays. Please go ahead.

Hi, good morning and thanks for taking the question. I just wanted to just talk a little bit just about the free cash flow. You guys did a great job of really improving the metrics there. How should we just think about the deployment of capital, I know in the prepared remarks you talked about the commitment to at least 50% to shareholders but how should we just think about more on the M&A side, I think you mentioned tuck ins but should we expect an increase in the rate of maybe acquisitions going forward and more focus on products and really leveraging the portfolio or just how should we think about that going forward?

I think Kristen you're sort of on the right track there. Yes, we have a lot of fire power here and we're building it and we intend to use it in M&A and focus on M&A indeed isn’t tuckins that accelerates our growth. And examples of things that we've already done expect more of the same. We just said the title [ph] is fine acquisition with Epix Therapeutics earlier in the year with Nutrino Health which is a great bug into diabetes by far with the nutritional database and you will see that, that works through into our next generation pumps. And then the Mazor X obviously which is -- I congratulate Geoff on that one because that's a great acquisition and what it is really pulling through in spine. So, those are examples and they're not all exactly that small either and we expect more of that. Now we will always be disciplined about this. We will look at the returns that we get and it has to be above our cost of capital. We look at the strategic fit and we look at the earnings impact and we look at those three things in a balanced manner as well as our team's ability to execute and put all that together and that's the strategy that we have for M&A and we've got tremendous firepower and you will see us accelerate that process as much is available.

Okay, so it sounds like kind of taking the M&A focus and driving more depth across the businesses versus going broader, you feel like you're in all those spots that you are and need to be?

Yeah, that is correct. They are sticking out there that helps the growth of our current business.

Okay, thanks very much.

Thanks Kristin. Next question please.

Our next question comes from Larry Biegelsen from Wells Fargo. Please go ahead.

Good morning, thanks for taking the question. One high level question for Omar, one product related question for Geoff. So Omar it feels like there's been a little bit of a shift in the regulatory environment towards more post market action from FDA. Do you agree with that, has anything changed on the premarket approval side, and what are the implications for Medtronic? And second for Jeff, there's a new competitor coming out in sacral neuro modulation space potentially second half of this calendar year. So what's your plan for protecting your position in that market and just remind us of the timeline for your next generation smaller rechargeable device, I think I heard earlier fiscal 2021? Thanks for taking the questions guys.

Okay, you know first of all the FDA question. Look The FDA's fundamental mission is to protect the safety of the American public and they do an excellent job in fulfilling that mission. And I think as more data becomes available they're using it wisely to make sure that their post market studies and that the approval process has in it enough of the safety profile and we are completely supportive of that. They're working closely with the industry in making sure that approval process are accelerated the right way but not compromising safety at any time. So we are pretty supportive of the moves that they're making. And we don't really see any major changes to the device approval framework that it has in place. I think that's about it. Geoff, you want to talk about sacral nerve. Geoffrey S. Martha: Sure, hey Larry. So good question. I think first and foremost regarding our new product that come into market we expect it to launch in the beginning of FY 2021 and it is going to be this is a rechargeable device with really strong MR labeling and about a 3cc device. So, with our overdrive battery technology on this which we've proven with Intellis and pain stim it's just superior. And so between the size and the overdrive technology we think this is a winner. The product that a competitor is launching here in the near-term will also be a rechargeable device but I think it's 5.5cc. So I think we compare it very well and the gap between when they launch, we expect them to launch. We don't know -- we don't really know, we don't know how the FDA is going to treat things like cyber security and things like that. So we really don't know when they're going to launch but conservatively for us we expect a three to four quarter gap there. And look Larry, I can say this, this isn't the first time that we have faced at RTG a new competitor coming into our markets that we've pioneered and we maintain a high share. And I'd like to think and matter of fact I'm confident we've learned from these experiences which have been painful especially like pain. When you go back to think about pain stim we have learned, we have built these lessons learnt into our commercial playbook. We changed our commercial leadership across RTG and all I can say is we are ready. And I don’t know what else to say we're ready for this.

Thank you guys, thanks for taking the questions.

Thanks Larry, next question please Carol.

Our next question comes from Matt Miksic from Credit Suisse. Please go ahead.

Hi, thanks for taking the questions. So I thought maybe just a couple of quick pipeline type questions if you could expand on your thoughts around a few things. Just one on uninterrupted any update on the transeptal delivery system pathway forward on that and thoughts on left atrial appendage closure which is something that you ought to be and I'm sure you plan to be exposed to? And then the second just kind of general topic, we see often in these meetings a lot of activity, clinical evidence, interest around innovation kind of rebounding for both hypertension and arrhythmias and just if you could update us on your intermediate or long term strategy for returning simplicity to commercial products, appreciate your thoughts? Michael J. Coyle: So I'll take those questions, uninterrupted we do expect in the fiscal year to do our first transeptal [ph] version of it. So that work is progressing and we're confident we're going to find a path forward to just as we did in the TAVR world to start with the valve that was critical [ph] but then move up to transeptal delivery system. On that appendage closure we do not currently have a product in development that we very -- follow developments in this space very carefully. We do have a lot of competency in our structural parts business that's applicable to this space. But we also would want to have a superior product before entering into that type of market. So we have a list of designs that we're interested in but we have no announcement to make today on that topic. And renal derivation is actually progressing as we discuss. We expect to have the pivotal trial result presentations next spring which will be sort of key to the FDA approval cycle. But as you pointed out there's a lot of clinical evidence being generated around this topic that has been presented both at -- PCR meeting here the week as well as at the HRS meeting two weeks ago. In support of both of those clinical trials is both very supportive of the technology. And the ones on atrial fibrillation were particularly interesting. We sponsored one that was presented to both clinical trials here this week at PCR. It basically showed a 60% reduction in patients who develop atrial fibrillation in a highly selective group of patients who had hypertension and were randomized to renal renovation. So the data continues to be very encouraging but obviously given the events of the [indiscernible] study results it will be very important that we have highly controlled data to show the efficacy of this product and we're very confident based on the pilot studies that we have already published on and the trial we are executing with FDA that when we get to next spring we're going to have some very good efficacy and safety data to discuss. So, we are excited about that market.

Thanks.

Our next question comes from Josh Jennings from Cowen. Please go ahead.

Hi, good morning, thanks for taking the questions. I was hoping to ask Mike just about curriculum in heart failure and the road to recovery there is about half of the revenue pie for CVG. And maybe you could just focus on the anchors, high voltage and LVADs whether we just had to wait for anniversaries or is there anything incremental you can share in terms of returning those businesses either to flatter or back to growth and then just to add on follow-up at each rest you had some really interesting data on some pipeline products post field ablation and the extra vascular ICV and just any incremental thoughts there in terms of the signal that those data sets provided and your outlook for those two platforms? Thanks a lot. Michael J. Coyle: True, starting with the portfolio of product lines. Actually on the CRT side we have I think some very exciting product development activities in addition to some easing headwinds and obviously the biggest challenge we've had in CRT has been we've significantly extended the battery life of these products. We have run into that replacement headwind and as you know in the CRT space for high power half the market is replacements. We still have a few quarters to go in terms of those headwinds being significant but as we head into next year into FY 2021 we actually see that go neutral and that will really help us in terms of just the overall growth profile of the business. But beyond that at HRS we launched the first active fixation Quadripolar [ph] lead for use in CRT for both CRTD and CRTP which physicians seemed very excited about and we have our new Galaxy platform, our next generation of ICD's releasing in the third quarter which basically will both add Bluetooth connectivity to the product but also some very important pacing features that both will enhance the performance of our products from atrial fibrillation perspective as well as from heart failure rehospitalization rate. So those will be I think really helpful in terms of just getting our CRTD and CRTP product lines accelerating from where they have been and then obviously we'll get the headwind going away as we head into FY 2021. On the LVAD side obviously we saw a fairly significant reduction in market share that took place at the middle of the year as a result of competitive product launches. We are going back on the offensive with our lateral data to basically take advantage of the smaller size of the HVAD system to basically show lower complication rates in surgical implants of the thoracotomy approach to the placement of the device. And we also think the data sets around the stroke are going to be in our favor as we get further evidence of the performance of these products. And so obviously the anniversary in the second half of next year is going to be very helpful to our overall growth rate but then obviously we're hoping to take sequential market share as we take advantage of the performances of the product. And then in terms of your question around the PSA and EVICD [ph], we're very excited about both of those programs. We would expect to basically go into pivotal studies with the EVICD this year which obviously has the benefits over existing sub cue products of actually allowing antitachy pacing and post op pacing to be done with the products. So, that we think will provide a big advantage. It's also got a footprint that looks like a standard ICD as opposed to much larger device you see in the sub cue application. And so we believe that will carry with it benefits at implant including potentially lower infection rates. And then PSA is probably the most exciting thing that we see in the holy atrial fibrillation ablation space. This allows us to actually do ablation without thermal energy either heating or cooling by essentially disrupting the miosites directly which has the potential to really address all of the major complications associated with atrial fibrillation or ablation of atrial fibrillation. So that coupled with our entry into the focal ablation segment with the Epix device, the DiamondTemp device really now significantly broadens our portfolio from what we have traditionally been cryo company focused on PAF ablation. So really nice work by the team to basically expand our product offerings. Both EVICD and PSA of course are beyond the FY 2020 window but we will speak to those I'm sure at the Analyst Meeting next year to give you more guidance as to when we expect them to be major revenue drivers for us.

Thanks Josh. We'll take one more question please Carol.

Our next question comes from Pito Chickering from Deutsche Bank. Please go ahead.

Good morning guys, thanks for squeezing me in here. A few questions on China. China is obviously a very important market for you guys. It looks like revenues in China slowed in the quarter to 13% from 16% last quarter. How are the tariffs impacting that business, what growth are you embedded within the 2020 guidance and how should we think about the doubling of tariffs and how that impacts your growth in that market?

Well, first look we're really excited about China and that is an important market like you point out and it will be the biggest health care market just by the size of the population and opportunity. So it's a market we intend to be present in. And look we are quite pleased with our performance. I mean, the business certainly grew sequentially quarter-over-quarter and it continues to grow and we expect pretty reliable double-digit growth from China on a very consistent basis and we're getting that. And so it is a market that we are committed to, one that we see is a big growth driver for us. The tariffs do pose somewhat of a headwind in terms of our margins but it's one that we will cover and we will offset. We faced some of that in FY 2019 which we successfully managed to offset and we don't expect a major increase in FY 2020 but there may be some towards the back half of the year which we will manage. But more importantly the need for our products in the Chinese population is very clear. So the demands from both the doctors and the patients and we will follow through with that. We have an outstanding team there with scale, with critical mass, presence in the big cities as well as the outlier regions in private hospitals as well as the government hospitals. And all of those are growth drivers for us across the board and in all our businesses. So make no mistake China is a big priority for us that we're all focused on and we're very confident that it will be a continued consistent growth driver in the double-digits for Medtronics.

Okay, and one follow up, this is a very big quarter on Mazor, because the pipeline looks for new robot sales in 2020 and how does this spike similar market share and households we had robot installed for over a year changed. Michael J. Coyle: Can you repeat the second part of that question, the first part was...

Leave it. For hospitals where the robot has been for over one year how would you spike assumable if market share changed within that year? Michael J. Coyle: Well, I will start with that question. I mean we are definitely seeing where we have robots installed and to your point up and running and we've trained the physicians and the surgical teams and our reps. We're clearly seeing faster growth and greater market share versus accounts that we don't have a robot. And that same can be said to maybe a slightly lesser degree when we have navigation in the OR without the robot. So basically we have enabling technology, our value proposition is better and we're seeing faster growth and better market share. We're seeing it quite a bit different and especially in competitive accounts. And the difference I'd say from a competitive standpoint between just having nav in OR versus having nav arm and the robot is the amount of competitive accounts that we're getting into. Customers that are big spine centers where we were zero and our competitors had these accounts very well covered. They're calling us and we're getting in there and not only getting robotic share but we're getting non-robotic cases. So, it is quite dramatic and so we're very happy with it. It's the overall value proposition of all of this technology working together. And the path to better outcomes for patients and better financial outcomes for the hospital and we're building evidence around both of those. So in terms of the outlook going forward we feel bullish. So far it's much better than our deal model, Mazor sales and for a variety of reasons. And we feel that we continued strong double digit growth in this area based on the existing -- we just launched the Mazor X edition with navigation, we just launched that. And so that still has a lot of runway but we have a series of continuous innovation on top of that, things like so we can navigate with the robot more of our enabling technology like more of our mileage platform drills and such. And then we will be which I don’t want to talk about for competitive reasons we will be adding other features that I think are even more differentiated that will improve basically the spine procedures. Take time out of these spine procedures and also drive more consistent reliable outcomes. So we feel very strong and that's what's generating excitement around the robot is the improvement in outcomes.

Great, thanks so much.

Thanks Pito, Omar do you want to…

Yeah let me just close out, thanks to all of you for your questions. And on behalf of our entire management team thank you for your continued support and your interest in Medtronic. We look forward to updating you on our progress on our Q1 earnings call which we currently anticipate holding on Tuesday, Aug 20th and with that thank you again very much.

This does conclude today's conference call. You may now disconnect.