Medtronic to return £3.5bn to shareholders by 2018

Medtronic to return £3.4bn ($5bn) to its shareholders through share repurchases, ‘before the end of fiscal year 2018’

An internal reorganisation of the company in September resulted in cash and cash equivalents of £6.4bn ($9.3bn), Medtronic said and provided it with additional financial flexibility and increased confidence in the company's ability to meet its financial commitments.

The reorganisation, including targeting an "A" credit profile, returning a minimum of 50% of its free cash flow to shareholders through dividends and share repurchases, and pursuing financially disciplined M&A.

The company announced that it intends to return £3.4bn ($5bn) of the £6.4bn ($9.3bn) to its shareholders through share repurchases to be executed before the end of fiscal year 2018. 

The company expects to repurchase shares based on market conditions, with a bias toward repurchasing shares earlier within the time period.

The £3.4bn ($5bn) return to shareholders is in addition to the company's current commitment of returning 50% of its free cash flow each year to shareholders in the form of dividends and share repurchases.

The net result of these capital allocation actions are not expected to materially affect the company's fiscal year 2016 income statement, including expectations for net interest expense, net earnings, diluted weighted shares outstanding, or diluted earnings per share. 

However, the company does expect these actions to be accretive to earnings per share starting in fiscal year 2017.