We’ll also discuss some non-GAAP financial measures with respect to our performance, including in particular, operational growth, which is net sales growth, excluding the affect of foreign exchange.A reconciliation of non-GAAP to GAAP measures can be found in our press release and its related financial tables, as well as in the invest relations section of our website covidien.com. For the third quarter, we reported GAAP diluted earnings per share of $0.70. After adjusting for certain onetime items, our non-GAAP earnings for the second quarter came in at $0.85 per share. Now, I’d like to turn it over to Rich, who will go to more details on the Third Quarter results, Rich. Rich Meelia Thank you, Cole. Before I discuss the Third Quarter, I’d like to make a few brief comments. As you all know, it has been almost exactly three years since we’ve spun off and became an independent company. At our first investor day, immediately appreciating spin, we highlighted five key strategic initiatives. They were focused on growth, commitment to innovation leveraging structure, driving up operational excellence and enhanced portfolio management. Three years later, these key initiatives, as well as our overall company strategy, remain unchanged. The objectives we highlighted to achieve our strategy at that time, included accelerating growth and higher margin franchises, continue improvement in gross margins, focusing R&D and business development on new technology, and managing the portfolio for growth. We successfully delivered against all of these objectives over the last three years. We markedly accelerated the pace of new product launches, significantly increased selling marketing and R&D investments, improved gross margins, reshaped the portfolio by divesting or deemphasizing lower-growth lower-margin businesses, and inquiring new businesses that will accelerate growth, expand our product line and deliver higher margins. Looking at operating margins for example, we committed to making the investments necessary to expand our selling organization, implement R&D investments to drive innovation and create the cooperate structure necessary for a standalone global company.
We knew these investments would put a damper on our operating margins, but I’m pleased to say that we’ve now brought our margins back to the 2007 pre-spin level.So, our strategy is not changed. Our objectives to achieve that strategy are being met, and we are very pleased with the progress we’ve made. However, in our conversations and meetings over the last month or so, we’ve heard that some of you believe we’ve changed our principles and modified the criteria we are using to make investments. Let me be perfectly clear, we have not changed our principles or investment criteria. We continue our rigorous financial evaluation process before we make any investment, large or small. Our investment criteria have not changed. Our capital allocation strategy has not changed. We continue with our disciplined approach to capital and are making investments that we expect will benefit the business over the long-term. We remain committed to maintaining our strong investment-grade rating, to use our balance sheet flexibility and significant free cash flow to make investments necessary to grow the business, and to be prudent in our allocation of capital. Specifically addressing the EV3 acquisition, the business provides significant scale to our existing vascular platform gives us a strong position in both the peripheral vascular and neurovascular categories is consistent with our growth strategy and will benefit from our global footprint and establish capabilities. EV3 has an outstanding product lineup and a robust pipeline of new offerings. We believe that it will accelerate our top-line growth rate, and be additive to our gross margins. On a cash basis, the acquisition will be accretive in the first full year, post close. EV3 is an excellent addition to the Covidien portfolio, and we are highly confident it will drive increase shareholder value. While their results will not be consolidated with ours until the fourth quarter, EV3 registered strong sales growth in their Fiscal Second Quarter ending in June; again exceeding the expectations. Read the rest of this transcript for free on seekingalpha.com