Medtronic 2010 Annual Report Download - page 93

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89
Medtronic, Inc.
Company does not agree with, the Company has filed its protest
with the IRS. As the statute of limitations for these tax years
expire in December 2010, the Company expects that the IRS will
issue a Notice of Deficiency for these remaining issues during the
Company’s fiscal year ending April 29, 2011 and Medtronic will
proceed to attempt to resolve these matters either at the IRS
Appellate level or in the courts, if necessary.
The Company’s reserve for the uncertain tax positions related
to these significant unresolved matters with the IRS, described
above, is subject to a high degree of estimation and management
judgment. Resolution of these significant unresolved matters, or
positions taken by the IRS or foreign tax authorities during future
tax audits, could have a material impact on the Company’s
financial results in future periods. The Company continues to
believe that its reserves for uncertain tax positions are appropriate
and has meritorious defenses for its tax filings and will vigorously
defend them during the audit process, appellate process and
through litigation in courts, as necessary.
15. Retirement Benefit Plans
The Company sponsors various retirement benefit plans, including
defined benefit pension plans (pension benefits), post-retirement
medical plans (post-retirement benefits), defined contribution
savings plans and termination indemnity plans, covering
substantially all U.S. employees and many employees outside the
U.S. The cost of these plans was $237 million, $223 million and
$222 million in fiscal years 2010, 2009 and 2008, respectively.
The Company adopted the new measurement date authoritative
guidance for pension benefits effective April 26, 2008. The
adoption of this guidance in fiscal year 2009 resulted in an after-
tax decrease in shareholders’ equity of $13 million, a decrease to
other long-term assets of $5 million and an increase to long-term
accrued compensation and retirement benefits of $8 million.
In the U.S., the Company maintains a qualified pension plan
designed to provide guaranteed minimum retirement benefits
to all eligible U.S. employees. Pension coverage for non-U.S.
employees of the Company is provided, to the extent deemed
appropriate, through separate plans. In addition, U.S. and Puerto
Rico employees of the Company are also eligible to receive specified
Company paid healthcare and life insurance benefits through the
Company’s post-retirement benefits. In addition to the benefits
provided under the qualified pension plan, retirement benefits
associated with wages in excess of the IRS allowable limits are
provided to certain employees under a non-qualified plan.
As of April 30, 2010 and April 24, 2009, the net underfunded
status of the Company’s benefit plans was $411 million and $157
million, respectively.