Medtronic 2012 Annual Report Download - page 92

Download and view the complete annual report

Please find page 92 of the 2012 Medtronic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

and post-retirement rules. For further discussion on the incremental defined benefit pension and post-
retirement related expenses, see Note 15. Of the $10 million of asset write-downs, $7 million related to
inventory write-offs and production-related asset impairments, and therefore, was recorded within cost of
products sold in the consolidated statements of earnings.
In the first quarter of fiscal year 2010, in connection with the fiscal year 2008 global realignment
initiative, the Company recorded an $8 million reversal of excess restructuring reserves partially offset by
a $5 million charge related to the further write-down of a non-inventory related asset.
In the fourth quarter of fiscal year 2010, the Company recorded a $12 million reversal of excess
restructuring reserves related to the fiscal year 2009 initiative. This reversal was primarily a result of a
higher than expected percentage of employees identified for elimination finding positions elsewhere within
the Company.
In connection with the fiscal year 2009 initiative, as of the end of the first quarter of fiscal year 2010,
the Company had identified approximately 1,500 positions for elimination which were achieved through
early retirement packages, voluntary separation, and involuntary separation. As of July 30, 2010, the fiscal
year 2009 initiative was substantially complete.
A summary of the activity related to the fiscal year 2009 initiative is presented below:
Fiscal Year 2009 Initiative
____________________________________________
Employee
Termination Asset
(in millions) Costs Write-downs Total
___________ ____________ _____________ ____________
Balance as of April 25, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . $ –$ –$ –
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5 34
Payments/write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (5) (6)
____________ _____________ ____________
Balance as of April 24, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28 $–$ 28
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 10 63
Reversal of excess accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) – (12)
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (64) (10) (74)
____________ _____________ ____________
Balance as of April 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5$ –$ 5
Payments/write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) – (5)
____________ _____________ ____________
Balance as of July 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ –$ –$ –
____________ _____________ ____________
____________ _____________ ____________
5. Acquisitions and Acquisition-Related Items
The Company had various acquisitions and other acquisition-related activity during fiscal years 2012,
2011, and 2010. Certain acquisitions were accounted for as business combinations as noted below. In
accordance with authoritative guidance on business combination accounting, the assets and liabilities of
the company acquired were recorded as of the acquisition date, at their respective fair values, and
consolidated with the Company’s assets and liabilities. The purchase price is recorded based on estimates
of the fair value of assets acquired and liabilities assumed. The pro forma impact of these acquisitions was
not significant, individually or in the aggregate, to the results of the Company for the fiscal years ended
April 27, 2012, April 29, 2011, or April 30, 2010. The results of operations related to each company acquired
have been included in the Company’s consolidated statements of earnings since the date each company
was acquired.
Fiscal Year 2012
Salient Surgical Technologies, Inc.
On August 31, 2011, the Company acquired Salient Surgical Technologies, Inc. (Salient). Salient
develops and markets devices for haemostatic sealing of soft tissue and bone incorporating advanced energy
technology. Salient’s devices are used in a variety of surgical procedures including orthopedic surgery,
spine, open abdominal, and thoracic procedures. Total consideration for the transaction was approximately
75
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)