Medtronic 2014 Annual Report Download - page 87

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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
Fiscal Year 2012 Initiative
In the fourth quarter of fiscal year 2012, the Company recorded a $118 million restructuring charge, which consisted of
employee termination costs of $66 million, asset write-downs of $9 million, contract termination costs of $30 million, and other
related costs of $13 million. The fiscal year 2012 initiative was designed to reduce general, administrative, and indirect
distribution costs in certain organizations within the Company while prioritizing investment in research and development, and
sales and marketing in those organizations within the Company where faster growth is anticipated, such as emerging markets
and new technologies.
As of the end of the fourth quarter of fiscal year 2012, the Company identified approximately 1,000 positions for elimination to
be achieved through involuntary and voluntary separation. As of April 26, 2013, the fiscal year 2012 initiative was substantially
complete.
In the fourth quarter of fiscal year 2013, the Company recorded a $10 million reversal of excess restructuring reserves related to
the fiscal year 2012 initiative. This reversal was primarily a result of revisions to particular strategies and certain employees
identified for elimination finding other positions within the Company.
A summary of the activity related to the fiscal year 2012 initiative is presented below:
Fiscal Year 2012 Initiative
(in millions)
Employee
Termination
Costs
Asset
Write-downs
Other
Costs Total
Balance as of April 29, 2011 $—$—$—$—
Restructuring charges 66 9 43 118
Payments/write-downs (2) (9) (16) (27)
Balance as of April 27, 2012 $ 64$ —$ 27$ 91
Payments (54) — (23) (77)
Reversal of excess accrual (10) — — (10)
Balance as of April 26, 2013 $—$—$ 4$ 4
Payments — — (4) (4)
Balance as of April 25, 2014 $—$—$—$—
4. Acquisitions and Acquisition-Related Items
The Company had various acquisitions and other acquisition-related activity during fiscal years 2014, 2013, and 2012. 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. 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 25, 2014, April 26, 2013, or April 27, 2012. 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 2014
TYRX, Inc.
On December 30, 2013, the Company acquired TYRX, Inc. (TYRX), a privately-held developer of antibiotic drug and
implanted medical device combinations. TYRX’s products include those designed to reduce surgical site infections associated
with implantable pacemakers, defibrillators, and spinal cord neurostimulators. Under the terms of the agreement, the transaction
included an initial up-front payment of $159 million, representing a purchase price net of acquired cash, including the
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