Medtronic 2007 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2007 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 96

  • 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

&'#>cXdbZIVmZh
I]Zegdk^h^dc[dg^cXdbZiVmZh^hWVhZYdcZVgc^c\hWZ[dgZ^cXdbZ
iVmZhgZedgiZY[dg[^cVcX^VahiViZbZciejgedhZh#I]ZXdbedcZcihd[
ZVgc^c\hWZ[dgZ^cXdbZiVmZhVgZ/
Fiscal Year
2007 2006 2005
U.S. $ 1,579 $ 1,581 $ 932
International 1,936 1,580 1,612
Earnings before income taxes $ 3,515 $ 3,161 $ 2,544
I]Zegdk^h^dc[dg^cXdbZiVmZhXdch^hihd[/
Fiscal Year
2007
2006
2005
Current tax expense:
U.S. $ 712 $ 471 $ 517
International 239 11 390
Total current tax expense 951 482 907
Deferred tax expense (benefit):
U.S. (216) 159 (192)
International (22) (27) 25
Net deferred tax expense (benefit) (238) 132 (167)
Total provision for income taxes $ 713 $ 614 $ 740
9Z[ZggZYiVmZhVg^hZWZXVjhZd[i]ZY^[[ZgZciigZVibZcid[
igVchVXi^dch[dg[^cVcX^VahiViZbZciVXXdjci^c\VcY^cXdbZiVm
VXXdjci^c\!`cdlcVhÆiZbedgVgnY^[[ZgZcXZh#ÇI]Z8dbeVcngZXdgYh
i]Z iVmZ[[ZXid[i]ZhZ iZbedgVgn Y^[[ZgZcXZh Vh ÆYZ[ZggZY iVm
VhhZihÇVcYÆYZ[ZggZYiVma^VW^a^i^Zh#Ç9Z[ZggZYiVmVhhZih\ZcZgVaan
gZegZhZci^iZbhi]ViXVcWZjhZYVhViVmYZYjXi^dcdgXgZY^i^cViVm
gZijgc^c[jijgZnZVgh[dgl]^X]i]Z8dbeVcn]VhVagZVYngZXdgYZY
i]ZiVmWZcZ[^i^ci]ZXdchda^YViZYhiViZbZcih d[ZVgc^c\h# I]Z
8dbeVcnZhiVWa^h]ZhkVajVi^dc VaadlVcXZh[dg YZ[ZggZYiVmVhhZih
l]Zci]ZVbdjcid[ZmeZXiZY[jijgZiVmVWaZ^cXdbZ^hcdia^`Zan
idhjeedgii]ZjhZd[i]ZYZYjXi^dcdgXgZY^i#I]Z8dbeVcn]Vh
ZhiVWa^h]ZYkVajVi^dcVaadlVcXZhgZaViZYidXZgiV^cVXfj^h^i^dchi]Vi!
^[cdijai^bViZangZfj^gZY!l^aagZhjai^cVgZYjXi^dcid\ddYl^aa0i]ZhZ
VaadlVcXZhlZgZoZgdVcY(&Vi6eg^a',!'%%,VcY6eg^a'-!'%%+!
gZheZXi^kZan#I]Z8dbeVcn]VhZhiVWa^h]ZYkVajVi^dcVaadlVcXZh[dg
XVe^iVaadhh XVggn[dglVgYhVcYYZ[ZggZYiVmZhl]^X]VgZXVe^iVa^c
cVijgZ^ci]ZVbdjci d[(*VcY&Vi6eg^a',!'%%,VcY 6eg^a'-!
'%%+!gZheZXi^kZan#>cVYY^i^dc!ViWdi]6eg^a',!'%%,VcY6eg^a'-!
'%%+!Veegdm^bViZan)d[cdc"J#H#iVmadhhZhlZgZVkV^aVWaZ[dg
XVggn[dglVgY#I]ZhZXVggn[dglVgYhVgZd[[hZiWnkVajVi^dcVaadlVcXZh
VcY\ZcZgVaan YdcdiZme^gZ#I]ZXVe^iVaadhhXVggn[dglVgYhZme^gZ
l^i]^cdcZid[^kZnZVgh#9Z[ZggZYiVma^VW^a^i^Zh\ZcZgVaangZegZhZci
iVmZmeZchZgZXd\c^oZY^ci]ZXdchda^YViZY[^cVcX^VahiViZbZcih[dg
l]^X]eVnbZci]VhWZZcYZ[ZggZYdgZmeZchZ]VhVagZVYnWZZciV`Zc
VhVYZYjXi^dcdci]Z8dbeVcnÉhiVmgZijgc!Wji]VhcdinZiWZZc
gZXd\c^oZYVhVcZmeZchZ^ci]ZXdchda^YViZYhiViZbZcihd[ZVgc^c\h#
9Z[ZggZYiVmVhhZih$a^VW^a^i^ZhVgZXdbeg^hZYd[i]Z[daadl^c\/
Fiscal Year
2007 2006
Deferred tax assets:
Inventory (intercompany profit in inventory and
excess of tax over book valuation) $ 235 $ 207
Convertible debt interest 314 197
Accrued liabilities 86 81
Allowance for doubtful accounts 52 62
Warranty reserves 13 20
Unrealized loss on minority investments 11 39
Unrealized loss on investments 37 Ñ
Pension and post-retirement benefits 29 Ñ
Stock-based compensation 71 3
Accrued losses on legal settlements Ñ9
Other 128 152
Total deferred tax assets 976 770
Deferred tax liabilities:
Intangible assets (280) (394)
Accumulated depreciation (13) (42)
Pension and post-retirement benefits Ñ(87)
Unrealized gain on investments Ñ(5)
Other (74) (67)
Total deferred tax liabilities (367)(595)
Deferred tax assets, net $ 609 $ 175
I]Z8dbeVcnÉhZ[[ZXi^kZ^cXdbZiVmgViZkVg^ZY[gdbi]ZJ#H#
;ZYZgVahiVijidgniVmgViZVh[daadlh/
Fiscal Year
2007 2006 2005
U.S. Federal statutory tax rate 35.035.0% 35.0%
Increase (decrease) in tax rate resulting from:
U.S. state taxes, net of Federal tax benefit 1.2 0.9 0.9
Research & development credit (0.4) (0.4) (0.6)
International
(12.9
)(10.9) (7.7)
Impact of repatriation, special,
restructuring, certain litigation,
and IPR&D charges 0.3 1.9 1.6
Reversal of excess tax accruals (3.7) (7.1) Ñ
Other, net 0.8 Ñ (0.1)
Effective tax rate 20.319.4% 29.1%
9jg^c\i]Z[djgi]fjVgiZgd[[^hXVanZVg'%%,!i]Z8dbeVcn
gZXdgYZYV&'.iVmWZcZ[^iVhhdX^ViZYl^i]i]ZgZkZghVad[ZmXZhh
iVmVXXgjVah^cXdccZXi^dcl^i]i]ZhZiiaZbZcigZVX]ZYl^i]i]Z>GH
^ckdak^c\i]ZgZk^Zld[i]Z8dbeVcnÉh[^hXVanZVg'%%(VcY[^hXVanZVg
'%%)YdbZhi^X^cXdbZiVmgZijgch!i]ZgZhdaji^dcd[XdbeZiZci
Vji]dg^in^hhjZh[dg[^hXVa nZVg&..' i]gdj\][^hXVanZVg'%%%!VcY
BZYigdc^X!>cX#,*