Medtronic 2015 Annual Report Download - page 99

Medtronic plc
Notes to Consolidated Financial Statements (Continued)
In fiscal year 2015, the Company recorded a reversal of excess restructuring reserves related to the fiscal year 2014 initiative
of $17 million. The reversal was primarily a result of 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 2014 initiative is presented below:
Fiscal Year 2014 Initiative
(in millions)
Employee
Termination
Costs
Asset
Write-downs
Other
Costs Total
Balance as of April 26, 2013 $—$—$—$—
Restructuring charges 65 26 25 116
Payments/write-downs (1) (26) (14) (41)
Balance as of April 25, 2014 $ 64$ —$ 11$ 75
Restructuring charges 1 9 28 38
Payments/write-downs (44) (9) (34) (87)
Reversal of excess accrual (14) — (3) (17)
Balance as of April 24, 2015 $7$—$2$9
Fiscal Year 2013 Initiative
The fiscal year 2013 initiative was designed to scale back the Company’s infrastructure in slower growing areas of the business,
while continuing to invest in geographies, businesses, and products where faster growth is anticipated. A number of factors have
contributed to ongoing challenging market dynamics, including increased pricing pressure, various governmental austerity
measures, and the U.S. medical device excise tax. In the fourth quarter of fiscal year 2013, the Company recorded a $192
million restructuring charge, which consisted of employee termination costs of $150 million, asset write-downs of $13 million,
contract termination costs of $18 million, and other related costs of $11 million. Of the $13 million of asset write-downs, $10
million related to inventory write-offs of discontinued product lines and production-related asset impairments, and therefore,
was recorded within cost of products sold in the consolidated statements of income. In the first quarter of fiscal year 2014, the
Company recorded an $18 million restructuring charge, which was the final charge related to the fiscal year 2013 initiative and
consisted primarily of contract termination costs of $14 million and other related costs of $4 million. As of April 24, 2015, the
fiscal year 2013 initiative was substantially complete.
In fiscal year 2015 and 2014, the Company recorded a reversal of excess restructuring reserves related to the fiscal year 2013
initiative of $10 million and $46 million, respectively. The reversal was primarily a result of revisions to particular strategies
and certain employees identified for elimination finding other positions within the Company.
4. Special (Gains) Charges, Net and Certain Litigation Charges, Net
Special (Gains) Charges, Net
During fiscal year 2015, the Company recognized a $138 million gain, which consisted of a $41 million gain on the sale of a
product line in the Surgical Technologies division and a $97 million gain on the sale of an equity method investment. In
addition, continuing with the Company’s commitment to improving the health of people and communities throughout the world,
the Company made a $100 million charitable contribution to the Medtronic Foundation, a related party non-profit organization.
During fiscal year 2014, the Company made a $40 million charitable contribution to the Medtronic Foundation. There were no
special (gains) charges during fiscal year 2013.
Certain Litigation Charges, Net
The Company classifies material litigation charges and gains recognized as certain litigation charges, net. During fiscal year
2015, the Company recorded certain litigation charges, net of $42 million, which primarily relates to additional accounting
charges for probable and reasonably estimable INFUSE product liability litigation, which were recorded as a result of additional
filed and unfiled claims, and other matters litigation. Refer to Note 16 for additional information.
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