Medtronic 2016 Annual Report Download - page 87
Download and view the complete annual report
Please find page 87 of the 2016 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.-
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
-
153
-
154
-
155
-
156
-
157
-
158
 |
 |
Table of Contents
Medtronic plc
Notes to Consolidated Financial Statements (Continued)
84
administrative office optimization, manufacturing and supply chain infrastructure, certain program cancellations, and certain
general and administrative savings. Restructuring charges are expected to be incurred in future fiscal years as cost synergy strategies
are finalized. Restructuring accruals resulting from restructuring charges are scheduled to be substantially complete within one
year from the period in which the restructuring charge was initially incurred.
A summary of the activity related to the cost synergies initiative is presented below:
(in millions)
Employee
Termination
Costs Asset
Write-downs Other
Costs Total
Balance as of April 25, 2014 $ — $ — $ — $ —
Restructuring charges 213 28 7 248
Payments/write-downs (77)(28) — (105)
Balance as of April 24, 2015 $ 136 $ — $ 7 $ 143
Restructuring charges 248 23 61 332
Payments/write-downs (153)(23)(31)(207)
Reversal of excess accrual (18) $ — $ — (18)
Balance as of April 29, 2016 $ 213 $ — $ 37 $ 250
As a result of certain employees identified for termination finding other positions within the Company and revisions to severance
provisions, the Company recorded an $18 million reversal of excess restructuring reserves during the fiscal year ended April 29,
2016.
As part of the cost synergies initiative for the fiscal year ended April 29, 2016, the Company recognized $23 million of asset write-
downs, which included $9 million related to inventory write-offs of discontinued product lines recognized within cost of products
sold in the consolidated statements of income. In addition, for the fiscal year ended April 29, 2016, asset write-downs included
$14 million related to property, plant, and equipment impairments.
In the fiscal year ended April 24, 2015, the Company recognized $28 million of asset write-downs, which included $15 million
related to inventory write-offs of discontinued product lines and production-related asset impairments recognized within cost of
products sold in the consolidated statements of income. In addition, for the fiscal year ended April 24, 2015, asset write-downs
included $13 million related to property, plant, and equipment impairments.
Covidien Initiative
Covidien's pre-acquisition restructuring program is designed to improve Covidien's cost structure. The program consists of reducing
corporate expenses, expanding shared services, consolidating manufacturing locations, and optimizing distribution centers. The
Covidien restructuring initiative is scheduled to be substantially complete by the end of fiscal year 2018. At the Acquisition Date,
the Company reserved $103 million in connection with the Covidien initiative, which consisted of employee termination costs of
$76 million and other costs of $27 million.