Medtronic 2010 Annual Report Download - page 90

86 Medtronic, Inc.
Notes to Consolidated Financial Statements
(continued)
Restricted Stock Awards The following table summarizes restricted stock award activity during fiscal years 2010, 2009 and 2008:
Fiscal Year
2010 2009 2008
Awards
(in thousands)
Wtd. Avg.
Grant Price
Awards
(in thousands)
Wtd. Avg.
Grant Price
Awards
(in thousands)
Wtd. Avg.
Grant Price
Nonvested, beginning balance 8,346 $43.88 5,789 $49.24 3,982 $50.16
Granted 2,783 34.92 3,520 36.47 2,204 47.74
Assumed from Kyphon acquisition — — — — 402 46.88
Vested (1,632) 35.36 (564) 12.26 (492) 47.60
Forfeited (588) 43.52 (399) 51.17 (307) 49.88
Nonvested at year-end 8,909 $42.67 8,346 $43.88 5,789 $49.24
Unrecognized compensation expense related to restricted stock
awards as of April 30, 2010 was $154 million and is expected to be
recognized over a weighted average period of 2.5 years and will
be adjusted for any future changes in estimated forfeitures.
14. Income Taxes
The provision for income taxes is based on earnings before
income taxes reported for financial statement purposes. The
components of earnings before income taxes, based on tax
jurisdiction, are:
Fiscal Year
(in millions) 2010 2009 2008
U.S. $ 1,557 $ 984 $ 568
International 2,412 1,456 2,172
Earnings before income taxes $ 3,969 $ 2,440 $ 2,740
The provision for income taxes consists of:
Fiscal Year
(in millions) 2010 2009 2008
Current tax expense:
U.S. $ 527 $ 264 $ 458
International 239 291 267
Total current tax expense 766 555 725
Deferred tax expense (benefit):
U.S. 106 (51) (92)
International (2) (134) (31)
Net deferred tax expense (benefit) 104 (185) (123)
Total provision for income taxes $ 870 $ 370 $ 602
Deferred taxes arise because of the different treatment of
transactions for financial statement accounting and income tax
accounting, known as “temporary differences.” The Company
records the tax effect of these temporary differences as “deferred
tax assets” and “deferred tax liabilities.” Deferred tax assets
generally represent items that can be used as a tax deduction or
credit in a tax return in future years for which the Company has
already recorded the tax benefit in the consolidated statements
of earnings. The Company establishes valuation allowances for
deferred tax assets when the amount of expected future taxable
income is not likely to support the use of the deduction or credit.
The Company has established valuation allowances for federal,
state and foreign net operating losses, credit carryforwards,
capital loss carryforwards and deferred tax assets which are
capital in nature in the amount of $238 million and $234 million
at April 30, 2010 and April 24, 2009, respectively. These carryover
attributes expire at various points in time, from within a year to
no expiration date. These valuation allowances would result in a
reduction to the provision for income taxes in the consolidated
statement of earnings, if they are ultimately not required. Deferred
tax liabilities generally represent tax expense recognized in the
consolidated financial statements for which payment has been
deferred or expense has already been taken as a deduction on
the Company’s tax return but has not yet been recognized as an