Medtronic 2012 Annual Report Download - page 90

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the deferred income tax benefit was reversed upon the finalization of the sale. In the fourth quarter of fiscal
year 2012, the Company recognized a pre-tax gain on sale of $218 million, which includes a reversal of the
portion of the Company’s currency translation adjustment related to Physio-Control. Additionally, during
fiscal year 2012, the Company recorded $42 million of Physio-Control divestiture-related costs in
discontinued operations. The Company reclassified $12 million of Physio-Control divestiture-related costs
previously recorded in acquisition-related items within continuing operations on the consolidated statements
of earnings in the first and second quarters of fiscal year 2012 to discontinued operations.
The following is a summary of the Physio-Control assets and liabilities sold and held for sale as of
January 30, 2012 and April 29, 2011:
January 30, April 29,
(in millions) 2012 2011
___________ ___________ ___________
ASSETS
U.S. accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47 $ 63
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 77
Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 20
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 6
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 23
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 18
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 51
___________ ___________
Total assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 251 $ 258
___________ ___________
___________ ___________
LIABILITIES
Accounts payable and other accrued expenses . . . . . . . . . . . . . . . . . . . . . . $ 63 $ 64
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 21
Deferred tax liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
___________ ___________
Total liabilities held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87 $ 88
___________ ___________
___________ ___________
4. Restructuring Charges
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.
In connection with the fiscal year 2012 initiative, as of the end of the fourth quarter of fiscal year 2012,
the Company had identified approximately 1,000 positions for elimination to be achieved through
involuntary and voluntary separation. The fiscal year 2012 initiative is scheduled to be substantially complete
by the end of the fourth quarter of fiscal year 2013.
A summary of the activity related to the fiscal year 2012 initiative is presented below:
Fiscal Year 2012 Initiative
____________________________________________________________
Employee
Termination Asset Other
(in millions) Costs Write-downs 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
____________ ____________ ____________ ____________
____________ ____________ ____________ ____________
73
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)