Medtronic 2016 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 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.

Page out of 158

  • 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)
85
A summary of the activity related to the Covidien initiative is presented below:
Covidien Initiative
(in millions)
Employee
Termination
Costs Other
Costs Total
Balance as of January 26, 2015 (Acquisition Date) $ 76 $ 27 $ 103
Restructuring charges — — —
Payments/write-downs (10)(10)(20)
Reversal of excess accrual (5) — (5)
Balance as of April 24, 2015 $ 61 $ 17 $ 78
Restructuring charges — — —
Payments/write-downs (49)(12)(61)
Reversal of excess accrual (10) — (10)
Balance as of April 29, 2016 $ 2 $ 5 $ 7
In the fiscal year ended April 29, 2016 and April 24, 2015, the Company recorded reversals of excess restructuring reserves related
to the Covidien initiative of $10 million and $5 million, respectively. The reversals were primarily a result of certain employees
identified for termination finding other positions within the Company and early lease termination negotiations in fiscal year 2015.
4. Special Charges (Gains), Net and Certain Litigation Charges, Net
Special Charges (Gains), Net
During fiscal year 2016, the Company recognized a special charge of $70 million in connection with the impairment of a debt
investment.
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.
During 2015 and 2014, continuing with the Company's commitment to improving the health of people and communities throughout
the world, the Company made charitable contributions of $100 million and $40 million, respectively, to the Medtronic Foundation,
a related party non-profit organization.
Certain Litigation Charges, Net
The Company classifies material litigation charges and gains recognized as certain litigation charges, net. During fiscal years 2016
and 2015, the Company recorded certain litigation charges, net of $26 million and $42 million, respectively, which primarily relate
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 litigation matters. Refer to Note 15 for additional information.
During fiscal year 2014, the Company recorded certain litigation charges, net of $770 million, which primarily include the global
patent settlement agreement with Edwards Lifesciences Corporation of $589 million, accounting charges for probable and
reasonably estimable INFUSE product liability litigation of $140 million, and other litigation matters.
5. Financial Instruments
The Company holds investments consisting primarily of marketable debt and equity securities. The authoritative guidance is
principally applied to financial assets and liabilities such as marketable equity securities and debt and equity securities that are
classified and accounted for as trading and available-for-sale and are measured on a recurring basis. Further, we also hold cost or
equity method investments which are measured at fair value on a nonrecurring basis.