Medtronic 2011 Annual Report Download - page 87

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Medtronic, Inc.
Restricted Stock Awards The following table summarizes restricted stock award activity during fiscal years 2011, 2010, and 2009:
Fiscal Year
2011 2010 2009
Awards
(in thousands)
Wtd. A vg.
Grant Price
Awards
(in thousands)
Wtd. Avg.
Grant Price
Awards
(in thousands)
Wtd. Avg.
Grant Price
Nonvested, beginning balance 8,909 $42.67 8,346 $43.88 5,789 $49.24
Granted 2,682 37.52 2,783 34.92 3,520 36.47
Vested (1,809) 47.28 (1,632) 35.36 (564) 12.26
Forfeited (575) 40.12 (588) 43.52 (399) 51.17
Nonvested at year-end 9,207 $40.42 8,909 $42.67 8,346 $43.88
Unrecognized compensation expense related to restricted stock
awards as of April 29, 2011 was $142 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.
13. 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 as follows:
Fiscal Year
(in millions) 2011 2010 2009
U.S. $ 1,447 $ 1 ,557 $ 984
International 2,276 2,412 1,456
Earnings before income taxes $ 3,723 $ 3,969 $ 2,440
The provision for income taxes consists of the following:
Fiscal Year
(in millions) 2011 2010 2009
Current tax expense:
U.S. $ 379 $ 527 $ 264
International 189 239 291
Total current tax expense 568766 555
Deferred tax expense (benefit):
U.S. 49 106 (51)
International 10 (2) (134)
Net deferred tax expense (benefit) 59 104 (185)
Total provision for income taxes $ 627 $ 870 $ 370
Deferred taxes arise because of the different treat ment 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 of $275 million and $238 million at April 29, 2011
and April 30, 2010, 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 statements 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 expense in the
consolidated statements of earnings. Deferred tax assets/
(liabilities) are comprised of the following: