Medtronic 2014 Annual Report Download - page 85

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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
two prescribed retrospective methods. Early adoption is not permitted. The Company is evaluating the impact of the amended
revenue recognition guidance on the Company’s consolidated financial statements.
2. Special Charges and Certain Litigation Charges, Net
Special Charges
During fiscal year 2014, consistent with the Company’s commitment to improving the health of people and communities
throughout the world, the Company made a $40 million charitable contribution to the Medtronic Foundation, which is a related
party non-profit organization.
During fiscal years 2013 and 2012, there were no special charges.
Certain Litigation Charges, Net
The Company classifies material litigation charges and gains recognized as certain litigation charges, net.
During fiscal year 2014, the Company recorded certain litigation charges, net of $770 million, which primarily includes the
global patent settlement agreement with Edwards Lifesciences Corporation (Edwards) of $589 million, accounting charges for
probable and reasonably estimable INFUSE product liability litigation of $140 million, and other litigation. Refer to Note 18 for
additional information.
During fiscal year 2013, the Company recorded certain litigation charges, net of $245 million related to probable and reasonably
estimated damages resulting from patent litigation with Edwards. Refer to Note 18 for additional information.
During fiscal year 2012, the Company recorded certain litigation charges, net of $90 million related to the agreement to settle
the federal securities class action initiated in December 2008 by the Minneapolis Firefighters’ Relief Association. During the
fourth quarter of fiscal year 2012, Medtronic settled all of these class claims for $85 million and incurred $5 million in
additional litigation fees.
3. Restructuring Charges, Net
Fiscal Year 2014 Initiative
In the fourth quarter of fiscal year 2014, the Company recorded a $116 million restructuring charge, which consisted of
employee termination costs of $65 million, asset write-downs of $26 million, contract termination costs of $3 million, and other
related costs of $22 million. Of the $26 million of asset write-downs, $10 million related to inventory write-offs of discontinued
product lines and production-related asset impairments, and therefore, was recorded within cost of products sold in the
consolidated statements of earnings. The fiscal year 2014 initiative primarily relates to the Company’s renal denervation
business, certain manufacturing shut-downs, and a reduction of back-office support functions in Europe.
As of the end of the fourth quarter of fiscal year 2014, the Company identified approximately 600 positions for elimination to be
achieved primarily through involuntary separation. The fiscal year 2014 initiative is scheduled to be substantially complete by
the end of the fourth quarter of fiscal year 2015.
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