SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
Entire Document
 
Medtronic plc
Notes to Consolidated Financial Statements
(Unaudited)


The following table presents information related to the assets and liabilities that were classified as held for sale in the consolidated balance sheets:
(in millions)
July 28, 2017
 
April 28, 2017
Inventories, net
$
369

 
$
371

Property, plant, and equipment, net
710

 
689

Goodwill
2,971

 
2,910

Other intangible assets, net
2,319

 
2,320

Total assets held for sale
$
6,369

 
$
6,290

 
 
 
 
Other accrued expenses
$
59

 
$
34

Accrued compensation and retirement benefits
12

 
12

Deferred tax liabilities
880

 
707

Other liabilities
1

 
1

Total liabilities held for sale
$
952

 
$
754

The Company determined that the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses does not meet the criteria to be classified as discontinued operations. The divestiture was completed on July 29, 2017, subsequent to the end of the first quarter of fiscal 2018. See Note 19 to the consolidated financial statements for additional information regarding the completion of the divestiture.
Divestiture-Related Items
Divestiture-related items includes expenses incurred in connection with the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses. During the three months ended July 28, 2017, the Company recognized divestiture-related items expense of $47 million, including $22 million of legal and advisory services and $16 million of accelerated stock compensation expense. There were no divestiture-related items expenses for the three months ended July 29, 2016.
5. Restructuring Charges
Cost Synergies Initiative
The cost synergies initiative is the Company's restructuring program primarily related to the integration of Covidien. This initiative contributes to the approximately $850 million in cost synergies expected to be achieved as a result of the integration of the Covidien acquisition through fiscal year 2018, including administrative office optimization, manufacturing and supply chain infrastructure, certain program cancellations, and reduction of general and administrative redundancies. Restructuring charges are primarily related to employee termination costs and costs related to manufacturing and facility closures and affect all reportable segments. Cash outlays for the cost synergies initiative restructuring program are scheduled to be substantially complete by the end of fiscal year 2019.

A summary of the restructuring accrual, recorded within other accrued expenses and other liabilities in the consolidated balance sheets, and related activity is presented below:
(in millions)
Employee Termination Costs
 
Other Costs
 
Total
April 28, 2017
$
261

 
$
30

 
$
291

Charges
12

 
7

 
19

Cash payments
(38
)
 
(10
)
 
(48
)
Accrual adjustments
(6
)
 
1

 
(5
)
July 28, 2017
$
229

 
$
28

 
$
257

For the three months ended July 28, 2017, the Company recognized $19 million in charges, which were partially offset by accrual adjustments of $5 million. Accrual adjustments relate to certain employees identified for termination finding other positions within the Company, cancellations of employee terminations, and employee termination costs being less than initially estimated. For the

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