SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
Entire Document
 



During the three months ended July 29, 2016, we recognized restructuring charges of $111 million, which were partially offset by accrual adjustments of $7 million related to certain employees identified for termination finding other positions within the Company. For the three months ended July 29, 2016, restructuring charges included $10 million recognized within cost of products sold.
For additional information about our restructuring program, see Note 5 to the current period's consolidated financial statements.
Certain Litigation Charges We classify litigation charges and gains related to significant legal proceedings as certain litigation charges. During the three months ended July 28, 2017, there were no certain litigation charges. During the three months ended July 29, 2016, we recognized $82 million of certain litigation charges related to probable and estimable damages.
Acquisition-Related Items During the three months ended July 28, 2017, the Company recognized acquisition-related items expense of $53 million, including $9 million recognized within cost of products sold in the consolidated statements of income. Acquisition-related items expense includes $46 million of costs associated with the integration of Covidien manufacturing, distribution, and administrative facilities as well as IT system implementation, benefits harmonization, and accelerated and incremental stock compensation expense. Acquisition-related items expense also includes changes in the fair value of contingent consideration as a result of revised revenue forecasts and the timing of anticipated regulatory payments.
During the three months ended July 29, 2016, the Company recognized acquisition-related items expense of $52 million, including $44 million of costs associated with the integration of Covidien manufacturing, distribution, and administrative facilities as well as IT system implementation and benefits harmonization, and $8 million of accelerated and incremental stock compensation expense.
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.
Amortization of Intangible Assets Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of purchased patents, trademarks, tradenames, customer relationships, purchased technology, and other intangible assets. Amortization expense was $454 million and $487 million for the three months ended July 28, 2017 and July 29, 2016, respectively. The decrease in amortization expense was primarily attributable to the discontinuation of amortization on the definite-lived intangible assets classified as assets held for sale at April 28, 2017 and July 28, 2017 related to the divestiture of a portion of our Patient Monitoring & Recovery division.
Other Expense, Net Other expense, net includes royalty income and expense, realized equity security gains and losses, currency transaction and derivative gains and losses, impairment charges on equity securities, and Puerto Rico excise tax. For the three months ended July 28, 2017, other expense, net was $66 million as compared to $39 million for the corresponding period in the prior fiscal year. The increase was primarily attributable to the timing of gains and losses realized in each period, and was also due, in part, to foreign exchange remeasurement and our hedging programs, which combined were a $5 million loss for the three months ended July 28, 2017, as compared to a $4 million gain for the corresponding period in the prior fiscal year.
Interest Expense, Net Interest expense, net includes interest earned on our cash, cash equivalents and investments, interest incurred on our outstanding borrowings, amortization of debt issuance costs and debt premiums or discounts, amortization of gains or losses on terminated or de-designated interest rate derivative instruments, and ineffectiveness on interest rate derivative instruments. For the three months ended July 28, 2017 and July 29, 2016, interest expense, net was $194 million and $179 million, respectively. The increase in interest expense, net during the three months ended July 28, 2017 was largely driven by an increase in total debt obligations, on average, compared to the corresponding period in the prior fiscal year.

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