Restructuring Charges, Net

Fiscal Year 2013 Initiative

In the fourth quarter of fiscal year 2013, the Company recorded a $192 million restructuring charge, which consisted of employee termination costs of $150 million, asset write-downs of $13 million, contract termination costs of $18 million, and other related costs of $11 million. Of the $13 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 costs of products sold in the consolidated statements of earnings. The fiscal year 2013 initiative was designed to scale back the Company's infrastructure in slower growing areas of the business, while continuing to invest in geographies, businesses, and products where faster growth is anticipated. A number of factors have contributed to ongoing challenging market dynamics, including increased pricing pressure, various governmental austerity measures, and the U.S. medical device excise tax.

As of the end of the fourth quarter of fiscal year 2013, the Company identified approximately 2,000 positions for elimination to be achieved through involuntary and voluntary separation. The fiscal year 2013 initiative is scheduled to be substantially complete by the end of the fourth quarter of fiscal year 2014.

A summary of the activity related to the fiscal year 2013 initiative is presented below:



	Fiscal Year 2013 Initiative
(in millions)	Employee Termination Costs			Asset Write-downs			Other Costs			Total
Balance as of April 27, 2012	$	—		$	—		$	—		$	—
Restructuring charges	150			13			29			192
Payments/write-downs	(3		)	(13		)	(6		)	(22		)
Balance as of April 26, 2013	$	147		$	—		$	23		$	170

Fiscal Year 2012 Initiative

In the fourth quarter of fiscal year 2012, the Company recorded a $118 million restructuring charge, which consisted of employee termination costs of $66 million, asset write-downs of $9 million, contract termination costs of $30 million, and other related costs of $13 million. The fiscal year 2012 initiative was designed to reduce general, administrative, and indirect distribution costs in certain organizations within the Company while prioritizing investment in research and development, and sales and marketing in those organizations within the Company where faster growth is anticipated, such as emerging markets and new technologies.

As of the end of the fourth quarter of fiscal year 2012, the Company identified approximately 1,000 positions for elimination to be achieved through involuntary and voluntary separation. As of April 26, 2013, the fiscal year 2012 initiative was substantially complete.

In the fourth quarter of fiscal year 2013, the Company recorded a $10 million reversal of excess restructuring reserves related to the fiscal year 2012 initiative. This reversal was primarily a result of revisions to particular strategies and certain employees identified for elimination finding other positions within the Company.

A summary of the activity related to the fiscal year 2012 initiative is presented below:



	Fiscal Year 2012 Initiative
(in millions)	Employee Termination Costs			Asset Write-downs			Other Costs			Total
Balance as of April 29, 2011	$	—		$	—		$	—		$	—
Restructuring charges	66			9			43			118
Payments/write-downs	(2		)	(9		)	(16		)	(27		)
Balance as of April 27, 2012	$	64		$	—		$	27		$	91
Payments	(54		)	—			(23		)	(77		)
Reversal of excess accrual	(10		)	—			—			(10		)
Balance as of April 26, 2013	$	—		$	—		$	4		$	4

Fiscal Year 2011 Initiative

In the fourth quarter of fiscal year 2011, the Company recorded a $272 million restructuring charge (including $2 million of restructuring charges related to the Physio-Control business presented as divestiture-related costs within discontinued operations), which consisted of employee termination costs of $177 million, asset write-downs of $24 million, contract termination fees of $45 million, and other related costs of $26 million. The fiscal year 2011 initiative was designed to restructure the business to align its cost structure to current market conditions and to continue to position the Company for long-term sustainable growth in emerging markets and new technologies. Included in the $177 million of employee termination costs were severance and the associated costs of continued medical benefits and outplacement services, as well as $15 million of incremental defined benefit pension and post-retirement related expenses for employees that accepted voluntary early retirement packages. These costs are not included in the table summarizing the restructuring costs below because they are associated with costs that are accounted for under the pension and post-retirement rules. For further discussion on the incremental defined benefit pension and post-retirement related expenses, see Note 14. Of the $24 million of asset write-downs, $11 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. Additionally, included in the other related costs was a $19 million intangible asset impairment related to the discontinuance of a product line within the Structural Heart business.

As of the end of the fourth quarter of fiscal year 2011, the Company identified approximately 2,100 net positions (including 55 net positions at Physio-Control) for elimination which were achieved through voluntary early retirement packages, voluntary separation, and involuntary separation. As of April 27, 2012, the fiscal year 2011 initiative was substantially complete.

In the fourth quarter of fiscal year 2012, the Company recorded a $31 million reversal of excess restructuring reserves related to the fiscal year 2011 initiative. This reversal was primarily a result of certain employees identified for elimination finding positions elsewhere within the Company, favorable severance negotiations outside the U.S., and more favorable than expected outcomes in the sub-leasing of previously vacated properties.

A summary of the activity (including Physio-Control) related to the fiscal year 2011 initiative is presented below:



	Fiscal Year 2011 Initiative
(in millions)	Employee Termination Costs			Asset Write-downs			Other Costs			Total
Balance as of Balance as of April 30, 2010	$	—		$	—		$	—		$	—
Restructuring charges	162			24			71			257
Payments/write-downs	(5		)	(24		)	(24		)	(53		)
Balance as of April 29, 2011	$	157		$	—		$	47		$	204
Payments	(134		)	—			(35		)	(169		)
Reversal of excess accrual	(23		)	—			(8		)	(31		)
Balance as of April 27, 2012	$	—		$	—		$	4		$	4
Payments	—			—			(4		)	(4		)
Balance as of April 26, 2013	$	—		$	—		$	—		$	—