Restructuring Charges

Cost Synergies Initiative

The cost synergies initiative is the Company's restructuring program primarily related to the integration of Covidien. This initiative is expected to contribute 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			Asset Write-downs			Other Costs			Total
April 24, 2015	$	136		$	—		$	7		$	143
Charges	248			23			61			332
Cash payments	(153		)	—			(31		)	(184		)
Settled non cash	—			(23		)	—			(23		)
Reversal of excess reserves	(18		)	—			—			(18		)
April 29, 2016	$	213		$	—		$	37		$	250
Charges	287			27			54			368
Cash payments	(179		)	—			(53		)	(232		)
Settled non cash	—			(27		)	—			(27		)
Reversal of excess reserves	(60		)	—			(8		)	(68		)
April 28, 2017	$	261		$	—		$	30		$	291

As part of the cost synergies initiative, for fiscal year 2017, the Company recognized $441 million in charges, which included $73 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 above, because they are associated with costs that are accounted for under the pension and post-retirement rules. See Note 17 for further discussion on the incremental defined benefit pension and post-retirement related expenses. The charges recognized during fiscal year 2017 were partially offset by reversals of excess restructuring reserves of $68 million. Reversals of restructuring reserves 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. Fiscal year 2017 asset write-downs included $17 million of property, plant, and equipment impairments. Fiscal year 2017 asset write-downs also included $10 million of inventory write-offs of discontinued product lines recognized within cost of products sold in the consolidated statements of income.

As part of the cost synergies initiative, for fiscal year 2016, the Company recognized $332 million in charges, which were partially offset by reversals of excess restructuring reserves of $18 million. Reversals of restructuring reserves relate to certain employees identified for termination finding other positions within the Company and revisions to severance provisions. Fiscal year 2016 asset write-downs included $14 million related to property, plant, and equipment impairments. Fiscal year 2016 asset write-downs also inclued $9 million of inventory write-offs of discontinued product lines recognized within cost of products sold in the consolidated statements of income.