Restructuring Charges

12 Months Ended

Apr. 24, 2020

Restructuring and Related Activities [Abstract]

Enterprise Excellence

In the third quarter of fiscal year 2018, the Company announced its Enterprise Excellence restructuring program, which is expected to leverage the Company's global size and scale, as well as enhance the customer and employee experience, with a focus on three objectives: global operations, functional optimization, and commercial optimization. Primary activities of the restructuring program include integrating and enhancing global manufacturing and supply processes, systems and site presence, enhancing and leveraging global operating models across several enabling functions, and optimizing certain commercial processes, systems, and models.

The Company estimates that, in connection with its Enterprise Excellence restructuring program, it will recognize pre-tax exit and disposal costs and other costs across all segments of approximately $1.6 billion to $1.8 billion, the majority of which are expected to be incurred by the end of fiscal year 2022. Approximately half of the estimated charges are related to employee termination benefits. The remaining charges are costs associated with the restructuring program, such as salaries for employees supporting the program and consulting expenses. These charges are recognized within restructuring charges, net, cost of products sold, and selling, general, and administrative expense in the consolidated statements of income.

For fiscal years 2020, 2019 and 2018, the Company recognized charges of $462 million, $424 million, and $96 million, respectively. During fiscal year 2020, charges were partially offset by accrual adjustments of $21 million related to certain employees identified for termination finding other positions within Medtronic. For fiscal years 2020, 2019 and 2018, charges included $155 million, $91 million, and $28 million, respectively, recognized within cost of products sold and $168 million,

$118 million, and $33 million, respectively, recognized within selling, general, and administrative expense in the consolidated statements of income.

The following table summarizes the activity related to the Enterprise Excellence restructuring program for fiscal years 2020, 2019, and 2018:


(in millions)	Employee Termination Benefits		Associated Costs⁽¹⁾		Asset Write-downs⁽²⁾		Other Costs		Total
April 28, 2017	$	—	$	—	$	—	$	—	$	—
Charges	35		61		—		—		96
Cash payments	(8)		(59)		—		—		(67)
April 27, 2018	27		2		—		—		29
Charges	192		193		17		22		424
Cash payments	(118)		(186)		—		(10)		(314)
Settled non-cash	—		—		(17)		—		(17)
April 26, 2019	101		9		—		12		122
Charges	129		300		24		9		462
Cash payments	(128)		(290)		—		(9)		(427)
Settled non-cash	—		—		(24)		—		(24)
Accrual adjustments	(13)		—		—		(8)		(21)
April 24, 2020	$	89	$	19	$	—	$	4	$	112

(1)Associated costs include costs incurred as a direct result of the restructuring program, such as salaries for employees supporting the program and consulting expenses.

(2)Recognized within cost of products sold and selling, general, and administrative expense in the consolidated statements of income.

Cost Synergies

The Cost Synergies program was related to administrative office optimization, manufacturing and supply chain infrastructure, and certain general and administrative savings achieved as part of the Covidien plc integration and was completed in the third quarter of fiscal year 2018. For fiscal year 2018, the Company recognized $107 million in charges, including $11 million in restructuring charges, net of $34 million of accrual adjustments, related to the Cost Synergies restructuring program. Accrual adjustments relate to certain employees identified for termination finding other positions within the Company, cancellations of employee terminations, and employee termination benefits being less than initially estimated. Cash outlays for the Cost Synergies program were substantially complete at the end of fiscal year 2019.