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Restructuring | 6 Months Ended
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Oct. 30, 2020
Restructuring and Related Activities [Abstract] |
Restructuring | Restructuring 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 the three and six months ended October 30, 2020, the Company recognized charges of $90 million and $169 million, respectively. Additionally, the Company incurred accrual adjustments of $3 million and $5 million for the three and six months ended October 30, 2020, respectively, related to certain employees identified for termination finding other positions within Medtronic and contract terminations being settled for less than originally estimated. For the three and six months ended October 30, 2020, charges included $32 million and $59 million, respectively, recognized within cost of products sold and $48 million and $95 million, respectively, recognized within selling, general, and administrative expense in the consolidated statements of income. For the three and six months ended October 25, 2019, the Company recognized charges of $95 million and $231 million, respectively. Additionally, the Company incurred accrual adjustments of $1 million and $13 million for the three and six months ended October 25, 2019, respectively, related to certain employees identified for termination finding other positions within Medtronic. For the three and six months ended October 25, 2019, charges included $32 million and $67 million, respectively, recognized within cost of products sold and $35 million and $77 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 the six months ended October 30, 2020:
(in millions) | Employee Termination Benefits |  |  |  |  |  | Associated Costs(1) |  |  |  | Other Costs |  | Total
April 24, 2020 | $ | 89 |  |  |  |  |  |  | $ | 19 |  |  |  |  | $ | 4 |  |  | $ | 112 |
Charges | 17 |  |  |  |  |  |  | 150 |  |  |  |  | 2 |  |  | 169 |
Cash payments | (42) |  |  |  |  |  |  | (146) |  |  |  |  | (3) |  |  | (191) |
Accrual adjustments | (3) |  |  |  |  |  |  | — |  |  |  |  | (2) |  |  | (5) |
October 30, 2020 | $ | 61 |  |  |  |  |  |  | $ | 23 |  |  |  |  | $ | 1 |  |  | $ | 85 |
(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. Simplification In the first quarter of fiscal year 2021, the Company initiated the Simplification restructuring program, designed to make the Company a more nimble and competitive organization focused on accelerating innovation, enhancing the customer experience, driving revenue growth, and winning market share, while also more efficiently and effectively leveraging the Enterprise scale. Under the oversight of the portfolio leaders, this new operating model, which will be fully operational the beginning of the fourth quarter of fiscal year 2021, will simplify the Company's organizational structure and accelerate decision-making and execution. Primary activities of the restructuring program will include reorganizing the Company into a portfolio-level structure, including the creation of highly focused, accountable, and empowered Operating Units (OUs), consolidating Operations at the Enterprise level, establishing Technology Development Centers in areas where the Company has deep core technology competencies to be leveraged by multiple OUs, and forming dedicated sales organizations that leverage the Company's scale but move with the same agility as smaller, local competitors. The Company estimates that, in connection with its Simplification restructuring program, it will recognize pre-tax exit and disposal costs and other costs across all segments of approximately $400 million to $450 million, the majority of which are expected to be incurred by the end of fiscal year 2022. Approximately three quarters 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 the three and six months ended October 30, 2020, the Company recognized charges of $102 million and $153 million, respectively, which included $97 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 restructuring charges below, because they are associated with costs that are accounted for under the pension and post-retirement rules. See Note 14 for further discussion on the incremental defined benefit pension and post-retirement expenses. The charges recognized for the three and six months ended October 30, 2020 were partially offset by accrual adjustments of $8 million for both periods related to certain employees identified for termination finding other positions within the Company. The charges recognized for the three and six months ended October 30, 2020 also included $2 million and $3 million, respectively, recognized within selling, general, and administrative expense in the consolidated statements of income. The following table summarizes the activity related to the Simplification restructuring program for the six months ended October 30, 2020:
(in millions) | Employee Termination Benefits |  | Associated Costs(1) |  |  |  |  |  | Total
April 24, 2020 | $ | — |  |  | $ | — |  |  |  |  |  |  | $ | — |
Charges | 53 |  |  | 3 |  |  |  |  |  |  | 56 |
Cash payments | (9) |  |  | (3) |  |  |  |  |  |  | (12) |
Accrual adjustments | (8) |  |  | — |  |  |  |  |  |  | (8) |
October 30, 2020 | $ | 36 |  |  | $ | — |  |  |  |  |  |  | $ | 36 |
(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.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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