Get documents about "Shareholder Separation Agreement
Description
Shareholder Separation Agreement document sample
Document Sample
Statement Of Income (USD $)
3 Months Ended
Dec. 25, 2009
In Millions, except Per Share data
Net sales $2,749
Cost of products sold 1,257
Gross profit 1,492
Selling, general and administrative expenses 834
Research and development expenses 101
Restructuring charges 5
Operating income 552
Interest expense (43)
Interest income 5
Other income 8
Income from continuing operations before income taxes 522
Income tax expense 110
Income from continuing operations 412
Income from discontinued operations, net of income taxes 0
Net income $412
Basic earnings per share:
Income from continuing operations $0.82
Income from discontinued operations $0
Net income $0.82
Diluted earnings per share:
Income from continuing operations $0.82
Income from discontinued operations $0
Net income $0.82
Weighted-average number of shares outstanding (note 3):
Basic 499
Diluted 504
3 Months Ended
Dec. 26, 2008
$2,564
1,192
1,372
731
94
3
544
(45)
7
10
516
135
381
5
$386
$0.76
$0.01
$0.77
$0.75
$0.01
$0.76
504
507
Statement Of Financial Position Classified (USD $)
Dec. 25, 2009
In Millions
Current Assets:
Cash and cash equivalents $1,513
Accounts receivable trade, less allowance for doubtful accounts of $43
and $43 1,745
Inventories 1,324
Shareholder settlement receivables 61
Prepaid expenses and other current assets 785
Total current assets 5,428
Property, plant and equipment, net 2,661
Goodwill 6,118
Intangible assets, net 1,700
Due from former parent and affiliates 706
Other assets 737
Total Assets 17,350
Current Liabilities:
Current maturities of long-term debt 255
Accounts payable 519
Shareholder settlement liability 104
Accrued and other current liabilities 1,329
Total current liabilities 2,207
Long-term debt 2,709
Income taxes payable 1,808
Guaranteed contingent tax liabilities 718
Other liabilities 1,510
Total Liabilities 8,952
Shareholders' Equity:
Preference shares, $0.20 par value, 125,000,000 authorized; none
issued and outstanding 0
Ordinary shares, $0.20 par value, 1,000,000,000 authorized;
500,017,406 and 499,049,675 outstanding, net of 4,539,685 and
3,979,904 treasury shares 100
Additional paid-in capital 6,237
Retained earnings 1,587
Accumulated other comprehensive income 474
Total Shareholders' Equity 8,398
Total Liabilities and Shareholders' Equity $17,350
Sep. 25, 2009
$1,467
1,724
1,334
62
875
5,462
2,661
6,046
1,562
708
700
17,139
30
500
106
1,603
2,239
2,961
1,774
718
1,446
9,138
0
100
6,173
1,199
529
8,001
$17,139
Statement Of Financial Position Classified (Parenthetical) (USD
$)
Dec. 25, 2009
In Millions, except Share data
Accounts receivable trade, allowance for doubtful accounts $43
Preference shares, par value $0.2
Preference shares, authorized 125,000,000
Preference shares, issued 0
Preference shares, outstanding 0
Ordinary shares, par value $0.2
Ordinary shares, authorized 1,000,000,000
Ordinary shares, outstanding 500,017,406
Ordinary shares, treasury shares 4,539,685
Sep. 25, 2009
$43
$0.2
125,000,000
0
0
$0.2
1,000,000,000
499,049,675
3,979,904
Statement Of Cash Flows Indirect (USD $)
3 Months Ended
Dec. 25, 2009
In Millions
Cash Flows From Operating Activities:
Net income $412
Income from discontinued operations, net of income taxes 0
Income from continuing operations 412
Adjustments to reconcile net cash provided by continuing
operating activities:
Change in receivable from former parent and affiliates related to Tax
Sharing Agreement (8)
Depreciation and amortization 120
Share-based compensation 28
Deferred income taxes (6)
Provision for losses on accounts receivable and inventory 18
Other non-cash items 1
Changes in assets and liabilities, net of the effects of
acquisitions and divestitures:
Accounts receivable, net (34)
Inventories (1)
Accounts payable 19
Income taxes 37
Accrued and other liabilities (175)
Other 42
Net cash provided by operating activities 453
Cash Flows From Investing Activities:
Capital expenditures (88)
Acquisition-related payments, net of cash acquired (156)
Acquisition of licenses and technology (15)
Other 15
Net cash used in investing activities (244)
Cash Flows From Financing Activities:
Net repayment of commercial paper (1)
Repayment of debt (84)
Dividends paid (90)
Repurchase of shares (27)
Proceeds from exercise of share options 38
Other 2
Net cash used in financing activities (162)
Effect of currency rate changes on cash (1)
Net increase (decrease) in cash and cash equivalents 46
Cash and cash equivalents at beginning of period 1,467
Cash and cash equivalents at end of period $1,513
3 Months Ended
Dec. 26, 2008
$386
(5)
381
(10)
97
21
24
16
2
23
(90)
(69)
25
(42)
(115)
263
(93)
(22)
(2)
9
(108)
(75)
(15)
(81)
(5)
6
0
(170)
(57)
(72)
1,208
$1,136
Basis of Presentation
3 Months Ended
Dec. 25, 2009
USD / shares
1. Basis of Presentation
Basis of
PresentationThe
accompanying financial
statements reflect the
consolidated operations of
Covidien plc and its
subsidiaries (Covidien or the
Company). The unaudited
financial statements have
been prepared in United
States dollars, in accordance
with accounting principles
generally accepted in the
United States of America
(GAAP). The preparation of
the financial statements in
conformity with GAAP
requires management to
make use of estimates and
assumptions that affect the
reported amount of assets
and liabilities, disclosure of
contingent assets and
liabilities, and the reported
amounts of revenues and
expenses. Actual results
may differ from those
estimates. In managements
opinion, the unaudited
financial statements contain
Basis of Presentation all normal recurring
adjustments necessary for a
Acquisition and Divestitures
3 Months Ended
Dec. 25, 2009
USD / shares
2. Acquisition and
Divestitures Aspect
Medical Systems, Inc.In
November2009, the
Companys Medical Devices
segment acquired Aspect
Medical Systems, Inc.
(Aspect), a provider of brain
monitoring technology, for
$150 million, net of cash
acquired. In addition, the
Company assumed $58
million of debt in the
transaction, which was
subsequently repaid. The
acquisition of Aspect
broadens the Companys
product offerings and adds a
brain monitoring technology
to its product portfolio.
The following table
sets forth the Companys
preliminary allocation of the
purchase price for Aspect
(dollars in millions):
Current
assets (including cash
acquired) $ 108
Intangible assets
153 Goodwill
(non-tax deductible)
Acquisition and Divestitures 70 Other non-
current assets 46
Earnings Per Share
3 Months Ended
Dec. 25, 2009
USD / shares
3. Earnings Per Share
The weighted average
ordinary shares used in the
computations of basic and
diluted earnings per share
were as follows:
QuartersEnded (in
Millions) December25,
2009 December26,
2008 Basic shares
499 504
Effect of share
options and restricted
shares 5 3
Diluted shares
504 507
The
computation of diluted
earnings per share for the
quarters ended
December25, 2009 and
December26, 2008 excludes
the effect of the potential
exercise of options to
purchase approximately
10million and 13million
shares, respectively,
because the effect would
have been anti-dilutive.
Earnings Per Share
Comprehensive Income
3 Months Ended
Dec. 25, 2009
USD / shares
4. Comprehensive
Income Comprehensive
income was comprised of
the following:
QuartersEnded
(Dollars in Millions)
December25, 2009
December26, 2008
Net income $
412 $ 386
Currency
translation (56 )
(256 )
Unrealized gain (loss)
on derivatives, net of
income taxes 1
(1 ) Change
related to benefit plans, net
of income taxes
1
Total
comprehensive income
$ 357 $ 130
Comprehensive Income
Inventories
3 Months Ended
Dec. 25, 2009
USD / shares
5. Inventories
Inventories were comprised
of the following at the end
of each period:
(Dollars
in Millions)
December25, 2009
September25, 2009
Purchased materials
and manufactured parts
$ 319 $ 303
Work in process
341 331
Finished goods
664 700
Inventories $
1,324 $ 1,334
Inventories
Goodwill and Intangible Assets
3 Months Ended
Dec. 25, 2009
USD / shares
6. Goodwill and
Intangible Assets The
changes in the carrying
amount of goodwill were as
follows:
(Dollars in
Millions) Medical
Devices
Pharmaceuticals
Medical Supplies
Total Goodwill
at September25, 2009
$ 5,125 $
532 $ 389 $
6,046
Acquisitions
83
83 Currency
translation (11 )
(11
)
Goodwill at
December25, 2009 $
5,197 $ 532
$ 389 $ 6,118
The
gross carrying amount and
accumulated amortization of
Goodwill and Intangible Assets intangible assets at the end
of each period were as
Debt
3 Months Ended
Dec. 25, 2009
USD / shares
7. Debt Debt was
comprised of the following
at the end of each period:
(Dollars in
Millions) December25,
2009 September25,
2009 Current
maturities of long-term
debt:
5.2% senior
notes due October2010
$ 250 $
Capital lease
obligations 5
5 Other
25
Total 255
30
Long-term debt:
Commercial
paper program 150
151 5.2%
senior notes due
October2010
250 5.5% senior
notes due October2012
500 500
6.0% senior notes
due October2017
Debt 1,150 1,150
6.6% senior notes
Retirement Plans
3 Months Ended
Dec. 25, 2009
USD / shares
8. Retirement Plans
The net periodic
benefit cost for the
Companys defined benefit
retirement plans and
postretirement plans was as
follows:
(Dollars in
Millions) Quarters
Ended
December25, 2009
December26, 2008
Service cost $
6 $6
Interest cost
14 15
Expected return on
plan assets (11 )
(11 )
Amortization of prior
service benefit (2
) (1 )
Amortization of net
actuarial loss 6
3
Net periodic
benefit cost $ 13
$ 12
The
Company anticipates that, at
a minimum, it will make
Retirement Plans required contributions of
$41million to its U.S. and
Financial Instruments
3 Months Ended
Dec. 25, 2009
USD / shares
9. Financial Instruments
The Company is
exposed to certain risks
relating to its business
operations. Risks that relate
to interest rate exposure,
foreign exchange exposure
and commodity price
exposure are managed by
using derivative
instruments. Interest rate
lock contracts were entered
into prior to the issuance of
the Companys fixed rate
senior notes to manage the
risk of changes in interest
rates prior to issuance of the
debt. Foreign currency
option and forward
contracts are used to
economically manage the
foreign exchange exposures
of operations outside the
United States. Swap
contracts on various
commodities are periodically
entered into to manage the
price risk associated with
forecasted purchases of
commodities used in the
Companys manufacturing
Financial Instruments processes. The
Company recognizes all
Transactions with Former Parent and Affiliates
3 Months Ended
Dec. 25, 2009
USD / shares
10. Transactions with
Former Parent and Affiliates
Separation and
Distribution AgreementOn
June29, 2007, the Company
entered into a Separation
and Distribution Agreement
and other agreements with
Tyco International and Tyco
Electronics. These
agreements provided for the
allocation to Covidien and
Tyco Electronics of certain
of Tyco Internationals
assets, liabilities and
obligations attributable to
periods prior to the
separation. In addition,
these agreements govern
the ongoing relationships
among Covidien, Tyco
International and Tyco
Electronics. Under the
Separation and Distribution
Agreement and other
agreements, subject to
certain exceptions contained
in the Tax Sharing
Agreement, Covidien, Tyco
International and Tyco
Electronics assumed 42%,
Transactions with Former Parent and Affiliates 27% and 31%, respectively,
of certain of Tyco
Commitments and Contingencies
3 Months Ended
Dec. 25, 2009
USD / shares
11. Commitments and
Contingencies The
Company is subject to
various legal proceedings
and claims, including patent
infringement claims,
antitrust claims, product
liability matters,
environmental matters,
employment disputes,
disputes on agreements and
other commercial disputes.
Management believes that
these legal proceedings and
claims likely will be resolved
over an extended period of
time. Although it is not
feasible to predict the
outcome of these
proceedings, based upon
the Companys experience,
current information and
applicable law, management
does not expect that these
proceedings will have a
material adverse effect on
the Companys financial
condition. However, one or
more of the proceedings
could have a material
adverse effect on the
Commitments and Contingencies Companys results of
operations or cash flows for
Segment Data
3 Months Ended
Dec. 25, 2009
USD / shares
12. Segment Data
Selected information by
business segment is
presented in the following
tables:
Quarters Ended
(Dollars in Millions)
December25, 2009
December26, 2008
Net sales(1):
Medical
Devices $ 1,690
$ 1,432
Pharmaceuticals
616 697
Medical Supplies
443 435
$ 2,749 $ 2,564
(1)
Amounts represent
sales to external customers.
Intersegment sales are not
significant.
Quarters Ended
(Dollars in Millions)
December25, 2009
December26, 2008
Operating income:
Segment Data
Medical Devices
Covidien International Finance S.A.
3 Months Ended
Dec. 25, 2009
USD / shares
13. Covidien
International Finance S.A.
CIFSA, a Luxembourg
company, is a holding
company that owns, directly
or indirectly, all of the
operating subsidiaries of
Covidienplc. CIFSA is the
issuer of the Companys
senior notes and commercial
paper and the borrower
under the revolving credit
facility, substantially all of
which are fully and
unconditionally guaranteed
by both Covidien plc and
Covidien Ltd., the owners of
CIFSA. Covidien plc was
incorporated on January16,
2009 and replaced Covidien
Ltd. as the ultimate parent
company on June4, 2009.
The following information
provides the composition of
the Companys income,
assets, liabilities, equity and
cash flows by relevant group
within the Company:
Covidien plc and
CovidienLtd. as the
guarantors, CIFSA as issuer
Covidien International Finance S.A. of the debt and the
operating companies that
Document Information
3 Months Ended
Dec. 25, 2009
USD / shares
Document Information [Text Block]
Document Type 10-Q
Amendment Flag false
Document Period End Date 2009-12-25
Entity Information (USD $)
3 Months Ended
Dec. 25, 2009
Entity [Text Block]
Trading Symbol COV
Entity Registrant Name Covidien plc
Entity Central Index Key 0001385187
Current Fiscal Year End Date --09-24
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding
Jan. 15, 2010
500,216,381
Other docs by ujh44521
