Medtronic settles IRS beef for $330m

By Brad Perriello

Medtronic (NYSE:MDT) took a nearly $330 million charge during its fiscal 4th quarter to cover a tax settlement with the IRS over its $4.2 billion acquisition of Kyphon in 2007.

CFO Gary Ellis, during a conference call yesterday discussing the company’s Q4 results, said the dispute concerned the $3.3 billion in overseas cash Medtronic used to buy Kyphon.

“This relates to an issue we’ve had that was raised by the IRS related to our acquisition of Kyphon several years ago and which we used a combination of basically OUS cash and U.S. cash,” Ellis said. “It was a major outstanding issue we had with the IRS and we’re happy to get this when settled and move beyond it.”

The $329 million charge included the $275 million settlement and another $54 million in interest, he said.


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