After its $49.9 billion Covidien acquisition in January, Medtronic PLC on Monday said it executed an internal restructuring that triggered a one-time U.S. tax charge of $500 million but will make a net $9.3 billion available for general company spending.

Medtronic moved its legal domicile from Fridley to Ireland earlier this year as part of its acquisition of surgical supplier Covidien, citing enhanced spending flexibility from moving headquarters overseas as one key benefit of the deal. The company kept its executives’ offices in Fridley and committed to making enhanced investments in the U.S.

On Monday, Medtronic disclosed in a filing with the Securities and Exchange Commission that it had reorganized former Covidien businesses in order to reduce cash and investments held by U.S.-controlled subsidiaries outside the country. The restructuring triggered a one-time charge of $500 million primarily related to U.S. income tax expenses.

“The restructuring provides Medtronic with additional financial flexibility and increased confidence in the company’s ability to meet its financial commitments, which include continuing to target an ‘A’ credit profile through a reduction in its debt to [earnings] ratio by the end of fiscal year 2018, returning a minimum of 50 percent of its free cash flow to shareholders through dividends and share repurchases, and pursuing financially disciplined M&A,” the company said in the filing after regular trading had closed Monday.

The move is not expected to affect the company’s previously announced revenue outlook or earnings guidance for the current fiscal year.

 

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