Medtronic 2009 Annual Report Download - page 50

46 Medtronic, Inc.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
(continued)
analysis. We are also exposed to interest rate changes affecting
principally our investments in interest rate sensitive instruments.
A sensitivity analysis of the impact on our interest rate sensitive
financial instruments of a hypothetical 10 percent change in
short-term interest rates compared to interest rates at April 24,
2009 indicates that the fair value of these instruments would
correspondingly change by $22 million.
We have investments in marketable debt securities that are
classified and accounted for as available-for-sale. Our debt
securities include corporate debt securities, government and
agency securities, certificates of deposit and mortgage backed
and other asset backed securities including auction rate securities.
For a discussion of current market conditions and the impact on
Medtronic, please see the “Liquidity and Capital Resources”
section of this management’s discussion and analysis.
We historically lent certain fixed income securities to enhance
our investment income. These lending activities were indemnified
against counterparty risk and collateralized at an average rate
of 102 percent, with the collateral determined based on the
underlying securities and creditworthiness of the borrowers. The
value of the securities on loan at April 25, 2008 was $610 million.
Due to our concerns about the liquidity condition in the fixed
income markets, we suspended our lending program in the
second quarter of fiscal year 2009 and had no lending activity
during the third and fourth quarters of fiscal year 2009.
Cautionary Factors That May Affect Future Results
This Annual Report may include “forward-looking” statements.
Forward-looking statements broadly involve our current
expectations or forecasts of future results. Our forward-looking
statements generally relate to our growth and growth strategies,
financial results, product development, regulatory approvals,
competitive strengths, intellectual property rights, litigation and
tax matters, mergers and acquisitions, market acceptance of our
products, accounting estimates, financing activities, ongoing
contractual obligations and sales efforts. Such statements can be
identified by the use of terminology such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,”
“possible,” “project,” “should,” “will” and similar words or
expressions. Forward-looking statements in this Annual Report
include, but are not limited to, growth in our Spinal business
related to the Kyphon acquisition and our intended reorganization
and consolidation of certain activities; future launches of products
and continued acceptance of products in our operating segments;
the effectiveness of our development activities in reducing patient
care costs; the elimination of certain positions or costs related to
restructuring initiatives; outcomes in our litigation matters; the
continued strength of our balance sheet and liquidity; and the
potential impact of our compliance with governmental regulations.
One must carefully consider forward-looking statements and
understand that such statements may be affected by inaccurate
assumptions and may involve a variety of risks and uncertainties,
known and unknown, including, among others, those discussed
in the section titled “Government Regulation and Other
Considerations” in our Form 10-K, in the section entitled “Risk
Factors” in our Form 10-K, as well as those related to competition
in the medical device industry, reduction or interruption in our
supply, quality problems, liquidity, decreasing prices, adverse
regulatory action, litigation success, self-insurance, healthcare
policy changes and international operations. Consequently, no
forward-looking statement can be guaranteed and actual results
may vary materially. We intend to take advantage of the Safe
Harbor provisions of the Private Securities Litigation Reform Act
of 1995 regarding our forward-looking statements, and are
including this sentence for the express purpose of enabling us to
use the protections of the safe harbor with respect to all forward-
looking statements.
We undertake no obligation to update any statement we make,
but investors are advised to consult any further disclosures by us
in our filings with the Securities and Exchange Commission,
especially on Forms 10-K, 10-Q and 8-K, in which we discuss in
more detail various important factors that could cause actual
results to differ from expected or historical results. In addition,
actual results may differ materially from those anticipated due
to a number of factors, including, among others, those discussed
in the section entitled “Risk Factors” in our Form 10-K. It is not
possible to foresee or identify all such factors. As such, investors
should not consider any list of such factors to be an exhaustive
statement of all risks, uncertainties or potentially inaccurate
assumptions.