Medtronic 2014 Annual Report Download - page 27

U.S. for arrangements with physicians, or other parties outside the U.S. if the physician or party is a government official of
another country and the arrangement violates the law of that country.
Environmental Health and Safety Laws
We are also subject to various environmental health and safety laws and regulations both within and outside the U.S. Like other
medical device companies, our manufacturing and other operations involve the use and transportation of substances regulated
under environmental health and safety laws including those related to the transportation of hazardous materials. To the best of
our knowledge at this time, we do not expect that compliance with environmental protection laws will have a material impact on
our consolidated results of operations, financial position, or cash flows.
Litigation Risks
Patent Litigation. We operate in an industry characterized by extensive patent litigation. Patent litigation can result in significant
damage awards and injunctions that could prevent the manufacture and sale of affected products or result in significant royalty
payments in order to continue selling the products. At any given time, we are involved as both a plaintiff and a defendant in a
number of patent infringement actions, the outcomes of which may not be known for prolonged periods of time. While it is not
possible to predict the outcome of patent litigation incidents to our business, we believe the costs associated with this type of
litigation could have a material adverse impact on our consolidated results of operations, financial position, or cash flows. For
additional information, see “Item 1A. Risk Factors” and Note 18 to the consolidated financial statements in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report on Form 10-K.
Product Liability and Other Claims. We operate in an industry susceptible to significant product liability claims. These claims
may be brought by individuals seeking relief on their own behalf or purporting to represent a class. We are also susceptible to
other litigation, including private securities litigation, shareholder derivative suits and contract litigation. These claims may be
asserted against us in the future based on events we are not aware of at the present time. For additional information, see
“Item 1A. Risk Factors” and Note 18 to the consolidated financial statements in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on Form 10-K.
Self-Insurance
We have elected to self-insure most of our insurable risks. We made this decision based on conditions in the insurance
marketplace that have led to increasingly higher levels of self-insurance retentions, increasing numbers of coverage limitations,
and dramatically higher insurance premium rates. We maintain a directors and officers insurance policy providing limited
coverage and we continue to monitor the insurance marketplace to evaluate the value to us of obtaining insurance coverage for
other categories of losses in the future. Based on historical loss trends, we believe that our self-insurance program accruals and
our existing insurance coverage will be adequate to cover future losses. Historical trends, however, may not be indicative of
future losses. The absence of third-party insurance coverage for other categories of losses increases our exposure to
unanticipated claims and these losses could have a material adverse impact on our consolidated earnings, financial condition
and/or cash flows.
Executive Officers of Medtronic
Set forth below are the names and ages of current Section 16(b) executive officers of Medtronic, Inc., as well as information
regarding their positions with Medtronic, their periods of service in these capacities, and their business experiences. There are
no family relationships among any of the officers named, nor is there any arrangement or understanding pursuant to which any
person was selected as an officer.
Omar Ishrak, age 58, has been Chairman and Chief Executive Officer of Medtronic since June 2011. Prior to joining
Medtronic, Mr. Ishrak served as President and Chief Executive Officer of GE Healthcare Systems, a division of GE Healthcare,
from 2009 to 2011. Before that, Mr. Ishrak was President and Chief Executive Officer of GE Healthcare Clinical Systems from
2005 to 2008 and President and Chief Executive Officer of GE Healthcare Ultrasound and BMD from 1995 to 2004.
Michael J. Coyle, age 51, has been Executive Vice President and Group President, Cardiac and Vascular Group since December
2009. Prior to that, he served as President of the Cardiac Rhythm Management division at St. Jude from 2001 to 2007, and prior
positions included serving St. Jude as President of the company’s Daig Catheter division and numerous leadership positions at
Eli Lilly & Company.
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