Medtronic 2014 Annual Report Download - page 36

may not be able to do so in a timely manner or for a value that is equal to the underlying principal. In addition, we may be
required to adjust the carrying value of the securities and record an impairment charge. If we determine that the fair value of
such securities is temporarily impaired, we would record a temporary impairment as a component of accumulated other
comprehensive loss within shareholders’ equity. If it is determined that the fair value of these securities is other-than-
temporarily impaired, we would record a loss in our consolidated statements of earnings, which could materially adversely
impact our results of operations and financial condition.
Negative market conditions may also impair our ability to access the capital markets through the issuance of commercial paper
or debt securities, or may impact our ability to sell such securities at a reasonable price and may negatively impact our ability to
borrow from financial institutions.
Our products are continually the subject of clinical trials conducted by us, our competitors, or other third parties, the results
of which may be unfavorable, or perceived as unfavorable, and could have a material adverse effect on our business,
financial condition, and results of operations.
As a part of the regulatory process of obtaining marketing clearance for new products and new indications for existing products,
we conduct and participate in numerous clinical trials with a variety of study designs, patient populations, and trial endpoints.
Unfavorable or inconsistent clinical data from existing or future clinical trials conducted by us, by our competitors, or by third
parties, or the market’s or U.S. FDA’s perception of this clinical data, may adversely impact our ability to obtain product
approvals, our position in, and share of, the markets in which we participate, and our business, financial condition, and results of
operations.
Failure to integrate acquired businesses into our operations successfully could adversely affect our business.
As part of our strategy to develop and identify new products and technologies, we have made several acquisitions in recent
years and may make additional acquisitions in the future. Our integration of the operations of acquired businesses requires
significant efforts, including the coordination of information technologies, research and development, sales and marketing,
operations, manufacturing, and finance. These efforts result in additional expenses and involve significant amounts of
management’s time that cannot then be dedicated to other projects. Our failure to manage and coordinate the growth of the
combined company successfully could also have an adverse impact on our business. In addition, we cannot be certain that the
businesses we acquire will become profitable or remain so. If our acquisitions are not successful, we may record unexpected
impairment charges. Factors that will affect the success of our acquisitions include:
•the presence or absence of adequate internal controls and/or significant fraud in the financial systems of
acquired companies,
•adverse developments arising out of investigations by governmental entities of the business practices of
acquired companies, including potential liability imposed by FCPA,
•any decrease in customer loyalty and product orders caused by dissatisfaction with the combined
companies’ product lines and sales and marketing practices, including price increases,
•our ability to retain key employees, and
•the ability of the combined company to achieve synergies among its constituent companies, such as
increasing sales of the combined company’s products, achieving cost savings, and effectively combining
technologies to develop new products.
For additional information regarding risks relating to the Pending Acquisition of Covidien plc, see risk factors below under the
heading “Risks relating to our pending acquisition of Covidien plc”.
The medical device industry is the subject of numerous governmental investigations into marketing and other business
practices. These investigations could result in the commencement of civil and/or criminal proceedings, substantial fines,
penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our
financial condition and results of operations.
We are subject to rigorous regulation by the U.S. FDA and numerous other federal, state, and foreign governmental authorities.
These authorities have been increasing their scrutiny of our industry. We have received subpoenas and other requests for
information from state and federal governmental agencies, including, among others, the U.S. DOJ and the Office of Inspector
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