Medtronic 2015 Annual Report Download - page 34

sales outside the U.S., especially in emerging markets, which could expose us to greater risks associated with international sales
and operations. Our profitability and international operations are, and will continue to be, subject to a number of risks and
potential costs, including:
•fluctuations in foreign currency exchange rates,
•healthcare reform legislation,
•multiple non-U.S. regulatory requirements that are subject to change and that could restrict our ability to
manufacture and sell our products,
•local product preferences and product requirements,
•longer-term receivables than are typical in the U.S.,
•trade protection measures and import or export licensing requirements,
•less intellectual property protection in some countries outside the U.S. than exists in the U.S.,
•different labor regulations and workforce instability,
•political and economic instability,
•the potential payment of U.S. income taxes on earnings of certain controlled foreign subsidiaries subject
to U.S. taxation upon repatriation,
•the expiration and non-renewal of foreign tax rulings and/or grants,
•potentially negative consequences from changes in or interpretations of tax laws, and
•economic instability and inflation, recession or interest rate fluctuations.
In particular, the Obama administration has announced potential legislative proposals to tax profits of U.S. companies earned
abroad. While it is impossible for us to predict whether these and other proposals will be implemented, or how they will
ultimately impact us, they may materially impact our results of operations if, for example, our profits earned abroad are subject
to U.S. income tax, or we are otherwise disallowed deductions as a result of these profits.
Finally, changes in foreign currency exchange rates may reduce the reported value of our foreign currency revenues, net of
expenses, and cash flows. We cannot predict changes in currency exchange rates, the impact of exchange rate changes, nor the
degree to which we will be able to manage the impact of currency exchange rate changes.
The failure to comply with U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws in non-U.S.
jurisdiction could materially adversely affect our business and result in civil and/or criminal sanctions.
The U.S. Foreign Corrupt Practices Act (FCPA) and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally prohibit
companies and their intermediaries from making improper payments to non-U.S. government officials for the purpose of obtaining or
retaining business. Because of the predominance of government-sponsored healthcare systems around the world, most of our customer
relationships outside of the U.S. are with governmental entities and are therefore potentially subject to such anti-bribery laws.
Global enforcement of anti-corruption laws has increased substantially in recent years, with more frequent voluntary self-
disclosures by companies, aggressive investigations and enforcement proceedings by U.S. and foreign governmental agencies,
and assessment of significant fines and penalties against companies and individuals. Our international operations create the risk
of unauthorized payments or offers of payments by one of our employees, consultants, sales agents, or distributors, because
these parties are not always subject to our control. It is our policy to implement safeguards to educate our employees and agents
on these legal requirements and discourage improper practices. However, our existing safeguards and any future improvements
may prove to be less than effective, and our employees, consultants, sales agents, or distributors may engage in conduct for
which we might be held responsible. In addition, the government may seek to hold us liable for successor liability FCPA
violations committed by any companies in which we invest or that we acquire. Any alleged or actual violations of these
regulations may subject us to government scrutiny, severe criminal or civil sanctions and other liabilities, including exclusion
from government contracting, and could disrupt our business, and result in a material adverse effect on our reputation, results of
operations, financial condition, and cash flows.
Laws and regulations governing the export of our products could adversely impact our business.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the Bureau of Industry and Security at
the U.S. Department of Commerce (BIS), administer certain laws and regulations that restrict U.S. persons and, in some
instances, non-U.S. persons, in conducting activities, transacting business with or making investments in certain countries,
governments, entities and individuals subject to U.S. economic sanctions. Due to our international operations, we are subject to
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