Medtronic 2015 Annual Report Download - page 36

Our research and development efforts rely upon investments and investment collaborations, and we cannot guarantee that
any previous or future investments or investment collaborations will be successful.
Our strategy to provide a broad range of therapies to restore patients to fuller, healthier lives requires a wide variety of
technologies, products, and capabilities. The rapid pace of technological development in the medical industry and the
specialized expertise required in different areas of medicine make it difficult for one company alone to develop a broad portfolio
of technological solutions. In addition to internally generated growth through our research and development efforts, historically
we have relied, and expect to continue to rely, upon investments and investment collaborations to provide us access to new
technologies both in areas served by our existing businesses as well as in new areas.
We expect to make future investments where we believe that we can stimulate the development or acquisition of new
technologies and products to further our strategic objectives and strengthen our existing businesses. Investments and investment
collaborations in and with medical technology companies are inherently risky, and we cannot guarantee that any of our previous
or future investments or investment collaborations will be successful or will not materially adversely affect our consolidated
earnings, financial condition, and/or cash flows.
The continuing development of many of our products depends upon us maintaining strong relationships with health care
professionals.
If we fail to maintain our working relationships with health care professionals, many of our products may not be developed and
marketed in line with the needs and expectations of the professionals who use and support our products, which could cause a
decline in our earnings and profitability. The research, development, marketing, and sales of many of our new and improved
products is dependent upon our maintaining working relationships with health care professionals. We rely on these professionals
to provide us with considerable knowledge and experience regarding the development, marketing, and sale of our products.
Physicians assist us as researchers, marketing and product consultants, inventors, and public speakers. If we are unable to
maintain our strong relationships with these professionals and continue to receive their advice and input, the development and
marketing of our products could suffer, which could have a material adverse effect on our consolidated earnings, financial
condition, and/or cash flows.
We are increasingly dependent on sophisticated information technology systems to operate our business and if we fail to
properly maintain the integrity of our data or if our products do not operate as intended or we experience a cyber-attack or
other breach of these systems, our business could be materially affected.
We are increasingly dependent on sophisticated information technology for our products and infrastructure. We rely on
information technology systems to process, transmit and store electronic information in our day-today operations. The size and
complexity of our information technology systems makes them vulnerable to increasingly sophisticated cyber-attacks, malicious
intrusion, breakdown, destruction, loss of data privacy, or other significant disruption. Our information systems require an
ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to
keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the
increasing need to protect patient and customer information, and changing customer patterns. As a result of technology
initiatives, recently enacted regulations, changes in our system platforms and integration of new business acquisitions, we have
been consolidating and integrating the number of systems we operate and have upgraded and expanded our information systems
capabilities.
In addition, third parties may attempt to hack into our products or systems and may obtain data relating to patients with our
products or the Company’s proprietary information. If we fail to maintain or protect our information systems and data integrity
effectively, we could lose existing customers, have difficulty attracting new customers, have problems in determining product
cost estimates and establishing appropriate pricing, have difficulty preventing, detecting, and controlling fraud, have disputes
with customers, physicians, and other health care professionals, have regulatory sanctions or penalties imposed, have increases
in operating expenses, incur expenses or lose revenues as a result of a data privacy breach, or suffer other adverse consequences.
There can be no assurance that our process of consolidating the number of systems we operate, upgrading and expanding our
information systems capabilities, protecting and enhancing our systems and developing new systems to keep pace with
continuing changes in information processing technology will be successful or that additional systems issues will not arise in the
future. Any significant breakdown, intrusion, interruption, corruption, or destruction of these systems, as well as any data
breaches, could have a material adverse effect on our business.
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