Medtronic 2015 Annual Report Download - page 115

Medtronic plc
Notes to Consolidated Financial Statements (Continued)
Global concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers
and their dispersion across many geographic areas. The Company monitors the creditworthiness of its customers to which it
grants credit terms in the normal course of business. However, a significant amount of trade receivables are with hospitals that
are dependent upon governmental health care systems in many countries. The current economic conditions in many countries
outside the U.S. may continue to increase the average length of time it takes the Company to collect on its outstanding trade
receivables in these countries as certain payment patterns have been impacted. Although the Company does not currently
foresee a significant credit risk associated with the outstanding accounts receivable, repayment is dependent upon the financial
stability of the economies of these countries.
10. Shareholders’ Equity
Share Capital
On January 26, 2015, the Company consummated a reorganization pursuant to which Medtronic plc domiciled in Ireland
became the publicly traded parent of Medtronic, Inc. In connection with the reorganization, all issued and outstanding
Medtronic, Inc. common shares were canceled and ceased to exist and each Medtronic, Inc. common stock share was converted
into one Medtronic plc ordinary share. Subsequent to the reorganization, Medtronic plc is authorized to issue 2.600 billion
Ordinary Shares, $0.0001 par value; 40 thousand Euro Deferred Shares, €1.00 par value; 128 million Preferred Shares, $0.20
par value; and 500 thousand A Preferred Shares, $1.00 par value.
Euro Deferred Shares
During the Transactions, the Company issued 40 thousand Euro Deferred Shares at their par value of €1.00 per share. The
holders of the Euro Deferred Shares are not entitled to receive any dividend or distribution and are not entitled to receive notice
of, nor attend, speak or vote at any general meeting of the Company. On a return of assets, whether on liquidation or otherwise,
the Euro Deferred Shares are entitled to only the repayment of the amounts paid up on such shares, after repayment of the
capital paid up on the ordinary shares. Euro Deferred shareholders are not entitled to any further participation in the assets or
profits of the Company.
A Preferred Shares
The Company issued 624 A Preferred Shares, par value $1.00, each to three of its advisors in connection with the Transactions,
for a total of 1,872 A Preferred Shares outstanding with an aggregate consideration of $75 thousand. The holders of A Preferred
Shares are entitled to payment of dividends prior to any other class of shares in the Company equal to twice the dividend to be
paid per Company ordinary share. On a return of assets, whether on liquidation or otherwise, the A Preferred Shares are entitled
to repayment of the capital paid up thereon in priority to any repayment of capital to the holders of any other shares and the
holders of the A Preferred Shares shall not be entitled to any further participation in the assets or profits of the Company. The
holders of the A Preferred Shares are not entitled to receive notice of, nor to attend, speak, or vote at any general meeting of the
Company.
Dividends
The timing, declaration and payment of future dividends to holders of our ordinary and A Preferred shares falls within the
discretion of the Company’s Board of Directors and depends upon many factors, including the statutory requirements of Irish
law, the Company’s earnings and financial condition, the capital requirements of our businesses, industry practice and any other
factors the Board of Directors deems relevant.
Ordinary Share Repurchase Program
Shares are repurchased from time to time to support the Company’s stock-based compensation programs and to return capital to
shareholders. In January 2015, the Company’s Board of Directors authorized, subject to the ongoing existence of sufficient
distributable reserves, the adoption of the existing Medtronic, Inc. share redemption program. During fiscal years 2015 and
2014, the Company repurchased approximately 29.8 million and 47.8 million shares at an average price of $64.53 and $53.37,
respectively. As of April 24, 2015, the Company had used 50.3 million of the 80 million shares authorized under the repurchase
105