8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2007

Medtronic, Inc.

(Exact name of Registrant as Specified in its Charter)

Minnesota (State or other jurisdiction of incorporation)	1-7707 (Commission File Number)	41-0793183 (IRS Employer Identification No.)
710 Medtronic Parkway Minneapolis, Minnesota		55432
(Address of principal executive offices)		(Zip Code)
(Registrant’s telephone number, including area code): (763) 514-4000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01. Exhibits.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

     On November 19, 2007, Medtronic, Inc. issued a press release announcing its fiscal 2008 second quarter financial results. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01. Exhibits.

     (d)       Exhibit 99.1       Press release of Medtronic, Inc. dated November 19, 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MEDTRONIC, INC.
Date: November 19, 2007	By /s/ Gary L. Ellis
	Gary L. Ellis
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Medtronic, Inc.
Form 8-K Current Report

Exhibit Number	Description
99.1	Press release dated November 19, 2007

EX-99.1

NEWS RELEASE

Contacts:
Martha Goldberg Aronson Investor Relations 763-505-2694	Marybeth Thorsgaard Public Relations 763-505-2644

FOR IMMEDIATE RELEASE

MEDTRONIC REPORTS SECOND QUARTER REVENUE OF $3.124 BILLION AND
DILUTED EPS OF $0.58

• Double Digit Revenue Growth Outside the U.S.

• Voluntary Suspension of Fidelis® Lead Significantly Impacted Quarterly Results

MINNEAPOLIS — November 19, 2007 — Medtronic, Inc. (NYSE:MDT) today announced financial results for its second quarter of fiscal year 2008, which ended October 26, 2007.

Medtronic recorded second quarter revenue of $3.124 billion, a two percent increase over the $3.075 billion reported in the second quarter of fiscal year 2007. Non-U.S. revenue of $1.166 billion grew 12 percent including the $73 million positive benefit of currency translation. For the quarter, 37 percent of Medtronic’s revenue was from outside the U.S. Net earnings for the quarter were $666 million, or $0.58 per diluted share, each a two percent decrease over the same period in the prior year.

Commenting on the voluntary suspension of Fidelis® leads and its negative impact to the business this quarter, Bill Hawkins, Medtronic president and chief executive officer said, “This was the right decision as there is nothing more important to us than the safety and well being of patients.”

Unless otherwise noted, all comparisons made in this news release are on an “as reported basis,” not on a constant currency basis, and references to quarterly figures increasing or decreasing are in comparison to the second quarter of fiscal year 2007.

Cardiac Rhythm Disease Management

Cardiac Rhythm Disease Management (CRDM) revenue of $1.148 billion decreased 8 percent. Revenue from implantable cardioverter defibrillators (ICDs) was $639 million, down 16 percent, while worldwide pacing revenue of $495 million in the quarter increased 5 percent. The Fidelis defibrillator lead recall had an estimated negative impact of $115 million and $15 million on ICD and Pacing revenue, respectively. Additionally, CRDM incurred expenses of approximately $31 million in inventory write-offs and other direct costs associated with Fidelis during the quarter.

Spinal

Spinal revenue of $660 million grew 10 percent, driven by sales of the biologics product line and strong growth outside the U.S. With the acquisition completed earlier than anticipated, the company expects Kyphon will contribute to revenue in the second half of the fiscal year as Medtronic expands its presence in the aging spine market.

CardioVascular

CardioVascular revenue of $490 million grew 8 percent, driven by Coronary Stents and Endovascular. Coronary Stent revenue of $149 million grew 13 percent and Endovascular revenue grew 11 percent. Final FDA approval for the Endeavor ® drug eluting stent is anticipated by the end of the calendar year, providing Medtronic entry into this approximately $2 billion U.S. market.

Neuromodulation

Neuromodulation revenue of $321 million grew 10 percent. Adjusting for the impact of the previously announced divestitures of the three diagnostics related product lines, the Neuromodulation business grew 15 percent.

Diabetes

Diabetes revenue of $246 million grew 16 percent, driven by double digit growth in pump therapies and a robust uptake in continuous glucose monitoring products.

Ear, Nose and Throat (ENT)

ENT revenue of $149 million grew 16 percent, driven by power systems and monitoring disposables along with further global penetration of the product portfolio.

Physio-Control

Physio-Control revenue of $74 million was down 33 percent, due to the voluntary suspension of U.S. product shipments to address quality system issues.

In closing Hawkins said, “While we are very focused on addressing the challenges in our CRDM business, we are pleased with a number of highlights in our second quarter including the positive FDA panel recommendation of our Endeavor drug-eluting stent, continued progress with our Prestige® Cervical Disc launch, and improved momentum in our neuromodulation business. With our broad diversified business portfolio and the opportunity to accelerate growth outside the U.S., we remain optimistic about our strong growth potential going forward.”

Webcast Information

Medtronic will host a webcast for the public, analysts and news media today, Nov. 19 at 4:30 p.m. EST (3:30 CST), to provide information about its businesses, quarterly financial results and analysts’ expectations for fiscal 2008 results. This quarterly webcast can be accessed by clicking on the Investor Relations link on the Medtronic home page at www.medtronic.com and this earnings release will be archived at www.medtronic.com/newsroom. Within 24 hours, a replay of the webcast and a transcript of the company’s prepared remarks will be available in the “Presentations & Transcripts” section of the Investor Relations homepage.

About Medtronic

Medtronic, Inc., headquartered in Minneapolis, is the world’s leading medical technology company, alleviating pain, restoring health and extending life for people with chronic disease.

Its Internet address is www.medtronic.com.

This news release contains forward-looking statements regarding our operating momentum, new products and other developments, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of medical products, integration of acquired businesses, government regulation, general economic conditions and other risk and uncertainties described in Medtronic’s Annual Report on Form 10-K for the year ended April 27, 2007. Actual results may differ materially from anticipated results. Medtronic does not undertake to update its forward-looking statements.

-end-

MEDTRONIC, INC.
REVENUE BY OPERATING SEGMENT — WORLD WIDE
(Unaudited)

($ millions)

	FY 07		FY 07		FY 07		FY 07		FY 07		FY 08		FY 08		FY 08		FY 08		FY 08
	QTR 1		QTR 2		QTR 3		QTR 4		Total		QTR 1		QTR 2		QTR 3		QTR 4		Total
REPORTED REVENUE :
CARDIAC RHYTHM DISEASE MANAGEMENT	$	1,149	$	1,252	$	1,186	$	1,291	$	4,876	$	1,235	$	1,148	$	—	$	—	$	2,383
Pacing Systems		460		473		458		504		1,895		494		495		—		—		990
Defibrillation Systems		673		764		711		770		2,917		726		639		—		—		1,365
Other		16		15		17		17		64		15		14		—		—		28
SPINAL	$	575	$	599	$	598	$	643	$	2,417	$	644	$	660	$	—	$	—	$	1,304
Spinal Instrumentation		412		421		429		456		1,721		454		462		—		—		916
Spinal Biologics		163		178		169		187		696		190		198		—		—		388
CARDIOVASCULAR	$	448	$	455	$	478	$	528	$	1,909	$	486	$	490	$	—	$	—	$	976
Coronary Stents		120		132		148		161		560		152		149		—		—		302
Other Coronary/Peripheral		99		92		92		100		386		95		96		—		—		191
Endovascular		61		63		64		72		259		69		70		—		—		138
Revasc & Surgical Therapies		100		98		105		114		417		102		105		—		—		207
Structural Heart Disease		68		70		69		81		287		68		70		—		—		138
NEUROMODULATION	$	276	$	291	$	290	$	326	$	1,183	$	289	$	321	$	—	$	—	$	610
Neuro Implantables		226		238		233		265		962		237		264		—		—		500
Gastroenterology & Urology		50		53		57		61		221		52		57		—		—		110
DIABETES	$	196	$	212	$	226	$	229	$	863	$	241	$	246	$	—	$	—	$	486
EAR, NOSE & THROAT (ENT)	$	128	$	129	$	134	$	147	$	539	$	144	$	149	$	—	$	—	$	293
Core ENT		65		65		69		77		278		75		75		—		—		150
Neurologic Technologies		63		64		65		70		261		69		74		—		—		143
CORPORATE TECHNOLOGIES AND NEW VENTURES	$	24	$	26	$	31	$	47	$	127	$	28	$	36	$	—	$	—	$	65
PHYSIO-CONTROL	$	101	$	111	$	105	$	69	$	385	$	60	$	74	$	—	$	—	$	133
TOTAL	$	2,897	$	3,075	$	3,048	$	3,280	$	12,299	$	3,127	$	3,124	$	—	$	—	$	6,250
ADJUSTMENTS :
CURRENCY (1)	$	6	$	32	$	55	$	71	$	166	$	49	$	73					$	121
COMPARABLE OPERATIONS (1)	$	2,891	$	3,043	$	2,993	$	3,209	$	12,133	$	3,078	$	3,051	$	—	$	—	$	6,129

(1)

Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP.

Note:

The data in this schedule has been intentionally rounded to the nearest million and therefore the quarterly revenues may not sum to the fiscal year to date revenue.

MEDTRONIC, INC.
REVENUE BY OPERATING SEGMENT  — US
(Unaudited)

($ millions)

	FY 07		FY 07		FY 07		FY 07		FY 07		FY 08		FY 08		FY 08		FY 08		FY 08
	QTR 1		QTR 2		QTR 3		QTR 4		Total		QTR 1		QTR 2		QTR 3		QTR 4		Total
REPORTED REVENUE :
CARDIAC RHYTHM DISEASE MANAGEMENT	$	733	$	807	$	737	$	773	$	3,048	$	754	$	679	$	—	$	—	$	1,432
Pacing Systems		228		244		220		240		931		244		237		—		—		480
Defibrillation Systems		495		554		507		525		2,082		504		434		—		—		938
Other		10		9		10		8		35		6		8		—		—		14
SPINAL	$	480	$	505	$	502	$	531	$	2,019	$	530	$	540	$	—	$	—	$	1,070
Spinal Instrumentation		322		333		338		353		1,348		349		352		—		—		701
Spinal Biologics		158		172		164		178		671		181		188		—		—		369
CARDIOVASCULAR	$	170	$	174	$	173	$	189	$	707	$	167	$	173	$	—	$	—	$	341
Coronary Stents		9		12		17		22		61		20		21		—		—		40
Other Coronary/Peripheral		37		36		29		30		130		24		24		—		—		50
Endovascular		33		35		34		37		140		35		37		—		—		72
Revasc & Surgical Therapies		52		51		53		56		213		49		52		—		—		101
Structural Heart Disease		39		40		40		44		163		39		39		—		—		78
NEUROMODULATION	$	196	$	215	$	207	$	226	$	844	$	201	$	239	$	—	$	—	$	439
Neuro Implantables		157		173		164		180		674		160		192		—		—		351
Gastroenterology & Urology		39		42		43		46		170		41		47		—		—		88
DIABETES	$	140	$	154	$	164	$	158	$	616	$	163	$	170	$	—	$	—	$	334
EAR, NOSE & THROAT (ENT)	$	87	$	88	$	91	$	96	$	362	$	93	$	97	$	—	$	—	$	190
Core ENT		43		44		47		49		183		48		47		—		—		95
Neurologic Technologies		44		44		44		47		179		45		50		—		—		95
CORPORATE TECHNOLOGIES AND NEW VENTURES	$	17	$	17	$	21	$	30	$	85	$	19	$	23	$	—	$	—	$	42
PHYSIO-CONTROL	$	60	$	73	$	62	$	24	$	219	$	21	$	37	$	—	$	—	$	58
TOTAL	$	1,883	$	2,033	$	1,957	$	2,027	$	7,900	$	1,948	$	1,958	$	—	$	—	$	3,906
ADJUSTMENTS :
CURRENCY	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
COMPARABLE OPERATIONS	$	1,883	$	2,033	$	1,957	$	2,027	$	7,900	$	1,948	$	1,958	$	—	$	—	$	3,906

Note: The data in this schedule has been intentionally rounded to the nearest million and therefore the quarterly revenues may not sum to the fiscal year to date revenue.

MEDTRONIC, INC.
REVENUE BY OPERATING SEGMENT  — INTERNATIONAL
(Unaudited)

($ millions)

	FY 07		FY 07		FY 07		FY 07		FY 07		FY 08		FY 08		FY 08		FY 08		FY 08
	QTR 1		QTR 2		QTR 3		QTR 4		Total		QTR 1		QTR 2		QTR 3		QTR 4		Total
REPORTED REVENUE :
CARDIAC RHYTHM DISEASE MANAGEMENT	$	416	$	445	$	449	$	518	$	1,828	$	481	$	469	$	—	$	—	$	951
Pacing Systems		232		229		238		264		964		250		258		—		—		510
Defibrillation Systems		178		210		204		245		835		222		205		—		—		427
Other		6		6		7		9		29		9		6		—		—		14
SPINAL	$	95	$	94	$	96	$	112	$	398	$	114	$	120	$	—	$	—	$	234
Spinal Instrumentation		90		88		91		103		373		105		110		—		—		215
Spinal Biologics		5		6		5		9		25		9		10		—		—		19
CARDIOVASCULAR	$	278	$	281	$	305	$	339	$	1,202	$	319	$	317	$	—	$	—	$	635
Coronary Stents		111		120		131		139		499		132		128		—		—		262
Other Coronary/Peripheral		62		56		63		70		256		71		72		—		—		141
Endovascular		28		28		30		35		119		34		33		—		—		66
Revasc & Surgical Therapies		48		47		52		58		204		53		53		—		—		106
Structural Heart Disease		29		30		29		37		124		29		31		—		—		60
NEUROMODULATION	$	80	$	76	$	83	$	100	$	339	$	88	$	82	$	—	$	—	$	171
Neuro Implantables		69		65		69		85		288		77		72		—		—		149
Gastroenterology & Urology		11		11		14		15		51		11		10		—		—		22
DIABETES	$	56	$	58	$	62	$	71	$	247	$	78	$	76	$	—	$	—	$	152
EAR, NOSE & THROAT (ENT)	$	41	$	41	$	43	$	51	$	177	$	51	$	52	$	—	$	—	$	103
Core ENT		22		21		22		28		95		27		28		—		—		55
Neurologic Technologies		19		20		21		23		82		24		24		—		—		48
CORPORATE TECHNOLOGIES AND NEW VENTURES	$	7	$	9	$	10	$	17	$	42	$	9	$	13	$	—	$	—	$	23
PHYSIO-CONTROL	$	41	$	38	$	43	$	45	$	166	$	39	$	37	$	—	$	—	$	75
TOTAL	$	1,014	$	1,042	$	1,091	$	1,253	$	4,399	$	1,179	$	1,166	$	—	$	—	$	2,344
ADJUSTMENTS :
CURRENCY (1)	$	6	$	32	$	55	$	71	$	166	$	49	$	73	$	—	$	—	$	121
COMPARABLE OPERATIONS (1)	$	1,008	$	1,010	$	1,036	$	1,182	$	4,233	$	1,130	$	1,093	$	—	$	—	$	2,223

(1) Medtronic management believes that in order to properly understand Medtronic’s short-term and long-term financial trends, investors may wish to consider the impact of foreign currency translation on revenue. In addition, Medtronic management uses results of operations before currency translation to evaluate the operational performance of the Company and as a basis for strategic planning. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP.

Note: The data in this schedule has been intentionally rounded to the nearest million and therefore the quarterly revenues may not sum to the fiscal year to date revenue.

MEDTRONIC, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in millions, except per share data)

	Three months ended						Six months ended
	October 26, 2007			October 27, 2006			October 26, 2007			October 27, 2006
Net sales	$	3,124		$	3,075		$	6,250		$	5,972
Costs and expenses:
Cost of products sold		840			795			1,632			1,527
Research and development expense		298			320			598			619
Selling, general, and administrative expense		1,107			1,036			2,203			2,020
Restructuring charges		—			—			14			—
Certain litigation charges		—			—			—			40
Purchased in-process research and development (IPR&D) charges		—			—			33			—
Other expense, net		72			50			128			116
Interest income, net		(61	)		(37	)		(105	)		(76	)
Total costs and expenses		2,256			2,164			4,503			4,246
Earnings before income taxes		868			911			1,747			1,726
Provision for income taxes		202			230			406			446
Net earnings	$	666		$	681		$	1,341		$	1,280
Earnings per share:
Basic	$	0.59		$	0.59		$	1.18		$	1.11
Diluted	$	0.58		$	0.59		$	1.17		$	1.10
Weighted average shares outstanding:
Basic		1,133.1			1,149.3			1,136.1			1,151.4
Diluted		1,147.7			1,159.4			1,150.6			1,161.9

MEDTRONIC, INC.
RECONCILIATION OF CONSOLIDATED GAAP NET EARNINGS
TO CONSOLIDATED NON-GAAP NET EARNINGS
(Unaudited)

(in millions, except per share data)

	Six months ended			Six months ended
	October 26, 2007			October 27, 2006
Net earnings, as reported	$	1,341		$	1,280
Restructuring charges		11	(a)		—
Certain litigation charges		—			40	(c)
IPR&D charges		25	(b)		—
Non-GAAP net earnings	$	1,377		$	1,320

MEDTRONIC, INC.
RECONCILIATION OF CONSOLIDATED GAAP DILUTED EPS
TO CONSOLIDATED NON-GAAP DILUTED EPS
(Unaudited)

	Six months ended			Six months ended
	October 26, 2007			October 27, 2006
Diluted EPS, as reported	$	1.17		$	1.10
Restructuring charges		0.01	(a)		—
Certain litigation charges		—			0.04	(c)
IPR&D charges		0.02	(b)		—
Non-GAAP diluted EPS	$	1.20		$	1.14

(a)	The $11 million ($0.01 per share) after-tax restructuring charge is related to restructuring initiatives that the Company began in the fourth quarter of fiscal year 2007. These initiatives were designed to drive manufacturing efficiencies in our CardioVascular business, downsize our Physio-Control business due to our voluntary suspension of U.S. shipments, and rebalance resources within our Cardiac Rhythm Disease Management (CRDM) business to reflect the market dynamics. As a continuation of our fiscal year 2007 initiatives, in the first quarter of fiscal year 2008 the Company recognized expense associated with compensation and early retirement benefits provided to employees whose employment terminated with the Company in the first quarter of fiscal year 2008 which could not be accrued in the fourth quarter of fiscal year 2007. In addition to disclosing restructuring charges that are determined in accordance with GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding these restructuring charges. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates these restructuring charges when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, this non-GAAP financial measure may not be the same as similar measures presented by other companies.
(b)	The $25 million ($0.02 per share) after-tax IPR&D charge is related to a $25 million ($18 million after-tax) milestone payment under a royalty bearing, non-exclusive patent cross-licensing agreement with NeuroPace, Inc. that the Company entered into in the first quarter of fiscal year 2006. The additional $8 million ($7 million after-tax) charge is related to purchases of certain intellectual property. These payments were expensed as IPR&D since technological feasibility of the underlying projects have not yet been reached and such technology has no future alternative use. In addition to disclosing IPR&D charges that are determined in accordance with U.S. generally accepted accounting principles (GAAP), Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding these IPR&D charges. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates these IPR&D charges when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, this non-GAAP financial measure may not be the same as similar measures presented by other companies.
(c)	The $40 million ($0.04 per share) after-tax certain litigation charge is related to the settlement agreement reached with the U.S. Department of Justice which requires the government to seek dismissal of two qui tam civil suits pending against Medtronic. In addition to disclosing certain litigation charges that are determined in accordance with GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding these litigation charges. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates these litigation charges when evaluating the operating performance of the Company. Investors should consider this non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, this non-GAAP financial measure may not be the same as similar measures presented by other companies.

MEDTRONIC, INC.
RECONCILIATION OF NEUROMODULATION GAAP REVENUE AND REVENUE GROWTH
TO NON-GAAP REVENUE AND REVENUE GROWTH
(Unaudited)
(in millions)

	Three months ended		Three months ended			Percentage
	October 26, 2007		October 27, 2006			Change
Neuromodulation revenue, as reported	$	321	$	291			10	%
Diagnostics product portfolio revenue		—		(12	) (a)	NA
Neuromodulation revenue, adjusted	$	321	$	279			15	%

(a) The $12 million represents the revenue earned by the three diagnostics product lines that were divested in fiscal year 2007. In addition to disclosing revenue and growth rates that are determined in accordance with GAAP, Medtronic management believes that in order to properly understand its short-term and long-term financial trends, investors may find it useful to consider the impact of excluding this diagnostics product portfolio revenue from these metrics. Management believes that the resulting non-GAAP financial measures provide useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Medtronic management eliminates this revenue when evaluating the operating performance of the Company. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.

MEDTRONIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	October 26,			April 27,
	2007			2007
	(in millions, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	4,683		$	1,256
Short-term investments		900			1,822
Accounts receivable, less allowances of $159 and $194, respectively		2,865			2,737
Inventories		1,248			1,215
Deferred tax assets, net		442			405
Prepaid expenses and other current assets		403			483
Total current assets		10,541			7,918
Property, plant and equipment		4,599			4,309
Accumulated depreciation		(2,438	)		(2,247	)
Property, plant and equipment, net		2,161			2,062
Goodwill		4,335			4,327
Other intangible assets, net		1,389			1,433
Long-term investments		1,481			3,203
Long-term deferred tax assets, net		323			204
Other assets		356			365
Total assets	$	20,586		$	19,512
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	877		$	509
Accounts payable		315			282
Accrued compensation		609			767
Accrued income taxes		100			350
Other accrued expenses		750			655
Total current liabilities		2,651			2,563
Long-term debt		5,494			5,578
Long-term accrued compensation		95			264
Long-term accrued income taxes		536			—
Other long-term liabilities		335			130
Total liabilities		9,111			8,535
Commitments and contingencies		—			—
Shareholders’ equity:
Preferred stock— par value $1.00		—			—
Common stock— par value $0.10		113			114
Retained earnings		11,492			10,925
Accumulated other comprehensive loss		(130	)		(62	)
Total shareholders’ equity		11,475			10,977
Total liabilities and shareholders’ equity	$	20,586		$	19,512

MEDTRONIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)

	Six months ended
	October 26,			October 27,
	2007			2006
Operating Activities:
Net earnings	$	1,341		$	1,280
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		276			277
IPR&D charges		33			—
Provision for doubtful accounts		17			21
Deferred income taxes		3			(251	)
Stock-based compensation		92			94
Excess tax benefit from exercise of stock-based awards		(32	)		(11	)
Change in operating assets and liabilities:
Accounts receivable		(128	)		(179	)
Inventories		(12	)		(143	)
Accounts payable and accrued liabilities		98			199
Other operating assets and liabilities		117			20
Net cash provided by operating activities		1,805			1,307
Investing Activities:
Acquisitions, net of cash acquired		(26	)		(8	)
Purchase of intellectual property		(52	)		(102	)
Additions to property, plant and equipment		(280	)		(251	)
Purchases of marketable securities		(4,279	)		(7,275	)
Sales and maturities of marketable securities		6,959			6,787
Other investing activities, net		(67	)		(44	)
Net cash provided by (used in) investing activities		2,255			(893	)
Financing Activities:
Change in short-term borrowings, net		266			64
Payments on long-term debt		—			(1,877	)
Dividends to shareholders		(284	)		(254	)
Issuance of common stock		285			113
Excess tax benefit from exercise of stock-based awards		32			11
Repurchase of common stock		(901	)		(398	)
Net cash used in financing activities		(602	)		(2,341	)
Effect of exchange rate changes on cash and cash equivalents		(31	)		23
Net change in cash and cash equivalents		3,427			(1,904	)
Cash and cash equivalents at beginning of period		1,256			2,994
Cash and cash equivalents at end of period	$	4,683		$	1,090