MINNEAPOLIS--(BUSINESS WIRE)--May 23, 2006--Medtronic, Inc. (NYSE:MDT):

 

• Annual Revenue of $11.3 Billion Grew 12% (13% Constant Currency Growth); Fourth Quarter Revenue of $3.1 Billion Grew 11% (13% Constant Currency Growth)
• Fourth Quarter Diluted Earnings Per Share of $0.62 Grew 288% (17% as Adjusted)
• Annual R&D Expenditures of $1.1 Billion Grew 17%
• The Company Repurchased 69 Million Shares ($3.6 Billion) During The Year

Medtronic, Inc. (NYSE:MDT) today announced financial results for its fiscal year and fourth quarter ended April 28, 2006.

Medtronic recorded fiscal year 2006 revenue of $11.303 billion, a 12 percent increase over the $10.055 billion in fiscal year 2005. On a constant currency basis, growth was 13 percent with a negative currency translation impact of $118 million. As reported fiscal year 2006 net earnings were $2.553 billion, or $2.10 per diluted share, an increase of 42 percent over the prior year. Before IPR&D (In-Process Research and Development) and other charges detailed in the attached table, net earnings for fiscal year 2006 were $2.689 billion, or $2.21 per diluted share, an increase of 18 percent and 19 percent over the comparable amounts in fiscal year 2005.

Fiscal fourth quarter revenue increased 11 percent to $3.077 billion from the $2.778 billion reported a year ago. On a constant currency basis, growth was 13 percent with a negative currency translation impact of $69 million. Reported fourth quarter net earnings were $747 million, or $0.62 per diluted share, an increase of 284 percent and 288 percent over the prior year. Excluding certain litigation charges and a one-time tax charge included in the prior year fourth quarter, net earnings and earnings per share increased 16 percent and 17 percent.

"Medtronic's strong annual and fourth quarter performance reflects the balance of our portfolio and underscores the importance of maintaining a diversified business," said Art Collins, Medtronic chairman and chief executive officer. "During this past fiscal year, revenue in six of our seven businesses reported double-digit growth. These six businesses also comprise 94 percent of total Medtronic revenue in the fiscal year. We are encouraged by the strength of our new product pipeline and continue to make major investments to support growth in the coming fiscal year and beyond."

Cardiac Rhythm Disease Management Business

Cardiac Rhythm Disease Management (CRDM) reported annual revenue of $5.218 billion and fourth quarter revenue of $1.398 billion, representing growth of 13 percent and 10 percent. Medtronic's largest product line, Implantable Cardioverter Defibrillators (ICDs), generated annual revenue of $2.941 billion, an increase of 24 percent (25 percent constant currency). Quarterly ICD revenue of $768 million grew 12 percent (14 percent constant currency). On a sequential basis, the overall ICD market grew $74 million over the third quarter with Medtronic capturing more than 60 percent of this growth. ICD revenue gains underscore the strength of Medtronic's product line and sales and technical support teams. Worldwide pacing revenue of $467 million in the quarter grew 7 percent (11 percent constant currency).

Emergency Response Systems reported fourth quarter revenue of $144 million, an increase of 14 percent (16 percent constant currency) reflecting the resolution of previously disclosed supplier issues.

    CRDM quarterly highlights include:

    --  Enrollment commenced in a clinical trial for Chronicle(R) ICD,
        a new heart failure device that combines the capabilities of
        an ICD with a new technology that continuously records
        pressure inside the heart and alerts physicians to potential
        heart-failure complications.

    --  The EnRhythm(R) pacemaker, with Medtronic's unique managed
        ventricular pacing (MVP) feature, helped drive 18 percent
        pacing growth in the U.S., the strongest performance in over
        four years.

    --  The Medtronic CareLink(R) Network continued to expand, with
        more than 66,000 patients now being monitored by more than 875
        clinics.

Key developments expected during the first half of fiscal 2007 include the full U.S. market launch of the Concerto(TM) CRT-D and Virtuoso(TM) ICD, which received U.S. FDA approval last week. In addition, the new Adapta(TM) portfolio of pacemakers is expected to be launched in the U.S. during the first quarter.

Spinal and Navigation Businesses

Spinal and Navigation reported annual revenue of $2.244 billion and fourth quarter revenue of $618 million, representing growth of 19 percent and 16 percent. Continuing a long track record of solid growth and market share leadership, fourth quarter Spinal revenue of $582 million grew 17 percent (18 percent constant currency).

    Spinal quarterly highlights include:

    --  Spinal Implant performance was once again led by the CD
        Horizon(R) Legacy family of lumbar products, which grew at 24
        percent.

    --  Spinal Biologics revenue increased more than 35 percent as
        surgeon demand for INFUSE(R) bone graft increased in both
        spinal and trauma indications. In addition, the largest ever
        grant was made to the Orthopedic Trauma Association to support
        an independent multi-center clinical study on rhBMP-2 in
        extremity trauma.

    --  The DIAM(TM) minimally invasive posterior dynamic
        stabilization product received FDA IDE approval to begin the
        pivotal U.S. clinical trial. This study, the first of three
        planned trials, will take place at 24 centers, enrolling about
        430 patients.

Looking ahead, several new products are expected to be launched in the first half of fiscal 2007, including the Direct Lateral family of MAST(TM) products and a new product targeted at the vertebral compression fracture market.

Neurological Business

Neurological reported annual revenue of $1.016 billion and fourth quarter revenue of $282 million, representing 10 percent growth. The segment's largest business, Neuro Implantables, generated fourth quarter revenue of $240 million, increasing 17 percent (20 percent constant currency).

    Neurological quarterly highlights include:

    --  U.S. FDA approval was received for the RestorePRIME(TM)
        Neuromodulation System for the treatment of chronic pain.

    --  Medtronic's Activa(R) Therapy for the treatment of Parkinson's
        disease was upgraded by the American Academy of Neurology to
        the status of a treatment option for patients with motor
        complications.

    --  Plans were announced to significantly increase the investment
        in clinical trials for the company's Neurological therapies,
        including: deep brain stimulation for the treatment of
        Parkinson's disease, epilepsy, and depression; spinal cord
        stimulation for back pain; sacral nerve stimulation for
        overactive bladder; transurethral needle ablation for enlarged
        prostate; and intrathecal baclofen for severe spasticity.

Key developments in the first half of fiscal 2007 are expected to include the commercial release of the new PROSTIVA(TM) RF Therapy system, a next generation device for treating enlarged prostate, which received U.S. FDA approval earlier this week. In addition, the new InterStim(R) II system for the treatment of overactive bladder and urinary retention is expected to be launched in the first quarter.

Vascular Business

Vascular reported annual revenue of $939 million and fourth quarter revenue of $273 million, representing 10 percent and 18 percent growth. Strong fourth quarter results were driven by Coronary Vascular which generated revenue of $206 million, representing growth of 21 percent (27 percent constant currency).

    Vascular quarterly highlights include:

    --  The Endeavor(R) Drug-Eluting Coronary Stent, now commercially
        released in nearly 100 countries outside the U.S., generated
        fourth quarter revenue of $59 million. Endeavor market share
        averages about 20 percent in markets where the product has
        been fully commercialized.

    --  Long term results from the ENDEAVOR III clinical trial were
        presented at the American College of Cardiology Annual
        Scientific Sessions in Atlanta in March, demonstrating
        consistent clinical efficacy and a strong safety profile.

    --  The AneuRx(R) AAAdvantage(TM) abdominal aortic aneurysm stent
        graft with the Xcelerant(R) delivery system received U.S. FDA
        approval.

    --  CE Mark approval was received for the Exponent(R) RX
        Self-Expanding Carotid Stent and Interceptor(TM) PLUS Carotid
        Filter System, Medtronic's next generation products providing
        patients with a new minimally invasive treatment option for
        the prevention of stroke.

Other recent developments include continued strong long-term clinical results from the ENDEAVOR I and ENDEAVOR II trials, which were presented last week at the Paris Course on Revascularization. Endeavor's PMA submission remains on track and U.S. FDA approval is still expected in calendar year 2007.

Diabetes Business

Diabetes reported annual revenue of $722 million and fourth quarter revenue of $188 million, representing growth of 11 percent and 5 percent.

Diabetes quarterly highlights include:

    --  Fourth quarter results were driven by strong sales of insulin
        pumps, which grew 18 percent in the U.S.

    --  Late in the quarter, Medtronic received U.S. FDA approval for
        the Paradigm(R) REAL-Time Insulin and Continuous Glucose
        Monitoring System, the world's first insulin pump integrated
        with continuous glucose monitoring.

Looking ahead, key developments in the first half of fiscal 2007 are to expected to include the full launch of the Paradigm REAL-Time system in the U.S., the expected U.S. FDA approval of the Guardian(R) REAL-Time Continuous Glucose Monitoring System, and continued progress in the STAR (Sensor-augmented pump Therapy for A1c Reduction) trials.

Cardiac Surgery Business

Cardiac Surgery reported annual revenue of $663 million and fourth quarter revenue of $183 million, representing a decline of 1 percent. Fourth quarter results were bolstered by Perfusion Systems, which grew modestly despite a declining market. In the first half of fiscal 2007, Medtronic expects to launch two new heart valve tissue repair products in the U.S. and to commence the European release of Melody(TM), expected to be the first commercially available pulmonic transcatheter heart valve.

Ear, Nose and Throat Business

For the first time, Medtronic reported annual and quarterly results for the Ear, Nose and Throat (ENT) business segment. In addition to ENT products, the business segment includes all products previously classified in Medtronic's Neurologic Technologies business. ENT reported annual revenue of $501 million and fourth quarter revenue of $135 million, representing 9 percent and 7 percent growth. Fourth quarter results were driven by the core ENT business, which grew 11 percent. In the first half of fiscal 2007, the Company expects to benefit from continued strength in powered surgical tools, image guided surgery and nerve monitoring.

Convertible Debt Offering

During the quarter, the Company issued $4.4 billion of convertible senior notes at very attractive after-tax financing rates. $2.5 billion of the proceeds were used to repurchase 49 million shares of Medtronic stock. Including these shares, the Company repurchased almost 69 million shares of common stock for $3.6 billion during fiscal year 2006. "These transactions were over-subscribed and reflect the financial strength of Medtronic," stated Gary Ellis, Medtronic chief financial officer. "The debt offering allowed us to repurchase Medtronic stock at very favorable rates and to prepare for the potential retirement of previously existing debt."

Concluding Comments

In reviewing the quarter, Collins concluded, "Medtronic's overall competitive position remains strong as we continue lead in a number of the most attractive segments of the medical technology industry. Many of these markets are still very under-penetrated, offering a great deal of growth potential for years to come. To address this potential, we will continue to bring forward new products and work to reach more of the patients who will benefit from our therapies."

Webcast Information

Medtronic will host a webcast today, May 23 at 4:30 pm EDT (3:30 CDT), to provide information about its businesses for the public, analyst and news media. 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.

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 press release contains forward-looking statements, including statements regarding clinical trials, new products, market growth 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, government regulation, general economic conditions and others described in Medtronic's Quarterly Report on Form 10-Q for the quarter ended January 27, 2006. Actual results may differ materially from anticipated results. Medtronic does not undertake to update its forward-looking statements.

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


                             Three months ended   Twelve months ended
                             ------------------- ---------------------
                             April 28, April 29, April 28,  April 29,
                                2006      2005      2006       2005
                             --------- --------- ---------- ----------


Net sales                    $3,077.4  $2,778.0  $11,302.7  $10,054.6

Costs and expenses:
  Cost of products sold         768.7     705.7    2,816.0    2,446.4
  Research and development
   expense                      294.0     247.9    1,112.9      951.3
  Selling, general and
   administrative expense       975.2     857.7    3,660.5    3,213.6
  Special charges                   -         -      100.0          -
  Certain litigation charges        -     630.1          -      654.4
  Purchased in-process
   research and development
   (IPR&D)                          -         -      363.8          -
  Other expense, net             65.6      78.4      166.7      290.5
  Interest income               (34.9)    (20.7)     (87.4)     (45.1)
                             --------- --------- ---------- ----------
    Total costs and expenses  2,068.6   2,499.1    8,132.5    7,511.1
                             --------- --------- ---------- ----------

Earnings before income taxes  1,008.8     278.9    3,170.2    2,543.5

Provision for income taxes      262.2      84.5      616.9      739.6
                             --------- --------- ---------- ----------

Net earnings                   $746.6    $194.4   $2,553.3   $1,803.9
                             ========= ========= ========== ==========


Earnings per share:
         Basic                  $0.63     $0.16      $2.12      $1.49
                             ========= ========= ========== ==========
         Diluted                $0.62     $0.16      $2.10      $1.48
                             ========= ========= ========== ==========


Weighted average shares
 outstanding:
         Basic                1,193.7   1,208.9    1,204.5    1,209.0
         Diluted              1,204.4   1,221.5    1,217.3    1,220.8



                          MEDTRONIC, INC.
         RECONCILIATION OF CONSOLIDATED GAAP NET EARNINGS
               TO CONSOLIDATED ADJUSTED NET EARNINGS
                            (Unaudited)
                           (in millions)

                              Three months ended Three months ended
                                April 28, 2006     April 29, 2005
                              ------------------ ------------------

Net earnings, as reported                $746.6             $194.4
Certain litigation charges                    -              402.5 (a)
Income tax adjustments                        -              $48.5 (b)
                              ------------------ ------------------
Adjusted net earnings                    $746.6             $645.4
                              ================== ==================




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


                              Three months ended Three months ended
                                April 28, 2006     April 29, 2005
                              ------------------ ------------------

Diluted EPS, as reported                  $0.62              $0.16
Certain litigation charges                    -               0.33 (a)
Income tax adjustments                        -              $0.04 (b)
                              ------------------ ------------------
Adjusted diluted EPS                      $0.62              $0.53
                              ================== ==================


(a) The $402.5 million ($0.33 per share) after-tax certain litigation
charge ($630.1 million pre-tax) is related to the settlement of a
legal dispute with Gary Michelson, M.D. and Karlin Technology, Inc.
(Michelson) and an arbitrator's decision related to litigation with
ETEX Corporation. In addition to disclosing certain litigation 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 litigation charges. Management believes that this
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.

(b) The $48.5 million ($0.04 per share) tax adjustment related to the
deferred tax liability associated with the repatriation of earnings of
our foreign subsidiaries which occurred in the fourth quarter of
fiscal year 2006. In addition to disclosing the provision for income
taxes that is 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 tax adjustment. Management believes that
this 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, specifically the effective tax rate.
Medtronic management eliminates this tax adjustment 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 CONSOLIDATED GAAP NET EARNINGS
                TO CONSOLIDATED ADJUSTED NET EARNINGS
                             (Unaudited)
                            (in millions)

                         Twelve months ended    Twelve months ended
                           April 28, 2006         April 29, 2005
                         -------------------    -------------------

Net earnings, as
 reported                          $2,553.3               $1,803.9
Special charges                        65.6 (a)                  -
Certain litigation
 charges                                  -                  418.1 (d)
IPR&D charges                         295.3 (b)                  -
Income tax adjustments               (225.0)(c)               48.5 (e)
                         -------------------    -------------------
Adjusted net earnings              $2,689.2               $2,270.5
                         ===================    ===================


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


                         Twelve months ended    Twelve months ended
                           April 28, 2006         April 29, 2005
                         -------------------    -------------------

Diluted EPS, as reported              $2.10                  $1.48
Special charges                        0.05 (a)                  -
Certain litigation
 charges                                  -                   0.34 (d)
IPR&D charges                          0.24 (b)                  -
Income tax adjustments                (0.18)(c)               0.04 (e)
                         -------------------    -------------------
Adjusted diluted EPS                  $2.21                  $1.86
                         ===================    ===================


(a) The $65.6 million ($0.05 per share) special charge represents an
after-tax charitable donation ($100.0 million pre-tax) made to The
Medtronic Foundation. In addition to disclosing special 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 this donation. The Company has not made a similar
donation to The Medtronic Foundation since fiscal year 2002.
Management believes that this 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 this donation 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 $295.3 million ($0.24 per share) after-tax IPR&D charges
($363.8 million pre-tax) represents the cumulative impact of pre-tax
charges of $168.7 million related to technology acquired through the
purchase of Transneuronix, Inc. that had not yet reached technological
feasability and had no future alternative use, $175.1 million related
to the purchase of spinal technology based devices owned by Michelson
that had not yet reached technological feasability and had no future
alternative use, and $20.0 million related to a cross-licensing
agreement with NeuroPace, Inc. for patent and patent applications on
products that had not yet reached technological feasability and had no
future alternative use, collectively the IPR&D charges. In addition to
disclosing IPR&D charges that is 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 IPR&D charges. These
IPR&D charges resulted from facts and circumstances that vary in
frequency and/or impact on continuing operations. Management believes
that this 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 $225.0 million ($0.18 per share) tax adjustment represents a
$225.0 million tax benefit associated with the reversal of reserves
resulting from favorable agreements reached with the U.S. Internal
Revenue Service involving the review of fiscal years 1997 through 2002
domestic income tax returns. In addition to disclosing the provision
for income taxes that is 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 tax adjustment.
Management believes that this 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,
specifically the effective tax rate. Medtronic management eliminates
this tax adjustment 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.

(d) The $418.1 million ($0.34 per share) after-tax certain litigation
charge ($654.4 million pre-tax) is related to the DuPuy/AcroMed, Inc.
litigation, the settlement of a legal dispute with Michelson and an
arbitrator's decision related to litigation with ETEX Corporation. 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 this 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.

e) The $48.5 million ($0.04 per share) tax adjustment is related to
the deferred tax liability associated with the repatriation of
earnings of our foreign subsidiaries which occurred in the fourth
quarter of fiscal year 2006. In addition to disclosing the provision
for income taxes that is 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 tax adjustment.
Management believes that this 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,
specifically the effective tax rate. Medtronic management eliminates
this tax adjustment 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.
                 Consolidated Statements of Cash Flows
                              (Unaudited)
                         (dollars in millions)

                                                       Fiscal Year
                                                   -------------------
                                                     2006      2005
                                                   -------------------

Operating Activities:
 Net earnings                                      $2,553.3  $1,803.9
 Adjustments to reconcile net earnings to net cash
  provided by operating activities:
   Depreciation and amortization                      543.6     463.3
   IPR&D                                              363.8        --
   Certain litigation charges                            --     654.4
   Provision for doubtful accounts                     11.5      26.3
   Tax benefit from exercise of stock awards           98.9      60.8
   Deferred income taxes                              104.7    (142.5)
   Change in operating assets and liabilities:
       Accounts receivable                           (197.9)   (254.0)
       Inventories                                   (258.0)    (51.3)
       Prepaid expenses and other assets              (85.6)   (107.3)
       Accounts payable and accrued liabilities      (964.9)    423.2
       Other long-term liabilities                     38.0     (57.4)
                                                   -------------------

Net cash provided by operating activities           2,207.4   2,819.4
                                                   -------------------
Investing Activities:
 Acquisitions, net of cash acquired                  (285.2)   (107.9)
 Purchase of intellectual property                   (837.1)    (10.0)
 Additions to property, plant and equipment          (407.1)   (452.0)
 Sales and maturities of marketable securities      6,626.8     807.5
 Purchases of marketable securities                (8,064.5) (1,805.3)
 Other investing activities, net                      100.5     (35.2)
                                                   -------------------

Net cash (used in) investing activities            (2,866.6) (1,602.9)
                                                   -------------------
Financing Activities:
 Change in short-term borrowings, net                 (18.0)     90.0
 Payments on long-term debt                            (0.5)     (1.8)
 Issuance of long-term debt                         5,428.4        --
 Purchase of call option spread                      (557.8)       --
 Dividends to shareholders                           (464.8)   (404.9)
 Repurchase of common stock                        (3,589.0)   (511.0)
 Issuance of common stock                             518.1     338.9
                                                   -------------------

Net cash provided by (used in) financing
 activities                                         1,316.4    (488.8)
Effect of exchange rate changes on cash and cash
 equivalents                                          104.9     (89.2)
                                                   -------------------

Net change in cash and cash equivalents               762.1     638.5
Cash and cash equivalents at beginning of period    2,232.2   1,593.7
                                                   -------------------
Cash and cash equivalents at end of period         $2,994.3  $2,232.2
                                                   ===================


                            Medtronic, Inc.
                      Consolidated Balance Sheets
                              (Unaudited)
               (dollars in millions, except share data)

                                                 April 28,  April 29,
                                                    2006       2005
Assets                                           ---------------------
Current assets:
 Cash and cash equivalents                        $2,994.3   $2,232.2
 Short-term investments                            3,107.1    1,159.4
 Accounts receivable, less allowances of $183.6
  and $174.9, respectively                         2,438.1    2,292.7
 Inventories                                       1,177.8      981.4
 Deferred tax assets, net                            196.8      385.6
 Prepaid expenses and other current assets           472.5      370.2
                                                 ---------------------
   Total current assets                           10,386.6    7,421.5
Property, plant and equipment, net                 1,881.1    1,859.3
Goodwill                                           4,345.6    4,281.2
Other intangible assets, net                       1,592.0    1,018.0
Long-term investments                                957.0    1,565.7
Other assets                                         512.5      471.7
                                                 ---------------------
   Total assets                                  $19,674.8  $16,617.4
                                                 =====================

Liabilities and Shareholders' Equity
Current liabilities:
 Short-term borrowings                            $2,436.8     $478.6
 Accounts payable                                    318.6      371.8
 Accrued compensation                                723.6      542.2
 Accrued income taxes                                463.4      923.3
 Other accrued expenses                              466.8    1,064.1
                                                 ---------------------
   Total current liabilities                       4,409.2    3,380.0

Long-term debt                                     5,486.3    1,973.2
Deferred tax liabilities, net                         22.1      478.1
Long-term accrued compensation                       188.9      157.9
Other long-term liabilities                          179.2      178.7
                                                 ---------------------
   Total liabilities                              10,285.7    6,167.9

Shareholders' equity:
 Common stock-par value $0.10                        115.5      121.0
 Retained earnings                                 9,118.8   10,178.5
 Accumulated other non-owner changes in equity       154.8      150.0
                                                 ---------------------
   Total shareholders' equity                      9,389.1   10,449.5
                                                 ---------------------
   Total liabilities and shareholders' equity    $19,674.8  $16,617.4
                                                 =====================




                           MEDTRONIC, INC.
                     REVENUE BY OPERATING SEGMENT
                             (Unaudited)

($ millions)
----------------------------------------------------------------------
                               FY 05   FY 05   FY 05   FY 05   FY 05
                               QTR 1   QTR 2   QTR 3   QTR 4   TOTAL
----------------------------------------------------------------------
REPORTED REVENUE:
  CARDIAC RHYTHM DISEASE
   MANAGEMENT                 $1,097  $1,104  $1,150  $1,265   $4,616
    Low Power Pacing             451     438     431     436    1,756
    High Power Defibrillation    551     546     598     684    2,379
    Emergency Response
     Systems                      79     104     104     126      413
    Other                         16      16      17      19       68

  SPINAL & NAVIGATION           $426    $451    $475    $532   $1,884
    Spinal Constructs            317     332     343     380    1,372
    Spinal Biologics              89      99     107     118      413
    Navigation                    20      20      25      34       99

  NEUROLOGICAL                  $212    $224    $233    $258     $927
    Neuro Implantables           170     179     184     206      739
    Gastroenterology &
     Urology                      42      45      49      52      188

  VASCULAR                      $196    $201    $221    $233     $851
    Stents                        71      78      86      82      317
    Other Coronary                71      71      77      89      308
    Endovascular/Peripheral       54      52      58      62      226

  DIABETES                      $146    $153    $171    $179     $649

  CARDIAC SURGERY               $161    $159    $164    $185     $669
    Valves                        56      54      56      64      230
    Perfusion                     79      79      80      89      327
    Cardiac Surgery
     Technologies                 26      26      28      32      112

  Ear, Nose & Throat (ENT)      $108    $108    $117    $126     $459
    ENT                           58      55      61      67      241
    Neurologic Technologies       50      53      56      59      218

    TOTAL                     $2,346  $2,400  $2,531  $2,778  $10,055
                              ========================================

ADJUSTMENTS:

  CURRENCY (1)                   $35     $40     $59     $32     $166

COMPARABLE OPERATIONS (1)     $2,311  $2,360  $2,472  $2,746   $9,889
                              ========================================

----------------------------------------------------------------------
                               FY 06   FY 06   FY 06   FY 06   FY 06
                               QTR 1   QTR 2   QTR 3   QTR 4   TOTAL
----------------------------------------------------------------------
REPORTED REVENUE:
  CARDIAC RHYTHM DISEASE
   MANAGEMENT                 $1,268  $1,289  $1,263  $1,398   $5,218
    Low Power Pacing             446     459     426     467    1,798
    High Power Defibrillation    718     733     723     768    2,941
    Emergency Response
     Systems                      87      81      99     144      412
    Other                         17      16      15      19       67

  SPINAL & NAVIGATION           $524    $539    $563    $618   $2,244
    Spinal Constructs            376     382     387     419    1,566
    Spinal Biologics             128     134     147     163      570
    Navigation                    20      23      29      36      108

  NEUROLOGICAL                  $235    $252    $247    $282   $1,016
    Neuro Implantables           186     204     202     240      833
    Gastroenterology &
     Urology                      49      48      45      42      183

  VASCULAR                      $205    $225    $236    $273     $939
    Stents                        65      90      96     114      366
    Other Coronary                81      78      83      92      334
    Endovascular/Peripheral       59      57      57      67      239

  DIABETES                      $173    $178    $182    $188     $722

  CARDIAC SURGERY               $165    $161    $154    $183     $663
    Valves                        58      56      52      63      229
    Perfusion                     79      78      75      89      321
    Cardiac Surgery
     Technologies                 28      27      27      31      113

  Ear, Nose & Throat (ENT)      $120    $121    $125    $135     $501
    ENT                           65      64      65      72      266
    Neurologic Technologies       55      57      60      63      235

    TOTAL                     $2,690  $2,765  $2,770  $3,077  $11,303
                              ========================================

ADJUSTMENTS:

  CURRENCY (1)                   $26     $(3)   $(72)   $(69)   $(118)

COMPARABLE OPERATIONS (1)     $2,664  $2,768  $2,842  $3,146  $11,421
                              ========================================
----------------------------------------------------------------------
(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 revenues.

Please click here to view Medtronic, Inc. latest financial tables.

    CONTACT: Medtronic, Inc., Minneapolis
             Investor Relations:
             Rachael Scherer, 763-505-2694
             or
             Public Relations:
             Marybeth Thorsgaard, 763-505-2644
             or
             Medtronic International
             Yvan Deurbroeck, +41 21 802 7574

    SOURCE: Medtronic, Inc.