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<SEC-DOCUMENT>0000897101-08-001392.txt : 20080624
<SEC-HEADER>0000897101-08-001392.hdr.sgml : 20080624
<ACCEPTANCE-DATETIME>20080624131943
ACCESSION NUMBER: 0000897101-08-001392
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 28
CONFORMED PERIOD OF REPORT: 20080425
FILED AS OF DATE: 20080624
DATE AS OF CHANGE: 20080624
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MEDTRONIC INC
CENTRAL INDEX KEY: 0000064670
STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
IRS NUMBER: 410793183
STATE OF INCORPORATION: MN
FISCAL YEAR END: 0430
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-07707
FILM NUMBER: 08913880
BUSINESS ADDRESS:
STREET 1: 710 MEDTRONIC PKWY
STREET 2: MS LC300
CITY: MINNEAPOLIS
STATE: MN
ZIP: 55432
BUSINESS PHONE: 7635144000
MAIL ADDRESS:
STREET 1: 710 MEDTRONIC PKWY
CITY: MINNEAPOLIS
STATE: MN
ZIP: 55432
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>medtronic082604s1_10k.htm
<DESCRIPTION>FORM 10-K FOR FISCAL YEAR ENDED APRIL 25, 2008
<TEXT>
<HTML>
<HEAD>
<title>Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<HR noshade color="black" size="3">
<HR noshade color="black" size="1" style="margin-top:-8pt">
<P style="font-weight:bold;text-align:center;font-size:14pt">UNITED STATES SECURITIES AND EXCHANGE COMMISSION</P>
<P style="font-weight:bold;text-align:center;font-size:10pt;margin-top:-12pt">Washington, D.C. 20549</P>
<HR noshade color="black" width="20%">
<P style="font-weight:bold;text-align:center;font-size:24pt">FORM 10-K</P>
<DIV style="margin-top:10pt" ALIGN="CENTER">
<TABLE WIDTH="70%" BORDER="0" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:12pt;font-weight:bold" VALIGN="TOP">
<TD WIDTH="4%"><FONT SIZE="2" FACE="wingdings">x</FONT></TD>
<TD WIDTH="96%">Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.<BR>For the fiscal
year ended April 25, 2008.</TD>
</TR>
<TR style="font-size:12pt;font-weight:bold" VALIGN="TOP">
<TD WIDTH="4%"><FONT SIZE="2" FACE="wingdings">o</FONT></TD>
<TD WIDTH="96%">Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.<BR>For the transition
period from __________ to __________</TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;font-weight:bold;text-align:center">Commission File No. 1-7707</P>
<HR noshade color="black" width="20%">
<P ALIGN="Center"><IMG SRC="med_blue.gif"></P>
<P style="text-align:center;font-size:24pt;font-weight:bold">Medtronic, Inc.</P>
<P style="text-align:center;font-size:10pt;margin-top:-12pt">(Exact name of registrant as specified in charter)</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%">
<TR VALIGN="bottom" style="font-size:10pt;padding-top:6pt">
<TD width="48%"><B>Minnesota</B></TD>
<TD width="2%"> </TD>
<TD align="right" width="48%"><B>41-0793183</B></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD><B>(State of incorporation)</B></TD>
<TD> </TD>
<TD align="right"><B>(I.R.S. Employer Identification No.)</B></TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-align:center">
<B>710 Medtronic Parkway</B>
<BR>
<B>Minneapolis, Minnesota 55432</B>
<BR>
<B>(Address of principal executive offices) (Zip Code)</B>
</P>
<P style="font-size:10pt;text-align:center">
<B>Telephone Number, including area code: (763) 514-4000</B>
</P>
<P style="font-size:10pt;text-align:center;margin-top:3pt">
<B>Securities registered pursuant to section 12(b) of the Act:</B>
</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="70%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH align="left">Title of each class</TH>
<TH> </TH> <TH align="left">Name of each exchange on which registered</TH>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD><B>Common stock, par value $0.10 per share</B></TD>
<TD width="2%"> </TD>
<TD><B>New York Stock Exchange, Inc.</B></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD><B>Preferred stock purchase rights</B></TD>
<TD> </TD>
<TD><B>New York Stock Exchange, Inc.</B></TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-align:center">
<B>Securities registered pursuant to section 12(g) of the Act:<BR>None</B>
</P>
<HR noshade color="black" width="20%">
<P style="font-size:9pt">
<B>Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
<FONT FACE="wingdings">x</FONT> No <FONT FACE="wingdings">o</FONT></B>
</P>
<P style="font-size:9pt">
<B>Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act. Yes <FONT FACE="wingdings">o</FONT> No <FONT FACE="wingdings">x</FONT></B>
</P>
<P style="font-size:9pt">
<B>Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
<FONT FACE="wingdings">x</FONT> No <FONT FACE="wingdings">o</FONT></B>
</P>
<P style="font-size:9pt">
<B>Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K. <FONT FACE="wingdings">o</FONT></B>
</P>
<P style="font-size:9pt">
<B>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. <BR>Large accelerated filer <FONT FACE="wingdings">x</FONT> Accelerated
filer <FONT FACE="wingdings">o</FONT> Non-accelerated filer <FONT FACE="wingdings">o</FONT> Smaller
reporting company <FONT FACE="wingdings">o</FONT></B>
</P>
<P style="font-size:9pt">
<B>Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).<BR>Yes <FONT
FACE="wingdings">o</FONT> No <FONT FACE="wingdings">x</FONT></B>
</P>
<P style="font-size:9pt">
<B>Aggregate market value of voting stock of Medtronic, Inc. held by nonaffiliates of the registrant as of October 26,
2007, based on the closing price of $47.82, as reported on the New York Stock Exchange: approximately $54.2 billion. Shares
of Common Stock outstanding on June 19, 2008: 1,125,244,102</B>
</P>
<P style="font-size:10pt;text-align:center;margin-top:3pt">
<B>DOCUMENTS INCORPORATED BY REFERENCE</B>
</P>
<P style="font-size:9pt">
<B>Portions of the Registrant’s 2008 Annual Report filed as Exhibit 13 hereto are incorporated by reference into Parts
I and II hereto and portions of Registrant’s Proxy Statement for its 2008 Annual Meeting are incorporated by reference
into Part III hereto.</B>
</P>
<P style="font-size:10pt;text-indent:20pt"> </P>
<HR noshade color="black" size="1">
<HR noshade color="black" size="3" style="margin-top:-8pt">
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:center">
<A name="toc"></A>TABLE OF CONTENTS</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH align="left">Item</TH>
<TH> </TH>
<TH>Description</TH>
<TH> </TH>
<TH ALIGN="RIGHT">Page</TH>
</TR>
<TR>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD STYLE="border-top:1px solid black; font-size:1pt" ALIGN="RIGHT"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD></TD>
<TD width="2%"> </TD>
<TD align="center"><B><A href="#toc1">PART I</A></B></TD>
<TD width="2%"> </TD>
<TD ALIGN="RIGHT"></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>1.</TD>
<TD> </TD>
<TD><A href="#toc2">Business</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>1A.</TD>
<TD> </TD>
<TD><A href="#toc3">Risk Factors</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">31</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>1B.</TD>
<TD> </TD>
<TD><A href="#toc4">Unresolved Staff Comments</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">37</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>2.</TD>
<TD> </TD>
<TD><A href="#toc5">Properties</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">37</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>3.</TD>
<TD> </TD>
<TD><A href="#toc6">Legal Proceedings</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">37</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>4.</TD>
<TD> </TD>
<TD><A href="#toc7">Submission of Matters to a Vote of Security Holders</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">38</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD></TD>
<TD> </TD>
<TD align="center"><B><A href="#toc8">PART II</A></B></TD>
<TD> </TD>
<TD ALIGN="RIGHT"></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>5.</TD>
<TD> </TD>
<TD><A href="#toc9">Market for Medtronic’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">38</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>6.</TD>
<TD> </TD>
<TD><A href="#toc10">Selected Financial Data</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>7.</TD>
<TD> </TD>
<TD><A href="#toc11">Management’s Discussion and Analysis of Financial Condition and Results of Operations</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>7A.</TD>
<TD> </TD>
<TD><A href="#toc12">Quantitative and Qualitative Disclosures About Market Risk</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>8.</TD>
<TD> </TD>
<TD><A href="#toc13">Financial Statements and Supplementary Data</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>9.</TD>
<TD> </TD>
<TD><A href="#toc14">Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>9A.</TD>
<TD> </TD>
<TD><A href="#toc15">Controls and Procedures</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">39</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>9B.</TD>
<TD> </TD>
<TD><A href="#toc16">Other Information</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">40</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD></TD>
<TD> </TD>
<TD align="center"><B><A href="#toc17">PART III</A></B></TD>
<TD> </TD>
<TD ALIGN="RIGHT"></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>10.</TD>
<TD> </TD>
<TD><A href="#toc18">Directors, Executive Officers and Corporate Governance</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">40</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>11.</TD>
<TD> </TD>
<TD><A href="#toc19">Executive Compensation</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">40</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>12.</TD>
<TD> </TD>
<TD><A href="#toc20">Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">40</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>13.</TD>
<TD> </TD>
<TD><A href="#toc21">Certain Relationships, Related Transactions and Director Independence</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">40</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>14.</TD>
<TD> </TD>
<TD><A href="#toc22">Principal Accounting Fees and Services</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">41</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD></TD>
<TD> </TD>
<TD align="center"><B><A href="#toc23">PART IV</A></B></TD>
<TD> </TD>
<TD ALIGN="RIGHT"></TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>15.</TD>
<TD> </TD>
<TD><A href="#toc24">Exhibits, Financial Statement Schedules</A></TD>
<TD> </TD>
<TD ALIGN="RIGHT">41</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:12pt;font-weight:bold;text-align:center"></P>
<P style="font-size:10pt;font-weight:bold">Annual Meeting and Record Dates</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic, Inc.’s (Medtronic or the Company) Annual Meeting of Shareholders
will be held on Thursday, August 21, 2008 at 10:30 a.m., Central Daylight Time at the Company’s World Headquarters,
710 Medtronic Parkway, Minneapolis (Fridley), Minnesota. The record date for the Annual Meeting is June 23, 2008 and all
shareholders of record at the close of business on that day will be entitled to vote at the Annual Meeting.</P>
<P style="font-size:10pt;font-weight:bold">Medtronic Website</P>
<P style="font-size:10pt;text-indent:20pt">Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 are available through our website (<U>www.medtronic.com</U> under the “Investor Relations”
caption) free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to,
the Securities and Exchange Commission (SEC).</P>
<P style="font-size:10pt;text-indent:20pt">Information relating to corporate governance at Medtronic, including our Principles
of Corporate Governance, Code of Conduct (including our Code of Ethics for Senior Financial Officers), Code of Business Conduct
and Ethics for Board Members and information concerning our executive officers, directors and Board committees (including committee
charters), and transactions in Medtronic securities by directors and officers, is available on or through our website at <U>www.medtronic.com</U>
under the “Corporate Governance” and “Investor Relations” captions.</P>
<P style="font-size:10pt;text-indent:20pt">We are not including the information on our website as a part of, or incorporating
it by reference into, our Form 10-K.</P>
<P style="font-size:10pt;font-weight:bold">Available Information</P>
<P style="font-size:10pt;text-indent:20pt">The SEC maintains a website that contains reports, proxy and information statements,
and other information regarding issuers, including the Company, that file electronically with the SEC. The public can obtain
any documents that the Company files with the SEC at <U>http://www.sec.gov</U>. The Company files annual reports, quarterly
reports, proxy statements and other documents with SEC under the Securities Exchange Act of 1934 (Exchange Act). The public
may read and copy any materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street,
N.E., Room 1580 Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt"><A href="#toc">Table of Contents</A></P>
<P style="font-size:12pt;font-weight:bold;text-align:center">PART I</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc1"></A><A name="item1"></A>Item 1. Business</P>
<P style="font-size:10pt;font-weight:bold">Overview</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic is the global leader in medical technology — alleviating pain, restoring
health, and extending life for millions of people around the world. We are committed to offering market-leading therapies to
restore patients to fuller, healthier lives. With beginnings in the treatment of heart disease, we have expanded well beyond
our historical core business and today provide a wide range of products and therapies that help solve many challenging, life-limiting
medical conditions. We hold market-leading positions in almost all of the major markets in which we operate.</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic was founded in 1949, incorporated as a Minnesota corporation in 1957, and
today serves physicians, clinicians and patients in more than 120 countries worldwide. Beginning with the development of the
heart pacemaker in the 1950s, we have assembled a broad and diverse portfolio of progressive technology expertise both through
internal development of core technologies as well as acquisitions. We remain committed to a mission written by our founder
more than 40 years ago that directs us “to contribute to human welfare by application of biomedical engineering in
the research, design, manufacture and sale of products that alleviate pain, restore health and extend life.”</P>
<P style="font-size:10pt;text-indent:20pt">With approximately 40,000 dedicated employees worldwide personally invested in supporting
our mission, our success in leading global advances in medical technology is the result of several key strengths:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Broad and deep technological knowledge of microelectronics, implantable devices and techniques, power sources,
coatings, materials, programmable devices and related areas, as well as a tradition of technological pioneering and breakthrough
products that not only yield better medical outcomes, but more cost-effective therapies.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Strong intellectual property portfolio that underlies our key products.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>High product quality standards, backed with stringent systems to help ensure consistent performance that meet or surpass
customers’ expectations.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Strong professional collaboration with customers, extensive medical educational programs, and thorough clinical research.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Full commitment to superior patient and customer service.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Extensive experience with the regulatory process and sound working relationships with regulators and reimbursement agencies,
including leadership roles in helping shape regulatory policy in the major markets in which we operate.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>A proven financial record of sustained revenue and earnings growth and continual introduction of new products.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">1</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt"><A href="#toc">Table of Contents</A></P>
<P style="font-size:10pt;text-indent:20pt">We currently function in seven operating segments that manufacture and sell device-based medical therapies. During
the first quarter of fiscal year 2008, we revised our operating segment reporting to combine our former Vascular and Cardiac Surgery businesses into the new
CardioVascular operating segment. Additionally, the Navigation business was separated from Spinal for most of fiscal year 2008 and was reported as part of a
stand alone segment named Corporate Technologies and New Ventures. In the fourth quarter of fiscal year 2008, the decision was made to include the Navigation
business as a component of the Ear, Nose and Throat segment, which was renamed Surgical Technologies to reflect the expanding scope and focus of this business.
Our operating segments are:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="42%">Cardiac Rhythm Disease Management</TD>
<TD ALIGN="Center" WIDTH="50%" ROWSPAN="7"><img src="a82604fy08.jpg"> </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Spinal</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>CardioVascular</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Neuromodulation</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Diabetes</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Surgical Technologies</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Physio-Control</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The chart above shows the net sales and percentage of total net sales contributed by each of our operating segments
for the fiscal year ended April 25, 2008 (fiscal year 2008).</P>
<P style="font-size:10pt;text-indent:20pt">With innovation and market leadership, we have pioneered advances in medical technology in all of our businesses and
enjoyed steady growth. Over the last five years, our net sales on a compound annual growth basis have increased more than 12 percent, from $7.665 billion
in fiscal year 2003 to $13.515 billion in fiscal year 2008. We attribute this growth to our commitment to develop or acquire new products to treat an
expanding array of medical conditions. In the coming decade, we anticipate that technology advancements, the Internet, and increasing patient participation in
treatment decisions will transform the nature of healthcare services. Medtronic is positioned to deliver on this promise of integration across device
technology, biotechnology, and information technology by building on trusted partnerships with caregivers; leveraging our scale, scope, and expertise; and
benefiting patients worldwide.</P>
<P style="font-size:10pt;text-indent:20pt">We will accomplish this goal by operating as ONE Medtronic, reaching within and across our operating segments to make
the whole of Medtronic greater than the sum of its parts. The main tenets of this approach are:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Driving sustainable long-term growth through innovation</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Strong focus on improving operating margins</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Delivering EPS growth and disciplined capital allocation</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Aligning the organization for relentless and consistent execution</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">Our primary customers include hospitals, clinics, third party healthcare providers,
distributors, and other institutions, including governmental healthcare programs and group purchasing organizations.</P>
<P style="font-size:10pt;font-weight:bold">Cardiac Rhythm Disease Management (CRDM)</P>
<P style="font-size:10pt;text-indent:20pt">CRDM is the world’s leading supplier of medical devices for cardiac rhythm disease
management. We pioneered the modern medical device industry by developing the first wearable external cardiac pacemaker in
1957, and manufactured the first reliable long-term implantable pacing system in 1960. Since then, we have been the world’s
leading producer of cardiac rhythm technology, and from these beginnings, a $10 billion industry has emerged. Today, our
products and technologies treat and monitor a wide variety of heart rhythm diseases and conditions.</P>
<BR>
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<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Natural electrical impulses stimulate the atria and ventricles, the heart’s
chambers, to rhythmically contract and relax with each heartbeat. Irregularities in the heart’s normal electrical signals
can result in debilitating and life-threatening conditions, including sudden cardiac arrest, one of the leading causes of death.
Physicians rely on our CRDM products to monitor and correct these irregularities and restore the heart to its normal rhythm.
Our CRDM products are designed to treat and monitor a broad range of heart conditions, including those described below.</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Bradycardia — abnormally slow or unsteady heart rhythms, usually less than 60 beats per minute, or
unsteady heart rhythms that cause symptoms such as dizziness, fainting, fatigue, and shortness of breath.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Tachyarrhythmia — heart rates that are dangerously fast or irregular. In the lower chambers of the heart, called
ventricles, this is called ventricular tachycardia or fibrillation and can lead to sudden cardiac arrest. In the upper chambers,
called the atria, this is called atrial arrhythmia which can affect blood flow to the body and increase the risk of stroke.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Heart Failure — impaired heart function resulting in the inability to pump enough blood to meet the body’s
needs, characterized by difficulty breathing, chronic fatigue and fluid retention. </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Sudden Cardiac Arrest — condition when the heart’s ventricles suddenly develop a rapid, irregular rhythm (ventricular
fibrillation) and the quivering ventricles cannot pump blood to the body, which, without immediate treatment, will almost always
lead to death.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Syncope — a sudden loss of consciousness, which occurs when the blood pressure drops and not enough oxygen reaches
the brain. Causes vary and include heart-related conditions, exhaustion, stress, overheating, illness and certain medications.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Atrial Fibrillation — condition when the atria quiver instead of pumping blood effectively. Blood in the atria may
pool and clot. If a clot breaks loose and advances to the brain, a stroke can result.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our CRDM products as a percentage of our
total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604crmi.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">We offer the broadest array of products
in the industry for the diagnosis and treatment of heart rhythm disorders and heart failure. Because many patients exhibit
multiple heart rhythm problems, we have developed implantable devices that specifically address complex combinations of arrhythmias.
In addition to implantable devices, we also provide leads, ablation products, electrophysiology catheters, and information
systems for the management of patients with our devices. Our CRDM devices are currently implanted in more than 3 million patients
worldwide.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Implantable Cardiac Pacemakers.</I></B> Bradycardia is a common condition, with hundreds of thousands
of patients diagnosed each year, and millions of people worldwide suffering from its effects. The only known treatment for
this condition is a cardiac pacemaker, a battery-powered device implanted in the chest that delivers electrical impulses to
stimulate the heart to beat at an appropriate rate.
</P>
<BR>
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Pacemaker technology has extended the lives of millions of patients with heart rhythm conditions, and each year nearly 1 million
pacemakers are implanted in patients worldwide. Medtronic’s Adapta family of fully automatic pacemakers, which includes
the Adapta, Versa, and Sensia models, incorporates an array of automatic features to help physicians improve pacing therapy
and streamline the patient follow-up process, potentially minimizing the amount of time spent in a physician’s office.
An example is Atrial Capture Management, which is intended to automatically adjust impulses for optimal stimulation of the
heart’s upper right chamber. Adapta offers a pacing mode called Managed Ventricular Pacing (MVP), which enables the device
to be programmed to minimize unnecessary pacing pulses to the right ventricle. Clinical studies have shown that unnecessary
pacing in the right ventricle can increase the risk for heart failure and atrial fibrillation. In September 2007, the
results of the Search AV Extension and Managed Ventricular Pacing for Promoting Atrioventricular Conduction (SAVE PACe) trial,
funded by Medtronic, were published in the <I>New England Journal of Medicine.</I> This trial of more than 1,000 patients showed
that reducing right ventricular pacing to less than 10 percent in patients with dual chamber pacemakers reduced the relative
risk of developing persistent atrial fibrillation by 40 percent compared with conventional dual chamber pacing. MVP has been
shown to reduce the amount of right ventricular pacing to less than 5 percent, compared to 50 percent or more from devices
with typical dual-chamber pacing. The Adapta family leads our portfolio of pacemakers, which also includes the EnRhythm and
EnPulse families.</P>
<P style="font-size:10pt;text-indent:20pt">Following the launch of our international trial in February 2007 of 350 patients,
in January 2008 we announced the start of a United States (U.S.) clinical trial of 470 patients to confirm the safety and efficacy
of the Medtronic EnRhythm MRI SureScan pacing system, the first-ever pacemaker system to be developed and tested specifically
for safe use in Magnetic Resonance Imaging (MRI) machines under specified scanning conditions. The EnRhythm MRI SureScan pacing
system consists of the dual-chamber EnRhythm MRI SureScan pacemaker and CapSureFix MRI SureScan pacing leads. Currently, individuals
with implanted cardiac devices such as pacemakers, implantable cardioverter-defibrillators (ICDs) and cardiac resynchronization
therapy (CRT) devices are prohibited from receiving MRI scans, since MRI machines may interact with traditional systems, potentially
compromising therapy and patient safety. While improvements to pacing technology have continued since its development nearly
50 years ago, this advance marks a concerted effort to pursue compatibility with MRI scans, an important healthcare diagnostic
procedure.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Implantable Cardioverter-Defibrillators.</I></B> Approximately 7 million people worldwide have tachyarrhythmia.
Tachyarrhythmia is a potentially fatal condition that can lead to sudden cardiac arrest, the sudden and complete cessation
of heart activity. Sudden cardiac arrest is one of the leading causes of death in the U.S. responsible for more than 310,000
deaths annually, with most due to ventricular fibrillation. ICDs are stopwatch-sized devices that continually monitor the heart
and deliver appropriate therapy when an abnormal heart rhythm is detected. Several large clinical trials have shown implantable
defibrillators significantly improve survival as compared to commonly prescribed antiarrhythmic drugs. In 2005, the results
of Sudden Cardiac Death in Heart Failure Trial (SCD-HeFT), sponsored by the National Institutes of Health, with funding provided
by Medtronic, were published in the <I>New England Journal of Medicine.</I> This 2,521 patient trial, the largest ICD trial
ever conducted, showed ICDs reduced death by 23 percent in people with moderate heart failure compared to those who did not
receive ICDs. Also in 2005, the Centers for Medicare and Medicaid Services expanded coverage of ICDs for Medicare beneficiaries
who meet SCD-HeFT indications. Despite the mounting evidence demonstrated in clinical trials such as SCD-HeFT, only about 35
percent of all patients in the U.S., and significantly less outside the U.S., who are indicated for an ICD actually receive
one, leaving hundreds of thousands of people at an increased risk for sudden cardiac death. Our Virtuoso family of dual and
single chamber ICDs offer unique features including Anti-tachyarrhythmia Pacing (ATP) During Charging, OptiVol Fluid Status
Monitoring, our pacing mode “MVP”, and Conexus Wireless Telemetry with SmartRadio. ATP During Charging is a feature
that automatically uses pacing pulses to stop fast, dangerous heartbeats, while concurrently preparing to deliver a shock,
if needed, with no delay. OptiVol automatically monitors fluid status in the thoracic cavity, the chest area encompassing the
lungs and heart. The accumulation of thoracic fluid is a primary indicator of worsening heart failure and will often result
in patient hospitalization. The OptiVol Fluid Status Monitoring diagnostic feature allows physicians earlier access to warning
signs of deteriorating heart failure, which can then be used for early treatment of the patient’s
</P>
<BR>
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<P style="font-size:10pt">
heart failure. In July 2007, we announced the launch of the Virtuoso family of ICDs in Japan, following launches in the U.S.
and Europe in May and June 2006, respectively.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Implantable Cardiac Resynchronization Therapy.</I></B> Heart failure is a large and growing health problem.
It is typically a late manifestation of one or more other cardiovascular diseases, including coronary artery disease, hypertension,
cardiomyopathy, and valvular disease. Chronic heart failure occurs when the heart is unable to pump enough blood to sustain
adequate circulation in the body’s tissues. Approximately 22 million patients suffer from heart failure globally and an
estimated $80 billion is spent each year to manage heart failure patients. Approximately 5.2 million Americans suffer from
heart failure and more than 550,000 new cases are estimated to develop each year. Heart failure is the most costly cardiovascular
disease in the U.S., with an estimated $40 billion spent on managing heart failure patients each year. Further, there are more
than one million hospitalizations in the U.S. annually with a primary diagnosis of heart failure.</P>
<P style="font-size:10pt;text-indent:20pt">Since 1997, Medtronic has supported more than 20 randomized, controlled clinical
studies evaluating device therapy in more than 8,000 heart failure and post-myocardial infarction patients. This research has
resulted in several medical “firsts,” among them the first U.S. Food and Drug Administration (FDA) approved resynchronization
device for the treatment of heart failure, which was based on results from the groundbreaking MIRACLE trial; the first study
of the risk of sudden cardiac death in a heart failure patient population with SCD-HeFT; and the landmark CARE-HF trial, which
demonstrated that patients with moderate and severe heart failure who received a Medtronic CRT device experienced a significant
reduction in risk in mortality and morbidity, and that long-term treatment with a CRT-pacing (CRT-P) device or CRT-defibrillator
(CRT-D) device is a cost-effective way to improve survival in patients with heart failure. In the fall of 2007, data from IMPROVE
HF was presented at the scientific sessions of the Heart Failure Society of America Annual Scientific Meeting and the American
Heart Association. This is the largest study of U.S.-based heart failure patients in the outpatient setting and is being sponsored
by Medtronic. Data demonstrated significant underutilization of many guideline-indicated life-saving medical and device therapies
provided to heart failure patients, particularly for women and the elderly. Based on current medical guidelines, only 39 percent
of eligible patients received CRT or CRT-D therapy, and only 51 percent of eligible patients received ICD therapy. This data
underscores the challenge and opportunity of the ICD market.</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic continues to offer the industry’s broadest selection of devices and
features for the growing number of patients with heart failure who are also considered at high risk of sudden cardiac arrest.
The Concerto CRT-D, together with the Virtuoso ICD, are Medtronic’s first cardiac rhythm disease management devices to
utilize our proprietary Conexus wireless telemetry, enabling communication remotely between the implanted device and programmers
at the time of implant, during follow-up in a clinician’s office, or remotely using a patient home monitor. The Concerto
CRT-D/Virtuoso ICD family represents our next step in the delivery of premium implantable devices, which, in addition to MVP
and ATP During Charging, include OptiVol Fluid Status Monitoring. Concerto CRT-D also offers Left Ventricular Capture Management
(LVCM). LVCM is intended to automatically sense and adjust impulses for stimulation of the heart’s left ventricle. Concerto,
along with previously released CRT-D devices (InSync Maximo and InSync Sentry), offer sequential biventricular pacing or “V-to-V”
(ventricle to ventricle) timing, a feature that allows physicians to separately adjust the timing of electrical therapy delivered
to the heart failure patient’s two ventricles, which can optimize the beating of the heart and enhance the flow of blood
throughout the body. These CRT-D devices represent important clinical advances since sudden cardiac arrest occurs in heart
failure patients at six to nine times the rate observed in the general population. In July 2007, we announced the commercial
launch of the Concerto CRT-D in Japan, following launches in the U.S. and Europe in May and June 2006, respectively.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Diagnostics and Monitoring</I></B> Approximately 1.5 million people worldwide suffer from unexplained
syncope. In almost 10 percent of patients, syncope has a cardiac cause; in 50 percent of patients, a non-cardiac cause; and
in 40 percent of patients the cause of syncope is unknown. It is a leading cause of emergency room visits. Syncope is difficult
to diagnose as syncopal episodes are often too infrequent and unpredictable for detection with conventional monitoring techniques.
Our Reveal DX, which launched in Europe in July 2007 and the U.S. in December 2007, is a device that is placed under the skin
and continuously monitors the heart’s electrical activity before, during, and after a syncopal event. With
</P>
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<P style="font-size:10pt">
the information obtained from the Reveal DX, the physician can understand if the cause of syncope is cardiac related, which
may help to appropriately manage the patient’s arrhythmia.</P>
<P style="font-size:10pt;text-indent:20pt">Atrial Fibrillation (AF) is the most common cardiac arrhythmia, experienced by approximately
4 to 5 million people worldwide. Treatment of AF can be difficult as episodes may show no symptoms and therefore go unnoticed
by patients. AF can lead to a two to seven times higher risk of stroke and an increased risk of heart failure with its attendant
risk of sudden cardiac arrest. Our Reveal XT Insertable Cardiac Monitor, launched in Europe in July 2007, monitors AF patients
24 hours a day, every day for up to three years. There are a variety of ways to treat AF, but prior to the launch of Reveal
XT physicians had no means of gathering detailed data over an extended period on the progression of AF and the effect of treatment.
Reveal XT gives new insight into patients’ heart rhythms, which may help physicians to evaluate stroke risk and determine
appropriate treatment options for their patients.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Patient Management Tools.</I></B> We have three different patient management tools, CareLink, Paceart,
and CardioSight Service. The Medtronic CareLink Network, monitor, and software help physicians and patients better manage chronic
cardiovascular disease treated by implantable device therapy. CareLink enables patients to transmit data from their pacemaker,
ICD, or CRT-D using a portable monitor that is connected to a standard telephone line. Within minutes, the patient’s physician
and nurses can view the data on a secure Internet website. The information, which is comparable to that provided during an
in-clinic device follow-up visit, provides the physician with a view of how the device and patient’s heart are operating.
The system provides an efficient, safe and convenient way for specialty physicians to remotely monitor the condition of their
patients and, if needed, make adjustments to medication or prescribe additional therapy. It also saves patients time by potentially
eliminating some in-office visits. For patients implanted with devices featuring Conexus Wireless Telemetry, clinicians can
schedule routine follow-ups to occur automatically while the patient sleeps, alleviating compliance issues, and program the
device to send a CareAlert notification to physicians wirelessly and automatically, providing the potential for treatment decisions
before the condition worsens. The information in the Medtronic CareLink Network, which can be forwarded automatically to Paceart,
provides access to detailed patient and device data for clinicians from a myriad of sources including in-clinic device interrogations,
for inclusion in the patient’s Paceart record; from Paceart, via HL7 industry standard protocols, the data can move seamlessly
to the hospital or clinic’s electronic health record system. Today, the Medtronic CareLink Network is being utilized in
more than 2,400 clinics and hospitals, and more than 250,000 patients are being monitored. In June 2007, CareLink was launched
in Europe, and is now currently available in the U.S., Canada, and Western Europe, and is being piloted in other parts of the
world including Japan and Australia.</P>
<P style="font-size:10pt;text-indent:20pt">For more than 20 years, the Paceart System has led in the development of information
solutions for device clinic management, including activities such as automating patient scheduling, correspondence and reporting.
Paceart supports a common workflow by organizing and archiving data for cardiac devices from all major device manufacturers,
serving as the central hub for patients’ device data. In addition to automatically downloading data from the Medtronic
CareLink Network, Paceart can automatically receive data from the Medtronic 2090 Programmer, using SessionSync technology.
Paceart acts as the gateway for managing clinics’ device data, receiving registration and scheduling data from, and sending
patient and device data to more than 15 of the leading electronic health record and practice management systems. Paceart can
interface with any HL7-compatible system and is actively sharing data with such industry leaders as athenahealth, EPIC, GEMMS,
and NextGen Healthcare, among others. Today, more than 1,100 clinics are using the Paceart System to streamline clinicians’
daily activities and better serve 1.5 million patients.</P>
<P style="font-size:10pt;text-indent:20pt">The third patient management tool we offer is called CardioSight Service, which is
an in-clinic data access tool available to physicians treating heart failure patients who have one of several Medtronic CRT-D
or ICD devices. CardioSight provides clinically valuable, device-derived information to help specialty physicians discern the
status of the heart failure patient’s symptoms. The CardioSight Reader gives insight into a patient’s condition without
using a device programmer. Within minutes of downloading device information using the reader, a Heart Failure Management Report
or Cardiac Compass Trends Report is available to the clinic and can be added to the patient chart before the physician consults
with the patient.</P>
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<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">The primary medical specialists who use our implanted cardiac rhythm devices include
electrophysiologists, implanting cardiologists, heart failure specialists, and cardiovascular surgeons. We hold the leading
market position among implantable cardiac rhythm device manufacturers. Our primary competitors in the CRDM business are Boston
Scientific Corporation and St. Jude Medical, Inc.</P>
<P style="font-size:10pt;font-weight:bold">Spinal</P>
<P style="font-size:10pt;text-indent:20pt">Our Spinal business is a leading supplier for innovative medical devices and implants
used in the treatment of the spine. Today we offer a wide range of products and therapies to treat a variety of conditions
of the spine.</P>
<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our Spinal business offers products for treatment and diagnosis of many spinal conditions,
including those listed below.</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Herniated Disc – A disc herniation occurs when the inner core of the intervertebral disc bulges out through
the outer layer of ligaments that surround the disc. This tear in the outer layer of ligaments causes pain in the back at the
point of herniation. If the protruding disc presses on a spinal nerve, the pain may spread to the area of the body that is
served by that nerve. The terms “ruptured,” “slipped,” and “bulging” are also commonly used to
describe this condition. </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Degenerative Disc Disease – As part of the natural aging process, intervertebral discs lose their flexibility and shock
absorbing characteristics. The ligaments that surround the discs become brittle and easier to tear. At the same time, the inner
core of the disc starts to dry out and shrink. Over time, these changes can cause the discs to lose their normal structure
and/or function.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Spinal Deformity – When viewed from behind, the human spine appears straight and symmetrical. When viewed from the
side, however, the spine is curved. Some curvature in the neck, upper trunk, and lower trunk is normal. These curves help the
upper body maintain proper balance and alignment over the pelvis. The term deformity is used to describe any variation in this
natural shape. One form of spinal deformity, scoliosis, involves a lateral, or side-to-side, curvature of the spine. The vertebrae
rotate along with the spine as a consequence of a scoliotic curve. Depending on the severity of the curve, a scoliotic spine
may create asymmetries in the shoulders, thoracic spine, and pelvis, leading to an imbalance of the trunk and significant disfigurement.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Spinal Tumors – Tumors or cancers of the spine and spinal cord are relatively rare. Three types of tumors affect the
spine and spinal cord: primary benign tumors, primary malignant tumors, and metastatic tumors. The term primary is used to
designate a tumor originating from actual spine cells. Secondary spinal tumors, or cancers, which are more commonly called
metastases, spread from other organs in the body.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Trauma/Fracture – Trauma to the spine refers to injury that has occurred to bony elements, soft tissues, and/or neurological
structures. Stability to the spinal column can be compromised when bony elements are injured or there is disruption to soft
tissues such as ligaments. Instability causes the back to become unable to successfully carry normal loads, which can lead
to permanent deformity, severe pain, and, in some cases, catastrophic neurological injuries. Most often the instability comes
from a fracture in one of the bony parts of the vertebra. Osteoporosis, a condition characterized by loss of bone mass and
structural deterioration of bone tissue, can lead to bone fragility and an increased susceptibility to fracture.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Stenosis – A condition caused by a gradual narrowing of the spinal canal, stenosis results from degeneration of both
the facet joints and the intervertebral discs. Bone spurs, called osteophytes, which develop because of the excessive load
on the intervertebral disc, grow into the spinal canal. The facet joints also enlarge as they become arthritic, which contributes
to a decrease in the space available for the nerve roots.</TD>
</TR>
</TABLE>
<BR>
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<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our Spinal products as a percentage of our
total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604spinal.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">Our Spinal products, include thoracolumbar,
cervical and interbody devices that are employed utilizing the most modern surgical techniques, including the latest Minimal
Access Spinal Technologies (MAST) along with bone growth substitutes, and devices for vertebral compression fractures and spinal
stenosis.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Spinal Instrumentation.</I></B> Each year approximately 25 million Americans experience back pain
that is severe enough to visit a healthcare professional. Of the approximately 25 million Americans, 13 million endure
a significant impairment of activity. We are committed to providing spinal surgeons with the most advanced options for treating
low back pain and other spinal conditions.</P>
<P style="font-size:10pt;text-indent:20pt">Today we offer one of the industry’s broadest lines of devices, including a
wide range of sophisticated internal spinal stabilization devices, instruments, and biomaterials used in the treatment of spinal
conditions. Spinal fusions, which are currently one of the most common types of spine surgery, join two or more vertebrae to
eliminate pain caused by movement of the unstable vertebrae. Our Spinal products are used in spinal fusion of both the thoracolumbar
region, referring to the mid to lower vertebrae, as well as of the cervical region, or upper spine and neck vertebrae. Products
used to treat spinal conditions include rods, pedicle screws, hooks, plates, and interbody devices, such as cages, as well
as biologic products, which include bone growth substitutes, dowels and wedges.</P>
<P style="font-size:10pt;text-indent:20pt">In October 2007, we launched the CD HORIZON LEGACY Anterior Spinal System. The newest
member of the CD HORIZON family offers an anterior (frontal) fixation solution for complex spinal surgery. The fixation system
is designed to assist with stability of the thoracic and lumbar spine when performing modern spinal fusion surgery and may
also help patients suffering from degenerative disc disease, trauma, tumors, severe curvatures and other degenerative diseases
of the spine. The system features titanium construction, low profile screw design, top loading, top tightening screws, and
color coding to make the procedure easier.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Dynamic Stabilization.</I></B> In July 2007, we launched the PRESTIGE Cervical Disc, the first artificial
disc commercially available in the U.S. for use in the neck. The PRESTIGE Cervical Disc gives some patients who are suffering
from degenerative disc disease that can cause intolerable neck and/or arm pain the potential for motion at the treated level
of the spine as well as another option for pain relief and restored function. With its patented ball-and-trough design, the
PRESTIGE Cervical Disc is designed to maintain motion and flexibility while replacing a diseased disc that is removed during
surgery. In July 2007, the Company also announced that the BRYAN Cervical Disc received a recommendation for approval from
the U.S. FDA’s Orthopedic and Rehabilitation Devices advisory panel. The BRYAN Cervical Disc, composed of a polyurethane
nucleus surrounded by titanium endplates, is designed to replicate normal, physiologic motion of the cervical spine.</P>
<P style="font-size:10pt;text-indent:20pt">In addition to the PRESTIGE and BRYAN Cervical Discs we have two additional disc
replacement programs currently under investigation in the U.S.: the MAVERICK Artificial Disc for the lumbar spine; and the
PRESTIGE LP, our next generation lower profile cervical disc, made of unique ceramic titanium composite.</P>
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<B><I>Minimal Access Spinal Technologies.</I></B> We have developed a series of MAST that facilitate safe,
reproducible access to the spine with minimal disruption of vital muscles and complementary structures. These techniques involve
the use of advanced navigation and instrumentation to allow surgeons to operate with smaller incisions and less tissue damage
than traditional surgeries, thus reducing pain and blood loss and improving recovery periods.</P>
<P style="font-size:10pt;text-indent:20pt">Our expanding portfolio of minimally invasive spinal technologies includes the CD
HORIZON SEXTANT II System, a next-generation METRx System, to treat herniated discs and allow minimally invasive access for
fusion and the MAST QUADRANT Retractor System a retractor that allows access to complex degenerative pathology.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Biologics.</I></B> Our INFUSE Bone Graft, used in spinal fusion, contains a recombinant human bone morphogenetic
protein, or rhBMP-2, that induces the body to grow its own bone, eliminating the need for a painful second surgery to harvest
bone from elsewhere in the body. In Europe, INFUSE Bone Graft is marketed as InductOs Bone Graft for spinal fusion. We also
offer INFUSE Bone Graft for the treatment of certain types of acute, open fractures of the tibial shaft, a long bone in the
lower leg, as well as certain oral maxillofacial indications.</P>
<P style="font-size:10pt;text-indent:20pt">In September 2006, we co-launched the MASTERGRAFT MATRIX and MASTERGRAFT PUTTY synthetic
bone graft products, which were developed to provide surgeons with a comprehensive solution. Embedded with MASTERGRAFT GRANULES,
both grafts are osteoconductive, malleable, and designed to fill gaps in the skeletal system. These new grafts give surgeons
more handling options, while providing an osteoconductive implant that localizes biologic components. These grafts are designed
to aid cellular proliferation and osteointegration during the bone healing process. MASTERGRAFT MATRIX is a compressive-resistant
collagen scaffold block that is designed to facilitate uninterrupted bone growth. MASTERGRAFT PUTTY is a malleable collagen
scaffold that may be used with bone marrow aspirate or sterile water. When the hydrated graft is combined with local bone,
it may provide more suitable handling characteristics for the surgical procedure. In May 2007, we announced the immediate,
nationwide availability of PROGENIX DBM, a bone graft substitute and bone void filler used in voids or gaps of the pelvis,
ilium, and extremities.</P>
<P style="font-size:10pt;text-indent:20pt">Late in April 2007, we began to market INFUSE Bone Graft for certain oral maxillofacial
and dental regenerative bone grafting procedures. It is estimated that more than 350,000 bone grafting procedures of this type
are performed in the U.S. each year. Medtronic has also submitted a pre-market approval (PMA) with the FDA for a posterolateral
spinal indication for INFUSE Bone Graft.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Kyphon.</I></B> During the third quarter of fiscal year 2008, we consummated the acquisition of Kyphon
Inc. (Kyphon), a public company, and it became our wholly owned subsidiary. Kyphon develops and markets medical devices designed
to restore and preserve spinal function using minimally invasive technology. Kyphon’s primary products are used in balloon
kyphoplasty for the treatment of spinal compression fractures caused by osteoporosis, trauma or cancer, and in the interspinous
process decompression (IPD) procedure for treating the symptoms of lumbar spinal stenosis (LSS). In the U.S., Kyphon’s
X-STOP IPD Device provides us with the first FDA-approved minimally invasive device for the treatment of mild to moderate LSS
patients. In Europe, both the X-STOP and the next generation Aperius<SUP> </SUP>PercLID device are available for the treatment
of LSS.</P>
<P style="font-size:10pt;text-indent:20pt">It is expected that the acquisition of Kyphon will add to the growth of our existing
Spinal business by extending its product offerings into some of the fastest growing product segments of the spine market, enabling
us to provide physicians with a broader range of therapies for use at all stages of the care continuum.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">The primary medical specialists who use our Spinal products are spinal surgeons,
orthopedic surgeons, neurosurgeons, and interventional radiologists. Our competitors in the Spinal business include Zimmer, Inc.,
Johnson & Johnson, Stryker Corporation, Synthes-Stratec, Inc., and over 200 small physician owned companies.</P>
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<P style="font-size:10pt;font-weight:bold">CardioVascular</P>
<P style="font-size:10pt;text-indent:20pt">Our CardioVascular business offers a full line of minimally invasive products and
therapies to treat coronary artery disease, abdominal and thoracic aortic aneurysms, peripheral vascular disease, and heart
valve disorders.</P>
<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our CardioVascular business offers minimally invasive products for the treatment
of the following conditions.</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Coronary artery disease — deposits of cholesterol and other fatty materials (plaque) on the walls
of the heart’s arteries, causing narrowing or blockage of the vessel and reducing the blood supply to the heart. Blockage
in a coronary artery can prevent the heart from receiving sufficient oxygen, which can impair heart function, potentially resulting
in a heart attack.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Peripheral vascular disease — narrowing or blockage of arteries outside the heart, impeding blood supply to the
brain, legs, and other vital organs.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Abdominal and Thoracic aortic aneurysm (AAA/TAA) — an aneurysm is a dangerous bulge or weakening of the body’s
main artery that can rupture with fatal consequences if left untreated. </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Heart valve disorders — diseased or damaged heart valves can restrict blood flow or leak, which limits the heart’s
ability to pump blood, causing the heart to work harder to meet the needs of the circulatory system.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our CardioVascular business as a percentage
of our total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604card.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">Our CardioVascular products include coronary
and peripheral stents and related delivery systems, endovascular stent graft systems, distal embolic protection systems, perfusion
systems which oxygenate and circulate a patient’s blood during arrested heart revascularization surgery, positioning and
stabilization systems for beating heart revascularization surgery, products for the repair and replacement of heart valves,
surgical ablation products, and a broad line of balloon angioplasty catheters, guide catheters, guidewires, diagnostic catheters
and accessories.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Coronary and Peripheral Stents.</I></B> If a blockage in a coronary artery prevents the heart from receiving
sufficient oxygen, the heart cannot function properly and a heart attack may result. Coronary artery disease is commonly treated
with balloon angioplasty, a procedure in which a special balloon is threaded through the coronary artery system to the site
of the arterial blockage, where it is inflated, pressing the obstructive plaque against the wall of the vessel to improve blood
flow.</P>
<P style="font-size:10pt;text-indent:20pt">Following balloon angioplasty, physicians often place coronary stents at the blockage
site to prop open diseased arteries to maintain blood flow to the heart. Stents are cylindrical, wire-mesh devices small enough
to insert into coronary arteries. Our leading Driver bare metal stent system is composed of an advanced cobalt-based alloy,
which surpasses the limitations of stainless steel by creating very strong, ultra-thin struts that offer excellent flexibility
and vessel support. The Driver stent is available in
</P>
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all major markets worldwide. The Micro-Driver coronary stent system, approved in the U.S. and Japan in 2006, is now also available
in all major markets. The Micro-Driver is a bare metal stent system designed specifically to perform in small vessels and tortuous
anatomies. This cobalt-alloy stent is the first bare metal stent for small vessels with an indication for new or untreated
vessels (a de novo indication), addressing an important need in the treatment of coronary artery disease.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Drug-Eluting Stents.</I></B> Drug-eluting stents (DES) are designed to inhibit the re-narrowing or re-clogging
of arteries, known as restenosis, that can occur after percutaneous coronary intervention (PCI). Our Endeavor DES (Endeavor)
drug-eluting coronary stent combines an innovative delivery system leveraging our discrete technology, our advanced Driver
cobalt alloy stent, Zotarolimus (a sirolimus analogue), and a biomimetic polymer coating that controls the release of the drug
into the vessel wall. In May 2002, we entered into a ten-year agreement with Abbott Laboratories (Abbott) granting us
co-exclusive use of Abbott’s proprietary immunosuppressant drug Zotarolimus, as well as the phosphorylcholine coating
Abbott has licensed from Biocompatibles International PLC for use in conjunction with Zotarolimus. Clinical and preclinical
studies have shown that this proprietary biocompatible polymer, which mimics the outer membrane of a red blood cell, is safe
and thrombo-resistant.</P>
<P style="font-size:10pt;text-indent:20pt">Worldwide, Medtronic has approximately 16,000 Endeavor patients enrolled in its multiple
clinical trials, and the growing volume of positive data and number of patients with long-term follow-up continues to reinforce
the stent’s favorable safety and efficacy profile. Ultimately, the ENDEAVOR clinical program will enroll more than 22,500
patients followed to five years; approximately 16,630 of these patients will receive an Endeavor stent.</P>
<P style="font-size:10pt;text-indent:20pt">Our Endeavor program achieved a number of significant regulatory and clinical milestones
during fiscal year 2008. In July 2007 we announced that the ENDEAVOR IV clinical trial had met its primary, non-inferiority
endpoint of Target Vessel Failure at nine months compared to the TAXUS Paclitaxel-Eluting Coronary Stent System from Boston
Scientific Corporation. These results were included in the Endeavor Pre-Market Approval application for FDA approval.</P>
<P style="font-size:10pt;text-indent:20pt">In October 2007 we announced the CE Mark approval and the international launch of
Endeavor Resolute DES (Endeavor Resolute). Endeavor Resolute is a next-generation DES with Biolinx, a proprietary biocompatible
polymer that is designed to address the special needs of patients who have complex medical conditions, and is engineered to
match the duration of drug delivery with the longer healing duration often required by these patients. Since approval, Endeavor
Resolute has been launched in more than 100 countries in Europe, Asia, the Middle East and Africa – making Medtronic the
first company to offer two internally developed DES options for the treatment of coronary artery disease.</P>
<P style="font-size:10pt;text-indent:20pt">In November 2007 we received CE Mark approval for the Sprinter Legend Semicompliant
Rapid Exchange Balloon Dilatation Catheter for use in coronary angioplasty procedures. The Sprinter Legend provides the latest
innovations in balloon technology, including the unique 1.25 mm Zerofold balloon, and is designed to address the most technically
difficult lesions in coronary angioplasty procedures.</P>
<P style="font-size:10pt;text-indent:20pt">On February 1, 2008 we announced FDA approval and the initiation of the U.S.
launch of the Endeavor. Based on the most comprehensive body of scientific evidence submitted to the FDA for a DES, the approval
gives U.S. cardiologists access to a new medical device for safely and effectively treating patients with narrowed coronary
arteries. Endeavor is the first new DES approved by the FDA since 2004. As a condition of FDA approval, we agreed to continue
our extensive post-market clinical program, and we will now add sites in the U.S. to ensure that at least 5,000 patients are
followed to a minimum of five years. With the U.S. launch, Endeavor is now available in all major global markets except for
Japan.</P>
<P style="font-size:10pt;text-indent:20pt">Also in February 2008, we announced the first human use of our investigational bifurcation
stent. The new stent employs an innovative Y-shaped design to match the anatomy of lesions that form at the junctions of coronary
arteries. The implant marked the first patient enrollment in the BRANCH study, a trial designed to assess the safety and deliverability
of the Medtronic bifurcation stent, which differs from other approaches by providing scaffolding to both branches of the bifurcation
simultaneously without overlapping stents. The prospective, single-arm trial will enroll up to 60 patients at five sites in
Australia and New Zealand. Of the approximately two million percutaneous coronary interventions
</P>
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performed each year worldwide, an estimated 450,000 involve patients with bifurcation lesions, which are consistently recognized
as one of the most difficult lesion types to treat and are associated with higher adverse event rates.</P>
<P style="font-size:10pt;text-indent:20pt">In March 2008 at the American College of Cardiology annual meeting, we presented
a pooled analysis of safety data from the ENDEAVOR clinical program that affirmed the superior long-term safety of the Endeavor
drug-eluting coronary stent compared to the Driver bare metal stent. The analysis illustrated that Endeavor, when compared
to Driver, was associated with low rates of all evaluated safety metrics.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Endovascular Stent Grafts.</I></B> Our CardioVascular product line also includes a range of endovascular
stent grafts including the market-leading AneuRx and Talent Stent Grafts for minimally invasive AAA repair and the Talent Thoracic
and Valiant Thoracic Stent Grafts for TAA repair. Present in an estimated 1.2 million people and responsible for approximately
15,000 annual deaths in the U.S., an AAA is a dangerous bulge or weakening of the body’s main artery that can rupture
with fatal consequences if left untreated. This is compared to over 60,000 people in the U.S. with a thoracic aortic aneurysm.
Medtronic now has more than 10 years of clinical experience with its endograft implants, by far the most clinical experience
in the endovascular industry. More than 130,000 patients have been treated worldwide with Medtronic stent grafts for AAA or
TAA aneurysms.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Abdominal Aortic Aneurysm (AAA) Repair</U>
</P>
<P style="font-size:10pt;margin-top:-12pt;text-indent:20pt">Our AneuRx AAAdvantage Stent Graft System is available in the U.S.
and the Talent Abdominal Stent Graft System is now approved worldwide with the exception of Japan. In March 2006, we announced
FDA approval of our AneuRx AAAdvantage stent graft with the Xcelerant delivery system. Enhancements to the AAAdvantage Stent
Graft System include contoured stents, broader proximal and distal sealing, and improved radiopaque markers. In January 2008,
we announced the U.S. market launch of the AneuRx AAAdvantage Stent Graft on the Xcelerant Hydro Delivery System, which features
a hydrophilic coating designed to aid navigation of the device through tight and tortuous arteries by reducing friction with
the artery wall. In March 2008, we announced the European market launch of the Talent Abdominal Stent Graft on this same Xcelerant
Hydro Delivery System. In addition, we anticipate continued sales growth outside the U.S. with future acceptance of our next
generation Endurant AAA Stent Graft. We anticipate completion of our first-in-human trial and CE mark approval for the Endurant
AAA Stent Graft in Western Europe in the second half of calendar year 2008. The Endurant AAA Stent Graft System’s precise
deployment, flexibility, and low delivery profile are designed for patients with challenging aneurysm anatomies.</P>
<P style="font-size:10pt;text-indent:20pt">The Talent Abdominal Stent Graft with the CoilTrac Delivery System PMA was approved
by the FDA in April 2008 and the U.S. launch occurred in June 2008. The Talent Abdominal Stent Graft System is specifically
indicated for endovascular repair (EVAR) of abdominal aortic and aorto-iliac aneurysms. It expands the indication for EVAR
with a proximal aortic neck length requirement of 10 mm or greater and a proximal aortic neck angulation of 60 degrees or less.
The stent graft is available in diameters of up to 36 mm, as well as flared and tapered iliac limbs of 8 mm to 24 mm. This
indication enables physicians to treat a broader range of patients than with other abdominal stent graft systems available
in the U.S. The U.S. PMA clinical data is consistent with Talent Abdominal’s international experience, where it is a leading
stent graft with more than 45,000 implants to date.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Thoracic Aortic Aneurysm (TAA) Repair</U>
</P>
<P style="font-size:10pt;margin-top:-12pt;text-indent:20pt">In July 2005, we announced the international commercial release
of the Valiant Thoracic Stent Graft with the Xcelerant Delivery System, a next-generation stent graft. The Xcelerant Delivery
System is designed to provide physicians with a smooth, controlled and more trackable delivery platform.</P>
<P style="font-size:10pt;text-indent:20pt">The Talent Thoracic Stent Graft with the CoilTrac Delivery System PMA was filed with
the FDA in July 2007 and we received FDA approval of our Talent Thoracic device in June 2008. We anticipate the launch of the
Talent Thoracic Stent Graft in the second half of calendar year 2008. The Talent Thoracic Stent Graft System may expand the
indication for thoracic stent grafting by as much as 25% due to the introduction of smaller and larger diameter stent grafts.
The Talent Thoracic Stent Graft System is available in Europe and the rest of the world, excluding Japan.</P>
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<P style="font-size:10pt;text-indent:20pt">In addition, we anticipate launching the next generation Valiant Thoracic Stent Graft
System with Xcelerant Hydro Delivery System and incorporated tip capture in Europe at the end of calendar year 2008. This delivery
system combines the reduced friction of the hydrophilic coating with a tip capture mechanism designed for precise and controlled
deployment of the stent graft.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Coronary Artery Bypass Surgery.</I></B> When physicians determine that they cannot effectively treat
a blockage in a coronary artery using balloon angioplasty or a stent, they typically turn to cardiac surgery to address the
problem. The most common surgical procedure used to treat blockage in a coronary artery is a Coronary Artery Bypass Graft (CABG).
In a CABG procedure, surgeons re-route the blood flow around the blockage by attaching a graft, usually from an artery or vein
from another part of the patient’s body, as an alternative pathway to the heart. There are two primary techniques, arrested
heart surgery and beating heart surgery.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Arrested Heart Surgery.</I></B> In a conventional coronary artery bypass procedure (as well as heart
valve surgery), the patient’s heart is temporarily stopped, or arrested. The patient is placed on a circulatory support
system that temporarily replaces the patient’s heart and lungs and provides blood flow to the body. We offer a complete
line of blood-handling products that form this circulatory support system and maintain and monitor blood circulation and coagulation
status, oxygen supply, and body temperature during arrested heart surgery.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Beating Heart Surgery.</I></B> As an alternative to conventional arrested heart bypass surgery, physicians
are performing coronary artery bypass surgery on the beating heart to avoid the complexity and potential risks of arresting
the heart. To assist physicians performing beating heart surgery, we offer positioning and stabilization technologies. These
technologies include our Starfish 2 and Urchin heart positioners, which use suction technology to gently lift and position
the beating heart to expose arteries on any of its surfaces. These heart positioners are designed to work in concert with our
Octopus tissue stabilizer, which holds a small area of the cardiac surface tissue nearly stationary while the surgeon is suturing
the bypass grafts to the arteries. In June 2006, we introduced the Octopus Evolution tissue stabilizer, the latest in a 10-year
series of innovative cardiac surgery instruments. It is currently estimated that beating heart surgeries make up approximately
20 percent of the estimated 270,000 coronary artery bypass surgeries that are performed in the U.S. each year.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Surgical Ablation.</I></B> Our Cardioblate surgical ablation systems (CSAS), which includes the Cardioblate
LP Surgical Ablation System and Cardioblate Navigator Tissue Dissector, allow cardiac surgeons to create ablation lines during
cardiac surgery. In November 2006, we announced FDA approval to initiate the Feasibility of the Lone Atrial Fibrillation Clincial
Trial, (FACT), to evaluate the use of the CSAS thorascopically in paroxysmal AF patients. In March 2007, we announced initiation
of the Concomitant Utilization of RadioFrequency Energy for Atrial Fibrillation (CURE-AF) study, a U.S. pivotal trial to evaluate
the CSAS to treat permanent AF. The purpose of CURE-AF is to evaluate the safety and effectiveness of our CSAS at reestablishing
the normal heart rhythm in patients with permanent AF requiring concomitant open heart surgery utilizing the modified Cox Maze
III procedure. This prospective, non-randomized, clinical trial will enroll 75 patients at 10 U.S. medical centers. The primary
endpoints of the trial are to evaluate the freedom from permanent AF in patients off antiarrhythmic drugs at six months and
the composite major adverse event rate at one month. The results of the trial will be submitted to the FDA to support an indication
for the Medtronic CSAS in the treatment of permanent AF in patients requiring concomitant open heart surgery.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Heart Valves.</I></B> We offer a complete line of surgical valve replacement and repair products for
damaged or diseased heart valves. Our replacement products include both tissue and mechanical valves. The valve market continues
to shift from mechanical to tissue valves, which is beneficial to us due to our broad selection of tissue valve products. Our
Mosaic bioprosthetic heart valve is a reduced-profile valve engineered from porcine tissue incorporating a proven flexible
stent. The low profile and flexibility of the stent offer benefits to the surgeon when implanting the valve. Other tissue product
offerings include the Freestyle stentless and Hancock II stented valves. Our mechanical heart valve offerings include the Medtronic
Hall, the ADVANTAGE and the ADVANTAGE Supra bileaflet valves. Currently, the standard ADVANTAGE aortic bileaflet valve is under
evaluation by the FDA in the U.S. Our valve repair products include the Duran Flexible and CG Future Band and CG Composite
Annuloplasty
</P>
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Systems. In January 2008 we announced the formation of an exclusive global licensing agreement with Arbor Surgical Technologies,
Inc. under which Medtronic will manufacture, market and distribute Arbor’s bovine pericardial tissue heart valve technologies. In
addition, we acquired a minority interest in Arbor. The technology will complement our Structural Heart Disease therapy objectives,
which are focused on developing effective options for valve disease, septal defects and atrial fibrillation.</P>
<P style="font-size:10pt;text-indent:20pt">In October 2006, Medtronic’s Melody Transcatheter Pulmonary Valve and Ensemble
Transcatheter Delivery System received European CE Mark making it the first transcatheter valve in the world to receive such
an approval. The system is the first of its kind to treat patients with congenital structural heart disease requiring pulmonary
heart valve replacement. According to the American Heart Association, congenital heart defects are the No. 1 birth defect worldwide.
In the U.S. alone, more than 25,000 babies are born each year with a congenital heart defect. Approximately 22 percent of these
babies have defects disrupting the blood flow from the right ventricle to the pulmonary artery. A feasibility study to evaluate
the use of the Medtronic Melody Transcatheter Pulmonary Valve and Ensemble Transcatheter Delivery System in the U.S. was initiated
in February 2007, and enrollment was completed in September 2007.</P>
<P style="font-size:10pt;text-indent:20pt">Transcatheter valve technology represents a less invasive means to treat heart valve
disease and is designed to allow physicians to deliver replacement valves via a catheter through the body’s cardiovascular
system, thus eliminating the need to open the chest. Traditionally, open heart surgery has been required to correct the problem
and it is not unusual for a patient to undergo multiple, open-heart surgeries during their lifetime. The Melody Valve and Ensemble
System provide a non-surgical means to restore effective pulmonary valve function and prolong the functional life of prosthetic
conduits, thereby reducing the number of open heart surgeries for these patients throughout their lifetime.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">The primary medical specialists who use our catheter-based products for treating
coronary artery disease are interventional cardiologists, while products treating peripheral vascular disease and aortic aneurysms
may be used by interventional radiologists, vascular surgeons, cardiac surgeons and interventional cardiologists. Our primary
competitors in the coronary and peripheral vascular business are Boston Scientific Corporation, Johnson & Johnson,
and Abbott Laboratories, Inc. Our primary competitors in the endovascular business are Cook, Inc. and W. L. Gore & Associates,
Inc. The principal medical specialists who use our cardiac surgery products are cardiac surgeons. Our primary competitors in
the structural heart disease business are Edwards LifeSciences Corporation, Boston Scientific Corporation, Johnson &
Johnson, St. Jude Medical, Inc., Terumo Medical Corporation, and Sorin S.p.A.</P>
<P style="font-size:10pt;font-weight:bold">Neuromodulation</P>
<P style="font-size:10pt;text-indent:20pt">Our Neuromodulation business develops, manufactures, and markets devices for the
treatment of neurological, urological, and gastroenterological disorders. We are the pioneer in the field of restorative neuroscience,
using site-specific neurostimulation and targeted drug delivery to modulate and restore nervous system function. Through collaborative
efforts with our customers we have developed a unique portfolio of therapeutic technologies for the treatment of debilitating
chronic diseases that represent large, unmet medical needs.</P>
<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our Neuromodulation business offers products for the treatment or diagnosis of the
conditions described below.</P>
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<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Pain Management — including neurostimulation and implantable drug delivery systems for chronic pain.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Movement Disorders — including deep brain stimulation for Parkinson’s disease, essential tremor, dystonia, and
intrathecal baclofen (ITB) therapy for spasticity.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Urological and gastroenterological disorders — including neurostimulation for overactive bladder and urinary incontinence,
radio frequency ablation for benign prostatic hyperplasia (BPH
</TD>
</TR>
</TABLE>
<BR>
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<TD width="4%"> </TD>
<TD width="92%">
or enlarged prostate), neurostimulation for gastroparesis, and a ph monitoring system used to diagnose gastroesophageal reflux
disease (GERD).</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our Neuromodulation products as a percentage
of our total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604neuro.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">Neuromodulation products consist of therapeutic
and diagnostic devices, including implantable spinal cord stimulation systems and implantable drug delivery devices, used to
treat intractable chronic pain; deep brain stimulation systems and implantable drug administration devices to treat movement
disorders like Parkinson’s disease and implantable intrathecal drug delivery for intractable spasticity; and sacral nerve
stimulation systems to treat overactive bladder and urinary incontinence. Our product portfolio also includes products for
the treatment of BPH, or enlarged prostate and gastroparesis and a pH monitoring system for diagnosing GERD. Many of these
are large, underpenetrated markets. Chronic pain affects an estimated 75 million people in the U.S. alone. Overactive bladder
affects 33 million people in the U.S. alone.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Pain Management – Implantable Neurostimulation Systems.</I></B> We offer the largest portfolio
of neurostimulation systems, including rechargeable and non-rechargeable devices, along with the largest selection of leads.
In February 2008, we announced the worldwide launch of RestoreULTRA neurostimulation systems for the treatment of chronic pain.
This rechargeable neurostimulator, the most advanced device in our market-leading family of RESTORE devices, is the smallest
and thinnest 16-electrode rechargeable neurostimulator available. Furthermore, for the first time with any neurostimulator,
the patient programmer includes an innovative new feature called TARGETmyStim. This feature allows patients to make appropriate
and immediate adjustments in their stimulation in order to best address normal fluctuations in pain, including changing pain
patterns. By using the remote control programmer, patients can fine-tune their stimulation to specific sites up and down the
spinal cord and increase/decrease the intensity of the electrical impulses. These adjustments allow the patient to customize
their pain therapy in a way that was previously only possible with a physician programmer during an office visit. The RestoreULTRA
neurostimulator allows patients who use medium stimulation settings to go at least two weeks before needing to recharge.</P>
<P style="font-size:10pt;text-indent:20pt">Our portfolio of neurostimulators also includes RestoreADVANCED (rechargeable) and
PrimeADVANCED (non-rechargeable) neurostimulation systems. All of the neurostimulation systems are implanted under the skin
and have up to two leads with eight electrodes each that deliver electrical pulses to the spinal cord. Based on individual
patient need, the positioning of the electrodes can be customized to deliver stimulation directly to the target area on the
spinal cord, and in doing so, block pain signals from reaching the brain.</P>
<P style="font-size:10pt;text-indent:20pt">In June 2007, we launched worldwide, the Specify 5-6-5 surgical lead for neurostimulation
therapy, designed to improve its effect on low back pain. The Specify 5-6-5 surgical lead features 16 electrodes arrayed in
three columns on a durable, flexible, curved paddle that conforms to the anatomy of the epidural space. The electrodes are
arranged in a diamond pattern that is intended to maximize therapeutic effectiveness while minimizing energy consumption. Each
electrode can be activated and programmed independently, which enables customization and adjustment of neurostimulation therapy
based on individual patient needs. This lead is the first of its class to use a tripolar design.</P>
<BR>
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<P style="font-size:10pt;text-align:center">15</P>
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<P style="font-size:10pt;text-indent:20pt">A continuing major initiative in fiscal year 2008 was the establishment of higher
levels of evidence for our therapies’ efficacy and cost-effectiveness. In September 2007, the international medical journal
<I>PAIN</I> published results from a study known as PROCESS showing that Medtronic neurostimulation therapy plus conventional
medical management provided patients with significantly greater pain relief, quality of life, functional capacity and treatment
satisfaction than conventional medical management alone after six months. Forty-eight percent of the patients assigned to receive
neurostimulation plus conventional treatments experienced a 50 percent or greater improvement in leg pain compared to 9 percent
of patients assigned to receive only conventional treatments (p<0.001). PROCESS is the largest multi-center randomized controlled
trial of neurostimulation therapy ever conducted. The study design randomly assigned 100 patients from 12 academic medical
centers in Australia, Belgium, Canada, Israel, Italy, Spain, Switzerland, and the United Kingdom to receive conventional medical
management or Medtronic neurostimulation therapy for a period of six months and includes long-term follow-up to 24 months.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Pain Management – Implantable Drug Delivery Systems.</I></B> Our portfolio of intrathecal drug
delivery systems consist of the only programmable, implantable drug pump and catheter that deliver small quantities of drug
directly into the intrathecal space in the spine. These devices are used to treat chronic, intractable pain.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Movement Disorders – Deep Brain Stimulation (DBS).</I></B> For patients suffering from movement
disorders like Parkinson’s disease, essential tremor, or dystonia, our line of Activa DBS Therapy systems offer a solution.
DBS therapy uses an implantable medical device akin to a cardiac pacemaker to deliver carefully controlled electrical pulses
to precisely targeted areas of the brain involved in motor control. Continuous stimulation of these areas blocks the signals
that cause the disabling motor symptoms of the disease.</P>
<P style="font-size:10pt;text-indent:20pt">The establishment of higher levels of evidence for our DBS therapies’ efficacy
and cost-effectiveness is a major step in their continued adoption. In August 2006, the <I>New England Journal of Medicine</I>
published results from a major randomized controlled multi-center study showing that Activa DBS Therapy combined with medication
is significantly more effective than medication alone in treating motor symptoms of advanced Parkinson’s disease. Conducted
at 10 academic medical centers in Germany and Austria, the study included 156 patients with severe motor symptoms of Parkinson’s
disease. Compared to medication alone, DBS of the subthalamic nucleus, a brain structure involved in regulating movement, caused
significantly greater improvements in motor function after six months of treatment. On average, patients who received DBS plus
medication showed a 41 percent improvement in motor function. In November 2006, research published in the <I>New England Journal
of Medicine</I> showed DBS can provide significant and sustainable benefits to people with disabling forms of dystonia, a neurological
movement disorder that forces parts of the body into abnormal, sometimes painful, movements or postures. Three months after
randomization, patients in the neurostimulation group experienced a 39 percent improvement in the movement score of the Burke-Fahn-Marsden
Dystonia Rating Scale, compared to a 5 percent improvement in the control group. Similarly, neurostimulation patients recorded
a 38 percent reduction in disability scores, compared to an 8 percent reduction in the control group.</P>
<P style="font-size:10pt;text-indent:20pt">During fiscal year 2008, we also continued to make progress in clinical trials designed
to explore new applications of our deep brain stimulation technologies in the treatment of other neurological disorders that
affect hundreds of thousands of patients. In the first quarter of fiscal year 2008, we completed the implants for the SANTE
pivotal trial, a study of our deep brain stimulation therapy for the treatment of medically refractory epilepsy, a form of
the neurological condition that does not respond to antiepileptic drugs. Epilepsy is a condition that affects more than three
million Americans of all ages; about one-third of these people do not respond to current treatment options and continue to
experience seizures. The data on the SANTE trial will be available in calendar year 2008.</P>
<P style="font-size:10pt;text-indent:20pt">Additionally, we continue to explore innovative new ways to use DBS therapy for severe
and intractable psychiatric disorders such as obsessive-compulsive disorder (OCD) and treatment-resistant depression. As previously
announced, we are pursuing a Humanitarian Device Exemption (HDE) for OCD and intend to pursue additional clinical evaluation
of the Company’s DBS therapy in the treatment of severe and treatment-resistant depression, a disabling form of the psychiatric
disorder affecting millions of people worldwide.</P>
<BR>
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<P style="font-size:10pt;text-indent:20pt"><B><I>Movement Disorders – Implantable Drug Delivery Systems.</I></B> Our portfolio of
intrathecal drug delivery systems consists of the only programmable, implantable drug pump and catheter that deliver small quantities of drug directly into the
intrathecal space in the spine. In addition to use in the treatment of intractable pain, these devices are used for the management of severe spasticity of
cerebral or spinal origin.</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic ITB (Intrathecal Baclofen) Therapy is indicated for the management of severe spasticity of cerebral and
spinal origin, including stroke, cerebral palsy, brain injury, spinal cord injury, and multiple sclerosis. It uses our SynchroMed II Implantable Infusion
System, which consists of a programmable drug pump connected to a thin tube, or catheter, to deliver precise amounts of a muscle relaxant manufactured by
Novartis Corporation under the trade name Lioresal® Intrathecal (baclofen injection) directly to the intrathecal space – the fluid-filled area
surrounding the spinal cord, the drug’s site of action. By targeting the spinal cord, ITB Therapy reduces spasticity with smaller amounts of medication
than would be required orally. Intrathecal infusion, which bypasses the body’s blood-brain barrier, also minimizes systemic side-effects. By reducing
spasticity, ITB Therapy may also improve function, quality of life, and ease of care. To date, the ITB therapy is relatively under penetrated.</P>
<P style="font-size:10pt;text-indent:20pt">In late April 2007, we announced a new study published in an issue of the<I> Journal of Child Neurology</I>
indicating that Medtronic ITB therapy for spasticity in children with cerebral palsy improves their quality of life and is cost-effective compared to other
established cost-effective treatments. The findings of this Medtronic-sponsored study were aimed to increase access to the treatment.</P>
<P style="font-size:10pt;text-indent:20pt"><B><I>Urology and Gastroenterology Devices.</I></B> Our therapeutic and diagnostic products for
urology and gastroenterology include the InterStim Therapy for the treatment of overactive bladder and urinary incontinence; Prostiva RF Therapy, which uses
low-level radio frequency energy to treat BPH, or enlarged prostate; Enterra Therapy for the treatment of gastroparesis; and the Bravo pH Monitoring System for
the evaluation of GERD.</P>
<P style="font-size:10pt;text-indent:20pt">In November 2007, we announced the initiation of the InSite Trial, a post-market study of InterStim Therapy. This
study aims to enroll more than 450 patients; those who qualify will be randomized to receive either InterStim Therapy or standard medical treatment, including
oral medications as determined by their physician. Patients implanted with InterStim Therapy will be followed out to five years. The results of this trial are
expected to provide further clinical evidence of InterStim Therapy’s efficacy in treating patients suffering from overactive bladder versus standard
medical therapy.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B></P>
<P style="font-size:10pt;text-indent:20pt">The primary medical specialists who use our Pain Management and Movement Disorders products are neurosurgeons,
neurologists, pain management specialists, physiatrists, and orthopedic spine surgeons. The primary medical specialists who use our urology and gastroenterology
products are urologists, urogynecologists, and gastroenterologists. Our primary competitors for pain management and movement disorders are Boston Scientific
Corporation and St. Jude Medical, Inc. Our primary competitors for urology and gastroenterology products are Boston Scientific Corporation, Urologix, Inc.,
and American Medical Systems, Inc.</P>
<P style="font-size:10pt;font-weight:bold">Diabetes</P>
<P style="font-size:10pt;text-indent:20pt">Our Diabetes business develops advanced diabetes management solutions. We are the world leader in integrated diabetes
management systems, insulin pump therapy, continuous glucose monitoring systems and therapy management software, and are committed to providing improved tools
and technologies to help people with diabetes live longer, healthier lives.</P>
<P style="font-size:10pt"> <B><I>Conditions Treated</I></B></P>
<P style="font-size:10pt;text-indent:20pt">Our Diabetes business offers solutions for the treatment of diabetes— the inability to control glucose (blood
sugar) levels resulting from the body’s failure to produce or properly use insulin.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">17</P>
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<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our Diabetes business as a percentage of
our total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604dia.jpg"></p>
<P style="font-size:10pt;text-indent:20pt">Our Diabetes products help patients maintain
near-normal glucose control. Diabetes afflicts roughly 250 million people worldwide, and almost 21 million people in the U.S.
Currently, our products serve the insulin-dependent population, approximately five million people in the U.S. The key to managing
diabetes is to maintain tight control of glucose levels. If not well-managed, diabetes can lead to blindness, kidney failure,
amputation, impotence and heart failure. More than $174 billion is spent annually on diabetes and its complications, including
$116 billion in direct medical costs.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Integrated Diabetes Management Systems.</I></B> The MiniMed Paradigm REAL-Time System is the first and
only integrated insulin pump and continuous glucose monitoring system. The MiniMed Paradigm REAL-Time System is made up of
two components, a REAL-Time Continuous Glucose Monitor (CGM), and a MiniMed Paradigm insulin pump. The system receives glucose
readings every five minutes from a glucose sensor worn on the body. This REAL-Time glucose information is displayed on the
insulin pump, allowing patients to take immediate action to improve their glucose control after taking a confirmatory fingerstick.
The REAL-Time System is indicated for any patient seven years of age or older.</P>
<P style="font-size:10pt;text-indent:20pt">Integrating an insulin pump with REAL-Time CGM is a major step toward the development
of a “closed-loop” insulin delivery system that may one day mimic some functions of the human pancreas. Medtronic
is testing future systems that would employ advanced scientific algorithms to proactively recommend insulin dosages to patients.
Through this process, Medtronic anticipates developing an external, closed-loop system designed to simplify and improve patient
diabetes management.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>External Insulin Pumps.</I></B> Our insulin pumps are primarily used by patients with type 1 diabetes,
which occurs when the pancreas stops producing insulin. In order to survive, people with type 1 diabetes must administer insulin
using injections or an insulin pump. Our therapies are also helpful in managing insulin-dependent type 2 diabetes, which results
from the body’s inability to produce enough insulin or properly use the insulin.</P>
<P style="font-size:10pt;text-indent:20pt">Our MiniMed Paradigm insulin pump is currently the leading choice in insulin pump
therapy. Worn like a pager, the Paradigm insulin pump calculates complex “diabetes math” and recommends precise insulin
dosages to patients helping manage their disease without daily insulin injections. Because MiniMed Paradigm insulin pump therapy
delivers precise micro-doses of insulin to the body, it helps diabetes patients keep their glucose levels within a near-normal
range, offering both short- and long-term health benefits. The MiniMed Paradigm REAL-Time System is indicated for all patients
requiring insulin.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Continuous Glucose Monitors.</I></B> Our Guardian REAL-Time System is intended to help protect diabetes
patients from high and low glucose levels, and to maintain tighter glucose control. Unique features include predictive and
rate-of-change alarms as well as expanded trend graphs. In addition to standard high and low glucose alerts, new early warning
alerts warn patients before their glucose reaches preset thresholds. The system also includes the MiniLink REAL-Time Transmitter,
a rechargeable, waterproof transmitter approximately one-third the size of previous transmitters.</P>
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<B><I>CareLink Therapy Management Software.</I></B> Medtronic offers therapy management software solutions
to help patients and their healthcare providers optimize their diabetes control and quality of life. These Web-based platforms
consist of CareLink Personal software for patients and CareLink Pro software for healthcare providers. It allows patients to
quickly and easily upload data from their diabetes management devices to a secure online database. And because the platform
is totally integrated, healthcare providers can quickly and easily download patient data remotely in advance of the office
visit. Both the patient and healthcare provider can save time to focus on optimizing therapy.</P>
<P style="font-size:10pt"> <B><I>Strategic Partnerships</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">In August 2007, we announced an exclusive U.S. agreement with LifeScan, Inc., a Johnson
& Johnson company, to distribute and co-market new blood glucose meters developed by LifeScan for Medtronic patients. Concurrently,
we announced an alliance with a division of Bayer HealthCare LLC, a member of the Bayer Group, to distribute and co-market
a new blood glucose meter for Medtronic patients outside the U.S. beginning in Canada and Europe. These new meters will wirelessly
transmit blood glucose test results directly to our MiniMed Paradigm insulin pumps and GuardianREAL-Time Systems. Wireless
communications make data entry easier and more convenient for patients. As part of the agreement with LifeScan, we are working
together to promote awareness of insulin pump therapy, the growth of the insulin pump market and proactive strategies for diabetes
management.</P>
<P style="font-size:10pt"> <B><I>Clinical Trials</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">In order to drive broad acceptance of sensor-augmented insulin pump therapy, we are
conducting the Sensor Augmented Therapy for A1C Reduction (STAR) trials, which will evaluate sensor-augmented insulin pump
therapy versus traditional insulin pumps and multiple daily injection therapy. The STAR trials are designed to drive therapy
acceptance and improved reimbursement for insulin pump and continuous glucose monitoring therapy based on anticipated positive
results.</P>
<P style="font-size:10pt;text-indent:20pt">In June 2007, preliminary results for STAR 1 were presented at the American Diabetes
Association Scientific Sessions in Chicago, IL. The study did not meet its primary endpoint in A1C reduction; however, the
results showed that usage compliance strongly correlated to benefit of therapy.</P>
<P style="font-size:10pt;text-indent:20pt">The STAR 3 trial is designed to compare the efficacy of the Paradigm REAL-Time System
versus today’s standard of care, Multiple Daily Injections with frequent fingerstick testing. The trial was designed with
input from the findings of STAR 1, and is currently targeting completion of patient enrollment in fiscal year 2009.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">The primary medical specialists who use our diabetes products are endocrinologists,
diabetologists, and internists. Our most significant competitors for diabetes products are Abbott Laboratories, DexCom, Inc.,
Insulet Corporation, Johnson & Johnson, Roche Ltd. and Smiths Group PLC.</P>
<P style="font-size:10pt;font-weight:bold">Surgical Technologies</P>
<P style="font-size:10pt;text-indent:20pt">Our Surgical Technologies business develops, manufactures, and markets products and
therapies to treat diseases and conditions of the ear, nose and throat (ENT), and certain neurological disorders. In addition,
the segment manufactures and markets image guided surgery systems that facilitate surgical planning during precision cranial,
spinal, sinus and orthopedic surgeries. As a market leader in ENT and neurosurgery, we are changing the way ENT surgery is
performed with innovative, minimally invasive products and techniques that benefit both patients and surgeons.</P>
<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our Surgical Technologies products are used in the treatment of the conditions described
below.</P>
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<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">ENT diseases and disorders, such as chronic sinusitis, chronic otitis media, hearing loss, Ménière’s
disease, thyroid diseases, and tumors of the head and neck.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>Neurological diseases and disorders, including both pediatric and normal pressure hydrocephalus, traumatic brain injury,
and spinal conditions.</TD>
</TR>
</TABLE>
<BR>
<BR>
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<TD width="4%"> </TD>
<TD width="4%">•</TD>
<TD width="92%">A broad range of cranial, spinal, sinus, and orthopedic maladies through the use of computer-assisted navigation
during surgery.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our Surgical Technologies business as a percentage
of our total net sales for each of the last three fiscal years:</P>
<p ALIGN=CENTER><img src="a82604surg.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">Our primary Surgical Technologies products
include powered tissue-removal systems, high-speed powered surgical drill systems to facilitate surgical access in the spine
and cranium, fluid-control products including shunts for pediatric and normal pressure hydrocephalus and systems for the treatment
of traumatic brain injury, a full line of cranial fixation devices that include both titanium and resorbable plates and screws,
nerve monitoring systems, image-guided surgery systems, and a Ménière’s disease therapy device.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Chronic rhinosinusitis (sinus infections).</I></B> For the surgical treatment of chronic sinus infections,
we offer powered and manual instruments with a variety of blade tips for removing diseased tissue and bone. Our bioresorbable
nasal packing and dressings, such as MeroGel Dressing, aid in wound-healing and help reduce postoperative complications following
these procedures. We also offer image-guided surgery systems to improve safety and efficacy when surgeons operate near critical
structures such as the brain and eyes. The LandmarX Evolution Plus provides a robust, expandable system that may be used for
virtually any ENT image guidance procedure. The LandmarX Element is a simple and convenient system ideal for functional endoscopic
sinus surgery and novice image guided system users. In November 2007, we announced that results of a laboratory study published
in the <I>American Journal of Rhinology</I> suggests that pressurized irrigation of the sinuses in conjunction with a specially
designed irrigation solution under development by Medtronic may offer new options to reduce bacteria associated with chronic
rhinosinusitis.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Chronic otitis media (ear infections).</I></B> For the treatment of chronic otitis media, we provide
a wide range of middle ear ventilation tubes to facilitate ventilation and prevent fluid accumulation. We also offer powered
instruments and drills, such as the XPS 3000 Powered ENT System, to remove enlarged adenoid tissue, enable surgical access
and remove diseased bone. Untreated chronic otitis media is the most common cause of hearing loss in children, which can impair
learning and speech development. It can also spread to other areas of the head and neck and lead to serious complications.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Hearing loss.</I></B> To correct conductive hearing loss, we offer various types of implantable middle
ear prostheses that replace missing bone(s) in the ear necessary to conduct sound. These products are malleable/trimmable and
may be shaped by the surgeon to fit each particular patient’s anatomy.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Thyroid disease.</I></B> For surgery related to thyroid disease, we offer the NIM-Response 2.0 Nerve
Integrity Monitor, NIM-Neuro 2.0 Nerve Integrity Monitor, and NIM EMG Tubes. These products assist surgeons in identifying
and continuously monitoring the recurrent laryngeal or vagus nerves during complicated, high-risk thyroid surgery. Since the
actual nerve damage during surgery is much higher than perceived, using our nerve monitoring products in these procedures is
a benefit to both the patient and the surgeon, reducing the risk of patient injury and enabling more precise, complete dissection.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Ménière’s disease.</I></B> To alleviate debilitating vertigo associated with the
inner ear condition known as Ménière’s disease, we offer the portable, minimally invasive Meniett Low-Pressure
Pulse Generator.
</P>
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Severe vertigo, which can cause nausea and vomiting, is considered by patients to be the most problematic and debilitating symptom
of Ménière’s disease, often affecting their ability to work or participate in daily activities. Using Meniett
therapy, patients can self-administer their treatment at home or work for a few minutes each day by delivering low-pressure
air pulses through a tube connected to an earpiece placed in the outer ear. In August 2007, we announced that results of a
survey published in <I>Otology & Neurotology</I> indicated that our Meniett Low Pressure Pulse Generator is the preferred
treatment method after diet modification for patients diagnosed with Ménière’s Disease.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Surgical Access and Cranial Fixation.</I></B> To facilitate surgical access in cranial, spinal and orthopedic
procedures, we offer the Legend electric and pneumatic high-speed powered surgical drill systems. The Stylus system, the most
recent addition to the high-speed drill line, provides significant power in a small, ergonomic design. We also offer titanium
and resorbable polymer plates and screw systems designed to provide for rigid fixation of the skull. In addition to plates
and screws, our Durepair dura substitute is indicated for use as both an on-lay and suturable graft for repair of the dura
skin layer.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Hydrocephalus.</I></B> The Strata valve is an adjustable shunt system for the treatment of hydrocephalus,
a condition characterized by an abnormal accumulation of cerebral spinal fluid in the brain. There are two primary forms of
hydrocephalus; congenital or pediatric hydrocephalus, and normal pressure hydrocephalus, which afflict the elderly. The Strata
valve allows surgeons to non-invasively adjust the valve’s performance level settings with an external magnetic adjustment
device. This enables the surgeon to change the valve’s performance characteristics over time without subjecting the patient
to additional surgery. The shunt line also includes a wide assortment of nonadjustable valves.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Brain Injury.</I></B> We also provide a large selection of external drainage and monitoring systems
such as the Becker and Exacta systems as well as catheters that are used for the treatment of traumatic brain injury. These
systems are designed to remove fluid from the brain in a controlled fashion to alleviate the build-up of intracranial pressure,
which can be life threatening.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Navigation.</I></B> We are one of the leaders in the field of computer-assisted surgery (CAS) and have
installed approximately 2,500 StealthStation Treatment Guidance Systems in hospitals worldwide. In recent years, the pace of
innovation in CAS has quickened considerably. We have developed and delivered new and updated hardware and software solutions
to assist with varied surgeries including total joint replacements, minimally invasive spinal surgery, cranial tumor resection,
biopsies, functional neurosurgery, and functional endoscopic sinus surgery. In June 2007, Medtronic acquired the O-arm Imaging
System assets of Breakaway Imaging, LLC, a privately held developer of medical imaging systems for surgery. With this acquisition,
Medtronic now owns, rather than licenses, exclusive worldwide distribution and marketing rights of the O-arm Imaging System,
an intraoperative crossover technology enabling two-dimensional, multi-plane two-dimensional, and three-dimensional volumetric
imaging.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our primary customers for products relating to our ENT diseases and disorders are
ENT surgeons and the hospitals and clinics where they perform surgery. The most significant competitors in this part of our
Surgical Technologies business are Olympus Corporation and Stryker Corporation.</P>
<P style="font-size:10pt;text-indent:20pt">Our primary customers for our ENT neurosurgical products are neurosurgeons, spinal
surgeons, and the hospitals and clinics where they perform surgery. Significant competitors are Johnson & Johnson, Stryker
Corporation and Integra LifeSciences Holdings Corporation.</P>
<P style="font-size:10pt;text-indent:20pt">Our primary customers for our computer assisted surgery products are hospitals and
clinics. The primary competitors of our computer assisted surgery products are BrainLAB, Inc.
and Stryker Corporation.</P>
<P style="font-size:10pt;font-weight:bold">Physio-Control</P>
<P style="font-size:10pt;text-indent:20pt">We develop, manufacture, market and service external defibrillators, including manual
defibrillator/monitors used by hospitals and emergency response personnel and automated external defibrillators (AEDs) used
in commercial and public settings. In addition to the portfolio of external defibrillation and emergency response systems,
we offer related data management solutions and support services.</P>
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<P style="font-size:10pt"> <B><I>Conditions Treated</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our Physio-Control products are used in the treatment of the condition described
below.</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">Sudden Cardiac Arrest (SCA) — is a condition in which the heartbeat stops suddenly and unexpectedly. SCA
is caused by life-threatening arrhythmias or abnormalities in the heart’s electrical system.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">The charts below set forth net sales of our Physio-Control business as a percentage
of our total net sales for each of the last three fiscal years:</P>
<P align=center><img src="a82604phys.jpg"></P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>External Defibrillators.</I></B> Many victims of SCA could be saved if they had quicker access to AEDs.
In the U.S., the survival rate for victims of sudden cardiac arrest is only about 5 percent because the average response time
to an emergency call for help is six to twelve minutes. Chances of survival are reduced significantly if the victim is not
treated within five minutes. In August 2004, results from the largest-ever clinical trial studying the outcomes of public access
to defibrillation were published in the <I>New England Journal of Medicine.</I> The data indicated that the use of portable
AEDs by trained volunteers can significantly improve the probability of saving lives that otherwise might have been lost to
sudden cardiac arrest. Hospitals, emergency medical services (EMS) and targeted responders rely on LIEFPAK products in the
most urgent cardiac emergencies. Our LIFEPAK series of external defibrillators are designed to adapt to the physical needs
of the patient and surrounding emergency conditions enabling fast, smooth transitions from the care from EMS to the treatment
at the hospital. Physio-Control offers a broad range of life-saving tools for multiple user needs and our products have been
incorporated in environments ranging from hospitals to emergency medical units to public places such as airports, sports arenas,
schools, and workplaces. Today there are more than 650,000 LIFEPAK devices distributed worldwide.</P>
<P style="font-size:10pt;text-indent:20pt">On December 4, 2006, we announced our intention to pursue a spin-off of Physio-Control
into an independent, publicly traded company. However, shortly thereafter, on January 15, 2007, we announced our voluntary
suspension of U.S. shipments of Physio-Control products manufactured at our facility in Redmond, Washington in order to address
quality system issues. In the months following the suspension of U.S. shipments, we worked diligently with the FDA to address
the quality system issues and resumed limited shipments to critical need customers. As a result of the work performed to date,
on April 28, 2008, we announced that we had reached an agreement on a consent decree with the FDA regarding quality system
improvements for our external defibrillator products. The agreement was filed on April 25, 2008 in the U.S. District Court
for the Western District of Washington and was approved by the court on May 9, 2008. The agreement addresses issues raised
by the FDA during inspections regarding Physio-Control’s quality system processes and outlines the actions Physio-Control
must take in order to resume unrestricted distribution of our external defibrillators. Following the resolution of the quality
system issue, we intend to pursue the spin-off of Physio-Control.</P>
<P style="font-size:10pt"> <B><I>Customers and Competitors</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">The primary customers for our manual external defibrillators are EMS personnel, emergency
care doctors and highly-trained nurses. Our primary competitors in the manual external defibrillator business are Zoll Medical
Corporation, Philips Medical Systems, Defibtech, LLC and Welch Allyn Inc.</P>
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<P style="font-size:10pt;text-indent:20pt">The primary customers for our AED products are hospitals, schools, governments, businesses,
and any other public facility. Our primary competitors in the AED business are Cardiac Science, Inc., Zoll Medical Corporation,
Philips Medical Systems, Defibtech, LLC, and Welch Allyn Inc.</P>
<P style="font-size:10pt;font-weight:bold">Research and Development</P>
<P style="font-size:10pt;text-indent:20pt">The markets in which we participate are subject to rapid technological advances.
Constant improvement of products and introduction of new products is necessary to maintain market leadership. Our research
and development efforts are directed toward maintaining or achieving technological leadership in each of the markets we serve
in order to help ensure that patients using our devices and therapies receive the most advanced and effective treatment possible.
We are committed to developing technological enhancements and new indications for existing products, as well as less invasive
and new technologies to address unmet patient needs and to help reduce patient care costs and length of hospital stays. We
have not engaged in significant customer or government-sponsored research.</P>
<P style="font-size:10pt;text-indent:20pt">During fiscal years 2008, 2007, and 2006, we spent $1.275 billion (9.4 percent of
net sales), $1.239 billion (10.1 percent of net sales) and $1.113 billion (9.9 percent of net sales) on research and development,
respectively. Our research and development activities include improving existing products and therapies, expanding their indications
and applications for use, and developing new products. While we continue to make substantial investments for the expansion
of our existing product lines and for the search of new innovative products, we have also focused heavily on carefully planned
clinical trials, which lead to market expansion and enable further penetration of our life changing devices.</P>
<P style="font-size:10pt;font-weight:bold">Acquisitions and Investments</P>
<P style="font-size:10pt;text-indent:20pt">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 acquisitions, investments, and alliances
to provide access to new technologies both in areas served by our existing businesses as well as in new areas.</P>
<P style="font-size:10pt;text-indent:20pt">We expect to make future investments or acquisitions where we believe that we can
stimulate the development of, or acquire new technologies and products to further our strategic objectives and strengthen our
existing businesses. Mergers and acquisitions of medical technology companies are inherently risky and no assurance can be
given that any of our previous or future acquisitions will be successful or will not materially adversely affect our consolidated
results of operations, financial condition, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">On April 15, 2008, we recorded an in process research and development (IPR&D)
charge of $42 million related to the acquisition of NDI Medical (NDI), a development stage company focused on commercially
developing technology to stimulate the dorsal genital nerve as a means to treat urinary incontinence. Total consideration for
NDI was approximately $42 million which included $39 million in cash and the forgiveness of $3 million of pre-existing loans
provided to NDI. The acquisition will provide us with exclusive rights to develop and use NDI’s technology in the treatment
of urinary urge incontinence. This payment was expensed as IPR&D since technological feasibility of the underlying projects
had not yet been reached and such technology has no future alternative use.</P>
<P style="font-size:10pt;text-indent:20pt">On November 2, 2007, we consummated the acquisition of Kyphon and it became
our wholly owned subsidiary. Kyphon develops and markets medical devices designed to restore and preserve spinal function using
minimally invasive technology. Kyphon’s primary products are used in balloon kyphoplasty for the treatment of spinal compression
fractures caused by osteoporosis or cancer, and in the IPD procedure for treating the symptoms of lumbar spinal stenosis. It
is expected that the acquisition of Kyphon will add to the growth of our existing Spinal business by extending its product
offerings into some of the fastest growing product segments of the spine market, enabling us to provide physicians with a broader
range of therapies for use at all stages of the care continuum.</P>
<P style="font-size:10pt;text-indent:20pt">Under the terms of the agreement announced on July 27, 2007, Kyphon shareholders
received $71 per share in cash for each share of Kyphon common stock they owned. Total consideration for the
</P>
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transaction was $4.203 billion which includes payments to Kyphon shareholders for the cancellation of outstanding shares, the
assumption and settlement of existing Kyphon debt, and payment of direct acquisition costs. Total debt assumed relates to Kyphon’s
obligations under existing credit and term loan facilities and outstanding senior convertible notes. As of the date of the
transaction, the existing credit and term loan facilities were fully paid and terminated. The senior convertible notes were
converted by the holders in the weeks following the close of the transaction and have been included in the total purchase consideration
above. In addition, the total consideration includes the estimated proceeds of unwinding the related convertible note hedges
and cancellation and payment of the warrants to the hedge participants that were originally issued by Kyphon in February 2007.</P>
<P style="font-size:10pt;text-indent:20pt">The transaction was financed through a combination of $3.303 billion cash on hand,
the issuance of $600 million short-term commercial paper and borrowing $300 million through a new long-term unsecured revolving
credit facility.</P>
<P style="font-size:10pt;text-indent:20pt">The results of operations related to Kyphon have been included in our consolidated
statements of earnings since the date of the acquisition and include the full amortization of a $34 million inventory write-up
recorded as part of the Kyphon acquisition accounting. The pro forma impact of Kyphon was significant to our results for fiscal year 2008. See Note 4 to the consolidated financial statements set forth in Exhibit 13 hereto for more information
including the unaudited pro forma results of operations for fiscal years 2008 and 2007.</P>
<P style="font-size:10pt;text-indent:20pt">On November 1, 2007, we recorded an IPR&D charge of $20 million related
to the acquisition of Setagon, Inc. (Setagon), a development stage company focused on commercially developing metallic nanoporous
surface modification technology. The acquisition will provide us with exclusive rights to use and develop Setagon’s Controllable
Elution Systems (CES) technology in the treatment of cardiovascular disease. Total consideration for Setagon was approximately
$20 million in cash, subject to purchase price increases, which would be triggered by the achievement of certain milestones.
This payment was expensed as IPR&D since technological feasibility of the underlying project had not yet been reached and
such technology has no future alternative use.</P>
<P style="font-size:10pt;text-indent:20pt">On June 25, 2007, we exercised a purchase option and acquired substantially
all of the O-arm Imaging System (O-arm) assets of Breakaway Imaging, LLC (Breakaway), a privately held company. Prior to the
acquisition, we had the exclusive rights to distribute and market the O-arm. The O-arm provides multi-dimensional surgical
imaging for use in spinal and orthopedic surgical procedures. The acquisition is expected to bring the O-arm into a broad portfolio
of image guided surgical solutions. Total consideration for Breakaway was approximately $26 million in cash, subject to purchase
price increases, which would be triggered by the achievement of certain milestones. The pro forma impact of the acquisition
of Breakaway was not significant to our results for fiscal years 2008 and 2007. The results of operations related to Breakaway
have been included in our consolidated statement of earnings since the date of acquisition.</P>
<P style="font-size:10pt;font-weight:bold">Patents and Licenses</P>
<P style="font-size:10pt;text-indent:20pt">We rely on a combination of patents, trademarks, copyrights, trade secrets, and nondisclosure
and non-competition agreements to establish and protect our proprietary technology. We have filed and obtained numerous patents
in the U.S. and abroad, and regularly file patent applications worldwide in our continuing effort to establish and protect
our proprietary technology. In addition, we have entered into exclusive and non-exclusive licenses relating to a wide array
of third-party technologies. We have also obtained certain trademarks and trade names for our products to distinguish our genuine
products from our competitors’ products, and we maintain certain details about our processes, products and strategies
as trade secrets. Our efforts to protect our intellectual property and avoid disputes over proprietary rights have included
ongoing review of third-party patents and patent applications. See “Item 1A. Risk Factors” and Note 15 to the consolidated
financial statements set forth in Exhibit 13 hereto for additional information.</P>
<P style="font-size:10pt;font-weight:bold">Markets and Distribution Methods</P>
<P style="font-size:10pt;text-indent:20pt">We sell most of our medical devices through direct sales representatives in the U.S.
and a combination of direct sales representatives and independent distributors in international markets. The three
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largest markets for our medical devices are the U.S., Western Europe, and Japan. Markets outside the U.S. are an area of increasing
focus and opportunity as we believe they remain under penetrated. Our primary customers include physicians, hospitals, other
medical institutions, and group purchasing organizations.</P>
<P style="font-size:10pt;text-indent:20pt">Our marketing and sales strategy is focused on rapid, cost-effective delivery of
high-quality products to a diverse group of customers worldwide. To achieve this objective, we organize our marketing and sales
teams around physician specialties. This focus enables us to develop highly knowledgeable and dedicated sales representatives
who are able to foster strong relationships with physicians and other customers, and enhance our ability to cross-sell complementary
products. We believe that we maintain excellent working relationships with physicians and others in the medical industry that
enable us to gain a detailed understanding of therapeutic and diagnostic developments, trends and emerging opportunities, and
respond quickly to the changing needs of physicians and patients. We attempt to enhance our presence in the medical community
through active participation in medical meetings and by conducting comprehensive training and educational activities. We believe
that these activities contribute to physician expertise.</P>
<P style="font-size:10pt;text-indent:20pt">In keeping with the increased emphasis on cost-effectiveness in healthcare delivery,
the current trend among hospitals and other customers of medical device manufacturers is to consolidate into larger purchasing
groups to enhance purchasing power. As a result, transactions with customers have become increasingly significant, more complex,
and tend to involve more long-term contracts than in the past. This enhanced purchasing power may also lead to pressure on
pricing and increased use of preferred vendors. We are not dependent on any single customer for more than 10 percent of our
total net sales.</P>
<P style="font-size:10pt;font-weight:bold">Competition and Industry</P>
<P style="font-size:10pt;text-indent:20pt">We compete in both the therapeutic and diagnostic medical markets in more than 120
countries throughout the world. These markets are characterized by rapid change resulting from technological advances and scientific
discoveries. In the product lines in which we compete, we face a mixture of competitors ranging from large manufacturers with
multiple business lines to small manufacturers that offer a limited selection of products. In addition, we face competition
from providers of alternative medical therapies such as pharmaceutical companies.</P>
<P style="font-size:10pt;text-indent:20pt">Major shifts in industry market share have occurred in connection with product problems,
physician advisories and safety alerts, reflecting the importance of product quality in the medical device industry. In the
current environment of managed care, economically motivated buyers, consolidation among healthcare providers, increased competition,
and declining reimbursement rates, we have been increasingly required to compete on the basis of price. In order to continue
to compete effectively, we must continue to create or acquire advanced technology, incorporate this technology into proprietary
products, obtain regulatory approvals in a timely manner, and manufacture and successfully market these products.</P>
<P style="font-size:10pt;font-weight:bold">Worldwide Operations</P>
<P style="font-size:10pt;text-indent:20pt">For financial reporting purposes, net sales and long-lived assets attributable to
significant geographic areas are presented in Note 17 to the consolidated financial statements set forth in Exhibit 13
hereto and will be included in our 2008 Annual Report.</P>
<P align=center><img src="a82604op.jpg"></P>
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<P style="font-size:10pt;font-weight:bold">Impact of Business Outside of the U.S.</P>
<P style="font-size:10pt;text-indent:20pt">Our operations in countries outside the U.S. are accompanied by certain financial
and other risks. Relationships with customers and effective terms of sale vary by country, often with longer-term receivables
than are typical in the U.S. Inventory management is an important business concern due to the potential for obsolescence, long
lead times from sole source providers and currency exposure. Currency exchange rate fluctuations can affect net sales from,
and profitability of, operations outside the U.S. We attempt to hedge these exposures to reduce the effects of foreign currency
fluctuations on net earnings. See the “Market Risk” section of Management’s Discussion and Analysis of Financial
Condition and Results of Operations and Note 5 to the consolidated financial statements set forth in Exhibit 13 hereto
and will be included in our 2008 Annual Report. In addition, the repatriation of certain earnings of our foreign subsidiaries’
may result in substantial U.S. tax cost.</P>
<P style="font-size:10pt;font-weight:bold">Production and Availability of Raw Materials</P>
<P style="font-size:10pt;text-indent:20pt">We manufacture most of our products at 22 manufacturing facilities located in various
countries throughout the world. The largest of these manufacturing facilities are located in Arizona, California, Florida,
Indiana, Ireland, Massachusetts, Mexico, Minnesota, Puerto Rico, Switzerland, Texas, and Washington. We purchase many of the
components and raw materials used in manufacturing these products from numerous suppliers in various countries. For reasons
of quality assurance, sole source availability, or cost effectiveness, certain components and raw materials are available only
from a sole supplier. We work closely with our suppliers to help ensure continuity of supply while maintaining high quality
and reliability. Due to the FDA’s requirements regarding manufacture of our products, we may not be able to quickly establish
additional or replacement sources for certain components or materials. Generally, we have been able to obtain adequate supplies
of such raw materials and components. However, the reduction or interruption in supply, and an inability to develop alternative
sources for such supply, could adversely affect our operations.</P>
<P style="font-size:10pt;font-weight:bold">Employees</P>
<P style="font-size:10pt;text-indent:20pt">On April 25, 2008, we employed approximately 40,000 employees. Our employees
are vital to our success. We believe we have been successful in attracting and retaining qualified personnel in a highly competitive
labor market due to our competitive compensation and benefits, and our rewarding work environment. We believe our employee
relations are excellent.</P>
<P style="font-size:10pt;font-weight:bold">Seasonality</P>
<P style="font-size:10pt;text-indent:20pt">Worldwide sales do not reflect any significant degree of seasonality.</P>
<P style="font-size:10pt;font-weight:bold">Government Regulation and Other Considerations</P>
<P style="font-size:10pt;text-indent:20pt">Our medical devices are subject to regulation by numerous government agencies, including
the FDA and comparable foreign agencies. To varying degrees, each of these agencies requires us to comply with laws and regulations
governing the development, testing, manufacturing, labeling, marketing, and distribution of our medical devices.</P>
<P style="font-size:10pt;text-indent:20pt">Authorization to commercially distribute a new medical device in the U.S. is generally
received in one of two ways. The first, known as the 510(k) process, requires us to demonstrate that our new medical device
is substantially equivalent to a legally marketed medical device. In this process, we must submit data that supports our equivalence
claim. If human clinical data is required, it must be gathered in compliance with FDA investigational device exemption regulations.
We must receive an order from the FDA finding substantial equivalence to another legally marketed medical device before we
can commercially distribute the new medical device. Modifications to cleared medical devices can be made without using the
510(k) process if the changes do not significantly affect safety or effectiveness. A very small number of our devices are exempt
from 510(k) clearance requirements.</P>
<P style="font-size:10pt;text-indent:20pt">The second, more rigorous process, known as PMA, requires us to independently demonstrate
that the new medical device is safe and effective. We do this by collecting data, including human clinical data for the medical
device. The FDA will authorize commercial release if it determines there is reasonable
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assurance that the medical device is safe and effective. This process is generally much more time-consuming and expensive than
the 510(k) process.</P>
<P style="font-size:10pt;text-indent:20pt">Both before and after a product is commercially released, we have ongoing responsibilities
under FDA regulations. The FDA reviews design and manufacturing practices, labeling and record keeping, and manufacturers’
required reports of adverse experience and other information to identify potential problems with marketed medical devices.
We may be subject to periodic inspection by the FDA for compliance with the FDA’s good manufacturing practice regulations
among other FDA requirements, such as restrictions on advertising and promotion. These regulations, also known as the Quality
System Regulations, govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging
and servicing of all finished medical devices intended for human use. If the FDA were to conclude that we are not in compliance
with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk,
the FDA could ban such medical devices, detain or seize adulterated or misbranded medical devices, order a recall, repair,
replacement, or refund of such devices, and require us to notify health professionals and others that the devices present unreasonable
risks of substantial harm to the public health. The FDA may also impose operating restrictions, enjoin and restrain certain
violations of applicable law pertaining to medical devices, and assess civil or criminal penalties against our officers, employees,
or us. The FDA may also recommend prosecution to the Department of Justice.</P>
<P style="font-size:10pt;text-indent:20pt">The FDA, in cooperation with U.S. Customs and Border Protection (CBP), administers
controls over the import of medical devices into the U.S. The CBP imposes its own regulatory requirements on the import of
our products, including inspection and possible sanctions for noncompliance. The FDA also administers certain controls over
the export of medical devices from the U.S. International sales of our medical devices that have not received FDA approval
are subject to FDA export requirements. Each foreign country to which we export medical devices also subjects such medical
devices to their own regulatory requirements. Frequently, we obtain regulatory approval for medical devices in foreign countries
first because their regulatory approval is faster or simpler than that of the FDA. However, as a general matter, foreign regulatory
requirements are becoming increasingly stringent.</P>
<P style="font-size:10pt;text-indent:20pt">In the European Union, a single regulatory approval process has been created, and
approval is represented by the CE Mark. To obtain a CE Mark in the European Union, defined products must meet minimum standards
of safety and quality (i.e., the essential requirements) and then comply with one or more of a selection of conformity routes.
A Notified Body assesses the quality management systems of the manufacturer and the product conformity to the essential and
other requirements within the Medical Device Directive. Medtronic is subject to inspection by Notified Bodies for compliance.</P>
<P style="font-size:10pt;text-indent:20pt">To be sold in Japan, most medical devices must undergo thorough safety examinations
and demonstrate medical efficacy before they are granted approval, or “shonin.” The Japanese government, through
the Ministry of Health, Labour, and Welfare (MHLW), regulates medical devices under the Pharmaceutical Affairs Law (PAL). Implementation
of PAL and enforcement practices thereunder are evolving, and compliance guidance from MHLW is still in development. Consequently,
companies continue to work on establishing improved systems for compliance with PAL. Penalties for a company’s noncompliance
with PAL could be severe, including revocation or suspension of a company’s business license and criminal sanctions.</P>
<P style="font-size:10pt;text-indent:20pt">The process of obtaining approval to distribute medical products is costly and time-consuming
in virtually all of the major markets where we sell medical devices. We cannot assure that any new medical devices we develop
will be approved in a timely or cost-effective manner or approved at all.</P>
<P style="font-size:10pt;text-indent:20pt">Federal and state laws protect the confidentiality of certain patient health information,
including patient medical records, and restrict the use and disclosure of patient health information by healthcare providers.
In particular, in April 2003, the U.S. Department of Health and Human Services (HHS) published patient privacy rules under
the Health Insurance Portability and Accountability Act of 1996 (HIPAA privacy rule) and, in April 2005, published security
rules for protected health information. The HIPAA privacy and security rules govern the use, disclosure and security of protected
health information by “Covered Entities,” which are healthcare providers that submit electronic claims, health plans
</P>
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and healthcare clearinghouses. Other than our Diabetes operating segment and our health insurance plans, each of which is a
Covered Entity, and where we operate as a Business Associate (which is anyone that performs a service on behalf of a Covered
Entity involving the use or disclosure of protected health information and is not a member of the covered entity’s workforce),
the HIPAA privacy and security rules only affect us indirectly. The patient data that we receive and analyze may include protected
health information. We are committed to maintaining patients’ privacy and working with our customers and business partners
in their HIPAA compliance efforts. The ongoing costs and impacts of assuring compliance with the HIPAA privacy and security
rules are not material to our business.</P>
<P style="font-size:10pt;text-indent:20pt">Government and private sector initiatives to limit the growth of healthcare costs,
including price regulation, competitive pricing, coverage and payment policies, and managed-care arrangements, are continuing
in many countries where we do business, including the U.S. These changes are causing the marketplace to put increased emphasis
on the delivery of more cost-effective medical devices. Government programs, including Medicare and Medicaid, private healthcare
insurance, and managed-care plans have attempted to control costs by limiting the amount of reimbursement they will pay for
particular procedures or treatments, and other mechanisms designed to constrain utilization and contain costs, including, for
example, gainsharing, where a hospital agrees with physicians to share any realized cost savings resulting from the physicians’
collective change in practice patterns such as standardization of devices where medically appropriate. This has created an
increasing level of price sensitivity among customers for our products. Some third-party payors must also approve coverage
for new or innovative devices or therapies before they will reimburse healthcare providers who use the medical devices or therapies.
Even though a new medical device may have been cleared for commercial distribution, we may find limited demand for the device
until reimbursement approval has been obtained from governmental and private third-party payors. In addition, some private
third-party payors require that certain procedures or that the use of certain products be authorized in advance as a condition
of reimbursement. As a result of our manufacturing efficiencies and cost controls, we believe we are well-positioned to respond
to changes resulting from the worldwide trend toward cost-containment; however, uncertainty remains as to the nature of any
future legislation, making it difficult for us to predict the potential impact of cost-containment trends on future operating
results.</P>
<P style="font-size:10pt;text-indent:20pt">The delivery of our devices is subject to regulation by HHS and comparable state
and foreign agencies responsible for reimbursement and regulation of healthcare items and services. U.S. laws and regulations
are imposed primarily in connection with the Medicare and Medicaid programs, as well as the government’s interest in regulating
the quality and cost of healthcare. Foreign governments also impose regulations in connection with their healthcare reimbursement
programs and the delivery of healthcare items and services.</P>
<P style="font-size:10pt;text-indent:20pt">Federal healthcare laws apply when we or customers submit claims for items or services
that are reimbursed under Medicare, Medicaid or other federally-funded healthcare programs. The principal federal laws include:
(1) the False Claims Act which prohibits the submission of false or otherwise improper claims for payment to a federally-funded
health care program; (2) the Anti-Kickback Statute which prohibits offers to pay or receive remuneration of any kind for the
purpose of inducing or rewarding referrals of items or services reimbursable by a Federal healthcare program; and (3) the Stark
law which prohibits physicians from referring Medicare or Medicaid patients to a provider that bills these programs for the
provision of certain designated health services if the physician (or a member of the physician’s immediate family) has
a financial relationship with that provider; and (4) healthcare fraud statutes that prohibit false statements and improper
claims with any third-party payor. There are often similar state false claims, anti-kickback, and anti-self referral and insurance
laws that apply to claims submitted under state Medicaid or state-funded healthcare programs. In addition, the U.S. Federal
Corrupt Practices Act can be used to prosecute companies in the U.S. for arrangements with physicians, or other parties outside
the U.S. if the physician or party is a government official of another country and the arrangement violates the law of that
country.</P>
<P style="font-size:10pt;text-indent:20pt">The laws applicable to us are subject to change, and to evolving interpretations.
If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, Medtronic
and its officers and employees could be subject to severe criminal and civil penalties including
</P>
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substantial penalties, fines and damages, and exclusion from participation as a supplier of product to beneficiaries covered
by Medicare or Medicaid.</P>
<P style="font-size:10pt;text-indent:20pt">We operate in an industry characterized by extensive patent litigation. Patent litigation
can result in significant damage awards and injunctions that could prevent the manufacture and sale of affected products or
result in significant royalty payments in order to continue selling the products. At any given time, we are involved as both
a plaintiff and a defendant in a number of patent infringement actions. While it is not possible to predict the outcome of
patent litigation incident to our business, we believe the costs associated with this type of litigation could have a material
adverse impact on our consolidated results of operations, financial position or cash flows. See Note 15 to the consolidated
financial statements set forth in Exhibit 13 hereto and will be included in our 2008 Annual Report for additional information.</P>
<P style="font-size:10pt;text-indent:20pt">We operate in an industry susceptible to significant product liability claims. These
claims may be brought by individuals seeking relief or by groups seeking to represent a class. In addition, product liability
claims may be asserted against us in the future based on events we are not aware of at the present time.</P>
<P style="font-size:10pt;text-indent:20pt">We are also subject to various environmental laws and regulations both within and
outside the U.S. Like other medical device companies, our operations involve the use of substances regulated under environmental
laws, primarily manufacturing and sterilization processes. We do not expect that compliance with environmental protection laws
will have a material impact on our consolidated results of operations, financial position, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">We have elected to self-insure most of our insurable risks, including medical and
dental costs, disability coverage, physical loss to property, business interruptions, workers’ compensation, comprehensive
general, director and officer, and product liability. This decision was made based on conditions in the insurance marketplace
that have led to increasingly higher levels of self-insurance retentions, increasing number of coverage limitations, and dramatically
higher insurance premium rates. We continue to monitor the insurance marketplace to evaluate the value to us of obtaining insurance
coverage in the future. Based on historical loss trends, we believe that our self-insurance program accruals will be adequate
to cover future losses. Historical trends, however, may not be indicative of future losses. These losses could have a material
adverse impact on our consolidated results of operations, financial position, or cash flows.</P>
<P style="font-size:10pt;font-weight:bold">Executive Officers of Medtronic</P>
<P style="font-size:10pt;text-indent:20pt">Set forth below are the names and ages of current executive officers of Medtronic,
Inc., as well as information regarding their positions with Medtronic, their periods of service in these capacities, and their
business experiences. There are no family relationships among any of the officers named, nor is there any arrangement or understanding
pursuant to which any person was selected as an officer.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>William A. Hawkins,</I></B> age 54, has been a Director of Medtronic since March 2007 and President and Chief Executive
Officer since August 2007. He served as President and Chief Operating Officer of Medtronic since May 2004. He served as Senior
Vice President and President, Medtronic Vascular, from January 2002 to May 2004. He served as President and Chief Executive
Officer of Novoste Corporation from 1998 to 2002. He is also a member of the board of visitors of the Engineering School of
Duke University and the Guthrie Theatre board.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Susan Alpert, Ph.D., M.D.,</I></B> age 62, has been Senior Vice President, Chief Regulatory Officer since May 2008. Prior
to that, she was Senior Vice President, Chief Quality and Regulatory Officer from November 2005 to May 2008, and prior to that,
Vice President, Chief Quality and Regulatory Officer from May 2004 to November 2005, and Vice President, Regulatory Affairs
and Compliance from July 2003 to May 2004. Prior to that, she was Vice President of Regulatory Sciences at C.R. Bard, Inc.
from October 2000 to July 2003. She held a variety of positions at the FDA from June 1987 to August 2000.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Martha Goldberg Aronson,</I></B> age 40, has been Senior Vice President and Chief Talent Officer since March 2008. Prior
to that, she was Vice President, Investor Relations from May 2006 to March 2008, Vice
</P>
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President of the Neurological, Gastroenterology/Urology, Obesity Management, ENT/Neurologic Technology and Diabetes businesses
in Western Europe from May 2003 to May 2006 and Vice President and General Manager of Medtronic Gastroenterology/Urology from
2001 to May 2003. She joined Medtronic in April 1991, from Bain & Company, a global management consulting firm.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Robert H. Blankemeyer,</I></B> age 61, has been Senior Vice President and President of Surgical Technologies since June
2008. Prior to that, he was President of the Ear, Nose & Throat and Neurologic Technologies business unit from April 2000
until its merger into Surgical Technologies in 2008. Prior to joining Medtronic, he was President of Storz Ophthalmics, where
he held several business leadership positions.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Jean-Luc Butel,</I></B> age 51, has been Senior Vice President and President, International since May 2008. Prior to that,
he was Senior Vice President and President, Asia Pacific from August 2003 to May 2008 and President of Independence Technology,
a Johnson & Johnson company, from 1999 to 2003. From 1991 to 1999, he worked for Becton Dickinson, initially as General
Manager of its Microbiology business in Japan and then as President of Nippon Becton Dickinson. His last assignment at Becton,
Dickinson and Company was President, Worldwide Consumer Healthcare.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Terrance L. Carlson,</I></B> age 55, has been Senior Vice President, General Counsel and Corporate Secretary since October
2004. Prior to that, he was Senior Vice President, Business Development, General Counsel and Secretary at PerkinElmer, Inc.
from June 1999 to September 2004; Deputy General Counsel of AlliedSignal (now Honeywell International) and General Counsel
of AlliedSignal Aerospace from April 1994 to June 1999; and an associate and partner of Gibson Dunn & Crutcher from November
1978 to April 1994.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>H. James Dallas,</I></B> age 49, has been Senior Vice President, Quality and Operations since April 2008. Prior to that
he was Senior Vice President and Chief Information Officer from April 2006 to April 2008. He was Vice President and Chief Information
Officer of Georgia Pacific from December 2002 to December 2005; General Manager of the Transportation Division and President
of the Lumber Division from October 2001 to December 2002; and Vice President, Building Products Distribution Sales and Logistics,
Georgia Pacific Corporation from October 2000 to October 2001.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Gary L. Ellis,</I></B> age 51, has been Senior Vice President and Chief Financial Officer since May 2005. Prior to that,
he was Vice President, Corporate Controller and Treasurer since October 1999 and Vice President Corporate Controller from August
1994. Mr. Ellis joined Medtronic in 1989 as Assistant Corporate Controller and was promoted to Vice President of Finance
for Medtronic Europe in 1992, until being named as Corporate Controller in 1994. Mr. Ellis is a member of the board of
directors of The Toro Company and chairman of the American Heart Association.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Richard Kuntz, M.D.,</I></B> age 51, has been Senior Vice President and President, Neuromodulation since October 2005.
Prior to that, he was an interventional cardiologist and Chief of the Division of Clinical Biometrics at Brigham and Women’s
Hospital, Associate Professor of Medicine and Chief Scientific Office of the Harvard Clinical Research Institute.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Steve La Neve,</I></B> age 49, has been Senior Vice President and President Spinal and Biologics since April 2008. Prior
to that, he was President of Medtronic Japan from April 2004 to April 2008. He was Senior Vice President of Business Development
and Supplier Integration and Executive Vice President of Relationship Management at Premier, Inc. from September 2000 to March
2004. He was Vice President and General Manager and Director of Sales and Marketing at Becton, Dickinson and Company from March
1990 to August 2000, and prior to that, he held other healthcare management roles with Hoffmann-La Roche and EM Diagnostic
Systems.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>James P. Mackin,</I></B> age 41, has been Senior Vice President and President Cardiac Rhythm Disease Management (CRDM)
since August 2007. Prior to that, he was Vice President, CRDM Commercial Operations from November 2006 to August 2007 and Vice
President, Vascular, Western Europe, from July 2004 to November 2006. He was Vice President and General Manager of Medtronic
Vascular’s Endovascular business from October 2002 to July 2004. Prior to joining Medtronic, he served in a number of
sales and executive positions at Genzyme Corporation from 1996 to 2004.</P>
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<B><I>Stephen H. Mahle,</I></B> age 62, has been Executive Vice President Healthcare Policy and Regulatory since April 2008.
Prior to that he was Executive Vice President and Senior Healthcare Policy Advisor from August 2007 to April 2008, and prior
to that was Executive Vice President and President, Cardiac Rhythm Disease Management since May 2004. He was Senior Vice President
and President, Cardiac Rhythm Management, since January 1998. Prior to that, he was President, Brady Pacing, from 1995 to 1997
and Vice President and General Manager, Brady Pacing, from 1990 to 1995. Mr. Mahle has been with the Company for 35 years
and served in various general management positions prior to 1990. Mr. Mahle serves on the board of directors of ATMI,
Inc.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Christopher J. O’Connell,</I></B> age 41, has been Senior Vice President and President, Diabetes, since October 2006.
Prior to that, he was President of Medtronic’s Emergency Response Systems division from May 2005 to October 2006, and
prior to that, he was Vice President of Sales and Marketing of Medtronic’s Cardiac Rhythm Disease Management division
from November 2001 to May 2005 and Vice President/General Manager of the Patient Management Business from January 2000 to November
2001. Mr. O’Connell has served in various management positions since joining the Company in 1994.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Stephen N. Oesterle, M.D.,</I></B> age 57, has been Senior Vice President, Medicine and Technology, since January 2002.
Prior to that, he was Associate Professor of Medicine at Harvard Medical School and Director of Invasive Cardiology Services
at Massachusetts General Hospital from 1998 to 2002, and was Associate Professor of Medicine at Stanford University and Director
of Cardiac Catheterization and Coronary Intervention Laboratories at the Stanford University Medical Center from 1992 to 1998.
Prior to that he held other academic positions and directed interventional cardiology programs at Georgetown University and
in Los Angeles, CA.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Catherine Szyman,</I></B> age 41, has been Senior Vice President, Strategy and Innovation since April 2008. Prior to that,
she was Vice President and General Manager of Endovascular Innovations, part of the CardioVascular business unit, from October
2004 to April 2008. From 1991 to 2004, she held numerous management and leadership roles at Medtronic, including Vice President
of Corporate Strategy and Vice President of Finance for the Vascular business.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Scott R. Ward,</I></B> age 48, has been Senior Vice President and President, CardioVascular since May 2007. Prior
to that he was Senior Vice President and President, Vascular from May 2004 to May 2007, Senior Vice President and President,
Neurological and Diabetes Business, from February 2002 to May 2004, and was President, Neurological, from January 2000
to January 2002. He was Vice President and General Manager of Medtronic’s Drug Delivery Business from 1995 to 2000.
Prior to that, Mr. Ward led the Company’s Neurological Ventures in the successful development of new therapies. Mr. Ward
also held various research, regulatory and business development positions since joining Medtronic in 1981.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc2"></A><A name="item1a"></A>Item 1A. Risk Factors</P>
<P style="font-size:10pt;text-indent:20pt">Investing in Medtronic involves a variety of risks and uncertainties, known and unknown,
including, among others, those discussed below.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>The medical device industry is highly competitive and we may be unable to compete effectively.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We compete in both the therapeutic and diagnostic medical markets in more than 120
countries throughout the world. These markets are characterized by rapid change resulting from technological advances and scientific
discoveries. In the product lines in which we compete, we face a mixture of competitors ranging from large manufacturers with
multiple business lines to small manufacturers that offer a limited selection of products. Development by other companies of
new or improved products, processes or technologies may make our products or proposed products less competitive. In addition,
we face competition from providers of alternative medical therapies such as pharmaceutical companies. Competitive factors include:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">product reliability,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>product performance,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>product technology,</TD>
</TR>
</TABLE>
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<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%"> </TD>
<TD width="4%">•</TD>
<TD width="92%">product quality,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>breadth of product lines,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>product services,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>customer support,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>price, and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>reimbursement approval from healthcare insurance providers.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">Major shifts in industry market share have occurred in connection with product problems,
physician advisories and safety alerts, reflecting the importance of product quality in the medical device industry. In the
current environment of managed care, consolidation among healthcare providers, increased competition, and declining reimbursement
rates, we have been increasingly required to compete on the basis of price. In order to continue to compete effectively, we
must continue to create, invest in, or acquire advanced technology, incorporate this technology into our proprietary products,
obtain regulatory approvals in a timely manner, and manufacture and successfully market our products. Given these factors,
we cannot guarantee that we will be able to continue our level of success in the industry.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Reduction or interruption in supply and an inability to develop alternative sources for supply may adversely affect our
manufacturing operations and related product sales.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We manufacture most of our products at 22 manufacturing facilities located throughout
the world. We purchase many of the components and raw materials used in manufacturing these products from numerous suppliers
in various countries. Generally we have been able to obtain adequate supplies of such raw materials and components. However,
for reasons of quality assurance, cost effectiveness, or availability, we procure certain components and raw materials only
from a sole supplier. While we work closely with our suppliers to try to ensure continuity of supply while maintaining high
quality and reliability, we cannot guarantee that these efforts will be successful. In addition, due to the stringent regulations
and requirements of the U.S. FDA regarding the manufacture of our products, we may not be able to quickly establish additional
or replacement sources for certain components or materials. A reduction or interruption in supply, and an inability to develop
alternative sources for such supply, could adversely affect our ability to manufacture our products in a timely or cost effective
manner and to make our related product sales.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>We are subject to many laws and governmental regulations and any adverse regulatory action may materially adversely affect
our financial condition and business operations.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our medical devices are subject to regulation by numerous government agencies, including
the FDA and comparable foreign agencies. To varying degrees, each of these agencies requires us to comply with laws and regulations
governing the development, testing, manufacturing, labeling, marketing, and distribution of our medical devices. We cannot
guarantee that we will be able to obtain marketing clearance for our new products, or enhancements or modifications to existing
products, and if we do, such approval may:</P>
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<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">take a significant amount of time,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>require the expenditure of substantial resources,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>involve stringent clinical and pre-clinical testing,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>involve modifications, repairs or replacements of our products, and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>result in limitations on the proposed uses of our products.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">Both before and after a product is commercially released, we have ongoing responsibilities
under FDA regulations. If the FDA were to conclude that we are not in compliance with applicable laws or regulations, or that
any of our medical devices are ineffective or pose an unreasonable health risk, the FDA could ban such medical devices, detain
or seize adulterated or misbranded medical devices, order a recall, repair, replacement, or refund of such devices, and require
us to notify health professionals and
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others that the devices present unreasonable risks of substantial harm to the public health. The FDA may also impose operating
restrictions, enjoin and restrain certain violations of applicable law pertaining to medical devices, and assess civil or criminal
penalties against our officers, employees, or us. The FDA may also recommend prosecution to the Department of Justice. Any
adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products.</P>
<P style="font-size:10pt;text-indent:20pt">Foreign governmental regulations have become increasingly stringent and more common,
and we may become subject to more rigorous regulation by foreign governmental authorities in the future. Penalties for a company’s
noncompliance with foreign governmental regulation could be severe, including revocation or suspension of a company’s
business license and criminal sanctions. Any domestic or foreign governmental law or regulation imposed in the future may have
a material adverse effect on us.</P>
<P style="font-size:10pt;text-indent:20pt">We are also subject to various environmental laws and regulations both within and
outside the U.S. Our operations involve the use of substances regulated under environmental laws, primarily those used in manufacturing
and sterilization processes. We cannot guarantee that compliance with environmental protection laws and regulations will not
have a material impact on our consolidated earnings, financial condition, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Our failure to comply with strictures relating to reimbursement and regulation of healthcare goods and services may subject
us to penalties and adversely impact our reputation and business operations.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our devices are subject to regulation regarding quality and cost by the HHS, including
the Centers for Medicare & Medicaid Services (CMS) as well as comparable state and foreign agencies responsible for reimbursement
and regulation of healthcare goods and services. Foreign governments also impose regulations in connection with their healthcare
reimbursement programs and the delivery of healthcare goods and services. U.S. federal government healthcare laws apply when
we submit a claim on behalf of a U.S. federal healthcare program beneficiary, or when a customer submits a claim for an item
or service that is reimbursed under a U.S. federal government funded healthcare program, such as Medicare or Medicaid. The
principal U.S. federal laws implicated include those that prohibit the filing of false or improper claims for federal payment,
those that prohibit unlawful inducements for the referral of business reimbursable under federally-funded healthcare programs,
known as the anti-kickback laws, and those that prohibit healthcare service providers seeking reimbursement for providing certain
services to a patient who was referred by a physician that has certain types of direct or indirect financial relationships
with the service provider, known as the Stark law.</P>
<P style="font-size:10pt;text-indent:20pt">The laws applicable to us are subject to evolving interpretations. If a governmental
authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees
could be subject to severe criminal and civil penalties, including, for example, exclusion from participation as a supplier
of product to beneficiaries covered by CMS. If we are excluded from participation based on such an interpretation it could
adversely affect our reputation and business operations.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Quality problems with our processes, goods, and services could harm our reputation for producing high quality products
and erode our competitive advantage.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Quality is extremely important to us and our customers due to the serious and costly
consequences of product failure. Our quality certifications are critical to the marketing success of our goods and services.
If we fail to meet these standards our reputation could be damaged, we could lose customers and our revenue could decline.
Aside from specific customer standards, our success depends generally on our ability to manufacture to exact tolerances precision
engineered components, subassemblies, and finished devices from multiple materials. If our components fail to meet these standards
or fail to adapt to evolving standards, our reputation as a manufacturer of high quality components will be harmed, our competitive
advantage could be damaged, and we could lose customers and market share.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>We are substantially dependent on patent and other proprietary rights and failing to be successful in patent or other
litigation may result in our payment of significant money damages and/or royalty payments, negatively impact our ability to
sell current or future products, or prohibit us from enforcing our patent and proprietary rights against others.</I></B>
</P>
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<P style="font-size:10pt;text-indent:20pt">We operate in an industry characterized by extensive patent litigation. Patent litigation
can result in significant damage awards and injunctions that could prevent our manufacture and sale of affected products or
require us to pay significant royalties in order to continue to manufacture or sell affected products. At any given time, we
are generally involved as both a plaintiff and a defendant in a number of patent infringement actions, the outcomes of which
may not be known for prolonged periods of time. While it is not possible to predict the outcome of patent litigation incident
to our business, we believe the results associated with any litigation could result in our payment of significant money damages
and/or royalty payments, negatively impact our ability to sell current or future products or prohibit us from enforcing our
patent and proprietary rights against others, which would generally have a material adverse impact on our consolidated earnings,
financial condition, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">We rely on a combination of patents, trade secrets and nondisclosure and non-competition
agreements to protect our proprietary intellectual property, and will continue to do so. While we intend to defend against
any threats to our intellectual property, there can be no assurance that these patents, trade secrets, or other agreements
will adequately protect our intellectual property. There can also be no assurance that pending patent applications owned by
us will result in patents issuing to us, that patents issued to or licensed by us in the past or in the future will not be
challenged or circumvented by competitors or that such patents will be found to be valid or sufficiently broad to protect our
technology or to provide us with any competitive advantage. Third parties could also obtain patents that may require us to
negotiate licenses to conduct our business, and there can be no assurance that the required licenses would be available on
reasonable terms or at all. We also rely on nondisclosure and non-competition agreements with certain employees, consultants
and other parties to protect, in part, trade secrets and other proprietary rights. There can be no assurance that these agreements
will not be breached, that we will have adequate remedies for any breach, that others will not independently develop substantially
equivalent proprietary information, or that third parties will not otherwise gain access to our trade secrets or proprietary
knowledge.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Product liability claims could adversely impact our financial condition and our earnings and impair our reputation.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our business exposes us to potential product liability risks which are inherent in
the design, manufacture and marketing of medical devices. In addition, many of the medical devices we manufacture and sell
are designed to be implanted in the human body for long periods of time. Component failures, manufacturing flaws, design defects
or inadequate disclosure of product-related risks or product-related information with respect to these or other products we
manufacture or sell could result in an unsafe condition or injury to, or death of, a patient. The occurrence of such a problem
could result in product liability claims or a recall of, or safety alert relating to, one or more of our products which could
ultimately result, in certain cases, in the removal from the body of such products and claims regarding costs associated therewith.
We have elected to self-insure with respect to product liability risks. Product liability claims or product recalls in the
future, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation and on our
ability to attract and retain customers for our products.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Our self-insurance program may not be adequate to cover future losses.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We have elected to self-insure most of our insurable risks. We made this decision
based on conditions in the insurance marketplace that have led to increasingly higher levels of self-insurance retentions,
increasing numbers of coverage limitations and dramatically higher insurance premium rates. We continue to monitor the insurance
marketplace to evaluate the value to us of obtaining insurance coverage in the future. While based on historical loss trends
we believe that our self-insurance program accruals will be adequate to cover future losses, we cannot guarantee that this
will remain true. Historical trends may not be indicative of future losses. These losses could have a material adverse impact
on our consolidated earnings, financial condition, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>If we experience decreasing prices for our goods and services and we are unable to reduce our expenses, our results of
operations will suffer.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We may experience decreasing prices for the goods and services we offer due to pricing
pressure experienced by our customers from managed care organizations and other third-party payors; increased
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">34</P>
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<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:10pt">
market power of our customers as the medical device industry consolidates; and increased competition among medical engineering
and manufacturing services providers. If the prices for our goods and services decrease and we are unable to reduce our expenses,
our results of operations will be adversely affected.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Our international operations are subject to a variety of risks that could adversely affect those operations and thus our
profitability and operating results.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Our operations in countries outside the U.S., which accounted for 38 percent of our
net sales for the year ended April 25, 2008, are accompanied by certain financial and other risks. We intend to continue
to pursue growth opportunities in sales internationally, which could expose us to greater risks associated with international
sales and operations. Our international operations are, and will continue to be, subject to a number of risks and potential
costs, including:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">changes in foreign medical reimbursement programs and policies,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>changes in foreign regulatory requirements,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>local product preferences and product requirements,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>longer-term receivables than are typical in the U.S.,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>fluctuations in foreign currency exchange rates,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>less protection of intellectual property in some countries outside of the U.S.,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>trade protection measures and import and export licensing requirements,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>work force instability,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>political and economic instability, and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>the potential payment of U.S. income taxes on certain earnings of our foreign subsidiaries’ upon repatriation.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Consolidation in the healthcare industry could have an adverse effect on our revenues and results of operations.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Many healthcare industry companies, including medical device companies, are consolidating
to create new companies with greater market power. As the healthcare industry consolidates, competition to provide goods and
services to industry participants will become more intense. These industry participants may try to use their market power to
negotiate price concessions or reductions for medical devices that incorporate components produced by us. If we are forced
to reduce our prices because of consolidation in the healthcare industry, our revenues would decrease and our consolidated
earnings, financial condition, or cash flows would suffer.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Healthcare policy changes may have a material adverse effect on us.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Healthcare costs have risen significantly over the past decade. There have been and
may continue to be proposals by legislators, regulators, and third-party payors to keep these costs down. Certain proposals,
if passed, could impose limitations on the prices we will be able to charge for our products, or the amounts of reimbursement
available for our products from governmental agencies or third-party payors. These limitations could have a material adverse
effect on our financial position and results of operations.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Our business is indirectly subject to healthcare industry cost containment measures that could result in reduced sales
of medical devices containing our components.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">Most of our customers, and the healthcare providers to whom our customers supply
medical devices, rely on third-party payors, including government programs and private health insurance plans, to reimburse
some or all of the cost of the procedures in which medical devices that incorporate components we manufacture or assemble are
used. The continuing efforts of government, insurance companies, and other payors of healthcare costs to contain or reduce
these costs could lead to patients being unable
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">35</P>
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<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:10pt">
to obtain approval for payment from these third-party payors. If that were to occur, sales of finished medical devices that
include our components may decline significantly and our customers may reduce or eliminate purchases of our components. The
cost containment measures that healthcare providers are instituting, both in the U.S. and internationally, could harm our ability
to operate profitably. For example, managed care organizations have successfully negotiated volume discounts for pharmaceuticals.
While this type of discount pricing does not currently exist for medical devices, if managed care or other organizations were
able to affect discount pricing for devices, it may result in lower prices to our customers from their customers and, in turn,
reduce the amounts we can charge our customers for our medical devices.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Our research and development efforts rely upon investments and alliances, and we cannot guarantee that any previous or
future investments or alliances will be successful.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">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 alliances to provide
us access to new technologies both in areas served by our existing businesses as well as in new areas.</P>
<P style="font-size:10pt;text-indent:20pt">We expect to make future investments where we believe that we can stimulate the development
of, or acquire, new technologies and products to further our strategic objectives and strengthen our existing businesses. Investments
and alliances in and with medical technology companies are inherently risky, and we cannot guarantee that any of our previous
or future investments or alliances will be successful or will not materially adversely affect our consolidated earnings, financial
condition, or cash flows.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>The success of many of our products depends upon strong relationships with physicians.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">If we fail to maintain our working relationships with physicians, 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 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 physicians. We rely on these professionals
to provide us with considerable knowledge and experience regarding our products and the marketing of our products. Physicians
assist us as researchers, marketing and product consultants, inventors, and as 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 effect on our consolidated earnings, financial condition, or cash
flows.</P>
<P style="font-size:10pt;text-indent:20pt">
<B><I>We may be unable to successfully integrate Kyphon’s operations or realize the anticipated benefits of the merger.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We entered into a merger agreement with Kyphon because we believe that the merger
will be beneficial to us and our shareholders. Achieving the anticipated benefits of the merger depends in part on whether
we can successfully integrate Kyphon’s business with our existing business. We may not be successful in integrating Kyphon’s
business as efficiently and effectively as we anticipate. The integration of certain operations following the merger will require
significant management resources which may distract attention from our day-to-day business. Any inability of management to
successfully integrate Kyphon’s business could have a material adverse effect on our business and result of operations.
We may not achieve anticipated cost synergies or long-term strategic benefits of the merger. An inability to realize the full
extent of, or any of, the anticipated benefits of the merger, as well as any delays encountered in the integration process,
could have an adverse effect on our business and results of operations, which may affect the value of our common stock after
completion of the merger. Risks we may encounter in connection with the integration of Kyphon’s business also include:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">•</TD>
<TD WIDTH="92%">difficulty incorporating acquired technologies or products with our existing product lines and maintaining uniform
standards, controls, procedures and policies,</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">36</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%"> </TD>
<TD width="4%">•</TD>
<TD width="92%">higher than anticipated costs in continuing support and development of acquired products,</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>legal or tax exposures as a result of unanticipated difficulties encountered during the integration process, and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>•</TD>
<TD>inability to achieve the anticipated synergies such as increased sales and cost savings.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;text-indent:20pt">
<B><I>Negative conditions in the global credit market may impair our commercial paper program, our auction rate securities and
our other fixed income securities, which may cause losses and cause us to face liquidity issues.</I></B>
</P>
<P style="font-size:10pt;text-indent:20pt">We have investments in marketable debt securities which are classified and accounted
for as available-for-sale. Our debt securities include government securities, commercial paper, corporate bonds, bank certificates
of deposit, and mortgage backed and other asset backed securities, including auction rate securities. Recent market conditions
indicate significant uncertainty on the part of investors on the economic outlook for the U.S. and for financial institutions
that have potential exposure to the sub-prime housing market. This uncertainty has created reduced liquidity across the fixed
income investment market, including the securities that we invest in. As a result, some of our investments have experienced
reduced liquidity. In the event we need to sell these securities, we may not be able to do so in a timely manner or for a value
that is equal to the underlying principal. In addition, we may be required to adjust the carrying value of the securities and
record an impairment charge. If we determine that the fair value of the securities is temporarily impaired, we would record
a temporary impairment within other comprehensive income, a component of shareholders’ equity. If it is determined that
the fair value of these securities is other-than-temporarily impaired, we would record a loss in our consolidated statements
of earnings, which could materially adversely impact our results of operations and financial condition.</P>
<P style="font-size:10pt;text-indent:20pt">Additionally, if uncertainties in the credit and capital markets continue, these
markets deteriorate further or we experience any rating downgrades on any investments in our portfolio, funds associated with
these securities may not be liquid or available to fund current operations, and/or we may incur further temporary or other-than-temporary
impairments in the carrying value of our investments, which could negatively affect our financial condition, cash flow and
reported earnings. Negative market conditions may also impair our ability to access the capital markets through the issuance
of commercial paper or debt securities, or may impact our ability to sell such securities at a reasonable price, and may negatively
impact our ability to borrow from financial institutions.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc3"></A><A name="item1b"></A>Item 1B. Unresolved Staff Comments</P>
<P style="font-size:10pt;text-indent:20pt">None.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc4"></A><A name="item2"></A>Item 2. Properties</P>
<P style="font-size:10pt;text-indent:20pt">Our principal offices are owned by us and located in the Minneapolis, Minnesota metropolitan
area. Manufacturing or research facilities are located in Arizona, California, Colorado, Connecticut, Florida, Indiana, Massachusetts,
Michigan, Minnesota, Tennessee, Texas, Washington, Puerto Rico, China, France, Ireland, Mexico, The Netherlands, and Switzerland.
Our total manufacturing and research space is approximately 3.0 million square feet, of which approximately 75 percent
is owned by us and the balance is leased.</P>
<P style="font-size:10pt;text-indent:20pt">We also maintain sales and administrative offices in the U.S. at approximately 90
locations in 40 states or jurisdictions and outside the U.S. at approximately 130 locations in 38 countries. Most of these
locations are leased. We are using substantially all of our currently available productive space to develop, manufacture, and
market our products. Our facilities are in good operating condition, suitable for their respective uses and adequate for current
needs.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc5"></A><A name="item3"></A>Item 3. Legal Proceedings</P>
<P style="font-size:10pt;text-indent:20pt">The information in Note 15 to the consolidated financial statements is incorporated
herein by reference set forth in Exhibit 13 hereto and will be included in our 2008 Annual Report.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">37</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:10pt;text-indent:20pt">The Company has received two letter requests from the chair of the U.S. Senate Committee
on Finance. On September 20, 2007, the chair sent a letter requesting information about financial ties between the medical
device industry and practicing physicians. On October 16, 2007, the chair sent a letter requesting information about the
Company’s decision to suspend distribution of its Sprint Fidelis family of defibrillation leads. The Company is cooperating
with the information requests.</P>
<P style="font-size:10pt;text-indent:20pt">On September 25, 2007, the Company received a letter from the SEC requesting
information relating to any potential violations of the U.S. Foreign Corrupt Practices Act in connection with the sale of medical
devices in an unspecified number of foreign countries, including Greece, Poland and Germany. The letter notes that the Company
is a significant participant in the medical device industry, and seeks any information concerning certain types of payments
made directly or indirectly to government-employed doctors. A number of competitors have publicly disclosed receiving similar
letters. On November 16, 2007, the Company received a letter from the Department of Justice requesting any information
provided to the SEC. The Company is cooperating with both requests.</P>
<P style="font-size:10pt;text-indent:20pt">On or about October 31, 2007, the Company received a letter from the United
States Attorney’s Office for the Eastern District of Pennsylvania requesting documents relating to the Company’s
relationship with one of its customers and any payments or things of value provided by the Company to physicians, physician
groups, hospitals, medical practices or other entities relating to the purchase of the Company’s cardiac resynchronization
therapy devices and cardiac stents. The Company is cooperating with the investigation.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc6"></A><A name="item4"></A>Item 4. Submission of Matters to a Vote of Security Holders</P>
<P style="font-size:10pt;text-indent:20pt">Not applicable.</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">
<A name="toc7"></A>PART II</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc8"></A><A name="item5"></A>Item 5. Market for Medtronic’s Common Equity, Related Shareholder Matters
and Issuer Purchases of Equity Securities</P>
<P style="font-size:10pt;text-indent:20pt">The information in the sections entitled “Price Range of Medtronic Stock”
and “Stock Exchange Listing” are incorporated by reference herein set forth in Exhibit 13 hereto and will be
included in our 2008 Annual Report.</P>
<P style="font-size:10pt;text-indent:20pt">In October 2005 and June 2007, the Company’s Board of Directors authorized
the repurchase of 40 million and 50 million shares of the Company’s stock, respectively. In addition, in April 2006, the
Board of Directors made a special authorization for the repurchase of up to 50 million shares in connection with the $4.400
billion Senior Convertible Note offering. As authorized by the Board of Directors each program expires when its total number
of authorized shares has been repurchased.</P>
<P style="font-size:10pt;text-indent:20pt">The following table provides information about the shares repurchased by Medtronic
during fourth quarter of fiscal year 2008:</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH colspan="2" align="left">Fiscal Period</TH>
<TH> </TH>
<TH> </TH> <TH nowrap colspan="2">Total Number of<BR>Shares Purchased</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2" nowrap >Average Price<BR>Paid per Share</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2" nowrap >Total Number of<BR>Shares Purchased as a<BR>Part of Publicly<BR>Announced Program</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2" nowrap >Maximum Number<BR>of Shares that May<BR>Yet Be Purchased<BR>Under the Program</TH>
<TH> </TH>
</TR>
<TR>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD width="50%">1/28/08 – 2/22/08</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%">1,719,900</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">46.51</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%">1,719,900</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%">34,347,561</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>2/25/08 – 3/28/08</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">34,347,561</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD>3/31/08 – 4/25/08</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">34,347,561</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:12pt">
<TD>Total</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,719,900</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">46.51</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,719,900</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">34,347,561</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">On June 23, 2008, there were approximately 53,600 shareholders of record of the Company’s
common stock. Cash dividends declared and paid totaled 12.5 cents per share for each quarter of fiscal year 2008 and 11 cents per share for each quarter of
fiscal year 2007. Stock price comparison follows:</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">38</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH colspan="2" align="left">Fiscal Qtr.</TH>
<TH> </TH>
<TH> </TH> <TH colspan="2">1st Qtr.</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">2nd Qtr.</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">3rd Qtr.</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">4th Qtr.</TH>
<TH> </TH>
</TR>
<TR>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD width="50%">2008 High</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">54.05</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">57.86</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">51.21</TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">50.44</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>2008 Low</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">50.57</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">47.00</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">45.25</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">46.19</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD>2007 High</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">51.43</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">50.93</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">54.51</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">54.58</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>2007 Low</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">46.86</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">42.47</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">48.33</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">48.67</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:12pt;font-weight:bold">
<A name="toc9"></A><A name="item6"></A>Item 6. Selected Financial Data</P>
<P style="font-size:10pt;text-indent:20pt">The information for fiscal years 2004 through 2008 in the section entitled “Selected
Financial Data” is incorporated herein by reference to Exhibit 13 hereto and will be included in our 2008 Annual
Report.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc10"></A><A name="item7"></A>Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations</P>
<P style="font-size:10pt;text-indent:20pt">The information in the section entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” is incorporated herein by reference to Exhibit 13 hereto and will
be included in our 2008 Annual Report.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc11"></A><A name="item7a"></A>Item 7A. Quantitative and Qualitative Disclosures About Market Risk</P>
<P style="font-size:10pt;text-indent:20pt">The information in the sections entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and “Market Risk” as well as Note 5 to the consolidated
financial statements is incorporated herein by reference to Exhibit 13 hereto and will be included in our 2008 Annual
Report.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc12"></A><A name="item8"></A>Item 8. Financial Statements and Supplementary Data</P>
<P style="font-size:10pt;text-indent:20pt">The Consolidated Financial Statements and Notes thereto, together with the report
of independent registered public accounting firm, are incorporated herein by reference to Exhibit 13 hereto and will be
included in our 2008 Annual Report.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc13"></A><A name="item9"></A>Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure</P>
<P style="font-size:10pt;text-indent:20pt">Not applicable.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc14"></A><A name="item9a"></A>Item 9A. Controls and Procedures</P>
<P style="font-size:10pt;font-weight:bold">Disclosure Controls and Procedures</P>
<P style="font-size:10pt;text-indent:20pt">Our management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)) and changes in the Company’s internal
control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) as of the end of the period covered
by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as
of the end of the period covered by this annual report, our disclosure controls and procedures (as defined in Rule 13a-15(e)
of the Exchange Act) are effective and are adequately designed to ensure that information required to be disclosed by us in
the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in applicable rules and forms.</P>
<P style="font-size:10pt;font-weight:bold">Management’s Annual Report on Internal Control Over Financial Reporting</P>
<P style="font-size:10pt;text-indent:20pt">Management is responsible for establishing and maintaining adequate internal control
over financial reporting for the Company. Management conducted an evaluation of the effectiveness of internal control over
financial reporting based on the framework in <I>Internal Control — Integrated Framework</I> issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company’s
internal control over financial reporting was effective as of April 25, 2008. Our internal control over financial reporting
as of April 25, 2008, has been
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">39</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:10pt">
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm who has also audited our consolidated
financial statements, as stated in their report which is included herein.</P>
<P style="font-size:10pt;font-weight:bold">Changes in Internal Control over Financial Reporting</P>
<P style="font-size:10pt;text-indent:20pt">We continue to implement a new enterprise resource planning (ERP) system using a
multi-phased approach which has resulted in certain changes in internal controls. During the second quarter of fiscal year
2008, portions of our Cardiac Rhythm Disease Management, CardioVascular, and Neuromodulation operating segments implemented
the new ERP system which resulted in some changes in internal controls. There have been no other changes in the Company’s
internal control over financial reporting during the period covered by this Annual Report on Form 10-K that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc15"></A><A name="item9b"></A>Item 9B. Other Information</P>
<P style="font-size:10pt;text-indent:20pt">None.</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">
<A name="toc16"></A>PART III</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc17"></A><A name="item10"></A>Item 10. Directors, Executive Officers and Corporate Governance</P>
<P style="font-size:10pt;text-indent:20pt">The sections entitled “Proposal 1 — Election of Directors —
Directors and Nominees”, “Governance of Medtronic — Committees of the Board and Meetings”, “Governance
of Medtronic — Audit Committee”, “Governance of Medtronic — Audit Committee Independence and Financial
Experts”, “Governance of Medtronic — Corporate Governance Committee”, and “Share Ownership Information
— Section 16(a) Beneficial Ownership Reporting Compliance” of our Proxy Statement for our 2008 Annual Shareholders’
Meeting are incorporated herein by reference. See also “Executive Officers of Medtronic” on page 29 herein.</P>
<P style="font-size:10pt;text-indent:20pt">We have adopted a written Code of Ethics that applies to our Chief Executive Officer,
Chief Financial Officer, Corporate Treasurer, Corporate Controller and other senior financial officers performing similar functions
who are identified from time to time by the Chief Executive Officer. We have also adopted a written Code of Business Conduct
and Ethics for Board members. The Code of Ethics for senior financial officers, which is part of our broader Code of Conduct
applicable to all employees, and the Code of Business Conduct and Ethics for Board members are posted on our website, <U>www.medtronic.com</U>
under the “Corporate Governance” caption. Any amendments to, or waivers for executive officers or directors of, these
ethics codes will be disclosed on our website promptly following the date of such amendment or waiver.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc18"></A><A name="item11"></A>Item 11. Executive Compensation</P>
<P style="font-size:10pt;text-indent:20pt">The sections entitled “Governance of Medtronic — Director Compensation”,
“Governance of Medtronic — Compensation Committee — Compensation Committee Interlocks and Insider Participation”,
“Compensation Discussion and Analysis”, and “Executive Compensation” in our Proxy Statement for our 2008
Annual Shareholders’ Meeting are incorporated herein by reference. The section entitled “Compensation Committee Report”
in our Proxy Statement for our 2008 Annual Shareholders’ Meeting is furnished herein by reference.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc19"></A><A name="item12"></A>Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters</P>
<P style="font-size:10pt;text-indent:20pt">The sections entitled “Share Ownership Information” and “Executive
Compensation — Equity Compensation Plan Information” in our Proxy Statement for our 2008 Annual Shareholders’
Meeting are incorporated herein by reference.</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc20"></A><A name="item13"></A>Item 13. Certain Relationships, Related Transactions and Director Independence</P>
<P style="font-size:10pt;text-indent:20pt">The sections entitled “Proposal 1 — Election of Directors —
Certain Relationships and Related Transactions” and “Proposal 1 — Election of Directors — Director Independence”
in our Proxy Statement for our 2008 Annual Shareholders’ Meeting are incorporated herein by reference.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">40</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc21"></A><A name="item14"></A>Item 14. Principal Accounting Fees and Services</P>
<P style="font-size:10pt;text-indent:20pt">The sections entitled “Governance of Medtronic — Audit Committee —
Audit Committee Pre-Approval Policies” and “Report of the Audit Committee — Audit and Non-Audit Fees” in
our Proxy Statement for our 2008 Annual Shareholders’ Meeting are incorporated herein by reference.</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">
<A name="toc22"></A>PART IV</P>
<P style="font-size:12pt;font-weight:bold">
<A name="toc23"></A><A name="item15"></A>Item 15. Exhibits, Financial Statement Schedules</P>
<P style="font-size:10pt;font-weight:bold">(a) 1. Financial Statements</P>
<P style="font-size:10pt;margin-left:30pt">The following report and consolidated financial statements are incorporated herein
by reference in Item 8.</P>
<P style="font-size:10pt;margin-left:30pt">The sections entitled “Report of Independent Registered Public Accounting Firm”
and “Consolidated Statements of Earnings” — years ended April 25, 2008, April 27, 2007, and April 28,
2006 are set forth in Exhibit 13 hereto and will be included in our 2008 Annual Report.</P>
<P style="font-size:10pt;margin-left:30pt">The section entitled “Consolidated Balance Sheets” — April 25,
2008 and April 27, 2007 is set forth in Exhibit 13 hereto and will be included in our 2008 Annual Report.</P>
<P style="font-size:10pt;margin-left:30pt">The section entitled “Consolidated Statements of Shareholders’ Equity” —
years ended April 25, 2008, April 27, 2007, and April 28, 2006 is set forth in Exhibit 13 hereto and will
be included in our 2008 Annual Report.</P>
<P style="font-size:10pt;margin-left:30pt">The section entitled “Consolidated Statements of Cash Flows” —
years ended April 25, 2008, April 27, 2007, and April 28, 2006 is set forth in Exhibit 13 hereto and will
be included in our 2008 Annual Report.</P>
<P style="font-size:10pt;margin-left:30pt">The section entitled “Notes to Consolidated Financial Statements” is set
forth in Exhibit 13 hereto and will be included in our 2008 Annual Report.</P>
<P style="font-size:10pt;font-weight:bold">2. Financial Statement Schedules</P>
<P style="font-size:10pt;margin-left:30pt">Schedule II. Valuation and Qualifying Accounts — years ended April 25,
2008, April 27, 2007, and April 28, 2006 (set forth on page 47 of this report).</P>
<P style="font-size:10pt;margin-left:30pt">All other schedules are omitted because they are not applicable or the required information
is shown in the financial statements or Notes thereto.</P>
<P style="font-size:10pt;font-weight:bold">3. Exhibits</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="88%">
<TR VALIGN="TOP" style="font-size:10pt">
<TD width="5%">2.1</TD>
<TD width="2%"> </TD>
<TD width="93%">Agreement and Plan of Merger Among Medtronic, Inc., Jets Acquisition Corporation and Kyphon Inc. (Dated as of
July 26, 2007) (Exhibit 2.1). (u)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>3.1</TD>
<TD> </TD>
<TD>Medtronic Restated Articles of Incorporation, as amended (Exhibit 3.1).(a)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>3.2</TD>
<TD> </TD>
<TD>Medtronic Bylaws, as amended to date (Exhibit 3.2).(b)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>4.1</TD>
<TD> </TD>
<TD>Rights Agreement, dated as of October 26, 2000, between Medtronic, Inc. and Wells Fargo Bank Minnesota, National
Association, including as: Exhibit A thereto the form of Certificate of Designations, Preferences and Rights of Series A
Junior Participating Preferred Shares of Medtronic, Inc.; and Exhibit B the form of Preferred Stock Purchase Right
Certificate (Exhibit 4.1).(c)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>4.2</TD>
<TD> </TD>
<TD>Indenture, dated as of September 11, 2001, between Medtronic, Inc. and Wells Fargo Bank Minnesota, N.A. (Exhibit 4.2).(d)</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">41</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="88%">
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.3</TD>
<TD> </TD>
<TD>Credit Agreement ($1,000,000,000 Five Year Revolving Credit Facility) dated as of January 20, 2005, among Medtronic,
Inc. as Borrower, certain of its subsidiaries as guarantors, Citicorp USA, Inc., as Administrative Agent and Bank of America,
N.A. as Syndication Agent, and Citigroup Global Markets Inc. and Banc of America Securities LLC as Joint Lead Arrangers and
Joint Book Managers (Exhibit 4.1).(e)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.4</TD>
<TD> </TD>
<TD>Form of Indenture between Medtronic, Inc. and Wells Fargo Bank, National Association (Exhibit 4.1).(f)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.5</TD>
<TD> </TD>
<TD>Indenture dated as of September 15, 2005 between the Company and Wells Fargo Bank, National Association, as Trustee,
with respect to the 4.375% Senior Notes due 2010 and 4.750% Senior Notes due 2015 (including the Forms of Notes thereof) (Exhibit
4.1).(g)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.6</TD>
<TD> </TD>
<TD>Form of 4.375% Senior Notes, Series B due 2010 (Exhibit 4.2).(g)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.7</TD>
<TD> </TD>
<TD>Form of 4.750% Senior Notes, Series B due 2015 (Exhibit 4.3).(g)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.8</TD>
<TD> </TD>
<TD>Indentures by and between Medtronic, Inc. and Wells Fargo Bank, N.A., as trustee dated as of April 18, 2006 (including
the Forms of Convertible Senior Notes thereof) (Exhibit 4.1).(h)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">4.9</TD>
<TD> </TD>
<TD>Credit Agreement dated as of December 20, 2006, among Medtronic, Inc., as Borrower, the Lenders party thereto, Bank
of America N.A., as Issuing Bank, and Citicorp USA, Inc., as Administrative Agent, Issuing Bank and Swingline Lender (Exhibit
4.1).(i)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.1</TD>
<TD> </TD>
<TD>1994 Stock Award Plan (amended and restated effective as of January 1, 2008) (Exhibit 10.1).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.2</TD>
<TD> </TD>
<TD>Medtronic Incentive Plan (amended and restated effective as of January 1, 2008) (Exhibit 10.2).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.3</TD>
<TD> </TD>
<TD>Executive Incentive Plan (Appendix C).(l)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.4</TD>
<TD> </TD>
<TD>Form of Employment Agreement for Medtronic executive officers (Exhibit 10.5).(a)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.5</TD>
<TD> </TD>
<TD>Capital Accumulation Plan Deferral Program (as amended and restated generally effective January 1, 2008)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.6</TD>
<TD> </TD>
<TD>Stock Option Replacement Program (Exhibit 10.8).(a)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.7</TD>
<TD> </TD>
<TD>Medtronic, Inc. 1998 Outside Director Stock Compensation Plan (as amended and restated effective as of January 1, 2008)
(Exhibit 10.3).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.8</TD>
<TD> </TD>
<TD>Amendment effective October 25, 2001, regarding change in control provisions in the Management Incentive Plan (Exhibit 10.10).(j)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%"> 10.9</TD>
<TD> </TD>
<TD>Indemnification Trust Agreement (Exhibit 10.11).(b)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%"> 10.10</TD>
<TD> </TD>
<TD>Asset Purchase Agreement and Settlement Agreement among Medtronic, Inc., Medtronic Sofamor Danek, Inc., SDGI Holdings, Inc.,
Gary K. Michelson, M.D. and Karlin Technology, Inc. (Exhibit 10.13).(o)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.11</TD>
<TD> </TD>
<TD>Form of Restricted Stock Award Agreement (Exhibit 10.3).(e)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.12</TD>
<TD> </TD>
<TD>Form of Non-Qualified Stock Option Agreement 2003 Long-Term Incentive Plan (four year vesting) (Exhibit 10.1).(e)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.13</TD>
<TD> </TD>
<TD>Form of Non-Qualified Stock Option Agreement 2003 Long-Term Incentive Plan (immediate vesting) (Exhibit 10.2).(e)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.14</TD>
<TD> </TD>
<TD>Form of Initial Option Agreement under the Medtronic, Inc. 1998 Outside Director Stock Compensation Plan (Exhibit 10.17).(o)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.15</TD>
<TD> </TD>
<TD>Form of Annual Option Agreement under the Medtronic, Inc. 1998 Outside Director Stock Compensation Plan (Exhibit 10.18).(o)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.16</TD>
<TD> </TD>
<TD>Form of Replacement Option Agreement under the Medtronic, Inc. 1998 Outside Director Stock Compensation Plan (Exhibit 10.19).(o)</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">42</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.17</TD>
<TD> </TD>
<TD>Form of Restricted Stock Units Award Agreement 2003 Long-Term Incentive Plan (Exhibit 10.20).(o)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.18</TD>
<TD> </TD>
<TD>Form of Performance Share Award Agreement 2003 Long-Term Incentive Plan (Exhibit 10.21).(o)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.19</TD>
<TD> </TD>
<TD>Medtronic, Inc. Supplemental Executive Retirement Plan (as restated generally effective January 1, 2008) (Exhibit 10.1).(s)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%"> 10.20</TD>
<TD> </TD>
<TD>Purchase Agreement by and among Medtronic, Inc. and the Initial Purchasers named therein dated as of April 12, 2006
(Exhibit 10.1).(h)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%"> 10.21</TD>
<TD> </TD>
<TD>Registration Rights Agreement by and among Medtronic, Inc. and the other parties named therein dated as of April 18,
2006 (Exhibit 4.2).(h)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.22</TD>
<TD> </TD>
<TD>2003 Long-Term Incentive Plan (as Amended and Restated effective as of January 1, 2008) (Exhibit 10.4).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.23</TD>
<TD> </TD>
<TD>Form of Option Agreement under the 2003 Long-Term Incentive Plan effective June 22, 2006 (Exhibit 10.23).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.24</TD>
<TD> </TD>
<TD>Form of Restricted Stock Agreement under the 2003 Long-Term Incentive Plan effective June 22, 2006 (Exhibit 10.24).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.25</TD>
<TD> </TD>
<TD>Form of Restricted Stock Unit Agreement under the 2003 Long-Term Incentive Plan effective June 22, 2006 (Exhibit 10.25).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.26</TD>
<TD> </TD>
<TD>Form of Performance Award Agreement under the 2003 Long-Term Incentive Plan effective June 22, 2006 (Exhibit 10.26).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">10.27†</TD>
<TD> </TD>
<TD>Form of Confirmations of Convertible Note Hedge related to Convertible Senior Notes issued on April 12, 2006, including
Schedule thereto (Exhibit 10.27).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">10.28†</TD>
<TD> </TD>
<TD>Form of Warrants issued on April 12, 2006, including Schedule thereto (Exhibit 10.28).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">10.29†</TD>
<TD> </TD>
<TD>Form of Amendment issued on April 13, 2006 to Form of Warrants issued on April 12, 2006, including Schedule thereto
(Exhibit 10.29).(q)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">10.30</TD>
<TD> </TD>
<TD>Amendment No. 1 dated September 5, 2006, to Indemnification Trust Agreement (Exhibit 10.1).(r)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.31</TD>
<TD> </TD>
<TD>Summary of Compensation Arrangements for Named Executive Officers and Directors</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.32</TD>
<TD> </TD>
<TD>Form of Restricted Stock Award Agreement under the 2003 Long-Term Incentive Plan (Exhibit 10.3).(s)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.33</TD>
<TD> </TD>
<TD>Form of Restricted Stock Unit Award Agreement under the 2003 Long-Term Incentive Plan (Exhibit 10.4).(s)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.34</TD>
<TD> </TD>
<TD>Medtronic, Inc. Israeli Amendment to the 2003 Long-Term Incentive Plan (Exhibit 10.5).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.35</TD>
<TD> </TD>
<TD>Medtronic, Inc. – Kyphon Inc. 2002 Stock Plan (Amended and Restated July 26, 2007, as further amended on October 18,
2007) (Exhibit 10.6).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.36</TD>
<TD> </TD>
<TD>Addendum: Medtronic, Inc. – Kyphon Inc. 2002 Stock Plan (dated December 13, 2007) (Exhibit 10.7).(t)</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.37</TD>
<TD> </TD>
<TD>Letter Agreement dated April 29, 2008 between Michael DeMane and Medtronic, Inc.</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.38</TD>
<TD> </TD>
<TD>Form of Change of Control Employment Agreement for Medtronic Executive Officers</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.39</TD>
<TD> </TD>
<TD>Form of Non-Qualified Stock Option Agreement 2003 Long-Term Incentive Plan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.40</TD>
<TD> </TD>
<TD>Form of Restricted Stock Unit Award Agreement 2003 Long-Term Incentive Plan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">*10.41</TD>
<TD> </TD>
<TD>Form of Restricted Stock Unit Award Agreement 2003 Long-Term Incentive Plan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD WIDTH="8%">12.1</TD>
<TD> </TD>
<TD>Computation of ratio of earnings to fixed charges</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">43</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>13</TD>
<TD> </TD>
<TD>This exhibit contains the information referenced under Part II, Items 5, 6, 7, 7A and 8</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>21</TD>
<TD> </TD>
<TD>List of Subsidiaries</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>23</TD>
<TD> </TD>
<TD>Consent of Independent Registered Public Accounting Firm</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>24</TD>
<TD> </TD>
<TD>Powers of Attorney</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>31.1</TD>
<TD> </TD>
<TD>Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>31.2</TD>
<TD> </TD>
<TD>Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>32.1</TD>
<TD> </TD>
<TD>Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>32.2</TD>
<TD> </TD>
<TD>Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
</TABLE>
</DIV>
<BR>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD colspan=2><HR noshade color="black" align="left" size="1" width="20%"></TD></tr>
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">(a)</TD>
<TD WIDTH="96%">Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended
April 27, 2001, filed with the Commission on July 26, 2001.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(b)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended April 30,
2004, filed with the Commission on June 30, 2004.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(c)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Report on Form 8-A, including the exhibits thereto, filed
with the Commission on November 3, 2000.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(d)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Report on Form 8-K/A, filed with the Commission on November 13,
2001.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(e)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended January 28,
2005, filed with the Commission on March 7, 2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(f)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our registration statement on Amendment No. 2 to Form S-4, filed
with the Commission on January 10, 2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(g)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Form S-4, filed with the Commission on December 6, 2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(h)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Current Report on Form 8-K, filed with the Commission on April 18,
2006.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(i)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended January 26,
2007, filed with the Commission on March 6, 2007.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(j)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended April 26,
2002, filed with the Commission on July 19, 2002.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(k)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended April 25,
2003, filed with the Commission on July 14, 2003.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(l)</TD>
<TD>Incorporated herein by reference to the cited appendix to our 2003 Proxy Statement, filed with the Commission on July 28,
2003.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(m)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Form S-8, filed with the Commission on November 21, 2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(n)</TD>
<TD>Incorporated herein by reference to the cited appendix to our 2005 Proxy Statement, filed with the Commission on July 21,
2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(o)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended April 29,
2005, filed with the Commission on June 29, 2005.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">44</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%">(p)</TD>
<TD width="96%">Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended
October 28, 2005, filed with the Commission on December 6, 2005.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(q)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Annual Report on Form 10-K for the year ended April 28,
2006, filed with the Commission on June 28, 2006.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(r)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended October 27,
2006, filed with the Commission on December 5, 2006.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(s)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended October 26,
2007, filed with the Commission on December 4, 2007.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(t)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Quarterly Report on Form 10-Q for the quarter ended January 25,
2008, filed with the Commission on March 4, 2008.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(u)</TD>
<TD>Incorporated herein by reference to the cited exhibit in our Current Report on Form 8-K, filed with the Commission on July 30,
2007.</TD>
</TR>
</TABLE>
<P style="font-size:10pt">*Items that are management contracts or compensatory plans or arrangements required to be filed as
an exhibit pursuant to Item 15(a)(3) of Form 10-K.</P>
<P style="font-size:10pt">†Confidential treatment requested as to portions of the exhibit. Confidential portions omitted
and filed separately with the Securities and Exchange Commission.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">45</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">SIGNATURES</P>
<P style="font-size:10pt;text-indent:20pt">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%">
<TR VALIGN="top" style="font-size:10pt">
<TD valign="bottom"></TD>
<TD colspan="2"><B>MEDTRONIC, INC.</B></TD>
<TD> </TD>
</TR>
<TR><TD> </TD></TR>
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%">Dated: June 24, 2008</TD>
<TD width=2%><B>By: </B></TD>
<TD width=33% style="border-bottom: 1px solid black">/s/ <B>William A. Hawkins</B></TD></TR>
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%"></TD>
<TD width=2%><B></B></TD>
<TD width=33%><B>William A. Hawkins<BR>President and<BR>Chief Executive Officer</B></TD></TR>
</table>
<P style="font-size:10pt;text-indent:20pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the report has
been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.</P>
<DIV>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%">
<TR VALIGN="top" style="font-size:10pt">
<TD valign="bottom"></TD>
<TD colspan="2"><FONT STYLE="font-size:10pt"><B>MEDTRONIC, INC.</B> </FONT></TD>
<TD><FONT STYLE="font-size:10pt"> </FONT></TD>
</TR>
<TR><TD><FONT STYLE="font-size:10pt"> </FONT></TD></TR>
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%"><FONT STYLE="font-size:10pt">Dated: June 24, 2008 </FONT></TD>
<TD width=2%><FONT STYLE="font-size:10pt"><B>By: </B> </FONT></TD>
<TD width=33% style="border-bottom: 1px solid black"><FONT STYLE="font-size:10pt">/s/ <B>William A. Hawkins</B> </FONT></TD></TR>
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%"></TD>
<TD width=2%><FONT STYLE="font-size:10pt"> </FONT></TD>
<TD width=33%><FONT STYLE="font-size:10pt"><B>William A. Hawkins<BR>President and<BR>Chief Executive Officer</B> </FONT></TD></TR>
<tr><td> </td></tr>
<TR>
<TD><FONT STYLE="font-size:10pt">Dated: June 24, 2008 </FONT></TD>
<TD><FONT STYLE="font-size:10pt"><B>By:</B> </FONT></TD>
<TD style="border-bottom: 1px solid black"><FONT STYLE="font-size:10pt">/s/ <B>Gary L. Ellis</B> </FONT></TD></TR>
<TR VALIGN="top">
<TD></TD>
<TD></TD>
<TD><FONT STYLE="font-size:10pt"><B>Gary L. Ellis<BR>Senior Vice President and<BR>Chief Financial Officer<BR>(Principal Financial and Accounting Officer)</B> </FONT></TD>
</TR>
<tr><td> </td></tr>
<TR>
<TD></TD>
<TD colspan=2><FONT STYLE="font-size:10pt"><B>Directors</B> </FONT></TD>
</TR>
<tr><td> </td></tr>
<TR>
<TD></TD>
<TD></TD>
<TD><FONT STYLE="font-size:10pt"><B>Richard H. Anderson<BR>David L. Calhoun<BR>Arthur D. Collins, Jr.<BR>Victor J. Dzau, M.D.<BR>William A. Hawkins<BR>Shirley
Ann Jackson, Ph.D<BR>James T. Lenehan<BR>Denise M. O’Leary<BR>Kendall J. Powell<BR>Robert C. Pozen<BR>Jean-Pierre Rosso<BR>Jack
W. Schuler</B> </FONT></TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">Terrance L. Carlson, by signing his name hereto, does hereby sign this document on
behalf of each of the above named directors of the registrant pursuant to powers of attorney duly executed by such persons.</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%">
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%">Dated: June 24, 2008</TD>
<TD width=2%><B>By: </B></TD>
<TD width=33% style="border-bottom: 1px solid black">/s/ <B>Terrance L. Carlson</B></TD></TR>
<TR VALIGN="top" style="font-size:10pt">
<TD width="65%"></TD>
<TD width=2%><B></B></TD>
<TD width=33%><B>Terrance L. Carlson</B><BR><B>Attorney-In-Fact</B><BR><B>Senior Vice President,</B><BR><B>General Counsel and Corporate Secretary</B></TD></TR>
</table>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">46</P>
<HR color="gray" size="3" noshade>
<page>
<BR>
<BR>
<P style="font-size:10pt">
<A href="#toc">Table of Contents</A>
</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">MEDTRONIC, INC. AND SUBSIDIARIES<BR>SCHEDULE II —
VALUATION AND QUALIFYING ACCOUNTS<BR>
<BR>(dollars in millions)</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH colspan="2" align="left"></TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Balance at<BR>Beginning of<BR>Fiscal Year</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Charges to<BR>Earnings</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Other<BR>Changes<BR>(Debit)<BR>Credit</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Balance<BR>at End of<BR>Fiscal Year</TH>
<TH> </TH>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD width="46%">Allowance for doubtful accounts:</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="5%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Year ended 4/25/08</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">160</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">31</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD nowrap align="right">(101</TD>
<TD nowrap>)(a)</TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">99</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">9</TD>
<TD nowrap>(b)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:6pt">
<TD>Year ended 4/27/07</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">184</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">31</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">(59</TD>
<TD nowrap>)(a)</TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">160</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">4</TD>
<TD nowrap>(b)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:6pt">
<TD>Year ended 4/28/06</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">175</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">39</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">(24</TD>
<TD nowrap>)(a)</TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">184</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#CCCCCC">
<TD></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">(6</TD>
<TD nowrap>)(b)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">(a)</TD>
<TD WIDTH="96%">Uncollectible accounts written off, less recoveries.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(b)</TD>
<TD>Reflects primarily the effects of foreign currency fluctuations.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">47</P>
<HR color="gray" size="3" noshade>
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end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>12
<FILENAME>medtronic082604s1_ex10-5.htm
<DESCRIPTION>CAPITAL ACCUMULATION PLAN DEFERRAL PROGRAM
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.5 to Medtronic, Inc. Form 10-K for fiscal year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.5</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:12pt;font-weight:bold;text-align:center">MEDTRONIC, INC.
<BR>CAPITAL ACCUMULATION PLAN
<BR>DEFERRAL PROGRAM
<BR>(as restated generally effective January 1, 2008)</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:12pt;font-weight:bold;text-align:center">TABLE OF CONTENTS</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH align="left"></TH>
<TH> </TH>
<TH align=center>Page</TH>
</TR>
<TR>
<TD></TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD>ARTICLE 1 DEFERRED COMPENSATION ACCOUNT</TD>
<TD width="2%"> </TD>
<TD align=right>1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 1.1 Establishment of Account</TD>
<TD> </TD>
<TD align=right>1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 1.2 Property of Company</TD>
<TD> </TD>
<TD align=right>1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 2 DEFINITIONS, GENDER, AND NUMBER</TD>
<TD> </TD>
<TD align=right>1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 2.1 Definitions</TD>
<TD> </TD>
<TD align=right>1</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 2.2 Gender and Number</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 3 PARTICIPATION</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 3.1 Who May Participate</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 3.2 Time and Conditions of Participation</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 3.3 Termination and Suspension of Participation</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 3.4 Missing Persons</TD>
<TD> </TD>
<TD align=right>5</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 3.5 Relationship to Other Plans</TD>
<TD> </TD>
<TD align=right>6</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 4 ENTRIES TO ACCOUNT</TD>
<TD> </TD>
<TD align=right>6</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 4.1 Contributions</TD>
<TD> </TD>
<TD align=right>6</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 4.2 Crediting Rate</TD>
<TD> </TD>
<TD align=right>8</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 4.3 Vesting</TD>
<TD> </TD>
<TD align=right>8</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 5 DISTRIBUTION OF ACCOUNTS</TD>
<TD> </TD>
<TD align=right>8</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 5.1 Distribution of Elective Deferral Accounts</TD>
<TD> </TD>
<TD align=right>8</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 5.2 Distribution of Company Contribution Account</TD>
<TD> </TD>
<TD align=right>9</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 5.3 Subsequent Election to Change Payment Terms</TD>
<TD> </TD>
<TD align=right>9</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 5.4 Exception to Payment Terms</TD>
<TD> </TD>
<TD align=right>9</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 5.5 Determination of Amount of Installment Payment</TD>
<TD> </TD>
<TD align=right>11</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 6 SPECIAL RULES FOR DEFERRED STOCK UNIT ACCOUNTS</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 7 CHANGE IN CONTROL PROVISIONS</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 7.1 Application of Article 7</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 7.2 Payments to and by the Trust</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 7.3 Legal Fees and Expenses</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 7.4 Late Payment and Additional Payment Provisions</TD>
<TD> </TD>
<TD align=right>12</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 8 FUNDING</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 8.1 Source of Benefits</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 8.2 No Claim on Specific Assets</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">i</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH align="left"></TH>
<TH> </TH>
<TH align=center>Page</TH>
</TR>
<TR>
<TD></TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 9 ADMINISTRATION</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.1 Administration</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.2 Powers of Committee</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.3 Actions of the Committee</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.4 Delegation</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.5 Reports and Records</TD>
<TD> </TD>
<TD align=right>13</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 9.6 Claims Procedure</TD>
<TD> </TD>
<TD align=right>14</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 10 AMENDMENTS AND TERMINATION</TD>
<TD> </TD>
<TD align=right>14</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 10.1 Amendments</TD>
<TD> </TD>
<TD align=right>14</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 10.2 Termination</TD>
<TD> </TD>
<TD align=right>14</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>ARTICLE 11 MISCELLANEOUS</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.1 No Guarantee of Employment or Contract to Perform Services</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.2 Release</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.3 Notices</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.4 Nonalienation</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.5 Withholding</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.6 Captions</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.7 Applicable Law</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.8 Invalidity of Certain Provisions</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.9 No Other Agreements</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.10 Incapacity</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.11 Electronic Media</TD>
<TD> </TD>
<TD align=right>15</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD style="padding-left:20pt">Section 11.12 USERRA Compliance</TD>
<TD> </TD>
<TD align=right>16</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>SCHEDULE A</TD>
<TD> </TD>
<TD align=right>17</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:6pt">
<TD>SCHEDULE B</TD>
<TD> </TD>
<TD align=right>18</TD>
</TR>
</TABLE>
</DIV>
<BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center">ii</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:12pt;font-weight:bold;text-align:center">MEDTRONIC, INC.<BR>CAPITAL ACCUMULATION PLAN<BR>DEFERRAL PROGRAM</P>
<P style="font-size:10pt;text-align:center">(as restated generally effective January 1, 2008)</P>
<P style="font-size:10pt;text-indent:20pt">Medtronic, Inc. (the “Company”) established this Medtronic, Inc. Capital Accumulation Plan Deferral Program
(the “Plan”) for the benefit of Eligible Employees of the Company and certain of its Affiliates, effective January 1, 1989. The Plan has been
amended and restated from time to time since its establishment. The most recent restatement was effective January 1, 2005. The Company hereby again
restates the Plan, effective January 1, 2008, to comply with the requirements of the final regulations issued under Section 409A of the Code (“Section
409A”) on April 10, 2007.</P>
<P style="font-size:10pt;text-indent:20pt">This restatement applies, generally, to amounts deferred under the Plan on or after January 1, 2008 (the
“Restatement Date”), and to the payment of all amounts deferred under the Plan (whether such amounts were deferred before, on, or after the
Restatement Date) that have not yet been distributed as of the Restatement Date. Except as set forth in Article 6, no amount deferred under the Plan is intended
to be “grandfathered” under Section 409A.</P>
<P style="font-size:10pt;text-indent:20pt">In the case of Participants who are employees, the Plan is intended to be (and shall be construed and administered
as) an employee benefit pension plan under the provisions of ERISA, which is unfunded and maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees, as described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.</P>
<P style="font-size:10pt;text-indent:20pt">The Plan is not intended to be qualified under Section 401(a) of the Code. The Plan, as restated herein, is subject
to, and intended to comply with, Section 409A of the Code.</P>
<P style="font-size:10pt;text-indent:20pt">The obligation of the Company to make payments under the Plan constitutes an unsecured (but legally enforceable)
promise of the Company to make such payments and no person, including any Participant or Beneficiary, shall have any lien, prior claim or other security
interest in any property of the Company as a result of the Plan.</P>
<P style="font-size:10pt;font-weight:bold"><U>ARTICLE 1. DEFERRED COMPENSATION ACCOUNT</U></P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt"><U>Section 1.1.</U> <U>Establishment of Account</U>. The Company shall establish
one or more Accounts for each Participant which shall be utilized solely as a device to measure and determine the amount of deferred compensation to be paid
under the Plan.</P>
<P style="font-size:10pt;text-indent:20pt"><U>Section 1.2.</U> <U>Property of Company</U>. Any amounts set aside for benefits payable
under the Plan are the property of the Company, except, and to the extent, provided in the Trust.</P>
<P style="font-size:10pt;font-weight:bold"><U>ARTICLE 2. DEFINITIONS, GENDER, AND NUMBER</U></P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt"><U>Section 2.1.</U> <U>Definitions</U>. Whenever used in the Plan, the following
words and phrases shall have the meanings set forth below unless the context plainly requires a different meaning, and when a defined meaning is intended, the
term is capitalized.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.1.</U> “<U>Account</U>” means a bookkeeping account established by the
Company on its books and records to record and determine the benefits payable to a Participant or Beneficiary under the Plan. The Company shall establish a
separate Account on behalf of a Participant for:</P>
<P style="font-size:10pt;padding-left:60pt"> (a) Each Deferral Election Agreement entered into by the
Participant pursuant to Section 4.1.1, termed an “Elective Deferral Account;”</P>
<P style="font-size:10pt;padding-left:60pt"> (b) Each Company Contribution made on the
Participant’s behalf pursuant to Section 4.1.2, termed a “Company Contribution Account;” and</P>
<P style="font-size:10pt;padding-left:60pt"> (c) Each deferral of Stock Units made by the Participant
under the Plan as in effect prior to January 1, 2005, as described in Article 6 herein, termed a “Deferred Stock Unit Account.” </P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">1</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">The Committee may establish any number of sub-accounts on behalf of a Participant or Beneficiary as
the Committee considers necessary or advisable for purposes of maintaining a proper accounting of amounts to be credited under the Plan on behalf of a
Participant or Beneficiary.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.2.</U> “<U>Affiliate</U>” or “<U>Affiliates</U>” means the
Company and any entity with which the Company would be considered a single employer under Section 414(b) of the Code (employees of controlled group of
corporations) and Section 414(c) of the Code (employees of partnerships, proprietorships, etc., under common control).</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.3.</U> “<U>Base Salary</U>,” of a Participant for any period, means the
Participant’s total salary and wages from all Affiliates for such period, including any amount that would be included in the definition of Base Salary but
for the individual’s election to defer some of his or her salary pursuant to the Plan or any other deferred compensation plan established by an Affiliate;
but excluding disability pay and any other remuneration paid by Affiliates, such as overtime, incentive compensation, stock options, distributions of
compensation previously deferred, restricted stock, allowances for expenses (including moving, travel expenses, and automobile allowances), and fringe benefits
whether payable in cash or in a form other than cash. In the case of an individual who is a participant in a plan sponsored by an Affiliate that is described in
Section 401(k), 125 or 132(f) of the Code, the term Base Salary shall include any amount that would be included in the definition of Base Salary but for the
individual’s election to reduce his or her salary and have the amount of the reduction contributed to or used to purchase benefits under such plan. In the
case of a Director, the term “Base Salary” shall mean the Director’s annual retainer, meeting fees, and any other amounts payable to the Director
by the Company for services performed as a Director, excluding any amounts distributable under the Plan or amounts not paid in cash.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.4.</U> “<U>Beneficiary</U>” or “<U>Beneficiaries</U>” means
the persons or trusts designated by a Participant in writing pursuant to Section 5.4.1(b) of the Plan as being entitled to receive any benefit payable under the
Plan by reason of the death of a Participant, or, in the absence of such designation, the persons specified in Section 5.4.1(c) of the Plan.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.5.</U> “<U>Board</U>” means the Board of Directors of the Company as
constituted at the relevant time.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.6.</U> “<U>Code</U>” means the Internal Revenue Code of 1986, as amended
from time to time and any successor statute. References to a Code section shall be deemed to be to that section or to any successor to that section.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.7.</U> “<U>Committee</U>” means the Committee or individual appointed by
the Compensation Committee of the Board (or any person or entity designated by the Committee) to administer the Plan pursuant to Section 9.4.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.8.</U> “<U>Company</U>” means Medtronic, Inc. and its successors and
assigns, by merger, purchase or otherwise.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.9.</U> “<U>Compensation</U>,” with respect to a Participant, for any
period means the sum of such Participant’s Base Salary and Incentive Compensation for such period.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.10.</U> “<U>Deferral Election Agreement</U>” means the agreement
described in Section 4.1.1 in which the Participant designates the amount of his or her Compensation, if any, that he or she wishes to contribute to the Plan
and acknowledges and agrees to the terms of the Plan.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.11.</U> “<U>Director</U>” means a member of the Board who is not an
employee of the Company.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.12.</U> “<U>Domestic Relations Order</U>” has the meaning set forth in
Section 414(p)(1)(B) of the Code.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt"><U>2.1.13.</U> “<U>Elective Deferral</U>” means a contribution to the Plan made
by a Participant pursuant to a Deferral Election Agreement that the Participant enters into with the Company. Elective Deferrals shall be made according to the
terms of the Plan set forth in Section 4.1.1.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">2</P>
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<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.14.</U> “<U>Eligible Employee</U>” means any United States employee who is: (a) an Officer or a
Vice President of the Company; (b) a member of the Sales Force of a Participating Affiliate whose Compensation for the Participating
Affiliate’s fiscal year ending immediately prior to the date on which he or she first enters into a Deferral Election
Agreement equals or exceeds the dollar amount set forth on Schedule A, hereto, which schedule may be revised from time to time
by the Company’s Chief Executive Officer in his or her discretion; or (c) any individual designated as eligible to participate
in the Plan by the Company’s Chief Executive Officer. Notwithstanding the preceding sentence, in order for an employee
to be an “Eligible Employee,” he or she must be considered to be a member of a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(3), and 401(a)(1) of ERISA and rules established by the Committee.
The Company may make such projections or estimates as it deems desirable in applying the eligibility requirements, and its
determination shall be conclusive.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.15.</U> “<U>Enrollment Period</U>” means the period designated by the Company during which a Deferral
Election Agreement may be entered into with respect to an Eligible Employee’s Compensation as described in Section 4.1.1.
Generally, the Enrollment Period must end no later than the end of the calendar year before the calendar year (or in the case
of a Director, the Company’s fiscal year) in which the services giving rise to the Compensation to be deferred are performed.
As described in Section 4.1.1, an exception may be made to this requirement for individuals who first become eligible to participate
in the Plan, and may be made in the case of Elective Deferrals from certain types of Incentive Compensation considered to be
Performance-Based Compensation, as determined by the Committee from time to time. In addition, other exceptions may be made
by the Company from time to time consistent with the requirements of Section 409A.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.16.</U> “<U>ERISA</U>” means the Employee Retirement Income Security Act of 1974, as amended from
time to time and any successor statute. References to an ERISA section shall be deemed to be to that section or to any successor
to that section.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.17.</U> “<U>Event</U>” means an event of change in control of the Company, as defined in the Trust.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.18.</U> “<U>Incentive Compensation</U>,” of a Participant for any period, means the total remuneration
of the Participant from all Affiliates for the period under the various incentive compensation programs maintained by Affiliates,
including, but not limited to, commissions, the cash portion of the Medtronic, Inc. 2003 Long-term Incentive Plan (or any successor
thereto) and any amount that would be included in the definition of Incentive Compensation but for the individual’s election
to defer some or all of his or her Incentive Compensation pursuant to the Plan or any other deferred compensation plan established
by an Affiliate, but excluding any other type of remuneration paid by Affiliates, such as Base Salary, overtime, stock options,
distributions of compensation previously deferred, restricted stock, allowances for expenses (including moving expenses, travel
expenses, and automobile allowances), and fringe benefits whether payable in cash or in a form other than cash. In the case
of an individual who is a participant in a plan sponsored by an Affiliate that is described in Section 401(k), 125 or 132(f)
of the Code, the term Incentive Compensation shall include any amount that would be included in the definition of Incentive
Compensation but for the individual’s election to reduce his or her Incentive Compensation and have the amount of the
reduction contributed to or used to purchase benefits under such plan. The Committee shall designate from time to time those
items of a Participant’s Compensation deemed to be Incentive Compensation.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.19.</U> “<U>Officer or Vice President</U>” means an employee who is either elected by the Board
or appointed by the Company’s Chief Executive Officer to such position.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.20.</U> “<U>Participant</U>” means an individual who is eligible to participate in the Plan and
who has satisfied the requirements set forth in Section 3.2.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.21.</U> “<U>Participating Affiliate</U>” or “<U>Participating Affiliates</U>” means the
Company and such Affiliates as may be designated by the Chief Executive Officer of the Company, or his designee, from time
to time.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.22.</U> “<U>Performance-Based Compensation</U>,” of a Participant for a period, means the Incentive
Compensation of the Participant for such period where the amount of, or entitlement to, the
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">3</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt">Incentive Compensation is contingent on the satisfaction of pre-established organizational
or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual
performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement
period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria
are established. Performance-based compensation may include payment based on performance criteria that are not approved by
the Board or the Compensation Committee of the Board or by the stockholders of the Company. Performance-Based Compensation
does not include any amount or portion of any amount that will be paid either regardless of performance, or based upon a level
of performance that is substantially certain to be met at the time the criteria are established.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.23.</U> “<U>Plan</U>” means the “Medtronic, Inc. Capital Accumulation Plan Deferral Program,”
as set forth herein and as amended or restated from time to time.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.24.</U> “<U>Plan Year</U>” means the 12-month period commencing each January 1 and ending the following
December 31.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.25.</U> “<U>Restatement Date</U>” means January 1, 2008, the effective date of this restatement.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.26.</U> “<U>Retirement</U>,” of a Participant who is an Eligible Employee, means the Participant’s
Separation from Service on or after the last day of the calendar month in which he or she attains age 55. In the case of a
Director, “Retirement” shall mean the Participant’s Separation from Service for any reason.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.27.</U> “<U>Sales Force</U>” means employees of Participating Affiliates whose primary employment
responsibilities involve selling the products manufactured by Participating Affiliates.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.28.</U> “<U>Separation from Service</U>” or “<U>Separate from Service</U>,” with respect
to a Participant, means the Participant’s separation from service with all Affiliates, within the meaning of Section 409A(a)(2)(A)(i)
of the Code and the regulations under such section. Solely for this purpose, a Participant who is an Eligible Employee will
be considered to have a Separation from Service when the Participant dies, retires, or otherwise has a termination of employment
with all Affiliates. The employment relationship is treated as continuing intact while the Participant is on military leave,
sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long
as the individual retains a right to reemployment with an Affiliate under an applicable statute or by contract. For purposes
hereof, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant
will return to perform services for an Affiliate. If the period of leave exceeds six months and the individual does not retain
a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the
first date immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any
medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than
six months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment
or any substantially similar position of employment, the Company may substitute a 29-month period of absence for such six-month
period.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">Whether a termination of employment has occurred is determined based
on whether the facts and circumstances indicate that the Affiliate and the Participant reasonably anticipated that no further
services will be performed after a certain date or that the level of bona fide services the Participant will perform after
such date (whether as an employee or independent contractor) will permanently decrease to no more than 40 percent of the average
level of bona fide services performed (whether as an employee or independent contractor) over the immediately preceding 36-month
period (or the full period of services if the Participant has been providing services for less than 36 months).</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">Notwithstanding anything in Section 2.1.2 to the contrary, in determining
whether a Participant has had a Separation from Service with an Affiliate, an entity’s status as an “Affiliate”
shall be determined substituting “50 percent” for “80 percent” each place it appears in Section 1563(a)(1),(2),
and (3) and in Treasury Regulation Section 1.414(c)-2.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">4</P>
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<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">The Company shall have discretion to determine whether a Participant
has experienced a Separation from Service in connection with an asset sale transaction entered into by the Company or an Affiliate,
provided that such determination conforms to the requirements of Section 409A and the regulations and other guidance issued
under such section, in which case the Company’s determination shall be binding on the Participant.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">A Director is considered to have a Separation from Service when
he or she ceases to perform services as a Director and the Company does not then anticipate that the Director will continue
to perform services for any Affiliate. Notwithstanding the foregoing, if a Participant provides services both as a Director
and an employee, the services provided as a Director are not taken into account in determining whether the Participant has
a Separation from Service as an employee for purposes of the Plan contributions made with respect to services performed as
an employee, and the services provided as an employee are not taken into account for purposes of determining whether the Participant
has had a Separation from Service for purposes of Plan contributions made with respect to services performed as a Director.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.29.</U> “<U>Section 409A</U>” means section 409A of the Internal Revenue Code, as amended from time
to time and any successor statute.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.30.</U> “<U>Specified Employee</U>” means an employee of an Affiliate who is subject to the six-month
delay rule described in Section 409A(2)(B)(i) of the Code. The Company shall establish a written policy for identifying Specified
Employees in a manner consistent with Section 409A, which policy may be amended by the Company from time to time as permitted
by Section 409A.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.31.</U> “<U>Stock</U>” means the Company’s common stock $.10 par value per share (as such par
value may be adjusted from time to time).</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.32.</U> “<U>Stock Unit</U>” means a notational unit representing the right to receive a share of
Stock.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>2.1.33.</U> “<U>Trust</U>” means the Medtronic, Inc. Compensation Trust Agreement Number Two, as may
be amended from time to time.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 2.2.</U> <U>Gender and Number</U>. Except as otherwise indicated by context, masculine terminology used
herein also includes the feminine and neuter, and terms used in the singular may also include the plural.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 3. PARTICIPATION</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 3.1.</U> <U>Who May Participate</U>. Participation in the Plan is limited to Eligible Employees
and Directors.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 3.2.</U> <U>Time and Conditions of Participation</U>. An Eligible Employee or Director shall
become a Participant only upon his or her compliance with such terms and conditions as the Committee may from time to time
establish for the implementation of the Plan, including, but not limited to, any condition the Committee may deem necessary
or appropriate for the Company to meet its obligations under the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 3.3.</U> <U>Termination and Suspension of Participation</U>. Once an individual has become
a Participant, participation shall continue until payment in full of all benefits to which the Participant or Beneficiary is
entitled under the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 3.4.</U> <U>Missing Persons</U>. Each Participant and Beneficiary entitled to receive benefits
under the Plan shall be obligated to keep the Company informed of his or her current address until all Plan benefits that are
due to be paid to the Participant or Beneficiary have been paid to him or her. If, after having made reasonable efforts to
do so, the Company is unable to locate the Participant or Beneficiary for purposes of making a distribution, the Participant’s
or Beneficiary’s Plan benefit will be forfeited. In no event will a Participant’s or Beneficiary’s benefit be
paid to him or her later than the date otherwise required by the Plan.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">5</P>
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<PAGE>
<BR>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 3.5.</U> <U>Relationship to Other Plans</U>. Participation in the Plan shall not preclude participation
of the Participant in any other fringe benefit program or plan sponsored by an Affiliate for which such Participant would otherwise
be eligible.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 4. ENTRIES TO ACCOUNT</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 4.1.</U> <U>Contributions</U>
</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>4.1.1.</U> <U>Deferrals</U>. A Participant may elect to reduce his or her Compensation for a Plan Year
and have the amount of the reduction contributed to the Plan on the Participant’s behalf as an Elective Deferral. A Participant
wishing to make an Elective Deferral under the Plan for a Plan Year shall enter into a Deferral Election Agreement during the
Enrollment Period immediately preceding the Plan Year. A separate Deferral Election Agreement must be entered into for each
Plan Year that a Participant wishes to make Elective Deferrals under the Plan. The Committee may require that a Participant
enter into a separate Deferral Election Agreement for Base Compensation and Incentive Compensation that he or she wishes to
defer and, if the Participant is eligible to receive more than one type of Incentive Compensation, that he or she enter into
a separate Deferral Election Agreement for each type of Incentive Compensation he or she is eligible to receive. In order to
be effective, the Deferral Election Agreement must be completed and submitted to the Company at the time and in the manner
specified by the Committee, which may be no later than the last day of the Enrollment Period. The Company shall not accept
Deferral Election Agreements entered into after the end of the Enrollment Period. Notwithstanding anything in this paragraph
to the contrary, in the case of a Director, the Deferral Election Agreement will apply to the Company’s fiscal year that
begins in the Plan Year immediately following the Enrollment Period.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">For the Plan Year in which an individual first becomes eligible
to participate in the Plan, the Committee may, in its discretion, allow the individual to enter into a Deferral Election Agreement
within 30 days after he or she first becomes eligible. In order to be effective, the Deferral Election Agreement must be completed
and submitted to the Committee on or before the 30-day period has elapsed. The Committee will not accept Deferral Election
Agreements entered into after the 30-day period has elapsed. If the eligible individual fails to complete a Deferral Election
Agreement by such time, he or she may enter into a Deferral Election Agreement during any succeeding Enrollment Period in accordance
with the rules described in the preceding paragraph. For Compensation that is earned based upon a specified performance period
(for example an annual bonus) where a Deferral Election Agreement is entered into in the first year of eligibility but after
the beginning of the performance period, the Deferral Election Agreement must apply to Compensation paid for services performed
after the Deferral Election Agreement is entered into. For this purpose, a Deferral Election Agreement will be deemed to apply
to Compensation paid for services performed after the Deferral Election Agreement is entered into if the Deferral Election
Agreement applies to no more than an amount equal to the total amount of the Compensation for the performance period multiplied
by the ratio of the number of days remaining in the performance period after the Deferral Election Agreement is entered into
over the total number of days in the performance period. The term “Plan,” for purposes of this paragraph, means the
Plan and any other plan required to be aggregated with the Plan pursuant to Section 409A and the regulations and other guidance
under such section.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">Except as otherwise specified in this Section 4.1.1, a Deferral
Election Agreement will be effective to defer Compensation earned after the Deferral Election Agreement is entered into, and
not before.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">Deferral Election Agreements for Base Salary and Incentive Compensation
other than Performance-Based Compensation must be completed and submitted to the Company at the time described above that is
ordinarily applicable to Deferral Election Agreements (subject to the exception for individuals who are newly eligible to participate).
Deferral Election Agreements for Incentive Compensation that is Performance-Based Compensation must be completed and submitted
to the Company no later than six months before the end of the performance period for the
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">6</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt">Incentive Compensation; provided, however, that in order for such an election to
be valid the Participant must perform services continuously from the beginning of the performance period (or the date the performance
criteria are established, if later) through the date the Deferral Election Agreement is entered into, and provided further,
that in no event may a Deferral Election Agreement be effective to defer Incentive Compensation after the Incentive Compensation
has become reasonably ascertainable. For purposes hereof, if Incentive Compensation is a specific or calculable amount, the
Incentive Compensation is readily ascertainable if and when the amount is first substantially certain to be paid. If the Incentive
Compensation is not a specific or calculable amount (for example, the amount may vary based upon the level of performance)
the Incentive Compensation, or any portion thereof, is readily ascertainable when the amount is both calculable and substantially
certain to be paid. Accordingly, in general, any minimum amount that is both calculable and substantially certain to be paid
will be treated as readily ascertainable. The Committee shall determine from time to time whether an item of Incentive Compensation
is considered Performance-Based Compensation for these purposes.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">Each Deferral Election Agreement shall specify the amount of Compensation
the Participant wishes to have deducted from his or her Compensation and contributed to the Plan by type and percentage or
dollar amount, subject to the following rules:</P>
<P style="font-size:10pt;padding-left:60pt"> (a) <I>Base Compensation.</I>
Each Participant may elect to make an Elective Deferral under the Plan for each Plan Year (fiscal year of the Company,
in the case of a Director) in an amount equal to any whole percentage or dollar amount not in excess of 50% (100% in the case
of a Director) of his or her Base Compensation (determined on a pay period basis).</P>
<P style="font-size:10pt;padding-left:60pt"> (b) <I>Incentive Compensation.</I>
Each Participant may elect to make an Elective Deferral under the Plan for each Plan Year in an amount equal to any whole
percentage or dollar amount not in excess of 100% of his or her Incentive Compensation.</P>
<P style="font-size:10pt;padding-left:60pt"> (c) <I>Minimum Elective
Deferral.</I> The Committee may from time to time establish a minimum amount that may be deferred by a Participant
pursuant to this Section 4.1.1 for any Plan Year.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">The Company shall establish an Elective Deferral Account for each
Elective Deferral Agreement entered into by a Participant, and if more than one type of Compensation is deferred under a Deferral
Election Agreement, for each separate type of Compensation deferred. Elective Deferrals made under the Elective Deferral Agreement
shall be credited to the Account as soon as administratively reasonable after the Compensation would have been paid to the
Participant had the Participant not elected to defer it under the Plan.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">In general, a Deferral Election Agreement shall become irrevocable
as of the last day of the Enrollment Period applicable to it. However, if a Participant incurs an “unforeseeable emergency,”
as defined in Section 5.4.5(g), or becomes entitled to receive a hardship distribution pursuant to Treas. Reg. Sec. 1.401(k)-1(d)(3)
after the Deferral Election Agreement otherwise becomes irrevocable, the Deferral Election Agreement shall be cancelled as
of the date on which the Participant is determined to have incurred the unforeseeable emergency or becomes eligible to receive
the hardship distribution and no further Elective Deferrals will be made under it. In addition, if a Participant becomes “disabled”
(as defined below), the Company may, in its discretion, cancel the Participant’s Deferral Election Agreement then in effect,
provided that such cancellation is made no later than end of the Plan Year, or if later, the 15<SUP>th</SUP> day of the third
month following the date on which the Participant becomes disabled, and provided further that the Company does not allow the
Participant a direct or indirect election regarding the cancellation. For purposes of the preceding sentence, “disability”
means any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the
duties of his or her position or any substantially similar position, where such impairment can be expected to result in death
or can be expected to last for a continuous period of not less than six months.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">7</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">At the time a Participant enters into a Deferral Election Agreement,
the Participant shall, as part of such agreement, elect the time, and if applicable the form, of distribution of the Elective
Deferral Account or Accounts corresponding to the Deferral Election Agreement in accordance with Section 5.1.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>4.1.2.</U> <U>Company Contributions.</U>The Company may make a contribution to an Account under the Plan on behalf
of one or more Eligible Employees or Directors in such amount and at such time and based upon such criteria as the Company,
in its sole and absolute discretion, deems appropriate or desirable. The Company shall establish a separate Company Contribution
Account for each Participant for each contribution made by the Company on the Participant’s behalf pursuant to this Section
4.1.2. The Company Contribution shall be credited to this Account at the time and in the manner specified by the Committee.
At the time a Company Contributions Account is established, the Company shall specify the time and manner in which it will
be distributed to the Participant.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 4.2.</U> <U>Crediting Rate</U>. The Committee shall designate the manner in which a Participant’s
Elective Deferral Accounts and Company Contribution Accounts are to be credited with gains and losses as described on Schedule
B hereto, which Schedule may be amended from time to time in the Committee’s discretion. If the Committee designates specific
investment funds to serve as an index for crediting gains and losses to such Accounts: (a) the Participant shall be entitled
to designate which such fund or funds shall be used to measure gains and losses on such Accounts and to change such designation
in accordance with rules established by the Committee (in which case, such change shall be effective prospectively); (b) the
Accounts will be credited with gains and losses as if invested in such fund or funds in accordance with the Participant’s
designation and the rules established by the Committee; and (c) the Committee may, in its sole discretion, eliminate any investment
fund or funds previously designated by it, substitute a new investment fund or funds therefore, or add an investment fund or
funds, at any time. If the Committee makes any such investment funds available for this purpose, the Company shall have no
obligation to actually invest any amounts in any such investment funds.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 4.3.</U> <U>Vesting</U>. Each Elective Deferral Account will be fully vested immediately. Each
Company Contribution Account will vest in the manner specified by the Company at the time the Company Contribution Account
is established.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 5. DISTRIBUTION OF ACCOUNTS</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 5.1.</U> <U>Distribution of Elective Deferrals Accounts</U>
</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.1.1.</U> <U>Time of Distribution</U>. A Participant shall be entitled to elect whether distribution
of an Elective Deferral Account shall begin at: (a) a specified future date, which must be at least five years after the first
day of the Plan Year (or in the case of a Director, the first day of the Company’s fiscal year, and in the case of a deferral
of Performance-Based Compensation, the first day of the last year of a performance cycle) to which the Deferral Election Agreement
applies; or (b) the Participant’s Retirement. If the Participant elects to have distribution commence at a specified future
date, the distribution commencement date must be specified in his or her Deferral Election Agreement in which case distribution
will commence to the Participant no later than the end of the Plan Year, or if later, the 15<SUP>th</SUP> day of the third
calendar month, following the specified date. If the Participant elects to have distributions commence at his or her Retirement,
distribution will commence to the Participant within 90 days after his or her Retirement. If the Participant does not specify
the distribution commencement date of an Elective Deferral Account, the Participant will be deemed to have elected to have
distribution of the Elective Deferral Account commence at his or her Retirement.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.1.2.</U> <U>Form of Distribution</U>. If a Participant elects to have distribution of an Elective
Deferral Account commence at a specified date, the Elective Deferral Account will be distributed to the Participant in a lump
sum. If the Participant elects to have distribution of an Elective Deferral Account commence at Retirement, the Participant
shall elect the form of distribution from those specified below:</P>
<P style="font-size:10pt;padding-left:60pt"> (a) lump sum; or</P>
<P style="font-size:10pt;padding-left:60pt"> (b) monthly installments
over five, ten or 15 years.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">8</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 5.2.</U> <U>Distribution of Company Contribution Account</U>. Distribution to a Participant
of a Company Contribution Account shall be made at the time and in the manner specified by the Company at the time the Participant
first has a legally binding right to the amounts credited to the Account, subject to Sections 5.3 and 5.4.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 5.3.</U> <U>Subsequent Election to Change Payment Terms</U>. A Participant may modify a Deferral
Election Agreement, and the distribution terms specified by the Company with respect to a Company Contribution Account, to
postpone the distribution commencement date of the Account to a later date and, in the case of an Account whose distribution
is scheduled to commence at Retirement, change the form of distribution to another form permitted under Section 5.1.2. In order
to be effective, the requested modification must: (a) be in writing and be submitted to the Company at the time and in the
manner specified by the Committee; (b) not take effect for at least 12 months from the date on which it is submitted to the
Company; (c) in the case of an Account whose distribution is scheduled to commence at a specified date pursuant to clause (a)
of Section 5.1.1, be submitted to the Company at least 12 months prior to the specified date; and (d) specify a new distribution
commencement date that is no earlier than five years after the date distribution would otherwise have commenced. For purposes
hereof, if the “specified date” referred to in clause (a) of Section 5.1.1 is a Plan Year rather than a specified
date within a Plan Year, the “specified date” shall be deemed to be the first day of the Plan Year.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 5.4.</U> <U>Exception to Payment Terms</U>. Notwithstanding anything in this Article 5 or a
Participant’s Deferral Election Agreement to the contrary, the following terms, if applicable, shall apply to the payment
of a Participant’s Elective Deferral Accounts and Company Contribution Accounts.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.4.1.</U> <U>Death</U>.</P>
<P style="font-size:10pt;padding-left:30pt"> (a) <I>Time and Form
of Payment.</I> In the event a Participant dies while there are amounts remaining in an Account, the Account (or
the remaining balance of the Account if distributions have commenced) shall be paid to the Participant’s Beneficiary in
a lump sum within 90 days after the Participant’s death.</P>
<P style="font-size:10pt;padding-left:30pt"> (b) <U>Designation by
Participant</U>. Each Participant has the right to designate primary and contingent Beneficiaries for death benefits
payable under the Plan. Such Beneficiaries may be individuals or trusts for the benefit of individuals. A Beneficiary designation
by a Participant shall be in writing on a form acceptable to the Committee and shall only be effective upon delivery to the
Company. A Beneficiary designation may be revoked by a Participant at any time by delivering to the Company either written
notice of revocation or a new Beneficiary designation form. The Beneficiary designation form last delivered to the Company
prior to the death of a Participant shall control.</P>
<P style="font-size:10pt;padding-left:30pt"> (c) <U>Failure to Designate
Beneficiary</U>. In the event there is no Beneficiary designation on file with the Company at the Participant’s
death, or if all Beneficiaries designated by a Participant have predeceased the Participant, any benefits payable pursuant
to this Section 5.4.1 will be paid to the Participant’s surviving spouse, if living; or if the Participant does not leave
a surviving spouse, to the Participant’s surviving issue by right of representation; or, if there are no such surviving
issue, to the Participant’s estate.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.4.2.</U> <U>Separation from Service</U>. If a Participant has a Separation from Service other than
due to Retirement or death, the Participant shall receive the balance in each of his or her Accounts in the form of monthly
installments over a five-year period, regardless of any payment election the Participant may have made under the Plan. Payments
pursuant to this Section 5.4.2 shall commence within 90 days after the Participant’s Separation from Service.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.4.3.</U> <U>Small Account Balances</U>. If at any time the present value of any benefit under the
Plan that would be considered a “single plan” under Treasury Regulation Section 1.409A-1(c)(2) together with the
present value of any benefit required to be aggregated with such benefit under Treasury Regulation Section 1.409A-1(c)(2),
is less than the dollar limit set forth in Section 402(g) of the Code, the Company may, in its discretion, distribute such
benefit (or benefits) to the Participant in the form of a lump sum, provided that the payment results in the liquidation of
the entirety of the
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">9</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:30pt">Participant’s interest under the “single plan, “ including all benefits
required to be aggregated as part of the “single plan” under Treasury Regulation Section 1.409A-1(c)(2).</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.4.4.</U> <U>Delay in Distributions</U>
</P>
<P style="font-size:10pt;padding-left:60pt"> (a) Except as set forth
in Section 5.4.5, if a Participant is a Specified Employee as of the date of his or her Separation from Service, any distributions
that under the terms of the Plan are to commence to the Participant on his or her Separation from Service (“separation
distributions”) shall commence within 90 days after the Participant’s “delayed distribution date” (as defined
below). In this case, the Company shall, in its discretion, determine whether the first separation distribution to the Participant
shall include the aggregate amount of any separation distributions that, but for this paragraph (a), would have been paid to
the Participant from the date of his or her Separation from Service until the delayed distribution date, or whether each separation
distribution shall be delayed for six months. For purposes of this paragraph (a), a Specified Employee’s “delayed
distribution date” is the first day of the seventh month following the Participant’s Separation from Service, or
if earlier, the date of the Participant’s death.</P>
<P style="font-size:10pt;padding-left:60pt"> (b) A payment under the
Plan may be delayed by the Company under any of the following circumstances so long as all payments to similarly situated Participants
are treated on a reasonably consistent basis:</P>
<P style="font-size:10pt;padding-left:90pt"> (i) The Company reasonably
anticipates that if such payment were made as scheduled, the Company’s deduction with respect to such payment would not
be permitted under Section 162(m) of the Code, provided that the payment is made either during the first Plan Year in which
the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction
of such payment will not be barred by application of Section 162(m) or during the period beginning with the date of the Participant’s
Separation from Service and ending on the later of the last day of the Company’s fiscal year in which the Participant
has a Separation from Service or the 15<SUP>th</SUP> day of the third month following the Separation from Service.</P>
<P style="font-size:10pt;padding-left:90pt"> (ii) The Company reasonably
anticipates that the making of the payment will violate Federal securities laws or other applicable law, provided that the
payment is made at the earliest date at which the Company reasonably anticipates that the making of the payment will not cause
such violation.</P>
<P style="font-size:10pt;padding-left:90pt"> (iii) Upon such other
events as determined by the Company and according to such terms as are consistent with Section 409A or are prescribed by the
Commissioner of Internal Revenue.</P>
<P style="font-size:10pt;margin-left:30pt;text-indent:20pt">
<U>5.4.5.</U> <U>Acceleration of Distributions</U>. The Company may, in its discretion, distribute all
or a portion of a Participant’s Accounts at an earlier time and in a different form than specified above in this Article
5 under the circumstances described below:</P>
<P style="font-size:10pt;padding-left:60pt"> (a) As may be necessary
to fulfill a Domestic Relations Order. Distributions pursuant to a Domestic Relations Order shall be made according to administrative
procedures established by the Company.</P>
<P style="font-size:10pt;padding-left:60pt"> (b) To the extent reasonably
necessary to avoid the violation of ethics laws or conflict of interest laws pursuant to Section 1.409A-3(j)(ii) of the Treasury
regulations.</P>
<P style="font-size:10pt;padding-left:60pt"> (c) To pay FICA on amounts
deferred under the Plan and the income tax resulting from such payment.</P>
<P style="font-size:10pt;padding-left:60pt"> (d) To pay the amount
required to be included in income as a result of the Plan’s failure to comply with Section 409A.</P>
<P style="font-size:10pt;padding-left:60pt"> (e) If the Company determines,
in its discretion, that it is advisable to liquidate the Plan in connection with a termination of the Plan pursuant to Section
10.2, subject to Article 7.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">10</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;padding-left:60pt"> (f) As satisfaction of
a debt of the Participant to an Affiliate, where such debt is incurred in the ordinary course of the service relationship between
the Affiliate and the Participant, the entire amount of the reduction in any Plan Year does not exceed $5,000, and the reduction
is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.</P>
<P style="font-size:10pt;padding-left:60pt"> (g) If the Participant
has an unforeseeable emergency. For these purposes an “unforeseeable emergency” is a severe financial hardship to
the Participant, resulting from an illness or accident of the Participant, the Participant’s spouse, the Beneficiary,
or the Participant’s dependent (as defined in Section 152, without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)
of the Code); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the Participant. For example, the imminent
foreclosure of or eviction from the Participant’s primary residence may constitute an unforeseeable emergency. In addition,
the need to pay for medical expenses, including non-refundable deductibles, as well as for the cost of prescription drug medication,
may constitute an unforeseeable emergency. Finally, the need to pay for funeral expenses of a spouse, Beneficiary, or a dependent
(as defined in Section 152, without regard to 152(b)(1), (b)(2), and (d)(1)(B) of the Code) may also constitute an unforeseeable
emergency. Except as otherwise provided in this paragraph (g), the purchase of a home and the payment of college tuition are
not unforeseeable emergencies. Whether a Participant or Beneficiary is faced with an unforeseeable emergency permitting a distribution
under this paragraph (g) is to be determined based on the relevant facts and circumstances of each case, but, in any case a
distribution on account of an unforeseeable emergency may not be made to the extent that such emergency is or may be relieved
through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Elective Deferrals.<BR>Distributions
because of an unforeseeable emergency must be limited to the amount reasonably necessary to satisfy the emergency need (which
may include amounts necessary to pay any Federal, state, local, or foreign income taxes or penalties reasonably anticipated
to result from the distribution). A determination of the amounts reasonably necessary to satisfy the emergency need must take
into account any additional compensation that is available due to cancellation of the Participant’s Deferral Election
Agreement pursuant to Section 4.1.1 as a result of this paragraph (g).</P>
<P style="font-size:10pt;text-indent:20pt">Notwithstanding anything in this Section 5.4.5 to the contrary, except for a Participant’s
election to request a distribution due to an unforeseeable emergency under paragraph (g), above (which the Participant, in
his or her discretion, may elect to make or not make), the Company shall not provide the Participant with discretion or a direct
or indirect election regarding whether a payment is accelerated pursuant to this Section 5.4.5.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 5.5.</U> <U>Determination of Amount of Installment Payment</U>. An Account to be distributed
in the form of installments will be credited with gains and losses pursuant to Section 4.2 during the payout period. The dollar
amount of each installment payment will be determined as follows. For the first Plan Year in which installment payments are
to be made, the Account balance will be determined as of the distribution commencement date (taking into account any Elective
Deferrals, vested Company contributions and gains and losses credited to the Account pursuant to Section 4.2 as of such date).
For this year, the amount of each installment payment will be determined by dividing the Account balance, as so determined,
by the total number of months that installment payments are required to be made to exhaust the Account. For each Plan Year
thereafter, the dollar amount of each installment payment to be paid during the Plan Year will be determined once during the
year, at the beginning of the Plan Year (the “Valuation Date”), by dividing the Account balance, determined as of
the Valuation Date (taking into account gains and losses credited to the Account pursuant to Section 4.2 and payments that
have
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">11</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">been made from the Account as of such Valuation Date), by the total number of months remaining, determined
as of such Valuation Date, that installment payments are required to be made to exhaust the Account.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 6. SPECIAL RULES FOR DEFERRED STOCK UNIT ACCOUNTS</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">Article 5 of the Plan, as in effect prior to January 1, 2005,
permitted certain Participants to defer the gain they otherwise would have realized on the exercise of stock options granted
to them by the Company and to convert that gain to the right to receive Stock at a future date, expressed in terms of Stock
Units. Each deferral of Stock Units by a Participant was credited to a separate Deferred Stock Unit Account maintained by the
Company on the Participant’s behalf under the Plan, which Account is credited with dividend equivalents in the manner
determined by the Committee and distributed to the Participant at the time and manner elected by the Participant, subject to
the terms of the Plan. Effective December 31, 2004, all deferrals of stock option gains ceased and no new Deferred Stock
Unit Accounts were permitted to be established under the Plan. The Company shall continue to maintain and administer the Deferred
Stock Unit Accounts established prior to January 1, 2005, according to Article 5 of the Plan as in effect immediately
prior to January 1, 2005. The Deferred Stock Unit Accounts shall be treated as grandfathered under, and therefore not
subject to, Section 409A of the Code.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 7. CHANGE IN CONTROL PROVISIONS</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 7.1.</U> <U>Application of Article 7</U>. To the extent applicable, the provisions of this
Article 7 relating to an Event of change in control of the Company shall control, notwithstanding any other provision of the
Plan to the contrary, and shall supersede any other provision of the Plan to the extent inconsistent with the provisions of
this Article 7.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 7.2.</U> <U>Payments to and by the Trust</U>. Pursuant to the terms of the Trust, the Company
is required to make certain payments to the Trust if an Event occurs or if the Company determines that it is probable that
an Event may occur. The obligation of the Company to make such payments shall be considered an obligation under the Plan; provided,
however, that such obligation shall at all times be and remain subject to the terms of the Trust as in effect from time to
time.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 7.3.</U> <U>Legal Fees and Expenses</U>. The Company shall reimburse a Participant or his or
her Beneficiary for all reasonable legal fees and expenses incurred by such Participant or Beneficiary after the date of an
Event in seeking to obtain any right or benefit provided by the Plan; provided however, that: (a) any such reimbursement shall
be made during a period not to exceed 20 years following the date of the Event; (b) the amount eligible for reimbursement during
a taxable year of the Participant or Beneficiary shall not affect the amount eligible for reimbursement in any other taxable
year; (c) the reimbursement is made on or before the last day of the Participant’s or Beneficiary’s taxable year
following the taxable year in which the legal fees and expenses are incurred; and (d) the right to reimbursement is not subject
to liquidation or exchange for another benefit.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 7.4.</U> <U>Late Payment and Additional Payment Provisions</U>. If, after the date of an Event,
the Company delays a payment required to be made under the Plan past the final date that the payment was due to be made, the
amount of each such delayed payment shall be credited with interest at the rate of five percent per year, compounded quarterly,
from the date on which the distribution was required to be made under the terms of the Plan until the actual date of the distribution.
In the event that this interest is to be credited for some period less than a full calendar quarter, the interest shall be
determined and compounded for the fractional quarter. This interest represents a late payment penalty for the delay in payment
and is intended to supplement any other interest or gains credited to a Participant’s Account under the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">Any benefit payments made by the Company after the date on which a benefit distribution
was required to be made under the terms of the Plan shall be applied first against the first due of such benefit distributions
(with application first against any applicable late payment penalty and next against the benefit amount itself) until fully
paid, and next against the next due of such payments in the same manner, and so forth, for purposes of calculating the late
payment penalties hereunder.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">12</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;text-indent:20pt">In the event that payment of benefits has commenced to a Participant or Beneficiary
prior to the date of an Event, then the date on which distribution was required to be made under the terms of the Plan shall
be determined with reference to the payment provision that was in effect prior to the date of the Event. No adjustment may
be made to any payment form which was in effect prior to the date of an Event with respect to any Account which would have
the effect of delaying payments otherwise to be made under the payment form or otherwise increasing the period of time over
which payments are to be made, except as elected by the Participant pursuant to the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">Participants and their Beneficiaries shall be entitled to benefit payments under
the Plan plus the late payment penalty referred to hereinabove first from the Trust and secondarily from the Company, as otherwise
provided in Section 7.2.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 8. FUNDING</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 8.1.</U> <U>Source of Benefits</U>. All benefits under the Plan shall be paid when due by the
Company out of its assets or from the Trust.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 8.2.</U> <U>No Claim on Specific Assets</U>. No Participant shall be deemed to have, by virtue
of being a Participant in the Plan, any claim on any specific assets of the Company such that the Participant would be subject
to income taxation on his or her benefits under the Plan prior to distribution and the rights of Participants and Beneficiaries
to benefits to which they are otherwise entitled under the Plan shall be those of an unsecured general creditor of the Company.</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 9. ADMINISTRATION</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 9.1.</U> <U>Administration.</U> The Plan shall be administered by the Committee. The Company shall bear
all administrative costs of the Plan other than those specifically charged to a Participant or Beneficiary.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 9.2.</U> <U>Powers of Committee</U>. In addition to the other powers granted under the Plan,
the Committee shall have all powers necessary to administer the Plan, including, without limitation, powers to:</P>
<P style="font-size:10pt;padding-left:30pt"> (a) interpret the provisions
of the Plan;</P>
<P style="font-size:10pt;padding-left:30pt"> (b) establish and revise
the method of accounting for the Plan and to maintain the Accounts; and</P>
<P style="font-size:10pt;padding-left:30pt"> (c) establish rules for
the administration of the Plan and to prescribe any forms required to administer the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 9.3.</U> <U>Actions of the Committee</U>. Except as modified by the Board, the Committee (including
any person or entity to whom the Committee has delegated duties, responsibilities or authority, to the extent of such delegation)
has total and complete discretionary authority to determine conclusively for all parties all questions arising in the administration
of the Plan, to interpret and construe the terms of the Plan, and to determine all questions of eligibility and status of employees,
Participants and Beneficiaries under the Plan and their respective interests. Subject to the claims procedures of Section 9.6,
all determinations, interpretations, rules and decisions of the Committee (including those made or established by any person
or entity to whom the Committee has delegated duties, responsibilities or authority, if made or established pursuant to such
delegation) are conclusive and binding upon all persons having or claiming to have any interest or right under the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 9.4.</U> <U>Delegation</U>. The Committee, or any officer designated by the Committee, shall
have the power to delegate specific duties and responsibilities to officers or other employees of the Company or other individuals
or entities. Any delegation may be rescinded by the Committee at any time. Each person or entity to which a duty or responsibility
has been delegated shall be responsible for the exercise of such duty or responsibility and shall not be responsible for any
act or failure to act of any other person or entity.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 9.5.</U> <U>Reports and Records</U>. The Committee, and those to whom the Committee has delegated
duties under the Plan, shall keep records of all their proceedings and actions and shall
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">13</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">maintain books of account, records, and other data as shall be necessary for the proper administration
of the Plan and for compliance with applicable law.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 9.6.</U> <U>Claims Procedure</U>. The Committee shall notify a Participant in writing within
90 days of the Participant’s written application for benefits of his or her eligibility or non-eligibility for benefits
under the Plan. If the Committee determines that a Participant is not eligible for benefits or full benefits, the notice shall
set forth: (a) the specific reasons for such denial; (b) a specific reference to the provision of the Plan on which the denial
is based; (c) a description of any additional information or material necessary for the claimant to perfect his or her claim,
and a description of why it is needed; and (d) an explanation of the Plan’s claims review procedure and other appropriate
information as to the steps to be taken if the Participant wishes to have his or her claim reviewed. If the Committee determines
that there are special circumstances requiring additional time to make a decision, the Committee shall notify the Participant
of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an
additional 90-day period. If a Participant is determined by the Committee to be not eligible for benefits, or if the Participant
believes that he or she is entitled to greater or different benefits, the Participant shall have the opportunity to have his
or her claim reviewed by the Committee by filing a petition for review with the Committee within 60 days after receipt by the
Participant of the notice issued by the Committee. If a Participant does not appeal on time, the Participant will lose the
right to appeal the denial and the right to file suit under ERISA, and the Participant will have failed to exhaust the Plan’s
internal administrative appeal process, which is generally a prerequisite to bringing suit. Said petition shall state the specific
reasons the Participant believes he or she is entitled to benefits or greater or different benefits. Within 60 days after receipt
by the Committee of said petition, the Committee shall afford the Participant (and his or her counsel, if any) an opportunity
to present the Participant’s position to the Committee orally or in writing, and the Participant (or his or her counsel)
shall have the right to review the pertinent documents, and the Committee shall notify the Participant of its decision in writing
within said 60-day period, stating specifically the basis of the decision written in a manner calculated to be understood by
the Participant and the specific provisions of the Plan on which the decision is based. If, because of the need for a hearing,
the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Committee,
but notice of this deferral shall be given to the Participant. <B>In the event an appeal of a denial of a claim for benefits
is denied, any lawsuit to challenge the denial of such claim must be brought within one year of the date the Committee has
rendered a final decision on the appeal.</B>
</P>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 10. AMENDMENTS AND TERMINATION</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 10.1.</U> <U>Amendments</U>. The Company, by action of the Compensation Committee of the Board,
or the Chief Executive Officer or the Senior Vice President of Human Resources of the Company, to the extent authorized by
the Compensation Committee of the Board, may amend the Plan, in whole or in part, at any time and from time to time. Any such
amendment shall be filed with the Plan documents. No amendment, however, may be effective to reduce a Participant’s vested
Account balances immediately before the date of such amendment, except that the Company may change investment funds pursuant
to Section 4.2.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 10.2.</U> <U>Termination</U>. The Company reserves the right to terminate the Plan at any time
by action of the Compensation Committee of the Board. Upon termination of the Plan, all Elective Deferrals and Company contributions
will cease and no future Elective Deferrals or Company contributions will be made. Termination of the Plan shall not operate
to eliminate or reduce a Participant’s vested Account balances.</P>
<P style="font-size:10pt;text-indent:20pt">If the Plan is terminated, payments from the Accounts of all Participants and Beneficiaries
shall be made at the time and in the manner specified in Articles 5 and 6, except as otherwise determined by the Company at
the time of termination, subject to Article 7 and to the requirements of Section 409A.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">14</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;font-weight:bold">
<U>ARTICLE 11. MISCELLANEOUS</U>
</P>
<P style="font-size:10pt;margin-top:3pt;text-indent:20pt">
<U>Section 11.1.</U> <U>No Guarantee of Employment or Contract to Perform Services</U>. Neither the adoption
and maintenance of the Plan nor the execution by the Company of a Deferral Election Agreement with any Participant shall be
deemed to be a contract of employment or for the performance of services between an Affiliate and any Participant. Nothing
contained herein shall give any Participant the right to be retained in the employ of an Affiliate or to perform services for
an Affiliate, or to interfere with the right of an Affiliate to discharge any Participant at any time; nor shall it give an
Affiliate the right to require any Participant to remain in its employ or to perform services for it or to interfere with the
Participant’s right to terminate his or her employment or performance of services at any time.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.2.</U> <U>Release</U>. Any payment of benefits to or for the benefit of a Participant or
a Participant’s Beneficiary that is made in good faith by the Company in accordance with the Company’s interpretation
of its obligations under the Plan shall be in full satisfaction of all claims against the Company for benefits under the Plan
to the extent of such payment.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.3.</U> <U>Notices</U>. Any notice permitted or required under the Plan shall be in writing
and shall be hand-delivered or sent, postage prepaid, by first class mail, or by certified or registered mail with return receipt
requested, to the principal office of the Company, if to the Company, or to the address last shown on the records of the Company,
if to a Participant or Beneficiary. Any such notice shall be effective as of the date of hand-delivery or mailing.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.4.</U> <U>Nonalienation</U>. No benefit payable at any time under the Plan shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, levy, attachment, or encumbrance of any kind by any Participant
or Beneficiary, except with respect to a Domestic Relations Order.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.5.</U> <U>Withholding</U>. The Company may withhold from any payment of benefits or other
compensation payable to a Participant or Beneficiary, or the Company may direct the trustee of the Trust to withhold from any
payment of benefits to a Participant or Beneficiary, such amounts as the Company determines are reasonably necessary to pay
any taxes or other amounts required to be withheld under applicable law.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.6.</U> <U>Captions</U>. Article and section headings and captions are provided for purposes
of reference and convenience only and shall not be relied upon in any way to construe, define, modify, limit, or extend the
scope of any provision of the Plan.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.7.</U> <U>Applicable Law</U>. The Plan and all rights under the Plan shall be governed by
and construed according to the laws of the State of Minnesota, except to the extent such laws are preempted by the laws of
the United States of America.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.8.</U> <U>Invalidity of Certain Provisions</U>. If any provision of the Plan is held invalid
or unenforceable, such invalidity or unenforceability shall not affect any other provision of the Plan and the Plan shall be
construed and enforced as if such provision had not been included. The Plan is intended to comply in form and operation with
Section 409A of the Code, and shall be construed accordingly. If any provision of the Plan does not conform to the requirements
of Section 409A, the Plan shall be construed and enforced as if such provision had not been included.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.9.</U> <U>No Other Agreements</U>. The terms and conditions set forth herein constitute
the entire understanding of the Company and the Participants with respect to the matters addressed herein.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.10.</U> <U>Incapacity</U>. In the event that any Participant is unable to care for his or
her affairs because of illness or accident, any payment due may be paid to the Participant’s spouse, parent, brother,
sister or other person deemed by the Committee to have incurred expenses for the care of such Participant, unless a duly qualified
guardian or other legal representative has been appointed.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.11.</U> <U>Electronic Media</U>. Notwithstanding anything in the Plan to the contrary, but
subject to the requirements of ERISA, the Code, or other applicable law, any action or communication otherwise required to
be taken or made in writing by a Participant or Beneficiary or by the Company or Committee shall be effective if accomplished
by another method or methods required or made
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">15</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">available by the Company or Committee, or their agent, with respect to that action or communication,
including e-mail, telephone response systems, intranet systems, or the Internet.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>Section 11.12.</U> <U>USERRA Compliance</U>. The Participant and Company deferral and payment election
requirements set forth in the Plan are deemed met to the extent a deferral election or payment election is provided to satisfy
the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended.</P>
<P style="font-size:10pt">Dated: 6/12/08</P>
<P style="font-size:10pt;margin-left:60%">MEDTRONIC, INC.</P>
<P style="font-size:10pt;margin-left:60%;margin-top:12pt">By /s/ David A. Ness
<BR> David A. Ness, Vice-President,
<BR> Global Rewards and HR Operations</P>
<BR>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center">16</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:12pt;font-weight:bold;text-align:center"><U>SCHEDULE A</U></P>
<P style="font-size:10pt;text-align:center">Minimum Compensation Level of Sales Force Members Considered to be<BR>“Eligible
Employees” Under the Plan</P>
<P style="font-size:10pt;text-indent:20pt">The minimum compensation level is the annual limit on compensation that can be taken
into account for purposes of qualified retirement plans under Section 401(a)(17) of the Internal Revenue Code (as may be adjusted
from time to time for cost of living pursuant to Section 401(a)(17)(B) of the Internal Revenue Code).</P>
<BR>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center">17</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:12pt;font-weight:bold;text-align:center"><U>SCHEDULE B</U></P>
<P style="font-size:10pt;text-align:center">Manner of Crediting Gains and Losses to Elective Deferral Accounts and Company Contribution
Accounts Pursuant to Section 4.2</P>
<P style="font-size:10pt;text-indent:20pt">The Accounts of all Participants shall be credited with gains and losses as if invested
in one or more of the investments funds listed below that are selected by the Company and communicated to the Participants
from time to time, in the proportions designated by a Participant on an investment election form submitted to the Company by
the Participant. The investment election form shall be submitted to the Company in the form and manner specified by the Committee,
which may be electronically pursuant to Section 11.11. Until and unless changed by the Committee, Participants shall be permitted
to change investment elections, generally, on a daily basis.</P>
<P style="font-size:10pt;text-align:center">Medtronic Interest Income Fund<BR>Vanguard Total Bond Market Index Fund<BR>Vanguard
Wellington Fund<BR>Vanguard 500 Index Fund<BR>Vanguard Windsor II Fund<BR>Vanguard U.S. Growth Fund<BR>Vanguard PRIMECAP Fund<BR>Vanguard
Extended Market Index Fund<BR>Vanguard Explorer Fund<BR>Vanguard International Growth Fund<BR>Medtronic, Inc. Stock Fund</P>
<P style="font-size:10pt;text-indent:20pt">Notwithstanding anything in this Schedule B to the contrary, the Accounts of Participants
who have commenced distributions prior to January 1, 2006, shall continue to be credited with interest in the manner set
forth in the Plan, as in effective prior to the Restatement Date.</P>
<BR>
<BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center">18</P>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>13
<FILENAME>medtronic082604s1_ex10-31.htm
<DESCRIPTION>SUMMARY OF COMPENSATION ARRANGEMENTS
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.31 to Medtronic, Inc. Form 10-K for fiscal year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.31</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Summary of Compensation Arrangements for<BR>Named Executive Officers
and Directors</P>
<P style="font-size:10pt;font-weight:bold">Compensation Arrangements for Named Executive Officers</P>
<P style="font-size:10pt;text-indent:20pt">Following is a description of the compensation arrangements that have been approved
by the Compensation Committee of the Board of Directors of Medtronic, Inc. (the “Compensation Committee”) for
the Company’s Chief Executive Officer, Chief Financial Officer and the other three most highly compensated executive officers
in fiscal year 2008 and Mr. Arthur D. Collins Jr. who completed his tenure as Chief Executive Officer at the beginning
of fiscal year 2008 (the “Named Executive Officers”).</P>
<P style="font-size:10pt"><B><I>Annual Base Salary:</I></B></P>
<P style="font-size:10pt;text-indent:20pt">The Compensation Committee approved the following base salaries, effective April 26,
2008, for five of the Named Executive Officers:</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="TOP" style="font-size:10pt" bgcolor="#D6F3E8">
<TD width="86%" style="padding-left:5pt;text-indent:-5pt">William A. Hawkins<BR>President and Chief Executive Officer</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">1,177,000</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD style="padding-left:5pt;text-indent:-5pt">Gary L. Ellis<BR>Senior Vice President and Chief Financial Officer</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">636,000</TD>
<TD> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Michael F. DeMane</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">725,000</TD>
<TD> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD style="padding-left:5pt;text-indent:-5pt">Stephen H. Mahle<BR>Executive Vice President of Healthcare Policy and Regulatory</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">620,000</TD>
<TD> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt" bgcolor="#D6F3E8">
<TD style="padding-left:5pt;text-indent:-5pt">Jean-Luc Butel<BR>Senior Vice President and President, International</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">525,000</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">Michael DeMane resigned as Chief Operating Officer of Medtronic on April 30,
2008, and entered into an agreement with Medtronic to address the terms of his continued employment with Medtronic. The agreement
provides that Mr. DeMane will remain an employee until May 31, 2009 or, if earlier, the date of an event of default
under the agreement. During the term of his employment he will continue to receive his current salary and will be eligible
to participate in the broad-based benefit plans, programs and arrangements generally available to Medtronic U.S. employees,
including participating in Medtronic’s incentive plan for fiscal year 2009. If Mr. DeMane remains an employee until
May 31, 2009, then Medtronic will pay him lump sum separation amounts of $362,500 and $688,750, representing six months
salary and his bonus for fiscal year 2009, respectively. Mr. DeMane also will be entitled to tax equalization amounts
for income that he earned as an employee of Medtronic that is subject to non-US taxes, consistent with Medtronic’s tax
equalization policy. The agreement contains confidentiality, non-compete and non-solicitation provisions.</P>
<P style="font-size:10pt;text-indent:20pt">Upon assuming the position of employee Chairman effective on the date of the 2007
Annual Shareholder’s Meeting, Mr. Collins’ base salary was established by the Committee at $1,000,000 through
the date of the 2008 Annual Shareholder’s Meeting.</P>
<P style="font-size:10pt"><B><I>Performance Bonus:</I></B></P>
<P style="font-size:10pt;text-indent:20pt">The Compensation Committee has approved the following bonus payments for performance
in fiscal year 2008:</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD width="86%">William A. Hawkins</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">632,295</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Gary L. Ellis</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">251,145</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Michael F. DeMane</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">335,926</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Stephen H. Mahle</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">276,818</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Jean-Luc Butel</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">241,657</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Arthur D. Collins, Jr. (1)</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">273,623</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<BR>
<HR noshade color="black" align="left" size="1" width="20%">
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%">(1)</TD>
<TD width="96%">Reflects a pro-rata performance bonus for the period of time in fiscal year 2008 in which he served as Chairman
and Chief Executive Officer.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;text-indent:20pt">On April 17, 2008, the Compensation Committee of the Board of Directors approved
performance measures for fiscal year 2009. The plan is a performance-based plan with awards based on company, geographic and
business unit performance. For fiscal 2009, the financial measures for the portion of our plan based on company performance
are earnings per share, revenue growth, and operating cash flow with weights of 40%, 40%, and 20% respectively. For fiscal
year 2009, senior executive officers are eligible for target awards ranging from 75% to 120% of base salary. The potential
maximum payouts senior executive officers are eligible for range from 165% to 264% of base salary.</P>
<P style="font-size:10pt"><B><I>Stock Option and Restricted Stock/Restricted Stock Units:</I></B></P>
<P style="font-size:10pt;text-indent:20pt">On October 17, 2007, the Compensation Committee approved the following stock
options and performance based restricted stock grants under the Company’s 2003 Long-Term Incentive Plan. The stock options
were granted on October 29, 2007 at an exercise price of $47.77, which was the fair market value of the Company’s
Common Stock on the date of grant and vest annually in 25% increments. The restricted stock grants will cliff vest in October
2010 (or, in the event of death, disability or retirement, they vest on a pro-rata basis) provided a minimum performance threshold
is achieved.</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>William A. Hawkins</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="18%">52,335 Restricted Stock</TD>
<TD width="1%"> </TD>
<TD width="12%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="18%">188,403 stock options</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Gary L. Ellis</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">11,514 Restricted Stock</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">41,868 stock options</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Michael F. DeMane</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">18,841 Restricted Stock</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">69,082 stock options</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Stephen H. Mahle</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15,701 Restricted Stock</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">56,521 stock options</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Jean-Luc Butel</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,281 Restricted Stock</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">23,028 stock options</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">As Chairman, Mr. Collins did not receive any grants of stock options or restricted
stock in fiscal year 2008.</P>
<P style="font-size:10pt;text-indent:20pt">In addition to the above-mentioned grants, in fiscal year 2008 the Compensation Committee
approved an additional grant of restricted stock units to Mr. Butel with a grant date of April 30, 2007 as outlined
below:</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="TOP" style="font-size:10pt">
<TD>Jean-Luc Butel</TD>
<TD width="2%"> </TD>
<TD align=right>37,786 Restricted Stock Units</TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">The restricted stock units granted to Mr. Butel will vest 50% on the third anniversary
and 50% on the fifth anniversary of the date of grant and will vest on a pro-rata basis in the event of death, disability or
retirement.</P>
<P style="font-size:10pt"><B><I>Long Term Incentive Plan Awards:</I></B></P>
<P style="font-size:10pt;text-indent:20pt">The Compensation Committee approved the following long-term incentive plan awards
established for the three-year cycle ending in fiscal 2008. The amounts listed below include the value of both cash and stock.
Half of the award is paid in Company common stock, with the other half paid in cash. The value of an award is determined at
the end of the performance period based on Medtronic’s financial performance and the fair market value per share on the
date of award payment.</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD width="86%">William A. Hawkins</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%">$</TD>
<TD align="right" width="8%">678,742</TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Gary L. Ellis</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">346,314</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Michael F. DeMane</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">364,552</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Stephen H. Mahle</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">417,038</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Jean-Luc Butel</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">284,735</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Arthur D. Collins, Jr.</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">1,427,656</TD>
<TD> </TD>
</TR>
</TABLE>
</DIV>
<P style="font-size:10pt;text-indent:20pt">On April 17, 2008, the Compensation Committee of the Board of Directors of approved
performance measures for fiscal year the 2009-2011 cycle of the Long-Term Performance Plan. Senior executive officers are eligible
for grants under the Long-Term Performance Plan. Grants are made annually for overlapping three-year performance periods. For
the 2009-2011 award cycle, the financial measures are 3-year cumulative diluted earnings per share growth, 3-year average revenue
growth and three-year return on invested capital, weighted at 50%, 30% and 20% respectively. The amount of cash payable at
the end of the three-year plan period can range from 20% to 180% of the original grant.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;font-weight:bold">Compensation Arrangements for Non-Employee Directors</P>
<P style="font-size:10pt;text-indent:20pt">Non-employee director compensation consists of an annual retainer, an annual cash
stipend for committee chairs and special committee members, an annual stock option grant and an annual grant of deferred stock
units. In addition, all new non-employee directors receive an initial stock option grant and a pro-rated annual stock option
grant based on the number of days remaining in the plan year.</P>
<P style="font-size:10pt;text-indent:20pt">The annual retainer for all non-employee directors for the fiscal year 2009 plan
year is $80,000. The Chairs of the Corporate Governance, Compensation and Technology and Quality Committees receive an annual
cash stipend of $10,000 and the chair of the Audit Committee receives an annual cash stipend of $15,000. In addition, non-chair
members of the Audit Committee receive an annual cash stipend of $5,000. Members of a Special Committee receive an additional
annual fee of $10,000 for each Special Committee upon which they serve, paid at the end of each fiscal quarter ($2,500 per
quarter), so long as the committee is convened. The annual retainer and annual cash stipend are reduced by 25% if a non-employee
director does not attend at least 75% of the total meetings of the Board and Board committees on which such director served
during the relevant plan year.</P>
<P style="font-size:10pt;text-indent:20pt">Non-employee directors are granted stock options on the first business day of each
plan year in an amount equal to the annual retainer divided by the fair market value of a share of Medtronic common stock on
the date of grant (which will also be the exercise price of the option).</P>
<P style="font-size:10pt;text-indent:20pt">Directors are granted deferred stock units on the last business day of the plan year
(each representing the right to receive one share of Medtronic common stock) in an amount equal to the annual retainer earned
during that plan year multiplied by a proration factor (on a pro-rated basis for participants who are directors for less than
the entire plan year) divided by the average closing price of a share of Medtronic common stock for the last 20 trading days
during the plan year. On the date he or she first becomes a director, each new non-employee director receives (1) a one-time
initial stock option grant for a number of shares of Medtronic common stock equal to two times the amount of the annual retainer
divided by the fair market value of a share of Medtronic common stock on the date of grant (which will also be the exercise
price of such option); and (2) a pro-rated annual stock option grant for a number of shares of Medtronic common stock equal
to the amount of the annual retainer (pro-rated based on the number of days remaining in the plan year) divided by the fair
market value of a share of Medtronic common stock on the date of grant (which will also be the exercise price of such option).</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>14
<FILENAME>medtronic082604s1_ex10-37.htm
<DESCRIPTION>LETTER AGREEMENT DATED APRIL 29, 2008
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.37 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.37</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">[LETTERHEAD OF WILLIAM A. HAWKINS]</P>
<P style="font-size:10pt;margin-top:18pt">April 29, 2008</P>
<P style="font-size:10pt;margin-top:6pt">Michael DeMane<BR>4060 Sibley Avenue<BR>Deephaven, MN 55391</P>
<P style="font-size:10pt">Dear Michael:</P>
<P style="font-size:10pt;text-indent:3%">We have sincerely appreciated your dedication and commitment to Medtronic’s mission and success. You have
informed me and the Board of Directors of your decision to pursue opportunities outside Medtronic, and we wish you success in that pursuit.</P>
<P style="font-size:10pt;text-indent:3%">This Letter Agreement (“Agreement”) sets forth the terms and conditions of the termination of your
employment effective May 31, 2009 (or earlier in accordance with this Agreement). This Agreement also sets forth the terms and treatment of certain of your
benefits acquired during your employment. In consideration of the provisions and agreements set forth below and for good and valuable consideration, the
sufficiency and receipt of which are acknowledged by both parties, we have agreed as follows.</P>
<P style="font-size:10pt;font-weight:bold"><U>Article 1. Separation Package.</U></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>1.1</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Separation Award.</B> This Agreement sets forth the terms and
conditions, including the amount, timing and method of payments, as well as the terms and benefits of your transition of employment. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<P style="font-size:10pt;font-weight:bold"><U>Article 2. Transition of Employment.</U></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.1</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Termination of Employment Date.</B> Your last day as a
Medtronic officer shall be April 30, 2008 and your employment with Medtronic shall terminate on the “Termination Date,” which is defined as the
earliest to occur of: (a) May 31, 2009, or (b) the date of an Event of Default (as defined in Section 2.8 below). </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.2</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Transition Period.</B> The period from May 1, 2008
through the Termination Date shall be defined as the Transition Period. During the Transition Period, you will not be required to report to work. However, you
agree to make yourself available (as is mutually convenient) as an employee for consultation regarding the transition of your duties until the Termination Date.
Although you will remain in regular employment through the end of the Transition Period, you will have a Separation from Service on April 30, 2008 (as that
term is defined for purposes of Medtronic’s deferred compensation arrangements subject to Code Section 409A) due to your decreased work commitment. </FONT>
</P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.3</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Transition Period Salary and Benefits.</B> During the
Transition Period, subject to the terms and conditions of this Agreement, Medtronic will pay your current base pay at a gross monthly amount of Sixty Thousand
Four Hundred Seventeen Dollars ($60,417.00) (less withholdings for applicable taxes and authorized deductions), for a total sum of Seven Hundred Eighty Five
Thousand Four Hundred Twenty One Dollars ($785,421.00) to be paid over thirteen (13) months if the Termination Date occurs on May 31, 2009. During this
Transition Period, your current base pay and benefits will continue under the same terms as during your regular employment prior to the Transition Period. For
the purposes of this Transition Period, employee benefits (“Benefits”) shall include only Medical and Dental Coverage, Basic and Optional Life
Insurance, Medtronic Retirement Plan, Supplemental Retirement Plan (401K) Employee Stock Purchase Plan, Salary Continuation, and Long Term Disability and no
other benefits or perquisites. Payment of this transition amount will commence after expiration of the revocation period set forth in Article 4 consistent with
Medtronic’s customary payroll dates and practices, provided you have signed and not revoked this Agreement. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<BR><BR>
<P style="font-size:10pt;text-align:center">1</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.4</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Management Incentive Program (“MIP”) FY08.</B> You
have already earned and will be paid the current forecasted amount earned under the FY08 MIP. The current forecasted MIP FY08 payout is Three Hundred Thousand
Nine Hundred Fifty Five Dollars ($300,955.00) (less standard federal and state withholdings and authorized deductions). Payment of the actual amount based on
business results will be made in accordance with the customary terms of the MIP, and consistent with Medtronic’s customary payroll dates and practices.
</FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.5</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Long Term Performance Plan (PSP/LTPP) FY08.</B> You have
already earned and will be paid the 2006-2008 LTPP payouts as calculated from corporate financial objectives and as approved by the Compensation Committee of
the Board. The 2006-2008 LTPP payout for you is currently forecasted to be Three Hundred Fifty-two Thousand One Hundred Thirty One Dollars ($352,131.00) (less
standard federal and state withholdings and authorized deductions). Payment of the actual amount based on business results will be made to you in accordance
with the terms of the LTP Plan and consistent with Medtronic’s customary payroll dates and practices. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.6</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Deferred Compensation Payout.</B> You will receive a
distribution of funds in your Capital Accumulation Plan consistent with Plan provisions and subject to the requirements of Code Section 409A. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.7</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>No Further Rights and Benefits.</B> Effective May 1,
2008, you shall have no duties and no authority to make any representations or commitments on behalf of Medtronic or in any capacity whatsoever, except as
provided by this Agreement. After expiration of the Transition Period, you shall have no further rights deriving from your employment by Medtronic, and shall
not be entitled to any further compensation or non-vested benefits, except as provided in this Agreement. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.8</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Event of Default.</B> In the event you breach any of your
material obligations under this Agreement, Medtronic will give you written notice of your alleged breach and you will have a reasonable time (not less than 10
days and not more than 30 days) to cure such breach after you receive such written notice. If you fail to cure a material breach of your obligations under this
Agreement within such time period, Medtronic may, upon written notice to you, declare an “Event of Default” and thereupon terminate your Transition
Period salary and benefits under Section 2.3 and your right to receive the payments and benefits under Sections 3.1 through 3.4. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<P style="font-size:10pt;font-weight:bold"><U>Article 3. Separation Package.</U></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.1</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Additional Consideration: Lump Sum Separation
Payment.</B> Subject to the terms and conditions of this Agreement, if the Termination Date occurs on May 31, 2009, Medtronic will pay to
you a lump sum separation amount of Three Hundred Sixty Two Thousand Five Hundred Dollars ($362,500.00) (less withholdings for taxes and authorized deductions),
which is an amount equal to six (6) months salary at your current base salary. Provided you have signed and not revoked this Agreement, this lump sum amount
will be paid to you as soon as practicable, but not later than 15 days, after the Termination Date if the Termination Date is May 31, 2009. If the
Termination Date occurs prior to May 31, 2009, the amount contemplated by this Section 3.1 will not be paid. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.2</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Management Incentive Program (“MIP”)
FY09.</B> Subject to the terms and conditions of this Agreement, if the Termination Date occurs on May 31, 2009, Medtronic will pay you a
FY09 MIP payout in the amount of Six Hundred Eighty Eight Thousand Seven Hundred Fifty Dollars ($688,750.00) (less withholdings for taxes and authorized
deductions). Provided you have signed and not revoked this Agreement, this lump sum amount will be paid to you as soon as practicable after the Termination Date
if the Termination Date is May 31, 2009. If the Termination Date occurs prior to May 31, 2009, the amount contemplated by this Section 3.2 will not be
paid. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.3</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Long Term Performance Plan (LTPP) FY09.</B> Subject to the
terms and conditions of this Agreement, if the Termination Date occurs on or after the last day of Medtronic’s fiscal year 2009, Medtronic will pay you
2007-2009 LTPP payouts as calculated from corporate financial objectives and as approved by the Compensation Committee of the Board. The LTPP payout for you is
currently forecasted to be Two Hundred Eighteen Thousand Eight Hundred Eighty Dollars ($218,880.00) (less standard federal and state withholdings and authorized
deductions). Payment of the actual amount based on business results will be made to you in accordance with the terms of the </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">2</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LTP Plan provided that you have complied with the terms of this Agreement. If the
Termination Date occurs prior to the last day of Medtronic’s fiscal year 2009, this amount will be forfeited consistent with LTP Plan provisions.
</FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.4</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Stock Options and Restricted Stock.</B> During the
Transition Period, your stock options and restricted stock grants will continue to vest. You may, at your sole discretion, exercise any stock option that is
vested or will vest on or before the Termination Date. The exercise of any such option must occur no later than the last date on which exercise is permitted
under the applicable option agreement in the event of termination of employment (i.e. the Termination Date). This exercise period will differ from option to
option and may end as early as the Termination Date. Any options not exercised by the last permitted exercise date will be forfeited. You agree that you are
solely responsible for determining the date on which your options expire per the terms of your option agreement(s). </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.5</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>References.</B> All requests for information for your
prospective future employer relative to your employment at Medtronic will be forwarded to William Hawkins, Medtronic CEO. Hawkins will make a good faith
response to such requests with confirmation of your title, dates of employment, salary and performance. In addition, you may use as references other current or
former Medtronic executives or directors who have agreed to provide you a reference to your prospective employer. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.6</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Regarding
COBRA Benefits.</B> As provided by COBRA, you shall have the right to continue coverage in the medical plan(s) in which you are presently
participating, in accordance with state and federal law, for a period of 18 months following the Termination Date at a cost to you as specified by such plans.
</FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.7</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Tax Equalization.</B> Medtronic will continue to have
Deloitte and Touche prepare your taxes for the earlier of a two year period or until there is no longer any impact of non-US taxes on your income earned while
you were employed by Medtronic. With respect to income earned as an employee of Medtronic that is subject to non-US taxes, you will be tax equalized
consistent with the tax equalization that has been previously provided to you in connection with Medtronic’s agreement with you regarding income earned by
you as an employee of Medtronic outside the US. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.8</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Non-Required Benefits.</B> You acknowledge that by accepting
the provisions of this Agreement, you are receiving certain benefits to which you would not otherwise be entitled. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<P style="font-size:10pt;font-weight:bold"><U>Article 4. Release.</U></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>4.1</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In consideration of the provisions of this Agreement, you, for yourself and your
heirs and executors, fully and completely release and forever discharge Medtronic, its officers, directors, shareholders, board members, representatives,
divisions, parents, subsidiaries, successors and assigns, employees and agents, of and from any and all claims, complaints, causes of action, demands, sums of
money, covenants, contracts, agreements, promises, liabilities, damages or judgments, whatsoever in law or in equity, which you, ever had, now have against
Medtronic or which you, hereafter, can, shall, or may have for or by reason of or in connection with any actions, conduct, decisions, behavior, events,
transactions, omissions or accounts, occurring to the date of this Agreement. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You acknowledge that this Release specifically covers, but is not limited to, any
and all claims, complaints, causes of action or demands (including related attorneys’ fees and costs) which you have or may have against Medtronic relating
in any way to the terms, conditions and circumstances of your employment and the termination, resignation and/or Retirement thereof; whether based on statutory
or common law claims for wrongful discharge, breach of contract, breach of any express or implied promise, misrepresentation, fraud, retaliation, breach of
public policy, infliction of emotional distress, defamation, promissory estoppel, invasion of privacy, or employment discrimination, including but not limited
to claims under the Federal Age Discrimination in Employment Act (29 U.S.C. Sec. 621, <U>et seq.</U>), the Older Workers Benefit Protection Act
(“OWBPA’), the Family Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act, the Sarbanes-Oxley Act of 2002 and state
statutes, if any, addressing the same subject matters or any other theory or basis, whether legal or equitable. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">3</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nothing in this Section 4.1 or elsewhere in this Agreement shall affect or impair
any right that you have to indemnification pursuant to Medtronic’s bylaws and certificate of incorporation or applicable law. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>4.2</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Protected Rights.</B> You expressly acknowledge that this
Release does not relinquish any protected rights you may have under Title VII of the Civil Rights Act of 1964, the Equal Pay Act (“EPA”), the
Americans with Disabilities Act (“ADA”), OWBPA or the Age Discrimination in Employment Act (“ADEA”) (or any similar state or local law,
including but not limited to the Minnesota Human Rights Act)to file a charge, testify, assist or participate in any manner in an investigation, hearing or
proceeding conducted by the Equal Employment Opportunity Commission (or comparable state or local agency) or the Office of Federal Contract Compliance. However,
you may not recover additional compensation or damages as a result of that participation. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>4.3</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notice of Rights of Review and Rescission. You acknowledge
receipt of this Agreement as notice in writing from Medtronic advising you to consult with an attorney prior to executing this Agreement and further acknowledge
that you have been provided the right to consider this Agreement, including the release delineated in this section, for a period of twenty-one (21) days prior
to executing same. The parties acknowledge that you have fifteen (15) days from the date of execution of this Agreement to revoke same, and that this entire
Agreement shall not be effective or enforceable in whole or in part until the revocation period has expired. If you choose to revoke this Agreement within
fifteen (15) days of execution, such revocation shall apply to the entire Agreement, and it is understood and agreed that such revocation shall render this
entire Agreement null and void. To be effective, the rescission must be in writing and delivered by hand or mailed to Jan Erickson, Vice President Human
Resources, 710 Medtronic Parkway, MS: LC245, Minneapolis, MN 55432. If mailed, the rescission must be (a) postmarked within the fifteen-day revocation period;
(b) properly addressed to Jan Erickson; and (c) sent by certified mail, return receipt requested. If you accept this Agreement, the signed Agreement should be
postmarked or returned by the close of the twenty-first day of the consideration period, to Jan Erickson at the address stated herein. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<P style="font-size:10pt;font-weight:bold"><U>Article 5. General Provisions.</U></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.1</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Vacation Pay.</B> You shall receive compensation for accrued
and unused vacation through April 30, 2008 in a lump sum by May 10, 2008. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.2</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Post-Employment Restrictions.</B> For purposes of this
Agreement, terms that are CAPITALIZED have the following defined meanings with respect to those businesses: </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPETITIVE PRODUCT means any good, product, product line or service developed,
designed, produced, manufactured, marketed, promoted, sold, supported, serviced, or in development or the subject of research by anyone other than Medtronic
that is the same as or similar to, or performs any of the same or similar functions as, may be substituted for, or is intended or used for any of the purposes
as any good, product, product line or service you (or other PERSONS at or on behalf of Medtronic) researched, developed, designed, produced, manufactured,
marketed, sold, solicited the sale of, or supported during the term of your employment or about which at any time you received or otherwise obtained or learned
CONFIDENTIAL INFORMATION. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPETITIVE RESEARCH AND SUPPORT means any research, development, analysis,
planning or support services of any kind or nature, including without limitation theoretical and applied research, or business, technical, regulatory or systems
research, analysis, planning or support, that assists, improves or enhances any aspect of the development, design, production, manufacture, marketing,
promotion, sale, support or service of a COMPETITIVE PRODUCT. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONFIDENTIAL INFORMATION means any information relating to Medtronic’s
business that you learned during the course of your employment by Medtronic that derives independent economic value from not being generally known, or readily
ascertainable by proper means, by other PERSONS who can obtain economic value from its disclosure or use. CONFIDENTIAL INFORMATION includes but is not limited
to trade secrets and inventions and, without limitation, may relate to research; development; experiments; clinical investigations; clinical trials; clinical
and </FONT></P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">4</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>product development results and data; engineering; product specifications; computer programs;
computer software; hardware configurations; manufacturing processes; compositions; algorithms; know-how; methods; machines; management systems and techniques;
strategic plans; long-range plans; operating plans; organizational plans; financial plans; financial models; financial projections; nonpublic financial
information; business, financial, planning, and strategic systems and methods; operating systems; information systems; acquisition and divestiture goals, plans,
strategies or targets; regulatory strategies, plans and approaches; quality control systems and techniques; patent and intellectual property strategies, plans
and approaches; vendor and customer data; employee and personnel data; human resources goals, plans and strategies; human resource management techniques; sales
volumes; pricing strategies; sales and marketing plans and strategies, contracts and bids; and any business management techniques that are being planned or
developed, utilized or executed by Medtronic; provided that CONFIDENTIAL INFORMATION does not include information that has been publicly disclosed by Medtronic
or is otherwise publicly available. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONFLICTING ORGANIZATION means any PERSON or entity, and any parent, subsidiary, partner or
affiliate of any PERSON or entity, that engages in, or is intended to become engaged in, the development, design, production, manufacture, promotion, marketing,
sale, support or service of a COMPETITIVE PRODUCT or in COMPETITIVE RESEARCH AND SUPPORT. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PERSON means any natural or judicial person or entity of any kind. </FONT>
</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD ALIGN=LEFT WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.2.1</B> </FONT> </TD>
<TD><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the Transition period and thereafter until May 1, 2010, you will not
engage in any of the following activities: </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="3%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="3%">•</TD>
<TD>Be employed by or affiliated in any capacity with, become an independent contractor or consultant for, a director
of or advisor to, or render any services, directly or indirectly, on behalf of or in support of, any CONFLICTING ORGANIZATION.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>Use, disclose, or rely upon any CONFIDENTIAL INFORMATION to or for the benefit of anyone other than Medtronic, for as long
as the information retains the characteristics described in the definition above.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>Encourage or induce any PERSON to stop or refrain from doing business with Medtronic. </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>Solicit, cause to be solicited, or participate in or promote the solicitation of any PERSON to purchase, use, recommend
or prescribe a COMPETITIVE PRODUCT.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>Solicit, cause to be solicited, or participate in or promote the solicitation of any PERSON to participate in, evaluate,
comment on or otherwise be engaged in COMPETITIVE RESEARCH AND SUPPORT.</TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD ALIGN=LEFT WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.2.2</B> </FONT> </TD>
<TD><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notification Process for Waiver Request; Arbitration. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="3%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="3%">•</TD>
<TD>You will provide to Medtronic advance written notice of your intention to engage in any activity that, if accepted
or undertaken by you, would constitute a breach of the provisions of Section 5.2.1 of this Agreement. Such advance notice will
include a description of the company and your proposed position, scope of duties and responsibilities.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>Medtronic will evaluate the nature and scope of the position and, determine, in the exercise of good faith, whether the
opportunity as described in your notice would constitute a violation of Section 5.2.1 of this Agreement. If Medtronic makes
a determination that the opportunity would constitute a breach of Section 5.2.1, Medtronic may, in the exercise of its reasonable
discretion, grant an appropriate waiver of the provisions of Section 5.2.1. If Medtronic grants an appropriate waiver of the
provisions of Section 5.2.1, such waiver shall be limited to the opportunity as described, and may contain such conditions
and terms as Medtronic considers appropriate under the circumstances.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>•</TD>
<TD>If the waiver is granted, Medtronic will request assurances of protection of Medtronic trade secret information from your
new employer.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">5</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2"><TR style="font-size:10pt" VALIGN="TOP">
<TD width="3%"> </TD>
<TD width="4%"> </TD>
<TD width="3%">•</TD>
<TD width="88%">If you believe that Medtronic’s determination that an opportunity would constitute a breach of Section 5.2.1 was not made in good faith or
that Medtronic did not exercise its reasonable discretion in withholding a waiver, you may fully engage the Arbitration process set forth in Section 5.2.3 set
forth below.</TD>
</TR>
</TABLE>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD ALIGN=LEFT WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.2.3</B> </FONT> </TD>
<TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Arbitration.</B> To the fullest extent permitted by law, all
claims that you may have against Medtronic or any other Released Party, or which Medtronic may have against you, in any way related to the subject matter,
interpretation, application, or alleged breach of this Agreement or the Medtronic Employee Agreement (“Arbitrable Claims”) shall be resolved by
binding arbitration in the state of Minnesota. The Arbitration will be held pursuant to the rules of Arbitration of the Center for Public Resources. The
decision of the arbitrator shall be in writing and shall include a statement of the essential conclusions and findings upon which the decision is based. </FONT>
</P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=7%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Arbitration shall be final and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims. Either party may bring an action in a Minnesota court to compel arbitration under this Agreement and to enforce an arbitration award.
Otherwise, neither party shall initiate or prosecute any lawsuit or administrative action in any way related to any Arbitrable Claim. Notwithstanding the
foregoing, either party may, in the event of an actual or threatened breach of this Agreement or the Medtronic Employee Agreement, seek a temporary restraining
order or injunction in a Minnesota court restraining breach pending a determination on the merits by the arbitrator. </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=7%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS,
INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE. </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.3</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Non-Solicitation of Employees.</B> Unless given prior
consent by the Chief Executive Officer of Medtronic, Inc, you shall not at any time prior to the third (3<SUP>rd</SUP>) anniversary of this Agreement, solicit,
participate in or promote the solicitation of any person who was employed by Medtronic, Inc. during your employment at Medtronic through and including the
Transition Period to leave the employ of Medtronic, Inc. to take employment with any company you are then employed by or serve in any advisory or managerial
capacity (including, without limitation, as a member of a board of directors). You further shall not, on your own behalf or behalf of any company you are then
employed by or serve in any advisory or managerial capacity (including, without limitation, as a member of a board of directors), hire, employ or engage any
such person or entity. You further agree that, during such time, if an employee of Medtronic, Inc. contacts you about prospective employment with any company
you are then employed by or serve in any advisory or managerial capacity (including, without limitation, as a member of a board of directors), you will inform
such individual that you cannot discuss the matter further without informing the CEO of Medtronic. If a Medtronic employee asks you provide reference to a
prospective employer, you may provide such information if you have no current employment, consultative or advisory relationship with that prospective employer.
Medtronic acknowledges that you may not be directly and specifically involved with the recruitment and hiring of a Medtronic employee by your employer. In such
a case, you agree that, upon Medtronic’s request, you will provide, and will use reasonable efforts to cause your employer to provide, evidence that this
provision has not been breached with respect to such recruitment and hiring. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.4</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Agreement Not to Affect Benefits.</B> This Agreement shall
not in any way impair any of your existing rights with respect to pension, retirement and/or other employee benefit plans of Medtronic applicable to former
employees. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.5</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Assignment.</B> The parties represent and warrant that they
have not assigned or transferred to any PERSON or entity, any claim or right released, granted or conveyed pursuant to this Agreement, and the parties covenant
and agree that neither party may assign any rights or benefits under this Agreement without the prior written consent of the other party, which consent shall
not be unreasonably withheld. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">6</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.6</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Company Property.</B> You will return all proprietary or
confidential information and documents, and company property including but not limited to cellular phones, credit cards, calling cards, keys, computers,
employment badges and any company provided hardware and software no later than the Termination Date. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.7</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Cooperation with Employer.</B> During the Transition Period,
you agree to cooperate with Medtronic and provide consulting as needed regarding the transition of your duties; provided that such cooperation and consulting
shall not unreasonably interfere with any employment or business pursuits, including consulting, that you may be engaged in from time to time. You represent
that you have fully and truthfully disclosed to Medtronic any and all concerns you may have related to your employment and/or any alleged or perceived violation
by Medtronic, its agents or employees of Medtronic’s Code of Conduct, its Business Conduct Standards, or any applicable legal, regulatory or quality
requirements. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, you agree to cooperate fully with Medtronic, including its attorneys
or accountants, in connection with any potential or actual litigation, or other real or potential disputes, which directly or indirectly involves Medtronic;
provided that such cooperation shall not unreasonably interfere with any employment or business pursuits, including consulting, that you may be engaged in from
time to time. You agree to appear as a witness and be available to attend depositions, consultations or meetings regarding litigation or potential litigation as
requested by Medtronic. Medtronic acknowledges that these efforts, if necessary, will impose on your time and would likely interfere with other commitments you
may have in the future. Consequently, Medtronic shall attempt to schedule such depositions, consultations or meetings in coordination with your schedule, but
you recognize that scheduling of certain court proceedings, including depositions, may be beyond Medtronic’s control. Likewise, following the transition
period, Medtronic agrees to compensate you for your time hereunder at a mutually agreeable per hour rate of Five Hundred Dollars ($500.00) for actual time spent
traveling to and from and attending such depositions, consultations or meetings, not to include ancillary time spent at hotels and related locations during
evenings between proceedings. Medtronic also agrees to reimburse you for the out-of-pocket expenditures actually and reasonably incurred by you in connection
with the performance of the services contemplated by this Subsection, including hotel accommodations, air fare transportation and meals consistent with
Medtronic’s generally applicable expense reimbursement policies. It is expressly understood by the parties that any compensation paid by Medtronic to you
under this Subsection shall be in exchange for your time and is not intended or understood to be dependent upon the character or content of any information you
disclose in good faith in any such proceedings, meetings or consultation. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.8</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Future Conduct.</B> You agree not to engage in any form of
conduct, or make any statements or representations, that disparage or otherwise harm the reputation, goodwill or commercial interests of Medtronic or its
management. You will refrain from making any statements including disparaging, derogatory or otherwise negative comments or statements about Medtronic to any
person, including specifically but not limited to, any person affiliated in any way with any actual or potential employee, customer, vendor or competitor of
Medtronic or any member of the medical, business, professional or scientific community with whom Medtronic has had or, to your knowledge, has contemplated a
business, professional, or scientific relationship. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Medtronic agrees not to engage in any form of conduct, or make any statements or
representations, that disparage or otherwise harm you or your reputation. Medtronic will refrain from making any statements including disparaging, derogatory or
otherwise negative comments or statements about you to any person. </FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.9</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Indemnification.</B> In the event that any payments,
benefits or other amounts provided to you under this agreement are subject to the excise tax imposed by Code Section 409A, Medtronic will indemnify and hold you
harmless on a net after-tax basis from such excise tax and all interest and penalties imposed upon you with respect to such tax as well as all expenses incurred
by you in contesting such tax. In the event of a claim is made against you for an excise tax under Code Section 409A, you agree that Medtronic may contest such
claim, at its expense, with counsel appointed by Medtronic and reasonably acceptable to you. In addition, in the event that you are named as a </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">7</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>defendant in litigation related to your employment with Medtronic, Medtronic will
indemnify and provide legal defense for you in accordance with the law and subject to the terms and conditions of Medtronic’s directors and officer’s
liability insurance coverage. The foregoing indemnification shall be provided subject to the requirements of Treasury Regulation Section 1.409A-3(i)(l)(v).
</FONT></P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.10</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Confidentiality, Non-Disclosure.</B> The parties agree that
they will not reveal, publish, disseminate or discuss any or all of the background, negotiations or terms and conditions of this Agreement except to one’s
spouse, attorney, accountant or as may be required by law. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.11</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Voluntary Agreement.</B> The parties acknowledge that they
have been provided a full opportunity to review and reflect upon the terms of this Agreement and to seek advice of legal counsel of their choice and that their
signatures are freely, voluntarily and knowingly given. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.12</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Entire Agreement.</B> The parties agree that, except as it
relates to the provisions of the Medtronic Employee Agreement executed by you on or about the date you commenced employment with Medtronic concerning
confidential information, inventions, documents, and tangible things and agreements related to the grant of any stock option, this Agreement supersedes any
prior arrangements, agreements or contracts, whether written, oral or implied (in law or fact), between them and contains the entire understanding and agreement
between the parties and cannot be amended, modified or supplemented in any respect, except by a subsequent written agreement executed by both parties. </FONT>
</P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.13</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Choice of Law.</B> This Agreement shall be governed by the
laws of the State of Minnesota. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.14</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Limited Severability.</B> If any Article or provision(s) of
this Agreement are found by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, then those provisions shall be deemed to be
modified or restricted in the manner necessary to render them valid and enforceable, and this Agreement shall be construed and enforced to the maximum extent
permitted by law, if any. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.15</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Headings.</B> The titles and subtitles of the various
sections and paragraphs of this Agreement are inserted for convenience and shall not be deemed to affect the meaning or construction of any of the terms,
provisions, covenants and conditions of this Agreement. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.16</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Death.</B> In the event of your death during the Transition
Period, the remaining payments to be to you under this Agreement shall be made to your estate and the Termination of Employment Date shall be May 31, 2009.
</FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.17</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Right to Pursue Other Activities and Employment During the Transition
Period.</B> Subject to your compliance with the provisions of this Agreement, you may seek and accept other employment and otherwise engage in
gainful employment, including consulting services, during the Transition Period. You shall continue to be paid the amounts under this Agreement and have the
benefits set forth in this Agreement during the Transition Period; provided, however, that your participation in the Medtronic, Inc. Savings and
Investment Plan, Medtronic, Inc. Retirement Plan and the Medtronic Medical Plan will cease if you accept employment with another Employer. Your
18-month COBRA continuation period will begin at such time. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.18</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Public Announcement.</B> The parties agree to the public
announcement attached as Exhibit A attached hereto as to the change in your employment status with Medtronic. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.19</B> </FONT> </TD>
<TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>No Mitigation.</B> Medtronic agrees you are not required to
seek other employment or to attempt in any way to reduce any amounts payable to you by Medtronic pursuant to this Agreement. Furthermore, the amount of any
payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by you as a result of employment by another employer or
otherwise. </FONT> </P></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<P style="font-size:10pt;text-align:center">8</P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">WHEREFORE, the parties execute this Agreement effective the date set forth below.</P>
<P style="font-size:10pt">MEDTRONIC, INC.</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%">
<TR VALIGN="TOP" style="font-size:10pt">
<TD width=3%>By: </TD>
<TD width=32%>/s/ William Hawkins</TD>
<TD> </TD>
<TD width=35%>/s/ Michael DeMane</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt">
<TD> </TD>
<TD>William Hawkins<BR>President and<BR>Chief Executive Officer</TD>
<TD> </TD>
<TD>Michael DeMane</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:12pt">
<TD colspan=2>Date: 4/29/08</TD>
<TD> </TD>
<TD>Date: 29 April, 2008</TD>
</TR>
</TABLE>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P style="font-size:10pt;text-align:center">9</P>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.38
<SEQUENCE>15
<FILENAME>medtronic082604s1_ex10-38.htm
<DESCRIPTION>FORM OF CHANGE OF CONTROL EMPLOYMENT AGREEMENT
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.38 to Medtronic, Inc. Form 10-K for fiscal year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.38</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">CHANGE OF CONTROL EMPLOYMENT AGREEMENT</P>
<P style="font-size:10pt;text-align:center"></P>
<P style="font-size:10pt;text-indent:20pt">CHANGE OF CONTROL EMPLOYMENT AGREEMENT by and between Medtronic, Inc., a Minnesota
corporation (the “Company”), and <U> </U>(the
“Executive”), dated as of the <U> </U>day of <U> </U>.</P>
<P style="font-size:10pt;text-indent:20pt">The Board of Directors of the Company (the “Board”) has determined that
it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication
of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 2) of
the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention
and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control which are competitive with those of other corporations
and which ensure that the compensation and benefits expectations of the Executive will be satisfied. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.</P>
<P style="font-size:10pt;text-indent:20pt">NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:</P>
<P style="font-size:10pt"> 1. <U>Certain Definitions</U>.</P>
<P style="font-size:10pt"> (a) The “Effective Date” shall
mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control) occurs.
Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive’s employment
with the Company is terminated or the Executive ceases to be an officer of the Company within the 18-months prior to the date
on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment
or cessation of status as an officer (i) was at the request of a third party who has taken steps reasonably calculated to effect
the Change of Control or (ii) otherwise arose in connection with or anticipation of the Change of Control (such a termination
of employment, an “Anticipatory Termination”), then for all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to the date of such termination of employment or cessation of status as an officer.</P>
<P style="font-size:10pt"> (b) The “Change of Control Period”
shall mean the period commencing on the date hereof and ending on the third anniversary of such date; <U>provided</U>, <U>however</U>,
that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless
at least 60 days prior to the Renewal Date the Company shall give written notice to the Executive that the Change of Control
Period shall not be so extended.</P>
<P style="font-size:10pt"> 2. <U>Change of Control.</U> For
the purpose of this Agreement, a “Change of Control” shall mean:</P>
<P style="font-size:10pt;padding-left:30pt"> (a) Any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Company Voting Securities”); <U>provided</U>, <U>however</U>,
that, for purposes of this Section 2(a), the following acquisitions shall not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company or any of its subsidiaries, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries, (4) any acquisition by an
underwriter temporarily holding securities pursuant to an offering of such securities or (5) any acquisition pursuant to a
transaction that complies with clauses (i), (ii) and (iii) of Section 2(c); or</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;padding-left:30pt"> (b) Individuals who,
as of the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least
a majority of the Board; <U>provided</U>, <U>however</U>, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority
of the Incumbent Directors then on the Board shall be considered as though such individual was an Incumbent Director, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened
election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board; or </P>
<P style="font-size:10pt;padding-left:30pt"> (c) Consummation of a
reorganization, merger, statutory share exchange or consolidation (or similar corporate transaction) involving the Company
or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition
of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”),
in each case, unless, immediately following such Business Combination, (i) substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the then-outstanding voting
securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body),
as the case may be, of (A) the entity resulting from such Business Combination (the “Surviving Corporation”) or (B)
if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of 80% or more of the voting
securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), in substantially
the same proportion as their ownership, immediately prior to the Business Combination, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (ii) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial
owner, directly or indirectly, of 30% or more of the outstanding shares of common stock and the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination;
or</P>
<P style="font-size:10pt;padding-left:30pt"> (d) Approval by the shareholders
of the Company of a complete liquidation or dissolution of the Company.</P>
<P style="font-size:10pt"> 3. <U>Employment Period.</U> The
Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the
Company, for the period commencing on the Effective Date and ending on the third anniversary of such date (the “Employment
Period”), <U>provided</U>, <U>that</U> nothing stated in this Agreement shall restrict the right of the Company or the
Executive at any time to terminate the Executive’s employment with the Company, subject to the obligations of the Company
provided for in this Agreement in the event of such terminations. The Employment Period shall terminate upon the Executive’s
termination of employment for any reason.</P>
<P style="font-size:10pt"> 4. <U>Terms of Employment</U>.</P>
<P style="font-size:10pt"> (a) <U>Position and Duties.</U> </P>
<P style="font-size:10pt"> (i) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at
any time during the 90-day period immediately preceding the Effective Date; and (B) the Executive’s services shall be
performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location
less than 50 miles from such location.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt"> (ii) Except as otherwise expressly provided
in this Agreement, during the Employment Period, and excluding any periods of vacation and sick leave to which the Executive
is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.</P>
<P style="font-size:10pt"> (b) <U>Compensation.</U> </P>
<P style="font-size:10pt"> (i) <I>Base Salary.</I> During
the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”) at an annual rate
at least equal to 12 times the highest monthly base salary paid or payable, including any base salary that has been earned
but deferred, to the Executive by the Company and the affiliated companies in respect of the 12-month period immediately preceding
the month in which the Effective Date occurs. The Annual Base Salary shall be paid at such intervals as the Company pays executive
salaries generally. During the Employment Period, the Annual Base Salary shall be reviewed at least annually and shall be increased
at any time and from time to time as shall be substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall
not be reduced after any such increase and the term “Annual Base Salary” as utilized in this Agreement shall refer
to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any
company controlled by, controlling or under common control with the Company. </P>
<P style="font-size:10pt"> (ii) <I>Annual Incentive Payments.</I>
In addition to Annual Base Salary, the Executive shall be paid, for each fiscal year ending during the Employment Period,
an annual bonus (“Annual Bonus”) in cash at least equal to the Executive’s average annual or annualized (for
any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company
for less than 12 full months) award earned by the Executive, including any award earned but deferred, under the Company’s
Executive Incentive Plan, as amended from time to time prior to the Effective Date (or under any successor or replacement annual
incentive plan of the Company or any of the affiliated companies), for the last three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs (the “Three-Year Average Bonus”). If the Executive has not been eligible
to earn, or has not been employed, for each of the last three fiscal years immediately preceding the fiscal year during which
the Effective Date occurs but has earned a bonus for at least one fiscal year during the last three fiscal years immediately
preceding the fiscal year during which the Effective Date occurs, the “Three-Year Average Bonus” shall mean the average
of any annual or annualized bonus actually earned over any such years. If the Executive has not been eligible to earn, or has
not received, such a bonus for any fiscal year prior to the Effective Date, the “Three-Year Average Bonus” shall
mean the Executive’s Target Annual Bonus for the year during which the Effective Date occurs. Each such Annual Bonus shall
be paid no later than two and a half months after the end of the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to defer the receipt of such Annual Bonus pursuant to an arrangement that meets the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).</P>
<P style="font-size:10pt"> (iii) <I>Long-Term Cash and Equity Incentives,
Savings Plans and Retirement Plans.</I> During the Employment Period, the Executive shall be entitled to participate
in all long-term cash incentive, equity incentive, savings and retirement plans, practices, policies and programs (any such
arrangement a “Plan”
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">for purposes of this Agreement) applicable generally to other peer executives of the Company and the
affiliated companies, but in no event shall such Plans provide the Executive with incentive opportunities (measured with respect
to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided
by the Company and the affiliated companies for the Executive under such Plans as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and the affiliated companies.</P>
<P style="font-size:10pt"> (iv) <I>Welfare Benefit Plans.</I>
During the Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit Plans provided by the Company and the affiliated
companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance Plans) to the extent applicable generally to other peer executives of
the Company and the affiliated companies, but in no event shall such Plans provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such Plans in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time
after the Effective Date to other peer executives of the Company and the affiliated companies.</P>
<P style="font-size:10pt"> (v) <I>Expenses.</I> During
the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and procedures of the Company and the affiliated
companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the
Company and the affiliated companies.</P>
<P style="font-size:10pt"> (vi) <I>Business Allowance.</I> During
the Employment Period, the Executive shall be entitled to a business allowance in accordance with the most favorable Plans
of the Company and the affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.</P>
<P style="font-size:10pt"> (vii) <I>Office and Support Staff.</I>
During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of
the foregoing provided to the Executive by the Company and the affiliated companies at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect
to other peer executives of the Company and the affiliated companies.</P>
<P style="font-size:10pt"> (viii) <I>Vacation.</I> During
the Employment Period, the Executive shall be entitled to paid vacations in accordance with the most favorable Plans of the
Company and the affiliated companies as in effect for the Executive at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.</P>
<P style="font-size:10pt"> 5. <U>Termination of Employment.</U>
</P>
<P style="font-size:10pt"> (a) <U>Death or Disability.</U> The
Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If
the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b)
of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment
with the Company shall terminate on the 30th day after receipt of such notice by the Executive (the “Disability Effective
Date”), <U>provided</U>, <U>that</U>, within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the
absence of the Executive from the Executive’s duties with
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">the Company on a full-time basis for 180 consecutive days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be unreasonably
withheld).</P>
<P style="font-size:10pt"> (b) <U>Cause.</U> (i) The Company
may terminate the Executive’s employment during the Employment Period with or without Cause. For purposes of this Agreement,
“Cause” shall mean (A) repeated violations by the Executive of the Executive’s obligations under Section 4(a)
of this Agreement (other than as a result of incapacity due to physical or mental illness) which are demonstrably willful and
deliberate on the Executive’s part, which are not remedied in a reasonable period of time after receipt of written notice
from the Company specifying such violations or (B) the conviction of the Executive of a felony involving moral turpitude.</P>
<P style="font-size:10pt"> (ii) For purposes of Section 5(b)(i)(A)
of this Agreement, no act, or failure to act, on the part of the Executive shall be considered “willful” unless it
is done, or omitted to be done, by the Executive in bad faith and without reasonable belief that the Executive’s action
or omission was in the best interests of the Company. Any act, or failure to act, based upon (A) authority given pursuant to
a resolution duly adopted by the Board, or if the Company is not the ultimate parent corporation of the affiliated companies
and is not publicly traded, the board of directors of the Parent Corporation (the “Applicable Board”), (B) the instructions
of the Chief Executive Officer of the Company or the Parent Corporation or a senior officer of the Company or the Parent Corporation
or (C) the advice of counsel for the Company or the Parent Corporation shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding
the Executive, if the Executive is a member of the Applicable Board) at a meeting of the Applicable Board called and held for
such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable
Board, the Executive is guilty of the conduct described in Section 5(b)(i)(A) of this Agreement, and specifying the particulars
thereof in detail.</P>
<P style="font-size:10pt"> (c) <U>Good Reason.</U> The
Executive’s employment may be terminated by the Executive for Good Reason or by the Executive voluntarily without Good
Reason. For purposes of this Agreement, “Good Reason” shall mean:</P>
<P style="font-size:10pt;padding-left:30pt"> (i) the assignment to
the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any
diminution in such position, authority, duties or responsibilities (whether or not occurring solely as a result of the Company
ceasing to be a publicly traded entity or becoming a subsidiary), excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given
by the Executive;</P>
<P style="font-size:10pt;padding-left:30pt"> (ii) any failure by the
Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the
Executive;</P>
<P style="font-size:10pt;padding-left:30pt"> (iii) the Company’s
requiring the Executive to be based at any office or location other than that described in Section 4(a)(i)(B) of this Agreement
or the Company’s requiring the Executive to be based at a location other than the principal executive offices of the Company
(if the Executive were employed at such location immediately preceding the Effective Date) or the Company’s requiring
the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective
Date;</P>
<P style="font-size:10pt;padding-left:30pt"> (iv) any purported termination
by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;padding-left:30pt"> (v) any failure by the
Company to comply with and satisfy Section 11(c) of this Agreement.</P>
<P style="font-size:10pt">For purposes of this Section 5(c) of this Agreement, any good faith determination of “Good Reason”
made by the Executive shall be conclusive. The Executive’s mental or physical incapacity following the occurrence of an
event described above in clauses (i) through (v) shall not affect the Executive’s ability to terminate employment for
Good Reason.</P>
<P style="font-size:10pt"> (d) <U>Notice of Termination.</U>
Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice
of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as
defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination
shall be not more than 30 days after the giving of such notice). The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause, respectively, shall
not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s respective rights hereunder.</P>
<P style="font-size:10pt"> (e) <U>Date of Termination.</U> “Date
of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive
for Good Reason, the date of receipt of the Notice of Termination or any later date specified in the Notice of Termination,
as the case may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause or Disability
or death, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, (iii)
if the Executive resigns without Good Reason, the date on which the Executive notifies the Company of such termination and
(iv) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the
date of death of the Executive or the Disability Effective Date, as the case may be. The Company and the Executive shall take
all steps necessary (including with regard to any post-termination services by the Executive) to ensure that any termination
described in this Section 5 constitutes a “separation from service” within the meaning of Section 409A of the
Code, and, notwithstanding the foregoing, the date on which such separation from service takes place shall be the “Date
of Termination.”</P>
<P style="font-size:10pt"> 6. <U>Obligations of the Company upon Termination.</U> </P>
<P style="font-size:10pt"> (a) <U>Good Reason; Other Than for Cause,
Death or Disability.</U> If, during the Employment Period, the Company terminates the Executive’s employment
other than for Cause or Disability or the Executive terminates employment for Good Reason, in lieu of further payments pursuant
to Section 4(b) of this Agreement with respect to periods following the Date of Termination:</P>
<P style="font-size:10pt;padding-left:30pt"> (i) the Company shall
pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:</P>
<P style="font-size:10pt;padding-left:60pt"> (A) the sum of (1) the
Executive’s Annual Base Salary through the Date of Termination, and (2) any accrued vacation pay, in each case, to the
extent not theretofore paid (the sum of the amounts described in subclauses (1) and (2), the “Accrued Obligations”);</P>
<P style="font-size:10pt;padding-left:60pt"> (B) an amount equal to
the product of (1) the higher of (I) the Three-Year Average Bonus and (II) the Annual Bonus paid or payable, including any
portion thereof that has been earned but deferred (and annualized for any fiscal year consisting of less than 12 full months
or during which the Executive has been employed for less than 12 full months), for the most recently completed fiscal year
during the Employment Period, if any (such higher amount, the “Highest Annual Bonus”), and (2) a fraction, the numerator
of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is
365, in lieu of any amounts otherwise payable pursuant to the Executive Incentive Plan solely with respect to the year in which
the Date of Termination occurs (the “Pro-Rata Incentive Payment”); and</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;padding-left:60pt"> (C) the amount equal
to the product of (1) three, and (2) the sum of (x) the Executive’s Annual Base Salary, and (y) the Highest Annual Bonus;
and</P>
<P style="font-size:10pt"> (ii) the Executive’s benefits under
the Company’s tax qualified retirement plan (the “Retirement Plan”) and any excess or supplemental retirement
plan in which the Executive participates as of the Effective Date (or if more favorable to the Executive, as of the Date of
Termination) (collectively, the “SERP”) shall be calculated assuming that the Executive’s employment continued
for the remainder of the Employment Period and that during such period the Executive received service credit for all purposes
under such plans and the Executive’s age increased by the number of years that the Executive is deemed to be so employed;
<U>provided</U>, <U>however</U>; that in no event shall the Executive be entitled to age or service credit, as a result of
the application of this Section 6(a)(ii), beyond the maximum age or maximum number of years of service credit, as applicable,
permitted under the Retirement Plan or the SERP; and</P>
<P style="font-size:10pt"> (iii) for the remainder of the Employment
Period, or such longer period as any plan, program, practice or policy may provide (the “Benefit Continuation Period”),
the Company shall provide health care and life insurance benefits to the Executive and/or the Executive’s family at least
equal to, and at the same after-tax cost to the Executive and/or the Executive’s family (taking into account any applicable
required employee contributions), as those which would have been provided to them in accordance with the Plans providing health
care and life insurance benefits and at the benefit level described in Section 4(b)(iv) of this Agreement if the Executive’s
employment had not been terminated; <U>provided</U>, <U>however</U>, that the health care benefits provided during the Benefit
Continuation Period shall be provided in such a manner that such benefits (and the costs and premiums thereof) are excluded
from the Executive’s income for federal income tax purposes and, if the Company reasonably determines that providing continued
coverage under one or more of its health care benefit plans contemplated herein could be taxable to the Executive, the Company
shall provide such benefits at the level required hereby through the purchase of individual insurance coverage; <U>provided</U>,
<U>further</U>, that if the Executive becomes re-employed with another employer and is eligible to receive health care and
life insurance benefits under another employer-provided plan, the health care and life benefits provided hereunder shall be
secondary to those provided under such other plan during such applicable period of eligibility. Following the end of the Benefit
Continuation Period, the Executive shall be eligible for continued health coverage as required by Section 4980B of the Code
or other applicable law (“COBRA Coverage”), as if the Executive’s employment with the Company had terminated
as of the end of such period, and the Company shall take such actions as are necessary to cause such COBRA Coverage not to
be offset by the provision of benefits under this Section 6(a)(iii) and to cause the period of COBRA Coverage to commence at
the end of the Benefit Continuation Period. For purposes of determining eligibility (but not the time of commencement of benefits)
of the Executive for retiree welfare benefits pursuant to the retiree welfare benefit Plans, the Executive shall be considered
to have remained employed until the end of the Employment Period and to have retired on the last day of such period, and the
Company shall cause the Executive to be eligible to commence in the applicable retiree welfare benefit Plans as of the applicable
benefit commencement date; and</P>
<P style="font-size:10pt"> (iv) except as otherwise set forth in the
last sentence of Section 7, to the extent not theretofore paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits that the Executive is otherwise entitled to receive under any other plan, program,
practice, policy, contract, arrangement or agreement of the Company or the affiliated companies (such other amounts and benefits,
the “Other Benefits”).</P>
<P style="font-size:10pt">Notwithstanding the foregoing provisions of Section 6(a)(i) and except as otherwise provided in Section
12(g) with respect to an Anticipatory Termination, in the event that the Executive is a “specified employee” within
the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in
effect on the Date of Termination) (a “Specified Employee”), amounts that would otherwise be payable under Section
6(a)(i) during the six-month period immediately following the Date of Termination (other than the Accrued Obligations) shall
instead be paid, with interest on any delayed payment at the applicable federal rate provided for in
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">Section 7872(f)(2)(A) of the Code (“Interest”), on the first business day after the date
that is six months following the Executive’s “separation from service” within the meaning of Section 409A of
the Code (the “409A Payment Date”).</P>
<P style="font-size:10pt"> (b) <U>Death.</U> If the Executive’s
employment is terminated by reason of the Executive’s death during the Employment Period, the Company shall provide the
Executive’s estate or beneficiaries with the Accrued Obligations, the Pro-Rata Incentive Payment and the timely payment
or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement. The Accrued Obligations
shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this Section
6(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company and the affiliated companies to the estates
and beneficiaries of peer executives of the Company and the affiliated companies under such Plans relating to death benefits,
if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries,
as in effect on the date of the Executive’s death with respect to other peer executives of the Company and the affiliated
companies and their beneficiaries.</P>
<P style="font-size:10pt"> (c) <U>Disability.</U> If the
Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, the Company
shall provide the Executive with the Accrued Obligations and the Pro-Rata Incentive Payment the timely payment or delivery
of the Other Benefits in accordance with the terms of the underlying plans or agreements, and shall have no other severance
obligations under this Agreement. The Accrued Obligations and the Pro-Rata Incentive Payment shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination, <U>provided</U>, that in the event that the Executive is a
Specified Employee, the Pro-Rata Incentive Payment shall be paid, with Interest, to the Executive on the 409A Payment Date.
With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits
at least equal to the most favorable of those generally provided by the Company and the affiliated companies to disabled executives
and/or their families in accordance with such Plans relating to disability, if any, as in effect generally with respect to
other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect
to other disabled peer executives of the Company and the affiliated companies and their families.</P>
<P style="font-size:10pt"> (d) <U>Cause; Other Than for Good Reason.</U> If
the Executive’s employment is terminated for Cause during the Employment Period, the Company shall provide to the Executive (i) the Accrued Obligations and
(ii) the Other Benefits, in each case to the extent theretofore unpaid, and shall have no other severance obligations under this Agreement. If the Executive
voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, the Company shall provide to the Executive the Accrued
Obligations and the Pro-Rata Incentive Payment and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under
this Agreement. In such case, the Accrued Obligations and the Pro-Rata Incentive Payment shall be paid to the Executive in a lump sum in cash within 30 days of
the Date of Termination, <U>provided</U>, that in the event that the Executive is a Specified Employee, the Pro-Rata Incentive Payment shall be paid, with
Interest, to the Executive on the 409A Payment Date.</P>
<P style="font-size:10pt"> 7. <U>Non-Exclusivity of Rights.</U> Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the
Company or any of the affiliated companies (other than participation in any severance plan upon the Executive’s termination of employment during the
Employment Period) and for which the Executive may qualify, nor, subject to Section 12(f) of this Agreement, shall anything herein limit or otherwise affect
such rights as the Executive may have under any contract or agreement with the Company or any of the affiliated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">of the affiliated companies at or subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. Without
limiting the generality of the foregoing, the Executive’s resignation under this Agreement with or without Good Reason,
shall in no way affect the Executive’s ability to terminate employment by reason of the Executive’s “retirement”
under any compensation and benefits plans, programs or arrangements of the affiliated companies, including without limitation
any retirement or pension plans or arrangements or to be eligible to receive benefits under any compensation or benefit plans,
programs or arrangements of the affiliated companies, including without limitation any retirement or pension plan or arrangement
of the affiliated companies or substitute plans adopted by the Company or its successors, and any termination which otherwise
qualifies as Good Reason shall be treated as such even if it is also a “retirement” for purposes of any such plan.
Notwithstanding the foregoing, if the Executive receives payments and benefits pursuant to Section 6(a) of this Agreement,
the Executive shall not be entitled to any other severance pay or benefits under any severance plan, program or policy of the
Company or the affiliated companies, unless expressly provided therein in a specific reference to this Agreement.</P>
<P style="font-size:10pt"> 8. <U>Full Settlement; Legal Fees.</U>
The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred
(within 10 days following the Company’s receipt of an invoice from the Executive) at any time from the Effective Date
of this Agreement through the Executive’s remaining lifetime (or, if longer, through the 20th anniversary of the Effective
Date), to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this Agreement), plus, in each case, Interest, <U>provided</U>,
that the Executive shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar
year next following the calendar year in which such fees and expenses were incurred. The amount of such legal fees and expenses
that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company
is obligated to pay in any other calendar year.</P>
<P style="font-size:10pt"> 9. <U>Certain Additional Payments by the
Company.</U> </P>
<P style="font-size:10pt"> (a) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes
and penalties imposed pursuant to Section 409A of the Code, the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined
that the Executive is entitled to the Gross-Up Payment, but that the Parachute Value (as defined below) of all Payments does
not exceed 110% of the Safe Harbor Amount (as defined below), then no Gross-Up Payment shall be made to the Executive and the
amounts payable under this Agreement shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals
the Safe Harbor Amount. The reduction of
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">Payments to the Safe Harbor Amount, if applicable, shall be made by reducing the Payments under the
following sections of this Agreement in the following order: (i) Section 6(a)(1)(C), (ii) Section 6(a)(1)(B), (iii) Section
6(a)(iii) and (iv) Section 6(a)(ii). For purposes of reducing the Payments to the Safe Harbor Amount, only amounts payable
under this Agreement (and no other Payments) shall be reduced. If the reduction of the amount payable under this Agreement
would not result in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under
the Agreement shall be reduced pursuant to this Section 9(a). The Company’s obligation to make Gross-Up Payments under
this Section 9 shall not be conditioned upon the Executive’s termination of employment.<BR>For the purposes of this
Section 9, (i) the “Parachute Value” of a Payment shall mean the present value as of the date of the change of control
for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent
the Excise Tax will apply to such Payment; and (ii) the “Safe Harbor Amount” means 2.99 times the Executive’s
“base amount,” within the meaning of Section 280G(b)(3) of the Code.</P>
<P style="font-size:10pt"> (b) Subject to the provisions of Section
9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made
by PricewaterhouseCoopers or such other nationally recognized certified public accounting firm as may be designated by the
Executive (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier
time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm shall then be referred to as the “Accounting Firm”
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.</P>
<P style="font-size:10pt"> (c) The Executive shall notify the Company
in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and the Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration
of such period that the Company desires to contest such claim, the Executive shall:</P>
<P style="font-size:10pt;padding-left:30pt"> (i) give the Company
any information reasonably requested by the Company relating to such claim;</P>
<P style="font-size:10pt;padding-left:30pt"> (ii) take such action
in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;</P>
<P style="font-size:10pt;padding-left:30pt"> (iii) cooperate with
the Company in good faith in order to effectively contest such claim; and </P>
<P style="font-size:10pt;padding-left:30pt"> (iv) permit the Company
to participate in any proceedings relating to such claim;</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">
<U>provided</U>, <U>however</U>, that the Company shall bear and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the
Company shall control all proceedings taken in connection with such contest and, at its sole discretion, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of
such claim and may, at its sole option, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive
and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; <U>provided</U>, <U>however</U>, that if the Company pays such claim and directs the
Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment or with
respect to any imputed income in connection with such payment; and <U>provided</U>, <U>further</U>, that any extension of the
statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest
shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing
authority.</P>
<P style="font-size:10pt"> (d) If, after the receipt by the Executive
of a Gross-Up Payment or payment by the Company of an amount on the Executive’s behalf pursuant to Section 9(c), the Executive
becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect
to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 9(c) if applicable)
promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after payment by the Company of an amount on the Executive’s behalf pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination,
then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.</P>
<P style="font-size:10pt"> (e) Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company within five days of the receipt of the Accounting Firm’s determination;
<U>provided</U> that, the Gross-Up Payment shall in all events be paid no later than the end of the Executive’s taxable
year next following the Executive’s taxable year in which the Excise Tax (and any income or other related taxes or interest
or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or,
in the case of amounts relating to a claim described in Section 9(c) that does not result in the remittance of any federal,
state, local and foreign income, excise, social security and other taxes, the calendar year in which the claim is finally settled
or otherwise resolved. The Gross-Up Payment shall be paid to the Executive; <U>provided</U> that the Company, in its sole discretion,
may withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding.</P>
<P style="font-size:10pt"> 10. <U>Confidential Information.</U>
The Executive shall comply with any and all confidentiality agreements with the Company to which the Executive is, or
shall be, a party.</P>
<P style="font-size:10pt"> 11. <U>Successors.</U> </P>
<P style="font-size:10pt"> (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by the Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt"> (b) This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns. Except as provided in Section 11(c) of this Agreement, this
Agreement shall not be assignable by the Company.</P>
<P style="font-size:10pt"> (c) The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.</P>
<P style="font-size:10pt"> 12. <U>Miscellaneous.</U> </P>
<P style="font-size:10pt"> (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of Minnesota, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors
and legal representatives.</P>
<P style="font-size:10pt"> (b) All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:</P>
<P style="font-size:10pt;text-indent:20pt">
<U>If to the Executive</U>:</P>
<P style="font-size:10pt;margin-left:60pt">At the most recent address on file at the Company.</P>
<P style="font-size:10pt;text-indent:20pt">
<U>If to the Company</U>:</P>
<P style="font-size:10pt;margin-left:60pt">Medtronic, Inc.<BR>Legal Dept. LC400<BR>710 Medtronic Parkway<BR>Minneapolis, MN
55432-5604<BR>Attention: General Counsel</P>
<P style="font-size:10pt">or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notices and communications shall be effective when actually received by the addressee.</P>
<P style="font-size:10pt"> (c) The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.</P>
<P style="font-size:10pt"> (d) The Company may withhold from any amounts
payable under this Agreement such United States federal, state, or local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.</P>
<P style="font-size:10pt"> (e) The Executive’s or the Company’s
failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive
or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Sections 5(c)(i) through 5(c)(v) of this Agreement, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.</P>
<P style="font-size:10pt"> (f) The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment
of the Executive by the Company may be terminated by either the Executive or the Company at any time prior to the Effective
Date or, subject to the obligations of the Company provided for in this Agreement in the event of a termination after the Effective
Date, at any time on or after the Effective Date. Moreover, if prior to the Effective Date, (i) the Executive’s employment
with the Company terminates or (ii) the Executive ceases to be an officer of the Company, then the Executive shall have no
further rights under this Agreement. From and after the Effective Date, except with respect to the agreements described in
Section 10 hereof, this Agreement shall supersede any other agreement between the parties with respect to the subject
matter hereof in effect immediately prior to the execution of this Agreement.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt"> (g) Notwithstanding any provision in this
Agreement to the contrary, in the event of an Anticipatory Termination, any payments that are deferred compensation within
the meaning of Section 409A of the Code that the Company shall be required to pay pursuant to Section 6(a)(1) of this Agreement
shall be paid as follows: (i) if such Change of Control is a “change in control event” within the meaning of Section
409A of the Code, (A) except as provided in clause (i)(B), on the date of such Change of Control, or (B) if the Executive is
a Specified Employee and the 409A Payment Date is later than the Change of Control, on the 409A Payment Date, and (ii) if such
Change of Control is not a “change in control event” within the meaning of Section 409A of the Code, (A) except as
provided in clause (ii)(B), on the first business day following the 18-month anniversary of the date of such Anticipatory Termination
(the “Payment Date”), or (B) if the Executive is a Specified Employee and the 409A Payment Date is later than the
date of such Change of Control, on the 409A Payment Date. In the event of an Anticipatory Termination, any payments or benefits
that are not deferred compensation within the meaning of Section 409A of the Code that the Company shall be required to pay
or provide pursuant to Section 6(a) of this Agreement shall be paid or shall commence being provided on the date of the Change
of Control. Interest with respect to the period, if any, from the date of the Change of Control until the actual date of payment
shall be paid on any delayed cash amounts. </P>
<P style="font-size:10pt"> (h) Within the time period permitted by
the applicable Treasury Regulations, the Company may, in consultation with the Executive, modify the Agreement, in the least
restrictive manner necessary and without any diminution in the value of the payments to the Executive, in order to cause the
provisions of the Agreement to comply with the requirements of Section 409A of the Code, so as to avoid the imposition of taxes
and penalties on the Executive pursuant to Section 409A of the Code.</P>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.39
<SEQUENCE>16
<FILENAME>medtronic082604s1_ex10-39.htm
<DESCRIPTION>FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.39 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<img src="logo-small.gif"><P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.39</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">NON-QUALIFIED STOCK OPTION AGREEMENT<BR>2003 LONG-TERM INCENTIVE PLAN</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">1.</TD>
<TD WIDTH="96%"><B>The Option.</B> Medtronic, Inc., a Minnesota corporation (the “Company”), hereby grants to you,
the individual named above, as of the above Grant Date, an option (the “Option”) to purchase the above number of
shares of common stock of the Company (the “Common Stock”), for the above Option Price Per Share, on the terms and
conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Medtronic, Inc. 2003
Long-Term Incentive Plan (the “Plan”). In the event of any inconsistency between the terms of the Agreement and the
Plan, the terms of the Plan shall govern. Capitalized terms not defined in this Agreement shall have the meanings ascribed
to them in the Plan.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>2.</TD>
<TD><B>Exercise of Option.</B> The exercise of the Option is subject to the following conditions and restrictions:</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">(a)</TD>
<TD WIDTH="92%"><U>Expiration</U>. Upon vesting of the underlying shares, the Option may be exercised in whole or in part until
the earlier of (i) the above Expiration Date, or (ii) the expiration of the applicable period following your termination of
employment with the Company or one of its subsidiaries, as provided in Sections 2(c), (d) or (e) below.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(b)</TD>
<TD><U>Schedule of Exercisability</U>. The Option shall become vested and exercisable to the extent of ___% of the above number
of shares of Common Stock on _____________________. Once a portion of the Option has become exercisable, that portion may be
exercised at any time thereafter, subject to the provisions of Paragraph 2(a) above.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(c)</TD>
<TD><U>Death</U>. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option shall become immediately
exercisable in full upon your death, and may be exercised by your Successor (as defined below) at any time, or from time to
time, within five years after the date of your death. For purposes of this Agreement, the term “Successor” shall
mean the legal representative of your estate or the person or persons who may, by bequest or inheritance, or valid beneficiary
designation (as provided in Section 15 of the Plan), acquire the right to exercise the Option.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(d)</TD>
<TD><U>Disability or Retirement</U>. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option
shall become immediately exercisable in full upon your Disability or Retirement (as each such term is defined below), and you
may exercise your Option at any time, or from time to time, within five years after the date of Retirement or determination
of Disability. For purposes of this Agreement, the terms “Disability” and “Retirement” shall have the meanings
ascribed to those terms under any retirement plan of the Company which is qualified under Section 401 of the Code (which
currently provides for retirement on or after age 55, provided you have been employed by the Company and/or one or more Affiliates
for at least ten years, or retirement on or after age 62), or under any disability or retirement plan of the Company or any
Affiliate applicable to you due to employment by a non-U.S. Affiliate or employment in a non-U.S. location, or as otherwise
determined by the Committee.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(e)</TD>
<TD><U>Termination for Any Other Reason</U>. In the event your employment with the Company terminates for any reason other than
those specified in Sections 2(c) and 2(d), the unvested portion of the Option will terminate as of 11:00 p.m. CT (midnight
ET) on the date of termination of your employment. You may exercise that portion of the Option that was vested but unexercised
as of the date of termination of your employment for thirty (30) days following the date of
</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%"> </TD>
<TD width="4%"> </TD>
<TD>termination of your employment. At 11:00 p.m. CT (midnight ET) on the date 30 days after the date of termination of your
employment, the Option will expire.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(f)</TD>
<TD><U>Change in Control</U>. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option shall
become immediately exercisable in full upon the occurrence of a Change in Control.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(g)</TD>
<TD><U>Expiration of Term</U>. Notwithstanding the foregoing paragraphs (a)-(f), in no event shall the Option be exercisable
after the Expiration Date.</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">3.</TD>
<TD WIDTH="96%"><B>Manner of Exercise.</B> To exercise your Option, you must deliver notice of exercise (the “Notice”)
to the administrator (the “Administrator”) designated by the Company to provide services relating to the administration
of the Plan at the time of your exercise. The Notice must be given in the manner specified by the Administrator and must specify
the number of shares of Common Stock (the “Shares”) as to which the Option is being exercised and must be accompanied
by payment of the purchase price for the Shares in cash, check, or by the delivery of Common Stock already owned by you, or
by a combination thereof, pursuant to such forms and subject to such conditions as may be prescribed from time to time by the
Committee.<BR>Exercise shall be deemed to occur on the earlier of the date the Notice and option cost payment are received
by the Administrator or the date you simultaneously exercise the Option and sell the shares, using the proceeds from such sale
to pay the purchase price.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>4.</TD>
<TD><B>Withholding Taxes.</B> You are responsible for payment of any federal, state, local or other taxes which must be withheld
upon the exercise of the Option, and you must promptly pay to the Company any such taxes. The Company and its subsidiaries
are authorized to deduct from any payment owed to you any taxes required to be withheld with respect to the Shares, including
social security and Medicare (FICA) taxes and federal, state and local income tax with respect to income arising from the exercise
of the Option. The Company shall have the right to require the payment of any such taxes before issuing any Shares pursuant
to an exercise of the Option. In lieu of all or any part of a cash payment, you may elect to have a portion of the Shares otherwise
issuable upon exercise of the Option withheld by the Company to satisfy all or part of the withholding tax requirements relating
to the Option exercise with such Shares valued in the same manner as used in computing such withholding taxes. Any fractional
share amount due relating to such tax withholding will be rounded up to the nearest whole share and the additional amount will
be added to your federal withholding.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>5.</TD>
<TD><B>Forfeitures.</B> If you have received or been entitled to receive payment in cash, delivery of Common Stock or a combination
thereof pursuant to this Option within the period beginning six months prior to termination of your employment with the Company
or any Affiliate and ending when the Option expires in accordance with Section 2(a), the Company, in its sole discretion, may
require you to return or forfeit the cash and/or Common Stock received or receivable with respect to this Option (or its economic
value as of the date of the exercise of the Option), in the event that you engage in any of the following activities:</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">a.</TD>
<TD WIDTH="88%">performing services for or on behalf of any competitor of, or competing with, the Company or any Affiliate,
within six months of the date of your termination of employment with the Company or any Affiliate;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>b.</TD>
<TD>unauthorized disclosure of material proprietary information of the Company or any Affiliate;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>c.</TD>
<TD>a violation of applicable business ethics policies or business policies of the Company or any Affiliate; or</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>d.</TD>
<TD>any other occurrence determined by the Committee.</TD>
</TR>
</TABLE>
<P style="font-size:10pt;margin-left:4%">The Company’s right to require forfeiture must be exercised not later than 90
days after the Company acquires actual knowledge of such an activity, but in no event later than 12 months after your termination
of employment with the Company or any Affiliate. Such right shall be deemed to
</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt;margin-left:4%">be exercised upon the Company’s mailing written notice of such exercise to your
most recent home address as shown on the personnel records of the Company. In addition to requiring forfeiture as described
herein, the Company may exercise its rights under this Section 5 by preventing or terminating the exercise of any rights
under this Option or the acquisition of Shares or cash thereunder.</P>
<P style="font-size:10pt;margin-left:4%">If you fail or refuse to forfeit the cash and/or Shares demanded by the Company (adjusted
for any events described in Section 11(a) of the Plan), you shall be liable to the Company for damages equal to the number
of Shares demanded times the highest closing price per share of the Common Stock during the period between the date of termination
of your employment with the Company or any Affiliate and the date of any judgment or award to the Company, together with all
costs and attorneys’ fees incurred by the Company to enforce this provision.</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">6.</TD>
<TD WIDTH="96%"><B>Transferability.</B> Upon prior written approval of the Corporate Secretary of the Company, in his or her
discretion, this Option may be transferred to a member of your “immediate family” (as such term is defined in Rule
16a-1(e) promulgated under the Exchange Act, or any successor rule or regulation) or to one or more trusts whose beneficiaries
are members of your “immediate family” or partnerships in which such family members are the only partners; provided,
however, that (1) you receive no consideration for the transfer and (2) the transferred Option shall continue to be subject
to the same terms and conditions as were applicable to such Option immediately prior to its transfer.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>7.</TD>
<TD><B>Conversion to Stock-Settled Stock Appreciation Rights.</B> At any time following the Grant Date, the Company may convert
this Option to a stock-settled Stock Appreciation Right. Upon exercise of a Stock Appreciation Right, you shall receive Common
Stock with a value equal to the excess of the Fair Market Value of the Shares on the date of exercise over the aggregate of
(a) the Option Price Per Share multiplied by the number of Shares and (b) the amount of any taxes required to be withheld as
a result of such exercise.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>8.</TD>
<TD><B>Agreement.</B> Your receipt of the Option and this Agreement constitutes your agreement to be bound by the terms and
conditions of this Agreement and the Plan.</TD>
</TR>
</TABLE>
<P style="border:thin solid;padding:9pt;font-size:10pt">Accompanying this Agreement are instructions for accessing the Plan and the Plan Summary (prospectus)
from the Administrator’s Internet website or HROC – Stock Administration’s intranet website. You may also request written copies by contacting
HROC - Stock Administration at 763.514.1500.</P>
<P style="font-size:10pt;text-align:center;margin-top:6pt">HROC - Stock Administration, MS V235<BR>Medtronic, Inc.<BR>3850 Victoria
Street North<BR>Shoreview, MN 55126-2978</P>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
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<SEQUENCE>17
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<DOCUMENT>
<TYPE>EX-10.40
<SEQUENCE>18
<FILENAME>medtronic082604s1_ex10-40.htm
<DESCRIPTION>FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT''
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.40 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<img src="logo-small.gif"><P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.40</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">RESTRICTED STOCK UNIT AWARD AGREEMENT<BR>2003 LONG-TERM INCENTIVE PLAN</P>
<P style="font-size:10pt">
<B>1. <U>Restricted Stock Units Award</U>. </B>Medtronic, Inc., a Minnesota corporation (the “Company”),
hereby awards to the individual named above Restricted Stock Units, in the number and at the Grant Date set forth above. The
Restricted Stock Units represent the right to receive shares of common stock of the Company (the “Shares”), subject
to the restrictions, limitations, and conditions contained in this Restricted Stock Unit Award Agreement (the “Agreement”)
and in the Medtronic, Inc. 2003 Long-term Incentive Plan (the “Plan”). Unless otherwise defined in the Agreement,
a capitalized term in the Agreement will have the same meaning as in the Plan. In the event of any inconsistency between the
terms of the Agreement and the Plan, the terms of the Plan will govern.</P>
<P style="font-size:10pt">
<B>2. <U>Vesting and Distribution</U>. </B>The Restricted Stock Units will vest ___________________________. The
Company will issue to you a number of Shares equal to the number of your vested Restricted Stock Units (including any dividend
equivalents described in Section 5, below) ____________________, provided that you have been continuously employed by the Company
and all other conditions and restrictions are met during the period beginning on the Grant Date and ending on the vesting date
(the “Restricted Period”). Notwithstanding the preceding sentence, if you terminate employment during the Restricted
Period due to death, Disability or Retirement, and all other conditions and restrictions are met during the Restricted Period,
______________________________, and the Company will issue you a number of Shares equal to the number of your vested Restricted
Stock Units (including any dividend equivalents described in Section 5, below) _________________________. Upon termination
of your employment during the Restricted Period for any reason other than death, Disability or Retirement, the Restricted Stock
Units will automatically be forfeited in full and canceled by the Company as of 11:00 p.m. CT (midnight ET) on the date
of such termination of employment. For purposes of this Agreement, the terms “Disability” and “Retirement”
shall have the meanings ascribed to those terms under any retirement plan of the Company which is qualified under Section 401
of the Code (which currently provides for retirement on or after age 55, provided you have been employed by the Company and/or
one or more Affiliates for at least ten years, or retirement on or after age 62), or under any disability or retirement plan
of the Company or any Affiliate applicable to you due to employment by a non-U.S. Affiliate or employment in a non-U.S. location,
or as otherwise determined by the Committee.</P>
<P style="font-size:10pt">
<B>3. <U>Forfeitures</U>. </B>If you have received or are entitled to receive delivery of Shares as a result of this
Restricted Stock Units award within the period beginning six months prior to termination of your employment with the Company
or any Affiliate and ending when the Restricted Stock Unit award terminates or is canceled, the Company, in its sole discretion,
may require you to return or forfeit the cash and/or Shares received or receivable with respect to this Restricted Stock Units
award, in the event that you engage in any of the following activities:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%" style="font-weight:bold">a.</TD>
<TD WIDTH="92%">performing services for or on behalf of any competitor of, or competing with, the Company or any Affiliate,
within six months of the date of your termination of employment with the Company or any Affiliate;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD style="font-weight:bold">b.</TD>
<TD>unauthorized disclosure of material proprietary information of the Company or any Affiliate; </TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD style="font-weight:bold">c.</TD>
<TD>a violation of applicable business ethics policies or business policies of the Company or any Affiliate; or</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD style="font-weight:bold">d.</TD>
<TD>any other occurrence determined by the Committee.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">The Company’s right to require forfeiture must be exercised not later than 90 days after the
Company acquires actual knowledge of such an activity, but in no event later than 12 months after your termination of employment
with the Company or any Affiliate. Such right shall be deemed to be exercised upon the Company’s mailing written notice
of such exercise to your most recent home address as shown on the personnel records of the Company. In addition to requiring
forfeiture as described herein, the Company may exercise its rights under this Section 3 by terminating this Restricted
Stock Units Award.</P>
<P style="font-size:10pt">If you fail or refuse to forfeit the cash and/or shares of Common Stock demanded by the Company (adjusted
for any events described in Section 11(a) of the Plan), you shall be liable to the Company for damages equal to the number
of Shares demanded times the highest closing price per share of the Common Stock during the period between the date of termination
of your employment with the Company or any Affiliate and the date of any judgment or award to the Company, together with all
costs and attorneys’ fees incurred by the Company to enforce this provision.</P>
<P style="font-size:10pt">
<B>4. <U>Change in Control</U>. </B>Notwithstanding anything in Section 2 to the contrary, if a Change in Control
of the Company, within the meaning of both the Plan and Section 409A of the Code, occurs during the Restricted Period, and
all other conditions and restrictions are met during the Restricted Period, then the Restricted Stock Units will become 100%
vested upon such Change in Control and, the Company will issue to you a number of Shares equal to the number of your Restricted
Stock Units (including any dividend equivalents described in Section 5, below) within six weeks following the Change in Control.</P>
<P style="font-size:10pt">
<B>5. <U>Dividend Equivalents</U>. </B>You are entitled to receive dividend equivalents on the Restricted Stock Units
generally in the same manner and at the same time as if each Restricted Stock Unit were a Share. These dividend equivalents
will be credited to you in the form of additional Restricted Stock Units. The additional Restricted Stock Units will be subject
to the terms of this Agreement.</P>
<P style="font-size:10pt">
<B>6. <U>Withholding Taxes</U>. </B>You are responsible to promptly pay any Social Security and Medicare taxes (together,
“FICA”) due upon vesting of the Restricted Stock Units, and any Federal, State, and local taxes due upon distribution
of the Shares. The Company and its subsidiaries are authorized to deduct from any payment to you any such taxes required to
be withheld. As described in Section 4(e) of the Plan, you may elect to have the Company withhold a portion of the Shares issued
upon conversion of the Restricted Stock Units to satisfy all or part of the withholding tax requirements. You may also elect,
at the time you vest in the Restricted Stock Units, to pay your FICA liability due with respect to those Restricted Stock Units
out of those units. If you choose to do so, the Company will reduce the number of your vested Restricted Stock Units accordingly.
The amount that is applied to pay FICA will be subject to Federal, State, and local taxes.</P>
<P style="font-size:10pt">
<B>7. <U>Limitation of Rights</U>. </B>Except as set forth in the Agreement, until the Shares are issued to you in
settlement of your Restricted Stock Units, you do not have any right in, or with respect to, any Shares (including any voting
rights) by reason of the Agreement. Further, you may not transfer or assign your rights under the Agreement and you do not
have any rights in the Company’s assets that are superior to a general, unsecured creditor of the Company by reason of
the Agreement.</P>
<P style="font-size:10pt">
<B>8. <U>No Employment Contract</U>. </B>Nothing contained in the Plan or Agreement creates any right to your continued
employment or otherwise affects your status as an employee at will. You hereby acknowledge that Medtronic and you each have
the right to terminate your employment at any time for any reason or for no reason at all.</P>
<P style="font-size:10pt">
<B>9. <U>Amendments to Agreement Under Section 409A of the Code</U>. </B>You acknowledge that the Agreement and the
Plan, or portions thereof, may be subject to Section 409A of the Internal Revenue Code; that it is anticipated that comprehensive
rules interpreting this Code section will be issued; and that changes may need to be made to the Agreement to avoid adverse
tax consequences to you under Section 409A. You agree that following the issuance of such rules, the Company may amend the
Agreement as it deems necessary or desirable to avoid such adverse tax consequences; provided, however, that the Company shall
accomplish such amendments in a manner that preserves your intended benefits under the Agreement to the greatest extent possible.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt"><B>10. <U>Agreement</U>. </B>You agree to be bound by the terms and conditions of this Agreement and the Plan. Your
signature is not required in order to make this Agreement effective. </P>
<P style="border:thin solid;padding:9pt;font-size:10pt">Accompanying this Agreement are instructions for accessing the Plan and the Plan Summary (prospectus)
from the Plan administrator’s Internet website or HROC – Stock Administration’s intranet website. You may also request written copies by
contacting HROC - Stock Administration at 763.514.1500.</P>
<P style="font-size:10pt;text-align:center;margin-top:6pt">HROC - Stock Administration, MS V235<BR>Medtronic, Inc.<BR>3850 Victoria
Street North<BR>Shoreview, MN 55126-2978</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>19
<FILENAME>medtronic082604s1_ex10-41.htm
<DESCRIPTION>FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 10.41 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<img src="logo-small.gif"><P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 10.41</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">RESTRICTED STOCK UNIT AWARD AGREEMENT<BR>2003 LONG-TERM INCENTIVE PLAN</P>
<P style="font-size:10pt">
<B>1. <U>Restricted Stock Units Award</U>. </B>Medtronic, Inc., a Minnesota corporation (the “Company”),
hereby awards to the individual named above Restricted Stock Units, in the number and at the Grant Date set forth above. The
Restricted Stock Units represent the right to receive shares of common stock of the Company (the “Shares”), subject
to the restrictions, limitations, and conditions contained in this Restricted Stock Unit Award Agreement (the “Agreement”)
and in the Medtronic, Inc. 2003 Long-term Incentive Plan (the “Plan”). Unless otherwise defined in the Agreement,
a capitalized term in the Agreement will have the same meaning as in the Plan. In the event of any inconsistency between the
terms of the Agreement and the Plan, the terms of the Plan will govern.</P>
<P style="font-size:10pt">
<B>2. <U>Vesting and Distribution</U>. </B>The Restricted Stock Units will vest ___________________________. The
Company will issue to you a number of Shares equal to the number of your vested Restricted Stock Units (including any dividend
equivalents described in Section 5, below) ____________________, provided that you have been continuously employed by the Company
and all other conditions and restrictions are met during the period beginning on the Grant Date and ending on the vesting date
(the “Restricted Period”). Notwithstanding the preceding sentence, if you terminate employment during the Restricted
Period due to death, Disability or Retirement, and all other conditions and restrictions are met during the Restricted Period,
______________________________, and the Company will issue you a number of Shares equal to the number of your vested Restricted
Stock Units (including any dividend equivalents described in Section 5, below) _________________________. Upon termination
of your employment during the Restricted Period for any reason other than death, Disability or Retirement, the Restricted Stock
Units will automatically be forfeited in full and canceled by the Company as of 11:00 p.m. CT (midnight ET) on the date
of such termination of employment. For purposes of this Agreement, the terms “Disability” and “Retirement”
shall have the meanings ascribed to those terms under any retirement plan of the Company which is qualified under Section 401
of the Code (which currently provides for retirement on or after age 55, provided you have been employed by the Company and/or
one or more Affiliates for at least ten years, or retirement on or after age 62), or under any disability or retirement plan
of the Company or any Affiliate applicable to you due to employment by a non-U.S. Affiliate or employment in a non-U.S. location,
or as otherwise determined by the Committee.</P>
<P style="font-size:10pt">
<B>3. <U>Forfeitures</U>. </B>If you have received or are entitled to receive delivery of Shares as a result of this
Restricted Stock Units award within the period beginning six months prior to termination of your employment with the Company
or any Affiliate and ending when the Restricted Stock Units award terminates or is canceled, the Company, in its sole discretion,
may require you to return or forfeit the cash and/or Shares received or receivable with respect to this Restricted Stock Units
award, in the event that you engage in any of the following activities:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%" style="font-weight:bold">a.</TD>
<TD WIDTH="88%">performing services for or on behalf of any competitor of, or competing with, the Company or any Affiliate,
within six months of the date of your termination of employment with the Company or any Affiliate;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD style="font-weight:bold">b.</TD>
<TD>unauthorized disclosure of material proprietary information of the Company or any Affiliate;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD style="font-weight:bold">c.</TD>
<TD>a violation of applicable business ethics policies or business policies of the Company or any Affiliate; or</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD style="font-weight:bold">d.</TD>
<TD>any other occurrence determined by the Committee.</TD>
</TR>
</TABLE>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">The Company’s right to require forfeiture must be exercised not later than 90 days after the
Company acquires actual knowledge of such an activity, but in no event later than 12 months after your termination of employment
with the Company or any Affiliate. Such right shall be deemed to be exercised upon the Company’s mailing written notice
of such exercise to your most recent home address as shown on the personnel records of the Company. In addition to requiring
forfeiture as described herein, the Company may exercise its rights under this Section 3 by terminating this Restricted
Stock Units award.</P>
<P style="font-size:10pt">If you fail or refuse to forfeit the cash and/or shares of Common Stock demanded by the Company (adjusted
for any events described in Section 11(a) of the Plan), you shall be liable to the Company for damages equal to the number
of Shares demanded times the highest closing price per share of the Common Stock during the period between the date of termination
of your employment with the Company or any Affiliate and the date of any judgment or award to the Company, together with all
costs and attorneys’ fees incurred by the Company to enforce this provision.</P>
<P style="font-size:10pt">
<B>4. <U>Change in Control</U>. </B>Notwithstanding anything in Section 2 to the contrary, if a Change in Control
of the Company, within the meaning of both the Plan and Section 409A of the Code, occurs during the Restricted Period, and
all other conditions and restrictions are met during the Restricted Period, then the Restricted Stock Units will become 100%
vested upon such Change in Control and the Company will issue to you a number of Shares equal to the number of your Restricted
Stock Units (including any dividend equivalents described in Section 5, below) within six weeks following the Change in Control.</P>
<P style="font-size:10pt">
<B>5. <U>Dividend Equivalents</U>. </B>You are entitled to receive dividend equivalents on the Restricted Stock Units
generally in the same manner and at the same time as if each Restricted Stock Unit were a Share. These dividend equivalents
will be credited to you in the form of additional Restricted Stock Units. The additional Restricted Stock Units will be subject
to the terms of this Agreement.</P>
<P style="font-size:10pt">
<B>6. <U>Withholding Taxes</U>. </B>You are responsible to promptly pay any Social Security and Medicare taxes (together,
“FICA”) due upon vesting of the Restricted Stock Units, and any Federal, State, and local taxes due upon distribution
of the Shares. The Company and its subsidiaries are authorized to deduct from any payment to you any such taxes required to
be withheld. As described in Section 4(e) of the Plan, you may elect to have the Company withhold a portion of the Shares issued
upon conversion of the Restricted Stock Units to satisfy all or part of the withholding tax requirements.</P>
<P style="font-size:10pt">
<B>7. <U>Limitation of Rights</U>. </B>Except as set forth in the Agreement, until the Shares are issued to you in
settlement of your Restricted Stock Units, you do not have any right in, or with respect to, any Shares (including any voting
rights) by reason of the Agreement. Further, you may not transfer or assign your rights under the Agreement and you do not
have any rights in the Company’s assets that are superior to a general, unsecured creditor of the Company by reason of
the Agreement.</P>
<P style="font-size:10pt">
<B>8. <U>No Employment Contract</U>. </B>Nothing contained in the Plan or Agreement creates any right to your continued
employment or otherwise affects your status as an employee at will. You hereby acknowledge that Medtronic and you each have
the right to terminate your employment at any time for any reason or for no reason at all.</P>
<P style="font-size:10pt">
<B>9. <U>Amendments to Agreement Under Section 409A of the Code</U>. </B>You acknowledge that the Agreement and the
Plan, or portions thereof, may be subject to Section 409A of the Internal Revenue Code; and that changes may need to be made
to the Agreement to avoid adverse tax consequences to you under Section 409A. You agree that the Company may amend the Agreement
as it deems necessary or desirable to avoid such adverse tax consequences; provided, however, that the Company shall accomplish
such amendments in a manner that preserves your intended benefits under the Agreement to the greatest extent possible.</P>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<P style="font-size:10pt">
<B>10. <U>Agreement</U>. </B>You agree to be bound by the terms and conditions of this Agreement and the Plan. Your
signature is not required in order to make this Agreement effective.</P>
<P style="border:thin solid;padding:9pt;font-size:10pt">Accompanying this Agreement are instructions for accessing the Plan and the Plan
Summary (prospectus) from the Plan administrator’s Internet website or HROC – Stock Administration’s intranet
website. You may also request written copies by contacting HROC – Stock Administration at 763.514.1500.</P>
<P style="font-size:10pt;text-align:center;margin-top:6pt">HROC - Stock Administration, MS V235<BR>Medtronic, Inc.<BR>3850 Victoria Street
North<BR>Shoreview, MN 55126-2978</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>20
<FILENAME>medtronic082604s1_ex12-1.htm
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 12.1 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 12.1</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">MEDTRONIC, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES</P>
<P style="font-size:10pt;text-indent:20pt">The ratio of earnings to fixed charges for the fiscal years ended April 25,
2008, April 27, 2007, April 28, 2006, April 29, 2005, April 30, 2004 and April 25, 2003 was computed
based on Medtronic’s historical consolidated financial information included in Medtronic’s most recent Annual Report
incorporated by reference on Form 10-K.</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM" style="font-size:8pt">
<TH colspan="2" align="left"></TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 25,<BR>2008</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 27,<BR>2007</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 28,<BR>2006</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 29,<BR>2005</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 30,<BR>2004</TH>
<TH> </TH>
<TH> </TH>
<TH colspan="2">Year ended<BR>April 25,<BR>2003</TH>
<TH> </TH>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD width="26%">Earnings:</TD>
<TD width="1%"> </TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD align="right" width="8%"></TD>
<TD width="1%"> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Net earnings</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,231</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,802</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,547</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">1,804</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">1,959</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">1,600</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Income taxes</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">654</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">713</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">614</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">740</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">838</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">742</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Minority interest (loss)/income</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(1</TD>
<TD>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(1</TD>
<TD>)</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD style="padding-left:5pt;text-indent:-5pt">Capitalized interest<SUP>(1)</SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(10</TD>
<TD>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(3</TD>
<TD>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(3</TD>
<TD>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(1</TD>
<TD>)</TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">(1</TD>
<TD>)</TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,875</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">3,512</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">3,158</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,542</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,800</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,340</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD>Fixed Charges:</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right"></TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD style="padding-left:5pt;text-indent:-5pt">Interest expense<SUP>(2)</SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">255</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">229</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">116</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">55</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">56</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">47</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD style="padding-left:5pt;text-indent:-5pt">Capitalized interest<SUP>(1)</SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">10</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD style="padding-left:5pt;text-indent:-5pt">Amortization of debt issuance costs<SUP>(3)</SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">12</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">14</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">—</TD>
<TD> </TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD style="padding-left:5pt;text-indent:-5pt">Rent interest factor<SUP>(4)</SUP></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">41</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">34</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">26</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">24</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">21</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">18</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">318</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">280</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">149</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">81</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">77</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">66</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt" bgcolor="#D6F3E8">
<TD style="padding-left:5pt;text-indent:-5pt">Earnings before income taxes and fixed charges</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">3,193</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">3,792</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">3,307</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,623</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,877</TD>
<TD> </TD>
<TD> </TD>
<TD>$</TD>
<TD align="right">2,406</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt">
<TD>Ratio of earnings to fixed charges</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">10</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">14</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">22</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">32</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">37</TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">36</TD>
<TD> </TD>
</TR>
<TR>
<TD colspan="2"></TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
<TD></TD>
<TD colspan="2" style="border-top:double black;border-width:3px;font-size:1pt"> </TD>
<TD></TD>
</TR>
</TABLE>
</DIV>
<BR>
<HR noshade color="black" align="left" size="1" width="20%">
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD width="4%"></TD>
<TD width="96%"></TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%">(1)</TD>
<TD WIDTH="96%">Capitalized interest relates to construction projects in process.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(2)</TD>
<TD>Interest expense consists of interest on indebtedness.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(3)</TD>
<TD>Represents the amortization of debt issuance costs incurred in connection with the Company’s registered debt securities.
See Note 7 to the consolidated financial statements for further information regarding the debt securities.</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD>(4)</TD>
<TD>Approximately one-third of rental expense is deemed representative of the interest factor.</TD>
</TR>
</TABLE>
<BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>21
<FILENAME>medtronic082604s1_ex13.htm
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 13 to Medtronic, Inc. Form 10-K for fiscal year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<p style=' margin-bottom:12pt; margin-top:0pt;text-align:right;'><b><font size=2>Exhibit 13 </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2> </font></p>
<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font size=2>Table of Contents </font></b></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#managements"><font size=2>Management’s Discussion and Analysis of Financial Condition and Results of Operations</font></a></p> </td>
<TD WIDTH="21" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="14" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD WIDTH="14" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#reports_of_management"><font size=2>Reports of Management</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>32</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#report_of_independent"><font size=2>Report of Independent Registered Public Accounting Firm</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>33</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#statements_of_earnings"><font size=2>Consolidated Statements of Earnings</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>34</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#balance_sheets"><font size=2>Consolidated Balance Sheets</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>35</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#shareholders_equity"><font size=2>Consolidated Statements of Shareholders’ Equity</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#cash_flows"><font size=2>Consolidated Statements of Cash Flows</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#notes"><font size=2>Notes to Consolidated Financial Statements</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>38</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#financial_data"><font size=2>Selected Financial Data</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><a href="#price_range"><font size=2>Price Range of Medtronic Stock</font></a></p> </td>
<td width="21" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="14" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>79</font></p> </td>
<td width="14" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<BR><BR><BR><BR><BR><BR><BR><BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>1</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><a name="managements"></a> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<b><font size=2>Management’s Discussion and Analysis of Financial Condition and Results of Operations</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Understanding Our Financial Information</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following discussion and analysis provides information management believes to be relevant to understanding the financial condition and results of operations of Medtronic, Inc. (Medtronic or the Company). You should read this discussion and analysis along with our consolidated financial statements and related Notes thereto as of April 25, 2008 and April 27, 2007 and for each of the three fiscal years ended April 25, 2008, April 27, 2007, and April 28, 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Organization of Financial Information </font></b></i><font
size=2>Management’s discussion and analysis, presented on pages 2 to 31 of this report, provides material historical and prospective disclosures
designed to enable investors and other users to assess our financial condition and results of operations. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The consolidated financial statements are presented on
pages 34 to 77 of this report, and include the consolidated statements of earnings, consolidated balance sheets, consolidated statements of
shareholders’ equity, consolidated statements of cash flows and the related Notes, which are an integral part of the consolidated financial statements.
</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Financial Trends</font></b></i><font size=2> Throughout this financial information, you will read about transactions or events that materially contribute to or reduce earnings and materially affect financial trends. We refer to these transactions and events as either special (such as asset impairments), restructuring, certain litigation, and purchased in-process research and development (IPR&D) charges, or certain tax adjustments. These charges, or benefits, result from facts and circumstances that vary in frequency and/or impact to operations. While understanding these charges is important in understanding and evaluating financial trends, other transactions or events may also have a material impact on financial trends. A complete understanding of the special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments is necessary in
order to estimate the likelihood that financial trends will continue. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our fiscal year-end is the last Friday in April, and therefore, the total weeks in a fiscal year can fluctuate between fifty-two and fifty-three weeks. Fiscal years 2008, 2007, and 2006 consisted of fifty-two weeks. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Executive Level Overview </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We are the global leader in medical
technology - alleviating pain, restoring health, and extending life for millions of people around the world. During the first quarter of fiscal year 2008, we
revised our operating segment reporting to combine our former Vascular and Cardiac Surgery businesses into the new CardioVascular operating segment.
Additionally, the Navigation business was separated from Spinal for most of fiscal year 2008 and was reported as part of a stand-alone segment named
Corporate Technologies and New Ventures. In the fourth quarter of fiscal year 2008, the decision was made to include the Navigation business as a component of
the Ear, Nose and Throat (ENT) segment, which was renamed Surgical Technologies to reflect the expanding scope and focus of this business. As a result, the
Company now functions in seven operating segments, consisting of Cardiac Rhythm Disease Management (CRDM), Spinal, CardioVascular, Neuromodulation, Diabetes,
Surgical Technologies, and Physio-Control. The applicable information for fiscal years 2007 and 2006 has been reclassified to conform to the current
presentation. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Through these seven operating segments, we develop, manufacture,
and market our medical devices in more than 120 countries. Our primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological
disorders, spinal conditions and musculoskeletal trauma, urological and digestive disorders, diabetes, and ear, nose, and throat conditions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 2, 2007, we consummated our $4.203 billion
acquisition of Kyphon Inc. (Kyphon) and it became our wholly owned subsidiary. Kyphon develops and markets medical devices designed to restore and preserve
spinal function using minimally invasive technology. Kyphon’s primary products are used in balloon kyphoplasty for the treatment of spinal compression
fractures caused by osteoporosis or cancer, and in the interspinous process decompression (IPD) procedure for treating the symptoms of lumbar spinal stenosis.
It is expected that the acquisition of Kyphon will add to the growth of our existing Spinal business by extending its product offerings into some of the fastest
growing product segments of the spine market, enabling us to provide physicians with a broader range of therapies for use at all stages of the care continuum.
For the fiscal year ended April 25, 2008, Kyphon contributed $298 million of revenue to the Spinal business. See the “Acquisitions” section of this
management’s discussion and analysis for further information.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>2</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net earnings for the fiscal year ended April 25, 2008 were
$2.231 billion, a $571 million, or 20 percent, decrease from net earnings of $2.802 billion for the fiscal year ended April 27, 2007. Diluted earnings per share
were $1.95 and $2.41 for the fiscal years ended April 25, 2008 and April 27, 2007, respectively. Fiscal year 2008 net earnings include after-tax special,
restructuring, IPR&D and certain litigation charges that decreased net earnings by $742 million and had a $0.65 impact on diluted earnings per share. Fiscal
year 2007 net earnings include after-tax special, restructuring and certain litigation charges, and certain tax adjustments that increased net earnings by $5
million and had no net impact on diluted earnings per share. See further discussion of these charges/benefits in the “Special, Restructuring, Certain
Litigation, and IPR&D Charges, and Certain Tax Adjustments” section of this management’s discussion and analysis. The fiscal year 2008 special,
restructuring, IPR&D and certain litigation charges more than offset the positive earnings growth from core operations. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Net Sales</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>% Change</font></b></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" WIDTH="64%">
<p style='margin:0in;margin-bottom:0pt'><b><font size=1>(</font></b><i><b><font size=1>dollars in millions)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Cardiac Rhythm Disease Management</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,963</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,876</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:6.75pt'><font size=2>2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Spinal</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,982</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,417</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>23</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>CardioVascular</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,131</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,909</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Neuromodulation</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,311</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,183</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Diabetes</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,019</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>863</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>18</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Surgical Technologies</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>780</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>666</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:4.5pt'><font size=2>17</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Physio-Control</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>329</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>385</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(15</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Total Net Sales</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><b><font size=2>13,515</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>12,299</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><b><font size=2>10</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>%</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net sales in fiscal year 2008 were $13.515 billion, an increase
of 10 percent from the prior fiscal year. Foreign currency translation had a favorable impact of $400 million on net sales when compared to fiscal year 2007.
The net sales increase in the current fiscal year was fortified by the addition of Kyphon to our Spinal business and led by organic double digit sales growth in
the CardioVascular, Diabetes, Neuromodulation, and Surgical Technologies businesses. Growth outside the United States (U.S.) was also especially strong, where
six of our seven operating segments had strong double digit growth rates. See our discussion in the “Net Sales” section of this
management’s discussion and analysis for more information on the results of our significant operating segments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We remain committed to our Mission of developing lifesaving and
life enhancing therapies to alleviate pain, restore health, and extend life. The diversity and depth of our current product offerings enable us to provide
medical therapies to patients worldwide. We will work to improve patient access through well planned studies, which show the cost-effectiveness of our therapies
and our alliance with patients, clinicians, regulators, and reimbursement agencies. Our investments in research and development, strategic acquisitions,
expanded clinical trials, and infrastructure provide the foundation for our growth. We are confident in our ability to drive long-term shareholder value using
the principles of our Mission, our strong product pipelines, and continued commitment to innovative research and development. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Other Matters</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On October 15, 2007, we announced the voluntary suspension of
worldwide distribution of Sprint Fidelis (Fidelis) leads because of the potential for lead fractures at higher than anticipated rates. Leads are sophisticated
“wires” that connect an electronic pulse generator to the heart and are the pathway for therapy delivery between the device and heart. The Fidelis
leads are applicable to therapy delivery in defibrillators only, including implantable cardioverter defibrillators (ICDs) and cardiac resynchronization therapy
– defibrillators (CRT-Ds). The decision to voluntarily suspend the worldwide distribution of the Fidelis lead was based on a variety of factors that, when
viewed together, indicated a voluntary suspension was the appropriate action. Based on Medtronic’s extensive performance data, Fidelis lead viability was
trending lower than Medtronic’s Sprint Quattro (Quattro) lead at 30 months after implant (97.7 percent Fidelis vs. 99.1 percent
Quattro). This difference was not considered statistically significant; however, if the current lead fracture rates remain constant, it could become significant
over time. We believed that given this performance trend, this suspension of worldwide distribution was in the patients’ best interests.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>When we ceased selling Fidelis leads and asked customers to
return their unused product, Fidelis leads represented approximately 75 percent of our high power lead manufacturing output with our Quattro leads representing
the other 25 percent. We successfully transitioned our manufacturing back to the production of Quattro leads and, by the end of the third quarter of fiscal year
2008, had re-established sufficient internal inventory levels to meet customer demand. Even though we quickly re-established our internal inventory levels, we believe we missed selling
opportunities in the second, third and fourth quarters of fiscal year 2008 due to the voluntary suspension of worldwide distribution of Fidelis leads, the lack
of a single coil lead, and the lack of an approved lead in Japan for most of the third quarter of fiscal year 2008. In January 2008, we were able to begin
selling our Quattro lead in Japan after receiving both regulatory and reimbursement approvals.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>3</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On December 4, 2006, we announced our intention to pursue a
spin-off of Physio-Control into an independent, publicly traded company. Physio-Control is our wholly-owned subsidiary that offers external defibrillators,
emergency response systems, data management solutions, and support services used by hospitals and emergency response personnel. However, shortly thereafter, in
January 2007, we announced a voluntary suspension of U.S. shipments of Physio-Control products manufactured at our facility in Redmond, Washington in order to
address quality system issues. In the months following the suspension of U.S. shipments, we worked diligently with the U.S. Food and Drug Administration
(FDA) to address the quality system issues and resumed limited shipments to critical need customers. As a result of the work performed to date, on April 28,
2008, we announced that we had reached an agreement on a consent decree with the FDA regarding quality system improvements for our external defibrillator
products. The agreement was filed on April 25, 2008 in the U.S. District Court for the Western District of Washington and was approved by the court on May 9,
2008. The agreement addresses issues raised by the FDA during inspections regarding Physio-Control’s quality system processes and outlines the actions
Physio-Control must take in order to resume unrestricted distribution of our external defibrillators. Following the resolution of the quality system issues, we
intend to pursue the spin-off of Physio-Control. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Critical Accounting Estimates </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have adopted various accounting policies to prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). Our most significant accounting policies are disclosed in Note 1 to the consolidated financial statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The preparation of our consolidated financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying Notes. Our estimates and assumptions, including those related to bad debts, inventories, intangible assets, property, plant and equipment, asset impairment, legal proceedings, IPR&D, warranty obligations, product liability, self-insurance, pension and post-retirement obligations, stock-based compensation, sales returns and discounts, valuation of equity and debt securities, and income tax reserves are updated as appropriate, which in most cases is at least quarterly. We base our estimates on historical experience, actuarial valuations, or various assumptions that are believed to be reasonable under the circumstances. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made and (2) material changes in the estimates are reasonably likely to occur from period to period. Our critical accounting estimates include the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Legal Proceedings</font></b><font size=2> We are involved in a number of legal actions involving both product liability and intellectual property disputes. The outcomes of these legal actions are not within our complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages as well as other relief, including injunctions barring the sale of products that are the subject of the lawsuit, that could require significant expenditures or result in lost revenues. In accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 5, “Accounting for Contingencies,” (SFAS No. 5) we record a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of
a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in Note 15 to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. Our significant legal proceedings are discussed in Note 15 to the consolidated financial statements. While it is not possible to predict the outcome for most of the matters discussed in Note 15 to the consolidated financial statements, we believe it is possible that costs associated with them could have a material adverse impact on our consolidated earnings, financial position or cash flows on any one interim or annual period. With the exception of the Cordis, Marquis, and Kyphon matters, negative outcomes for the balance of the litigation matters
discussed in Note 15 to the consolidated financial statements are not considered probable or cannot be reasonably estimated.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Tax Strategies</font></b><font size=2> Our effective tax
rate is based on income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. We establish
reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions are likely to be challenged and that we
may or may not prevail. These reserves are established and adjusted in accordance with the principles of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (FIN No. 48). Under this Interpretation, if we determine that a tax position is more likely than not of being sustained upon
audit, based solely on the technical merits of the position, we recognize the benefit. We measure the benefit by determining the amount that is greater than 50 percent
likely of being realized upon settlement. We presume that all tax positions will be examined by a taxing authority with full knowledge of all relevant
information. We regularly monitor our tax positions and FIN No. 48 tax liabilities. We reevaluate the technical merits of our tax positions and recognize an
uncertain tax benefit, or derecognize a previously recorded tax benefit, when (i) there is a completion of a tax audit, (ii) there is a change in applicable tax
law including a tax case or legislative guidance, or (iii) there is an expiration of the statute of limitations. Significant judgment is required in accounting
for tax reserves. Although we believe that we have adequately provided for liabilities resulting from tax assessments by taxing authorities, positions taken by
these tax authorities could have a material impact on our effective tax rate in future periods.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>4</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In the event there is a special, restructuring, certain litigation and/or IPR&D charge recognized in our operating results, the tax cost or benefit attributable to that item is separately calculated and recorded. Because the effective rate can be significantly impacted by these discrete items that take place in the period, we often refer to our tax rate using both the effective rate and the non-GAAP nominal tax rate. The non-GAAP nominal tax rate is defined as the income tax provision as a percentage of taxable income, excluding special, restructuring, certain litigation, and IPR&D charges. We believe that this resulting non-GAAP financial measure provides useful information to investors because it excludes the effect of these discrete items so that investors can compare our recurring results over multiple periods.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Tax regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated financial statements. As a result, our effective tax rate reflected in our consolidated financial statements is different than that reported in our tax returns. Some of these differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which we have already recorded the tax benefit in our consolidated statements of earnings. We establish valuation allowances for our deferred tax assets when the amount of expected future taxable income is not likely to
support the use of the deduction or credit. Deferred tax liabilities generally represent tax expense recognized in our consolidated financial statements for which payment has been deferred or expense has already been taken as a deduction on our tax return but has not yet been recognized as an expense in our consolidated statements of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company’s overall tax rate including the tax impact on
special, restructuring, certain litigation, and IPR&D charges has resulted in an effective tax rate of 22.7 percent for fiscal year 2008. Excluding the
impact of these items, our operational and tax strategies have resulted in a non-GAAP nominal tax rate of 21.0 percent versus the U.S. statutory rate of 35.0
percent. An increase in our nominal tax rate of 1.0 percent would result in an additional income tax provision for the fiscal year ended April 25, 2008 of
approximately $38 million. See discussion of the tax rate in the “Income Taxes” section of the management’s discussion and
analysis.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Valuation of IPR&D, Goodwill and Other Intangible Assets</font></b><font size=2> When we acquire a company, the purchase price is allocated, as applicable, between IPR&D, other identifiable intangible assets, net tangible assets, and goodwill as required by U.S. GAAP. IPR&D is defined as the value assigned to those projects for which the related products have not received regulatory approval and have no alternative future use. Determining the portion of the purchase price allocated to IPR&D and other intangible assets requires us to make significant estimates. The amount of the purchase price allocated to IPR&D and other intangible assets is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of acquisition in
accordance with accepted valuation methods. For IPR&D, these methodologies include consideration of the risk of the project not achieving commercial feasibility. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Goodwill represents the excess of the aggregate purchase price over the fair value of net assets, including IPR&D, of the acquired businesses. Goodwill is tested for impairment annually, or more frequently if changes in circumstances or the occurrence of events suggest that the carrying amount may be impaired. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The test for impairment requires us to make several estimates about fair value, most of which are based on projected future cash flows. Our estimates associated with the goodwill impairment tests are considered critical due to the amount of goodwill recorded on our consolidated balance sheets and the judgment required in determining fair value amounts, including projected future cash flows. Goodwill was $7.519 billion and $4.327 billion as of April 25, 2008 and April 27, 2007, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Other intangible assets consist primarily of purchased technology, patents, and trademarks and are amortized using the straight-line or accelerated method, as appropriate, over their estimated useful lives, ranging from 3 to 20 years. As of April 25, 2008, all of our intangible assets are definite lived and amortized on a straight-line basis. We review these intangible assets for impairment annually or as changes in circumstance or the occurrence of events suggest the remaining value may not be recoverable. Other intangible assets, net of accumulated amortization, were $2.193 billion and $1.433 billion as of April 25, 2008 and April 27, 2007, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>5</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Net Sales </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The table below illustrates net sales by product line and operating segment for
fiscal years 2008, 2007, and 2006:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Net Sales</font></b></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Net Sales</font></b></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal year</font></b></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal year</font></b></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: .25in;text-indent:-.25in; '><i><b><font size=1>(dollars in millions)</font></b></i></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>%</font></b><br> <b><font size=1>Change</font></b></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>%</font></b><br> <b><font size=1>Change</font></b></p> </td>
<TD VALIGN="BOTTOM">
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Pacing Systems</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,008</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,895</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="6%" NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>6</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,895</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,795</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>6</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Defibrillation Systems</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,897</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,917</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(1</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,917</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,932</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(1</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-11.25pt; '><font size=2>Other</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>58</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>64</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>64</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>67</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(4</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>CARDIAC RHYTHM DISEASE MANAGEMENT</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>4,963</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>4,876</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>4,876</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>4,794</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Core Spinal</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,869</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,713</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,713</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,566</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Biologics</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>815</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>704</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>704</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>570</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>24</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-11.25pt; '><font size=2>Kyphon</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>298</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>SPINAL</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2,982</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2,417</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>23</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2,417</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2,136</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>13</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Coronary Stents</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>710</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>560</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>27</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>560</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>366</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>53</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Other Coronary/Peripheral</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>408</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>386</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>6</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>386</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>357</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Endovascular</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>285</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>259</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>259</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>216</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>20</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:24.5pt; text-indent:-.25in; '><font size=2>Revascularization and Surgical Therapies</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>431</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>417</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>417</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>401</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 24.5pt;text-indent:-.25in; '><font size=2>Structural Heart Disease</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>297</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>287</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>287</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>263</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>CARDIOVASCULAR</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>2,131</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,909</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>12</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,909</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,603</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>19</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Neuro Implantables</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,069</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>962</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>962</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>833</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>15</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-11.25pt; '><font size=2>Gastroenterology and Urology</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>242</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>221</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>221</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>183</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>21</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>NEUROMODULATION</font></B></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,311</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,183</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>11</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,183</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,016</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>16</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>DIABETES</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>1,019</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>863</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>18</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>863</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>722</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>20</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Core ENT</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>323</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>278</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>278</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>266</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-11.25pt; '><font size=2>Neurologic Technologies</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>298</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>261</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>261</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>235</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-11.25pt; '><font size=2>Navigation</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>159</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>127</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>25</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>127</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>108</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>18</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in; '><B><font SIZE=2>SURGICAL TECHNOLOGIES</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>780</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>666</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>17</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>666</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>609</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>9</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in; '><B><font SIZE=2>PHYSIO-CONTROL</font></B></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>329</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>385</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>(15</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><b><font size=2>)</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>385</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>412</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>(7</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><b><font size=2>)</font></b><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 32.0pt;text-indent:-.25in; '><B><font SIZE=2>TOTAL</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>$</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>13,515</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>$</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>12,299</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>10</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>$</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>12,299</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:4.5pt; text-indent:-4.5pt; '><b><font size=2>$</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>11,292</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><b><font size=2>9</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal years 2008 and 2007, net sales were favorably impacted by foreign currency translation of $400 million and $166 million, respectively. The primary exchange rate movements that impact our consolidated net sales growth are the U.S. dollar as compared to the Euro and the Japanese Yen. The impact of foreign currency fluctuations on net sales is not indicative of the impact on net earnings due to the offsetting foreign currency impact on operating costs and expenses and our hedging activities. See the “Market Risk” section of this management’s discussion and analysis and Note 8 to the consolidated financial statements for further details on foreign currency instruments and our related risk management strategies. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Forward-looking statements are subject to risk factors (see “Risk Factors” set forth in our Form 10-K). </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Cardiac Rhythm Disease Management</font></b><font size=2> CRDM products consist primarily of pacemakers, implantable defibrillators, leads, ablation products, electrophysiology catheters, insertable cardiac monitors,</font><font size=2> </font><font size=2>and information systems for the management of patients with our devices. CRDM fiscal year 2008 net sales grew by 2 percent from the prior fiscal year to $4.963 billion. Foreign currency translation had a favorable impact on net sales of approximately $160 million when compared to the prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>6</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Defibrillation Systems net sales of $2.897 billion for fiscal year 2008 decreased 1 percent as compared to fiscal year 2007. The decrease in net sales is the result of sales declines in the U.S., offset by sales growth outside the U.S. Global sales were driven by the Virtuoso ICD and the Concerto CRT-D. Both of these devices feature Conexus wireless technology which allows for remote transfer of patient data and enables communication remotely between the implanted device and programmer at the time of implant, during follow-up in a clinician’s office, or remotely using a patient home monitor. Net sales from Defibrillation Systems in the U.S. were $1.955 billion, a decrease of 6 percent in comparison to the prior year. The decrease in U.S. Defibrillation Systems net sales in fiscal year 2008 is primarily the result of the suspension of worldwide distribution of the Fidelis lead. See the
discussion in the “Other Matters” section of this management’s discussion and analysis for further information on the suspension of worldwide distribution of the Fidelis lead. Although the U.S. Defibrillation Systems market appears to have stabilized from the impact of the Fidelis lead issue, in the fourth quarter of fiscal year 2008 the rebound was not enough to offset the negative impact that the Fidelis lead issue had in the second and third quarters of fiscal year 2008. Outside the U.S., net sales from Defibrillation Systems were $942 million, an increase of 13 percent over the prior fiscal year. This growth is partially driven by favorable foreign currency translation as compared to the prior year, but is principally the result of strong market acceptance of the Virtuoso ICD and Concerto CRT-D. Outside the U.S. net sales were also impacted by the Fidelis lead issue. In particular, for most of the third quarter, we did not have an approved high power lead on the
market in Japan, and as of the close of the fourth quarter we still do not have an approved single coil lead, which is a more popular lead design in certain Western European markets.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Pacing Systems net sales for fiscal year 2008 increased by 6 percent over the prior fiscal year to $2.008 billion. The increase in the current fiscal year is attributable primarily to continued worldwide acceptance of the Adapta family of pacemakers, including the Adapta, Versa, and Sensia models, which were launched in the U.S. in the second quarter of fiscal year 2007 and have been available outside the U.S. since late fiscal year 2006. The Adapta family of pacemakers incorporates an array of automatic features to help physicians improve pacing therapy and streamline the patient follow-up process, potentially minimizing the amount of time spent in a physician’s office. Adapta offers Managed Ventricular Pacing, or MVP, which is an atrial based pacing mode that significantly reduces unnecessary pacing in the right ventricle while providing the safety of a dual chamber backup if
necessary. Clinical studies have suggested that reducing this unnecessary pacing in the right ventricle may decrease the risk of developing heart failure and atrial fibrillation, a potentially life-threatening irregular heartbeat. Net sales from Pacing Systems in the U.S. were $940 million, an increase of 1 percent. The revenue growth in the U.S. was slowed in the second and third quarters of fiscal year 2008 by the suspension of worldwide distribution of the Fidelis lead, as our field organization focused their efforts on serving Fidelis customers and patients. Outside the U.S., net sales from Pacing Systems were $1.068 billion, an increase of 11 percent over the prior fiscal year due primarily to foreign currency translation which had an $86 million favorable impact on net sales outside the U.S.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Fiscal year 2008 Defibrillation and Pacing Systems sales also benefited from the continued acceptance of the Medtronic CareLink Service. The Medtronic CareLink Service enables clinicians to review data about implanted cardiac devices in real time and access stored patient and device diagnostics through a secure Internet website. The data, which is comparable to information provided during an in-clinic device follow-up, provides the patient’s medical team with a comprehensive view of how the device and patient’s heart are operating. Today, over 250,000 patients are being monitored through Medtronic’s CareLink Service worldwide, up from approximately 124,000 patients being monitored a year ago. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>CRDM fiscal year 2007 net sales grew by 2 percent from the prior fiscal year to $4.876 billion. Foreign currency translation had a favorable impact on net sales of approximately $70 million when compared to the prior fiscal year.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Defibrillation Systems net sales of $2.917 billion for fiscal year 2007 decreased 1 percent as compared to fiscal year 2006. This slight decrease was the result of sales declines in the U.S., offset by strong sales growth outside the U.S. Net sales from Defibrillation Systems in the U.S. were $2.082 billion, a decrease of 9 percent. The decrease in U.S. Defibrillation Systems net sales in fiscal year 2007 was primarily the result of a decline in the U.S. ICD market. Outside the U.S., net sales from Defibrillation Systems were $835 million, an increase of 29 percent over the prior fiscal year, driven by the Virtuoso ICD and the Concerto CRT-D. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Pacing Systems net sales for fiscal year 2007 increased by 6
percent over fiscal year 2006 to $1.895 billion. The increase was attributable primarily to increased market share in a
pacing market that experienced low single digit growth. Instrumental in the increase in sales over fiscal year 2006 was the Adapta family of pacemakers,
including the Adapta, Versa, and Sensia models, which were launched in the U.S. in the second quarter of fiscal year 2007 and experienced a full year of sales
outside the U.S. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>7</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Fiscal year 2007 Defibrillation and Pacing Systems sales also benefited from the continued acceptance of the Medtronic CareLink Service, as over 124,000 patients were being monitored through Medtronic’s CareLink Service worldwide, up from approximately 70,000 patients being monitored a year ago.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our CRDM operating segment should benefit from the following:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The future acceptance upon launch of our new Vision 3D portfolio, which will comprise a full line of ICDs, CRT-Ds, pacemakers and cardiac resynchronization therapy-pacemakers (CRT-Ps) to address the needs of patients with arrhythmias, heart failure and those at risk of sudden cardiac arrest. The Secura ICD and the Consulta CRT-D, the portfolio’s first ICD and CRT-D devices, are expected to be commercially available in the coming months. Vision 3D is our first generation device with a common platform across ICDs, CRT-Ds and pacing systems. Additionally, these products provide enhanced follow-up and automaticity features and create meaningful manufacturing synergies. We will continue to develop our industry leading product portfolio to meet the medical needs of our patients.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The future acceptance of our single coil Quattro lead, which we expect to launch in markets around the world in the first quarter of fiscal year 2009. Some physicians prefer a single coil lead, particularly physicians in certain Western European countries. We believe the future availability of this product will help us to further recover from the impact of the Fidelis lead issue.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of the Adapta family of pacemakers, including the Adapta, Versa, and Sensia models. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued expansion of the Medtronic CareLink Service, available on both the Pacing and Defibrillator platforms in the U.S., Canada, and Western Europe, and beginning in the fourth quarter of fiscal year 2008, on a pilot basis in Japan and Australia. We believe Medtronic CareLink Service continues to drive physician preference for our products.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The future launch and acceptance of the EnRhythm MRI SureScan pacing system (EnRhythm MRI). EnRhythm MRI will be the first pacemaker system to be developed and tested specifically for safe use in Magnetic Resonance Imaging (MRI) machines under specified scanning conditions. EnRhythm MRI is designed to address and mitigate interactions between the pacing system and the magnetic resonance environment. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our growth in CRDM has been and will continue to be contingent
upon continued market growth and our ability to maintain our market position.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Spinal </font></b><font size=2>Spinal products include
thoracolumbar, cervical, and interbody spinal devices, bone growth substitutes, and devices for vertebral compression fractures and spinal stenosis. Spinal net
sales for fiscal year 2008 increased by 23 percent from the prior fiscal year to $2.982 billion. Foreign currency translation had a favorable impact on net
sales of $44 million when compared to the prior fiscal year. The growth in fiscal year 2008 was primarily driven by the November 2, 2007 close of the
acquisition of Kyphon, which generated revenue of $298 million during the fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Core Spinal net sales for fiscal year 2008 were $1.869 billion,
an increase of 9 percent from the prior fiscal year. Growth in the period was primarily based on continued acceptance of our products for the thoracolumbar and
cervical sections of the spine. Net sales in fiscal year 2008 were hampered by the trend of small companies increasing their presence and placing pressure on
the Core Spinal market. Today, there are over 200 small physician owned companies competing in the marketplace. Thoracolumbar net sales growth for fiscal year
2008 was driven by net sales of the CD HORIZON LEGACY family of products (CD HORIZON) and the CAPSTONE Vertebral Body Spacer (CAPSTONE) outside the U.S., net
sales of the VERTE-STACK CRESCENT Vertebral Body Spacer (CRESCENT) for thoracolumbar stabilization in the U.S., and worldwide net sales growth of the Lumbar
Dynamic platform of products. CD HORIZON is the most comprehensive system on the market today, and is designed to provide procedural solutions for degenerative,
deformity, or trauma applications using color coded implants and ergonomic instrumentation. The CAPSTONE and CRESCENT are minimal access devices and techniques
designed to replace and restore vertebral height in the thoracolumbar spine. The growth of our Lumbar Dynamic platform of products, which allow some range in
motion as compared to our fixed stabilization devices, was driven by demand for our PEEK Rod System in the U.S. and DIAM System outside the U.S. The growth in
net sales in our cervical products during the fiscal year was led by the continued acceptance of the VERTEX Max Reconstruction System for cervical
stabilization outside the U.S. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Biologics net sales for fiscal year 2008 increased 16 percent
from the prior fiscal year to $815 million. This increase was primarily driven by continued strong acceptance of INFUSE Bone Graft in the U.S. INFUSE Bone Graft
contains a recombinant human bone morphogenetic protein, or rhBMP-2, that induces the body to grow its own bone, eliminating the need for a painful second
surgery to harvest bone from elsewhere in the body. In addition to FDA approval for use of INFUSE Bone Graft for spinal fusion, we received FDA approval
to use INFUSE Bone Graft for the treatment of certain types of acute, open fractures of the tibial shaft in fiscal year 2005, and for certain oral maxillofacial
and dental regenerative bone grafting procedures late in fiscal year 2007. Additionally, although on a smaller base, we have continued to experience strong
fiscal year 2008 growth in the sales of InductOs Bone Graft, the outside the U.S. equivalent of INFUSE Bone Graft. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>8</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Kyphon, which was acquired on November 2, 2007, had net sales of $298 million for fiscal year 2008 that were driven by continued acceptance of balloon kyphoplasty procedures for treating vertebral compression fractures and acceptance of Kyphon’s interspinous products for treating lumbar spinal stenosis. Balloon kyphoplasty, using Kyphon instruments, is presently used primarily by spine specialists, including orthopedic surgeons and neurosurgeons, interventional radiologists and interventional neuroradiologists, who repair compression fractures of the spine through minimally invasive spine surgeries. Kyphon’s interspinous products for treating lumbar spinal stenosis include the commercially available X-STOP IPD technology available in both the U.S. and outside the U.S. and Aperius PercLID available outside the U.S.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Spinal net sales for fiscal year 2007 increased by 13 percent from the prior fiscal year to $2.417 billion, driven by solid growth across our entire portfolio of product offerings. Foreign currency translation had a favorable impact of $7 million on net sales when compared to the prior fiscal year. Core Spinal net sales were $1.713 billion, a 9 percent increase over the prior fiscal year, based on continual acceptance of our CD HORIZON LEGACY Spinal System family of products, strong growth in our minimal access technology platforms, and an increase in dynamic stabilization product sales outside of the U.S., led by the DIAM System. CD HORIZON SEXTANT II, a percutaneous lumbar fixation system with minimal access technologies that reduce procedural steps, was the main driver of the growth in the minimal access technology portfolio. Other revenue growth drivers in Core Spinal were CAPSTONE
and CRESCENT, and the VERTEX Max Reconstruction System which is used to stabilize the complex junction between the flexible cervical and rigid thoracic spine. Biologics net sales were $704 million in fiscal year 2007, a 24 percent increase over the prior year, based on continued strong acceptance of INFUSE Bone Graft. In the Spinal market, the trend has been that small companies continue to increase their presence in the U.S., putting pressure on the market. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our Spinal operating segment should benefit from the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our products for stabilization of the thoracolumbar and cervical sections of the spine, including the CD HORIZON LEGACY 5.5 and the VERTEX Max Reconstruction System.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of the INFUSE Bone Graft for spinal fusion and certain types of acute, open tibia fractures. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future launch of the extra small and double extra small
INFUSE kits for use in Spinal and oral maxillofacial procedures. We received FDA approval to market these two smaller kit sizes in April 2008, and they
are expected to be available for clinical use in June 2008. These smaller kits should help to continue the strong growth that we have experienced to date by
expanding the potential user population. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued growth in the acceptance of our PRESTIGE Cervical Disc System for dynamic stabilization, which received FDA approval on July 16, 2007 and was launched in the U.S. at the end of the first quarter of fiscal year 2008. We continue to train surgeons in the use of this product, and are encouraged by the steady progress we are making with reimbursement agencies for coverage. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our Lumbar dynamic platform of products including the PEEK Rod System in the U.S. and the DIAM System outside the U.S. combined with continued acceptance of Kyphon’s X-Stop IPD system and the Aperius PercLID, for the treatment of mild to moderate lumbar spinal stenosis.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of the Kyphon instruments for use in balloon kyphoplasty. The acquisition of Kyphon is expected to add to the growth of our existing Spinal business by extending our product offerings into some of the fastest growing product segments of the spine market, enabling us to provide physicians with a broader range of therapies for use at all stages of the care continuum.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>CardioVascular</font></b><font size=2> CardioVascular products consist of coronary and peripheral stents and related delivery systems, endovascular stent graft systems, heart valve replacement technologies and tissue ablation systems, and open heart and coronary bypass grafting surgical products. CardioVascular net sales for fiscal year 2008 increased 12 percent from the prior fiscal year to $2.131 billion. Foreign currency translation had a favorable impact of $101 million on net sales when compared to the prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>9</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Coronary Stent and Other Coronary/Peripheral net sales increased
18 percent in comparison to the prior fiscal year to $1.118 billion. The growth in Coronary Stent and Other Coronary/Peripheral net sales was primarily a result
of the successful launch of the Endeavor drug-eluting stent (Endeavor) in the U.S., strong sales of Endeavor and the Endeavor Resolute
drug-eluting stent (Endeavor Resolute) outside the U.S., and continued acceptance of the Driver family of bare metal stents. Although the market for
stents and drug-eluting stents has declined, Endeavor and Endeavor Resolute continue to benefit from favorable safety and efficacy data, along with their ease
of delivery. Endeavor, which was commercially released in the U.S. in February 2008, generated net sales of $81 million. Outside the U.S., Endeavor and Endeavor
Resolute generated net sales of $337 million in fiscal year 2008, an increase of 12 percent over the prior year. Endeavor Resolute received CE Mark approval in
October 2007 and is currently available in more than 100 countries. We also recognized net sales of $292 million in fiscal year 2008 from the Driver family of
bare metal stents, which experienced strong growth in the U.S. as a result of reduced penetration of drug-eluting stents in the U.S. marketplace. The Driver
bare metal stent, which is also the base stent used in Endeavor and Endeavor Resolute, is a cobalt-chromium coronary stent which has thinner struts and provides
greater maneuverability in placing the stent.
</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Endovascular fiscal year 2008 net sales grew 10 percent when
compared to the prior fiscal year. Growth in the Endovascular business was driven in part by net sales of the Talent AAA Stent Graft System and the Valiant
Thoracic Stent Graft System outside the U.S. The Valiant Thoracic Stent Graft System is a next-generation stent graft used for the minimally invasive repair of
the thoracic aorta, the body’s largest artery, for several disease states including aneurysms, penetrating ulcers, acute or chronic dissections, and
contained or traumatic ruptures. Net sales in the U.S. decreased in fiscal year 2008 as compared to the prior fiscal year as a result of a voluntary field
action on the AneuRx AAAdvantage Stent Graft System that required physician and patient notification of a product packaging issue. As of the end of the fiscal year,
both of these issues have been corrected and we expect to return to growth in the U.S. market. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Revascularization and Surgical Therapies net sales for fiscal year 2008 were $431 million, an increase of 3 percent in comparison to the prior fiscal year. The increase is the result of net sales growth outside the U.S., which increased 13 percent primarily from sales of our cannulae and beating heart products. The strong growth outside the U.S. was partially offset by a decrease in net sales in the U.S. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Structural Heart Disease net sales grew 3 percent in comparison
to the prior fiscal year to $297 million. The increase in net sales for the fiscal year was driven by net sales outside the U.S., which offset slightly negative
growth in the U.S. Net sales growth outside the U.S. was driven by sales of our Mosaic and Mosaic Ultra tissue values and our Melody Transcatheter Pulmonary
Valve and Ensemble Transcatheter Delivery System. The growth outside the U.S. was tempered by the suspension of sales of the Advantage mechanical heart valve in
the first quarter of fiscal year 2008. The Advantage valve was reintroduced to the market during the third quarter of fiscal year 2008. The Mosaic and Mosaic
Ultra tissue valves incorporate several design features to facilitate implantation and improve durability. The Melody Transcatheter Pulmonary Valve and Ensemble
Transcatheter Delivery System provide a catheter-based approach to pulmonic valve replacement for patients with congenital heart defects, with the goal
of reducing the invasiveness and risk associated with pulmonic valve replacement.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>CardioVascular net sales for fiscal year 2007 increased 19
percent from the prior fiscal year to $1.909 billion. Foreign currency translation had a favorable impact of $43 million on net sales when compared to the
prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Coronary Stent and Other Coronary/Peripheral net sales for
fiscal year 2007 increased 31 percent in comparison to the prior fiscal year to $946 million. The growth in Coronary Stent and Other Coronary/Peripheral net
sales was primarily a result of the commercial availability of Endeavor outside the U.S. for a full fiscal year and further acceptance of the Driver family of
bare metal stents. Endeavor, which generated revenue of $300 million in fiscal year 2007, was then commercially released in over 100 countries outside the U.S.
We recognized revenue of $260 million in fiscal year 2007 from the Driver family of bare metal stents, which experienced strong growth in the U.S. as a result
of reduced penetration of drug-eluting stents in the U.S. marketplace. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Endovascular fiscal year 2007 net sales grew 20 percent when compared to the prior fiscal year. Growth in the Endovascular business was driven by the successful U.S. launch of the market-leading AneuRx AAAdvantage Stent Graft System, which is used to treat abdominal aortic aneurysms (AAA), and increased sales of the Valiant Thoracic Stent Graft System outside the U.S. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Revascularization and Surgical Therapies net sales for fiscal year 2007 were $417 million, an increase of 4 percent in comparison to the prior fiscal year, led by net sales of our cannulae and cardiopulmonary products outside the U.S.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>10</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Structural Heart Disease net sales grew 9 percent in fiscal year 2007 in comparison to the prior fiscal year to $287 million. The increase in net sales for the fiscal year was driven by sales of our Mosaic and Mosaic Ultra tissue values as well as sales of the Melody Transcatheter Pulmonary Valve and Ensemble Transcatheter Delivery System outside the U.S.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our CardioVascular operating segment should benefit from the following:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of Endeavor, which was launched in the U.S. market in February 2008. Endeavor is the first new drug-eluting stent approved for use in the U.S. market in over four years and offers a unique and beneficial safety and efficacy profile for treating patients with coronary artery disease. Additionally, we anticipate receiving regulatory approval and launching Endeavor in Japan in the second half of fiscal year 2009. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of Endeavor Resolute in markets
outside the U.S. Endeavor Resolute combines the proven drug and stent components of Endeavor with Biolinx, a proprietary biocompatible polymer specifically
engineered for drug eluting stent use. Biolinx facilitates the elongation of Zotarolimus elution while providing excellent biocompatibility. The design goal of
Endeavor Resolute is enhanced safety and efficacy in the most complex lesions and patients.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our Sprinter Legend Semicompliant Rapid Exchange Balloon Dilation Catheter for use in coronary angioplasty procedures. We received CE Mark approval and initiated a November 2007 launch in markets outside the U.S. The Sprinter Legend Balloon incorporates revolutionary Zerofold technology which enables an exceptionally low profile with no wrapped material and no balloon shoulders. This design assists our customers in addressing their most difficult technical challenges. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Further acceptance of the Melody Transcatheter Pulmonary Valve and Ensemble Transcatheter Delivery System, which received CE Mark approval for commercial sale in October 2006. A feasibility study to evaluate the use of the Medtronic Melody Transcatheter Pulmonary Valve and Ensemble Transcatheter Delivery System in the U.S. was initiated in February 2007 and enrollment was completed in September 2007. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future acceptance of the Talent AAA Stent Graft System
in the U.S. market and our anticipated entry into the U.S. and Japanese thoracic stent graft markets. The Talent AAA Stent Graft System received FDA approval in
April 2008 and is anticipated to be commercially available in June 2008. We received FDA approval of the Talent Thoracic stent graft in June 2008, and we
anticipate Japanese approval of the Talent Thoracic stent graft in the third quarter of fiscal year 2009. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance and sales growth outside the U.S. with future acceptance of our next generation Endurant AAA stent graft and continued acceptance of the Valiant Thoracic Stent Graft System. The first-in-human trial for the new Endurant AAA stent graft in Western Europe was completed in April 2008. We anticipate CE mark approval of the Endurant AAA stent graft in the second half of calendar year 2008. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Neuromodulation</font></b><font size=2> Neuromodulation products consist of therapeutic and diagnostic devices, including implantable neurostimulation systems, implantable drug delivery devices, and urology and gastroenterology products. Neuromodulation net sales for fiscal year 2008 increased 11 percent from the prior fiscal year to $1.311 billion. Foreign currency translation had a favorable impact of $32 million on net sales when compared to the prior fiscal year. In the third quarter of fiscal year 2007, we divested our Urology diagnostics product line and in the first quarter of fiscal year 2008 we completed the divestiture of our Gastroenterology and Neurological diagnostics product lines. The loss of these product lines had a negative net sales growth impact of 4 percent for fiscal year 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Neuro Implantables is comprised of two product lines: Pain Management and Movement Disorders. Net sales from Neuro Implantables for treating pain and movement disorders were $1.069 billion, an increase of 11 percent over the prior period. The growth was driven by key products in Pain Management including RestoreULTRA, RestoreADVANCED and PrimeADVANCED neurostimulation systems for pain management, our SynchroMed II drug delivery pump, and our surgical lead for spinal cord stimulation, the Specify 5-6-5. RestoreULTRA, which was launched in March 2008, is our next generation rechargeable neurostimulator with advanced programming capabilities and is the smallest and thinnest 16-electrode neurostimulator on the market. Movement Disorder revenue was driven by growth in worldwide net sales of Activa Deep Brain Stimulation (DBS) Therapy. Activa DBS Therapy is used for the treatment of common
movement disorders including Parkinson’s disease, essential tremor and dystonia. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>11</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net sales of Gastroenterology and Urology products increased 10 percent over fiscal year 2007 to $242 million. The growth in Gastroenterology and Urology was led by net sales of our InterStim II product, which experienced its first full fiscal year on the market, and was partially offset by the impact of the divestitures of the Gastroenterology and Urology diagnostic product lines. InterStim II for the treatment of overactive bladder and urinary incontinence was launched in the second quarter of fiscal year 2007, and the smaller design has been widely accepted.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Neuromodulation net sales for fiscal year 2007 increased 16 percent from the prior fiscal year to $1.183 billion. Foreign currency translation had a favorable impact of $16 million on net sales when compared to the prior fiscal year. The increase in sales was driven by strong growth of both Neuro Implantables and Gastroenterology and Urology sales. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net sales from Neuro Implantables were $962 million, an increase of 15 percent over the prior period. The growth in Neuro Implantables was driven by key products including RestoreADVANCED, PrimeADVANCED and Activa DBS Therapy. Fiscal year 2007 revenue for Neuro Implantables also benefited from increased sales of our SynchroMed II drug delivery pump. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net sales of Gastroenterology and Urology products increased 21 percent over fiscal year 2006 to $221 million. The growth in Gastroenterology and Urology was led by sales of our InterStim product line and our PROSTIVA product line for the treatment of an enlarged prostate. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our Neuromodulation operating segment should benefit from the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>• </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of RestoreULTRA, our next generation rechargeable neurostimulator with advanced programming capabilities and smaller device size, which was launched in the fourth quarter of fiscal year 2008. RestoreULTRA is the smallest and thinnest 16-electrode rechargeable neurostimulator on the market and offers an innovative patient programmer that gives patients the ability to customize their pain control. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>• </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our surgical lead, the Specify 5-6-5 with Durable Electrode Technology, which was launched in the first quarter of fiscal year 2008. The Specify 5-6-5 surgical lead offers exclusive advantages and electrode programming patterns when used with our neurostimulators. Additionally, we anticipate the launch of the Specify 2x8 surgical lead in the first half of fiscal year 2009. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>• </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our Activa DBS Therapy for the
treatment of common movement disorders. We continue to educate neurologists and the patient population on the benefits that our Activa DBS Therapy offers
them. Additionally, we look forward to the anticipated launch of Activa PC and RC, our next generation neurostimulators. Activa PC is a primary cell and Activa
RC will be the therapy’s first rechargeable device. We anticipate launch of Activa RC in the second half of fiscal year 2009. </font></p> </td>
</tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Diabetes</font></b><font size=2> Diabetes products consist of external insulin pumps and related consumables, continuous glucose monitoring systems, and subcutaneous glucose sensors. Diabetes net sales in fiscal year 2008 increased 18 percent over the prior fiscal year to $1.019 billion. Foreign currency translation had a favorable impact of $29 million on net sales when compared to the prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>External pump sales for fiscal year 2008 were $448 million,
representing growth of 15 percent over the prior fiscal year. This increase reflects strong worldwide market acceptance of the Paradigm REAL-Time
sensor-augmented pump system that integrates continuous glucose monitoring and insulin pump functionality. The sales increase of 41 percent outside the U.S. was
especially strong, driven by growth in the markets in which we recently launched the Paradigm Real-Time system. The strong growth outside the U.S. was
offset by slowed growth in the U.S., as we experienced a modest slowdown in replacement business given the timing of upgrades to our latest technology. Net
sales of Consumables, including glucose sensors and other monitoring equipment, during fiscal year 2008 were $571 million, an increase of 20 percent. Net sales
of infusion sets outside the U.S., in correlation with our strong pump growth, fueled the growth in Consumables. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Diabetes net sales in fiscal year 2007 increased 20 percent over the prior fiscal year to $863 million. Foreign currency translation had a favorable impact of $13 million on net sales when compared to the prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>External pump sales for fiscal year 2007 were $389 million, representing growth of 32 percent over the prior fiscal year. This increase reflects strong worldwide market acceptance of the Paradigm REAL-Time sensor-augmented pump system. Net sales of Consumables, including glucose monitoring system and sensor products and other equipment, during fiscal year 2007 were $474 million, an increase of 11 percent. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>12</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our Diabetes operating segment should benefit from the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance from both physicians and patients of the Paradigm REAL-Time sensor-augmented pump system, which integrates continuous glucose monitoring and insulin pump functionality.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of the Guardian REAL-Time System, our personal-use Continuous Glucose Monitoring System (CGMS) for diabetes management. The Guardian REAL-Time System is a stand alone glucose monitoring system that provides patients with real-time glucose trend graphs and predictive alarms informing them when their glucose levels become too high or too low, enabling better management of diabetes. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Future acceptance and customer preference for Medtronic products due to the alliances with LifeScan, Inc. (LifeScan), a Johnson & Johnson company, and Bayer Diabetes Care (Bayer), a member of the Bayer group, which we announced on August 21, 2007. The alliances reached with Lifescan (for the U.S. market) and Bayer (for markets outside the U.S.) provide for the distribution and marketing of blood glucose meters that communicate with Medtronic’s insulin pumps. These alliances provide our customers an integrated solution for managing diabetes, thereby improving the quality of life and ease of use. We launched our co-developed blood glucose meters with Bayer and LifeScan in February 2008 and April 2008, respectively. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Improved reimbursement for insulin pumps in certain international markets and for continuous glucose monitoring in both the U.S. and certain international markets.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Completion of the first user evaluation of a
partially-closed loop system in the United Kingdom and the Netherlands. The study represents the first time patients with diabetes have been able to use a
low-glucose suspend feature, the development of which is considered by many in the industry to be a major advance towards a closed-loop diabetes management
system. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Surgical Technologies</font></b><font size=2> Surgical
Technologies products are used to treat conditions of the ear, nose, and throat, and certain neurological disorders. Additionally, we manufacture and sell image-guided surgery
systems. Our portfolio consists of powered tissue-removal systems and other microendoscopy instruments, implantable devices, nerve monitoring systems,
disposable fluid-control products, a Ménière’s disease therapy device, hydrocephalus shunt devices, external drainage systems, cranial fixation
devices, neuroendoscopes, dura repair products, and image-guided surgery systems. Surgical Technologies net sales for fiscal year 2008 increased by 17 percent
over the prior fiscal year to $780 million. Foreign currency translation had a favorable impact of $20 million on net sales when compared to the prior fiscal
year.
</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Core ENT net sales grew 16 percent to $323 million in fiscal year 2008 led by strong growth of sales outside the U.S. of the Straightshot M4 Microdebrider and endoscopy sales. In the U.S., there was an increase in net sales of our Image Guided Surgery Systems which was partially due to the launch of the Fusion EM IGS System for use in sinus surgical procedures. Fusion EM IGS is an electromagnetic-based image-guided surgery product that will avoid “line of sight constraints” of optical systems. Net sales of monitoring disposables also experienced strong worldwide growth. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Neurologic Technologies net sales grew 14 percent to $298 million in fiscal year 2008. The primary drivers of growth in Neurologic Technologies were continued acceptance of high-speed powered surgical drill systems, including the EHS Stylus system.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Navigation net sales for fiscal year 2008 increased 25 percent from the prior fiscal year to $159 million based on strong U.S. net sales of the O-arm Imaging Systems, a multi-dimensional surgical imaging platform that is optimized for use in spine and orthopedic surgery, and increased global service revenue. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Surgical Technologies net sales for fiscal year 2007 increased by 9 percent over the prior fiscal year to $666 million. Foreign currency translation had a favorable impact of $8 million on net sales when compared to the prior fiscal year.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Core ENT net sales grew 5 percent to $278 million in fiscal year 2007 led by continued physician acceptance of the Straightshot M4 Microdebrider and the NIM-Response 2.0 Nerve Integrity Monitor. Net sales within Core ENT were impacted by the loss of revenue from our tonometry product line, which was sold in the third quarter of fiscal year 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Neurologic Technologies net sales grew 11 percent to $261 million in fiscal year 2007. The primary drivers of growth in Neurologic Technologies were continued acceptance of high-speed powered surgical drill systems, including the EHS Stylus system and the Strata valve used in the treatment of hydrocephalus. The Strata valve is an adjustable flow control valve in which the resistance properties of the valve can be charged non-invasively by the caregiver. The valve is designed to minimize overdrainage of cerebrospinal fluid and maintain intraventricular pressure within a normal physiologic range, regardless of patient position. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>13</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Navigation net sales for fiscal year 2007 increased 18 percent from fiscal year 2006 to $127 million based on strong sales of the PoleStar N20, an intra-operative Magnetic Resonance Image (iMRI)-Guidance System and O-arm Imaging Systems. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Looking ahead, we expect our Surgical Technologies operating segment should benefit from the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of our new FUSION EM IGS System that was launched in the U.S. in the third quarter of fiscal year 2008. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued adoption of power systems outside the U.S. for sinus procedures, including the Straightshot M4 Microdebrider, as well as continued global adoption of nerve monitoring for ENT and thyroid procedures. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued development of the normal pressure
hydrocephalus market, resulting in increased sales of our shunt products, including the Strata valve, and continued acceptance of our Legend high-speed drill
systems, electric bone mill, and Durepair dura substitute. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>•</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Continued acceptance of the O-arm Imaging System and future acceptance of the S7 Navigation System which we expect to release in fiscal year 2009. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Continued net sales growth in all operating segments is contingent on our ability to gain further market share, penetrate existing markets, develop new products, improve existing products, and develop new markets.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Costs and Expenses </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following is a summary of major costs and expenses as a percent of net sales: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
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<TD WIDTH="66%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Cost of products sold</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>25.5</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>25.8</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>24.9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:5.25pt; text-indent:-5.25pt; '><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Research and development expense</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9.4</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10.1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9.9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Selling, general and administrative expense</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>34.8</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>33.8</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>32.4</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Special charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.6</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.8</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Restructuring charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.3</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.2</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Certain litigation charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.7</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.3</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>IPR&D charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.9</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3.2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Other expense, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3.2</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.7</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.5</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Interest income, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.8</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(1.3</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.8</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt; '><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Cost of Products Sold</font></b><font size=2> Cost of products sold was $3.446 billion in fiscal year 2008 representing 25.5 percent of net sales, a decrease of 0.3 of a percentage point from fiscal year 2007. The cost of products sold was positively impacted by 0.7 of a percentage point of favorable foreign currency translation and 0.3 of a percentage point for reduced product costs and favorable manufacturing variances. These decreases were offset by 0.3 of a percentage point associated with the impact of the $34 million fair value adjustment for the inventory acquired in the Kyphon acquisition and 0.4 of a percentage point of unfavorability for scrap and other product costs associated with the suspension of the worldwide distribution of the Fidelis lead and scrap costs at our Physio-Control business segment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Cost of products sold was $3.168 billion in fiscal year 2007 representing 25.8 percent of net sales, an increase of 0.9 of a percentage point from fiscal year 2006. The increase in cost of products sold as a percentage of net sales was due to 0.1 of a percentage point increase for the recognition of $15 million of incremental stock-based compensation expense in fiscal year 2007, 0.2 of a percentage point increase for unfavorable manufacturing variances, and 0.9 of a percentage point increase relating to geographic and product mix shifts. The product mix impact was the result of decreased sales of higher margin ICDs in the U.S. and increased sales of INFUSE Bone Graft and certain tissue products in our Spinal business which have margins that are below our average gross margins. These increases were offset by 0.3 of a percentage point of favorable foreign currency translation.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Research and Development</font></b><font size=2> Consistent
with prior years, we continue to invest heavily in the future by spending aggressively on research and development efforts. Research and development spending
was $1.275 billion in fiscal year 2008, representing 9.4 percent of net sales, a decrease of 0.7 of a percentage point from fiscal year 2007. While our
fiscal year 2008 research and development spending increased over the prior fiscal year, our restructuring initiatives and our efforts to prioritize projects
with the greatest potential for future growth have impacted the current year rate of spending.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>14</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Research and development spending was $1.239 billion in fiscal year 2007 representing 10.1 percent of net sales, an increase of 0.2 of a percentage point over fiscal year 2006. The 0.2 of a percentage point increase over the prior year was the result of the recognition of $31 million of incremental stock-based compensation expense in fiscal year 2007. Excluding the incremental stock-based compensation expense, research and development expense was flat as a percentage of sales as compared to fiscal year 2006, but on a gross basis increased $95 million, or 9.0 percent as compared to the prior fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We remain committed to developing technological enhancements and new indications for existing products and new, less invasive, technologies to address unmet medical needs. That commitment leads to our initiation and participation in numerous clinical trials in every fiscal year. Furthermore, we expect our development activities to help reduce patient care costs and the length of hospital stays in the future. In addition to our investment in research and development, we continue to access new technologies in areas served by our existing businesses, as well as in new areas, through acquisitions, licensing agreements, alliances, and certain strategic equity investments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Selling, General and Administrative</font></b><font size=2> Fiscal year 2008 selling, general and administrative expense as a percentage of net sales increased by 1.0 percentage point from fiscal year 2007 to 34.8 percent. The increase in selling, general and administrative expense for fiscal year 2008 was predominantly driven by the acquisition of Kyphon which increased selling, general, and administrative expense by 0.6 of a percentage point. The remainder of the increase was due to expenses associated with our previously communicated investment in selling and marketing activities related to the U.S. launches of the Prestige Cervical Disc System and Endeavor, and the continued implementation of our global information technology system, which included the full conversion of our U.S. distribution systems in the second quarter of fiscal year 2008. These increases
were offset by our continual cost control measures across all of our businesses and attempts to leverage the general and administrative expense categories.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Fiscal year 2007 selling, general and administrative expense as a percentage of net sales increased by 1.4 percentage points from fiscal year 2006 to 33.8 percent. The recognition of incremental stock-based compensation expense of $104 million drove 0.9 of a percentage point of the overall increase. The remaining increase in selling, general and administrative expense for fiscal year 2007 was due to expenses associated with our previously communicated investment in our marketing campaign for CRDM, the expansion of our sales forces across all businesses, especially in the CardioVascular business, and costs associated with our global information technology system implementation. These increases were offset by our continual cost control measures across all of our businesses and attempts to leverage the general and administrative expense categories. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Special, Restructuring, Certain Litigation, and IPR&D Charges, and Certain Tax Adjustments </font></b><font size=2>We believe that in order to properly understand our short-term and long-term financial trends, investors may find it useful to consider the impact of special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments. Special (such as asset impairment charges), restructuring, certain litigation, and IPR&D charges, and certain tax adjustments recorded during the previous three fiscal years are as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
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<TD WIDTH="63%" VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:9.0pt; text-indent:-9.0pt'><i><b><font size=1>(dollars in millions)</font></b></i><i></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:9.0pt; text-indent:-9.0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Special charges:</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-1.5pt'><font size=2>Asset impairment charges </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>98</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-2.25pt'><font size=2>Medtronic Foundation donation </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Total special charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>98</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Restructuring charges </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Certain litigation charges </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>366</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>IPR&D charges </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>390</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>364</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Total special, restructuring, certain litigation, and IPR&D charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>879</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>174</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>464</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Tax impact of special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(137</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(179</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(328</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Total special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments, net of tax</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>742</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 5.25pt;text-indent:-5.25pt'><font size=2>) </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>136</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Special Charges</font></b></i><font size=2> In fiscal year
2008, we recorded a special charge related to the impairment of intangible assets associated with our benign prostatic hyperplasia, or enlarged prostate, product
line purchased in fiscal year 2002. The development of the market, relative to our original assumptions, has changed as a result of the broad acceptance of a
new line of drugs to treat the symptoms of an enlarged prostate. After analyzing the estimated future cash flows utilizing this technology, based on the market
development, we determined that the carrying value of these intangible assets was impaired and a write-down of $78 million was necessary. See
Note 2 to the consolidated financial statements for further discussion of this special charge. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>15</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, we concluded two intangible assets
were fully impaired due to inadequate clinical results and the resulting delays in product development. As a result, we recorded a $98 million special
charge related to the impairments of intangible assets stemming from the July 1, 2005 acquisition of Transneuronix, Inc. (TNI) and the November 1,
2004 acquisition of Angiolink Corporation (Angiolink). TNI focused on the development of an implantable gastric stimulator to treat obesity. Angiolink focused
on the development of wound closure devices for vascular procedures. See Note 2 to the consolidated financial statements for further discussion of this special
charge.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2006, we recorded a $100 million charitable donation to The Medtronic Foundation, which is a related party non-profit organization. The donation to The Medtronic Foundation was paid in the second quarter of fiscal year 2006. See Note 2 to the consolidated financial statements for further discussion of this special charge.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Restructuring Charges</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><font size=2>Global Realignment Initiative</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.28in;text-align:left;'><font size=2>In fiscal year 2008, as part of a global realignment initiative, we recorded a $31 million restructuring charge, which consisted of employee termination costs of $27 million and asset write-downs of $4 million. This initiative began in the fourth quarter of fiscal year 2008 and focuses on shifting resources to those areas where we have the greatest opportunities for growth and streamlining operations to drive operating leverage. The global realignment initiative impacts most businesses and certain corporate functions. Within CRDM, we are reducing research and development infrastructure by closing a facility outside the U.S., reprioritizing research and development projects to focus on the core business and consolidating manufacturing operations to drive operating leverage. Within Spinal, we intend to reorganize and consolidate certain activities where Medtronic’s existing
infrastructure, resources, and systems can be leveraged to obtain greater operational synergies. The global realignment initiative is also designed to further consolidate manufacturing of CardioVascular products, streamline distribution of products in select businesses and to reduce general and administrative costs in our corporate functions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.28in;text-align:left;'><font size=2>The asset write-downs were recorded within </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statement of earnings. The employee termination costs of $27 million consist of severance and the associated costs of continued medical benefits, and outplacement services. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>This global realignment initiative will result in charges being recognized in both the fourth quarter of fiscal year 2008 and the first quarter of fiscal year 2009, and we expect that when complete, will eliminate approximately 1,100 positions. Restructuring charges were recognized in the fourth quarter of fiscal year 2008 for standard severance benefits to be provided to impacted positions identified prior to the close of the fiscal year. In the first quarter of fiscal year 2009 we will recognize additional restructuring charges associated with (i) enhanced severance benefits for positions, identified in the fourth quarter of fiscal year 2008, and (ii) standard and enhanced severance benefits provided for positions that were identified in the first quarter of fiscal year 2009. These incremental costs were not accrued in fiscal year 2008 because either the enhanced benefits had not yet been
communicated to the impacted employees or the positions for elimination had not yet been identified. We anticipate that the additional expense that we will recognize in the first quarter of fiscal year 2009 related to the global realignment initiative will be in the range of $80 million to $105 million. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Of the 1,100 positions that will be eliminated as part of this
initiative, 560 positions were identified for elimination in the fourth quarter of fiscal year 2008 and will be achieved through voluntary and involuntary
separation. Of these 560 positions identified, the majority will be eliminated in fiscal year 2009. The restructuring initiatives related to the 560 employees
identified in the fourth quarter of fiscal year 2008 are scheduled to be completed by the end of fiscal year 2009, and are expected to produce annualized
operating savings of approximately $69 million. These savings will arise
mostly from reduced compensation expense. See Note 3 to the consolidated financial statements for further discussion. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><font size=2>Fiscal Year 2007 Initiative</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, we recorded a $36 million restructuring charge, which consisted of employee termination costs of $28 million and asset write-downs of $8 million. 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 CRDM business in response to market dynamics. The employee termination costs consist of severance and the associated costs of continued medical benefits, and outplacement services. The asset write-downs consist of a $5 million charge for inventory write-downs and a $3 million charge for non-inventory asset write-downs. The inventory and asset write-downs were recorded within </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statement of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>16</font></A></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As a continuation of our fiscal year 2007 initiatives, in the first quarter of fiscal year 2008 we incurred $14 million of incremental restructuring charges associated with compensation provided to employees whose employment terminated with the Company in the first quarter of fiscal year 2008. These incremental costs were not accrued in fiscal year 2007 because these benefits had not yet been communicated to the impacted employees. Included in the total $14 million restructuring charge is $4 million of incremental defined benefit pension and post-retirement related expense for those employees who accepted early retirement packages. For further discussion on the incremental defined benefit pension and post-retirement related expense, see Note 13 to the consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>When the restructuring initiative began in fiscal year 2007, we identified approximately 900 positions for elimination which were achieved through early retirement packages offered to employees, voluntary separation, and involuntary separation, as necessary. As of April 25, 2008, the initiatives begun in the fourth quarter of fiscal year 2007 were substantially complete. This restructuring initiative produced annualized operating savings of approximately $125 million mostly from reduced compensation expense. See Note 3 to the consolidated financial statements for further discussion.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>There were no restructuring charges in fiscal year 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Certain Litigation Charges</font></b></i><font size=2> We classify material litigation reserves recognized as certain litigation charges. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During fiscal year 2008, we incurred certain litigation charges of $366 million. Of that amount, $123 million relates to the settlement of certain lawsuits relating to the Marquis line of ICDs and CRT-Ds that were subject to a field action announced on February 10, 2005. The remainder of the charge, $243 million, relates to an estimated reserve established for litigation with Cordis Corporation, a subsidiary of Johnson & Johnson. The Cordis litigation originated in October 1997 and pertains to a patent infringement claim on a previous generation of bare metal stents that are no longer on the market. We believe an unfavorable outcome in the Cordis matter is probable. In accordance with SFAS No. 5, we have recorded a $243 million reserve for estimated damages in this matter. See Notes 2 and 15 to the consolidated financial statements for further discussion of these certain litigation
charges. In May 2008, we paid substantially all of the settlement for certain lawsuits relating to the Marquis line of ICDs and CRT-Ds. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During fiscal year 2007, we recorded a certain litigation charge
of $40 million related to a settlement agreement with the U.S. Department of Justice which requires the government to obtain dismissal of two qui tam
civil suits pending against us, and is conditioned upon such dismissal being obtained. The two suits were based upon allegations about certain sales and
marketing practices in the Spinal business. The settlement agreement reflects our assertion that the Company and its current employees have not engaged in any
wrongdoing or illegal activity.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>There were no certain litigation charges in fiscal year 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>IPR&D Charges</font></b></i><b><font size=2> </font></b><font size=2>During fiscal year 2008, we recorded $390 million of IPR&D charges of which $42 million related to the acquisition of NDI Medical, Inc., a development stage company, $290 million related to a technology acquired through the purchase of Kyphon, $20 million related to the purchase of intellectual property from Setagon, Inc., $25 million related to a milestone payment under the existing terms of a royalty bearing, non-exclusive patent cross-licensing agreement with NeuroPace, Inc., and $13 million was for unrelated purchases of certain intellectual property. These payments were expensed as IPR&D since technological feasibility of the underlying projects had not yet been reached and such technology has no future alternative use. See Note 4 to the consolidated financial statements for further discussion.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>There were no IPR&D charges for fiscal year 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During fiscal year 2006, we recorded $364 million of IPR&D charges of which $169 million related to the acquisition of TNI, $175 million related to the acquisition of substantially all of the spine-related intellectual property and related contracts, rights, and tangible materials owned by Gary Michelson, M.D. and Karlin Technology, Inc. (Michelson), and $20 million related to a royalty bearing, non-exclusive patent cross-licensing agreement with NeuroPace, Inc. See Note 4 to the consolidated financial statements for further discussion. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We are responsible for the valuation of IPR&D charges. The values assigned to IPR&D are based on valuations that have been prepared using methodologies and valuation techniques consistent with those used by independent appraisers. All values were determined by identifying research projects in areas for which technological feasibility had not been established. Additionally, the values were determined by estimating the revenue and expenses associated with a project’s sales cycle and the amount of after-tax cash flows attributable to these projects. The future cash flows were discounted to present value utilizing an appropriate risk-adjusted rate of return. The rate of return included a factor that takes into account the uncertainty surrounding the successful development of the IPR&D. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>17</font></A></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>At the time of acquisition, we expect all acquired IPR&D will reach technological feasibility, but there can be no assurance that the commercial viability of these products will actually be achieved. The nature of the efforts to develop the acquired technologies into commercially viable products consists principally of planning, designing and conducting clinical trials necessary to obtain regulatory approvals. The risks associated with achieving commercialization include, but are not limited to, delay or failure to obtain regulatory approvals to conduct clinical trials, delay or failure to obtain required market clearances, and patent litigation. If commercial viability were not achieved, we would likely look to other alternatives to provide these therapies.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>See the “Acquisitions” section of this management’s discussion and analysis for detailed discussion of each material acquisition in fiscal years 2008 and 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Certain Tax Adjustments </font></b></i><font size=2>We classify the material recognition or derecognition of uncertain tax positions as certain tax adjustments. There were no certain tax adjustments in fiscal year 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, we recorded a $129 million tax benefit associated with the reversal of excess tax accruals in connection with the settlement reached with the U.S. Internal Revenue Service (IRS) with respect to their review of our fiscal years 2003 and 2004 domestic income tax returns and the resolution of competent authority issues for fiscal years 1992 through 2000. The $129 million tax benefit was recorded in the </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings for fiscal year 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2006, we reversed excess tax accruals of $225 million associated with favorable agreements reached with the IRS involving the review of our fiscal years 1997 through 2002 domestic income tax returns. The $225 million tax benefit was recorded in the </font><i><font size=2>provision for income taxes </font></i><font size=2>in the consolidated statement of earnings for fiscal year 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>See the “Income Taxes” section of this management’s discussion and analysis for further discussion of the certain tax adjustments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Other Expense, Net</font></b><font size=2> Other expense, net includes intellectual property amortization expense, royalty income and expense, realized equity security gains and losses, realized foreign currency transaction and derivative gains and losses, and impairment charges on equity securities. In fiscal year 2008, net other expense was $436 million, an increase of $224 million from $212 million in fiscal year 2007. This change is primarily due to currency hedges, which resulted in losses in fiscal year 2008 of $147 million versus gains in fiscal year 2007 of $20 million, and $46 million of amortization on intangible assets resulting from the Kyphon acquisition. Additionally, prior year other expense was offset by $55 million due to the accelerated amortization of deferred income in connection with a product supply agreement in the CardioVascular business,
where the other party elected not to exercise its option to extend the agreement. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, net other expense was $212 million, an increase of $45 million from $167 million in fiscal year 2006. This change was partially due to currency hedges, which resulted in gains in fiscal year 2007 of $20 million versus gains in fiscal year 2006 of $92 million. Fiscal year 2007 was also positively impacted by $55 million due to the accelerated amortization of deferred income in connection with a product supply agreement in the CardioVascular business. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Interest Income, Net</font></b><font size=2> Interest income, net includes interest earned on our investments, interest paid on our borrowings, amortization of debt issuance costs and the net realized gain or loss on sales of available for sale (AFS) debt securities. In fiscal year 2008, net interest income was $109 million, a decrease of $45 million from net interest income of $154 million in fiscal year 2007. The decrease in net interest income in fiscal year 2008 as compared to fiscal year 2007 is a result of the impact of the cash utilized to finance the Kyphon acquisition, increased borrowings outstanding and a decline in interest rates being received on our short- and long-term investments. The decrease was partially offset by recognition of $26 million in net gains on the sale of AFS debt securities. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, net interest income was $154 million, an increase of $67 million from net interest income of $87 million in fiscal year 2006. The increase in net interest income in fiscal year 2007 as compared to fiscal year 2006 was a result of higher average cash and cash investment balances as compared to prior periods. Interest income increased, as we maintained our ability to generate rates of return on our investments that exceeded the interest rates we were paying on our outstanding debt. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>18</font></A></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Income Taxes </font></b></p>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>654</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>713</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>614</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font SIZE=2>N/A</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Effective tax rate</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>20.3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19.4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>2.4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>0.9</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Impact of special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.7</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3.9)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6.6</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>(5.6)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>(2.7)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Non-GAAP nominal tax rate (1)</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>21.0</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double white 2.25pt">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24.2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double white 2.25pt">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>26.0</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>(3.2)</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>(1.8)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_______________</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-GAAP nominal tax rate is defined as the income tax (benefit) provision as a percentage of taxable income, excluding special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments. We believe that the resulting non-GAAP financial measure provides useful information to investors because it excludes the effect of these discrete items so that investors can compare our recurring results over multiple periods.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The effective tax rate of 22.7 percent increased by 2.4 percentage points from fiscal year 2007 to fiscal year 2008. This increase reflects the 5.6 percentage points increase from the tax impact of special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments partially offset by a 3.2 percentage points decrease in the non-GAAP nominal tax rate. The 5.6 percentage points increase is largely due to the non-deductible IPR&D charges incurred during fiscal year 2008 compared to the $129 million certain tax benefit recorded in fiscal year 2007 associated with the reversal of excess tax accruals in connection with the settlement reached with the IRS with respect to their review of our fiscal years 2003 and 2004 domestic income tax returns and the resolution of competent authority issues for fiscal years 1992 through 2000. The non-GAAP nominal tax rate
decrease of 3.2 percentage points is mainly due to increased benefits from our international operations subject to tax rates lower than our U.S. statutory rates. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The fiscal year 2007 effective tax rate of 20.3 percent increased by 0.9 of a percentage point from fiscal year 2006. This increase reflects a 2.7 percentage points increase from the tax impact of special, restructuring, certain litigation, and IPR&D charges, and certain tax adjustments partially offset by a 1.8 percentage points decrease in the non-GAAP nominal tax rate. The 2.7 percentage points increase is largely due to the $129 million certain tax adjustment recorded in fiscal year 2007 compared to the $225 million certain tax adjustment recorded in fiscal year 2006 associated with favorable agreements reached with the IRS involving the review of our fiscal years 1997 through 2002 domestic income tax returns. The non-GAAP nominal tax rate decrease of 1.8 percentage points is mainly due to increased benefits from our international operations subject to tax rates lower than
our U.S. statutory rate. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Tax audits associated with the allocation of income, and other complex issues, may require an extended period of time to resolve and may result in income tax adjustments if changes to our allocation are required between jurisdictions with different tax rates. Tax authorities periodically review our tax returns and propose adjustments to our tax filings. The IRS has settled its audits with us for all years through fiscal year 1996. Tax years settled with the IRS may remain open for foreign tax audits and competent authority proceedings. Competent authority proceedings are a means to resolve intercompany pricing disagreements between countries.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In August 2003, the IRS proposed adjustments arising out
of its audit of the fiscal years 1997, 1998 and 1999 tax returns. We initiated a defense of these adjustments at the IRS appellate level, and in the second
quarter of fiscal year 2006 we reached settlement on most, but not all matters. The remaining issue relates to the allocation of income between Medtronic, Inc.,
and its wholly owned subsidiary in Switzerland. On April 16, 2008, the IRS issued a statutory notice of deficiency with respect to this remaining issue. We
intend to file a Petition with the U.S. Tax Court and vigorously defend our position. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2005, the IRS issued its audit report for fiscal years 2000, 2001 and 2002. In addition, the IRS issued its audit report for fiscal years 2003 and 2004 in March 2007. We have reached agreement with the IRS on substantially all of the proposed adjustments for these fiscal years 2000 through 2004. The only item of significance that remains open for these years relates to the carryover impact of the allocation of income issue proposed for fiscal years 1997 through 1999. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The unresolved issue from the 1997 through 2004 tax audits, as well as tax positions taken by the IRS or foreign tax authorities during future tax audits, could have a material unfavorable impact on our effective tax rate in future periods. We continue to believe that we have meritorious defenses for our tax filings and will vigorously defend them through litigation in the courts, as necessary. We believe that we have adequately provided for probable liabilities resulting from tax assessments by taxing authorities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>19</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Liquidity and Capital Resources </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><i><b><font size=1>(dollars in millions)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Working capital</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,787</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,355</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Current ratio*</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.1:1.0</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.1:1.0</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Cash, cash equivalents, and short-term investments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,613</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,078</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Long-term investments in debt securities**</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,078</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,004</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Cash, cash equivalents, short-term investments, and long-term debt securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,691</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,082</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Short-term borrowings and long-term debt</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,956</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,087</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Net cash position***</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3,265</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid #CCCCCC 2.25pt; background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:5.25pt; text-indent:-5.25pt'><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_______________</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="377" style='border-collapse:collapse; '>
<tr >
<td width="28" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>*</font></p> </td>
<td width="349" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current ratio is the ratio of current assets to current liabilities.</font></p> </td> </tr></table>
</div>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="667" style='border-collapse:collapse; '>
<tr >
<td width="28" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>**</font></p> </td>
<td width="639" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-term investments include debt securities with a maturity date greater than one year from the end of the period.</font></p> </td> </tr></table>
</div>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="28" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>*** </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net cash position is the sum of cash, cash equivalents, short-term investments, and long-term investments in debt securities less short-term borrowings and long-term debt. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We believe our liquidity remains strong as of April 25, 2008 and our strong balance sheet and liquidity provide us with flexibility in the future. We believe our existing cash and investments, future cash generated from operations, and available lines of credit and commercial paper capacity of $1.945 billion, if needed, will satisfy our foreseeable working capital requirements for at least the next twelve months. However, we periodically consider various financing alternatives and may, from time to time, seek to take advantage of favorable interest rate environments or other market conditions. At April 25, 2008, our Standard and Poor’s Ratings Group and Moody’s Investors Service ratings remain unchanged as compared to the fiscal year ended April 27, 2007 with long-term debt ratings of AA- and A1, respectively, and strong short-term debt ratings of A-1+ and P-1.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The decrease in our net cash position in fiscal year 2008 as compared to fiscal year 2007 is primarily due to the acquisition of Kyphon which was consummated on November 2, 2007. The transaction was financed through a combination of $3.303 billion of cash on hand, the issuance of $600 million short-term commercial paper and borrowing $300 million through a new long-term unsecured revolving credit facility. For further information regarding the acquisition of Kyphon, see Note 4 to the consolidated financial statements. See the “Summary of Cash Flows” section of this management’s discussion and analysis for further discussion of our cash uses and proceeds. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have future contractual obligations and other minimum commercial commitments that are entered into in the normal course of business. We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position, or cash flows. See the “Off-Balance Sheet Arrangements and Long-Term Contractual Obligations” section of this management’s discussion and analysis for further information. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Notes 2 and 15 to the consolidated financial statements provide information regarding amounts we have accrued related to significant legal proceedings as well as information regarding the expected timing of payment. In accordance with SFAS No. 5, we record a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. In May 2008, we paid substantially all of the settlement for certain lawsuits relating to the Marquis line of ICDs and CRT-Ds. In June 2008, we paid the settlement amount for the Kyphon qui tam complaint, which we assumed in the acquisition of Kyphon.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>At April 25, 2008 and April 27, 2007, $3.317 billion and
$5.428 billion, respectively, of cash, cash equivalents, and short- and long-term debt securities were held by our non-U.S. subsidiaries.
The reduction in this cash balance is the result of the use of cash by our non-U.S. subsidiaries in connection with the acquisition of Kyphon,
partially offset by additional cash generated by our non-U.S. subsidiaries.
These funds are
available for use by worldwide operations; however, if these funds were to be repatriated to the U.S. or used for U.S. operations, the amounts would be subject
to U.S. tax. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have investments in marketable debt securities that are classified and accounted for as available-for-sale. Our debt securities include government securities, commercial paper, corporate bonds, bank certificates of deposit, and mortgage backed and other asset backed securities including auction rate securities. Market conditions during the third and fourth quarters of fiscal year 2008 and subsequent to our fiscal year-end continue to indicate significant uncertainty on the part of investors on the economic outlook for the U.S. and for financial institutions that have potential exposure to the sub-prime housing market. This uncertainty has created reduced liquidity across the fixed income investment market, including certain securities in which we have invested. As a result, some of our investments have experienced reduced liquidity including unsuccessful monthly auctions for our auction
rate security holdings. During the third quarter of fiscal year 2008, we reclassified all of our auction rate fixed income securities, which had a cost basis of
$198 million, from </font><i><font size=2>short-term investments</font></i><font size=2> to </font><i><font size=2>long-term investments</font></i><font size=2>
on our consolidated balance sheet due to the fact that they are currently not trading, and current conditions in the general debt markets have reduced the likelihood that the
securities will successfully auction within the next 12 months. Auction rate securities that did not successfully auction reset to the maximum rate as
prescribed in the underlying indenture and all of our holdings continue to be current with their interest payments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>20</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>For the fiscal year ended April 25, 2008, we recognized a
$3 million impairment loss on AFS debt securities. Based on our assessment of the credit quality of the underlying collateral and credit support available
to each of the remaining securities in which we are invested, we believe no other-than-temporary impairment has occurred as we have the ability and the intent
to hold these investments long enough to avoid realizing any significant loss. Additionally, if we required capital we believe we could liquidate the majority
of our portfolio and incur no material impairment loss and we have capacity under our commercial paper program and lines of credit that we could access. As of
April 25, 2008, we do not believe that we have material risk in our current portfolio of investments that would impact our financial condition or
liquidity. For further information about the risks associated with our investments, see the “Market Risk” section and the section entitled
“Risk Factors” in our Form 10-K.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Summary of Cash Flows</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><i><b><font size=1>(dollars in millions)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Cash provided by (used in):</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt;'><font size=2>Operating activities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3,489</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,979</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,220</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Investing activities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(2,790</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(1,701</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(2,867</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.75pt; text-indent:-.75pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Financing activities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(835</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(3,011</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,304</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Effect of exchange rate changes on cash and cash equivalents</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(60</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>105</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Net change in cash and cash equivalents</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(196</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: double white 2.25pt'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(1,738</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 5.25pt;text-indent:-5.25pt; '><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>762</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Operating Activities </font></b><font size=2> Our net cash
provided by operating activities was $3.489 billion for the fiscal year ended April 25, 2008 compared to net cash provided by operating activities of $2.979
billion in the same period of the prior year. The $510 million increase in net cash provided by operating activities was primarily attributable to a $442
million decrease in cash used for operating assets and liabilities. The decrease in cash used was led by our improved management of outstanding accounts
receivable and inventory.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our net cash provided by operating activities was $2.979 billion
for the fiscal year ended April 27, 2007 compared to net cash provided by operating activities of $2.220 billion in the same period of the prior year. The $759
million increase in net cash provided by operating activities was primarily attributable to a $1.055 billion decrease in cash used for operating assets and
liabilities. The decrease in cash used was led by our improved management of outstanding accounts receivable and inventory.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Investing Activities </font></b><font size=2> Our net cash used in investing activities was $2.790 billion for the fiscal year ended April 25, 2008 compared to $1.701 billion used in investing activities for the fiscal year ended April 27, 2007. The $1.089 billion increase in net cash used in investing activities was primarily attributable to the $4.185 billion increase in cash used for acquisitions and the purchase of intellectual property, principally the Kyphon acquisition, partially offset by $3.067 billion in incremental cash generated through the liquidation of marketable securities as compared to the prior year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our net cash used in investing activities was $1.701 billion for the fiscal year ended April 27, 2007 compared to $2.867 billion used in investing activities for the fiscal year ended April 28, 2006. The $1.166 billion decrease in net cash used in investing activities was primarily attributable to a decrease of $993 million in cash used for acquisitions and purchases of intellectual property, as fiscal year 2006 included several acquisitions and a $495 million decrease in cash used to purchase marketable securities. These decreases were partially offset by a $166 million increase in capital expenditures for property, plant, and equipment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Financing Activities </font></b><font size=2> Our net cash used in financing activities was $835 million for the fiscal year ended April 25, 2008, compared to net cash used in financing activities of $3.011 billion for the fiscal year ended April 27, 2007. The $2.176 billion decrease in net cash used in financing activities was primarily attributable to the fact that in the prior year $1.877 billion in cash was used to repurchase long-term debt as the bond holders put the Contingent Convertible Debentures to us and in fiscal year 2008 we generated proceeds of $543 million from short-term borrowings and $300 million from the issuance of long-term debt. These cash inflows were offset by a $505 million increase in cash used for stock repurchases. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>21</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our net cash used in financing activities was $3.011 billion for
the fiscal year ended April 27, 2007, compared to net cash provided by financing activities of $1.304 billion for the fiscal year ended April 28, 2006. The
$4.315 billion increase in net cash used in financing activities was primarily attributable to the following: a $1.877 billion increase in cash used to
repurchase long-term debt as the bond holders put the Contingent Convertible Debentures to us in fiscal year 2007, a $5.428 billion decrease in proceeds from
the issuance of long-term debt, and a $517 million net reduction in the sale of warrants. These cash outflows were offset by a $2.550 billion decline in cash
used to repurchase common stock and a $1.075 billion decrease in cash used in the purchase of call options. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Off-Balance Sheet Arrangements and Long-Term Contractual Obligations </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We acquire assets still in development, enter into research and development arrangements and sponsor certain clinical trials that often require milestone and/or royalty payments to a third-party, contingent upon the occurrence of certain future events. Milestone payments may be required contingent upon the successful achievement of an important point in the development life cycle of a product or upon certain pre-designated levels of achievement in clinical trials. In addition, if required by the arrangement, we may have to make royalty payments based on a percentage of sales related to the product under development or in the event that regulatory approval for marketing is obtained. In situations where we have no ability to influence the achievement of the milestone or otherwise avoid the payment, we have included those milestone or minimum royalty payments in the following table. However,
the majority of these arrangements give us the discretion to unilaterally make the decision to stop development of a product or cease progress of a clinical trial, which would allow us to avoid making the contingent payments. Although we are unlikely to cease development if a device successfully achieves clinical testing objectives, these payments are not included in the table of contractual obligations because of the contingent nature of these payments and our ability to avoid them if we decided to pursue a different path of development or testing. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.29in;text-align:left;'><font size=2>In the normal course of business, we periodically enter into agreements that require us to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising out of our products or the negligence of our personnel or claims alleging that our products infringe third-party patents or other intellectual property. Our maximum exposure under these indemnification provisions cannot be estimated, and we have not accrued any liabilities within our consolidated financial statements or included any indemnification provisions in our commitments table. Historically, we have not experienced significant losses on these types of indemnification obligations. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We believe our off-balance sheet arrangements do not have a material current or anticipated future effect on our consolidated earnings, financial position or cash flows. Presented below is a summary of contractual obligations and other minimum commercial commitments. See Notes 7, 8 and 14 to the consolidated financial statements for additional information regarding long-term debt, foreign currency contracts, and lease obligations, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In addition to the amounts shown in the following table, we have $455 million of unrecognized tax benefits recorded as long-term liabilities in</font><i><font size=2> long-term accrued incomes taxes</font></i><font size=2> on the April 25, 2008 consolidated balance sheet. However, we are uncertain as to if or when such amounts may be settled. The gross accrued interest and penalties related to these uncertain tax positions totaled $126 million at April 25, 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="20" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Maturity by Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Total</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2009</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2010</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2011</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2012</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2013</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Thereafter</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="36%" VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:9.0pt; text-indent:-9.0pt'><i><b><font size=1>(dollars in millions)</font></b></i></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><i><font size=2>Contractual obligations related to</font></i><font size=2> </font><i><font size=2>off-balance sheet arrangements:</font></i><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Foreign currency contracts<sup>(1)</sup></font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,613</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,812</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,026</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>775</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Operating leases<sup>(2)</sup></font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>261</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>88</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>59</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>35</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>29</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Inventory purchases<sup>(3)</sup></font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>749</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>323</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>174</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>103</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>30</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>92</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Commitments to fund minority investments/contingent acquisition consideration<sup>(4)</sup></font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>478</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>280</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>53</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>85</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Interest payments<sup>(5)</sup></font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>558</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>124</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>124</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>111</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>64</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>64</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>71</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Other<sup>(6)</sup></font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>210</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>44</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>32</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>69</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Total</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,869</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,671</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,481</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,078</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>144</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>147</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>348</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><i><font size=2>Contractual obligations reflected in the balance sheet:</font></i></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Long-term debt, excluding capital leases<sup>(7)</sup></font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,829</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>94</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,908</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,200</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>627</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Capital leases<sup>(8)</sup></font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>20</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Other<sup>(9)</sup></font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Total</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,918</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>115</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,925</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,220</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>628</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>22</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_______________</font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="24" VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt">
<p style='margin:0in;margin-bottom:0pt'><font size=2>(1) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>As these obligations were entered into as hedges, the majority of these obligations will be offset by losses/gains on the related assets, liabilities and transactions being hedged. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(2) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>Certain leases require us to pay real estate taxes, insurance, maintenance, and other operating expenses associated with the leased premises. These future costs are not included in the schedule above.</font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(3) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>We have included inventory purchase commitments which are legally binding and specify minimum purchase quantities. These purchase commitments do not exceed our projected requirements and are in the normal course of business. These commitments do not include open purchase orders. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(4) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Certain commitments related to the funding of minority
investments and/or previous acquisitions are contingent upon the achievement of certain product-related milestones and various other favorable operational
conditions. While it is not certain if and/or when these payments will be made, the maturity dates included in this table reflect our best estimates. These commitments also
include amounts related to our agreement to form a joint venture with Shandong Weigao Group Medical Polymer Company Limited (Weigao), which was announced in
December 2007, to market therapies in the spine and orthopedics sector throughout China. In addition, we agreed to acquire a 15 percent equity interest in
Weigao for approximately $220 million. We expect to close the transaction in the first half of fiscal year 2009. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(5) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>Interest payments in the table above reflect the interest on our outstanding debt, including the $4.400 billion of Senior Convertible Notes, $1.000 billion of Senior Notes, $94 million of Contingent Convertible Debentures, and the $300 million Credit Agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd. The interest rate on each outstanding obligation varies and interest is payable semi-annually on the Senior Convertible Notes and the Contingent Convertible Debentures. The interest rate is 1.500 percent on the $2.200 billion Senior Convertible Notes due 2011 and 1.625 percent on the $2.200 billion Senior Convertible Notes due 2013, 4.375 percent on the $400 million of Senior Notes due 2010, 4.750 percent on the $600 million of Senior Notes due 2015, and 1.250 percent on the Contingent Convertible Debentures due 2021. Interest on the $300 million Credit Agreement with the Bank of Tokyo-Mitsubishi UFJ,
Ltd. due 2011 is variable and paid quarterly. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(6) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>These obligations include certain research and development arrangements. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(7) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>Long-term debt in the table above includes $4.400 billion Senior Convertible Notes
issued in April 2006, $1.000 billion Senior Notes issued in September 2005 and $94 million related to our Contingent Convertible Debentures, and the $300
million Credit Agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd. In September 2006, we repurchased $1.877 billion of Contingent Convertible
Debentures as a result of certain holders exercising their put options. The table above also includes the impact of the five year interest rate swap entered
into in November 2005 and the eight year interest rate swap entered into in June 2007. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(8) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>Capital lease obligations include a sale-leaseback agreement entered into in the fourth quarter of fiscal year 2006 whereby certain manufacturing equipment was sold and is being leased by us over a seven year period. </font></p> </td> </tr>
<tr >
<td width="24" valign=top style='padding:1.5pt 1.5pt 1.5pt 1.5pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>(9) </font></p> </td>
<TD VALIGN="TOP" STYLE="padding:1.5pt 1.5pt 1.5pt 1.5pt;"> <p><font size=2>These obligations primarily relate to the agreement with Michelson that settled all outstanding litigation and disputes between Michelson and the Company. See Note 4 to the consolidated financial statements for further discussion.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Debt and Capital</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In October 2005 and June 2007, our Board of Directors authorized the repurchase of up to 40 million and 50 million shares of our common stock, respectively. In addition, in April 2006, the Board of Directors made a special authorization for the repurchase of up to 50 million shares in connection with the $4.400 billion Senior Convertible Note offering (see below for further discussion). </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.28in;text-align:left;'><font size=2>Shares are repurchased from time to time to support our stock-based compensation programs and to take advantage of favorable market conditions. During fiscal years 2008 and 2007, we repurchased approximately 30.7 million shares and 21.7 million shares at an average price of $50.28 and $47.83, respectively. The amounts disclosed as repurchased for fiscal year 2007 include 544,224 shares that we obtained as part of the final settlement of the previously announced and executed accelerated share repurchase program. Excluding the shares obtained in the settlement of the accelerated share repurchase program, for fiscal year 2007 we repurchased 21.2 million shares at an average price of $49.06. As of April 25, 2008, we have approximately 34.3 million shares remaining under current buyback authorizations approved by the Board of Directors. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>23</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In April 2006, we issued $2.200 billion of 1.500 percent Senior
Convertible Notes due 2011 and $2.200 billion of 1.625 percent Senior Convertible Notes due 2013, collectively the Senior Convertible Notes. The Senior
Convertible Notes were issued at par and pay interest in cash semi-annually in arrears on April 15 and October 15 of each year. The Senior Convertible Notes are
unsecured unsubordinated obligations and rank equally with all other unsecured and unsubordinated indebtedness. The Senior Convertible Notes have an initial
conversion price of $56.14 per share. The Senior Convertible Notes may only be converted: (i) during any calendar quarter if the closing price of our
common stock reaches 140 percent of the conversion price for 20 trading days during a specified period, or (ii) if specified distributions to holders of
our common stock are made or specified corporate transactions occur, or (iii) during the last month prior to maturity of the applicable notes. Upon
conversion, a holder would receive: (i) cash equal to the lesser of the principal amount of the note or the conversion value and (ii) to the extent
the conversion value exceeds the principal amount of the note, shares of our common stock, cash, or a combination of common stock and cash, at our option. In
addition, upon a change in control, as defined, the holders may require us to purchase for cash all or a portion of their notes for 100 percent of the principal
amount of the notes plus accrued and unpaid interest, if any, plus a number of additional make-whole shares of our common stock, as set forth in the applicable
indenture. The indentures under which the Senior Convertible Notes were issued contain customary covenants, all of which we remain in compliance with as
of April 25, 2008. A total of $2.500 billion of the net proceeds from these note issuances were used to repurchase common stock. As of April 25, 2008,
pursuant to provisions in the indentures relating to the Company’s increase of its quarterly dividend to shareholders, the conversion rates for each of the
Senior Convertible Notes is now 17.8715, which correspondingly changed the conversion price per share for each of the Senior Convertible Notes to $55.96. See
Note 7 to the consolidated financial statements for further discussion of the accounting treatment.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Concurrent with the issuance of the Senior Convertible Notes, we purchased call options on our common stock in private transactions. The call options allow us to receive shares of our common stock and/or cash from counterparties equal to the amounts of common stock and/or cash related to the excess conversion value that we would pay to the holders of the Senior Convertible Notes upon conversion. These call options will terminate upon the earlier of the maturity dates of the related Senior Convertible Notes or the first day all of the related Senior Convertible Notes are no longer outstanding due to conversion or otherwise. The call options, which cost an aggregate $1.075 billion ($699 million net of tax benefit), were recorded as a reduction of shareholders’ equity. See Note 7 to the consolidated financial statements for further discussion of the accounting treatment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In separate transactions, we sold warrants to issue shares of our common stock at an exercise price of $76.56 per share in private transactions. Pursuant to these transactions, warrants for 41 million shares of our common stock may be settled over a specified period beginning in July 2011 and warrants for 41 million shares of our common stock may be settled over a specified period beginning in July 2013 (the “settlement dates”). If the average price of our common stock during a defined period ending on or about the respective settlement dates exceeds the exercise price of the warrants, the warrants will be settled in shares of our common stock. Proceeds received from the issuance of the warrants totaled approximately $517 million and were recorded as an addition to shareholders’ equity. See Note 7 to the consolidated financial statements for further discussion of the
accounting treatment. In April 2008, certain of the holders requested adjustment to the exercise price of the warrants from $76.47 to $76.30 pursuant to the anti-dilution provisions of the warrants relating to our payment of dividends to common shareholders. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.29in;text-align:left;'><font size=2>In September 2005, we issued two tranches of Senior Notes with the aggregate face value of $1.000 billion. The first tranche consisted of $400 million of 4.375 percent Senior Notes due 2010 and the second tranche consisted of $600 million of 4.750 percent Senior Notes due 2015. Each tranche was issued at a discount which resulted in an effective interest rate of 4.433 percent and 4.760 percent for the five and ten year Senior Notes, respectively. Interest on each series of Senior Notes is payable semi-annually, on March 15 and September 15 of each year. The Senior Notes are unsecured unsubordinated obligations and rank equally with all other unsecured and unsubordinated indebtedness. The indentures under which the Senior Notes were issued contain customary covenants, all of which we remain in compliance with as of April 25, 2008. We used the net proceeds from the sale of the Senior
Notes for repayment of a portion of our outstanding commercial paper. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In November 2005, we entered into a five year interest rate swap agreement with a notional amount of $200 million. This interest rate swap agreement was designated as a fair value hedge of the changes in fair value of a portion of our fixed-rate $400 million Senior Notes due 2010. We pay variable interest equal to the three-month London Interbank Offered Rate (LIBOR) minus 55 basis points and we receive a fixed interest rate of 4.375 percent. The outstanding market value of this swap agreement was an $8 million unrealized gain at April 25, 2008. The unrealized gain of $8 million at April 25, 2008 is recorded in </font><i><font size=2>long-term debt</font></i><font size=2> with the offset recorded in </font><i><font size=2>other long-term assets</font></i><font size=2> on the consolidated balance sheets. There was no unrealized gain or loss at April 27, 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In June 2007, we entered into an eight year interest rate swap agreement with a notional amount of $300 million. This interest rate swap agreement was designated as a fair value hedge of the changes in fair value of a portion of our fixed-rate $600 million Senior Notes due 2015. We pay variable interest equal to the three-month LIBOR minus 90 basis points and we receive a fixed interest rate of 4.750 percent. The outstanding market value of this swap agreement was a $27 million unrealized gain at April 25, 2008. The unrealized gain of $27 million at April 25, 2008 is recorded in </font><i><font size=2>long-term debt</font></i><font size=2> with the offset recorded in </font><i><font size=2>other long-term assets </font></i><font size=2>on the consolidated balance sheets.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>24</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2001, we completed a $2.013 billion private
placement of 1.250 percent Contingent Convertible Debentures due September 2021 (Old Debentures). Interest is payable semi-annually. Each Old Debenture is
convertible into shares of common stock at an initial conversion price of $61.81 per share; however, the Old Debentures are not convertible before their final
maturity unless the closing price of our common stock reaches 110 percent of the conversion price for 20 trading days during a consecutive 30 trading day
period. In September 2002 and 2004, as a result of certain holders of the Old Debentures exercising their put options, we repurchased $39 million and
$1 million, respectively, of the Old Debentures for cash.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On January 24, 2005, we completed an exchange offer whereby holders of approximately $1.930 billion of the total principal amount of the Old Debentures exchanged their existing securities for an equal principal amount of 1.250 percent Contingent Convertible Debentures, Series B due 2021 (New Debentures), as described below. Following the completion of the exchange offer, we repurchased approximately $2 million of the Old Debentures for cash.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The terms of the New Debentures are consistent with the terms of
the Old Debentures noted above, except that: (i) the New Debentures require us to settle all conversions for a combination of cash and shares of our common
stock, if any, in lieu of only shares. Upon conversion of the New Debentures, we will pay holders cash equal to the lesser of the principal amount of the
New Debentures or their conversion value, and shares of our common stock to the extent the conversion value exceeds the principal amount of the New Debentures;
and (ii) the New Debentures require us to pay only cash (in lieu of shares of our common stock or a combination of cash and shares of our common stock)
when we repurchase the New Debentures at the option of the holder or when we repurchase the New Debentures in connection with a change of control.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2006, as a result of certain holders of the New Debentures and Old Debentures exercising their put options, we repurchased $1.835 billion of the New Debentures for cash and $42 million of the Old Debentures for cash. We may be required to repurchase the remaining debentures at the option of the holders in September 2008, 2011 or 2016. Twelve months prior to the put options becoming exercisable, the remaining balance of the New Debentures and the Old Debentures will be classified as </font><i><font size=2>short-term borrowings. </font></i><font size=2>At each balance sheet date without a put option within the subsequent four quarters, the remaining balance will be classified as </font><i><font size=2>long-term debt. </font></i><font size=2>Accordingly, during the second quarter of fiscal year 2008, $93 million of New Debentures and $1 million of the Old Debentures were
reclassified from </font><i><font size=2>long-term debt </font></i><font size=2>to </font><i><font size=2>short-term borrowings </font></i><font size=2>due to the put option becoming exercisable in September 2008. For put options exercised by the holders of the New Debentures and the Old Debentures, the purchase price is equal to the principal amount of the applicable debenture plus any accrued and unpaid interest thereon to the repurchase date. If the put option is exercised, we will pay holders the repurchase price solely in cash (or, for the Old Debentures, in cash or stock at our option). As of April 25, 2008, approximately $93 million aggregate principal amount of New Debentures remain outstanding and approximately $1 million aggregate principal amount of Old Debentures remain outstanding. We can redeem the debentures for cash at any time.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We maintain a commercial paper program that allows us to have a maximum of $2.250 billion in commercial paper outstanding, with maturities up to 364 days from the date of issuance. At April 25, 2008 and April 27, 2007, outstanding commercial paper totaled $874 million and $249 million, respectively. During fiscal years 2008 and 2007, the weighted average original maturity of the commercial paper outstanding was approximately 35 and 56 days, respectively, and the weighted average interest rate was 4.46 percent and 5.26 percent, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In connection with the issuance of the contingent convertible debentures, Senior Notes, Senior Convertible Notes and commercial paper, Standard and Poor’s Ratings Group and Moody’s Investors Service issued us strong long-term debt ratings of AA- and A1, respectively, and strong short-term debt ratings of A-1+ and P-1, respectively. These ratings remain unchanged from the same periods of the prior year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 2, 2007, we entered into a new Credit Agreement (the “New Credit Agreement”) with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (the “New Lender”). The New Credit Agreement provides for a $300 million unsecured revolving credit facility (the “New Facility”) maturing November 2, 2010. In addition to certain initial fees, we are obligated to pay a commitment fee based on the total revolving commitment. Interest rates on these borrowings are determined by a pricing matrix, based on our long-term debt ratings, assigned by Standard and Poor’s Ratings Group and Moody’s Investors Service. The New Credit Agreement contains customary representations and warranties of the Company as well as affirmative covenants regarding the Company. Upon the occurrence of an event of default as defined under the New Credit Agreement, the New Lender could elect to declare
all amounts outstanding under the New Facility to be immediately due and payable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have existing unsecured lines of credit of approximately $2.795 billion with various banks at April 25, 2008. The existing lines of credit include a five-year $1.750 billion syndicated credit facility dated December 20, 2006 that will expire on December 20, 2011 (Credit Facility). The Credit Facility provides backup funding for the commercial paper program and may also be used for general corporate purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>25</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Credit Facility provides us with the ability to increase its capacity by an additional $500 million at any time during the life of the five-year term of the agreement. We can also request the extension of the Credit Facility maturity date for one additional year on December 20, 2008, the second anniversary of the date of this facility. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest rates on these borrowings are determined by a pricing matrix, based on our long-term debt ratings, assigned by Standard and Poor’s Ratings Group and Moody’s Investors Service. Facility fees are payable on the credit facilities and are determined in the same manner as the interest rates. The agreements also contain other customary covenants, all of which we remain in compliance with as of April 25, 2008. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As of April 25, 2008, we have unused credit lines and commercial paper capacity of approximately $1.945 billion.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Acquisitions</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On April 15, 2008, we recorded an IPR&D charge of $42 million related to the acquisition of NDI Medical (NDI), a development stage company focused on commercially developing technology to stimulate the dorsal genital nerve as a means to treat urinary incontinence. Total consideration for NDI was approximately $42 million which included $39 million in cash and the forgiveness of $3 million of pre-existing loans provided to NDI. The acquisition will provide us with exclusive rights to develop and use NDI’s technology in the treatment of urinary urge incontinence. This payment was expensed as IPR&D since technological feasibility of the underlying projects had not yet been reached and such technology has no future alternative use.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 2, 2007, we consummated the acquisition of Kyphon and it became our wholly owned subsidiary. Kyphon develops and markets medical devices designed to restore and preserve spinal function using minimally invasive technology. Kyphon’s primary products are used in balloon kyphoplasty for the treatment of spinal compression fractures caused by osteoporosis or cancer, and in the IPD procedure for treating the symptoms of lumbar spinal stenosis. It is expected that the acquisition of Kyphon will add to the growth of our existing Spinal business by extending its product offerings into some of the fastest growing product segments of the spine market, enabling us to provide physicians with a broader range of therapies for use at all stages of the care continuum. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Under the terms of the agreement announced on July 27, 2007, Kyphon shareholders received $71 per share in cash for each share of Kyphon common stock they owned. Total consideration for the transaction was $4.203 billion which includes payments to Kyphon shareholders for the cancellation of outstanding shares, the assumption and settlement of existing Kyphon debt, and payment of direct acquisition costs. Total debt assumed relates to Kyphon’s obligations under existing credit and term loan facilities and outstanding senior convertible notes. As of the date of the transaction, the existing credit and term loan facilities were fully paid and terminated. The senior convertible notes were converted by the holders in the weeks following the close of the transaction and have been included in the total purchase consideration above. In addition, the total consideration includes the proceeds of
unwinding the related convertible note hedges and cancellation and payment of the warrants to the hedge participants that were originally issued by Kyphon in February 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The transaction was financed through a combination of $3.303 billion cash on hand, the issuance of $600 million short-term commercial paper and borrowing $300 million through a new long-term unsecured revolving credit facility.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The results of operations related to Kyphon have been included
in our consolidated statements of earnings since the date of the acquisition and include the full amortization of a $34 million inventory write-up recorded as
part of the Kyphon acquisition accounting. The pro forma impact of Kyphon was significant to our results for fiscal year 2008. See Note 4 to the
consolidated financial statements for the unaudited pro forma results of operations for fiscal years 2008 and 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 1, 2007, we recorded an IPR&D charge of $20
million related to the acquisition of Setagon, Inc. (Setagon), a development stage company focused on commercially developing metallic nanoporous surface
modification technology. The acquisition will provide us with exclusive rights to use and develop Setagon’s Controllable Elution Systems technology
in the treatment of cardiovascular disease. Total consideration for Setagon was approximately $20 million in cash, subject to purchase price increases, which
would be triggered by the achievement of certain milestones.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On June 25, 2007, we exercised a purchase option and acquired substantially all of the O-arm Imaging System (O-arm) assets of Breakaway Imaging, LLC (Breakaway), a privately held company. Prior to the acquisition, we had the exclusive rights to distribute and market the O-arm. The O-arm provides multi-dimensional surgical imaging for use in spinal and orthopedic surgical procedures. The acquisition is expected to bring the O-arm into a broad portfolio of image guided surgical solutions. Total consideration for Breakaway was approximately $26 million in cash, subject to purchase price increases, which would be triggered by the achievement of certain milestones. The pro forma impact of the acquisition of Breakaway was not significant to our results for fiscal year 2008 and 2007. The results of operations related to Breakaway have been included in our consolidated statement of earnings since
the date of acquisition. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>26</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On March 26, 2007, we acquired manufacturing assets, know-how, and an exclusive license to intellectual property related to the manufacture and distribution of EndoSheath products from Vision–Sciences, Inc. (VSI), which was accounted for as a purchase of assets. The license acquired from VSI expanded our existing U.S. distribution rights of EndoSheath products to worldwide distribution rights. The EndoSheath is a sterile disposable sheath that fits over a fiberoptic endoscope preventing contamination of the scope during procedures and allowing reuse of the scope without further sterilization. The consideration paid was $27 million in cash which was primarily allocated to technology-based intangible assets with an estimated useful life of 10 years. The purchase price is subject to increases triggered by the achievement of certain milestones.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On September 15, 2006, we acquired and/or licensed selected patents and patent applications owned by Dr. Eckhard Alt (Dr. Alt), or certain of his controlled companies in a series of transactions. In connection therewith, we also resolved all outstanding litigation and disputes with Dr. Alt and certain of his controlled companies. The agreements required the payment of total consideration of $75 million, $74 million of which was capitalized as technology based intangible assets that had an estimated useful life of 11 years at the time of acquisition. The acquired patents or licenses pertain to the cardiac rhythm disease management field and have both current application and potential for future patentable commercial products. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On July 25, 2006, we acquired substantially all of the assets of Odin Medical Technologies, Ltd. (Odin), a privately held company. Prior to the acquisition, we had an equity investment in Odin, which was accounted for under the cost method of accounting. Odin focused on the manufacture of the PoleStar iMRI-Guidance System which we already exclusively distributed. We expect this acquisition to help further drive the acceptance of iMRI guidance in neurosurgery. The consideration for Odin was approximately $21 million, which included $6 million in upfront cash and a $2 million milestone payment. The $8 million in net cash paid resulted from the $21 million in consideration less the value of our prior investment in Odin and Odin’s existing cash balance. The pro forma impact of Odin was not significant to our results for fiscal year 2007. The results of operations
related to Odin have been included in our consolidated statements of earnings since the date of the acquisition.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>New Accounting Pronouncements</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Information regarding new accounting pronouncements is included in Note 1 to the consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Operations Outside the U.S.</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The table below illustrates U.S. net sales versus net sales outside the U.S. for fiscal years 2008, 2007 and 2006:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><i><b><font size=1>(dollars in millions)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>U.S. net sales</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,336</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,900</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,626</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Non-U.S. net sales</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,179</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,399</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,666</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Total net sales</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,515</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,299</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,292</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>From fiscal year 2007 to fiscal year 2008, consolidated net
sales in the U.S. grew 6 percent compared to 18 percent growth in net sales outside the U.S. The slower U.S. growth is primarily a result of the
voluntary suspension of the Fidelis lead and the voluntary suspension of U.S. shipments of Physio-Control products from our Redmond, Washington facility.
Outside the U.S., net sales growth was strong across all businesses and led by strong performance in CardioVascular, Diabetes and CRDM, the benefit of
the addition of Kyphon in Spinal, and a favorable impact of foreign currency translation which added 9 percentage points to the outside the U.S. growth rate.
CardioVascular net sales were led by market share gains with Endeavor and Endeavor Resolute. Diabetes sales increased as a result of further acceptance of the
paradigm Real Time System. Increased sales of Defibrillation Systems and Pacing Systems led the increase within our CRDM business.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>From fiscal year 2006 to fiscal year 2007, consolidated net
sales in the U.S. grew 4 percent compared to 20 percent growth in net sales outside the U.S. The slower U.S. growth is primarily a result of declines
in the overall ICD market in the U.S. and the voluntary suspension of U.S. shipments of Physio-Control products from our Redmond, Washington facility.
Outside the U.S., net sales growth was strong across all businesses and led by strong performance in CardioVascular and CRDM, and a favorable impact of
foreign currency translation. CardioVascular net sales were led by market share gains with Endeavor. Increased sales of Defibrillation Systems and Pacing
Systems led the increase within our CRDM business.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>27</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net sales outside the U.S. are accompanied by certain financial risks, such as collection of receivables, which typically have longer payment terms. Outstanding receivables from customers outside the U.S. totaled $1.800 billion at April 25, 2008, or 53 percent of total outstanding accounts receivable, and $1.456 billion at April 27, 2007, or 50 percent of total outstanding accounts receivable. The increase in the percentage of accounts receivable from customers outside the U.S. is primarily driven by increased sales volume outside the U.S. and the impact of foreign currency exchange rates.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Market Risk</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Due to the global nature of our operations, we are subject to the exposures that arise from foreign currency exchange rate fluctuations. We manage these exposures using operational and economic hedges as well as derivative financial instruments. The primary currencies hedged are the Euro and the Japanese Yen.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our objective in managing exposure to foreign currency fluctuations is to minimize earnings and cash flow volatility associated with foreign exchange rate changes. We enter into various contracts, principally forward contracts that change in value as foreign exchange rates change, to protect the value of existing foreign currency assets, liabilities, net investments, and probable commitments. The gains and losses on these contracts offset changes in the value of the related exposures. It is our policy to enter into foreign currency hedging transactions only to the extent true exposures exist; we do not enter into foreign currency transactions for speculative purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We had foreign exchange derivative contracts outstanding in notional amounts of $6.613 billion and $5.372 billion at April 25, 2008 and April 27, 2007, respectively. The fair value of these contracts at April 25, 2008 was $441 million less than the original contract value. A sensitivity analysis of changes in the fair value of all foreign exchange derivative contracts at April 25, 2008 indicates that, if the U.S. dollar uniformly strengthened/weakened by 10 percent against all currencies, the fair value of these contracts would increase/decrease by $654 million, respectively. Any gains and losses on the fair value of derivative contracts would be largely offset by gains and losses on the underlying transactions. These offsetting gains and losses are not reflected in the above analysis.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We are also exposed to interest rate changes affecting principally our investments in interest rate sensitive instruments. A sensitivity analysis of the impact on our interest rate sensitive financial instruments of a hypothetical 10 percent change in short-term interest rates compared to interest rates at April 25, 2008 indicates that the fair value of these instruments would correspondingly change by $21 million. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have investments in marketable debt securities that are classified and accounted for as available-for-sale. Our debt securities include government securities, commercial paper, corporate bonds, bank certificates of deposit, and mortgage backed and other asset backed securities including auction rate securities. Market conditions during the third and fourth quarters of fiscal year 2008 and subsequent to our fiscal year-end continue to indicate significant uncertainty on the part of investors on the economic outlook for the U.S. and for financial institutions that have potential exposure to the sub-prime housing market. This uncertainty has created reduced liquidity across the fixed income investment market, including certain securities in which we have invested. As a result, some of our investments have experienced reduced liquidity including unsuccessful monthly auctions for our auction
rate security holdings. During the third quarter of fiscal year 2008, we reclassified all of our auction rate fixed income securities, which had a cost basis of $198 million, from </font><i><font size=2>short-term investments</font></i><font size=2> to </font><i><font size=2>long-term investments</font></i><font size=2> on our consolidated balance sheet due to the fact that they are currently not trading, and current conditions in the general debt markets have reduced the likelihood that the securities will successfully auction within the next 12 months. Auction rate securities that did not successfully auction reset to the maximum rate as prescribed in the underlying indenture and all of our holdings continue to be current with their interest payments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>For the fiscal year ended April 25, 2008, we recognized a
$3 million impairment loss on AFS debt securities. Based on our assessment of the credit quality of the underlying collateral and credit support available
to each of the remaining securities in which we are invested, we believe no other-than-temporary impairment has occurred as we have the ability and the intent
to hold these investments long enough to avoid realizing any significant loss. Additionally, if we required capital, we believe we could liquidate the majority
of our portfolio and incur no material impairment loss and we have capacity under our commercial paper program and lines of credit that we could access. As of
April 25, 2008, we do not believe that we have material risk in our current portfolio of investments that would impact our financial condition or
liquidity. As of April 25, 2008, we have $70 million of gross unrealized losses on our aggregate investments of $2.631 billion; however, if market
conditions continue to deteriorate further, some of these holdings may experience other-than-temporary impairment in the future. For further information
about the liquidity risks associated with our investments, see the “Liquidity and Capital Resources” section and the section entitled
“Risk Factors” in our Form 10-K.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>28</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We lend certain fixed income securities to enhance our investment income. These lending activities are collateralized at an average rate of 103 percent, with the collateral determined based on the underlying securities and creditworthiness of the borrowers. The value of the securities on loan at April 25, 2008 and April 27, 2007 was $610 million and $1.318 billion, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Government Regulation and Other Considerations </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Our medical devices are subject to regulation by numerous government agencies, including the FDA and comparable foreign agencies. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our medical devices.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Authorization to commercially distribute a new medical device in the U.S. is generally received in one of two ways. The first, known as the 510(k) process, requires us to demonstrate that our new medical device is substantially equivalent to a legally marketed medical device. In this process, we must submit data that supports our equivalence claim. If human clinical data is required, it must be gathered in compliance with FDA investigational device exemption regulations. We must receive an order from the FDA finding substantial equivalence to another legally marketed medical device before we can commercially distribute the new medical device. Modifications to cleared medical devices can be made without using the 510(k) process if the changes do not significantly affect safety or effectiveness. A very small number of our devices are exempt from 510(k) clearance requirements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The second, more rigorous process, known as pre-market approval (PMA), requires us to independently demonstrate that the new medical device is safe and effective. We do this by collecting data, including human clinical data for the medical device. The FDA will authorize commercial release if it determines there is reasonable assurance that the medical device is safe and effective. This process is generally much more time-consuming and expensive than the 510(k) process.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Both before and after a product is commercially released, we
have ongoing responsibilities under FDA regulations. The FDA reviews design and manufacturing practices, labeling and record keeping, and manufacturers’
required reports of adverse experience and other information to identify potential problems with marketed medical devices. We may be subject to periodic
inspection by the FDA for compliance with the FDA’s good manufacturing practice regulations among other FDA requirements, such as restrictions on
advertising and promotion. These regulations, also known as the Quality System Regulations, govern the methods used in, and the facilities and controls used
for, the design, manufacture, packaging and servicing of all finished medical devices intended for human use. If the FDA were to conclude that we are not in
compliance with applicable laws or regulations, or that any of our medical devices are ineffective or pose an unreasonable health risk, the FDA could ban such
medical devices, detain or seize adulterated or misbranded medical devices, order a recall, repair, replacement, or refund of such devices, and require us to
notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health. The FDA may also impose operating
restrictions, enjoin and restrain certain violations of applicable law pertaining to medical devices, and assess civil or criminal penalties against our
officers, employees, or us. The FDA may also recommend prosecution to the U.S. Department of Justice.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The FDA, in cooperation with U.S. Customs and Border Protection (CBP), administers controls over the import of medical devices into the U.S. The CBP imposes its own regulatory requirements on the import of our products, including inspection and possible sanctions for noncompliance. The FDA also administers certain controls over the export of medical devices from the U.S. International sales of our medical devices that have not received FDA approval are subject to FDA export requirements. Each foreign country to which we export medical devices also subjects such medical devices to their own regulatory requirements. Frequently, we obtain regulatory approval for medical devices in foreign countries first because their regulatory approval is faster or simpler than that of the FDA. However, as a general matter, foreign regulatory requirements are becoming increasingly stringent.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In the European Union, a single regulatory approval process has been created, and approval is represented by the CE Mark. To obtain a CE Mark in the European Union, defined products must meet minimum standards of safety and quality (i.e., the essential requirements) and then comply with one or more of a selection of conformity routes. A Notified Body assesses the quality management systems of the manufacturer and the product conformity to the essential and other requirements within the Medical Device Directive. Medtronic is subject to inspection by Notified Bodies for compliance.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>To be sold in Japan, most medical devices must undergo thorough safety examinations and demonstrate medical efficacy before they are granted approval, or “shonin.” The Japanese government, through the Ministry of Health, Labour, and Welfare (MHLW), regulates medical devices under the Pharmaceutical Affairs Law (PAL). Implementation of PAL and enforcement practices thereunder are evolving, and compliance guidance from MHLW is still in development. Consequently, companies continue to work on establishing improved systems for compliance with PAL. Penalties for a company’s noncompliance with PAL could be severe, including revocation or suspension of a company’s business license and criminal sanctions.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>29</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The process of obtaining approval to distribute medical products is costly and time-consuming in virtually all of the major markets where we sell medical devices. We cannot assure that any new medical devices we develop will be approved in a timely or cost-effective manner, or approved at all.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Federal and state laws protect the confidentiality of certain patient health information, including patient medical records, and restrict the use and disclosure of patient health information by healthcare providers. In particular, in April 2003, the U.S. Department of Health and Human Services (HHS) published patient privacy rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA privacy rule) and, in April 2005, published security rules for protected health information. The HIPAA privacy and security rules govern the use, disclosure and security of protected health information by “Covered Entities,” which are healthcare providers that submit electronic claims, health plans and healthcare clearinghouses. Other than our Diabetes operating segment and our health insurance plans, each of which is a Covered Entity, and where we operate as a Business
Associate (which is anyone that performs a service on behalf of a Covered Entity involving the use or disclosure of protected health information and is not a member of the covered entity’s workforce), the HIPAA privacy and security rules only affect us indirectly. The patient data that we receive and analyze may include protected health information. We are committed to maintaining patients’ privacy and working with our customers and business partners in their HIPAA compliance efforts. The ongoing costs and impacts of assuring compliance with the HIPAA privacy and security rules are not material to our business.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Government and private sector initiatives to limit the growth of healthcare costs, including price regulation, competitive pricing, coverage and payment policies, and managed-care arrangements, are continuing in many countries where we do business, including the U.S. These changes are causing the marketplace to put increased emphasis on the delivery of more cost-effective medical devices. Government programs, including Medicare and Medicaid, private healthcare insurance, and managed-care plans have attempted to control costs by limiting the amount of reimbursement they will pay for particular procedures or treatments, and other mechanisms designed to constrain utilization and contain costs, including, for example, gainsharing, where a hospital agrees with physicians to share any realized cost savings resulting from the physicians’ collective change in practice patterns such as
standardization of devices where medically appropriate. This has created an increasing level of price sensitivity among customers for our products. Some third-party payors must also approve coverage for new or innovative devices or therapies before they will reimburse healthcare providers who use the medical devices or therapies. Even though a new medical device may have been cleared for commercial distribution, we may find limited demand for the device until reimbursement approval has been obtained from governmental and private third-party payors. In addition, some private third-party payors require that certain procedures or that the use of certain products be authorized in advance as a condition of reimbursement. As a result of our manufacturing efficiencies and cost controls, we believe we are well-positioned to respond to changes resulting from the worldwide trend toward cost-containment; however, uncertainty remains as to the nature of any future legislation, making it difficult
for us to predict the potential impact of cost-containment trends on future operating results.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The delivery of our devices is subject to regulation by HHS and comparable state and foreign agencies responsible for reimbursement and regulation of healthcare items and services. U.S. laws and regulations are imposed primarily in connection with the Medicare and Medicaid programs, as well as the government’s interest in regulating the quality and cost of healthcare. Foreign governments also impose regulations in connection with their healthcare reimbursement programs and the delivery of healthcare items and services.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Federal healthcare laws apply when we or customers submit claims
for items or services that are reimbursed under Medicare, Medicaid or other federally-funded healthcare programs. The principal federal laws include:
(1) the False Claims Act which prohibits the submission of false or otherwise improper claims for payment to a federally-funded healthcare program;
(2) the Anti-Kickback Statute which prohibits offers to pay or receive remuneration of any kind for the purpose of inducing or rewarding referrals of items
or services reimbursable by a Federal healthcare program; (3) tbe Stark law which prohibits physicians from referring Medicare or Medicaid patients to a
provider that bills these programs for the provision of certain designated health services if the physician (or a member of the physician’s immediate
family) has a financial relationship with that provider; and (4) healthcare fraud statutes that prohibit false statements and improper claims with any
third-party payor. There are often similar state false claims, anti-kickback, anti-self referral and insurance fraud laws that apply to claims submitted under
state Medicaid or state-funded or private healthcare benefit programs. In addition, the U.S. Federal Corrupt Practices Act can be used to prosecute companies in
the U.S. for arrangements with physicians or other parties outside the U.S. if the physician or party is a government official of another country and the
arrangement violates the law of that country.
</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The laws applicable to us are subject to change, and to evolving interpretations. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, Medtronic and its officers and employees could be subject to severe criminal and civil penalties including substantial penalties, fines and damages, and exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>30</font></A></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We operate in an industry characterized by extensive patent litigation. Patent litigation can result in significant damage awards and injunctions that could prevent the manufacture and sale of affected products or result in significant royalty payments in order to continue selling the products. At any given time, we are involved as both a plaintiff and a defendant in a number of patent infringement actions. While it is not possible to predict the outcome of patent litigation incident to our business, we believe the costs associated with this type of litigation could have a material adverse impact on our consolidated results of operations, financial position or cash flows. See Notes 2 and 15 to the consolidated financial statements for additional information.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We operate in an industry susceptible to significant product liability claims. These claims may be brought by individuals seeking relief or by groups seeking to represent a class. In addition, product liability claims may be asserted against us in the future based on events we are not aware of at the present time.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We are also subject to various environmental laws and regulations both within and outside the U.S. Like other medical device companies, our operations involve the use of substances regulated under environmental laws, primarily manufacturing and sterilization processes. We do not expect that compliance with environmental protection laws will have a material impact on our consolidated results of operations, financial position, or cash flows.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We have elected to self-insure most of our insurable risks, including medical and dental costs, disability coverage, physical loss to property, business interruptions, workers’ compensation, comprehensive general, director and officer, and product liability. This decision was made based on conditions in the insurance marketplace that have led to increasingly higher levels of self-insurance retentions, increasing number of coverage limitations, and dramatically higher insurance premium rates. We continue to monitor the insurance marketplace to evaluate the value to us of obtaining insurance coverage in the future. Based on historical loss trends, we believe that our self-insurance program accruals will be adequate to cover future losses. Historical trends, however, may not be indicative of future losses. These losses could have a material adverse impact on our consolidated results of
operations, financial position, or cash flows.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Cautionary Factors That May Affect Future Results </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>This Annual Report may include “forward-looking” statements. Forward-looking statements broadly involve our current expectations or forecasts of future results. Our forward-looking statements generally relate to our growth strategies, financial results, product development, regulatory approvals, competitive strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations, and sales efforts. Such statements can be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “possible,” “project,” “should,” “will” and similar words or expressions.
Forward-looking statements in this Annual Report include, but are not limited to, growth in our Spinal business related to the Kyphon acquisition and our intended reorganization and consolidation of certain activities; our intention to pursue the spin-off of Physio-Control; future launches of products and continued acceptance of products in our operating segments; the effectiveness of our development activities in reducing patient care costs; the elimination of certain positions related to the global realignment initiative; outcomes in our litigation matters; the continued strength of our balance sheet and liquidity; and the potential impact of our compliance with governmental regulations. One must carefully consider forward-looking statements and understand that such statements may be affected by inaccurate assumptions and may involve a variety of risks and uncertainties, known and unknown, including, among others, those discussed in the previous section, in the section entitled
“Risk Factors” in our Form 10-K, as well as those related to competition in the medical device industry, reduction or interruption in our supply, quality problems, liquidity, decreasing prices, adverse regulatory action, litigation success, self-insurance, healthcare policy changes, and international operations. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially. We intend to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our forward-looking statements, and are including this sentence for the express purpose of enabling us to use the protections of the safe harbor with respect to all forward-looking statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>We undertake no obligation to update any statement we make, but investors are advised to consult any further disclosures by us in our filings with the Securities and Exchange Commission, especially on Forms 10-K, 10-Q, and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historical results. In addition, actual results may differ materially from those anticipated due to a number of factors, including, among others, those discussed in the section entitled “Risk Factors” in our Form 10-K. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks, uncertainties, or potentially inaccurate assumptions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>31</font>
</A></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><a name="reports_of_management"></a></font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'>
<b><font size=2>Reports of Management</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Management’s Report on the Financial Statements </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The management of Medtronic, Inc. is responsible for the
integrity of the financial information presented in this Annual Report. The consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America. Where necessary, and as discussed under </font><i><font size=2>Critical Accounting
Estimates</font></i><font size=2> on pages 4-5, the consolidated financial statements reflect estimates based on management’s judgment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, who conducted their audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). The independent registered public accounting firm’s responsibility is to express an opinion that such financial statements present fairly, in all material respects, our financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Management’s Report on Internal Control over Financial Reporting </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in </font><i><font size=2>Internal Control</font></i><font size=2> – </font><i><font size=2>Integrated Framework</font></i><font size=2> issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of April 25, 2008. Our internal control over financial reporting as of April 25, 2008, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, who has also audited our consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>/s/ William A. Hawkins</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>William A. Hawkins </font></p>
<p style=' margin-bottom:5pt; margin-top:0pt;text-align:left;'><i><font size=2>President and Chief Executive Officer</font></i><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>/s/ Gary L. Ellis</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Gary L. Ellis </font></p>
<p style=' margin-bottom:5pt; margin-top:0pt;text-align:left;'><i><font size=2>Senior Vice President and Chief Financial Officer</font></i><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<BR><BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>32</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<PAGE>
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<p style=' margin-bottom:5pt; margin-top:5pt;text-align:center;'>
<font size=2><a name="report_of_independent"></a></font><b><font size=2>Report of Independent Registered Public Accounting Firm</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>To the Shareholders and Board of Directors of Medtronic, Inc.: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Medtronic, Inc. and its subsidiaries (the Company) at April 25, 2008 and April 27, 2007, and the results of their operations and their cash flows for each of the three fiscal years in the period ended April 25, 2008 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 25, 2008, based on criteria established in</font><i><font size=2> Internal Control – Integrated Framework</font></i><font size=2> issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The
Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As discussed in Note 12 to the consolidated financial statements, in 2008 the Company changed the manner in which it accounts for income taxes as a result of adopting the provisions of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” As discussed in Note 1 to the consolidated financial statements, in 2007 the Company changed the manner in which it accounts for share-based compensation and defined benefit pension and other postretirement plans as a result of adopting the provisions of Statement of Financial Accounting Standard No. 123 (revised 2004), “Share-Based Payment”</font><i><font size=2> </font></i><font size=2>and of Statement of Financial Accounting Standard No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>/s/ PricewaterhouseCoopers LLP</font></p>
<p style=' margin-bottom:0pt; margin-top:10pt;text-align:left;'><font size=2>PricewaterhouseCoopers LLP </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Minneapolis, Minnesota </font></p>
<p style=' margin-bottom:5pt; margin-top:0pt;text-align:left;'><font size=2>June 19, 2008 </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>33</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'>
</p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Medtronic, Inc.</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Consolidated</font></b><font size=2> </font><b><font size=2> <a name="statements_of_earnings"></a></font></b><i><b><font size=3>Statements
of Earnings</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><i><b><font size=1>(in millions, except per share data)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Net sales</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,515</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,299</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,292</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Costs and expenses:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Cost of products sold</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,446</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,168</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,815</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Research and development expense</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,275</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,239</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,113</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Selling, general and administrative expense</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,707</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,153</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,659</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Special charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>98</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Restructuring charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>28</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Certain litigation charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>366</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Purchased in-process research and development (IPR&D) charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>390</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>364</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Other expense, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>436</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>212</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>167</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt'><font size=2>Interest income, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(109</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(154</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 1.5pt;text-indent:-1.5pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(87</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt'><b><font size=2>Total costs and expenses</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,630</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,784</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,131</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Earnings before income taxes</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,885</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,515</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,161</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Provision for income taxes</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>654</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>713</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>614</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Net earnings</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,231</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Earnings per share:</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt'><b><font size=2>Basic</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.97</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.44</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt'><b><font size=2>Diluted</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.95</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.41</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.09</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Weighted average shares outstanding:</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Basic</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,130.7</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,149.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,204.5</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Diluted</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,142.1</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,161.8</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,217.3</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Cash dividends declared per common share</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.50</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.44</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.39</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><i><font size=2>The accompanying notes are an integral part of these consolidated financial statements.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<BR><BR><BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>34</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Medtronic, Inc.</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Consolidated</font></b><font size=2> </font><b><font size=2> <a name="balance_sheets"></a></font></b><i><b><font size=3>Balance Sheets</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 25,</font></b><br> <b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 27,</font></b><br> <b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:9.0pt; text-indent:-9.0pt'><i><b><font size=1>(in millions, except share and per share data)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Assets</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Current assets:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Cash and cash equivalents</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,060</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,256</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Short-term investments</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>553</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,822</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Accounts receivable, less allowances of $99 and $160, respectively</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,287</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,737</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Income tax receivable</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>73</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Inventories</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,280</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,215</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Deferred tax assets, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>600</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>405</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt'><font size=2>Prepaid expenses and other current assets</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>469</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>483</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><b><font size=2>Total current assets</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,322</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,918</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Property, plant and equipment, net</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,221</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,062</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Goodwill</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,519</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,327</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Other intangible assets, net</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,193</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,433</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Long-term investments</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,322</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,203</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Long-term deferred tax assets, net</font></b></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>103</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>204</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Other long-term assets</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>518</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>365</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:3.0pt'><b><font size=2>Total assets</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background: #CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22,198</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19,512</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Liabilities and Shareholders’ Equity</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Current liabilities:</font></b></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Short-term borrowings</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,154</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>509</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Accounts payable</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>383</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>282</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Accrued compensation</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>789</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>767</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Accrued income taxes</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>350</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt'><font size=2>Other accrued expenses</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,209</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>655</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><b><font size=2>Total current liabilities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,535</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,563</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Long-term debt</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,802</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,578</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Long-term accrued compensation</font></b><font size=2> </font><b><font size=2>and retirement benefits</font></b></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>304</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>264</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Long-term accrued income taxes</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>519</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Other long-term liabilities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>502</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>130</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:3.0pt'><b><font size=2>Total liabilities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,662</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,535</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Commitments and contingencies (Notes 7, 14 and 15)</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Shareholders’ equity:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Preferred stock-par value $1.00; 2.5 million shares authorized, none outstanding</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-9.0pt'><font size=2>Common stock-par value $0.10; 1.6 billion shares authorized, 1,124,926,775 and 1,143,407,452 shares issued and outstanding, respectively</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>112</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>114</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; '><font size=2>Retained earnings</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,710</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,925</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt'><font size=2>Accumulated other comprehensive loss</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(286</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(62</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 3.75pt;text-indent:-3.75pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:3.0pt'><b><font size=2>Total shareholders’ equity</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background: #CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,536</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,977</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:3.0pt'><b><font size=2>Total liabilities and shareholders’ equity</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22,198</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19,512</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><i><font size=2>The accompanying notes are an integral part of these consolidated financial statements.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>35</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Medtronic, Inc.</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Consolidated</font></b><font size=2> </font><b><font size=2> <a name="shareholders_equity"></a></font></b><i><b><font size=3>Statements of Shareholders’ Equity</font></b></i><b><font size=2> </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Common</font></b><br> <b><font size=1>Shares</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Common</font></b><br> <b><font size=1>Stock</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Retained</font></b><br> <b><font size=1>Earnings</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Accumulated</font></b><br> <b><font size=1>Other</font></b><br> <b><font size=1>Comprehensive (Loss)/Income</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Total</font></b><br> <b><font size=1>Shareholders’</font></b><br> <b><font size=1>Equity</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="50%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><i><b><font size=1>(in millions)</font></b></i><i></i></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Balance April 30, 2005</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,210</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>121</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,179</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>150</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,450</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Net earnings</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><i><font size=2>Other comprehensive (loss)/income</font></i></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Unrealized gain on investments</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Translation adjustment</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(13</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(13</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Minimum pension liability</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(9</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-2.25pt'><font size=2>Unrealized gain on foreign exchange derivatives</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>26</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>26</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Total comprehensive income</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,552</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Dividends to shareholders</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(465</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(465</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Issuance of common stock under stock purchase and award plans</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>516</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>518</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Repurchase of common stock</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(69</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(7</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3,582</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3,589</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Excess tax benefit from exercise of stock-based awards</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>99</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>99</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Purchased call options, net of tax benefit</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(699</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(699</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Sale of warrants</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>517</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>517</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Balance April 28, 2006</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,155</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>116</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,112</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>155</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,383</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Net earnings</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><i><font size=2>Other comprehensive (loss)/income</font></i></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Unrealized gain on investments</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>20</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>20</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Translation adjustment</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>18</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>18</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Minimum pension liability </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-2.25pt'><font size=2>Unrealized loss on foreign exchange derivatives</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>(70</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(70</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 2.25pt;text-indent:-2.25pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Total comprehensive income</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,794</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Dividends to shareholders</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(504</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(504</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Issuance of common stock under stock purchase and award plans</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>330</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>331</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Adjustment to adopt SFAS No. 158 (Note 1)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(209</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:6.0pt; text-indent:-6.0pt'><font size=2>) </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(209</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Repurchase of common stock</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(22</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,036</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,039</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Excess tax benefit from exercise of stock-based awards</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Stock-based compensation</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>185</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>185</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Balance April 27, 2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,143</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>114</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,925</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(62</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,977</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Net earnings</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,231</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,231</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><i><font size=2>Other comprehensive (loss)/income</font></i></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Unrealized loss on investments</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(47</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(47</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Translation adjustment</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Net change in retirement obligations </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-2.25pt'><font size=2>Unrealized loss on foreign exchange derivatives</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2>(211</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(211</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Total comprehensive income</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,024</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Dividends to shareholders</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(565</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(565</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Issuance of common stock under stock purchase and award plans</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>402</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>403</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Adjustment to deferred tax benefit recorded on adoption of SFAS No. 158</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Repurchase of common stock</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(31</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,541</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,544</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2>Excess tax benefit from exercise of stock-based awards</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Stock-based compensation</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>217</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>217</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Cumulative effect adjustment to retained earnings related to the adoption of FIN No. 48 (Note 12)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Balance April 25, 2008</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,125</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>112</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,710</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt" WIDTH="8%">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(286</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double white 2.25pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,536</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><i><font size=2>The accompanying notes are an integral part of these consolidated financial statements.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>36</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Medtronic, Inc.</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Consolidated</font></b><font size=2> </font><b><font size=2> <a name="cash_flows"></a></font></b><i><b><font size=3>Statements of Cash Flows</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:9.0pt;text-align:center;text-indent:-9.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:9.0pt; text-indent:-9.0pt'><i><b><font size=1>(in millions)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Operating Activities:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-1.5pt'><font size=2>Net earnings</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,231</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-10.5pt'><font size=2>Adjustments to reconcile net earnings to net cash provided by operating activities:</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Depreciation and amortization</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>637</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>583</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>544</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Special charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>98</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>IPR&D charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>390</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>364</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Provision for doubtful accounts</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>39</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Stock-based compensation</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>217</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>185</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Excess tax benefit from exercise of stock-based awards</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(40</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(36</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>99</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Deferred income taxes</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(49</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(236</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>105</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Change in operating assets and liabilities, net of effect of acquisitions:</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:13.5pt'><font size=2>Accounts receivable</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(461</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(326</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(217</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:12.75pt'><font size=2>Inventories</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>30</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(24</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(257</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:12.75pt'><font size=2>Prepaid expenses and other assets</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>92</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(45</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(86</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:13.5pt'><font size=2>Accounts payable and accrued liabilities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>61</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(981</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:13.5pt'><font size=2>Other long-term liabilities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>272</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(70</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>38</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Net cash provided by operating activities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,489</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,979</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,220</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Investing Activities:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-1.5pt'><font size=2>Acquisitions, net of cash acquired</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(4,221</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(8</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(285</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Purchases of intellectual property</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(93</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(121</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(837</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-1.5pt'><font size=2>Additions to property, plant and equipment</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(513</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(573</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(407</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.95pt; text-indent:-1.45pt'><font size=2>Purchases of marketable securities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6,433</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(11,837</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(8,065</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.95pt; text-indent:-1.45pt'><font size=2>Sales and maturities of marketable securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,557</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,894</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,627</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-1.5pt'><font size=2>Other investing activities, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(87</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(56</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Net cash used in investing activities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,790</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,701</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,867</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Financing Activities:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Change in short-term borrowings, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>543</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(18</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Payments on long-term debt</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(12</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,880</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Issuance of long-term debt</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>300</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,428</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Purchase of call options</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,075</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Sale of warrants</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>517</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-1.5pt'><font size=2>Dividends to shareholders</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(565</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(504</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(465</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Repurchase of common stock</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,544</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,039</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3,589</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.75pt; text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Issuance of common stock</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>403</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>331</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>506</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-2.25pt'><font size=2>Excess tax benefit from exercise of stock-based awards</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Net cash (used in) provided by financing activities</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(835</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3,011</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,304</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Effect of exchange rate changes on cash and cash equivalents</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(60</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>105</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Net change in cash and cash equivalents</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(196</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,738</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:3.0pt; text-indent:-3.0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>762</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><font size=2>Cash and cash equivalents at beginning of period</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,256</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,994</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,232</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.0pt;text-indent:-9.0pt'><b><font size=2>Cash and cash equivalents at end of period</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,060</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,256</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,994</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-9.0pt'><b><font size=2>Supplemental Cash Flow Information:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Cash paid during the year for:</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Income taxes</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>717</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,034</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>860</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Interest</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>258</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>230</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>109</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:-2.25pt'><font size=2>Supplemental noncash investing and financing activities:</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Reclassification of debentures from short-term to long-term debt</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>94</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:9.0pt; text-indent:3.0pt'><font size=2>Reclassification of debentures from long-term to short-term debt</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>94</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,971</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><i><font size=2>The accompanying notes are an integral part of these consolidated financial statements.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>37</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Medtronic, Inc.</font></b><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><FONT SIZE="2"><B><a name="notes"></a>Notes to Consolidated Financial Statements </B> </FONT></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>(dollars in millions, except per share data)</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="295" style='border-collapse:collapse; '>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1.</font></b></p> </td>
<td width="271" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Summary of Significant Accounting Policies</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Nature of Operations</font></b><font size=2> Medtronic, Inc.
(Medtronic or the Company) is the global leader in medical technology - alleviating pain, restoring health, and extending life for millions of people
around the world. The Company provides innovative products and therapies for use by medical professionals to meet the healthcare needs of their patients.
Primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders, spinal conditions and musculoskeletal trauma,
urological and digestive disorders, diabetes, and ear, nose, and throat conditions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company is headquartered in Minneapolis, Minnesota, and markets its products primarily through a direct sales force in the United States (U.S.) and a combination of direct sales representatives and independent distributors in international markets. The primary markets for products are the U.S., Western Europe, and Japan. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Principles of Consolidation</font></b><font size=2> The consolidated financial statements include the accounts of Medtronic, Inc., and all of its subsidiaries. All significant intercompany transactions and accounts have been eliminated. The principles of Financial Accounting Standards Board (FASB) Interpretation (FIN) No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” and Accounting Research Bulletin (ARB) No. 51, “Consolidated Financial Statements” are considered when determining whether an entity is subject to consolidation. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Fiscal Year-End</font></b><font size=2> The Company utilizes a 52/53-week fiscal year, ending the last Friday in April. The Company’s fiscal years 2008, 2007, and 2006 ended on April 25, 2008, April 27, 2007, and April 28, 2006, respectively, all of which were 52-week years. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Use of Estimates</font></b><font size=2> The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Cash Equivalents</font></b><font size=2> The Company considers highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Investments</font></b><font size=2> Investments in marketable equity securities and debt securities are classified and accounted for as available-for-sale (AFS) at April 25, 2008 and April 27, 2007. AFS debt securities are recorded at fair value in both </font><i><font size=2>short-term</font></i><font size=2> and </font><i><font size=2>long-term investments</font></i><font size=2> and AFS equity securities are recorded at fair value in </font><i><font size=2>long-term investments</font></i><font size=2> on the consolidated balance sheets</font><i><font size=2>.</font></i><font size=2> The change in fair value for AFS securities is recorded, net of taxes, as a component of </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> on the consolidated balance sheets. Management determines the appropriate classification of its investments
in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Certain of the Company’s investments in equity and other securities are long-term, strategic investments in companies that are in varied stages of development. The Company accounts for these investments under the cost or the equity method of accounting, as appropriate. The valuation of equity and other securities accounted for under the cost method considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If an unrealized loss for any investment is considered to be other-than-temporary, the loss will be recognized in the consolidated statements of earnings in the period the determination is made. Equity securities accounted for under the equity method are initially recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the
investee’s income or loss and dividends paid. Equity securities accounted for under both the cost and equity methods are reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. See Note 5 for discussion of the gains and losses recognized on equity and other securities. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Accounts Receivable</font></b><font size=2> The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company maintains an allowance for doubtful accounts for potential credit losses. Uncollectible accounts are written-off against the allowance when it is deemed that a customer account is uncollectible. The allowance for doubtful accounts was $99 at April 25, 2008 and $160 at April 27, 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>38</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<b><font size=2>Inventories</font></b><font size=2> Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. Inventory balances are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 25,</font></b><br> <b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 27,</font></b><br> <b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Finished goods</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>784</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>753</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Work in process</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>250</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>209</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Raw materials</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>246</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>253</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt'><font size=2>Total</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,280</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,215</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Property, Plant and Equipment</font></b><font size=2> Property, plant and equipment is stated at cost. Additions and improvements that extend the lives of the assets are capitalized while expenditures for repairs and maintenance are expensed as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the various assets. Property, plant and equipment balances and corresponding lives are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 25,</font></b><br> <b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 27,</font></b><br> <b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Lives</font></b><br> <b><font size=1>(in years)</font></b></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Land and land improvements</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>123</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>95</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>Up to 20</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Buildings and leasehold improvements</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,240</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,007</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>Up to 40</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Equipment</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,066</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,784</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=2>3-7</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Construction in progress</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>314</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>423</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=2>—</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Subtotal</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,743</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,309</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Less: Accumulated depreciation</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,522</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,247</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Property, plant and equipment, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,221</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,062</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Depreciation expense of $417, $401, and $369 was recognized in fiscal years 2008, 2007, and 2006, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Goodwill</font></b><font size=2> Goodwill is the excess of purchase price of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets,” goodwill is not amortized. Goodwill is tested for impairment annually and when an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value is determined using a discounted future cash flows analysis. The Company completed its annual goodwill impairment test in the third
quarter of fiscal years 2008, 2007, and 2006 and determined that no goodwill was impaired.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Intangible Assets</font></b><font size=2> Intangible assets include patents, trademarks, and purchased technology. Intangible assets with a definite life are amortized on a straight-line or accelerated basis, as appropriate, with estimated useful lives ranging from 3 to 20 years. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. Impairment is calculated as the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted future cash flows analysis. As of April 25, 2008, all of the Company’s intangible assets are definite lived and amortized on a straight-line basis.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Warranty Obligation</font></b><font size=2> The Company offers a warranty on various products. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time the product is sold. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The amount of the reserve recorded is equal to the costs to repair or otherwise satisfy the claim. The Company includes the covered costs associated with field actions, if any, in warranty expense. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<BR><BR><BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>39</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Changes in the Company’s product warranty obligations during the years ended April 25, 2008 and April 27, 2007 consisted of the following:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Balance April 28, 2006</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>41</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:12.0pt;'><font size=2>Warranty claims provision</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>27</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt; '><font size=2>Settlements made</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(34</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><b><font size=2>Balance April 27, 2007</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>34</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:12.0pt;'><font size=2>Warranty claims provision</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>22</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt; '><font size=2>Settlements made</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(13</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><b><font size=2>Balance April 25, 2008</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>43</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Self-Insurance</font></b><font size=2> It is the Company’s policy to self-insure the vast majority of its insurable risks including medical and dental costs, disability coverage, physical loss to property, business interruptions, workers’ compensation, comprehensive general, director and officer and product liability. Insurance coverage is obtained for those risks required to be insured by law or contract. A provision for losses under the self-insured program is recorded and revised quarterly. The Company uses claims data and historical experience, as applicable, to estimate liabilities associated with the exposures that the Company has self-insured. Based on historical loss trends, the Company believes that its self-insurance program accruals are adequate to cover future losses. Historical trends, however, may not be indicative of future losses. These losses
could have a material adverse impact on the Company’s consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Retirement Benefit Plan Assumptions</font></b><font size=2> The Company sponsors various retirement benefit plans, including defined benefit pension plans, post-retirement medical plans, defined contribution savings plans, and termination indemnity plans, covering substantially all U.S. employees and many employees outside the U.S. Pension benefit plan costs include assumptions for the discount rate, retirement age, compensation rate increases, and the expected return on plan assets. Post-retirement medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and healthcare cost trend rate assumptions.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Annually, the Company evaluates the discount rate, retirement age, compensation rate increases, expected return on plan assets and healthcare cost trend rates of its pension benefit and post-retirement medical plans. In evaluating these assumptions, many factors are considered, including an evaluation of assumptions made by other companies, historical assumptions compared to actual results, current market conditions, asset allocations, and the views of leading financial advisors and economists. In evaluating the expected retirement age assumption, the Company considers the retirement ages of past employees eligible for pension and medical benefits together with expectations of future retirement ages.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>It is reasonably possible that changes in these assumptions will occur in the near term and, due to the uncertainties inherent in setting assumptions, the effect of such changes could be material to the Company’s consolidated financial statements. Refer to Note 13 for additional information regarding the Company’s retirement benefit plans.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Revenue Recognition</font></b><font size=2> The Company sells its products primarily through a direct sales force in the U.S. and a combination of direct sales representatives and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss transfers to customers, provided there are no remaining performance obligations required of the Company or any matters requiring customer acceptance. In cases where the Company utilizes distributors or ships product directly to the end user, it recognizes revenue upon shipment provided all revenue recognition criteria have been met. A portion of the Company’s revenue is generated from inventory maintained at hospitals or with field representatives. For these products, revenue is recognized at the time that the product has been used or implanted. The Company records
estimated sales returns, discounts, and rebates as a reduction of net sales in the same period revenue is recognized.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Research and Development </font></b><font size=2> Research and development costs are expensed when incurred. Research and development costs include costs of all basic research activities as well as other research, engineering, and technical effort required to develop a new product or service or make significant improvement to an existing product or manufacturing process. Research and development costs also include pre-approval regulatory expenses. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>IPR&D</font></b><font size=2> When the Company acquires another entity, the purchase price is allocated, as applicable, between IPR&D, other identifiable intangible assets, net tangible assets, and goodwill. The Company’s policy defines IPR&D as the value assigned to those projects for which the related products have not received regulatory approval and have no alternative future use. Determining the portion of the purchase price allocated to IPR&D requires the Company to make significant estimates. The amount of the purchase price allocated to IPR&D is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of acquisition in accordance with accepted valuation methods. These methodologies include consideration of
the risk of the project not achieving commercial feasibility. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>40</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Other Expense, Net</font></b><font size=2> Other expense, net includes intellectual property amortization expense, royalty income and expense, realized equity security gains and losses, realized foreign currency transaction and derivative gains and losses, and impairment charges on equity securities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Stock-Based Compensation </font></b><font size=2>The Company’s compensation programs include share-based payments. Concurrent with the adoption of SFAS No. 123 (revised 2004), “Share Based Payment” (SFAS No. 123(R)), beginning in fiscal year 2007, all awards under share-based payment programs are accounted for at fair value and these fair values are generally amortized on a straight-line basis over the vesting terms into </font><i><font size=2>cost of products sold</font></i><font size=2>, </font><i><font size=2>research and development expense</font></i><font size=2>, and </font><i><font size=2>selling, general and administrative expense </font></i><font size=2>in the consolidated statement of earnings, as appropriate. In fiscal year 2006 and earlier years, grants under share-based payment programs were accounted for using the intrinsic value method, which measured fair
value based on the difference between the quoted market price of the stock and the exercise price on the date of grant. Refer to Note 11 for additional information.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Foreign Currency Translation</font></b><font size=2> Assets and liabilities are translated to U.S. dollars at period-end exchange rates, and the resulting gains and losses arising from the translation of net assets located outside the U.S. are recorded as a cumulative translation adjustment, a component of </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> on the consolidated balance sheets. Elements of the consolidated statements of earnings are translated at average exchange rates in effect during the period and foreign currency transaction gains and losses are included in </font><i><font size=2>other expense, net</font></i><font size=2> in the consolidated statements of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Comprehensive Income and Accumulated Other Comprehensive (Loss)/Income</font></b><font size=2> In addition to net earnings, comprehensive income includes changes in foreign currency translation adjustments (including the change in current exchange rates, or spot rates, of net investment hedges), unrealized gains and losses on foreign exchange derivative contracts qualifying and designated as cash flow hedges, defined benefit pension adjustments, and unrealized gains and losses on AFS marketable securities. Comprehensive income in fiscal years 2008, 2007, and 2006 was $2,024, $2,794, and $2,552, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Presented below is a summary of activity for each component of </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> for fiscal years 2008, 2007, and 2006:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Unrealized</font></b><br> <b><font size=1>Gain/(Loss) on</font></b><br> <b><font size=1>Investments</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Cumulative Translation Adjustments</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Net Change in Retirement Obligations</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Unrealized</font></b><br> <b><font size=1>(Loss)/Gain on</font></b><br> <b><font size=1>Foreign Exchange Derivatives</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Accumulated</font></b><br> <b><font size=1>Other</font></b><br> <b><font size=1>Comprehensive</font></b><br> <b><font size=1>(Loss)/Income</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="39%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Balance April 29, 2005</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(15</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>190</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(15</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(11</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>150 </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Other comprehensive (loss)/income</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(13 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>26 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>5 </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Balance April 28, 2006</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(14</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>177 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>15</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>155 </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Other comprehensive (loss)/income</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>20 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>18</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>24 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(70 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(8</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Adoption of SFAS No. 158 </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(209</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(209</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Balance April 27, 2007 </font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>6 </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>195</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(209</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(55</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(62</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Other comprehensive (loss)/income</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(47</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>37</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(211</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(207</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Adjustment to deferred tax benefit recorded on adoption of SFAS No. 158</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><b><font size=2>Balance April 25, 2008 </font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>209</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(189</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 2.25pt;text-indent:-2.25pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(266</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 9.75pt;text-indent:-9.75pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(286</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid #CCCCCC 2.25pt; background:#CCCCCC' >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Translation adjustments are not adjusted for income taxes as substantially all translation adjustments relate to permanent investments in non-U.S. subsidiaries. The tax (benefit)/expense on the unrealized (loss)/gain on derivatives in fiscal years 2008, 2007, and 2006 was $(132), $(38), and $14, respectively. The tax benefit on the minimum pension liability was $5 in fiscal year 2006. The minimum pension liability was eliminated at the end of fiscal year 2007 as a result of the Company’s adoption of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (SFAS No. 158). The tax benefit related to SFAS No. 158 was $17 and $92 in fiscal years 2008 and 2007, respectively. The tax expense/(benefit) on the unrealized gain/(loss) on investments in fiscal years 2008,
2007, and 2006 was $(26), $11 and $1, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>41</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<PAGE>
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</p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Derivatives</font></b><font size=2> SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” (SFAS No. 133) as amended, requires companies to recognize all derivatives as assets and liabilities on the balance sheet and to measure the instruments at fair value through earnings unless the derivative qualifies as a hedge. If the derivative is a hedge, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recorded currently through earnings or recognized in </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> on the consolidated balance sheets until the hedged item is recognized in earnings upon settlement/termination. The changes in the fair value of the derivative will offset the change in fair value of the hedged asset, liability,
net investment, or probable commitment. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company uses derivative instruments, primarily forward exchange contracts, to manage its exposure related to foreign exchange rate changes. The Company enters into contracts with major financial institutions that change in value as foreign exchange rates change. These contracts are designated either as cash flow hedges, net investment hedges, or freestanding derivatives. It is the Company’s policy to enter into forward exchange derivative contracts only to the extent true exposures exist; the Company does not enter into forward exchange derivative contracts for speculative purposes. Principal currencies hedged are the Euro and the Japanese Yen. All derivative instruments are recorded at fair value on the consolidated balance sheets, as a component of </font><i><font size=2>prepaid expenses and other current assets, other long-term assets, other accrued expenses</font></i><font
size=2>, or </font><i><font size=2>other long-term liabilities</font></i><font size=2> depending upon the gain or loss position of the contract and contract maturity date.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Forward contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. Changes in value of derivatives designated as cash flow hedges are recorded in </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> on the consolidated balance sheets until earnings are affected by the variability of the underlying cash flows. At that time, the applicable amount of gain or loss from the derivative instrument, that is deferred in shareholders’ equity, is reclassified to earnings and is included in </font><i><font size=2>other expense, net</font></i><font size=2> or </font><i><font size=2>cost of products sold </font></i><font size=2>in the consolidated statements of earnings, depending on the underlying transaction that is being hedged.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The purpose of net investment hedges is to hedge the long-term investment (equity) in foreign operations. The gains and losses related to the change in the forward exchange rates of the net investment hedges are recorded currently in earnings as </font><i><font size=2>other expense, net.</font></i><font size=2> The gains and losses based on changes in the current exchange rates, or spot rates, are recorded as a cumulative translation adjustment, a component of </font><i><font size=2>accumulated other comprehensive (loss)/income </font></i><font size=2>on the consolidated balance sheets.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company uses forward exchange contracts to offset its exposure to the change in value of certain foreign currency denominated intercompany assets and liabilities. These forward exchange contracts are not designated as hedges, and therefore, changes in the value of these freestanding derivatives are recognized currently in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In addition, the Company uses interest rate derivative instruments to manage its exposure to interest rate movements and to reduce borrowing costs by converting fixed-rate debt into floating-rate debt. The objective of the instruments is to more effectively balance the Company’s borrowing costs and interest rate risk. These derivative instruments are designated as fair value hedges under SFAS No. 133. Changes in the fair value of the derivative instrument are recorded in</font><i><font size=2> other expense, net, </font></i><font size=2>and are offset by gains or losses on the underlying debt instrument. Interest expense includes interest payments made or received under interest rate derivative instruments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Earnings Per Share</font></b><font size=2> Basic earnings per share is computed based on the weighted average number of common shares outstanding. Diluted earnings per share is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include stock options and other stock-based awards granted under stock-based compensation plans and shares committed to be purchased under the employee stock purchase plan.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>42</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<PAGE>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The table below sets forth the computation of basic and diluted earnings per share: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in; '><font size=1> </font></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in; '><i><font size=1>(shares in millions)</font></i></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
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<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
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<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Numerator:</font></b><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
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<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Net earnings</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,231</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,802</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,547</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
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<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Denominator:</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Basic-weighted average shares outstanding</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,130.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,149.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,204.5</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
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<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Effect of dilutive securities:</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
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<p style='margin:0in;margin-bottom:0pt;text-indent:12.0pt;'><font size=2>Employee stock options</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9.9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10.4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:12.0pt;'><font size=2>Shares issuable upon conversion of Contingent Convertible Debentures</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.7</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt; '><font size=2>Other</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.0</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Diluted-weighted average shares outstanding</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,142.1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,161.8</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,217.3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Basic earnings per share</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.97</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.44</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.11</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Diluted earnings per share</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.95</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.09</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The calculation of weighted average diluted shares outstanding excludes options for approximately 22 million, 35 million and 12 million common shares in fiscal years 2008, 2007 and 2006, respectively, as the exercise price of those options was greater than the average market price, resulting in an anti-dilutive effect on diluted earnings per share.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>New Accounting Standards</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2006, the FASB issued SFAS No. 157, “Fair
Value Measurements” (SFAS No. 157). SFAS No. 157 establishes a framework for measuring fair value in accordance with generally accepted accounting
principles, clarifies the definition of fair value within that framework and expands disclosures about fair value measurements. SFAS No. 157 applies whenever
other standards require (or permit) assets or liabilities to be measured at fair value, except for the measurement of share-based payments. SFAS No. 157 does
not expand the use of fair value in any new circumstances. For certain types of financial instruments, SFAS No. 157 requires a limited form of retrospective
transition, whereby the cumulative impact of the change in principle is recognized in the opening balance in retained earnings in the fiscal year of adoption.
All other provisions of SFAS No. 157 will be applied prospectively. On February 12, 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2,
“Effective Date of FASB Statement No. 157” (FSP FAS 157-2). FSP FAS 157-2 defers the implementation of SFAS No. 157 for certain nonfinancial assets
and nonfinancial liabilities. The remainder of SFAS No. 157 is effective, for the Company, beginning in the first quarter of fiscal year 2009. The aspects that
have been deferred by FSP FAS 157-2 will be effective for the Company beginning in the first quarter of fiscal year 2010. The fiscal year 2009 adoption is not
expected to have a material impact on the consolidated financial statements. The Company is currently evaluating the impact that FSP FAS 157-2 will have on the
consolidated financial statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2006, the FASB issued SFAS No. 158 which
requires the recognition of an asset or liability for the funded status of defined benefit pension and other post-retirement benefit plans in the statement of
financial position. The funded status of a defined benefit plan is measured as the difference between plan assets at fair value and the benefit obligation. For
a defined benefit pension plan, the benefit obligation is the projected benefit obligation (PBO); for any other defined benefit post-retirement plan, such as a
retiree healthcare plan, the benefit obligation is the accumulated post-retirement benefit obligation. The initial incremental recognition of the funded
status under SFAS No. 158 of the Company’s defined pension and other post-retirement benefit plans, as well as subsequent changes in the Company’s
funded status that are not included in net periodic benefit cost will be reflected in <i>accumulated other comprehensive (loss)/income</i>. As of April 25,
2008 and April 27, 2007, the net overfunded/(underfunded) status of the Company’s defined benefit plans was $90 and $(2), respectively, and
recognition of this status upon the adoption of SFAS No. 158 resulted in an after-tax charge to shareholders’ equity of $209 in fiscal year 2007. Amounts
recognized in <i>accumulated other comprehensive (loss)/income</i> are adjusted as they are subsequently recognized as a component of net periodic benefit cost.
The method of calculating net periodic benefit cost will not change from existing guidance. SFAS No. 158 also prescribes enhanced disclosures, including current
and long-term components of plan assets and liabilities, as well as amounts recognized in <i>accumulated other comprehensive (loss)/income</i> that will
subsequently be recognized as a component of net periodic benefit cost in the following year. See Note 13 for additional information. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>43</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The funded status recognition and certain disclosure provisions of SFAS No. 158 were effective for the Company’s fiscal year ended April 27, 2007. SFAS No. 158 also requires the consistent measurement of plan assets and benefit obligations as of the date of the Company’s fiscal year-end statement of financial position effective for the Company’s fiscal year ended April 24, 2009. A select number of the Company’s plans, including the U.S. plans, currently have a January 31 measurement date. This standard will require the Company to change, in fiscal year 2009, that measurement date to match the date of the Company’s fiscal year-end. The Company does not expect a material impact on the financial condition for those plans in which the Company has not adopted the requirement to measure the plan assets and benefit obligations as of the date of the balance sheet.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 will be effective for the Company at the beginning of fiscal year 2009. The Company has not elected the fair value option for eligible items that existed as of April 26, 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In June 2007, the Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received to Be Used in Future Research and Development Activities” (EITF No. 07-3). EITF No. 07-3 requires companies that are involved in research and development activities to defer nonrefundable advance payments for future research and development activities and to recognize those payments as goods and services are delivered. The Company will be required to assess on an ongoing basis whether or not the goods or services will be delivered and to expense the nonrefundable advance payments immediately if it is determined that delivery is unlikely. EITF No. 07-3 is effective for new arrangements entered into subsequent to April 25, 2008. The adoption of EITF No. 07-3 will not be material to the consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In December 2007, the FASB issued SFAS No. 141(R),
“Business Combinations” (SFAS No. 141(R)). SFAS No. 141(R) replaces SFAS No. 141, “Business Combinations.” SFAS No. 141(R)
establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interests in the acquiree and the goodwill acquired. Some of the key changes under SFAS No. 141(R) will impact the
accounting treatment for certain specific acquisition related items including: (1) accounting for acquired in process research and development (IPR&D) as an
indefinite-lived intangible asset until approved or discontinued rather than as an immediate expense; (2) expensing acquisition costs rather than adding them to
the cost of an acquisition; (3) expensing restructuring costs in connection with an acquisition rather than adding them to the cost of an acquisition; (4)
including the fair value of contingent consideration at the date of an acquisition in the cost of an acquisition; and (5) recording at the date of an
acquisition the fair value of contingent liabilities that are more likely than not to occur. SFAS No. 141(R) also includes a substantial number of new
disclosure requirements. SFAS No. 141(R) will be effective for the Company beginning fiscal year 2010 and must be applied prospectively to all new acquisitions
closing on or after April 25, 2009. Early adoption of SFAS No. 141(R) is prohibited. SFAS No. 141(R) is expected to have a material impact on how the Company
will identify, negotiate, and value future acquisitions and a material impact on how an acquisition will affect the Company’s consolidated financial
statements. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (SFAS No. 160). SFAS No. 160 will change the
accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. This
new consolidation method will significantly change the accounting for partial and/or step acquisitions. SFAS No. 160 will be effective for the Company in the
first quarter of fiscal year 2010. The Company is currently evaluating the impact that the adoption of SFAS No. 160 will have, but does not believe it will
be material to the consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In March 2008, the FASB issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging Activities,” (SFAS No. 161) which will require increased disclosures about an entity’s
strategies and objectives for using derivative instruments; the location and amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under SFAS No. 133; and how derivative instruments and related hedged items affect an
entity’s financial position, financial performance, and cash flows. Certain disclosures will also be required with respect to derivative features that are
credit risk-related. SFAS No. 161 is effective for the Company beginning in the fourth quarter of fiscal year 2009 but only requires the revised
disclosures on a prospective basis. Since SFAS No. 161 requires only additional disclosures about the Company’s derivatives and hedging activities, the
adoption of SFAS No. 161 will not affect the Company’s consolidated financial statements.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (FSP APB 14-1). FSP APB 14-1 requires the proceeds from the issuance of such convertible debt instruments to be allocated between a liability component (issued at a discount) and an equity component. The resulting debt discount is amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense. The change in accounting treatment is effective for the Company beginning in fiscal 2010, and will be applied retrospectively to prior periods. FSP APB 14-1 changes the accounting treatment for the Company’s $2,200 of 1.500 percent and $2,200 of 1.625 percent Senior Convertible Notes due in 2011 and 2013, respectively, which were issued in April 2006 and the $93
remaining balance of the Company’s Contingent Convertible Debentures due 2021. The Company is currently evaluating the impact of this new accounting treatment, which will result in an increase to non-cash interest expense reported in its historical financial statements. Based on a preliminary review, the Company believes historical diluted EPS would be impacted in the range of $0.06 to $0.10 per fiscal year. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>44</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="712" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Special and Certain Litigation Charges</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Special Charges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2008, the Company recorded a special charge of $78 related to the impairment of intangible assets associated with its benign prostatic hyperplasia, or enlarged prostate, product line purchased in fiscal year 2002. The development of the market, relative to the Company’s original assumptions, has changed as a result of the broad acceptance of a new line of drugs to treat the symptoms of an enlarged prostate. After analyzing the estimated future cash flows utilizing this technology, based on the market development, the Company determined that the carrying value of these intangible assets was impaired and a write-down was necessary.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, the Company concluded two intangible assets
were fully impaired due to inadequate clinical results and the resulting delays in product development. As a result, the Company recorded a $98 special charge
related to the impairments of intangible assets stemming from the July 1, 2005 acquisition of Transneuronix, Inc. (TNI) and the November 1, 2004
acquisition of Angiolink Corporation (Angiolink). TNI focused on the development of an implantable gastric stimulator to treat obesity. Angiolink focused on the
development of wound closure devices for vascular procedures.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2006, the Company recorded a $100 charitable donation to The Medtronic Foundation, which is a related party non-profit organization. The donation to The Medtronic Foundation was paid in the second quarter of fiscal year 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Certain Litigation Charges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company classifies material litigation reserves recognized as certain litigation charges. In fiscal year 2008, the Company incurred certain litigation charges of $366. Of that amount, $123 relates to the settlement of certain lawsuits relating to the Marquis line of implantable cardioverter defibrillators (ICDs) and cardiac resynchronization therapy-defibrillators (CRT-Ds) that were subject to a field action announced on February 10, 2005. The remainder of the charge, $243, relates to an estimated reserve established for litigation with Cordis Corporation (Cordis), a subsidiary of Johnson & Johnson (J&J). The Cordis litigation originated in October 1997 and pertains to a patent infringement claim on a previous generation of bare metal stents that are no longer on the market. See Note 15 for further discussion of these certain litigation charges. In May 2008, the Company
paid substantially all of the settlement for certain lawsuits relating to the Marquis line of ICDs and CRT-Ds. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, the Company reached a settlement agreement
with the U.S. Department of Justice which requires the government to obtain dismissal of the two qui tam civil suits and is conditioned upon such
dismissal being obtained. To resolve the matter, Medtronic has entered into a five-year corporate integrity agreement effective upon dismissal of the two suits
that further strengthens its employee training and compliance systems surrounding sales and marketing practices. The settlement agreement also reflects
Medtronic’s assertion that the Company and its current employees have not engaged in any wrongdoing or illegal activity. Medtronic also agreed to pay $40
pending dismissal of the related lawsuits.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>There were no certain litigation charges in fiscal year 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="173" style='border-collapse:collapse; '>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
<td width="149" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Restructuring Charges</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Global Realignment Initiative</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.28in;text-align:left;'><font size=2>In fiscal year 2008, as part of a global realignment initiative, the Company recorded a $31 restructuring charge, which consisted of employee termination costs of $27 and asset write-downs of $4. This initiative began in the fourth quarter of fiscal year 2008 and focuses on shifting resources to those areas where the Company has the greatest opportunities for growth and streamlining operations to drive operating leverage. The global realignment initiative impacts most businesses and certain corporate functions. Within the Company’s Cardiac Rhythm Disease Management (CRDM) business, the Company is reducing research and development infrastructure by closing a facility outside the U.S., reprioritizing research and development projects to focus on the core business and consolidating manufacturing operations to drive operating leverage. Within Spinal, the Company intends to reorganize and
consolidate certain activities where Medtronic’s existing infrastructure, resources, and systems can be leveraged to obtain greater operational synergies. The global realignment initiative is also designed to further consolidate manufacturing of CardioVascular products, streamline distribution of products in select businesses and to reduce general and administrative costs in the Company’s corporate functions. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>45</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>The
asset write-downs were recorded within </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statement of earnings. The
employee termination costs of $27 consist of severance and the associated costs of continued medical benefits, and outplacement services. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>This global realignment initiative will result in charges being recognized in both the fourth quarter of fiscal year 2008 and the first quarter of fiscal year 2009, and the Company expects that when complete, will eliminate approximately 1,100 positions. Restructuring charges were recognized in the fourth quarter of fiscal year 2008 for standard severance benefits to be provided to impacted employees. In the first quarter of fiscal year 2009 the Company will recognize additional restructuring charges associated with (i) enhanced severance benefits for positions identified in the fourth quarter of fiscal year 2008, and (ii) standard and enhanced severance benefits provided for positions that were identified in the first quarter of fiscal year 2009. These incremental costs were not accrued in fiscal year 2008 because either the enhanced benefits had not yet been communicated to the impacted
employees or the positions for elimination had not yet been identified. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Of the 1,100 positions that will be eliminated as part of this initiative, 560 positions were identified for elimination in the fourth quarter of fiscal year 2008 and will be achieved through voluntary and involuntary separation. Of these 560 positions identified, the majority will be eliminated in fiscal year 2009. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>A summary of the activity related to the fiscal year 2008 global realignment initiative is presented below:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Global Realignment Initiative</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Employee Termination Costs</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Asset Write-downs</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Total</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="57%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Balance at April 27, 2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Restructuring charges</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Payments/write-downs</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(4</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 2.25pt;text-indent:-2.25pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Balance at April 25, 2008</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Fiscal Year 2007 Initiative</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, the Company recorded a $36 restructuring charge, which consisted of employee termination costs of $28 and asset write-downs of $8. These initiatives were designed to drive manufacturing efficiencies in the Company’s CardioVascular business, downsize the Physio-Control business due to the Company’s voluntary suspension of U.S. shipments, and rebalance resources within the CRDM business in response to market dynamics. The employee termination costs consist of severance and the associated costs of continued medical benefits, and outplacement services. The asset write-downs consist of a $5 charge for inventory write-downs and a $3 charge for non-inventory asset write-downs. The inventory and non-inventory asset write-downs were recorded within </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statement of earnings. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As a continuation of the fiscal year 2007 initiatives, in the first quarter of fiscal year 2008 the Company incurred $14 of incremental restructuring charges associated with compensation provided to employees whose employment terminated with the Company in the first quarter of fiscal year 2008. These incremental costs were not accrued in fiscal year 2007 because these benefits had not yet been communicated to the impacted employees. Included in the total $14 restructuring charge is $4 of incremental defined benefit pension and post-retirement related expense for those employees who accepted early retirement packages. These costs are not included in the table summarizing restructuring costs below because they are associated with costs that are accounted for under the pension and postretirement rules. For further discussion on the incremental defined benefit pension and post-retirement
related expense, see Note 13. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>When the restructuring initiative began in fiscal year 2007, the Company identified approximately 900 positions for elimination which were achieved through early retirement packages offered to employees, voluntary separation, and involuntary separation, as necessary. As of April 25, 2008, the initiatives begun in the fourth quarter of fiscal year 2007 were substantially complete. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>46</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>A summary of the activity related to the fiscal year 2007 initiative is presented below:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year 2007 Initiative</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Employee Termination Costs</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Asset Write-downs</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Total</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="57%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Balance at April 28, 2006</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Restructuring charges</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>28</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Payments/write-downs</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(8</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(13</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 2.25pt;text-indent:-2.25pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Balance at April 27, 2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>23</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>23</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Restructuring charges</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Payments</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(33</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(33</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 2.25pt;text-indent:-2.25pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Balance at April 25, 2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>There were no restructuring charges in fiscal year 2006.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="236" style='border-collapse:collapse'>
<tr >
<td width="23" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
<td width="213" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Acquisitions and IPR&D Charges</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>When the Company acquires another company or a group of assets, the purchase price is allocated, as applicable, between IPR&D, other identifiable intangible assets, net tangible assets, and goodwill as required by U.S. GAAP. Goodwill represents the excess of the aggregate purchase price over the fair value of net assets, including IPR&D, of acquired businesses. The values assigned to IPR&D and other identifiable intangible assets are based on valuations that have been prepared using methodologies and valuation techniques consistent with those used by independent appraisers. These techniques include estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values utilizing an appropriate risk-adjusted rate of return (discount rate). The discount rate used is determined at the time of the acquisition in accordance with
accepted valuation methods. For IPR&D, these methodologies include consideration of the risk of the project not achieving commercial feasibility and include a factor that takes into account the uncertainty surrounding the successful development of the IPR&D.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>At the time of acquisition, the Company expects all acquired IPR&D will reach technological feasibility, but there can be no assurance that the commercial viability of these products will actually be achieved. The nature of the efforts to develop the acquired technologies into commercially viable products consists principally of planning, designing, and conducting clinical trials necessary to obtain regulatory approvals. The risks associated with achieving commercialization include, but are not limited to, delay or failure to obtain regulatory approvals to conduct clinical trials, delay or failure to obtain required market clearances, and patent issuance, validity and litigation, if any. If commercial viability were not achieved, the Company would likely look to other alternatives to provide these therapies.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Fiscal Year 2008</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Kyphon Acquisition</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 2, 2007, the Company consummated the acquisition of Kyphon Inc. (Kyphon) and it became a wholly owned subsidiary of the Company. Kyphon develops and markets medical devices designed to restore and preserve spinal function using minimally invasive technology. Kyphon’s primary products are used in balloon kyphoplasty for the treatment of spinal compression fractures caused by osteoporosis or cancer, and in the interspinous process decompression procedure for treating the symptoms of lumbar spinal stenosis. It is expected that the acquisition of Kyphon will add to the growth of the Company’s existing Spinal business by extending its product offerings into some of the fastest growing product segments of the spine market, enabling the Company to provide physicians with a broader range of therapies for use at all stages of the care continuum. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Under the terms of the agreement announced on July 27, 2007, Kyphon shareholders received $71 per share in cash for each share of Kyphon common stock they owned. Total consideration for the transaction was approximately $4,203, which includes payments to Kyphon shareholders for the cancellation of outstanding shares, the assumption and settlement of existing Kyphon debt and payment of direct acquisition costs. Total debt assumed relates to Kyphon’s obligations under existing credit and term loan facilities and outstanding senior convertible notes. In addition, the total consideration includes the proceeds of unwinding the related convertible note hedges and cancellation and payment of the warrants to the hedge participants that were originally issued by Kyphon in February 2007. The transaction was financed through a combination of approximately $3,303 cash on hand, the issuance of $600
short-term commercial paper and borrowing $300 through a new long-term unsecured revolving credit facility.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>47</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company has accounted for the acquisition of Kyphon as a purchase under U.S. GAAP. Under the purchase method of accounting, the assets and liabilities of Kyphon were recorded as of the acquisition date, at their respective fair values, and consolidated with the Company. The break down of the purchase price of Kyphon is as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: .25in;text-indent:-.25in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=2> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="85%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Cash acquisition of Kyphon outstanding common stock</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,300</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Cash settlement of vested stock-based awards</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>218</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Debt assumed and settled</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>570</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Cash settlement of convertible debt warrants, net of proceeds from convertible note hedges</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>87</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Direct acquisition costs</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>28</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .5in;text-indent:-.25in'><font size=2>Total purchase price</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,203</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The purchase price allocation is based on estimates of the fair value of assets acquired and liabilities assumed. The purchase price has been allocated as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="60%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: .25in;text-indent:-.25in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=2> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="85%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Current assets</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>367</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Property, plant and equipment</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>39</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>In-process research and development</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>290</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Other intangible assets</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>996</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Goodwill</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,175</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:2.0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Other long-term assets</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .5in;text-indent:-.25in'><font size=2>Total assets acquired</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,877</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Current liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>359</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Deferred tax liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>282</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Other long-term liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>33</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .5in;text-indent:-.25in'><font size=2>Total liabilities assumed</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>674</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Net assets acquired</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,203</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:.5pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In connection with the acquisition, the Company acquired $996 of intangible assets that had a weighted average useful life of approximately 10.5 years. The intangible assets include $887 of technology-based assets and $109 of tradenames with weighted average lives of 10.5 years and 11 years, respectively. Also as part of the acquisition, the Company recognized, in total, $290 and $3,175 for IPR&D and goodwill, respectively. The IPR&D was expensed on the date of acquisition. Various factors contributed to the establishment of goodwill, including: the benefit of adding existing Medtronic products to the portfolio of products already sold by Kyphon sales representatives; the value of Kyphon’s highly trained assembled workforce; and the expected revenue growth that is attributable to expanded indications and increased market penetration from future products and customers. The
goodwill is not deductible for tax purposes. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The $290 IPR&D charge primarily relates to three projects: 1) future launch of the balloon kyphoplasty (kyphoplasty) procedure into the Japanese market, 2) future launch of the Aperius product into the U.S. market, and 3) the development of the next generation kyphoplasty balloon technology. Kyphoplasty is Kyphon’s minimally invasive approach to treat spinal fractures including vertebral compression fractures due to osteoporosis and cancer. Aperius is Kyphon’s internally developed interspinous spacing device which provides a minimally invasive approach to treat lumbar spinal stenosis. For purposes of valuing the acquired IPR&D, the Company estimated total costs to complete of approximately $19. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As required, the Company recognized a $34 fair value adjustment
related to inventory acquired from Kyphon. Inventory fair value is defined as the estimated selling price less the sum of (a) cost to complete (b) direct costs
to sell and (c) a reasonable profit allowance for the selling effort. The $34 fair value adjustment was fully expensed through cost of products sold during the
third quarter of fiscal year 2008, which reflects the estimated period over which the acquired inventory was sold to customers. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>48</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>In connection with the acquisition, the Company began to assess and formulate a plan for the elimination of duplicative positions, employee relocations, the exit of certain facilities and the termination of certain contractual obligations. The purchase accounting liabilities recorded in connection with these activities were approximately $68 and included approximately $48 for termination benefits and employee relocation and approximately $20 of estimated costs to cancel contractual obligations. The remaining balance of these liabilities as of April 25, 2008 was approximately $63. The Company continues to assess these liabilities and until the plan is finalized and the integration activities are complete, the allocation of the purchase price is subject to adjustment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company’s consolidated financial statements include Kyphon’s operating results from the date of acquisition, November 2, 2007. The following unaudited pro forma information sets forth the combined results of Medtronic’s and Kyphon’s operations for fiscal years 2008 and 2007, as if the acquisition had occurred at the beginning of each of the periods presented. The unaudited pro forma results of operations for the fiscal year ending April 25, 2008 is comprised of (i) Kyphon’s historical financial information for the six months ended September 30, 2007, (ii) Medtronic’s historical financial information for the six months ended October 27, 2007 and (iii) the Company’s actual results for the six month period comprised of the three months ended January 25, 2008 and the three months ended April 25, 2008. The unaudited pro forma results of operations for the
fiscal year ended April 27, 2007 include the results of Medtronic’s historical financial information for Medtronic’s fiscal year 2007 and the operations for Kyphon for the twelve month period ended March 31, 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The pro forma information gives effect to actual operating results prior to the acquisition, adjusted to reflect, among other things, reduced interest income, additional intangible asset amortization and interest expense that would have resulted from the change in the accounting basis of certain assets and liabilities due to the acquisition. Pro forma adjustments are tax-effected at the Company’s statutory tax rate. No effect has been given to cost reductions or operating synergies in this presentation. These pro forma amounts are not necessarily indicative of the results that would have been obtained if the acquisition had occurred as of the beginning of the periods presented or that may occur in the future, and does not reflect future synergies, integration costs, or other such costs or savings. The unaudited pro forma condensed consolidated financial information is presented for
informational purposes only.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="75%" STYLE="border-collapse:collapse">
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: .25in;text-indent:-.25in'><font size=1> </font></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: .25in;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
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<TD WIDTH="71%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Net sales</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,804</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="10%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,744</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Net earnings</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,093</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,321</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Earnings per share:</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.5in; text-indent:-.25in'><font size=2>Basic</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.85</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.02</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.5in; text-indent:-.25in'><font size=2>Diluted</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.83</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.00</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The unaudited pro forma financial information for fiscal year 2008 and 2007 include a $290 IPR&D charge and a $34 increase in cost of products sold related to the step-up to fair value of inventory acquired, both of which are non-recurring. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Other Acquisitions and IPR&D Charges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On April 15, 2008, the Company recorded an IPR&D charge of $42 related to the acquisition of NDI Medical (NDI), a development stage company focused on commercially developing technology to stimulate the dorsal genital nerve as a means to treat urinary incontinence. Total consideration for NDI was approximately $42 which included $39 in cash and the forgiveness of $3 of pre-existing loans provided to NDI. The acquisition will provide the Company with exclusive rights to develop and use NDI’s technology in the treatment of urinary urge incontinence. This payment was expensed as IPR&D since technological feasibility of the underlying projects had not yet been reached and such technology has no future alternative use.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 1, 2007, the Company recorded an IPR&D charge of
$20 related to the acquisition of Setagon, Inc. (Setagon), a development stage company focused on commercially developing metallic nanoporous surface
modification technology. The acquisition will provide the Company with exclusive rights to use and develop Setagon’s Controllable Elution Systems
technology in the treatment of cardiovascular disease. Total consideration for Setagon was approximately $20 in cash, subject to purchase price increases, which
would be triggered by the achievement of certain milestones. This payment was expensed as IPR&D since technological feasibility of the underlying project
had not yet been reached and such technology has no future alternative use.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>49</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>On June 25, 2007, the Company exercised a purchase option and acquired substantially all of the O-arm Imaging System (O-arm) assets of Breakaway Imaging, LLC (Breakaway), a privately held company. Prior to the acquisition, the Company had the exclusive rights to distribute and market the O-arm. The O-arm provides multi-dimensional surgical imaging for use in spinal and orthopedic surgical procedures. The acquisition is expected to bring the O-arm into a broad portfolio of image guided surgical solutions. Total consideration for Breakaway was approximately $26 in cash, subject to purchase price increases, which would be triggered by the achievement of certain milestones. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In connection with the acquisition of Breakaway, the Company acquired $22 of technology-based intangible assets that had an estimated useful life of 15 years at the time of acquisition, $1 of tangible assets, and $3 of goodwill. The goodwill is deductible for tax purposes. The pro forma impact of the acquisition of Breakaway was not significant to the results of the Company for the fiscal years 2008 and 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Additionally, during fiscal year 2008, the Company recorded IPR&D charges of $25 related to a milestone payment under the existing terms of a royalty bearing, non-exclusive patent cross-licensing agreement with NeuroPace, Inc. and $13 for unrelated purchases of certain intellectual property. These payments were expensed as IPR&D since technological feasibility of the underlying projects had not yet been reached and such technology has no future alternative use.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Fiscal Year 2007</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On March 26, 2007, the Company acquired manufacturing assets, know-how, and an exclusive license to intellectual property related to the manufacture and distribution of EndoSheath products from Vision–Sciences, Inc. (VSI), which was accounted for as a purchase of assets. The license acquired from VSI expanded the Company’s existing U.S. distribution rights of EndoSheath products to worldwide distribution rights. The EndoSheath is a sterile disposable sheath that fits over a fiberoptic endoscope preventing contamination of the scope during procedures and allowing reuse of the scope without further sterilization. The consideration paid was $27 in cash which was primarily allocated to technology-based intangible assets with an estimated useful life of 10 years at the time of acquisition. The purchase price is subject to increases triggered by the achievement of certain milestones.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On September 15, 2006, the Company acquired and/or licensed selected patents and patent applications owned by Dr. Eckhard Alt (Dr. Alt), or certain of his controlled companies in a series of transactions. In connection therewith, the Company also resolved all outstanding litigation and disputes with Dr. Alt and certain of his controlled companies. The agreements required the payment of total consideration of $75, $74 of which was capitalized as technology based intangible assets that had an estimated useful life of 11 years at the time of acquisition. The acquired patents or licenses pertain to the cardiac rhythm disease management field and have both current application and potential for future patentable commercial products. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On July 25, 2006, the Company acquired substantially all of the assets of Odin Medical Technologies, Ltd. (Odin), a privately held company. Prior to the acquisition, the Company had an equity investment in Odin, which was accounted for under the cost method of accounting. Odin focused on the manufacture of the PoleStar intra-operative Magnetic Resonance Image (iMRI)-Guidance System which was already exclusively distributed by the Company. This acquisition was expected to help the Company further drive the acceptance of iMRI guidance in neurosurgery. The consideration for Odin was approximately $21, which included $6 in upfront cash and a $2 milestone payment made in the three months ended October 27, 2006. The $8 in net cash paid resulted from the $21 in consideration less the value of the Company’s prior investment in Odin and Odin’s existing cash balance. In connection with the
acquisition of Odin, the Company acquired $9 of technology-based intangible assets that had an estimated useful life of 12 years at the time of acquisition. Total goodwill was $12 and was deductible for tax purposes. The results of operations related to Odin have been included in the Company’s consolidated statements of earnings since the date of the acquisition. The pro forma impact of Odin was not significant to the results of the Company for the fiscal year ended April 27, 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Fiscal Year 2006</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On August 26, 2005, the Company acquired all the outstanding stock of Image-Guided Neurologics, Inc. (IGN), a privately held company. Prior to the acquisition, the Company had an equity investment in IGN, which was accounted for under the cost method of accounting. IGN specialized in precision navigation and delivery technologies for brain surgery. The IGN product line includes the NexFrame disposable, “frameless” sterotactic head frame, which is used in conjunction with image-guided surgery systems during deep brain stimulation. This acquisition complements the Company’s position in deep brain stimulation by offering instruments that simplify the procedure for surgeons and improve patient comfort during surgery. The total consideration for IGN was approximately $65, which includes $58 in net cash paid. The $58 in net cash paid results from the $65 in consideration less the
value of the Company’s prior investment in IGN and IGN’s existing cash balance. As a result of the acquisition of IGN, the Company acquired $22 of technology-based intangible assets that had an estimated useful life of 12 years at the time of acquisition. Goodwill of $41 was not deductible for tax purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>50</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="87%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Current assets</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Property, plant and equipment</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Other intangible assets</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>22</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Goodwill</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>41</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in; '><font size=2>Total assets acquired</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>67</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Current liabilities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Deferred tax liability – long term</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in; '><font size=2>Total liabilities assumed</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Net assets acquired</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>65</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On July 1, 2005, the Company acquired all of the outstanding stock of TNI, a privately held company. Prior to the acquisition, the Company had an equity investment in TNI, which was accounted for under the cost method of accounting. TNI focused on the development of an implantable gastric stimulator to treat obesity. This acquisition was expected to complement the Company’s strategy to deliver therapeutic solutions for the worldwide challenges of obesity. The consideration for TNI was approximately $269, which included $227 in net cash paid. The $227 in net cash paid resulted from the $269 in consideration less the value of the Company’s prior investment in TNI and TNI’s existing cash balance. The purchase price is subject to increases triggered by the achievement of certain milestones. As a result of the acquisition of TNI, the Company acquired $55 of intangible assets of
which $54 were technology-based intangible assets that had an estimated useful life of 15 years at the time of acquisition and $169 of IPR&D that was expensed on the date of acquisition related to a product being developed for the treatment of obesity by stimulation of the stomach that had not yet reached technological feasibility and for which no future alternative use had been identified. Goodwill of $51 was not deductible for tax purposes. In fiscal year 2007, the Company recognized an impairment charge related to the intangible assets acquired from TNI. See discussion in Note 2 for further information.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following table summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:8.65pt; text-indent:-8.65pt'><font size=2>Current assets</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:8.65pt; text-indent:-8.65pt'><font size=2>Other intangible assets</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>55</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:8.65pt; text-indent:-8.65pt'><font size=2>IPR&D</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>169</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 8.65pt;text-indent:-8.65pt'><font size=2>Goodwill</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 25.9pt;text-indent:-8.65pt'><font size=2>Total assets acquired</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>288</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:8.65pt; text-indent:-8.65pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:8.65pt; text-indent:-8.65pt'><font size=2>Current liabilities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 8.65pt;text-indent:-8.65pt'><font size=2>Deferred tax liability – long term</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 25.9pt;text-indent:-8.65pt'><font size=2>Total liabilities assumed</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 8.65pt;text-indent:-8.65pt'><font size=2>Net assets acquired</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>269</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The pro forma impact of the IGN and TNI acquisitions was not significant, individually or in the aggregate, to the results of the Company for fiscal year 2006. The results of operations related to each company have been included in the Company’s consolidated statements of earnings since the date each company was acquired.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On May 18, 2005, the Company acquired substantially all of the spine-related intellectual property and related contracts, rights, and tangible materials owned by Gary Michelson, M.D. and Karlin Technology, Inc. (Michelson) and settled all outstanding litigation and disputes between Michelson and the Company. The acquired patents pertain to novel spinal technology and techniques that have both current application and the potential for future patentable commercial products. The agreement requires the payment of total consideration of $1,350 for (i) the purchase of a portfolio of more than 100 issued U.S. patents, (ii) over 110 pending U.S. patent applications and numerous foreign counterparts to these patents and patent applications, and (iii) the settlement of all litigation. A value of $550 was assigned to the settlement of past damages between the parties and was recorded as an expense in
the fourth quarter of fiscal year 2005. The remaining consideration, including $3 of direct acquisition costs, was allocated between $628 of acquired technology based intangible assets that had an estimated useful life of 17 years at the time of acquisition and $175 of IPR&D that was expensed on the date of acquisition related to spinal technology based devices that had not yet reached technological feasibility and had no future alternative use. The patents pertain to novel spinal technology and techniques that have the potential for future patentable commercial products in the area of spinal surgery. During the first quarter of fiscal year 2006, the Company paid $1,320 and committed to three future installments of $10 to be paid in May 2006, 2007, and 2008. The future installments of $10 were paid in May 2006, 2007 and 2008.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>51</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During the first quarter of fiscal year 2006, the Company also entered into a royalty bearing, non-exclusive patent cross-licensing agreement with NeuroPace, Inc. Under the terms of the agreement, the two companies cross-licensed patents and patent applications of neurological technology related to direct electrical stimulation or monitoring of the brain. On the date of the agreement, $20 was expensed as IPR&D related to the licensed technology since technological feasibility of the project had not yet been reached and such technology had no future alternative use. This licensed technology is expected to enhance the Company’s ability to further develop and expand its therapies for neurological disorders. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Contingent Consideration</font></i><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Certain of the Company’s acquisitions involve the potential for the payment of future contingent consideration upon the achievement of certain product development milestones and/or various other favorable operating conditions. While it is not certain if and/or when these payments will be made, the Company has developed an estimate of the potential contingent consideration for each of its acquisitions with an outstanding potential obligation. At April 25, 2008, the estimated potential amount of future contingent consideration that the Company is expected to pay associated with all acquisitions is approximately $131. The milestones associated with the contingent consideration must be reached in future periods ranging from fiscal years 2009 to 2016 in order for the consideration to be paid. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="112" style='border-collapse:collapse'>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
<td width="88" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Investments</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The carrying amounts of cash and cash equivalents approximate fair value due to their short maturities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Information regarding the Company’s </font><i><font size=2>short-term</font></i><font size=2> and </font><i><font size=2>long-term investments</font></i><font size=2> at April 25, 2008 is as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-collapse:collapse" WIDTH="93%">
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Cost</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Unrealized </font></b></p>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Gains</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Unrealized </font></b></p>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Losses</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fair Value</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Corporate debt securities</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>942</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(15</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>929</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Auction rate securities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>198</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(22</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>176</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Mortgage backed securities </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>693</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>679</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Government and agency securities </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>478</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>476</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Other asset backed securities </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>382</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(12</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>371</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.0pt'><font size=2>Marketable equity securities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:9.0pt'><font size=2>Cost method, equity method and other investments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>231</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>231</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:.55pt'><font size=2>Total short-term and long-term investments</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,938</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(70</font></p> </td>
<td width="3%" valign=bottom style="border-bottom:solid white 2.25pt">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,875</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Information regarding the Company’s </font><i><font size=2>short-term</font></i><font size=2> and </font><i><font size=2>long-term investments</font></i><font size=2> at April 27, 2007 is as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="93%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Cost</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Unrealized </font></b></p>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Gains</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Unrealized </font></b></p>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Losses</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Fair Value</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Corporate debt securities</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,578</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,576</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Auction rate securities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>870</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>870</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Mortgage backed securities </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>887</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(4</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>885</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Government and agency securities </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>831</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>830</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Certificates of deposit</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>110</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>110</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Other asset backed securities </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>555</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>555</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:9.55pt'><font size=2>Marketable equity securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>26</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:9.55pt'><font size=2>Cost method, equity method and other investments</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>173</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>173</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:.55pt'><font size=2>Total short-term and long-term investments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,015</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>21</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(11</font></p> </td>
<td width="3%" valign=bottom style='border-bottom:solid #CCCCCC 2.25pt; background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,025</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>52</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>Activity related to the Company’s short-term and long-term investment portfolio is as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="17" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Debt (1)</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Equity (2)</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Debt (1)</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Equity (2)</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Debt (1)</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Equity (2)</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="27%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Proceeds from sales</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8,531</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>26</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,870</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6,620</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Gross realized gains </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Gross realized losses</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt;background: #CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt;background: #CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt;background: #CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Impairment losses recognized</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid black 0pt'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>26</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td width="24" valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
<td valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Includes AFS debt securities.</font></p> </td> </tr></table>
</div>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td width="24" valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
<td valign=top style='padding:1.5pt 0in 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Includes marketable equity securities, cost method, equity method, and other investments. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The April 25, 2008 balance of AFS debt securities by contractual maturity is shown in the following table. Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows, assuming no change in the current interest rate environment. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 25, </font></b></p>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Due in one year or less</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>701</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Due after one year through five years</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,657</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Due after five years through ten years</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>77</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Due after ten years</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>196</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:2.25pt'><font size=2>Total debt securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,631</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As of April 25, 2008, the Company has $116 in debt securities that have been in an unrealized loss position for more than twelve months. The aggregate amount of unrealized losses for these investments is $6. These investments are in high quality, investment grade securities. The Company does not consider these unrealized losses to be other-than-temporary as it has the intent and ability to hold these investments long enough to avoid realizing any significant losses. The total fair value of all investments currently in an unrealized loss position as of April 25, 2008 is $1,683. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company has investments in marketable debt securities that are classified and accounted for as available-for-sale. The Company’s debt securities include government securities, commercial paper, corporate bonds, bank certificates of deposit, and mortgage backed and other asset backed securities including auction rate securities. Market conditions during the third and fourth quarters of fiscal year 2008 and subsequent to the Company’s fiscal year-end continue to indicate significant uncertainty on the part of investors on the economic outlook for the U.S. and for financial institutions that have potential exposure to the sub-prime housing market. This uncertainty has created reduced liquidity across the fixed income investment market, including certain securities in which the Company has invested. As a result, some of the Company’s investments have experienced reduced
liquidity including unsuccessful monthly auctions for auction rate security holdings. As of April 25, 2008, all of the investments in auction rate fixed income securities have been reclassified from </font><i><font size=2>short-term investments</font></i><font size=2> to </font><i><font size=2>long-term investments</font></i><font size=2> on the consolidated balance sheet due to the fact that they are currently not trading, and current conditions in the general debt markets have reduced the likelihood that the securities will successfully auction within the next 12 months. Auction rate securities that did not successfully auction reset to the maximum rate as prescribed in the underlying indenture and all of the Company’s holdings continue to be current with their interest payments. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>For the fiscal year ended April 25, 2008, the Company recognized a $3 impairment loss on AFS debt securities. Based on the Company’s assessment of the credit quality of the underlying collateral and credit support available to each of the remaining securities in which invested, the Company believes no other-than-temporary impairment has occurred as the Company has the ability and the intent to hold these investments long enough to avoid realizing any significant loss.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As of April 25, 2008 and April 27, 2007, the aggregate
carrying amount of equity and other securities without a quoted market price and accounted for using the cost or equity method was $231 and $173, respectively. The
total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s
investment may not be recoverable. The fair value of cost or equity method investments is not estimated if there are no identified events or changes in
circumstances that may have a material adverse effect on the fair value of the investment. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>53</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>Gains and losses recognized on debt instruments are recorded in </font><i><font size=2>interest income, net</font></i><font size=2> in the consolidated statements of earnings. Gains and losses recognized on equity instruments are recorded in </font><i><font size=2>other expense, net</font></i><font size=2> in the consolidated statements of earnings. Gains and losses from the sale of investments are calculated based on the specific identification method.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company lends certain fixed income securities to enhance its investment income. These lending activities are collateralized at an average rate of 103 percent, with the collateral determined based on the underlying securities and creditworthiness of the borrowers. The value of the securities on loan at April 25, 2008 and April 27, 2007 was $610 and $1,318, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="259" style='border-collapse:collapse; '>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
<td width="235" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Goodwill and Other Intangible Assets</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The changes in the carrying amount of goodwill for fiscal years 2008 and 2007 are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Beginning balance</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,327</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,346</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Goodwill as a result of acquisitions</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,178</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Purchase accounting adjustments, net (1)</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(10</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(41</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.75pt; text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Currency adjustment, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Ending balance</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>7,519</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,327</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fiscal years 2008 and 2007 included $10 and $41, respectively, related to the reversal of tax valuation allowances on deferred tax assets previously established with certain acquisitions.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company completed its fiscal years 2008, 2007, and 2006 impairment tests of all goodwill and concluded there were no impairments.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Balances of acquired intangible assets, excluding goodwill, are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Purchased</font></b><br> <b><font size=1>Technology</font></b><br> <b><font size=1>and Patents</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Trademarks</font></b><br> <b><font size=1>and</font></b><br> <b><font size=1>Tradenames</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><b><font size=1>Other</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Total</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Amortizable intangible assets as of April 25, 2008:</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
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<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Original cost</font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,538</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>373</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>244</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,155</font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt'><font size=2>Accumulated amortization</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(616</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(181</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(165</font></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(962</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt'><font size=2>Carrying value</font></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,922</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>192</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>79</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,193</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
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<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:9.75pt'><font size=2>Weighted average original life (in years)</font></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14.0</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.3</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9.7</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
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<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
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<p style='margin:0in;margin-bottom:0pt'><font size=2>Amortizable intangible assets as of April 27, 2007:</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Original cost</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,754</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>265</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>217</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,236</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt'><font size=2>Accumulated amortization</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(519</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(150</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(134</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(803</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt'><font size=2>Carrying value</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,235</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>115</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>83</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,433</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:9.75pt'><font size=2>Weighted average original life (in years)</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14.5</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.0</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.2</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Amortization expense for fiscal years 2008, 2007, and 2006 was $220, $182, and $175, respectively. See Note 2 for discussion of the special charges recorded in fiscal year 2008 and the impact on the above balances. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets is as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="87%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p style='margin:0in;margin-bottom:0pt'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Amortization</font></b><br> <b><font size=1>Expense</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2009</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-top:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>248</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>2010</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>250</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>236</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>2012</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>212</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2013</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>197</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Thereafter</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,050</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,193</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>54</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="187" style='border-collapse:collapse'>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
<td width="163" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Financing Arrangements</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Debt consisted of the following: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>April 25, 2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="4" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>April 27, 2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Maturity by</font></b><br> <b><font size=1>Fiscal Year</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Payable</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Average</font></b><br> <b><font size=1>Interest</font></b><br> <b><font size=1>Rate</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Payable</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Average</font></b><br> <b><font size=1>Interest</font></b><br> <b><font size=1>Rate</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="44%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Short-Term Borrowings:</font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Contingent convertible debentures</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2009-2022</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>94</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.25%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Bank borrowings</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2009</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>175</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.87%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>255</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.83%</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Commercial paper</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2009</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>874</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.42%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>249</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5.29%</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt; '><font size=2>Capital lease obligations</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>2009</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>5.33%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>5.19%</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt; '><b><font size=2>Total Short-Term Borrowings</font></b><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,154</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>509</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Long-Term Debt:</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Contingent convertible debentures</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2010-2022</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>94</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.25%</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Five-year senior convertible notes</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,200</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.50%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,200</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.50%</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Five-year senior notes</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>400</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4.38%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>400</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4.38%</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>New credit agreement</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>300</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.90%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Seven-year senior convertible notes</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2013</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,200</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.63%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,200</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.63%</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt;'><font size=2>Ten-year senior notes</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2016</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>600</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4.75%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>600</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4.75%</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt;'><font size=2>Interest rate swaps</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2011/2016</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2.04%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4.81%</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt; '><font size=2>Capital lease obligations</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>2009-2014</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>67</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>5.37%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>84</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2>5.38%</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt; '><b><font size=2>Total Long-Term Debt</font></b><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5,802</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5,578</font></p> </td>
<td width="3%" valign=bottom >
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Senior Convertible Notes</font></b><font size=2> In April 2006, the Company issued $2,200 of 1.500 percent Senior Convertible Notes due 2011 and $2,200 of 1.625 percent Senior Convertible Notes due 2013 (collectively, the Senior Convertible Notes). The Senior Convertible Notes were issued at par and pay interest in cash semi-annually in arrears on April 15 and October 15 of each year. The Senior Convertible Notes are unsecured unsubordinated obligations and rank equally with all other unsecured and unsubordinated indebtedness. The Senior Convertible Notes have an initial conversion price of $56.14 per share. The Senior Convertible Notes may only be converted: (i) during any calendar quarter if the closing price of the Company’s common stock reaches 140 percent of the conversion price for 20 trading days during a specified period, or (ii) if
specified distributions to holders of the Company’s common stock are made or specified corporate transactions occur, or (iii) during the last month prior to maturity of the applicable notes. Upon conversion, a holder would receive: (i) cash equal to the lesser of the principal amount of the note or the conversion value and (ii) to the extent the conversion value exceeds the principal amount of the note, shares of the Company’s common stock, cash, or a combination of common stock and cash, at the Company’s option. In addition, upon a change in control, as defined, the holders may require the Company to purchase for cash all or a portion of their notes for 100 percent of the principal amount of the notes plus accrued and unpaid interest, if any, plus a number of additional make-whole shares of the Company’s common stock, as set forth in the applicable indenture. The indentures under which the Senior Convertible Notes were issued contain customary
covenants. A total of $2,500 of the net proceeds from these note issuances were used to repurchase common stock. As of April 25, 2008, pursuant to provisions in the indentures relating to the Company’s increase of its quarterly dividend to shareholders, the conversion rates for each of the Senior Convertible Notes is now 17.8715, which correspondingly changed the conversion price per share for each of the Senior Convertible Notes to $55.96. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Under EITF No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” (EITF No. 00-19), the notes are accounted for similar to traditional convertible debt (that is, as a combined instrument) because the conversion spread meets the requirements of EITF No. 00-19, including the provisions contained in paragraphs 12–32 of EITF No. 00-19. Accordingly, the “conversion spread” is not separated as a derivative. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Concurrent with the issuance of the Senior Convertible Notes, the Company purchased call options on its common stock in private transactions. The call options allow the Company to receive shares of the Company’s common stock and/or cash from counterparties equal to the amounts of common stock and/or cash related to the excess conversion value that it would pay to the holders of the Senior Convertible Notes upon conversion. These call options will terminate upon the earlier of the maturity dates of the related Senior Convertible Notes or the first day all of the related Senior Convertible Notes are no longer outstanding due to conversion or otherwise. The call options, which cost an aggregate $1,075 ($699 net of tax benefit), were recorded as a reduction of shareholders’ equity.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>55</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>In separate transactions, the Company sold warrants to issue shares of the Company’s common stock at an exercise price of $76.56 per share in private transactions. Pursuant to these transactions, warrants for 41 million shares of the Company’s common stock may be settled over a specified period beginning in July 2011 and warrants for 41 million shares of the Company’s common stock may be settled over a specified period beginning in July 2013 (the “settlement dates”). If the average price of the Company’s common stock during a defined period ending on or about the respective settlement dates exceeds the exercise price of the warrants, the warrants will be settled in shares of the Company’s common stock. Proceeds received from the issuance of the warrants totaled approximately $517 and were recorded as an addition to shareholders’ equity. In April
2008, certain of the holders requested adjustment to the exercise price of the warrants from $76.47 to $76.30 pursuant to the anti-dilution provisions of the warrants relating to the Company’s payment of dividends to common shareholders.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>EITF No. 00-19 provides that contracts are initially classified as equity if (1) the Contract requires physical settlement or net-share settlement, or (2) the Contract gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The settlement terms of the Company’s purchased call options and sold warrant contracts provide for net cash settlement for the particular contract or net share settlement, depending on the method of settlement, as discussed above, which is at the option of Medtronic. Based on the guidance from EITF No. 00-19 and SFAS No. 133, the purchased call option contracts were recorded as a reduction of equity and the warrants were recorded as an addition to equity as of the trade date. SFAS No. 133 states that a reporting entity shall not consider contracts to be derivative
instruments if the contract issued or held by the reporting entity is both indexed to its own stock and classified in shareholders’ equity in its statement of financial position. The Company concluded the purchased call option contracts and the warrant contracts should be accounted for in shareholders’ equity. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Senior Notes</font></b><font size=2> In September 2005, the Company issued two tranches of Senior Notes with the aggregate face value of $1,000. The first tranche consisted of $400 of 4.375 percent Senior Notes due 2010 and the second tranche consisted of $600 of 4.750 percent Senior Notes due 2015. Each tranche was issued at a discount which resulted in an effective interest rate of 4.433 percent and 4.760 percent for the five and ten year Senior Notes, respectively. Interest on each series of Senior Notes is payable semi-annually, on March 15 and September 15 of each year. The Senior Notes are unsecured unsubordinated obligations of the Company and rank equally with all other unsecured and unsubordinated indebtedness of the Company. The indentures under which Senior Notes were issued contain customary covenants. The Company used the net proceeds from the sale of the
Senior Notes for repayment of a portion of its outstanding commercial paper.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In November 2005, the Company entered into a five year interest rate swap agreement with a notional amount of $200. This interest rate swap agreement was designated as a fair value hedge of the changes in fair value of a portion of the Company’s fixed-rate $400 Senior Notes due 2010. The Company pays variable interest equal to the three-month London Interbank Offered Rate (LIBOR) minus 55 basis points and it receives a fixed interest rate of 4.375 percent. The outstanding market value of this swap agreement was an $8 unrealized gain at April 25, 2008. The unrealized gain of $8 at April 25, 2008 is recorded in </font><i><font size=2>long-term debt</font></i><font size=2> with the offset recorded in </font><i><font size=2>other long-term assets</font></i><font size=2> on the consolidated balance sheets. There was no unrealized gain or loss at April 27, 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In June 2007, the Company entered into an eight year interest rate swap agreement with a notional amount of $300. This interest rate swap agreement was designated as a fair value hedge of the changes in fair value of a portion of the Company’s fixed-rate $600 Senior Notes due 2015. The Company pays variable interest equal to the three-month London LIBOR minus 90 basis points and it receives a fixed interest rate of 4.750 percent. The outstanding market value of this swap agreement was a $27 unrealized gain at April 25, 2008. The unrealized gain of $27 at April 25, 2008 is recorded in </font><i><font size=2>long-term debt</font></i><font size=2> with the offset recorded in </font><i><font size=2>other long-term assets </font></i><font size=2>on the consolidated balance sheets.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Contingent Convertible Debentures</font></b><font size=2> In September 2001, the Company completed a $2,013 private placement of 1.250 percent Contingent Convertible Debentures due September 2021 (Old Debentures). Interest is payable semi-annually. Each Old Debenture is convertible into shares of common stock at an initial conversion price of $61.81 per share; however, the Old Debentures are not convertible before their final maturity unless the closing price of the Company’s common stock reaches 110 percent of the conversion price for 20 trading days during a consecutive 30 trading day period. In September 2002 and 2004, as a result of certain holders of the Old Debentures exercising their put options, the Company repurchased $39 and $1, respectively, of the Old Debentures for cash. On January 24, 2005, the Company completed an exchange offer whereby
holders of approximately $1,930 of the total principal amount of the Old Debentures exchanged their existing securities for an equal principal amount of 1.250 percent Contingent Convertible Debentures, Series B due 2021 (New Debentures), as described below. Following the completion of the exchange offer, the Company repurchased approximately $2 of the Old Debentures for cash.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>56</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>The terms of the New Debentures are consistent with the terms of the Old Debentures noted above, except that: (i) the New Debentures require the Company to settle all conversions for a combination of cash and shares of the Company’s common stock, if any, in lieu of only shares. Upon conversion of the New Debentures the Company will pay holders cash equal to the lesser of the principal amount of the New Debentures or their conversion value, and shares of the Company’s common stock to the extent the conversion value exceeds the principal amount of the New Debentures; and (ii) the New Debentures require the Company to pay only cash (in lieu of shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock) when the Company repurchases the New Debentures at the option of the holder or when the Company repurchases the New Debentures in
connection with a change of control.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2006, as a result of certain holders of the New
Debentures and Old Debentures exercising their put options, the Company repurchased $1,835 of the New Debentures for cash and $42 of the Old Debentures for
cash. The Company may be required to repurchase the remaining debentures at the option of the holders in September 2008, 2011, or 2016. Twelve months prior to
the put options becoming exercisable, the remaining balance of the New Debentures and the Old Debentures will be classified as </font><i><font size=2>short-term
borrowings.</font></i><font size=2> At each balance sheet date without a put option within the subsequent four quarters, the remaining balance will be
classified as </font><i><font size=2>long-term debt.</font></i><font size=2> Accordingly, during the second quarter of fiscal year 2008, $93 of New Debentures
and $1 of the Old Debentures were reclassified from
</font><i><font size=2>long-term debt</font></i><font size=2> to </font><i><font size=2>short-term borrowings</font></i><font size=2> due to the put option becoming exercisable in September 2008. For put options exercised by the holders of the New Debentures and the Old Debentures, the purchase price is equal to the principal amount of the applicable debenture plus any accrued and unpaid interest thereon to the repurchase date. If the put option is exercised, the Company will pay holders the repurchase price solely in cash (or, for the Old Debentures, in cash or stock at the Company’s option). As of April 25, 2008, approximately $93 aggregate principal amount of New Debentures remain outstanding and approximately $1 aggregate principal amount of Old Debentures remain outstanding. The Company can redeem the debentures for cash at any time.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Commercial Paper</font></b><font size=2> The Company maintains a commercial paper program that allows the Company to have a maximum of $2,250 in commercial paper outstanding, with maturities up to 364 days from the date of issuance. At April 25, 2008 and April 27, 2007, outstanding commercial paper totaled $874 and $249, respectively. During fiscal years 2008 and 2007, the weighted average original maturity of the commercial paper outstanding was approximately 35 and 56 days, respectively, and the weighted average interest rate was 4.46 percent and 5.26 percent, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Bank Borrowings</font></b><font size=2> Bank borrowings consist primarily of borrowings from non-U.S. banks at interest rates considered favorable by management and where natural hedges can be gained for foreign exchange purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Credit Arrangements</font></b><font size=2> The Company has existing unsecured lines of credit of approximately $2,795 with various banks at April 25, 2008. The existing lines of credit include a five-year $1,750 syndicated credit facility dated December 20, 2006 that will expire on December 20, 2011 (Credit Facility). The Credit Facility provides backup funding for the commercial paper program and may also be used for general corporate purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Credit Facility provides the Company with the ability to increase its capacity by an additional $500 at any time during the life of the five-year term of the agreement. The Company can also request the extension of the Credit Facility maturity date for one additional year on December 20, 2008, the second anniversary of the date of this facility. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest rates on these borrowings are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard and Poor’s Ratings Group and Moody’s Investors Service. Facility fees are payable on the credit facilities and are determined in the same manner as the interest rates.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 2, 2007, the Company entered into a new Credit Agreement (the “New Credit Agreement”) with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (the “New Lender”). The New Credit Agreement provides for a $300 unsecured revolving credit facility (the “New Facility”) maturing November 2, 2010. In addition to certain initial fees, the Company is obligated to pay a commitment fee based on the total revolving commitment. Interest rates on these borrowings are determined by a pricing matrix, based on the Company’s long-term debt ratings, assigned by Standard and Poor’s Ratings Group and Moody’s Investors Service. The New Credit Agreement contains customary representations and warranties of the Company as well as affirmative covenants regarding the Company. Upon the occurrence of an event of default as defined under the New Credit Agreement, the New
Lender could elect to declare all amounts outstanding under the New Facility to be immediately due and payable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>57</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>As of April 25, 2008 and April 27, 2007, $300 and $0, respectively, were outstanding on all available lines of credit.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Maturities of long-term debt, including capital leases, for the next five fiscal years are as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="87%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p style='margin:0in;margin-bottom:0pt'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Obligation</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2009</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-top:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>2010</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,924</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>2012</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>2013</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,220</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Thereafter</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>628</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>Total long-term debt</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,813</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Less: Current portion of long-term debt</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Long-term portion of long-term debt</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,802</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company has entered into agreements to sell specific pools of receivables in Italy in the amount of $0, $37, and $53 in fiscal years 2008, 2007, and 2006, respectively. The discount cost related to the receivable sales was insignificant and recorded in </font><i><font size=2>interest income, net</font></i><font size=2> in the consolidated statements of earnings. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Derivatives and Foreign Exchange Risk Management</font></b><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company uses operational and economic hedges, as well as forward exchange derivative contracts to manage the impact of foreign exchange rate changes on earnings and cash flows. In order to reduce the uncertainty of foreign exchange rate movements, the Company enters into derivative instruments, primarily forward exchange contracts, to manage its exposure related to foreign exchange rate changes. These contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets, liabilities, net investments, and probable commitments. At inception of the forward contract, the derivative is designated as either a freestanding derivative, net investment hedge, or cash flow hedge. Principal currencies hedged are the Euro and the Japanese Yen. The Company does not enter into forward exchange derivative contracts for speculative purposes.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Notional amounts of these contracts outstanding at April 25, 2008 and April 27, 2007 were $6,613 and $5,372, respectively. All derivative instruments are recorded at fair value on the consolidated balance sheets, as a component of </font><i><font size=2>prepaid expenses and other current assets, other long-term assets, other accrued expenses</font></i><font size=2>, or </font><i><font size=2>other long-term liabilities</font></i><font size=2> depending upon the gain or loss position of the contract and contract maturity date. Aggregate foreign currency gains/(losses) were $(134), $22, and $52, in fiscal years 2008, 2007 and 2006, respectively. These gains/(losses), which were offset by gains/(losses) on the related assets, liabilities, and transactions being hedged, were recorded in either </font><i><font size=2>other expense, net</font></i><font size=2> or </font><i><font size=2>cost of
products sold</font></i><font size=2> in the consolidated statements of earnings. As a result of hedging inventory-related forecasted transactions, the Company recognized gains/(losses) of $14, $1, and $(40) in </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statements of earnings in fiscal years 2008, 2007, and 2006, respectively; the remaining $(148), $21, and $92 was recognized in </font><i><font size=2>other expense, net</font></i><font size=2> in the consolidated statements of earnings for fiscal years 2008, 2007, and 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Freestanding Derivative Forward Contracts</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Freestanding derivative forward contracts are used to offset the Company’s exposure to the change in value of certain foreign currency denominated intercompany assets and liabilities. These derivatives are not designated as hedges, and, therefore, changes in the value of these forward contracts are recognized currently in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. The aggregate foreign currency transaction losses were $7, $9, and $3 in fiscal years 2008, 2007, and 2006, respectively, and are recognized in </font><i><font size=2>other expense, net</font></i><font size=2> in the consolidated statements of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Net Investment Hedges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Net investment hedges are used to hedge the long-term investment (equity) in foreign operations. Net gains/(losses) related to changes in the current rates, or spot rates, were $(143), $(41), and $57 during fiscal years 2008, 2007, and 2006, respectively, and recorded as a cumulative translation adjustment, a component of </font><i><font size=2>accumulated other comprehensive (loss)/ income</font></i><font size=2> on the consolidated balance sheets. Net gains associated with changes in forward rates of the contracts totaled $19, $23, and $15 in fiscal years 2008, 2007, and 2006, respectively, and are reflected in </font><i><font size=2>other expense, net</font></i><font size=2> in the consolidated statements of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>58</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Cash Flow Hedges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Forward contracts designated as cash flow hedges are designed to
hedge the variability of cash flows associated with forecasted transactions, denominated in a foreign currency, that will take place in the future. Net
unrealized losses related to the Company’s outstanding cash flow hedges totaled $(266) and $(55) in fiscal years 2008 and 2007, respectively, and
were recorded in </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> on the consolidated balance sheets. During fiscal
years 2008, 2007, and 2006, the Company’s net gains/(losses) related to the settlement of cash flow hedges were $(146), $8, and $40, respectively. In
fiscal years 2008, 2007, and 2006, gains/(losses) of $(160), $7, and $80 were recorded as </font><i><font size=2>other expense, net</font></i><font size=2> and
gains/(losses) of $14, $1, and $(40) were recorded in </font><i><font size=2>cost of products sold</font></i><font size=2> in the consolidated statements of
earnings. No gains or losses relating to ineffectiveness of cash flow hedges were recognized in earnings during fiscal years 2008, 2007, and 2006. No components
of the hedge contracts were excluded in the measurement of hedge ineffectiveness and no hedges were derecognized or discontinued during fiscal years 2008, 2007,
and 2006. All cash flow hedges outstanding at April 25, 2008 mature within the subsequent 36-month period. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following table summarizes activity in </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> related to all derivatives classified as cash flow hedges in fiscal years 2008, 2007, and 2006 (amounts are net of tax):</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Accumulated derivative losses, April 29, 2005</font></b><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(11</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Net gains reclassified to earnings</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(14</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:3.0pt; text-indent:-3.0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Change in fair value of hedges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Accumulated derivative gains, April 28, 2006</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>Net gains reclassified to earnings</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Change in fair value of hedges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(59</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Accumulated derivative losses, April 27, 2007</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(55</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Net losses reclassified to earnings</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>96</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Change in fair value of hedges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(307</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid white 1.0pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="87%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Accumulated derivative losses, April 25, 2008</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(266</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double white 2.25pt; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company expects that the $163, net of tax, in accumulated derivative losses at April 25, 2008 will be reflected in the consolidated statements of earnings over the next twelve months.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Fair Value Hedges</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest rate derivative instruments designated as fair value
hedges are designed to manage the exposure to interest rate movements and to reduce borrowing costs by converting fixed-rate debt into floating-rate debt. The
Company currently has two outstanding interest rate derivatives, one from November 2005 which is a five year interest swap agreement and one from June
2007 that is an eight year interest rate swap agreement. See Note 7 for further information on the interest rate derivatives. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During fiscal years 2008, 2007, and 2006, the Company did not have any ineffective fair value hedging instruments. In addition, the Company did not recognize any gains or losses during fiscal years 2008, 2007, and 2006 on firm commitments that no longer qualify as fair value hedges. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="180" style='border-collapse:collapse; '>
<tr >
<td width="180" nowrap valign=top >
<p style='margin:0in;margin-bottom:0pt'><i><font size=2>Concentrations of Credit Risk</font></i><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of interest-bearing investments, forward exchange derivative contracts, and trade accounts receivable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company maintains cash and cash equivalents, investments, and certain other financial instruments (including forward exchange contracts) with various major financial institutions. The Company performs periodic evaluations of the relative credit standings of these financial institutions and limits the amount of credit exposure with any one institution.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>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 national healthcare systems in many countries. Although the Company does not currently foresee a credit risk associated with these receivables, repayment is dependent upon the financial stability of the economies of those countries. As of April 25, 2008 and April 27, 2007, no customer represented more than 10 percent of the outstanding accounts receivable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>59</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="160" style='border-collapse:collapse; '>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>9.</font></b></p> </td>
<td width="136" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Interest Income, Net</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest income and interest expense for fiscal years 2008, 2007 and 2006 are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=center>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Interest income</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(364</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(382</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(203</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Interest expense</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>255</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>228</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>116</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Interest income, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(109</font></p> </td>
<td width="3%" valign=bottom style='border-bottom: solid #CFCFCF 2.25pt;background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(154</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CFCFCF 2.25pt; background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(87</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid #CFCFCF 2.25pt; background:#CCCCCC'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest income includes interest earned on cash and cash
equivalents, short- and long-term investments and the net realized gains or losses on the sale of AFS debt securities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Interest expense includes the expense associated with the interest that the Company pays on outstanding borrowings, including short- and long-term instruments, and the amortization of debt issuance costs.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="164" style='border-collapse:collapse'>
<tr >
<td width="23" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
<td width="8%" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shareholders’ Equity</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Repurchase of Common Stock </font></b><font size=2> In October 2005 and June 2007, the Company’s Board of Directors authorized the repurchase of 40 million and 50 million shares of the Company’s stock, respectively. In addition, in April 2006, the Board of Directors made a special authorization for the repurchase of up to 50 million shares in connection with the $4,400 Senior Convertible Note offering (see Note 7 for further discussion). Shares are repurchased from time to time to support the Company’s stock-based compensation programs and to take advantage of favorable market conditions. The Company repurchased approximately 30.7 million and 21.7 million shares at an average price of $50.28 and $47.83, respectively, during fiscal years 2008 and 2007. The amounts disclosed as repurchased for fiscal year 2007 include 544,224 shares
that the Company obtained as part of the final settlement of the previously announced and executed accelerated share repurchase program. Excluding the shares obtained in the settlement of the accelerated share repurchase program, for fiscal year 2007 the Company repurchased 21.2 million shares at an average price of $49.06. As of April 25, 2008, the Company has approximately 34.3 million shares remaining under the buyback authorizations. The Company accounts for repurchases of common stock using the par value method and shares repurchased are cancelled.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Shareholder Rights Plan</font></b><font size=2> On October 26, 2000, the Company’s Board of Directors adopted a Shareholder Rights Plan and declared a dividend of one preferred share purchase right (a “right”) for each outstanding share of common stock with a par value $.10 per share. Each right will allow the holder to purchase 1/5000 of a share of Series A Junior Participating Preferred Stock at an exercise price of $400 per share, once the rights become exercisable. The rights are not exercisable or transferable apart from the common stock until 15 days after the public announcement that a person or group (the Acquiring Person) has acquired 15 percent or more of the Company’s common stock or 15 business days after the announcement of a tender offer which would increase the Acquiring Person’s beneficial ownership to 15 percent or
more of the Company’s common stock. After any person or group has become an Acquiring Person, each right entitles the holder (other than the Acquiring Person) to purchase, at the exercise price, common stock of the Company having a market price of two times the exercise price. If the Company is acquired in a merger or other business combination transaction, each exercisable right entitles the holder to purchase, at the exercise price, common stock of the acquiring company or an affiliate having a market price of two times the exercise price of the right.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Board of Directors may redeem the rights for $0.005 per right at any time before any person or group becomes an Acquiring Person. The Board may also reduce the threshold at which a person or group becomes an Acquiring Person from 15 percent to no less than 10 percent of the outstanding common stock. The rights expire on October 26, 2010.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="233" style='border-collapse:collapse'>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11.</font></b></p> </td>
<td width="209" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Stock Purchase and Award Plans</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Effective April 29, 2006, the Company adopted SFAS No. 123(R) which replaced SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123) and supersedes Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB Opinion No. 25). Under the fair value recognition provisions of SFAS No. 123(R), the Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period, which is generally the vesting period. The Company elected the modified-prospective method of adopting SFAS No. 123(R), under which prior periods are not retroactively restated. The provisions of SFAS No. 123(R) apply to awards granted after the April 29, 2006 effective date. Stock-based compensation expense for the non-vested portion of awards granted prior
to the effective date is being recognized over the remaining service period using the fair-value based compensation cost estimated for SFAS No. 123 pro forma disclosures. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>60</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Stock Options</font></b><font size=2> Stock option awards are granted at exercise prices equal to the closing price of the Company’s common stock on the grant date. The majority of the Company’s stock option awards are non-qualified stock options with a ten-year life and a four-year ratable vesting term. The Company currently grants stock options under the Medtronic, Inc. 2003 Long-Term Incentive Plan (2003 Plan), the Medtronic, Inc. – Kyphon Inc. 2002 Stock Plan (Kyphon Plan), and the Medtronic, Inc. 1998 Outside Directors Stock Compensation Plan (Directors Plan). The 2003 plan was approved by the Company’s shareholders in August 2003 and provides for the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock, performance shares, and other stock and cash-based awards. The Kyphon Plan was adopted by the Board of
Directors on December 13, 2007 and provides for the grant of nonqualified and incentive stock options, restricted stock, and stock purchase rights. The Directors Plan, a stock compensation plan for outside directors, was adopted in fiscal year 1998 and replaced the provisions in the 1994 stock award plan relating to awards granted to outside directors. As of April 25, 2008, there were approximately 14 million, 3 million, and 2 million shares available for future grants under the 2003 Plan, the Kyphon Plan, and the Directors Plan, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Restricted Stock Awards</font></b><font size=2> Restricted stock and restricted stock units (collectively referred to as restricted stock awards) are granted to officers and key employees. Restricted stock awards are subject to forfeiture if employment terminates prior to the lapse of the restrictions. The Company grants restricted stock awards that typically cliff vest in three- and five-year periods. Restricted stock awards are expensed over the vesting period. The Company also grants shares of performance-based restricted stock that will cliff vest only if the Company has also achieved certain performance objectives. Performance awards are expensed over the performance period based on the probability of achieving the performance objectives. Shares of restricted stock are considered issued and outstanding shares of the Company at the grant date and have the same
dividend and voting rights as other common stock. Restricted stock units are not considered issued or outstanding common stock of the Company. Dividend equivalent units are accumulated on restricted stock units during the vesting period. The Company grants restricted stock awards under the 2003 Plan, the Kyphon Plan, and the Directors Plan.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Employee Stock Purchase Plan</font></b><font size=2> The Medtronic, Inc. 2005 Employee Stock Purchase Plan (ESPP) allows participating employees to purchase shares of the Company’s common stock at a discount through payroll deductions. Employees can contribute up to the lesser of 10 percent of their wages or the statutory limit under the U.S. Internal Revenue Code toward the purchase of the Company’s common stock at 85 percent of its market value at the end of the calendar quarter purchase period. Employees purchased 2 million shares at an average price of $43.73 per share in the fiscal year ended April 25, 2008. As of April 25, 2008, plan participants have had approximately $6 withheld to purchase Company common stock at 85 percent of its market value on June 27, 2008, the last trading day before the end of the calendar quarter purchase period. At April
25, 2008, approximately 5 million shares of common stock were available for future purchase under the ESPP.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Valuation Assumptions</font></b><font size=2> The Company uses the Black-Scholes option pricing model (Black-Scholes model) to determine the fair value of stock options as of the grant date. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price, and expected dividends. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The expense recognized for shares purchased under the Company’s ESPP is equal to the 15 percent discount the employee receives at the end of the calendar quarter purchase period. The expense recognized for restricted stock awards is equal to the grant date fair value, which is equal to the closing stock price on the date of grant. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes model: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="63%" VALIGN="top" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Weighted average fair value of options granted</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15.29</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11.72</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:3.0pt; text-indent:-3.0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15.53</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=top style='background:white'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: .25in;text-indent:-.25in'><font size=2>Assumptions used:</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=top style='background:#CFCFCF'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: 22.0pt;text-indent:-.25in'><font size=2>Expected life (years)<sup>(a)</sup></font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.42</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.83</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.00</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=top style='background:white'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: 22.0pt;text-indent:-.25in'><font size=2>Risk-free interest rate <sup>(b)</sup></font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.02</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.66</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.28</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=top style='background:#CFCFCF'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: 22.0pt;text-indent:-.25in'><font size=2>Volatility <sup>(c)</sup></font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22.27</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19.90</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25.00</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" valign=top style='background:white'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:.5pt;margin-left: 22.0pt;text-indent:-.25in'><font size=2>Dividend yield <sup>(d)</sup> </font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.05</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.90</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.5pt; text-indent:-7.5pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.69</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.5pt; text-indent:-7.5pt'><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>61</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="36" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Expected life</font></i><font size=2>: The Company analyzes historical employee stock option exercise and termination data to estimate the expected life assumption. Beginning in the third quarter of fiscal year 2008, the Company began to calculate the expected life assumption using the midpoint scenario, which combines historical exercise data with hypothetical exercise data, as the Company believes this data currently represents the best estimate of the expected life of a new employee option. Prior to the third quarter of fiscal year 2008, the Company calculated the expected life based solely on historical data. The Company also stratifies its employee population into two groups based upon distinctive exercise behavior patterns. Prior to adopting SFAS No. 123(R), the Company used one pool, the entire employee population, for estimating
the expected life assumptions. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in; text-indent:-0.38in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="36" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Risk-free interest rate</font></i><font size=2>: The rate is based on the grant date yield of a zero-coupon U.S. Treasury bond whose maturity period equals or approximates the option’s expected term. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in; text-indent:-0.38in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="36" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Volatility</font></i><font size=2>: Beginning in the third quarter of fiscal year 2007, the expected volatility is based on a blend of historical volatility and an implied volatility of the Company’s common stock. Implied volatility is based on market traded options of the Company’s common stock. Prior to the third quarter of fiscal year 2007, the Company calculated the expected volatility based exclusively on historical volatility. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.38in; text-indent:-0.38in;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="36" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>Dividend yield</font></i><font size=2>: The dividend yield rate is calculated by dividing the Company’s annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Stock-Based Compensation Expense</font></b><font size=2> Prior to adopting SFAS No. 123(R), the Company accounted for stock-based compensation under APB Opinion No. 25 using the intrinsic value method and the impact of the fair value method on the Company’s net earnings was disclosed on a pro forma basis in the Notes to the consolidated financial statements. In the pro forma disclosures, the Company recognized stock-based compensation expense based on the stated vesting period, rather than the time to achieve retirement eligibility. Upon adopting SFAS No. 123(R), the Company changed its method of recognition and now recognizes stock-based compensation expense based on the substantive vesting period for all new awards. As a result, compensation expense related to stock options granted prior to fiscal year 2007 is being recognized over the stated vesting term of the grant rather than
being accelerated upon retirement eligibility. If the Company had historically accounted for stock-based awards made to retirement eligible individuals under the requirements of SFAS No. 123(R), the pro forma expense disclosed below would have been increased by $2 for fiscal year 2006. There was no stock-based compensation expense capitalized as it was deemed immaterial. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the total expense recognized over the vesting period will equal the fair value of awards that actually vest.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following table presents the components and classification of pre-tax stock-based compensation expense, for options, ESPP, and restricted stock awards, recognized for fiscal years 2008 and 2007:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt;background:white'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;background:white'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:white">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; background:white'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="76%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Stock options</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>138</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>135</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Restricted stock awards</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>63</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>35</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Employee stock purchase plan</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><FONT SIZE="2">Total stock-based compensation expense </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><FONT SIZE="1"> </FONT></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">$ </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">217 </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><FONT SIZE="2"> </FONT></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">$ </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">185 </FONT></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:30.0pt; text-indent:-30.0pt'><font size=2>Cost of sales</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:35.0pt; text-indent:-35.0pt'><font size=2>Research and development expense</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>52</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>39</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 30.0pt;text-indent:-30.0pt'><font size=2>Selling, general and administrative expense</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>141</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>127</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><FONT SIZE="2">Total stock-based compensation expense </FONT></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><FONT SIZE="1"> </FONT></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">$ </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">217 </FONT></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><FONT SIZE="2"> </FONT></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">$ </FONT></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><FONT SIZE="2">185 </FONT></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>62</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'>
<font size=2>The following table illustrates the effect on net earnings and net earnings per share for fiscal year 2006 if the Company had applied the fair value recognition provisions of SFAS No. 123 to its stock-based employee compensation: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Net earnings, as reported</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Add: Stock-based compensation expense included in net earnings <sup>(1)</sup></font></p> </td>
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<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Less: Stock-based compensation expense determined under fair value based method for all awards <sup>(1)</sup></font></p> </td>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(142</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Pro forma net earnings</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,421</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Basic earnings per share:</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.3pt; text-indent:-.25in'><font size=2>As reported</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.11</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.3pt; text-indent:-.25in'><font size=2>Pro forma</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.01</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Diluted earnings per share:</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.3pt; text-indent:-.25in'><font size=2>As reported</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.09</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.3pt; text-indent:-.25in'><font size=2>Pro forma</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.98</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_________________</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=2><sup>(1) </sup></font></p> </td>
<td valign=top >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Compensation expense is net of related tax effects. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Tax Impacts of Stock-Based Compensation</font></b><font size=2> Prior to the adoption of SFAS No. 123(R), benefits of tax deductions in excess of recognized share-based compensation expense were reported on the consolidated statement of cash flows as operating cash flows. Under SFAS No. 123(R), such excess tax benefits are reported as financing cash flows. Although total cash flows under SFAS No. 123(R) remain unchanged from what would have been reported under prior accounting standards, net operating cash flows are reduced and net financing cash flows are increased due to the adoption of SFAS No. 123(R). For the fiscal years ended April 25, 2008 and April 27, 2007, there were excess tax benefits of $40 and $36, respectively, which are classified as financing cash flows. For the fiscal year ended April 28, 2006, there were excess tax benefits of $99, which was classified as an operating cash flow. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Stock Options</font></b><font size=2> The following table summarizes all stock option activity, including activity from options assumed or issued as a result of acquisitions, during fiscal years 2008, 2007, and 2006:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
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<tr >
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="17" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Options</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Exercise</font></b><br> <b><font size=1>Price</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Options</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Exercise</font></b><br> <b><font size=1>Price</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Options</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Exercise</font></b><br> <b><font size=1>Price</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="27%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Beginning balance</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>90,906</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.99</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>88,838</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.23</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>87,655</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>43.65</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Granted </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,436</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.13</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,529</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.64</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,740</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>56.16</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Assumed from Kyphon acquisition</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,486</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27.73</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Exercised</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(9,111</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37.80</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6,089</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37.37</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(10,617</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37.53</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Canceled</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,273</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.18</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2,372</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.22</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(1,940</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>47.59</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Outstanding at year-end</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>92,444</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>47.21</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>90,906</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.99</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>88,838</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.23</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Exercisable at year-end</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>67,741</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.80</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>67,017</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45.47</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>63,123</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>44.13</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>For options outstanding and exercisable at April 25, 2008, the weighted average remaining contractual life was 5.65 years and 4.61 years, respectively. The total intrinsic value, calculated as the closing stock price at year-end less the option exercise price, of options exercised during fiscal years 2008, 2007, and 2006 was $138, $88, and $187, respectively. For options outstanding and exercisable at April 25, 2008, the total intrinsic value of in-the-money options was $325 and $257, respectively. The Company issues new shares when stock option awards are exercised. Cash received from the exercise of stock options for the fiscal year ended April 25, 2008 was $325 and the related tax benefits realized were $40. Unrecognized compensation expense related to outstanding stock options as of April 25, 2008 was $260, pre-tax, and is expected to be recognized over a weighted
average period of 2.5 years and will be adjusted for any future changes in estimated forfeitures. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>63</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Restricted Stock Awards</font></b><font size=2> The following table summarizes restricted stock award activity during fiscal years 2008, 2007, and 2006: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="17" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Awards</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Grant</font></b><br> <b><font size=1>Price</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Awards</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Grant</font></b><br> <b><font size=1>Price</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Awards</font></b><br> <b><font size=1>(in thousands)</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Wtd. Avg.</font></b><br> <b><font size=1>Grant</font></b><br> <b><font size=1>Price</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="27%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Nonvested, beginning balance</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,982</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.16</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,008</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51.64</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,062</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.52</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Granted</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,200</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>47.74</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,188</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.19</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,063</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>54.62</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Assumed from Kyphon acquisition</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>402</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.88</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Reinvested dividend equivalent units</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>49.53</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.33</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>54.62</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Vested</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(492</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>47.60</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(112</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>47.57</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>49.96</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Forfeited</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(307</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>49.88</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(106</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51.16</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(79</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 18.75pt;text-indent:-18.75pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.68</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Nonvested at year-end</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background: #CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,789</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background: #CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>49.24</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background: #CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,982</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,008</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51.64</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Unrecognized compensation expense related to restricted stock awards as of April 25, 2008 was $178, pre-tax, is expected to be recognized over a weighted average period of 2.5 years and will be adjusted for any future changes in estimated forfeitures.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="123" style='border-collapse:collapse'>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
<td width="99" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Income Taxes</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The provision for income taxes is based on earnings before income taxes reported for financial statement purposes. The components of earnings before income taxes are:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font SIZE=2>U.S.</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>713</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,579</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,581</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>International</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,172</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,936</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,580</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Earnings before income taxes</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,885</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,515</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,161</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The provision for income taxes consists of:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Current tax expense:</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt;'><font SIZE=2>U.S.</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>458</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>712</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>471</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt; '><font size=2>International</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>267</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>239</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Total current tax expense</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>725</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>951</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>482</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Deferred tax expense (benefit):</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt;'><font SIZE=2>U.S.</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(40</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(216</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>) </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>159</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:6.75pt; '><font size=2>International</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(31</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(22</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(27</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Net deferred tax expense (benefit)</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(71</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(238</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 3.0pt;text-indent:-3.0pt; '><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>132</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><b><font size=2>Total provision for income taxes</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>654</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>713</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>614</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Deferred taxes arise because of the different treatment of transactions for financial statement accounting and income tax accounting, known as “temporary differences.” The Company records the tax effect of these temporary differences as “deferred tax assets” and “deferred tax liabilities.” Deferred tax assets generally represent items that can be used as a tax deduction or credit in a tax return in future years for which the Company has already recorded the tax benefit in the consolidated statements of earnings. The Company establishes valuation allowances for deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. The Company has established valuation allowances related to tax benefits from certain acquisitions that, if not ultimately required, will result in a reduction to goodwill;
these allowances were $15 and $16 at April 25, 2008 and April 27, 2007, respectively. The Company has established valuation allowances for capital loss carryforwards and deferred taxes which are capital in nature in the amount of $122 and $35 at April 25, 2008 and April 27, 2007, respectively. The capital loss carryforwards expire within five years. In addition, the Company has state loss and credit carryforwards and non-U.S. tax losses of approximately $40 available at both April 25, 2008 and April 27, 2007. These carryforwards are offset by valuation allowances and expire at various points in time, from within three years to no expiration date. These additional allowances would result in a reduction to the </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings, if they are ultimately not required. Deferred tax liabilities generally represent tax expense recognized in the consolidated financial
statements for which payment has been deferred or expense has already been taken as a deduction on the Company’s tax return but has not yet been recognized as an expense in the consolidated statements of earnings. Deferred tax assets/(liabilities) are comprised of the following:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>64</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 25,</font></b></p>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>April 27,</font></b></p>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Deferred tax assets:</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Allowance for doubtful accounts</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>52</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Inventory (intercompany profit in inventory and excess of tax over book valuation)</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>265</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>235</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Unrealized loss on available for sale securities and derivative financial instruments</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>186</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Unrealized loss on equity investments </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Accrued liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>128</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>109</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Warranty reserves</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Convertible debt interest </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>254</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>314</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Accrued legal reserves</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>90</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Pension and post-retirement benefits</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>29</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Stock-based compensation</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>130</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>71</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Federal and state benefit on uncertain tax positions</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>112</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt'><font size=2>Other</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>119</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>105</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:12.0pt'><font size=2>Total deferred tax assets (net of valuation allowance)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,337</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>976</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Deferred tax liabilities:</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Intangible assets</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(488</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(280</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Accumulated depreciation</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(8</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(13</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Pension and post-retirement benefits</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(8</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:7.5pt'><font size=2>Realized loss on derivative financial instruments</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(103</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(48</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:3.0pt; text-indent:-3.0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:7.5pt'><font size=2>Other</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(27</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(26</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in;text-indent:12.0pt'><font size=2>Total deferred tax liabilities</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(634</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(367</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><b><font size=2>Deferred tax assets, net</font></b><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>703</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>609</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company’s effective income tax rate varied from the U.S. Federal statutory tax rate as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>U.S. Federal statutory tax rate</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35.0</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35.0</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35.0</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>%</font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Increase (decrease) in tax rate resulting from:</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>U.S. state taxes, net of Federal tax benefit</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.1</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.9</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>Research and development credit</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.6</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.4</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.4</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>Domestic production activities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.4</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(0.2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>International</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(18.3</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(12.9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(10.9</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>Impact of special, restructuring, certain litigation, and IPR&D charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>5.9</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>0.3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.9</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2>Reversal of excess tax accruals</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(3.7</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(7.1</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-4.0pt; '><font size=2>Other, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1.0</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-4.0pt; '><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><b><font size=2>Effective tax rate</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>22.7</font></p> </td>
<td width="3%" valign=bottom STYLE="border-bottom: double white 2.25pt">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>20.3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double white 2.25pt">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 6.75pt;text-indent:-6.75pt; '><font size=2>%</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>19.4</font></p> </td>
<td width="1%" valign=bottom STYLE="border-bottom: double white 2.25pt">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 6.75pt;text-indent:-6.75pt; '><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2007, the Company recorded a $129 certain tax benefit associated with the reversal of excess tax accruals in connection with the settlement reached with the U.S. Internal Revenue Service (IRS) involving the review of the Company’s fiscal year 2003 and fiscal year 2004 domestic income tax returns, and the resolution of competent authority issues for fiscal year 1992 through fiscal year 2000. The $129 certain tax benefit was recorded in the </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings for fiscal year 2007.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In fiscal year 2006, the Company reversed excess tax accruals of $225 associated with the favorable agreements reached with the IRS involving the review of the Company’s fiscal years 1997 through 2002 domestic income tax returns. The $225 certain tax adjustment was recorded in </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings for fiscal year 2006. As a result of the agreements reached with the IRS, the Company made approximately $326 of incremental tax payments during the third quarter of fiscal year 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company has not provided U.S. income taxes on certain of its
non-U.S. subsidiaries’ undistributed earnings as such amounts are permanently reinvested outside the U.S. At April 25, 2008, and April 27, 2007, such
earnings were approximately $8,338 and $6,573, respectively. Currently, the Company’s operations in Puerto Rico, Switzerland, and
Ireland have various tax incentive grants. Unless these grants are extended, they will expire between fiscal years 2010 and 2027. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>65</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>As a result of the implementation of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN No. 48), effective April 28, 2007, the Company recognized a $1 decrease in its existing liabilities for uncertain tax positions which has been recorded as an increase to the opening balance of retained earnings. As of the adoption date, the Company had $408 of gross unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="87%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Gross unrecognized tax benefits at April 28, 2007</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>408</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Gross increases: </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:27.0pt; '><font size=2>Prior year tax positions</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>21</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:27.0pt; '><font size=2>Current year tax positions</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Gross decreases:</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:27.0pt; '><font size=2>Prior year tax positions</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(23</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:27.0pt; '><font size=2>Settlements</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 27.0pt'><font size=2>Statute of limitation lapses</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Gross unrecognized tax benefits at April 25, 2008</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>455</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>If all of the Company’s unrecognized tax benefits as of April 25, 2008 were recognized, $370 would impact the Company’s effective tax rate. The Company has recorded the FIN No. 48 liability as a long-term liability, as it does not expect significant payments to occur or the total amount of unrecognized tax benefits to change significantly over the next 12 months. Prior to the adoption of FIN No. 48, the Company classified uncertain tax position in </font><i><font size=2>current accrued income taxes</font></i><font size=2> on the consolidated balance sheet. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company recognizes interest and penalties related to income tax matters in the </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings and records the liability in the current or long-term income taxes payable, as appropriate. The Company had $126 and $89 of accrued gross interest and penalties as of April 25, 2008 and April 28, 2007, respectively. During the fiscal year ended April 25, 2008, the Company recognized interest expense of approximately $24 in the </font><i><font size=2>provision for income taxes</font></i><font size=2> in the consolidated statement of earnings.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Tax audits associated with the allocation of income, and other complex issues, may require an extended period of time to resolve and may result in income tax adjustments if changes to the Company’s allocation are required between jurisdictions with different tax rates. Tax authorities periodically review the Company’s tax returns and propose adjustments to the Company’s tax filings. The IRS has settled its audits with the Company for all years through fiscal year 1996. Tax years settled with the IRS may remain open for foreign tax audits and competent authority proceedings. Competent authority proceedings are a means to resolve intercompany pricing disagreements between countries.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In August 2003, the IRS proposed adjustments arising out
of its audit of the fiscal years 1997, 1998 and 1999 tax returns. The Company initiated defense of these adjustments at the IRS appellate level and in the
second quarter of fiscal 2006 the Company reached settlement on most, but not all matters. The remaining issue relates to the allocation of income between
Medtronic, Inc., and its wholly owned subsidiary in Switzerland. On April 16, 2008, the IRS issued a statutory notice of deficiency with respect to this
remaining issue. The Company intends to file a Petition with the U.S. Tax Court and vigorously defend its position. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2005, the IRS issued its audit report for fiscal years 2000, 2001 and 2002. In addition, the IRS issued its audit report for fiscal years 2003 and 2004 in March 2007. The Company has reached agreement with the IRS on substantially all of the proposed adjustments for these fiscal years 2000 through 2004. The only item of significance that remains open for these years relates to the carryover impact of the allocation of income issue proposed for fiscal years 1997 through 1999. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The unresolved issue from the 1997 through 2004 tax audits, as well as tax positions taken by the IRS or foreign tax authorities during future tax audits, could have a material unfavorable impact on the Company’s effective tax rate in future periods. The Company continues to believe that it has meritorious defenses for its tax filings and will vigorously defend them through litigation in the courts, as necessary. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>66</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>13.</font></b><font size=1> </font><b><font size=2>Retirement Benefit Plans</font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company sponsors various retirement benefit plans, including
defined benefit pension plans (pension benefits), post-retirement medical plans (post-retirement benefits), defined contribution savings plans, and termination
indemnity plans, covering substantially all U.S. employees and many employees outside the U.S. The cost of these plans was $215, $184, and $188 in fiscal
years 2008, 2007, and 2006, respectively. The Company uses a January 31 measurement date for its U.S. plans and an April 30 measurement date for the
majority of its plans outside the U.S.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In the U.S., the Company maintains a qualified pension plan designed to provide guaranteed minimum retirement benefits to all eligible U.S. employees. Pension coverage for non-U.S. employees of the Company is provided, to the extent deemed appropriate, through separate plans. In addition, U.S. and Puerto Rico employees of the Company are also eligible to receive specified Company paid healthcare and life insurance benefits through the Company’s post-retirement medical plans. In addition to the benefits provided under the qualified pension plan, retirement benefits associated with wages in excess of the IRS allowable limits are provided to certain employees under a non-qualified plan.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In September 2006, the FASB issued SFAS No. 158. This
standard requires employers to recognize the funded status of defined benefit pension and post-retirement plans as an asset or liability in its statement of
financial position, and recognize changes in the funded status in the year in which the changes occur through <i>accumulated other comprehensive
(loss)/income</i>, which is a component of shareholders’ equity. This standard also eliminates the requirement or need for the recognition of Additional
Minimum Pension Liability required under SFAS No. 87, “Employers’ Accounting for Pensions.” As of April 25, 2008 and April 27,
2007, the net overfunded/(underfunded) status of the Company’s benefit plans was $90 and $(2), respectively. In fiscal year 2007, recognition of the
underfunded status upon the adoption of SFAS No. 158 resulted in an after-tax charge to shareholders’ equity of $209.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The change in benefit obligation and funded status of the Company’s employee retirement plans follow:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
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<p align=center style='margin-top:0in;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
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<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><B><font SIZE=1>U.S.</font></B></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Non-U.S.</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Post-Retirement</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><font size=1> </font></p> </td> </tr>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
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<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="39%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Accumulated benefit obligation at end of year: </font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>751</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>721</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>324</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>278</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>184</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>196</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Change in projected benefit obligation: </font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Projected benefit obligation at beginning of year </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>868</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>750</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>353</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>286</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>196</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>172</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Service cost </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>72</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>64</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>32</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Interest cost </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>52</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Plan amendments </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.0pt; text-indent:-.25in'><font size=2>Actuarial (gain)/loss </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(70</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>23</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(40</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(35</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Benefits paid </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(24</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(16</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(14</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(4</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Special termination benefits</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 25.0pt;text-indent:-.25in'><font size=2>Foreign currency exchange rate changes </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>52</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Projected benefit obligation at end of year </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>902</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>868</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>400</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>353</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>184</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>196</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Change in plan assets:</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Fair value of plan assets at beginning of year </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,008</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>851</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>280</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>217</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>127</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>102</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:26.0pt; text-indent:-.25in'><font size=2>Actual return on plan assets </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>31</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>86</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(26</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>) </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Employer contributions </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>85</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>87</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>34</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:25.0pt; text-indent:-.25in'><font size=2>Benefits paid </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(16</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(14</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(6</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(4</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 25.0pt;text-indent:-.25in'><font size=2>Foreign currency exchange rate changes </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>44</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Fair value of plan assets at end of year </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,008</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>335</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>280</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>141</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>127</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Funded status at end of year: </font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Fair value of plan assets </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,008</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>335</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>280</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>141</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>127</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Benefit obligations </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>902</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>868</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>400</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>353</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>184</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>196</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Overfunded/(underfunded) status of the plan </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>198</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>140</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(65</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(73</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(43</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(69</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Recognized asset (liability)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>198</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>140</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(65</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(73</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
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<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(43</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(69</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
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<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Amounts recognized on the consolidated balance sheet consist of: </font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Non-current assets</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>300</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>229</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Current liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(4</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Non-current liabilities</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(97</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(85</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(65</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(73</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(43</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(69</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Recognized asset (liability)</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>198</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>140</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(65</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(73</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(43</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(69</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .75pt;text-indent:-.75pt'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Amounts recognized in accumulated other comprehensive (loss)/income:</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Prior service (benefit)/cost</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(11</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Net actuarial loss</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>221</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>250</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>42</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Ending balance</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>212</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$ </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>239</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>49</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>67</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The following illustrates the adjustments made to the consolidated balance sheets to record the funded status as of April 27, 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td nowrap colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Balance as of</font></b><br> <b><font size=1>April 28, 2006</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td nowrap colspan="2" valign=bottom style='border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Additional Minimum</font></b><br> <b><font size=1>Liability Adjustments</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td nowrap colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>SFAS No. 158</font></b><br> <b><font size=1>Adjustments</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Balance as of</font></b><br> <b><font size=1>April 27, 2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Asset/(liability), net</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" NOWRAP VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>274</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" NOWRAP VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" NOWRAP VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(276</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" NOWRAP VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>)</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Intangible asset</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Deferred tax asset</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>17</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(17</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>129</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>129</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>AOCI, net</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>209</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>209</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>AOCI, gross</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>338</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>338</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In certain countries outside the U.S., fully funding pension plans is not a common practice, as funding provides no income tax benefit. Consequently, certain pension plans were partially funded as of April 25, 2008 and April 27, 2007. Plans with accumulated benefit obligations in excess of plan assets consist of the following:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="75%" VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Accumulated benefit obligation</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>129</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:3.0pt; text-indent:-3.0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>201 </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Projected benefit obligation</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:white; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>159</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>241</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Plan assets at fair value</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CFCFCF; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>15</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>95</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Plans with projected benefit obligations in excess of plan assets:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="75%" VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Projected benefit obligation</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>403</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:2.25pt; text-indent:-2.25pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>355 </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Plan assets at fair value</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>232</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>191</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The net periodic benefit costs of the plans include the following components:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>U.S. Pension Benefits</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Non-U.S. Pension Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="39%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Service cost</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>72</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>64</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>51</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>32</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>27</font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="6%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>23</font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Interest cost</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>52</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>45</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>39</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>12</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Expected return on plan assets</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(87</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(74</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(64</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(18</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.75pt; text-indent:-.75pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(13</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:6.0pt; text-indent:-6.0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(10</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Amortization of net actuarial loss and prior service cost</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>14</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>14</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>13</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>4</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Net periodic benefit cost</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>51</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>49</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>39</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>33</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>29</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>28</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Special termination benefits</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Curtailment/settlement recognition</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Total cost for fiscal year</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>54</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>49</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>41</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>33</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>29</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>28</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Post-Retirement Benefits</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="8" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:12.0pt;text-align:center;text-indent:-12.0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>2006</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Service cost</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>13</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Interest cost</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>12</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Expected return on plan assets</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(11</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(9</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(7</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Amortization of net actuarial loss and prior service cost</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Net periodic benefit cost</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>19</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt; '><font size=2>Special termination benefits</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Curtailment/settlement recognition</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-12.0pt; '><font size=2>Total cost for fiscal year</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>20</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>16</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom: double black 2.25pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>17</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>68</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The changes in the components of unrecognized benefit plan costs for fiscal year 2008 are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD WIDTH="66%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>U.S. Pension</font></b><br> <b><font size=1>Benefits</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Non-U.S. Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Post-Retirement Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Net actuarial gain</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="1%" ALIGN="LEFT">
<p style='margin:0in;margin-bottom:0pt;text-indent:0pt;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(14</font></p> </td>
<TD VALIGN="TOP" WIDTH="3%" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(5</font></p> </td>
<TD VALIGN="TOP" WIDTH="3%" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="8%" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(25</font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="1%" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Prior service cost</font></p> </td>
<TD VALIGN="BOTTOM" WIDTH="1%" ALIGN="LEFT">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="TOP">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD VALIGN="TOP">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Amortization of net actuarial gain and prior service costs</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC" WIDTH="1%" ALIGN="LEFT">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(14</font></p> </td>
<TD VALIGN="TOP" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(3</font></p> </td>
<TD VALIGN="TOP" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(2</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Effect of exchange rates </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;" WIDTH="1%" ALIGN="LEFT">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="TOP">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom STYLE="border-bottom: solid black 1.0pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>7</font></p> </td>
<TD VALIGN="TOP">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom STYLE="border-bottom: solid black 1.0pt;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Changes in unrecognized benefit plan costs</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC" WIDTH="1%" ALIGN="LEFT">
<p style='margin:0in;margin-bottom:0pt;text-indent:0;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(27</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>—</font></p> </td>
<TD VALIGN="TOP" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background: #CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(27</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CCCCCC 2.25pt;background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>)</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The estimated amounts that will be amortized from </font><i><font size=2>accumulated other comprehensive (loss)/income</font></i><font size=2> into net periodic benefit cost, before tax, in fiscal year 2009 are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<td width="63%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>U.S. Pension</font></b><br> <b><font size=1>Benefits</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Non-U.S. Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Post-Retirement Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0in;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Amortization of prior service cost</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE=" border-top:solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(1</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(1</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>)</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD WIDTH="8%" NOWRAP VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" nowrap valign=bottom style='background:white; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Amortization of net actuarial loss</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" nowrap valign=bottom style='border-bottom: solid black 1.0pt;background:white; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:white;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<td width="63%" nowrap valign=bottom style='background:#CFCFCF; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<td width="8%" nowrap valign=bottom style=' border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<td width="8%" nowrap valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:2.25pt'><font size=2>(1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid #CCCCCC 2.25pt; background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 3.0pt;text-indent:-3.0pt'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>$</font></p> </td>
<TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CFCFCF'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The actuarial assumptions were as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD NOWRAP VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>U.S. Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Non-U.S. Pension Benefits</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Post-Retirement Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="18%" NOWRAP VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD WIDTH="6%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Weighted average assumptions – projected benefit obligation:</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Discount rate</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.75</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.37</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.42</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.34</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.75</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Rate of compensation increase</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.24</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.10</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.09</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.07</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Healthcare cost trend rate</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9.00</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD NOWRAP VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Weighted average assumptions – net periodic benefit cost:</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Discount rate</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.42</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.34</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.39</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>6.00</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Expected return on plan assets</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.76</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.59</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5.46</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>8.75</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Rate of compensation increase</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.24</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.24</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4.00</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:30.0pt; text-indent:-30.0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.09</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.07</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.99</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:6.75pt'><font size=2>Healthcare cost trend rate</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font SIZE=2>N/A</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.00</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9.00</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10.00</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company’s discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The expected long-term rate of return on plan assets assumptions is determined using a building block approach, considering historical averages and real returns of each asset class. In certain countries, where historical returns are not meaningful, consideration is given to local market expectations of long-term returns. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2><b>Retirement Benefit Plan Investment
Strategy</b> The Company has an account that holds the assets for both the U.S. pension plan and other post-retirement benefits, primarily
retiree medical. For investment purposes, the plans are managed in an identical way, as their objectives are similar.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company has a Qualified Plan Committee (the Plan Committee) that sets investment guidelines with the assistance of an external consultant. These guidelines are established based on market conditions, risk tolerance, funding requirements, and expected benefit payments. The Plan Committee also oversees the investment allocation process, selects the investment managers, and monitors asset performance. As pension liabilities are long-term in nature, the Company employs a long-term total return approach to maximize the long-term rate of return on plan assets for a prudent level of risk. An annual analysis on the risk versus the return of the investment portfolio is conducted to justify the expected long-term rate of return assumption.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The investment portfolio contains a diversified portfolio of investment categories, including equities, fixed income securities, hedge funds and private equity. Securities are also diversified in terms of domestic and international securities, short- and long-term securities, growth and value styles, large cap and small cap stocks, active and passive management and derivative-based styles. The Plan Committee believes with prudent risk tolerance and asset diversification, the account should be able to meet its pension and other post-retirement obligations in the future.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Plan assets also include investments in the Company’s common stock of $62 and $68 at April 25, 2008 and April 27, 2007, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>69</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company’s pension plan weighted average asset
allocations and the target allocations at April 25, 2008 and April 27, 2007, by asset category, are as follows:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>U.S. Plans</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="5" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt" >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Pension Benefits Allocation</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="5" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt" >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Target Allocation</font></b></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="2" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt" >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="2" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="2" VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt" >
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD COLSPAN="2" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;">
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td> </tr>
<tr >
<TD WIDTH="68%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Asset Category</font></b><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Equity securities</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>53</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>64</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>60</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>60</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Debt securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>15</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Other</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>30</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>25</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Total</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.5pt; text-indent:-7.5pt'><font size=2>%</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><i><b><font size=2>Non-U.S. Plans</font></b></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Pension Benefits Allocation</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Target Allocation</font></b></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:.25in;text-align:center;text-indent:-.25in'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<TD VALIGN="bottom" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD WIDTH="68%" VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><b><font size=2>Asset Category </font></b></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="2%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Equity securities</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="3%" valign=top style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>42</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Debt securities</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=top style='background:#CFCFCF'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:.25in; text-indent:-.25in'><font size=2>Cash</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=top style='background:white'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:white">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:#CFCFCF">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Other</font></p> </td>
<td width="3%" valign=bottom style='background:#CFCFCF; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" valign=top style='background:#CFCFCF'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt;background:#CFCFCF;">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD VALIGN="top" STYLE="background:#CFCFCF">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CFCFCF">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr style='page-break-inside:avoid'>
<TD VALIGN="TOP" STYLE="background:white">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: .25in;text-indent:-.25in'><font size=2>Total</font></p> </td>
<td width="3%" valign=bottom style='background:white'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="3%" valign=top style='background:white'>
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:white;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:white">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.5pt; text-indent:-7.5pt'><font size=2>%</font></p> </td>
<TD VALIGN="top" STYLE="background:white">
<p align=right style='margin-top:0pt;margin-right:0in;margin-bottom:0pt; margin-left:0in;text-align:right'><font size=1> </font></p> </td>
<TD STYLE="border-bottom:double black 2.25pt; background:white">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:white">
<p style='margin:0in;margin-bottom:0pt;text-indent:3.75pt'><font size=2>%</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>It is the Company’s policy to fund retirement costs within
the limits of allowable tax deductions. During fiscal year 2008, the Company made discretionary contributions of approximately $85 to the U.S. pension plan and
approximately $19 to fund post-retirement benefits. Internationally, the Company contributed approximately $51 for pension benefits during fiscal year 2008.
During fiscal year 2009, the Company anticipates that its contribution for pension benefits and post-retirement benefits will be in the range of $125 and $160.
Based on the guidelines under the U.S. Employee Retirement Income Security Act (ERISA) and the various guidelines which govern the plans outside the U.S., the
majority of anticipated fiscal year 2009 contributions will be discretionary. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Retiree benefit payments, which reflect expected future service, are anticipated to be paid as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><B><font SIZE=1>U.S.</font></B><br> <b><font size=1>Pension Benefits</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Non-U.S.</font></b><br> <b><font size=1>Pension Benefits</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="5" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Post-Retirement Benefits</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Gross Payments</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Gross Payments</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Gross Payments</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Gross Medicare</font></b><br> <b><font size=1>Part D Receipts</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2009</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>24</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>7</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2010</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>29</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>33</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>9</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2012</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>37</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>13</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>10</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2013</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>43</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>14</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>2014 – 2018</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>315</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>89</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>77</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>12</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Total</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>481</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>146</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom: double black 2.25pt;background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>122</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>18</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In August 2006, the Pension Protection Act was signed into law
in the U.S. The Pension Protection Act replaces the funding requirements for defined benefit pension plans by subjecting defined benefit plans to
100 percent of the current liability funding target. Defined benefit plans with a funding status of less than 80 percent of the current liability are
defined as being “at risk.” The Pension Protection Act was effective for the 2008 plan year. The Company’s U.S. qualified defined benefit
plans are funded in excess of 80 percent, and therefore the Company expects that the plans will not be subject to the “at risk” funding
requirements of the Pension Protection Act and that the law will not have a material impact on future contributions.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>70</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The healthcare cost trend rate for post-retirement benefit plans was 9 percent at April 25, 2008. The trend rate is expected to decline to 5 percent over a five-year period. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>One-Percentage-</font></b><br> <b><font size=1>Point Increase</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>One-Percentage-</font></b><br> <b><font size=1>Point Decrease</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Effect on post-retirement benefit cost</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(2</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Effect on post-retirement benefit obligation</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(10</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:5.25pt; text-indent:-5.25pt'><font size=2>) </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font size=2>Defined Contribution Savings Plans</font></b><font size=2>
The Company has defined contribution savings plans that cover substantially all U.S. employees and certain non-U.S. employees. The general
purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings. Company
contributions to the plans are based on employee contributions and Company performance and starting in fiscal year 2006 the entire match is made in cash.
Expense under these plans was $78, $64, and $83 in fiscal years 2008, 2007, and 2006, respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Effective May 1, 2005, the Company froze participation in the
existing defined benefit pension plan in the U.S. and implemented two new plans including an additional defined benefit pension plan and a new defined
contribution pension plan, respectively: the Personal Pension Account (PPA) and the Personal Investment Account (PIA). Employees in the U.S. hired on or after
May 1, 2005 have the option to participate in either the PPA or the PIA. Participants in the PPA receive an annual allocation of their salary and bonus on which
they will receive an annual guaranteed rate of return which is based on the 10-year Treasury bond rate. Participants in the PIA also receive an annual
allocation of their salary and bonus; however, they are allowed to determine how to invest their funds among identified fund alternatives. The cost associated
with the PPA is included in the U.S. Pension Benefits in the tables presented earlier. The defined contribution cost associated with the PIA was approximately
$30, $25, and $18 in fiscal years 2008, 2007, and 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="83" style='border-collapse:collapse'>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14.</font></b></p> </td>
<td width="59" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Leases</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company leases office, manufacturing and research facilities, and warehouses, as well as transportation, data processing and other equipment under capital and operating leases. A substantial number of these leases contain options that allow the Company to renew at the fair rental value on the date of renewal.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Future minimum payments under capitalized leases and non-cancelable operating leases at April 25, 2008 are:</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Capitalized</font></b><br> <b><font size=1>Leases</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Operating</font></b><br> <b><font size=1>Leases</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="75%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2009</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>15</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>88</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2010</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>17</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>59</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2011</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>19</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2012</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>19</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>19</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>2013</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>21</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>29</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>2014 and thereafter</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>31</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Total minimum lease payments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>92</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>261</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Less amounts representing interest</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>(14</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>) </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font SIZE=2>N/A</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2>Present value of net minimum lease payments</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>78</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font SIZE=2>N/A</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in; '><font size=1> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Rent expense for all operating leases was $135, $112, and $89 in fiscal years 2008, 2007, and 2006, respectively. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In April 2006, the Company entered into a sale-leaseback agreement with a financial institution whereby certain manufacturing equipment was sold to the financial institution and is being leased by the Company over a seven year period. The transaction has been recorded as a capital lease and included in the preceding table. Payments for the remaining balance of the sale-leaseback agreement are due semi-annually. The lease provides for an early buyout option whereby the Company, at its option, could repurchase the equipment at a predetermined fair market value in calendar year 2009.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>71</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=LEFT WIDTH=24><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>15.</b></FONT></TD>
<TD ><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Contingencies</b> </FONT></P></TD>
</TR>
</TABLE>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company is involved in a number of legal actions. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages, as well as other relief, including injunctions barring the sale of products that are the subject of the lawsuit, that could require significant expenditures or result in lost revenues. In accordance with SFAS No. 5, “Accounting for Contingencies” (SFAS No. 5), the Company records a liability in the consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is possible but not known
or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. While it is not possible to predict the outcome for most of the matters discussed, the Company believes it is possible that costs associated with them could have a material adverse impact on the Company’s consolidated earnings, financial position or cash flows on any one interim or annual period. With the exception of the Cordis, Marquis, and Kyphon matters discussed below, negative outcomes for the balance of the litigation matters are not considered probable or cannot be reasonably estimated. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Litigation with Cordis Corporation</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On October 6, 1997, Cordis, a subsidiary of J&J, filed suit in U.S. District Court for the District of Delaware against Arterial Vascular Engineering, Inc., which Medtronic acquired in January 1999 and which is now known as Medtronic Vascular, Inc. (Medtronic Vascular). The suit alleged that Medtronic Vascular’s previously marketed stents infringe certain patents owned by Cordis. Boston Scientific Corporation is also a defendant in this suit. On December 22, 2000, a jury rendered a verdict that Medtronic Vascular’s previously marketed MicroStent and GFX stents infringed valid claims of two Cordis patents and awarded damages to Cordis totaling approximately $270. On March 28, 2002, the District Court entered an order in favor of Medtronic Vascular, deciding as a matter of law that Medtronic Vascular’s MicroStent and GFX stents did not infringe the patents. Cordis appealed,
and on August 12, 2003, the U.S. Court of Appeals for the Federal Circuit reversed the District Court’s decision and remanded the case to the District Court for further proceedings. The District Court thereafter issued a new patent claim construction and a new trial was held in March 2005. On March 14, 2005, the jury found that the previously marketed MicroStent and GFX stent products infringed valid claims of Cordis’ patents. On March 27, 2006, the District Court denied post-trial motions filed by the parties, including Cordis’ motion to reinstate the previous damages award. On April 26, 2006, Medtronic filed its Notice of Appeal of the judgment of infringement. On February 23, 2007, the United States Patent and Trademark Office (USPTO) granted a request for reexamination of the claims of the patent at issue in the above proceedings. Until that reexamination is concluded, its impact remains unknown. On January 7, 2008, the U.S. Court of Appeals for the Federal Circuit
upheld the District Court’s judgment of infringement. The District Court had deferred any hearing on damages issues until after the U.S. Court of Appeals for the Federal Circuit resolved the appeal on the finding of liability. A hearing date to address damages issues has not yet been set. The Company believes an unfavorable outcome in the matter is probable. In accordance with SFAS No. 5, Medtronic has recorded a $243 reserve in the third quarter of fiscal year 2008 for estimated damages in the matter. The range of potential loss related to this matter is subject to a high degree of estimation. The amount recorded represents an estimate of the low end of the range of probable outcomes related to this matter. At the time the reserve was recorded, the high end of the range was undeterminable, but the range of loss included the previous jury award of approximately $270, which did not include post-judgment interest. When including post-judgment interest, the award would have equaled
approximately $450. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font><i><font size=2>Litigation with Wyeth and Cordis Corporation</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On February 22, 2008, Wyeth and Cordis filed a lawsuit against the Company and its subsidiary, Medtronic AVE, Inc., in U.S. District Court for the District of New Jersey, alleging that Medtronic’s Endeavor drug eluting stent infringes three U.S. “Morris” patents alleged to be owned by Wyeth and exclusively licensed to Cordis. The same three patents are the subject of a pending arbitration between Medtronic and J&J in which Medtronic asserts that under a 1997 Agreement J&J has covenanted not to sue Medtronic on the three patents. The arbitration hearing is scheduled to start July 21, 2008, before a panel of three arbitrators. On May 15, 2008, the District Court stayed the lawsuit filed by Wyeth and Cordis pending the result of the arbitration. Additionally, the Company believes it is indemnified for the claims made by Wyeth and Cordis. The Company has not recorded an
expense related to damages in connection with these matters because any potential loss is not currently probable or reasonably estimable under SFAS No. 5.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>72</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Litigation with Johnson & Johnson and Cordis Corporation</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On February 20, 2006, an arbitration panel issued a final, non-appealable award concluding that Medtronic Vascular’s S670, S660, S540, S7 and Driver stents, which were formerly the subject of a patent infringement dispute between J&J and Cordis and Medtronic Vascular, are licensed under a 1997 agreement between the two companies and subject to a covenant not to sue contained within a 1998 amendment to the 1997 agreement. Cordis since initiated two arbitration proceedings against Medtronic Vascular alleging that certain of the products infringe certain patents of J&J and Cordis, and is seeking royalties for such infringement, if any. Medtronic Vascular believes it has meritorious defenses to these allegations and intends to assert these defenses vigorously. Hearings on the two arbitration proceedings have been scheduled for December 2008 and March 2009. The Company has not
recorded an expense related to damages in this matter because any potential loss is not currently probable or reasonably estimable under SFAS No. 5.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Litigation with Abbott Cardiovascular Systems Inc.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On December 24, 1997, Abbott Cardiovascular Systems Inc. (ACS), a subsidiary of Abbott Laboratories, sued Medtronic Vascular in U.S. District Court for the Northern District of California alleging that certain models of Medtronic Vascular’s bare metal stents infringe the Lau stent patents held by ACS, and seeking injunctive relief and monetary damages. Medtronic Vascular denies infringement. In February 2005, following trial in Delaware federal district court, a jury determined that the ACS Lau stent patents were valid and that Medtronic’s Driver, GFX, MicroStent, S540, S660, S670, Bestent2 and S7 stents (the bare metal stents) infringe those patents. Medtronic Vascular made numerous post-trial motions challenging the jury’s verdict of infringement and validity. In August 2005, the Court had issued an order continuing a stay of any further proceedings on the questions of
damages or willfulness. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On March 30, 2007, the District Court denied the motions, and on April 24, 2007, the District Court decided that the patents were enforceable. The District Court entered judgment in favor of ACS and against Medtronic Vascular on the issues of validity, infringement and enforceability of the Lau patents in May 2007. ACS filed a motion for injunction in the District Court on June 29, 2007 on both the bare metal stents and the Endeavor drug eluting stent, which had never previously been named as an accused product in the lawsuit. On July 6, 2007, Medtronic filed its motion to stay ACS’s June 29, 2007 motion for a permanent injunction pending arbitration under a 2002 Abbott/Medtronic agreement providing Medtronic with a license that Medtronic asserted precludes the ACS injunction motion. On February 12, 2008, the District Court conducted a hearing on the motion for permanent injunction on
Medtronic’s bare metal stents. Once the District Court has ruled on the motion for injunction, Medtronic will appeal the May 2007 judgment. Issues of damages have been bifurcated from the liability phase of the proceedings. On May 18, 2007, the District Court again confirmed that it would not hold a trial on damage issues until the U.S. Court of Appeals for the Federal Circuit has reviewed the underlying liability issues concerning alleged infringement, invalidity and inequitable conduct.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On August 6, 2007, the Delaware District Court granted Medtronic’s July 6, 2007 motion to stay, in part, permitting arbitration to proceed on Medtronic’s assertion that it has a license to practice the Lau patents in its Endeavor stent. On February 26, 2008, an arbitrator concluded that the Company was not licensed to practice the Lau patents in its Endeavor stent. ACS filed a sealed motion with the District Court seeking to lift the July 6, 2007 stay of proceedings on ACS’s motion for an injunction as to Endeavor. Medtronic intends to oppose that motion. The District Court has not set a hearing date with respect to the motion to lift the stay.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On June 18, 2008, Abbott started legal proceedings in
the Netherlands against Medtronic BV, Medtronic Trading NL BV and BV Medtronic FSC asserting that Medtronic’s Driver, Endeavor and Endeavor Resolute stents
infringe an Abbott European Lau patent issued on June 18, 2008. A hearing is scheduled for August 7, 2008 in the Netherlands district court in The
Hague to consider Abbott’s request for a preliminary injunction against infringement in the Netherlands. The European Lau patent remains subject to challenges
to the patent’s validity in opposition proceedings in the European patent office as well as in the proceedings in court in the Netherlands.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In response to Medtronic’s Request for Reexamination for
each of the four Lau patents, in December 2006, the USPTO issued an initial “office action” finding that the claims which Medtronic products were
previously found to have infringed were not patentable. The USPTO granted a second petition to reexamine each of the four Lau patents. On February 11,
2008, the USPTO again determined that all claims of two of the Lau patents that Medtronic was found to have infringed were invalid with the exception of a
single claim of one of those patents. The patent holder will have an opportunity to challenge the USPTO’s determinations in further proceedings in the
reexaminations. On March 3, 2008, the USPTO again determined that all claims of a third lau patent that Medtronic was found to infringe were invalid
with the exception of a single claim of that patent. This third patent is involved in a reexamination proceeding, which allows Medtronic to participate in the
USPTO proceedings. The USPTO has not acted again on the fourth lau patent; thus, all of the claims in the fourth patent that Medtronic was found to infringe are
invalid at present. Until these reexaminations are concluded, their potential impact upon the claims relating to the Lau patents in the above proceeding remains
unknown. The Company has not recorded an expense related to damages in this matter because any potential loss is not currently probable or reasonably estimable
under SFAS No. 5.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>73</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Litigation with DePuy Spine</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On January 26, 2001, DePuy Spine (formerly DePuy/AcroMed),
a subsidiary of J&J, and Biedermann Motech GMBH (collectively, “DePuy”) filed suit in U.S. District Court for the District of Massachusetts
alleging that Medtronic’s subsidiary, Medtronic Sofamor Danek USA, Inc. (MSD), was infringing a patent relating to a design for a thoracolumbar multi-axial
screw (MAS). DePuy subsequently supplemented its allegations to claim that MSD’s M10, M8 and Vertex screws infringe the patent. On April 17, 2003 and
February 26, 2004, the District Court ruled on summary judgment that the M10, M8 and Vertex screws do not infringe. On October 1, 2004, a jury found
that MAS screws, which MSD no longer sells in the U.S., infringe under the doctrine of equivalents. The jury awarded damages of $21 and on February 9,
2005, the Court entered judgment against MSD, including prejudgment interest, in the aggregate amount of $24. In the third quarter of fiscal year 2005, the
Company recorded an expense equal to the $24 judgment in the matter. DePuy appealed the Court’s decisions that the M10, M8 and Vertex screws do not
infringe, and MSD appealed the jury’s verdict that the MAS screws infringe valid claims of the patent. On November 20, 2006, the U.S. Court of
Appeals for the Federal Circuit affirmed the decision of the District Court that the M10 and M8 screws do not infringe, affirmed the jury’s verdict and
damage award on the MAS screws, affirmed the decision that the Vertex screws do not literally infringe, but remanded the case, ruling that there is a triable
issue of fact as to whether the Vertex screws infringe under the doctrine of equivalents. On remand, DePuy further supplemented its allegations to claim that an
additional product, the Vertex Max screws, also infringe. On March 20, 2007, the District Court declined to stay execution of the judgment relating to the
MAS product. On March 30, 2007, the judgment plus accrued interest was paid under protest. On May 30, 2007, the USPTO ordered reexamination of the patent
and on March 5, 2008, confirmed the patentability of the claims in the patent. On September 27, 2007, a jury found that the Vertex and Vertex Max screws
infringe under the doctrine of equivalents and awarded $226 in damages to DePuy, and the District Court entered judgment against Medtronic on December 12,
2007. Thereafter, the District Court ruled on all post-trial motions, increasing the award to DePuy to an estimated amount of $272. The District Court also
granted a permanent injunction against Medtronic that prohibits Medtronic from making, using and selling Vertex and Vertex Max polyaxial screws in the
U.S.; however, Medtronic’s recently-introduced Vertex Select multi-axial screw is not affected by the injunction. Medtronic has filed a notice of
appeal in the U.S. Court of Appeals for the Federal Circuit, although a hearing date has not been set. The Company believes that an unfavorable outcome in
this matter is not probable. Accordingly, the Company has not recorded any additional expense related to damages in this matter because any potential loss is
not currently probable under SFAS No. 5.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Litigation with Cross Medical Products, Inc.</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On May 2, 2003, Cross Medical Products, Inc. (Cross) sued MSD in
the U.S. District Court for the Central District of California. The suit alleges that MSD’s CD Horizon, Vertex and Crosslink products infringe
certain patents owned by Cross. MSD has countered that Cross’ cervical plate products infringe certain patents of MSD, and Cross has filed a reply alleging
that certain MSD cervical plate products infringe certain patents of Cross. On May 19, 2004, the Court found that the MAS, Vertex, M8, M10, CD Horizon
Sextant and CD Horizon Legacy screw products infringe one Cross patent. A hearing on the validity of that patent was held on July 12, 2004, after
which the District Court ruled that the patents were valid. Cross made a motion for permanent injunction on the multi-axial screw products, which the District
Court granted on September 20, 2004, but stayed the effect of the injunction until January 3, 2005. MSD requested an expedited appeal of the ruling and the U.S.
Court of Appeals for the Federal Circuit granted the request. On September 30, 2005, the Federal Circuit vacated the injunction, modified the trial court’s
claim construction rulings, and remanded the matter for trial in the District Court. The Federal Circuit awarded costs to Medtronic on the appeal. In April
2005, the District Court ruled invalid certain claims in the patents Cross asserted against MSD’s Crosslink and cervical plate products. The Court also
ruled that Cross’ cervical plate products infringe MSD’s valid patents and that MSD’s redesigned pedicle screw products infringe one claim of one
of the patents owned by Cross. Cross thereafter moved for an injunction against the redesigned screw products, which the District Court granted on May 24, 2005.
The District Court then stayed the effectiveness of the injunction until August 22, 2005. On July 27, 2005, the U.S. Court of Appeals for the Federal Circuit
granted MSD’s motion to stay the District Court’s injunction pending a full hearing on the appeal. On March 20, 2007, the Federal Circuit ruled that
MSD’s current multi-axial screw products do not infringe any claim of Cross’ patent and vacated the District Court’s injunction, which had
already been stayed. On February 28, 2008, the U.S. District Court for the Central District of California found that the remaining patent claims asserted
against MSD’s polyaxial screws are invalid. The trial scheduled for April 29, 2008, has been vacated, and a new trial date on remaining issues has not been
set. The Company has not recorded an expense related to damages in this matter because any potential loss is not currently probable or reasonably estimable
under SFAS No. 5. Separately, on February 1, 2006, MSD filed a lawsuit against Biomet Inc., the corporate parent of Cross (Biomet) and its subsidiary EBI Spine,
L.P., for patent infringement. The suit, which involves seven Medtronic patents and seeks injunctive relief and monetary damages, was filed in the U.S. District
Court for the District of New Jersey. Three of the patents were purchased by Medtronic from Michelson and involve single-lock anterior cervical plating systems
used in cervical spinal fusions. Medtronic claims that a cervical plate marketed by Biomet under the trade name VueLock Anterior Cervical Plate System, and
openly promoted as a plate that has a “Secure One Step Locking” mechanism feature, infringes these patents. The other patents involve instruments and
surgical implantation methods commonly used in spinal surgeries to implant pedicle screws. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>74</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Other Matters</font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On February 10, 2005, Medtronic voluntarily began to advise
physicians about the possibility that a specific battery shorting mechanism might manifest itself in a subset of ICDs and cardiac resynchronization
therapy-defibrillators (CRT-Ds). These included certain Marquis VR/DR and Maximo VR/DR ICDs and certain InSync I/II/III CRT-D devices. Subsequent to this
voluntary field action, a number of lawsuits have been filed against the Company in both federal and state courts, alleging a variety of claims, including
individuals asserting claims of personal injury and third party payors (TPP) alleging entitlement to reimbursement. On December 21, 2007, Medtronic accepted a
settlement agreement to resolve these matters. The cases in the settlement arise from the February 2005 field action and include both cases that have been filed
and some cases that could properly have been filed. As a term of the settlement, each settling plaintiff must satisfy any insurance claims and subrogation
interests of either Medicare or Medicaid from the proceeds of their individual settlement payments. No additional sums will be paid by Medtronic for third-party
claims or attorney’s fees. Neither side has admitted any liability or the validity of any defenses in the litigation. The Judicial Panel on Multidistrict
Litigation has entered an order terminating the Multidistrict Litigation proceedings. In addition, class action personal injury suits are pending in Canada. In
the third quarter of fiscal year 2008, the Company recorded an expense of $123 relating to the settlement in accordance with SFAS No. 5 as the potential loss is
both probable and reasonably estimable. The Company paid substantially all of the settlement on May 9, 2008, and expects to pay the remaining
amounts in the first or second quarter of fiscal year 2009. There remain a limited number of immaterial, individual lawsuits relating to the same subject matter
that remain unresolved.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On October 24, 2005, Medtronic received a subpoena from the Office of the United States Attorney for the District of Massachusetts issued under the Health Insurance Portability & Accountability Act of 1996 requesting documents the Company may have, if any, relating to pacemakers and defibrillators and related components; monitoring equipment and services; a provision of benefits, if any, to persons in a position to recommend purchases of such devices; and the Company’s training and compliance materials relating to the fraud and abuse and federal Anti-Kickback statutes. The Company is cooperating fully with the investigation, and has begun to produce documents on a schedule requested by the United States Attorney.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During 2005, the Office of the United States Attorney for the
District of New York received a complaint, which Medtronic has since learned is a qui tam complaint. The alleged impropriety involves Kyphon’s sales and
marketing practices. On May 19, 2008, the U.S. Department of Justice and Kyphon executed a settlement agreement to settle the complaint for $75,
without any admission of liability and subject to appropriate releases. The settlement amount was paid on June 10, 2008. The settlement agreement required
entry into a mutually agreed upon Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The
Corporate Integrity Agreement was executed between the Office of Inspector General and Kyphon on May 16, 2008. Kyphon recorded a liability in September
2007 as a result of the previously proposed settlement to pay $75, which the Company assumed in the acquisition of Kyphon. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On October 15, 2007, the Company voluntarily suspended worldwide
distribution of its Sprint Fidelis (Fidelis) family of defibrillation leads. This decision was based on a variety of factors that, when viewed together,
indicated that suspending distribution was the appropriate action. At the time, Fidelis lead viability was trending lower than other Company defibrillation
leads, but had not then become statistically significant. The leads are used to deliver therapy in patients with ICDs, but are generally not used in pacemaker
patients. The U.S. Food and Drug Administration (FDA) subsequently classified the Company’s action as a Class I recall. As of June 19, 2008, approximately
225 lawsuits regarding the Fidelis leads have been filed against the Company, including approximately 33 putative class action suits reflecting a total
of approximately 600 individual personal injury cases. In general, the suits allege claims of product liability, warranty, negligence, unjust enrichment,
emotional distress and consumer protection violations. One lawsuit includes a claim by an individual purporting to act as a surrogate for the Center for
Medicare and Medicaid Services, and one lawsuit has been brought by a third payor as a putative class action suit. In addition, one purported class action has
been filed in Canada. Approximately 73 of the lawsuits have been filed in state court, generally alleging similar causes of action. Of those state court
actions, approximately 65 are consolidated before a single judge in Minnesota state court. The federal court cases have been consolidated for pretrial
proceedings before a single federal judge in the U.S. District Court for the District of Minnesota pursuant to the MDL rules. The MDL court held its first
appearance on May 28, 2008, and the Court has since entered an Order staying all discovery pending the outcome of a November 4, 2008 hearing on
Medtronic’s motion to dismiss the complaints. The Company has not recorded an expense related to damages in connection with the matter because any
potential loss is not currently probable or reasonably estimable under SFAS No. 5. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>75</font></A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<BR>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On November 8, 2007, a class action complaint was filed against the Company and certain of its officers in the U.S. District Court for the District of Minnesota, alleging violations of Section 10b-5 of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint is brought on behalf of persons or entities who purchased securities of Medtronic during the period of June 25, 2007 through October 15, 2007. The complaint alleges that “materially false and misleading” representations were made as to the market acceptance and use of the Fidelis defibrillator leads to artificially inflate Medtronic’s stock price. In addition, parallel shareholder derivative actions alleging breach of fiduciary duty, waste of corporate assets and other claims arising out of the same subject matter have been filed in Minnesota state court and the U.S. District Court for the District of
Minnesota. Medtronic has moved to stay the District Court proceedings pending the outcome of its motion to dismiss the U.S. District Court actions. Oral argument on the motions to dismiss is scheduled for November 5, 2008. The Company has not recorded an expense related to damages in connection with these matters because any potential loss is not currently probable or reasonably estimable under SFAS No. 5.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Medtronic is a licensee to the RE 38,119 patent (‘119
Patent) and RE 38,897 patent (‘897 Patent) owned by Mirowski Family Ventures, LLC (Mirowski) relating to the treatment of hemodynamic dysfunction.
Medtronic and Mirowski dispute the application of the ‘119 and ‘897 Patents to certain Medtronic cardiac resynchronization products. The parties
entered into a tolling agreement deferring and conditioning any litigation of the dispute upon conditions precedent. The tolling agreement expired on October 1,
2007. In subsequent notices, Mirowski identified certain claims of the two patents that Mirowski asserts Medtronic is using. On December 17, 2007,
Medtronic filed an action in U.S. District Court in Delaware seeking a declaration that none of its products infringe any valid claims of either the ‘119
or ‘897 Patents. If certain conditions are fulfilled, the ‘119 and/or ‘897 Patents are determined to be valid and the Medtronic products
are found to infringe the ‘119 and/or ‘897 Patents, Medtronic will be obligated to pay royalties to Mirowski based upon sales of certain CRT-D
products. As of April 25, 2008, the amount of disputed royalties and interest related to CRT-D products is $81. This amount has not been accrued because
the outcome is not currently probable under SFAS No. 5. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In addition, Medtronic is a licensee to the 4,407,288 Patent (‘288 Patent) owned by Mirowski relating to ICDs. Until November 2001, Medtronic accrued and paid royalties under the license based on a percentage of ICD sales. Medtronic and Mirowski dispute the application of the ‘288 Patent to certain Medtronic ICD products. In November 2001, Medtronic ceased paying royalties and entered into an agreement with Mirowski to pay putative royalties into an interest-bearing escrow account through the expiration of the ‘288 Patent in December of 2003. As of April 25, 2008, the current balance in the interest-bearing escrow account is $83. The parties also entered into a tolling agreement deferring and conditioning any litigation of the obligation to pay royalties upon certain conditions precedent. If these conditions are fulfilled and the patent determined to be invalid or
Medtronic’s products found not to infringe, the escrowed funds will be released to Medtronic.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>In the normal course of business, the Company periodically enters into agreements that require it to indemnify customers or suppliers for specific risks, such as claims for injury or property damage arising out of the Company’s products or the negligence of its personnel or claims alleging that its products infringe third-party patents or other intellectual property. The Company’s maximum exposure under these indemnification provisions cannot be estimated, and the Company has not accrued any liabilities within the consolidated financial statements. Historically, the Company has not experienced significant losses on these types of indemnifications. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="259" style='border-collapse:collapse; '>
<tr >
<td width="24" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>16.</font></b></p> </td>
<td width="235" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Quarterly Financial Data (unaudited)</font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>First</font></b><br> <b><font size=1>Quarter</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Second</font></b><br> <b><font size=1>Quarter</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Third</font></b><br> <b><font size=1>Quarter</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fourth</font></b><br> <b><font size=1>Quarter</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal</font></b><br> <b><font size=1>Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="39%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Net Sales</font></b><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><b><font size=2>2008</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>3,127</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>3,124</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>3,405</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>3,860</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>13,515</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><font size=2>2007</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,897 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,075</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,048</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,280</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,299</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Gross Profit</font></b><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><b><font size=2>2008 </font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>2,335</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>2,284</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>2,535</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>2,915</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>10,069</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><font size=2>2007</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,165 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,280</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,273</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,414</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,131</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Net Earnings</font></b></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><b><font size=2>2008 </font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>675</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>666</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>77</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>812</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>2,231</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><font size=2>2007</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>599 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>681</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>710</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>812</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Basic Earnings per Share</font></b><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><b><font size=2>2008 </font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.59</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.59</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.07</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.72</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>1.97</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><font size=2>2007</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.52</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.59</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.62</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.71</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.44</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><b><font size=2>Diluted Earnings per Share</font></b><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><b><font size=2>2008 </font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.59</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.58</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.07</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>0.72</font></b></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font><b><font size=2> </font></b></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>$ </font></b></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><b><font size=2>1.95</font></b></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt;text-indent:11.25pt'><font size=2>2007</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.51 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.59</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.61</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.70</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; text-indent:9.0pt'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.41</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>76</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The data in the schedule above has been intentionally rounded to the nearest million and therefore the quarterly amounts may not sum to the fiscal year to date amounts.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>17.</font></b></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Segment and Geographic Information </font></b></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>During the first quarter of fiscal year 2008, the Company revised its operating segment reporting to combine its former Vascular and Cardiac Surgery businesses into the new CardioVascular operating segment. Additionally, the Navigation business was separated from Spinal for most of fiscal year 2008 and was reported as part of a stand alone segment named Corporate Technologies and New Ventures. In the fourth quarter of fiscal year 2008, the decision was made to include the Navigation business as a component of the Ear, Nose and Throat (ENT) segment, which was renamed Surgical Technologies to reflect the expanding scope and focus of this business. As a result, the Company now functions in seven operating segments, consisting of CRDM, Spinal, CardioVascular, Neuromodulation, Diabetes, Surgical Technologies, and Physio-Control. The applicable information for fiscal years 2007 and 2006 has been
reclassified to conform to the current presentation. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Each of the Company’s operating segments has similar economic characteristics, technology, manufacturing processes, customers, distribution and marketing strategies, regulatory environments, and shared infrastructures. Net sales by operating segment are as follows: </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="8" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom style='border-top:solid black 1.0pt; '>
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt;">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="63%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>Cardiac Rhythm Disease Management</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,963</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,876</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,794</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Spinal </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,982</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,417</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,136</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>CardioVascular</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,131</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,909</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,603</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Neuromodulation</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,311</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,183</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,016</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2>Diabetes</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,019</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>863</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>722</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>Surgical Technologies</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>780</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>666</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>609</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>Physio-Control</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>329</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC; '>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>385</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>412</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<td width="63%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,515</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,299</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="border-bottom:double black 2.25pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,292</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>On December 4, 2006, the Company announced its intention to
pursue a spin-off of Physio-Control into an independent, publicly traded company. Physio-Control is the Company’s wholly-owned subsidiary that offers
external defibrillators, emergency response systems, data management solutions and support services used by hospitals and emergency response personnel. However,
shortly thereafter, on January 15, 2007, the Company announced a voluntary suspension of U.S. shipments of Physio-Control products manufactured at its facility
in Redmond, Washington in order to address quality system issues. In the months following the suspension of U.S. shipments, the Company worked diligently with
the FDA to address the quality system issues and resumed limited shipments to critical customers. As a result of the work performed, on April 28, 2008,
the Company announced that it had reached an agreement on a consent decree with the FDA regarding quality system improvements for its external
defibrillator products. The agreement was filed on April 25, 2008 in the U.S. District Court for the Western District of Washington and was approved by the
court on May 9, 2008. The agreement addresses issues raised by the FDA during inspections regarding Physio-Control’s quality system processes and
outlines the actions Physio-Control must take in order to resume unrestricted distribution of its external defibrillators. In fiscal year 2008, Physio-Control
has resumed limited shipments to critical need customers in the U.S. Following the resolution of the quality system issues, the Company intends to pursue the
spin-off of Physio-Control. Physio-Control’s (loss)/income before interest and income taxes for fiscal years 2008, 2007, and 2006 were $(28), $7, and $15,
respectively.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Geographic Information </font></i></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>United</font></b><br> <b><font size=1>States</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Europe</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Asia</font></b><br> <b><font size=1>Pacific</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Other</font></b><br> <b><font size=1>Foreign</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center; '><b><font size=1>Consolidated</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center; '><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="39%" VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Fiscal Year 2008</font></b></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Net sales to external customers</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8,336</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3,288</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,437</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>454</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>13,515</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Long-lived assets*</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>3,611</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8,632</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>171</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>37</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>12,451</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Fiscal Year 2007</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Net sales to external customers</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>7,900</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,811</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,195</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>393</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>12,299</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Long-lived assets*</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>6,947</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,040</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>165</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>35</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8,187</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><b><font size=2>Fiscal Year 2006</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2> </font></p> </td>
<td width="1%" style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Net sales to external customers</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>7,626 </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>2,314 </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,023 </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>329 </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>11,292 </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt; '><font size=2>Long-lived assets*</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>7,100 </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>1,039 </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>156 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>36 </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left;'><font size=2>$ </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right; '><font size=2>8,331 </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt; '><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_______________</font></p>
<p style='margin:0in;margin-bottom:0pt; '><font size=2>* Excludes other long-term financial
instruments and long-term deferred tax assets, net, as applicable.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>No single customer represents over 10 percent of the Company’s consolidated net sales in fiscal years 2008, 2007, or 2006. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>77</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Selected</font></b><font size=2> </font><b><font size=2> <a name="financial_data"></a></font></b><i><b><font size=3>Financial Data</font></b></i><b><font size=2> </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="14" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Year</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:12.0pt;text-align:center;text-indent:-12.0pt'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2008</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2007</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2006</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2005</font></b></p> </td>
<TD VALIGN="bottom">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none; '>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>2004<sup>(2)</sup></font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="39%" VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:12.0pt; text-indent:-12.0pt'><i><b><font size=1>(in millions, except per share data)</font></b></i></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="3%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="8%" VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD WIDTH="1%" VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><b><font size=2>Operating Results for the Fiscal Year:</font></b><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Net sales</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>13,515</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>12,299</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,292</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,055</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,087</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Cost of products sold</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,446</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,168</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,815</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,446</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,253</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Gross margin percentage</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>74.5</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>74.2</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>75.1</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:5.25pt; text-indent:-5.25pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>75.7</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:5.25pt; text-indent:-5.25pt'><font size=2>%</font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>75.2</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:7.5pt; text-indent:-7.5pt'><font size=2>%</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Research and development expense</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,275</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,239</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,113</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>951</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>852</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Selling, general and administrative expense</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,707</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,153</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,659</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,214</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,801</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Special charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>78</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>98</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>100</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(5</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2>) </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Restructuring charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>28</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Certain litigation charges</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>366</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>654</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Purchased in-process research and development charges</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>390</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>364</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>—</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>41</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Other expense, net</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>436</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>212</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>167</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>291</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>351</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-5.25pt'><font size=2>Interest income, net</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(109</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(154</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(87</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(45</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>(3</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2>)</font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Earnings before income taxes</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,885</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,515</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,161</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,544</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,797</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-5.25pt'><font size=2>Provision for income taxes</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>654</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>713</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='border-bottom: solid black 1.0pt'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>614</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>740</font></p> </td>
<TD VALIGN="bottom">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:solid black 1.0pt;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>838</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 12.0pt;text-indent:-5.25pt'><font size=2>Net earnings</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,231</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,802</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='border-bottom: double black 2.25pt;background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2,547</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,804</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='border-bottom:double black 2.25pt; background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="border-bottom:double black 2.25pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,959</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin-top:0pt;margin-right:0in;margin-bottom:0pt;margin-left: 0in'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><b><font size=2>Per Share of Common Stock:</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Basic earnings</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.97</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.44</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.11</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.49</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.61</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Diluted earnings</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.95</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.41</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.09</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.48</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.60</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Cash dividends declared</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.50</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.44</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.39</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.34</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>0.29</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><b><font size=2>Financial Position at Fiscal Year-end:</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Working capital<sup>(1)</sup></font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3,787</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,355</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,971</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>4,042</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,072</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Current ratio<sup>(1)</sup></font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.1:1.0</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>3.1:1.0</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.4:1.0</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>2.2:1.0</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.3:1.0</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Total assets</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>22,198</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19,512</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>19,665</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>16,617</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>14,111</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Long-term debt<sup>(1)</sup></font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,802</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,578</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>5,486</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1,973</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>1.1</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Shareholders’ equity</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>11,536</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,977</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,383</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>10,450</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>9,077</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD>
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=1> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="3%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="8%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-12.0pt'><b><font size=2>Additional Information:</font></b></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom" STYLE="background:#CCCCCC;">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Full-time employees at year-end</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>36,484</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>34,554</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>32,280</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>29,835</font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>27,868</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="bottom">
<p style='margin-top:0in;margin-right:0in;margin-bottom:0pt;margin-left:12.0pt; text-indent:-5.25pt'><font size=2>Full-time equivalent employees at year-end</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>40,351</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>37,800</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>35,733</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>33,067</font></p> </td>
<TD VALIGN="bottom">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="bottom">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>30,900</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>_______________</font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In fiscal year 2002 $2,000 of contingent convertible debentures were issued to fund acquisitions. These contingent convertible debentures include repayment provisions that give holders the option to require the Company to repurchase the debentures (referred to as a put option) in specific periods. Twelve months prior to the put option for the debentures becoming exercisable, the remaining balance of the debentures will be classified as short-term borrowings on the consolidated balance sheets. At each balance sheet date without a put option within the subsequent four quarters, the remaining balance will be classified as long-term debt on the consolidated balance sheets. Therefore, working capital and the current ratio are impacted by the periodic reclassification of these contingent convertible debentures. In fiscal years 2008, 2006 and 2004 there were
$94, $1,971 and $1,974, respectively, of debentures classified in short-term borrowings. See Note 7 to the consolidated financial statements.</font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=1> </font></p>
<div align=left>
<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
<tr >
<td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2) </font></p> </td>
<td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fiscal year 2004 consisted of 53 weeks, as compared to 52 weeks in all other fiscal years disclosed above. See Note 1 to the consolidated financial statements. </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>78</font>
</A></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
<PAGE>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><a name="price_range"></a> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<b><font size=2>Price Range of Medtronic Stock </font></b></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<div align=left>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" STYLE="border-collapse:collapse">
<tr >
<TD VALIGN="BOTTOM" >
<p style='margin:0in;margin-bottom:0pt'><b><font size=1></font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="11" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fiscal Quarter</font></b></p> </td>
</tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><b><font size=1></font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>First Quarter</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Second Quarter</font></b></p> </td>
<td width="3%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Third Quarter</font></b></p> </td>
<TD VALIGN="BOTTOM">
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td>
<td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt'>
<p align=center style='margin:0in;margin-bottom:0pt;text-align:center'><b><font size=1>Fourth Quarter</font></b></p> </td>
<td width="1%" valign=bottom >
<p align=center style='margin-top:0pt;margin-right:0in;margin-bottom:0in; margin-left:0in;text-align:center'><font size=1> </font></p> </td> </tr>
<tr >
<TD WIDTH="51%" VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>2008 High</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54.05</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top: solid black 1.0pt;background:#CCCCCC">
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>57.86</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51.21</font></p> </td>
<TD WIDTH="3%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:left'><font size=2>$</font></p> </td>
<TD WIDTH="8%" VALIGN="BOTTOM" STYLE="border-top:solid black 1.0pt; background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.44</font></p> </td>
<TD WIDTH="1%" VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>2008 Low</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>50.57</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>47.00</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>45.25</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.19</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p style='margin:0in;margin-bottom:0pt'><font size=2>2007 High</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>51.43</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<td width="8%" valign=bottom style='background:#CCCCCC; '>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>50.93</font></p> </td>
<td width="3%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC;">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>54.51</font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=1> </font></p> </td>
<TD VALIGN="BOTTOM" STYLE="background:#CCCCCC">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>54.58</font></p> </td>
<td width="1%" valign=bottom style='background:#CCCCCC'>
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr>
<tr >
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2>2007 Low</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>46.86</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<td width="8%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>42.47</font></p> </td>
<td width="3%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.33</font></p> </td>
<TD VALIGN="BOTTOM">
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td>
<td width="1%" valign=bottom >
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2> </font></p> </td>
<TD VALIGN="BOTTOM">
<p align=right style='margin:0in;margin-bottom:0pt;text-align:right'><font size=2>48.67</font></p> </td>
<td width="1%" valign=bottom >
<p style='margin:0in;margin-bottom:0pt'><font size=2> </font></p> </td> </tr></table>
</div>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Prices are closing quotations. On June 23, 2008, there
were approximately 53,600 shareholders of record of the Company’s common stock. The regular quarterly cash dividend was 12.5 cents per share
for fiscal year 2008 and 11.0 cents per share for fiscal year 2007. </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2> </font></p>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><A NAME="PAGENUM"><font size=2>79</font></A></p>
<HR SIZE=3 COLOR=GRAY NOSHADE>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>22
<FILENAME>medtronic082604s1_ex21.htm
<DESCRIPTION>LIST OF SUBSIDIARIES
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 21 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 21</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Medtronic, Inc. and subsidiaries</P>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="BOTTOM" style="font-size:8pt;padding-top:0pt">
<TH align="left">Company</TH>
<TH width=5%> </TH>
<TH width=15% NOWRAP align="left">Jurisdiction of Incorporation</TH></TR>
<TR>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD></TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Arterial Vascular Engineering Canada, Company</TD>
<TD> </TD>
<TD>Nova Scotia</TD></TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Arterial Vascular Engineering Netherlands Holding B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD></TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Arterial Vascular Engineering UK Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>AVE Ireland Limited</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>AVECOR Cardiovascular Limited</TD>
<TD> </TD>
<TD>England, Wales</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>B.V. Medtronic FSC</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Cardiotron G.m.b.H.</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Carmel Biosensors Ltd.</TD>
<TD> </TD>
<TD>Israel</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Europrisme Medical S.A.</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Fundacion Medtronic Aula Miguel Servet</TD>
<TD> </TD>
<TD>Spain</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>IGN AB</TD>
<TD> </TD>
<TD>Sweden</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>IGN GmbH</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>India Medtronic Private Limited</TD>
<TD> </TD>
<TD>India</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Americas, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Australia Pty Ltd.</TD>
<TD> </TD>
<TD>Australia</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Cayman Ltd.</TD>
<TD> </TD>
<TD>Cayman Islands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Deutschland GmbH</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Europe BVBA</TD>
<TD> </TD>
<TD>Belgium</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon France SARL</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon GmbH (Austria)</TD>
<TD> </TD>
<TD>Austria</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Iberica, S.L.</TD>
<TD> </TD>
<TD>Spain</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Ireland Ltd.</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Ireland Research Holding</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Italia S.R.L.</TD>
<TD> </TD>
<TD>Italy</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Nippon K.K.</TD>
<TD> </TD>
<TD>Japan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon South Africa (Proprietary) Ltd.</TD>
<TD> </TD>
<TD>South Africa</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Switzerland GmbH</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon Sàrl</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Kyphon UK Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>MG Biotherapeutics LLC</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>MRM Merger Corporation</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Magnolia Medical, LLC</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medical Education Y.K.</TD>
<TD> </TD>
<TD>Japan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic (Africa) (Proprietary) Limited</TD>
<TD> </TD>
<TD>South Africa</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic (Schweiz) A.G. (Medtronic (Suisse) S.A.)</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic (Shanghai) Ltd.</TD>
<TD> </TD>
<TD>China</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic (Thailand) Limited</TD>
<TD> </TD>
<TD>Thailand</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic A/S</TD>
<TD> </TD>
<TD>Denmark</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Aktiebolag</TD>
<TD> </TD>
<TD>Sweden</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Angiolink, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Asia, Ltd.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Australasia E.S.P. Company Pty. Limited</TD>
<TD> </TD>
<TD>Australia</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Australasia Pty. Limited</TD>
<TD> </TD>
<TD>New South Wales</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Bakken Research Center B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Belgium S.A./N.V.</TD>
<TD> </TD>
<TD>Belgium</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Bio-Medicus, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic China, Ltd.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Comercial Ltda.</TD>
<TD> </TD>
<TD>Brazil</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="BOTTOM" style="font-size:8pt;padding-top:0pt">
<TH align="left">Company</TH>
<TH width=5%> </TH>
<TH width=15% NOWRAP align="left">Jurisdiction of Incorporation</TH></TR>
<TR>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Czechia s.r.o.</TD>
<TD> </TD>
<TD>Czech Republic</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Danmark A/S</TD>
<TD> </TD>
<TD>Denmark</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Endonetics, Inc.</TD>
<TD> </TD>
<TD>California</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Europe BVBA/SPRL</TD>
<TD> </TD>
<TD>Belgium</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Europe Sàrl</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Fabrication SAS</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Finland Oy</TD>
<TD> </TD>
<TD>Finland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic France S.A.S.</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Functional Diagnostics Zinetics, Inc.</TD>
<TD> </TD>
<TD>Utah</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Functional Diagnostics, Inc.</TD>
<TD> </TD>
<TD>New Jersey</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic G.m.b.H.</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Hellas Medical Device Commercial S.A.</TD>
<TD> </TD>
<TD>Greece</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Holding Switzerland G.m.b.H.</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Hungaria Kereskedelmi Kft</TD>
<TD> </TD>
<TD>Hungary</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Ibérica S.A.</TD>
<TD> </TD>
<TD>Spain</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic InStent (Israel) Ltd.</TD>
<TD> </TD>
<TD>Israel</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic International Technology, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic International Trading Sàrl</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic International Trading, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic International, Ltd.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Interventional Vascular, Inc.</TD>
<TD> </TD>
<TD>Massachusetts</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Ireland Holdings Company</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Ireland Limited</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Ireland Manufacturing Limited</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Italia S.p.A.</TD>
<TD> </TD>
<TD>Italy</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Japan Co., Ltd.</TD>
<TD> </TD>
<TD>Japan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Korea Co. Ltd.</TD>
<TD> </TD>
<TD>Korea</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic LLC</TD>
<TD> </TD>
<TD>Russia</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Latin America, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Lifelink MD, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Medical Appliance Technology and Service (Shanghai) Ltd.</TD>
<TD> </TD>
<TD>China</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Medical Technology Ticaret Limited Sirketi</TD>
<TD> </TD>
<TD>Turkey</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Mediterranean SAL</TD>
<TD> </TD>
<TD>Beirut, Lebanon</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Mexico S. de R.L. de C.V. (Tijuana)</TD>
<TD> </TD>
<TD>Mexico</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Micro Motion Sciences, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic MiniMed, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Navigation Israel Ltd.</TD>
<TD> </TD>
<TD>Israel</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Navigation, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Norge AS</TD>
<TD> </TD>
<TD>Norway</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Oesterreich G.m.b.H.</TD>
<TD> </TD>
<TD>Austria</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic PS Medical, Inc.</TD>
<TD> </TD>
<TD>California</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Pacific Trading, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Physio-Control Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Poland Sp. z o.o.</TD>
<TD> </TD>
<TD>Poland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Portugal - Comércio e Distribuiçao de Aparelhos Médicos Lda</TD>
<TD> </TD>
<TD>Portugal</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Puerto Rico Operations Co.</TD>
<TD> </TD>
<TD>Cayman Islands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic S. de R.L. de C.V. (Mexico City)</TD>
<TD> </TD>
<TD>Mexico</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic S.A.I.C.</TD>
<TD> </TD>
<TD>Argentina</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Servicios S. de R.L. de C.V.</TD>
<TD> </TD>
<TD>Mexico</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="BOTTOM" style="font-size:8pt;padding-top:0pt">
<TH align="left">Company</TH>
<TH width=5%> </TH>
<TH width=15% NOWRAP align="left">Jurisdiction of Incorporation</TH></TR>
<TR>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek (NZ) Limited</TD>
<TD> </TD>
<TD>New Zealand</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek (UK) Ltd.</TD>
<TD> </TD>
<TD>England, Wales</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek Australia Pty. Ltd.</TD>
<TD> </TD>
<TD>Australia</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek Co., Ltd.</TD>
<TD> </TD>
<TD>Japan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek Deggendorf GmbH</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek South Africa (Proprietary) Limited</TD>
<TD> </TD>
<TD>South Africa</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek USA, Inc.</TD>
<TD> </TD>
<TD>Tennessee</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Sofamor Danek, Inc.</TD>
<TD> </TD>
<TD>Indiana</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Spine International Holding Company</TD>
<TD> </TD>
<TD>Cayman Islands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Spine LLC</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Synectics Aktiebolag</TD>
<TD> </TD>
<TD>Sweden</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Trading NL BV</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Transneuronix, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Treasury International, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Treasury Management, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic USA, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Vascular Connaught</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Vascular Galway Limited</TD>
<TD> </TD>
<TD>Ireland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Vascular, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Vertelink, Inc.</TD>
<TD> </TD>
<TD>California</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic VidaMed, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic World Trade Corporation</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Xomed Instrumentation SAS</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Xomed U.K. Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic Xomed, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic do Brasil Ltda.</TD>
<TD> </TD>
<TD>Brazil</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic of Canada Ltd.</TD>
<TD> </TD>
<TD>Canada</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic, Inc.</TD>
<TD> </TD>
<TD>Minnesota</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Medtronic-Mediland (Taiwan) Ltd.</TD>
<TD> </TD>
<TD>Taiwan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>MiniMed Distribution Corp.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>MiniMed Pty Ltd.</TD>
<TD> </TD>
<TD>Australia</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>NDI Medical, Inc.</TD>
<TD> </TD>
<TD>Ohio</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Physio-Control International, Inc.</TD>
<TD> </TD>
<TD>Washington</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Physio-Control Manufacturing, Inc.</TD>
<TD> </TD>
<TD>Washington</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Physio-Control, Inc.</TD>
<TD> </TD>
<TD>Washington</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Restoragen, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>S.F.M.T. Europe B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Sanatis GmbH</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Setagon, Inc.</TD>
<TD> </TD>
<TD>Delaware</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Societe De Fabrication de Material Orthopedique En Abrege Sofamor</TD>
<TD> </TD>
<TD>France</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>SpinalGraft Technologies, LLC</TD>
<TD> </TD>
<TD>Tennessee</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>St. Francis Medical Technologies UK Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Synectics Medical - Equipamento Electronico de Medicina, Limitada</TD>
<TD> </TD>
<TD>Portugal</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Synectics Medical Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Transneuronix International GmbH</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>VidaMed International Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron A.G.</TD>
<TD> </TD>
<TD>Switzerland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron BV</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Belgium S.A./N.V.</TD>
<TD> </TD>
<TD>Belgium</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Czechia s.r.o.</TD>
<TD> </TD>
<TD>Czech Republic</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Denmark A/S</TD>
<TD> </TD>
<TD>Denmark</TD>
</TR>
</TABLE>
</DIV>
<BR>
<BR>
<P style="font-size:10pt;text-align:center"> </P>
<HR color="gray" size="3" noshade>
<PAGE>
<BR>
<DIV align="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="80%">
<TR VALIGN="BOTTOM" style="font-size:8pt;padding-top:0pt">
<TH align="left">Company</TH>
<TH width=5%> </TH>
<TH width=15% NOWRAP align="left">Jurisdiction of Incorporation</TH></TR>
<TR>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
<TD></TD>
<TD style="border-top:1px solid black; font-size:1pt"> </TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Finland Oy</TD>
<TD> </TD>
<TD>Finland</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron GmbH</TD>
<TD> </TD>
<TD>Austria</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron GmbH</TD>
<TD> </TD>
<TD>Germany</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Holding B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Japan Co., Ltd.</TD>
<TD> </TD>
<TD>Japan</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Medical España, S.A.</TD>
<TD> </TD>
<TD>Spain</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Nederland B.V.</TD>
<TD> </TD>
<TD>Netherlands</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Portugal - Comércio e Distribuição de Dispositivos Médicos, Lda</TD>
<TD> </TD>
<TD>Portugal</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron Sweden Aktiebolag</TD>
<TD> </TD>
<TD>Sweden</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Vitatron U.K. Limited</TD>
<TD> </TD>
<TD>United Kingdom</TD>
</TR>
<TR VALIGN="TOP" style="font-size:10pt;padding-top:0pt">
<TD>Warsaw Orthopedic, Inc.</TD>
<TD> </TD>
<TD>Indiana</TD>
</TR>
</TABLE>
</DIV>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>23
<FILENAME>medtronic082604s1_ex23.htm
<DESCRIPTION>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 23 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 23</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</P>
<P style="font-size:10pt;text-indent:20pt">We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-136361) and
on Form S-8 (Nos. 33-37529, 33-44230, 33-55329, 33-63805, 333-04099, 333-07385, 333-65227, 333-71259, 333-71355, 333-74229, 333-75819, 333-90381, 333-44766,
333-52840, 333-66978, 333-68594, 333-100624, 333-106566, 333-112267, 333-128531, 333-129872, 333-147399 and 333-148672) of Medtronic, Inc. of our report dated
June 19, 2008 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in
Exhibit 13 to this Form 10-K. We also consent to the incorporation by reference of our report dated June 19, 2008 relating to the financial statement
schedule, which appears in this Form 10-K.</P>
<P style="font-size:10pt;margin-top:6pt">/s/ PricewaterhouseCoopers LLP<BR>
<BR>PricewaterhouseCoopers LLP<BR>Minneapolis, Minnesota<BR>June 24, 2008</P>
<BR><BR>
<P style="font-size:12pt;font-weight:bold;text-align:center">Report of Independent Registered Public Accounting Firm on
<BR>Financial Statement Schedule</P>
<P style="font-size:10pt;text-indent:20pt"><B>To the Board of Directors of Medtronic, Inc.:</B></P>
<P style="font-size:10pt;text-indent:20pt">Our audits of the consolidated financial statements and of the effectiveness of internal
control over financial reporting referred to in our report dated June 19, 2008 appearing in Exhibit 13 to this Annual
Report on Form 10-K of Medtronic, Inc. (which report and consolidated financial statements are included in Exhibit 13 to this
Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial statements.</P>
<P style="font-size:10pt;margin-top:6pt">/s/ PricewaterhouseCoopers LLP<BR>
<BR>PricewaterhouseCoopers LLP<BR>Minneapolis, Minnesota<BR>June 19, 2008</P>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>24
<FILENAME>medtronic082604s1_ex24.htm
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 24 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 24</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">POWER OF ATTORNEY</P>
<P style="font-size:10pt;text-indent:20pt">Each of the undersigned directors of Medtronic, Inc., a Minnesota corporation, hereby
constitutes and appoints each of WILLIAM A. HAWKINS and TERRANCE L. CARLSON, acting individually or jointly, their true and
lawful attorneys-in-fact and agents, with full power to act for them and in their name, place and stead, in any and all capacities,
to do any and all acts and execute any and all documents which either such attorney and agent may deem necessary or desirable
to enable Medtronic, Inc. to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection with the filing with the Commission of Medtronic’s
Annual Report on Form 10-K for the fiscal year ended April 25, 2008, including specifically, but without limiting the
generality of the foregoing, power and authority to sign the names of the undersigned directors to the Form 10-K and to any
instruments and documents filed as part of or in connection with the Form 10-K or any amendments thereto; and the undersigned
hereby ratify and confirm all actions taken and documents signed by each said attorney and agent as provided herein.</P>
<P style="font-size:10pt;text-indent:20pt">The undersigned have set their hands this 19<SUP>th</SUP> day of June, 2008.</P>
<DIV align="left">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="90%">
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD width="35%">/s/ Richard H. Anderson<BR>
<HR style="width:100%;height:1;color:black" noshade>
Richard H. Anderson</TD>
<TD> </TD>
<TD width="35%">/s/ James T. Lenehan<BR>
<HR style="width:100%;height:1;color:black" noshade>
James T. Lenehan</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD>/s/ David L. Calhoun<BR>
<HR style="width:100%;height:1;color:black" noshade>
David L. Calhoun</TD>
<TD> </TD>
<TD>/s/ Denise M. O’Leary<BR>
<HR style="width:100%;height:1;color:black" noshade>
Denise M. O’Leary</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD>/s/ Arthur D. Collins, Jr.<BR>
<HR style="width:100%;height:1;color:black" noshade>
Arthur D. Collins, Jr.</TD>
<TD> </TD>
<TD>/s/ Kendal J. Powell<BR>
<HR style="width:100%;height:1;color:black" noshade>
Kendall J. Powell</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD>/s/ Victor J. Dzau<BR>
<HR style="width:100%;height:1;color:black" noshade>
Victor J. Dzau, M.D.</TD>
<TD> </TD>
<TD>/s/ Robert C. Pozen<BR>
<HR style="width:100%;height:1;color:black" noshade>
Robert C. Pozen</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD>/s/ William A. Hawkins<BR>
<HR style="width:100%;height:1;color:black" noshade>
William A. Hawkins</TD>
<TD> </TD>
<TD>/s/ Jean-Pierre Rosso<BR>
<HR style="width:100%;height:1;color:black" noshade>
Jean-Pierre Rosso</TD>
</TR>
<TR VALIGN="BOTTOM" style="font-size:10pt;padding-top:18pt">
<TD>/s/ Shirley Ann Jackson<BR>
<HR style="width:100%;height:1;color:black" noshade>
Shirley Ann Jackson, Ph.D.</TD>
<TD> </TD>
<TD>/s/ Jack W. Schuler<BR>
<HR style="width:100%;height:1;color:black" noshade>
Jack W. Schuler</TD>
</TR>
</TABLE>
</DIV>
<BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>25
<FILENAME>medtronic082604s1_ex31-1.htm
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 31.1 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 31.1</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Certification of Chief Executive Officer<BR>Pursuant to Section 302
of the<BR>Sarbanes-Oxley Act of 2002</P>
<P style="font-size:10pt">I, William A. Hawkins, certify that:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">1.</TD>
<TD WIDTH="92%">I have reviewed this Annual Report on Form 10-K of Medtronic, Inc.;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>2.</TD>
<TD>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>3.</TD>
<TD>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>4.</TD>
<TD>The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">a.</TD>
<TD WIDTH="88%">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>b.</TD>
<TD>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>c.</TD>
<TD>Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>d.</TD>
<TD>Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">5.</TD>
<TD WIDTH="92%">The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions): </TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">a.</TD>
<TD WIDTH="88%">All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>b.</TD>
<TD>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.</TD>
</TR>
</TABLE>
<P style="font-size:10pt">Date: June 24, 2008</P>
<DIV style="font-size:10pt;margin-left:65%;margin-right:10%">
<P>/s/ William A. Hawkins</P>
<HR align="left" color="black" noshade size=1 style="margin-top:-18pt;position:relative">
<P style="margin-top:-18pt">William A. Hawkins<BR>President and Chief Executive Officer</P>
</DIV>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>26
<FILENAME>medtronic082604s1_ex31-2.htm
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 31.2 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 31.2</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Certification of Chief Financial Officer<BR>Pursuant to Section 302
of the<BR>Sarbanes-Oxley Act of 2002</P>
<P style="font-size:10pt">I, Gary L. Ellis, certify that:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">1.</TD>
<TD WIDTH="92%">I have reviewed this Annual Report on Form 10-K of Medtronic, Inc.;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>2.</TD>
<TD>Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>3.</TD>
<TD>Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>4.</TD>
<TD>The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">a.</TD>
<TD WIDTH="88%">Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>b.</TD>
<TD>Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles;</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>c.</TD>
<TD>Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>d.</TD>
<TD>Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and</TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">5.</TD>
<TD WIDTH="92%">The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions): </TD>
</TR>
</TABLE>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">a.</TD>
<TD WIDTH="88%">All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD> </TD>
<TD>b.</TD>
<TD>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.</TD>
</TR>
</TABLE>
<P style="font-size:10pt">Date: June 24, 2008</P>
<DIV style="font-size:10pt;margin-left:65%;margin-right:10%">
<P>/s/ Gary L. Ellis</P>
<HR align="left" color="black" noshade size=1 style="margin-top:-18pt;position:relative">
<P style="margin-top:-18pt">Gary L. Ellis<BR>Senior Vice President and<BR>Chief Financial Officer</P>
</DIV>
<BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>27
<FILENAME>medtronic082604s1_ex32-1.htm
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 906
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 32.1 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 32.1</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Certification of Chief Executive Officer<BR>Pursuant to Section 906
of the<BR>Sarbanes-Oxley Act of 2002</P>
<P style="font-size:10pt">In connection with this annual report on Form 10-K of Medtronic, Inc. for the fiscal year ended April 25,
2008, the undersigned hereby certifies, in his capacity as Chief Executive Officer of Medtronic, Inc., for purposes of 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">(1)</TD>
<TD WIDTH="92%">The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(2)</TD>
<TD>The information contained in this report fairly presents, in all material respects, the financial condition and results
of operations of Medtronic, Inc.</TD>
</TR>
</TABLE>
<P style="font-size:10pt">Date: June 24, 2008</P>
<DIV style="font-size:10pt;margin-left:65%;margin-right:10%">
<P>/s/ William A. Hawkins</P>
<HR align="left" color="black" noshade size=1 style="margin-top:-18pt;position:relative">
<P style="margin-top:-18pt">William A. Hawkins<BR>President and Chief Executive Officer</P>
</DIV>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>28
<FILENAME>medtronic082604s1_ex32-2.htm
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 906
<TEXT>
<HTML>
<HEAD>
<title>Exhibit 32.2 to Medtronic, Inc. Form 10-K for year ended April 25, 2008</title>
</HEAD>
<BODY bgcolor="#ffffff" style='font-family:"Times New Roman"'>
<BR>
<P style="font-size:10pt;font-weight:bold;text-align:right">Exhibit 32.2</P>
<P style="font-size:12pt;font-weight:bold;text-align:center">Certification of Chief Financial Officer<BR>Pursuant to Section 906
of the<BR>Sarbanes-Oxley Act of 2002</P>
<P style="font-size:10pt">In connection with this annual report on Form 10-K of Medtronic, Inc. for the fiscal year ended April 25,
2008, the undersigned hereby certifies, in his capacity as Chief Financial Officer of Medtronic, Inc., for purposes of 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:</P>
<TABLE WIDTH="100%" CELLPADDING="2" CELLSPACING="2">
<TR style="font-size:10pt" VALIGN="TOP">
<TD WIDTH="4%"> </TD>
<TD WIDTH="4%">(1)</TD>
<TD WIDTH="92%">The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended; and</TD>
</TR>
<TR style="font-size:10pt" VALIGN="TOP">
<TD> </TD>
<TD>(2)</TD>
<TD>The information contained in this report fairly presents, in all material respects, the financial condition and results
of operations of Medtronic, Inc.</TD>
</TR>
</TABLE>
<P style="font-size:10pt">Date: June 24, 2008</P>
<DIV style="font-size:10pt;margin-left:65%;margin-right:10%">
<P>/s/ Gary L. Ellis</P>
<HR align="left" color="black" noshade size=1 style="margin-top:-18pt;position:relative">
<P style="margin-top:-18pt">Gary L. Ellis<BR>Senior Vice President and<BR>Chief Financial Officer</P>
</DIV>
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<HR color="gray" size="3" noshade>
<BR>
</BODY>
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