Advancing Our Stewardship 2008 Corporate Responsibility Report

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2008 Corporate Responsibility Report

Table of Contents A Message from the Chairman and CEO.................................................................................................... 5 Company Profile................................................................................................................................................. 7 Corporate Governance & Business Ethics . .............................................................................................. 11 Our Employees ................................................................................................................................................ 17 Responsibility for Our Products.................................................................................................................. 25 Environment, Health and Safety ............................................................................................................... 31 Global Community Support ....................................................................................................................... 37 GRI Index ........................................................................................................................................................... 42

About this Report This report describes the corporate responsibility programs and performance of Medtronic, Inc., during fiscal year 2008 (April 28, 2007-April 25, 2008) unless otherwise stated. Our goal for this inaugural report is to provide an accurate account of economic, social and environmental performance in the areas that are most relevant to our business and stakeholders. In determining the content for this report, we took into account input from stakeholders, current Global Reporting Initiative (GRI) guidelines and an internal analysis of the primary issues most material to Medtronic. The report references performance indicators and other items from the GRI G3 Sustainability Reporting Guidelines as indicated in our GRI Index.

Data included in the report covers Medtronic, Inc. and all of its consolidated subsidiaries, but does not include joint ventures or strategic alliances. Financial information is reported in U.S. dollars. Environmental, health and safety data are from both manufacturing and research and development facilities. Medtronic has not sought independent verification of this report but will consider doing so in the future. We encourage stakeholder feedback to assess the usefulness of this report and to provide suggestions regarding the content of future reports. To provide feedback or request additional information about this report, please email: [email protected].

Medtronic Mission To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life. To direct our growth in the areas of biomedical engineering where we display maximum strength and ability; to gather people and facilities that tend to augment these areas; to continuously build on these areas through education and knowledge assimilation; to avoid participation in areas where we cannot make unique and worthy contributions. To strive without reserve for the greatest possible reliability and quality in our products; to be the unsurpassed standard of comparison and to be recognized as a company of dedication, honesty, integrity, and service. To make a fair profit on current operations to meet our obligations, sustain our growth, and reach our goals. To recognize the personal worth of employees by providing an employment framework that allows personal satisfaction in work accomplished, security, advancement opportunity, and means to share in the company’s success. To maintain good citizenship as a company.

2008 Corporate Responsibility Report

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A Message from the Chairman and CEO On behalf of our employees, executive management team and board of directors, I am pleased to present the 2008 Medtronic Corporate Responsibility Report. At Medtronic we are united by our Mission to contribute to human welfare with products, therapies and services that alleviate pain, restore health and extend life for millions of people. Advancing our stewardship lies in Medtronic’s ability to improve and enhance the lives of people around the world and is inseparable from our ability to:

markets we serve. In November 2007, our executive committee approved a new Environmental Sustainability Policy for Medtronic that articulates our global view in regard to sensible environmental management.

> sustain financial growth,



> fully engage and advance our employees and business partners,



> deliver life-saving therapies to the broadest possible population,



> achieve environmentally-friendly manufacturing, and



> improve the communities in which we work and live.

This new policy requires each Medtronic business to develop environmental goals. We have worked with each business to establish 5-year goals to reduce waste, air emissions and energy and water use. Progress against these goals is tracked on a quarterly basis. Recognizing that we are a global citizen, the Medtronic Foundation Board of Directors recently committed to increasing the percentage of grant dollars awarded to organizations that support health, education and community initiatives outside of the U.S. from 12 percent in fiscal year 2007 to 20 percent by fiscal year 2009.

We want to be recognized as a company of the highest integrity. A good corporate citizen of the communities and the countries where we do business and the planet we all share. Promoting a sustainable world is vital to our future and to advancing the Medtronic Mission. Our responsibility to be an environmentallyfriendly company has never been clearer. Conducting business in a safe and environmentally sustainable manner is, quite simply, the right thing to do. Investors demand it. Customers deserve it. Our children and our children’s children depend on it.

Medtronic has a strong history of corporate citizenship. In addition to aligning with our company values, it’s also good business. With the publication of this inaugural Corporate Responsibility Report and subsequent reports, we are committed to providing stakeholders with an honest assessment of our economic, social and environmental performance.

As a diverse corporation, our challenge is to create sustainability practices company-wide and within each business that provide the greatest benefit for the

William A. Hawkins Chairman and Chief Executive Officer Medtronic, Inc.

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2008 Corporate Responsibility Report

Company Profile Medtronic, Inc. is a global leader in medical technology, redefining how technology is used in the management of chronic disease. Our understanding of human physiology yields a range of therapies that are transforming the treatment of chronic conditions including heart disease, diabetes, neurological and spinal disorders and vascular disease for nearly six million patients worldwide each year. Perhaps best known for our implantable pacemakers and cardioverter defibrillators (ICDs), other high profile Medtronic products include heart stents, spinal discs, insulin pumps and continuous glucose monitoring systems, deep brain stimulation, neurostimulation for chronic pain, and remote monitoring and diagnostic products for chronic disease management. Our seven key businesses — Cardiac Rhythm Disease Management; Spinal; CardioVascular; Neuromodulation; Diabetes; Surgical Technologies; and Physio-Control — employ more than 38,000 people worldwide. Headquartered in Minneapolis, Minnesota, Medtronic operates regional headquarters in Switzerland and Japan and does business in more than 120 countries. Medtronic stock is traded on the New York Stock Exchange under the ticker symbol MDT.

“To contribute to human welfare by application of biomedical engineering in the research, design, manufacture and sale of instruments or appliances that alleviate pain, restore health, and extend life. To direct our growth in the areas of biomedical engineering where we display maximum strength and ability… To make a fair profit on current operations to meet our obligations, sustain our growth and reach our goals.” – Medtronic Mission

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2008 Corporate Responsibility Report

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Significant business developments during fiscal year 2008 included:

2008 Financial Summary

Acquisitions and Joint Ventures

In fiscal year 2008, Medtronic’s annual revenue totaled $13.5 billion, an increase of 10 percent over fiscal year 2007 revenue of $12.3 billion. Revenue outside the United States increased 18 percent to $5.2 billion, driven by revenue growth in all major geographic areas.

2008 Revenue by Business (in millions) U.S.

Beyond these acquisitions, we also divested certain businesses. For example we divested gastroenterology and urology diagnostics related product lines in our Neuromodulation business to enable a sharper focus on the growing aspects of our InterStim product, which treats overactive bladder conditions.

$4,000

CEO Transition

$3,000

(in millions)

Worldwide

CRDM Spinal CardioVascular Neuromodulation Diabetes Surgical Technologies Physio-Control

U.S.

Int’l

4,963 2,982 2,131 1,311 1,019 780 329

2,922 2,395 761 929 681 497 151

2,041 587 1,370 382 338 283 178

$2,000

Our 2008 Annual Report contains additional financial information.

$1,000

Physio-Control

Surgical Technologies

Diabetes

Neuromodulation

Cardio Vascular

$0 CRDM

On August 23, 2007, William A. Hawkins, became president and chief executive officer of Medtronic. Prior to becoming CEO, Hawkins served as president and chief operating officer (May 2004 to August 2007) and as president of Medtronic’s vascular business. Hawkins was named Chairman effective August 21, 2008.

INT’L

$5,000

Spinal

We completed the acquisition of Kyphon in November. Kyphon is an important addition to our Spinal and Biologics business that gives us access to therapies designed for the aging spine. We negotiated a joint venture with Weigao in China to market therapies in the spine and orthopedics sector – including products designed to treat the hip, shoulder, spine and related traumas. Another smaller, tuck-in acquisition was Restore Medical, a company that now fits in our Surgical Technologies business and whose intellectual property includes an FDA approved therapy that treats sleep apnea and snoring.

Corporate Awards > Named to Fortune magazine’s annual list of “America’s Most Admired Companies” for the eleventh consecutive year and ranked #6 in industry sector. (March 2008) > Recognized on “Global Top Companies for Leaders” list by Hewitt Associates, in partnership with The RBL Group and Fortune magazine. (September 2007) > Medtronic Denmark, France, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and United Kingdom each made the Great Place to Work Institute’s “2008 Best Companies List” for their respective countries.

“… to be recognized as a company of dedication, honesty, integrity, and service.”

– Medtronic Mission

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2008 Corporate Responsibility Report

Corporate Governance & Business Ethics Board of Directors Medtronic operates under the direction of an 11-member Board of Directors, comprised of 10 independent directors and Medtronic Chairman and CEO William A. Hawkins. Historically, Medtronic’s CEO has served as Chairman of the Board to facilitate a unified vision for the company. The independent directors meet in executive session without management present at every regularly scheduled Board meeting. The Chair of the Corporate Governance Committee presides at these sessions. The standing committees of the Board include: Audit, Compensation, and Corporate Governance, with a Nominating Subcommittee. In addition, the Board has a Quality and Technology Committee charged with:

> overseeing risk management in the area of product quality and safety, including review of Medtronic’s overall quality strategy and processes in place to monitor and control product quality and safety; > periodic review of results of product quality and quality system assessments by Medtronic and external regulators; and review of selected product quality issues and field actions; > overseeing the scientific and technical direction of Medtronic, including monitoring of overall effectiveness of research and development and periodic review of Medtronic’s intellectual property portfolio; > overseeing risk management in the area of human and animal studies, including the periodic review of policies and procedures related to the conduct of human and animal studies.

Members of the Board’s standing committees also meet in executive session, without management present, at each committee meeting. Appropriate officers of the company may be invited by Chairman of the Board to attend the general session of all Board meetings.

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2008 Corporate Responsibility Report

Ethics and Compliance

Corporate Governance Medtronic has a record of establishing progressive policies and practices that support strong corporate governance and transparency in financial reporting, including the following initiatives that reach beyond the Sarbanes-Oxley Act.

Incentive Forfeiture Policy

Majority Vote Resignation Policy

If the Board determines that an executive officer has received any improper payment or gain, which is an incentive payment or grant paid or awarded to the executive officer due to misconduct, the executive officer must return the improper payment or gain to the extent it would not have been made had the misconduct not occurred. “Misconduct” means any material violation of the Medtronic Code of Conduct or other fraudulent or illegal activity for which an executive officer is personally responsible, as determined by the Board. All executive officers are required to agree to this policy in writing.

Any nominee for director in an uncontested election who receives a greater number of votes “withheld” than votes “for” will tender a written offer to resign from the Board of Directors. The Corporate Governance Committee will promptly consider the resignation offer and recommend to the Board of Directors whether to accept it.

Our independent directors may also be contacted via e-mail at: [email protected].

Annual Election of Board of Directors

Additional contact information.

In 2007, Medtronic amended its articles of incorporation to provide for the annual election of all of board members. Directors elected at the 2008 annual shareholders meeting and thereafter will be elected to one-year terms, as opposed to three-year terms as in prior elections.

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Medtronic is committed to encouraging an environment where integrity is valued and guides our decisions. We are committed to fully complying with the laws and regulations in every country where we operate. Medtronic’s Ethics and Compliance program exists to maintain and protect a culture that encourages open and honest communication. Our Chief Ethics and Compliance Officer, working with Medtronic legal counsel, directs and oversees the development and implementation of corporate-wide policies, processes and practices that support ethics and compliance throughout the organization.

Code of Conduct The Medtronic Code of Conduct covers all areas of professional conduct, such as customer relationships, conflict of interest, insider trading, intellectual property and confidential information. Every employee is expected to adhere to the Medtronic Code of Conduct as a condition of employment and is required to bring any suspected violations to the attention of Medtronic management or human resources, ethics and compliance, or legal groups. Employees also have access to Medtronic’s Voice Your Concern Line, our confidential compliance hotline.

View: Medtronic Principles of Corporate Governance. All U.S. and Puerto Rico employees are required to certify that they have received, read, understand and agree to follow the Medtronic’s Code of Conduct. In addition to the Code of Conduct, Medtronic also has Business Conduct Standards that govern customer interactions. Our Business Conduct Standards are country-specific, and address the diverse legal and regulatory complexities in markets around the world. Because the development and improvement of therapies is a collaborative process between Medtronic and physicians, customer relationships are of particular relevance. We remain committed to continuing collaboration with physicians. Our Code of Conduct and Local Business Conduct Standards provide employees with detailed guidelines, and in some cases spending limits, regarding donations, gifts, business courtesies and payments to customers.

Our Code of Ethics for Senior Financial Officers includes certain specific policies applicable to our Chief Executive Officer, Chief Financial Officer, Treasurer and Controller and to other senior financial officers. These policies relate to internal controls, the public disclosures of Medtronic, violations of the securities laws or other laws, rules or regulations and conflicts of interest. A 24-hour, toll-free confidential compliance line is available for the submission of concerns regarding accounting, internal controls or auditing matters. View: Medtronic’s business conduct documents.

2008 Corporate Responsibility Report

Customs Compliance Medtronic’s Global Customs Compliance Program sets forth policies and procedures related to importing goods manufactured abroad for consumption in the United States and for export to other destinations around the world. We are committed to full compliance with all applicable laws and regulations of the United States and other countries in which we conduct business. These include U.S. export controls, economic sanctions and anti-boycott programs.

Public Policy Development and Political Contributions Medtronic encourages the advancement of sound public policy that supports our Mission. To this end, Medtronic has established the Medical Technology Fund (MTF), an employee-based, voluntary, non-partisan political action committee. The MTF, governed by a Board of Directors comprised of Medtronic employees and executives, has adopted by-laws and operational guidelines that include criteria for disbursements by the MTF to federal candidates. In jurisdictions that permit corporations to make contributions to campaigns of state and local

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candidates or party committees, Medtronic uses the same criteria and framework to evaluate such contributions. Any support for candidates is made in compliance with applicable law. AdvaMed is the only national medical device trade association of which Medtronic is a member. Medtronic pays its membership dues with corporate funds. The MTF support of AdvaMed is limited by law to $5,000 per year, which is drawn entirely from the pooled voluntary contributions of Medtronic employees to the MTF. Further, the MTF ensures that congressional candidates that receive AdvaMed PAC support satisfy MTF’s own rigorous contribution criteria. Medtronic is also a member of several state-based industry associations, but, except as disclosed, has declined to participate in their political action committees. A list of political contributions made by Medtronic and the MTF is updated annually. Medtronic is also a member of Eucomed, which represents the interests of the medical technology industry in Europe. Eucomed initiatives include promoting future legislation that supports innovative medical technologies.

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2008 Corporate Responsibility Report

Stakeholder Engagement Medtronic engages with a variety of stakeholders including physicians, patients and patient advocacy groups, government regulators, policymakers, shareholders, institutional investors, employees, suppliers, nongovernmental organizations and local communities. We focus on these groups because of the impact our business has on them and the impact they have on our business. Contact with these groups encompasses a variety of methods and frequencies as appropriate for each situation, and occurs at the corporate, business and department level. These activities include, but are not limited to, our employee survey, the convening of independent physician panels, analyst meetings, participation in industry conventions, and our annual shareholders meeting.

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Our Employees The quality and integrity of our people and the passion they share for saving and enhancing the lives of others is Medtronic’s greatest strength. We take pride in our diverse, creative, enthusiastic and innovative global workforce, which numbers more than 38,000 and spans 120 countries.

Medtronic Global Workforce U.S. & Puerto Rico International Global

FY05

FY06

FY07

FY08

22,521 9,234 31,755

24,464 10,511 34,975

25,649 11,516 37,165

25,702 12,527 38,229

Employee Engagement In fiscal year 2007, Medtronic conducted Global Voices, a worldwide employee survey. In this most recent study, 87 percent of employees worldwide participated as compared to 85 percent in fiscal year 2005. The survey was conducted in nine languages. More than 95 percent of respondents indicated that they have a clear understanding of the company’s mission to alleviate pain, restore health and extend life and feel their work supports this goal.

Category Results for 2007 Global Voices Survey (Percentage Favorable)

100 80

Valuing Employees

Training

Teamwork

Senior Management

Overall Satisfaction

Operating Effectiveness

Mission/Strategy

Measurement

Involvement

Immediate Mgr/Spvr

Employee Retention

20

Customer Focus

– Medtronic Mission

40

Corporate Citizenship

“ To recognize the personal worth of employees by providing an employment framework that allows personal satisfaction in work accomplished, security, advancement opportunity, and means to share in the company’s success.”

Employee Development

60

0 Employees gave the highest favorable rankings to Mission and Strategic Direction (89 percent) and Overall Satisfaction (80 percent). Medtronic’s Global Voices employee survey results are substantially more favorable than the Health Care Products industry norm, as reported by Kenexa WorkTrends™.

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Global Voices in Action Senior managers across Medtronic are responsible for reviewing the Global Voices data specific to their business and geography, sharing it with their employees, and engaging employees to implement changes in areas needing improvement. Several resources, including a Survey Follow-up Process Overview and Feedback and Action Planning Guide, are available to facilitate the process.

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At the close of fiscal year 2008, women comprised 47 percent of our global workforce, and held 28 percent of executive and management positions. Minorities comprised 26 percent of our U.S. workforce and held 15 percent of executive and management positions. Supplier Diversity: Medtronic engages in active outreach, ongoing training, and benchmarking of world-class supplier diversity programs to help us increase opportunities for certified minority-owned, women-owned, HUBZone and veteran/service disabled veteran-owned businesses.

G LOB AL VOICES LEADS TO COM M UNICATION I M PROVE M ENTS M e d t r o n ic I n c l u s io n S tat e m e n t

FOR PATIENT AND CONTACT SOLUTIONS G ROU P

Medtronic’s 2007 Global Voices Survey revealed opportunities to improve information flow for employees in Patient and Contact Solutions, who require access to continually updated information as they serve patients, their families, healthcare professionals and internal customers through call center services, 24/7 messaging services and patient registration and tracking services. After gathering feedback from fellow employees, a Global Voices in Action team created a communications plan that included:

> a weekly e-newsletter with information pertaining to their job functions;

> “Out and About,” a quarterly offsite meeting with the senior director and select employees to address concerns and garner feedback for the leadership team; and > a commitment to hold regular morning meetings during which employees are briefed on changes and have an opportunity to ask questions. As a result, employees receive pertinent information sooner, which allows them to be more efficient while providing improved customer service.

Medtronic seeks to create a culture of inclusion that leverages the benefits of a diverse workforce in fulfilling the needs of our employees, customers, patients, health care providers, suppliers, and other constituents, while increasing shareholder value. N o n - di s c r i m i n at io n / EEO A f f i r m at i v e Ac t io n P ol ic y

It is the policy of Medtronic to provide equal employment opportunity to all persons regardless of age, color, national origin, physical or mental disability, race, religion, creed, gender, sexual orientation, gender identity and/or expression, marital status, status with regard to public assistance and to disabled veterans and veterans of the Vietnam Era. In addition, Medtronic will provide reasonable accommodations for otherwise qualified disabled individuals. Medtronic’s goal is to achieve at least proportional representation of women and people of color across the company. Our programs are designed to comply with all applicable federal, state and local laws, directives and regulations and cover all human resource actions including employment, compensation, benefits, training, education, tuition aid, transfers, promotions and social/recreational programs.

Office of Workplace Inclusion

Diversity and Inclusion As global demand for Medtronic’s lifesaving therapies grows, so does our need for a diverse workforce that better reflects our customer base and can effectively communicate across cultures. A diverse workforce increases our competitive advantage and ability to attract and retain top talent.

Diversity at Medtronic In 2006, Medtronic established the CEO Council on Diversity and Inclusion to serve as an advisory body to the CEO and executive management and to drive diversity and inclusion at the company. The council drafted a Blueprint for Change focused on creating accountability systems with measurable targets for increasing representation of women and minorities.

Medtronic’s Office of Workplace Inclusion partners with employees, individual business units, Human Resources, Legal and Community Affairs to facilitate programs that support diversity inclusion within and across Medtronic’s various businesses, which include: > Employee Resource Groups that encourage employees to identify and share their common interests.

> Inclusion Councils to support diversity and inclusion initiatives within individual businesses.



> Diversity Training to support employee development.

> Medtronic’s CEO Inclusion Award which recognizes employees who foster cultural change and make inclusion a way of life at Medtronic.

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Compensation and Benefits Medtronic provides its employees with comprehensive compensation and benefits programs. We use a marketbased pay approach to establish competitive base pay levels, but recognize that an individual’s compensation should also reflect overall responsibilities, performance and ongoing development. Medtronic also offers incentive and recognition programs that may include cash, stock options, and an employee stock purchase program. Our benefits package for employees working in the U.S. includes vacation, holidays, medical and dental insurance coverage, life insurance, and short- and long-term disability coverage. Medtronic also provides retirement benefits for eligible employees, which include a retirement plan, a 401(k) plan with a company match, and financial education and planning tools. In addition to standard benefits, such as vacation and holidays, Medtronic provides a variety of benefits to employees working outside the U.S. Some examples include: IRELAND:

a defined benefit pension, medical benefits for employees and their families, wellness screenings, a subsidized cafeteria, and educational assistance.

JAPAN:

home mortgage subsidies, an annual employee appreciation bonus, life, accident, and disability benefits, and an on-site massage facility.

CHINA:

employee and family private medical insurance, housing assistance, life and accident insurance, and annual physical exams.

SWITZERLAND:

a cash balance retirement plan, life and accident insurance, medical benefits, a social club (that sponsors group social events and employee discounts on various products, services and travel), an onsite cafeteria, and employee assistance program.

Additional information on: Compensation and Benefits.

Executive Compensation The Compensation Committee of the Board of Directors, which consists of members of the Board who satisfy the independence requirements of the New York Stock Exchange, has the primary authority on all matters of executive compensation. Medtronic’s philosophy is to provide total compensation commensurate with our size and performance relative to other leading medical device and pharmaceutical companies, as well as select leading corporations from other industries. The principle components of executive compensation at Medtronic include annual cash compensation (including base salary and performance-based bonus), stock options, performance-based restricted stock and long-term performance-based bonus. Medtronic structures many of these components to increase or decrease along with our stock price, to align executive compensation with the interests of our shareholders.

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Health and Wellness Medtronic values the health of our employees and their families but recognizes it as a shared responsibility. We encourage employees to maximize their well being by providing a variety of resources and opportunities to engage in healthy activities.

Total Health Program In fiscal year 2007, Medtronic introduced Total Health, a program for all employees working in the U.S. and their spouses. Total Health provides participants with the following tools and resources to improve their personal health:

> on-site wellness screenings and health risk assessments,



> personal health coaches,



> customized wellness programs,



> on-site fitness centers,



> smoking cessation programs,



> massage therapy, and



> recreational sports teams.

By proactively addressing preventable risk factors, including poor diet, smoking, obesity, high blood pressure, high cholesterol and lack of exercise, Medtronic has the potential to improve employee productivity, reduce absenteeism and save millions of dollars in healthcare costs. More than 86 percent of U.S. employees registered on our Total Health Web site, with 83 percent completing the Health Risk Questionnaire. Nearly 35 percent participated in lifestyle management and disease management coaching programs.

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Total Health Participation

2008 Corporate Responsibility Report

Leadership Development Employees

Registered on Total Health Website Completed Health Risk Questionnaire (HRQ) Lifestyle and Disease Management Coaching *

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Spouses

Total

20,300 584 19,441 463

20,884 19,904 8,149

* Total enrollment in the Lifestyle Management 6-and 12-month coaching programs and the Disease Management coaching program.

T o ta l H e a lt h R e s o u rc e s H e l p Empl oy e e s Ac h i e v e R e s u lt s

Lora Cracraft’s commitment to exercise regularly and improve her diet has provided measurable results. An associate contract analyst in Neuromodulation at Medtronic World Headquarters, Lora lowered her cholesterol rating by 30 points since accessing the free wellness screening, on-site fitness facility, personal coach, and online tracking tools offered by the company’s Total Health program. Lora, who also has high blood pressure, exercises three times a week during her lunch hour. Her Total Health coach has provided nutrition and exercise information and counseled Lora on her methods and progress. Incentives, such as earning benefits rewards by tracking her exercise online, provide additional motivation to stay on track.

Work-Life Resources The Medtronic Employee Assistance Program helps employees resolve work-related, personal or family concerns by providing short term counseling, referral, and follow-up services for issues ranging from child and elder care to adoption assistance. The program also provides information on mental health topics such as stress management and communication and relationship skills, and specific concerns such as depression or addiction.

Talent Management Talent management is a critical organizational challenge for all companies. Globally, the worldwide talent force is aging and while talent supply will decrease, demand for managerial talent will remain high, making the international competition for talent more intense.

Medtronic’s Global Talent Management Program uses Leadership Development Committees to identify and develop top talent throughout the organization. The program also conducts performance evaluations against Medtronic’s 20 leadership competencies and implements plans for leadership succession. Medtronic’s Leadership Development Rotation Program provides a small group of highly talented individuals two 12- to 18-month assignments in functional areas such as Marketing, Finance, Human Resources, Supply Chain, or IT, while exposing that group to the company’s core businesses, technologies and leaders. Program alumni are expected to assume leadership roles within the organization and, with time, to become directors, vice presidents, controllers, country managers, and general managers.

Employee Development

Training and Education

Medtronic’s Talent Development Solutions Department provides the following resources to help all employees reach their professional potential:

Medtronic provides worldwide employee training in Engineering, Science and Technology, Finance and Economics, Management Development, Information Technology, Manufacturing/Supply Chain Management, Quality and Statistics, Ethics and Compliance, and Therapies and Products. In 2008, we offered nearly 14,000 distinct courses through our enterprise-wide learning management system, with employees completing 393,868 class sessions.

> customized individual development plans that outline short- and long-term learning and development goals, > comprehensive classes covering business and career assessment and development courses, > mentoring resources and peer advisor programs, > individual development planning and career consultations, either in person or virtual, > tuition reimbursement and scholarship programs, and > self-assessment tools and reference materials, online and in print. Employees also participate annually in a performance review and career development process.

“To strive without reserve for the greatest possible reliability and quality in our products; to be the unsurpassed standard of comparison and to be recognized as a company of dedication, honesty, integrity and service..” – Medtronic Mission

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Responsibility for Our Products Since co-founder Earl Bakken developed the first wearable heart pacemaker in 1958, Medtronic has steadily expanded its product portfolio to address a wide variety of chronic medical conditions. Today our breadth of products provides therapeutic, diagnostic, and monitoring systems for cardiac rhythm disorders; cardiovascular disease; diabetes; ear, nose and throat conditions; and neurological and spinal disorders.

Quality and Patient Safety Quality Management Medtronic has a broad range of programs to ensure product quality and safety from design stage to the end of the product life cycle, with management systems that address regulatory compliance and product performance. Regulatory Compliance. Medtronic products are

heavily regulated by governmental agencies, health ministries, and other regulatory authorities worldwide. Our Quality, Regulatory and Clinical Councils, in conjunction with our corporate departments, oversee company-wide compliance with worldwide product regulations, including design controls, clinical studies, marketing approvals, good manufacturing practice requirements and standards, and labeling and advertising. All Medtronic manufacturing facilities comply with FDA quality system regulations and are certified to ISO 13485, a standard that provides a basis for quality management systems which satisfy international medical device regulations. When quality issues arise, Medtronic maintains open communications with regulators and takes appropriate action, such as issuing revised labeling, issuing a physician letter, suspending distribution of a product, and/or recalling a product from the market. Product Performance. Since the early 1980s, Medtronic has regularly issued external Product Performance Reports on our Cardiac Rhythm Disease Management (CRDM) products. The reports provide

important patient management information to physicians, such as device survival estimates, advisory summaries, performance notes, and malfunction listings. Our other businesses communicate similar product performance information through a variety of channels. Medtronic also participates on a cross-industry AdvaMed subcommittee on standardization in product performance reporting. The initiative will align reporting practices among major medical device manufacturers to improve consistency in terminology, methodology and data presentation. Independent Physician Quality Panels. When

appropriate, Medtronic convenes panels of independent practicing physicians to help us communicate quality issues to the practitioner community. Quality Benchmarking. Medtronic also works with outside experts when evaluating our quality systems, and we benchmark ourselves against appropriate segments of the broader healthcare industry.

Clinical Trials Medtronic is committed to using evidence-based research to bring safe, effective device therapies to patients. In 2008, we established Clinical Trials Principles to guide Medtronic clinical trials, which are designed to develop safety and efficacy data that will directly impact clinical practice. We also launched a Clinical Trials Registry that links to information on Medtronicsponsored clinical studies that are currently registered on www.clinicaltrials.gov.

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Physician Education

Product Environmental Impacts

Medtronic has 22 education centers in 16 countries, including the United States, Switzerland, India, Japan, and The Netherlands, to educate and train physicians and other healthcare professionals on the safe and effective use of our products. These centers feature classrooms, hands-on training areas, and technical facilities and host product training sessions, medical and scientific seminars, and professionally accredited workshops.

Materials Selection

Medtronic sponsors additional educational seminars and medical conferences worldwide. On May 1, 2008, we launched a public registry of all charitable donations made to U.S. organizations, including our support for medical conferences and public education programs. Beginning with the first quarter of Medtronic’s 2009 fiscal year, which ended July 25, 2008, we will post donation information in the Donations Registry on a quarterly basis, within 30 days after the end of the quarter.

Advertising and Promotion Each Medtronic business has several levels of legal and regulatory review for promotional and marketing materials used both inside and outside of the U.S. The review process is designed to ensure that we adhere to the regulatory requirements of each geography.

Research and Development Medtronic operates 26 research centers around the globe and works closely with physicians and scientists to conduct research and clinical evaluations of products. We invest approximately 10 percent of revenue in research and development. About 20 percent of our research budget is designated for new ventures.

Product Design Our Design for Lean Sigma approach to product development ensures that data guides decisions throughout the design process. We combine Lean and Six Sigma methods, business processes which seek to eliminate waste and remove causes of defects and errors, to achieve faster development of products aligned to customer needs. At the inception of product design, our engineers evaluate possible designs using metrics that examine issues related to mass

production, such as materials use, assembly, distribution, and product performance. This translates to fewer quality issues, higher yields, less waste, safer manufacturing processes and lower costs. Through joint global manufacturing sites and Lean Sigma efforts, we are also using our size and scale to optimize production processes across the company with a goal to reduce our cost of goods sold by 25 percent over the next five years.

Animal Research Animal research by Medtronic conforms to, or exceeds, standards and principles set by federal authorities and is overseen by the U.S. Department of Agriculture and Medtronic’s staff of licensed veterinarians. In many cases, animal research is required by the U.S. Food and Drug Administration and other regulatory authorities worldwide for approval of products and therapies. We are committed to replacing, refining and reducing the use of animals in research and employ alternative methods whenever possible. For example, when appropriate we use computer models and simulators to test cardiovascular devices and computer simulation and non-animal models to train physicians. For more information: Animals in Research Policy.

For every product we design, we conduct an Environmental Health and Safety Evaluation Plan that assesses the use of hazardous materials, waste generation, air emissions, energy use, waste water, packaging and product disposition. The evaluation plan also identifies opportunities to decrease existing environmental, health and safety risks and impacts. An example is outlined in the section below.

Packaging Waste Reduction and Electronic Labeling Reducing the amount and toxicity of packaging waste is a priority for Medtronic. Our design teams continually work to decrease our environmental impact through packaging reduction and recycling, and recent projects have yielded significant cost savings. Three Medtronic CRDM product packaging and literature reduction projects reduced packaging and paper use by more than 1,360 metric tons, saving $2.3 million over a 3-year period from fiscal year 2006 to fiscal year 2008. Highlights include the following:

>

Designers decreased packaging for stylets, a medical product critical in pacemaker implants, by 80 percent in size and 54 percent in weight, resulting in a total savings of 8 metric tons. The new package contains no polyvinyl chloride (PVC) and can be reused as a DVD/CD case.

> PVC was eliminated from new packaging for Medtronic pacemakers and leads. The pacemaker packaging can also be reused, potentially saving 81 metric tons of material. > Medtronic converted several products to electronic product manuals, saving more than 1,360 metric tons of paper.

For these efforts, Medtronic received the 2007 Minnesota Governor’s Award for Excellence in Waste and Pollution Prevention.

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2008 Corporate Responsibility Report

RoHS Compliance Medtronic supports our suppliers’ efforts to eliminate or substitute substances covered by the European Union’s Restriction of Hazardous Substances (RoHS) Directive with alternative materials that do not compromise product quality or performance. Although medical devices are currently exempt from RoHS, we have developed guidelines for validating changes made to electronic components to ensure product integrity.

Product Recycling Medtronic complies with all local, state, national and international requirements for the management of electronic waste, including the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive which regulates the collection, treatment and recycling of electronic products. Recognizing that responsible treatment of products at the end of their useful life is a shared responsibility with our customers, we label products as appropriate with the WEEE symbol, indicating that they should be collected separately and returned to a designated recycling service.

2008 Corporate Responsibility Report

p. 31

Environment, Health and Safety At Medtronic we recognize the critical interdependence between human health and the environment, and our inherent responsibility for the welfare of our employees. Our well-being ultimately depends on the health and resources of the planet. For this reason, we continually strive to reduce our environmental footprint and mitigate our impact on climate change. Environment protection is a core corporate citizenship value and provides Medtronic with a competitive advantage by reducing costs and managing risks. Employee safety is also a core value and helps ensure a productive and healthy workforce.

Environmental Sustainability Policy In November 2007, Medtronic adopted an Environmental Sustainability Policy that articulates our global view of sensible environmental management. The Policy’s tenets are to:

> > > > >

conserve natural resources, promote energy efficiency, eliminate waste, reuse and recycle materials, and enhance new building construction and facility modification.

EHS Management A Senior Management EHS Committee and an EHS Council manage issues across Medtronic’s global organization. These groups provide input and approval regarding EHS strategies, compliance oversight, performance metrics and resolution of issues. The businesses are accountable for maintaining compliance with applicable EHS regulations and company policy and meeting EHS performance goals established for each business. The Corporate EHS Department conducts compliance audits in each of our most significant manufacturing facilities and measures progress against goals using our EHS Scorecard. Each year we develop an audit schedule for Medtronic locations.

Long-term Environmental Goals Our Environmental Sustainability Policy requires Medtronic to develop long-term environmental goals. Goals for fiscal year 2013 include 10 percent reductions (normalized to revenue) in volatile organic compound (VOC) air emissions, greenhouse gas emissions and water use and 5 percent reductions (normalized to revenue) in regulated and non-regulated waste. The baseline for these goals is fiscal year 2007.

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Financial Risks and Opportunities Due to Climate Change

Recycling Improvements

Climate change regulations appear to primarily impact the power industry and other industries with significant energy consumption. Although we are not a significant energy user as compared to power, mining and chemical industries, we realize that current and proposed regulations may increase the cost of energy, which impacts our building operations, product transportation and employee travel expenses.

Excluding construction and demolition debris, Medtronic recycled more than 6,000 metric tons of waste materials or 44 percent of our total waste generation (both non-hazardous and regulated) in 2008 compared to 38 percent in 2007. The improvement is largely due to recycling programs within plants and at individual workspaces, which promote the recycling of plastics, metals, beverage containers, fiber (printing paper, newspaper, cardboard, etc.), ink cartridges, batteries, and manufacturing materials.

Our greatest financial opportunity lies in reducing our energy needs by installing energy efficient equipment for building and production purposes and partnering with transportation carriers that are using alternatives to petroleum power to reduce or stabilize our cost. We continue to track proposed and current climate change regulations and pursue energy conservation projects that reduce greenhouse gas emissions.

2008 EHS Review Quantity (Tonne)

Solid Waste Rate (Tonne/$B)

16,000

1,200

14,000

1,000

12,000

800

10,000

Volatile organic compounds (VOCs) are emitted as gasses from certain solids and liquids. In 2008 Medtronic generated 142 metric tons of VOC air emissions. This represents a 23 percent decrease from 2007, normalized to revenue.

600

8,000 6,000

400

4,000 2,000

450 350

5,000 4,000

250

3,000

150

2,000 50

1,000 0

0 FY04

FY05

Quantity (Tonne)

FY06

FY07

FY08

Air VOC Rate (Tonne/$B)

180

16

160

14

140

12

120

10

100

8

80

6

60 40

4

20

2 0

0 FY04

200

FY05

FY06

FY07

FY08

0

0 FY04

FY05

Quantity (Tonne)

FY06

FY07

FY08

M e d t r o n ic M e r o c e l De c r e a s e s A i r Em i s s io n s b y 4 4%

Regulated Waste Rate (Tonne/$B)

1,600

100

1,400

Medtronic also generated approximately 1,200 metric tons of regulated waste. This includes waste that is generated primarily by manufacturing facilities, such as scrap metal and solvents. This represents a 6 percent decrease normalized to revenue compared to 2007. This was largely due to improvements in manufacturing processes.

Recycling (Tonne/$B Revenue)

6,000

Air Emissions

Waste Management Medtronic generated approximately 12,500 metric tons of non-regulated solid waste in 2008, which accounted for more than 90 percent of the total waste generation. This represents a 6 percent increase normalized to revenue compared to 2007. The increase was largely due to building expansions and facility restructuring to support business growth as well as major production increases to support new product launches. With company-wide education efforts and goals focused on reducing overall waste generation, we expect this rate of waste generation to decrease in the coming years.

Quantity (Tonne)

7,000

80

1,200 1,000

Medtronic’s Merocel business in Mystic, Connecticut produces foam-like absorbants critical to ear, nose and throat surgeries. Through its efforts to optimize production and increase its manufacturing yield, Merocel was successful in reducing its overall emissions of volatile organic chemicals (VOC) by 44 percent, while increasing overall sales and saving nearly $75,000.

60

800 600

40

400

Energy Use and Greenhouse Gas Emissions

20

200 0 FY04

FY05

FY06

FY07

FY08

0

Medtronic used approximately 494,000 megawatt-hours of energy (electricity, natural gas and fuel oil) in 2008. This resulted in corresponding greenhouse gas (GHG) emissions, measured as carbon dioxide (CO2) produced from energy consumption, of approximately 250,000 metric tons. Normalized to revenue, our rates of energy consumption and CO2 emissions in 2008 were essentially level with 2007.

2008 Corporate Responsibility Report

Quantity (MWh)

p. 34

Quantity (Tonne)

Energy Ratio (MWh/$M Revenue)

45

600,000

40

500,000

35 30

400,000

25

300,000

20 15

200,000

10

100,000

5 0

0 FY04

FY05

FY06

FY07

280,000

CO2 (Tonne/$M Revenue)

Assessing Our Progress Against 2013 Goals 24

240,000

20

200,000

16

160,000

12

120,000

8

80,000

4 0

0

FY08

FY04

FY05

FY06

FY07

FY08

FY13 GOALS



FY07

FY08

% Change

Rate

Reduction

Air VOC (Tonne/$B) NonRegulated Waste (Tonne/$B) Regulated Waste (Tonne/$B) Energy Use (MWh/$M) CO2 Emissions (Tonne/$M) Water Use (cubic M/$M)

13.6 873 95 36.4 18.6 109

10.5 930 89 36.5 18.5 104

-23% 7% -6% 0% -1% -5%

12.2 829 90 32.8 16.7 98.1

-10% -5% -5% -10% -10% -10%

Note: All % reduction goals are relative to FY07 baseline.



Our fiscal year 2008 performance resulted in significant improvements for the regulated waste and VOC emissions rates, however these are rate-based goals. As the business grows our challenge will be to maintain and hopefully exceed our 2013 goals. We are continually working to improve our performance and will reassess our 2013 goals in the future to ensure that we minimize our environmental impact.

Medtronic uses energy conservation technologies to reduce energy use and associated GHG emissions, including energy efficient lighting and ventilation systems, and the use of automated building controls. Energy savings from improvements in lighting, compressed air, and HVAC (heating, ventilation and air conditioning) systems at our facilities in Memphis, Tennessee; Danvers, Massachusetts and Rice Creek, Minnesota were offset by increased energy use at our Mounds View, Woodbury, and Coon Rapids facilities in Minnesota and our MiniMed facility in Northridge, California. New building construction, facility modifications and increased production accounted for the increase in energy use. Our businesses are establishing project plans to reduce energy and GHG emissions at their locations, with the goal of achieving a company-wide 10-percent rate reduction in energy use and GHG emissions by 2013.

Health and Safety Medtronic is committed to a safe, healthy work environment that is in compliance with all applicable laws and regulations.

Water Conservation Medtronic used approximately 1.4 million cubic meters of water in 2008, 5 percent less than 2007 normalized to revenue.

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Employee Injury Rate Use Qty (cu M)

Water Use (cu M/$M Revenue)

120

1,600,000 1,400,000

100

1,200,000

Medtronic tracks the following employee work-related injury and illness metrics:

Incident Rate

2.5

>

Incident rate : The number of work-

2.0

related injuries or illnesses serious enough to require treatment beyond first-aid, per 100 employees working a full year.

1.5

Lost work day case rate (LWCR) :

External Partnerships

>

Medtronic also maintains a commitment to environmental responsibility outside of our company walls. We are a member of the U.S. Environmental Protection Agency’s Energy Star Program and the Minnesota Environmental Initiative’s Clean Air Program, which strives to reduce air pollution. We also participate in key environmental initiatives, such as the Carbon Disclosure Project.

In 2008, the incident rate decreased in 8 of our 9 businesses, and our overall incident rate decreased from 1.55 in 2007 to 1.16 in 2008. In 2008, the LWCR decreased to 0.50 from 0.78 in 2007.

Significant savings were achieved by projects to establish more natural landscaping and incorporate strict guidelines on water irrigation at several Medtronic locations. This decrease was led by nearly 23,000 cubic meters in water savings at Medtronic’s Tempe, Arizona facility, and significant savings at facilities in Fort Worth, Texas; Santa Rosa, California; Juncos, Puerto Rico; and Tolochenaz, Switzerland.

80

1,000,000

60

800,000 600,000

40

400,000

20

200,000

0

0 FY04

FY05

FY06

FY07

FY08

The number of work-related injuries or illnesses serious enough to cause an employee to miss one or more work days or to have one or more work days of restricted duty, per 100 employees working a full year.

Lost / Restricted Workday Case Rate

1.0 0.5 0.0

FY04

FY05

FY06

FY07

FY08

This reduction in injury rate and injury severity is largely due to the maturation of the EHS Governance structure, increased qualifications of our EHS staff, and ongoing initiatives, such as our ergonomics programs. Performance in our CRDM, CardioVascular, Surgical Technologies and Neuromodulation businesses was especially noteworthy.

2008 Corporate Responsibility Report

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Global Community Support At Medtronic, we align our community support with our Mission by focusing our resources in three areas: Health, Education and Community. This allows us to make unique and positive contributions that achieve our goals to:

> improve the health of people with chronic diseases and conditions,



> prepare future generations of scientific innovators, and



> support Medtronic employees and the communities where they live and work.

Through a combination of Medtronic Foundation giving and donations of cash and medical devices by Medtronic, our contributions exceeded $55 million in 2008. Medtronic is a member of the Minnesota Keystone Program, which recognizes and honors companies that donate at least 2 percent of their U.S. pre-tax earnings to the community.

Medtronic Giving Fiscal -Year 2008 Giving

Total Giving

(by type)

(in millions)

Foundation Giving 48% Cash Contributions 43% Product Donations 9%

60 50 40

9%

30

48%

20

43% 47.3

53.1

55.4

– Medtronic Foundation Mission

48.5

“Improving the health of people and communities through focus, innovation and leadership.”

40.2

10

FY04

FY05

FY06

FY07

FY08

0

2008 Corporate Responsibility Report

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Foundation Grants

Wor l d H e a r t Day E v e n t s A r o u n d t h e G l ob e R a i s e Awa r e n e s s

In fiscal year 2008, the Medtronic Foundation awarded grants totaling $26.2 million to more than 400 organizations in 31 countries. Meeting a commitment set forth by its Board, the foundation’s annual plans are based on 10 percent growth. In line with our growing global business presence, the Medtronic Foundation is also increasing the percentage of grant dollars awarded to organizations that serve communities outside of the U.S. and is on track to meet its commitment to increase this amount from 12 percent in 2007 to 20 percent by fiscal year 2009.

Foundation Grants by Focus Area

Medtronic Grant Programs

Health Community Education

Patient Link Partnering with national and international patient organizations in the U.S., Canada and Europe that educate, support and advocate on behalf of patients and their families to improve the lives of people with chronic diseases and conditions.

45% 29% 26%

HeartRescue Saving lives from sudden cardiac arrest (SCA) through support of SCA awareness, prevention and treatment efforts.

26% 45%

29%

2008 Corporate Responsibility Report

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MedLink Breaking down barriers to quality health care by educating health professionals in regions with critical health needs. Medtronic Scholars Supporting scholarships and fellowship programs in science and engineering at select universities in the U.S. and Oxford University in the United Kingdom. CommunityLink Enhancing the vitality of the communities where our employees live and work by supporting health, education and community (human services and art/civic/culture) programs. A summary of specific grant awards for fiscal year 2008 is available online.

The Medtronic Foundation coordinated a series of World Heart Day events in several countries in September 2007. The events supported the World Heart Federation’s efforts to raise public awareness of healthy lifestyles and the latest in heart care. More than 5,000 people visited tent exhibits hosted by Medtronic Hungary at a September 30, 2007 event in Budapest. Participants viewed displays of current technologies to treat heart conditions and related illnesses and were “quizzed” on their knowledge of sudden cardiac arrest (SCA), vascular disease and diabetes. Visitors were also offered blood pressure and cholesterol checks, in an effort to raise public awareness of personal heart care. In collaboration with Stichting Kloppend Hart and the Dutch Heart Association, Medtronic Netherlands promoted resuscitation techniques and the public availability of automated external defibrillators (AEDs) in the city of Maastricht. Representatives gave CPR demonstrations on the Vrijthof, a public square in the center of the city, and distributed information leaflets. Volunteers from Medtronic’s Bakken Research Center also participated in a series of events around the theme “Call 112, Resuscitate, Defibrillate.” The Swiss Heart Foundation’s HelpMobil, which provides awareness training about basic life support and defibrillation, provided public demonstrations at the Autumn Market in Morges, Switzerland. Supported by a Medtronic HeartRescue grant, HelpMobil is part of a larger national heart health campaign.

Product Donations Medtronic donated $5.1 million (estimated fair market value) in medical devices in 2008 to Project Pacer International, Solidarity Bridge, Heartbeat International and other organizations, primarily to support the medical needs of people in developing countries who lack access to these therapies. Products were shipped to more than 15 countries in 2008. Product donations are administered by Medtronic’s individual businesses.

Medtronic Product Donations

Estimated Fair Market Value (in millions)

$6 $5 $4 $3 $2 $1 0

4.9

6

5.1

FY06

FY07

FY08

2008 Corporate Responsibility Report

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2008 Corporate Responsibility Report

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Medtronic Product Donations Estimated Fair Market Value (in millions)

Pat i e n t Ac c e s s : CRDM Empl oy e e s Ta k e Ac t io n

Employee Volunteerism

t o R e du c e E t h n ic Di s pa r i t y

Research demonstrates that among patients with the same insurance coverage, income and education level, minorities receive poorer-quality care than the rest of the population. To address this, Cardiac Rhythm Disease Management (CRDM) District Service Manager Eric Winston and Therapy Sales Representative Jeanine Ferguson created a business plan to launch Medtronic’s market development Disparity Outreach Impact Team (DO IT). The DO IT team collaborates with cardiologists, internal medicine physicians, medical associations, African American schools, community organizations, associations and churches to expand access to device treatment for cardiac conditions and reduce variability in care based on race, ethnicity and gender.

At Medtronic we put our Mission in Motion by bringing together the talents and gifts of our 38,000 employees to improve communities around the world. Medtronic employees actively participate in Mission in Motion volunteer and giving projects, many of which are led locally by Mission in Motion Ambassadors and Team Captains who coordinate outreach activities at their facilities. In addition, employees are encouraged to take advantage of the following Medtronic volunteer programs: > Volunteer Grants – The volunteer grants program supports our employees’ personal volunteer efforts by donating $500 to organizations where they contribute more than 25 hours of their personal time during a 12-month period. > VolunteerMatch – We partner with VolunteerMatch, an online volunteer resource database, to help our employees find volunteer opportunities that match their passions.

Matching Gifts With a dollar-for-dollar match, employees and Medtronic, combined efforts to donate $2.6 million to the United Way in 2008. The money benefited United Way organizations in 10 communities in the U.S., Puerto Rico and Canada. In addition, in response to major disasters in China and Myanmar, Medtronic employees contributed almost $99,000 to China and Myanmar disaster relief organizations through the Foundation’s disaster relief program. With the Foundation’s match, and a one-time grant of $100,000 to assist in the rebuilding of community health organizations and clinics in China, employee and Medtronic Foundation contributions totaled almost $300,000. When employees make financial contributions to accredited educational institutions, we also match their donations up to $7,000 per fiscal year. In 2008, the Medtronic Foundation matched employee donations for a total contribution of $1.36 million.

> Disaster Relief – Medtronic’s disaster relief paid-leave volunteer program, provides U.S. employees up to five days of paid time off to volunteer their time to major disaster relief efforts conducted by nonprofit organizations. Medtronic employees have a strong track record of volunteerism. In 2008 10,301 employee volunteer hours were recorded.

Empl oy e e s M a k e M a r t i n L u t h e r K i n g , J r . Hol i day a “ Day O n ” f or S e r v ic e

On January 21, 2008, 200 Medtronic employees, family members and friends from Minneapolis and St. Paul, Minnesota made the Martin Luther King, Jr. holiday a “Day On” for service. Medtronic’s Black Employee Resource Group (MECCA) along with our Foundation and Community Affairs Department encouraged employees to put their day off to good use by partnering with Second Harvest Heartland. Volunteers worked morning or afternoon shifts packing boxes of food that benefited 1,000 Second Harvest member agencies and programs, including food shelves, homeless shelters, soup kitchens and income-eligible senior centers and after-school programs.

2008 Corporate Responsibility Report

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GRI Index This table lists the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines items included in this report. Medtronic self-declares this report to GRI G3 Application Level C. Category Item ........................................................................................................................Location in Report (page number)



Vision and strategy 1.1

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2008 Corporate Responsibility Report

4.5 4.8 4.13 4.14 4.15 4.16

Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance)..................................................................................................................................................... 20 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.............................................................................................................................................................................................. 4, 13, 19, 31 Memberships in associations (such as industry associations) and/or national/international advocacy organizations...........................................................................................................................................................................................................14 List of stakeholder groups engaged by the organization............................................................................................................................................15 Basis for identification and selection of stakeholders with whom to engage.....................................................................................................15 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group................................................................................................................................................................................................................15

Statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and its strategy......................................................................................................................................................5

Performance Indicators Organizational profile 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10

Name of the organization. . ......................................................................................................................................................................................................3 Primary brands, products, and or services. ........................................................................................................................................................................7 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.........7 Location of organization’s headquarters. ..........................................................................................................................................................................7 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. .............................................................................................7 Nature of ownership and legal form. ...................................................................................................................................................................................7 Markets served (including geographic breakdown, sectors served, and types of customers beneficiaries). . .........................................9 Scale of the reporting organization. . ...................................................................................................................................................................................7 Significant changes during the reporting period regarding size, structure, or ownership. ............................................................................8 Awards received in the reporting period. . .........................................................................................................................................................................9

Report parameters 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.10 3.11 3.12

Reporting period (e.g., fiscalcalendar year) for information provided. ...................................................................................................................3 Date of most recent previous report (if any). ..................................................................................................................... Not relevant (first report) Reporting cycle (annual, biennial, etc.)..................................................................................................................................................................Biennial Contact point for questions regarding the report or its contents. ............................................................................................................................3 Process for defining report content. . ...................................................................................................................................................................................3 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers)...............................................3 State any specific limitations on the scope or boundary of the report.....................................................................................................................3 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations...............................................................3 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers acquisitions, change of base years periods, nature of business, measurement methods)...................................................................................................................... Not relevant (first report) Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.............................................................................................................. Not relevant (first report) Table identifying the location of the Standard Disclosures in the report............................................................................................................. 42

Governance 4.1 4.2 4.3 4.4

Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.............................................................................11 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reasons for this arrangement)....................................................................11 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and or non-executive members...............................................................................11 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body................................................................................................................................................................................................12

Economic EC1 EC2 EC3

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.........8, 37, 39 Financial implications and other risks and opportunities for the organization’s activities due to climate change.............................. 32 Coverage of the organization’s defined benefit plan obligations. . ....................................See Medtronic Annual Report 2008, page 79

Environmental EN3 EN4 EN8 EN16 EN18 EN22 EN26 EN20

Direct energy consumption by primary energy source.............................................................................................................................................. 34 Indirect energy consumption by primary source.......................................................................................................................................................... 34 Total water withdrawal by source........................................................................................................................................................................................ 34 Total direct and indirect greenhouse gas emissions by weight............................................................................................................................... 34 Initiatives to reduce greenhouse gas emissions and reductions achieved. (Additional)................................................................................ 34 Total weight of waste by type and disposal method.................................................................................................................................................... 32 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation........................................... 27 NOx, SOx, and other significant air emissions by type and weight......................................................................................................................... 33

Labor practices and decent work LA1 LA3 LA7 LA8 LA12 LA13

Total workforce by employment type, employment contract, and region..........................................................................................................17 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations. (Additional)....................................................................................................................................................................................... 20 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region. . ................... 35 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. ......................................................................................................................21 Percentage of employees receiving regular performance and career development reviews. (Additional)........................................... 23 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity................................................................................................................................19

Society SO6

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. (Additional)...................................................................................................................................................................................................................................14

Product responsibility PR1 PR3 PR6

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures..................................................................... 25 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements...................................................................................................................................................................... 25 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.................................................................................................................................................... 26

www.medtronic.com Medtronic International Training Sàri Route du Molliau 31 Case Postale CH-1131 Tolochenaz Switzerland Telephone: 41.21.802.7000 Telephone: 41.802.7900

Medtronic International, Ltd. Comodio Shiodome 2-14-1 Higashi Shimbashi, Minato-ku, Tokyo Japan Telephone: 81.3.6430.7300 Fax: X81.3.6430.7010

© Medtronic, Inc. 2008. All Rights Reserved.

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