þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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04-2695240
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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ONE BOSTON SCIENTIFIC PLACE, NATICK, MASSACHUSETTS 01760-1537
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(Address of principal executive offices) (zip code)
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COMMON STOCK, $.01 PAR VALUE PER SHARE
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NEW YORK STOCK EXCHANGE
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(Title of each class)
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(Name of exchange on which registered)
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Large accelerated filer
þ
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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•
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Strengthen Execution to Grow Share
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•
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Expand into High Growth Adjacencies
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•
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Drive Global Expansion
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•
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Fund the Journey to Fuel Growth
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•
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Develop Key Capabilities
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•
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Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including the world's first and only commercially available subcutaneous implantable cardioverter defibrillator - the S-ICD® System, and implantable cardiac resynchronization therapy defibrillator (CRT-D) systems used to treat heart failure; and
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Implantable pacemaker systems used to manage slow or irregular heart rhythms (bradycardia), including implantable cardiac resynchronization therapy pacemaker (CRT-P) systems used to treat heart failure.
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regulatory compliance, clinical science, and internal research and development programs, as well as other programs obtained through our strategic acquisitions and alliances; and
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engineering efforts which incorporate customer feedback into continuous improvement efforts for currently marketed and next-generation products.
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Our ability to increase CRM net sales, including for both new and replacement units, expand the market and capture market share;
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The volatility of the coronary stent market and our ability to increase our drug-eluting stent systems net sales, including with respect to our SYNERGY™, PROMUS® Element™ and Promus PREMIER™ stent systems, and capture market share;
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The on-going impact on our business, including CRM and coronary stent businesses, of physician alignment to hospitals, governmental investigations and audits of hospitals, and other market and economic conditions on the overall number of procedures performed, including with respect to the drug-eluting coronary stent market the average number of stents used per procedure, and average selling prices;
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Competitive offerings and related declines in average selling prices for our products, particularly our drug-eluting coronary stent systems and our CRM products;
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The performance of, and physician and patient confidence in, our products and technologies, including our coronary drug-eluting stent systems and CRM products, or those of our competitors;
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The impact and outcome of ongoing and future clinical trials, including coronary stent and CRM clinical trials, and market studies undertaken by us, our competitors or other third parties;
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Our ability to timely and successfully launch new or next-generation products and technology features worldwide and across our businesses in line with our commercialization strategies, including our S-ICD® system;
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•
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The effect of consolidation and competition in the markets in which we do business, or plan to do business;
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•
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Disruption in the manufacture or supply of certain components, materials or products, or the failure to timely secure alternative manufacturing or additional or replacement components, materials or products;
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Our ability to retain and attract key personnel, including in our cardiology and CRM sales force and other key cardiology and CRM personnel;
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The impact of enhanced requirements to obtain regulatory approval in the U.S. and around the world, including the associated timing and cost of product approval; and
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The impact of increased pressure on the availability and rate of third-party reimbursement for our products and procedures in the U.S and around the world, including with respect to the timing and costs of creating and expanding markets for new products and technologies.
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The impact of healthcare policy changes and legislative or regulatory efforts in the U.S. and around the world to modify product approval or reimbursement processes, including a trend toward demonstrating clinical outcomes, comparative effectiveness and cost efficiency, as well as the impact of other healthcare reform legislation;
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Risks associated with our regulatory compliance and quality systems and activities in the U.S. and around the world, including meeting regulatory standards applicable to manufacturing and quality processes;
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Our ability to minimize or avoid future field actions or FDA warning letters relating to our products and processes and the on-going inherent risk of potential physician advisories related to medical devices;
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The impact of increased scrutiny of and heightened global regulatory enforcement facing the medical device industry arising from political and regulatory changes as well as economic pressures;
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The effect of our litigation and risk management practices, including self-insurance, and compliance activities on our loss contingencies, legal provision and cash flows;
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The impact of, diversion of management attention as a result of, and costs to cooperate with, litigate and/or resolve, governmental investigations and our class action, product liability, contract and other legal proceedings; and
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Risks associated with a failure to protect our intellectual property rights and the outcome of patent litigation.
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The timing, size and nature of our strategic growth initiatives and market opportunities, including with respect to our internal research and development platforms and externally available research and development platforms and technologies, and the ultimate cost and success of those initiatives and opportunities;
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Our ability to complete planned clinical trials successfully, obtain regulatory approvals and launch new and next generation products in a timely manner consistent with cost estimates, including the successful completion of in-process projects from purchased research and development;
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Our ability to identify and prioritize our internal research and development project portfolio and our external investment portfolio on profitable revenue growth opportunities as well as to keep them in line with the estimated timing and costs of such projects and expected revenue levels for the resulting products and technologies;
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Our ability to successfully develop, manufacture and market new products and technologies in a timely manner and the ability of our competitors and other third parties to develop products or technologies that render our products or technologies noncompetitive or obsolete;
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The impact of our failure to succeed at or our decision to discontinue, write-down or reduce the funding of any of our research and development projects, including in-process projects from purchased research and development, in our growth adjacencies or otherwise;
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Dependence on acquisitions, alliances or investments to introduce new products or technologies and to enter new or adjacent growth markets, and our ability to fund them or to fund contingent payments with respect to those acquisitions, alliances and investments; and
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The failure to successfully integrate and realize the expected benefits from the strategic acquisitions, alliances and investments we have consummated or may consummate in the future.
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Our dependency on international net sales to achieve growth, including in emerging markets;
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The impact of changes in our international structure and leadership;
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Risks associated with international operations and investments, including political and economic conditions, protection of our intellectual property, compliance with established and developing local legal and regulatory requirements as well as changes in reimbursement practices and policies;
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Our ability to maintain or expand our worldwide market positions in the various markets in which we compete or seek to compete, including through investments in product diversification and emerging markets such as Brazil, Russia, India and China;
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Our ability to execute and realize anticipated benefits from our investments in emerging markets; and
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The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses and resulting margins.
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Our ability to generate sufficient cash flow to fund operations, capital expenditures, global expansion initiatives, litigation settlements, share repurchases and strategic investments and acquisitions as well as maintaining our investment grade ratings and managing our debt levels and covenant compliance;
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Our ability to access the public and private capital markets when desired and to issue debt or equity securities on terms reasonably acceptable to us;
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The unfavorable resolution of open tax matters, exposure to additional tax liabilities and the impact of changes in U.S. and international tax laws;
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The impact of examinations and assessments by domestic and international taxing authorities on our tax provision, financial condition or results of operations;
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The impact of goodwill and other intangible asset impairment charges, including on our results of operations; and
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The impact of the European sovereign debt crisis on our ability to collect outstanding and future receivables and/or sell receivables under our factoring programs.
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Risks associated with significant changes made or expected to be made to our organizational and operational structure, pursuant to our 2011 Restructuring plan as expanded and as a result of our 2010 Restructuring plan and Plant Network Optimization program; and
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Business disruption and employee distraction as we execute our global compliance program, restructuring plans and divestitures of assets or businesses and implementing strategic and restructuring initiatives.
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•
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our ability to identify suitable opportunities for acquisition, investment or alliance, if at all;
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our ability to finance any future acquisition, investment or alliance on terms acceptable to us, if at all;
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whether we are able to complete an acquisition, investment or alliance on terms that are satisfactory to us, if at all; and
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intellectual property and litigation related to newly acquired technologies.
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•
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take a significant period of time;
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require the expenditure of substantial resources;
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involve rigorous pre-clinical and clinical testing, as well as increased post-market surveillance;
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require changes to products; and
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result in limitations on the indicated uses of products.
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Owned
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Leased
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Total
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U.S.
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4,739,000
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1,329,000
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6,068,000
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International
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1,512,000
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1,227,000
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2,739,000
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6,251,000
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2,556,000
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8,807,000
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2012
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High
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Low
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||||
First Quarter
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$
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6.36
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$
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5.30
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Second Quarter
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6.31
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5.51
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Third Quarter
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5.82
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4.97
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Fourth Quarter
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5.82
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5.07
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2011
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First Quarter
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$
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7.78
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$
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6.85
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Second Quarter
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7.79
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6.57
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Third Quarter
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7.28
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5.62
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Fourth Quarter
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5.90
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5.09
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Year Ended December 31,
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2012
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2011
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2010
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2009
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2008
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||||||||||
Net sales
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$
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7,249
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$
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7,622
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$
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7,806
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$
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8,188
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$
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8,050
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Gross profit
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4,900
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4,963
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5,207
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5,612
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5,581
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|||||
Total operating expenses
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8,768
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4,059
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5,863
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6,506
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7,086
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|||||
Operating income (loss)
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(3,868
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)
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904
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(656
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)
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(894
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)
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(1,505
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)
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|||||
Income (loss) before income taxes
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(4,107
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)
|
|
642
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(1,063
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)
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(1,308
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)
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(2,031
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)
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|||||
Net income (loss)
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(4,068
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)
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441
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(1,065
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)
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(1,025
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)
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(2,036
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)
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|||||
Net income (loss) per common share:
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||||||||||
Basic
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$
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(2.89
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)
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$
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0.29
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$
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(0.70
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)
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$
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(0.68
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)
|
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$
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(1.36
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)
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Assuming dilution
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$
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(2.89
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)
|
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$
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0.29
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|
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$
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(0.70
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)
|
|
$
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(0.68
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)
|
|
$
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(1.36
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)
|
As of December 31,
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2012
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2011
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2010
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2009
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2008
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||||||||||
Cash, cash equivalents and marketable securities
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$
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207
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$
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267
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$
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213
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|
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$
|
864
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|
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$
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1,641
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Working capital (1)
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1,250
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|
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1,298
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|
|
1,006
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|
|
1,577
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|
|
2,219
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|||||
Total assets
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17,154
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|
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21,290
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|
|
22,128
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|
|
25,177
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|
|
27,139
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|||||
Borrowings (long-term and short-term)
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4,256
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|
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4,261
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|
|
5,438
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|
|
5,918
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|
|
6,745
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|||||
Stockholders’ equity
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6,870
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|
|
11,353
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|
|
11,296
|
|
|
12,301
|
|
|
13,174
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|||||
Book value per common share
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$
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5.07
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|
|
$
|
7.84
|
|
|
$
|
7.43
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|
|
$
|
8.14
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|
|
$
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8.77
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(1)
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|
In 2010, we reclassified certain assets to the ‘assets held for sale’ caption in our consolidated balance sheets. These assets are labeled as ‘current’ in our 2010 consolidated balance sheet to give effect to the short term nature of those assets that were divested in the first quarter of 2011 in connection with the sale of our Neurovascular business and other assets that were expected to be sold in 2011. We reclassified 2009 balances for comparative purposes in the working capital metric above. We have not restated working capital for these items in years prior to 2009.
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Year Ended December 31, 2012
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||||||||||||||
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Tax
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|
|
|
Impact per
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||||||||
in millions, except per share data
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|
Pre-Tax
|
|
Impact
|
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After-Tax
|
|
share
|
||||||||
GAAP results
|
|
$
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(4,107
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)
|
|
$
|
39
|
|
|
$
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(4,068
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)
|
|
$
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(2.89
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)
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill and other intangible asset impairment charges
|
|
4,492
|
|
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(46
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)
|
|
4,446
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|
|
3.15
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||||
Acquisition- and divestiture-related net credits
|
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(50
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)
|
|
14
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|
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(36
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)
|
|
(0.02
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)
|
||||
Restructuring-related charges
|
|
160
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|
|
(38
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)
|
|
122
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|
|
0.09
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|
||||
Litigation-related charges
|
|
192
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|
|
(74
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)
|
|
118
|
|
|
0.08
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Discrete tax items
|
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|
|
2
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|
|
2
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|
|
—
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|||||
Amortization expense
|
|
395
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|
|
(46
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)
|
|
349
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|
|
0.25
|
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||||
Adjusted results
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|
$
|
1,082
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|
|
$
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(149
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)
|
|
$
|
933
|
|
|
$
|
0.66
|
|
|
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Year Ended December 31, 2011
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||||||||||||||
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Tax
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Impact per
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||||||||
in millions, except per share data
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Pre-Tax
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Impact
|
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After-Tax
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share
|
||||||||
GAAP results
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|
$
|
642
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|
|
$
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(201
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)
|
|
$
|
441
|
|
|
$
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0.29
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|
Non-GAAP adjustments:
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|
|
|
|
|
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|
||||||||
Goodwill and other intangible asset impairment charges
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|
718
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(5
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)
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|
713
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|
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0.47
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||||
Acquisition- and divestiture-related net credits
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(798
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)
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|
229
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|
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(569
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)
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(0.37
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)
|
||||
Restructuring-related charges
|
|
129
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|
|
(39
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)
|
|
90
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|
|
0.06
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||||
Litigation-related charges
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48
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|
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(18
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)
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|
30
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|
|
0.02
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||||
Discrete tax items
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(27
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)
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(27
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)
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(0.02
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)
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Amortization expense
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421
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|
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(81
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)
|
|
340
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|
|
0.22
|
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||||
Adjusted results
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$
|
1,160
|
|
|
$
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(142
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)
|
|
$
|
1,018
|
|
|
$
|
0.67
|
|
|
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Year Ended
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Year Ended
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||||||||||||||||||||
(in millions)
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December 31, 2012
|
|
December 31, 2011
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||||||||||||||||||||
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U.S.
|
|
International
|
|
Total
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U.S.
|
|
International
|
|
Total
|
||||||||||||
ICD systems
|
|
$
|
858
|
|
|
$
|
521
|
|
|
$
|
1,379
|
|
|
$
|
949
|
|
|
$
|
569
|
|
|
$
|
1,518
|
|
Pacemaker systems
|
|
256
|
|
|
273
|
|
|
529
|
|
|
279
|
|
|
290
|
|
|
569
|
|
||||||
CRM products
|
|
$
|
1,114
|
|
|
$
|
794
|
|
|
$
|
1,908
|
|
|
$
|
1,228
|
|
|
$
|
859
|
|
|
$
|
2,087
|
|
•
|
the on-going impact of physician alignment to hospitals, government investigations and audits of hospitals, and other market and economic conditions on the overall number of procedures performed and average selling prices;
|
•
|
our ability to retain and attract key members of our CRM sales force and other key CRM personnel;
|
•
|
the ability of CRM manufacturers to maintain the trust and confidence of the implanting physician community, the referring physician community and prospective patients in CRM technologies;
|
•
|
future product field actions or new physician advisories issued by us or our competitors;
|
•
|
our ability to timely and successfully acquire or develop and launch new or next-generation competitive products and technologies worldwide, in line with our commercialization strategies, including the S-ICD® system;
|
•
|
new product launches by our competitors;
|
•
|
variations in clinical results, reliability or product performance of our and our competitors’ products; and
|
•
|
delayed or limited regulatory approvals and unfavorable reimbursement policies.
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||||
(in millions)
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
||||||||||||
Drug-eluting
|
|
$
|
557
|
|
|
$
|
720
|
|
|
$
|
1,277
|
|
|
$
|
750
|
|
|
$
|
759
|
|
|
$
|
1,509
|
|
Bare-metal
|
|
24
|
|
|
62
|
|
|
86
|
|
|
32
|
|
|
79
|
|
|
111
|
|
||||||
|
|
$
|
581
|
|
|
$
|
782
|
|
|
$
|
1,363
|
|
|
$
|
782
|
|
|
$
|
838
|
|
|
$
|
1,620
|
|
•
|
the performance benefits of our current and future technology;
|
•
|
the strength of our pipeline of drug-eluting stent products, which has shown favorable results in clinical trials to date;
|
•
|
the broad and consistent long-term results of our TAXUS® clinical trials, and the favorable results of PROMUS® Element™ and TAXUS® Element™ (ION™) stent system clinical trials to date;
|
•
|
our overall position in the interventional medical device market and our experienced interventional cardiology sales force;
|
•
|
the strength of our clinical, selling, marketing and manufacturing capabilities; and
|
•
|
our increased presence and investment in rapidly growing emerging markets, including Brazil, Russia, India and China.
|
•
|
the impact of competitive pricing pressure on average selling prices of drug-eluting stent systems available in the market;
|
•
|
the impact and outcomes of on-going and future clinical results involving our or our competitors’ products, including those trials sponsored by our competitors, or perceived product performance of our or our competitors’ products;
|
•
|
new product launches by our competitors;
|
•
|
our ability to timely and successfully launch new or next-generation products and technologies, in line with our commercialization strategies;
|
•
|
physician and patient confidence in our current and next-generation technology;
|
•
|
changes in the overall number of percutaneous coronary intervention procedures performed, drug-eluting stent penetration rates and the average number of stents used per procedure;
|
•
|
delayed or limited regulatory approvals and unfavorable reimbursement policies; and
|
•
|
the outcome of intellectual property litigation.
|
|
|
|
|
2012 versus 2011
|
2011 versus 2010
|
||||||||||||||||
|
Year Ended
December 31,
|
As Reported
Currency
Basis
|
Constant
Currency
Basis
|
As Reported
Currency
Basis
|
Constant
Currency
Basis
|
||||||||||||||||
(in millions)
|
2012
|
2011
|
2010
|
||||||||||||||||||
|
|
(restated)*
|
|
(restated)*
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
3,756
|
|
$
|
4,010
|
|
$
|
4,215
|
|
(6
|
)
|
%
|
(6
|
)
|
%
|
(5
|
)
|
%
|
(5
|
)
|
%
|
EMEA
|
1,568
|
|
1,721
|
|
1,662
|
|
(9
|
)
|
%
|
(3
|
)
|
%
|
4
|
|
%
|
(1
|
)
|
%
|
|||
Japan
|
931
|
|
951
|
|
886
|
|
(2
|
)
|
%
|
(2
|
)
|
%
|
7
|
|
%
|
(2
|
)
|
%
|
|||
Inter-Continental
|
872
|
|
799
|
|
699
|
|
9
|
|
%
|
11
|
|
%
|
14
|
|
%
|
9
|
|
%
|
|||
International
|
3,371
|
|
3,471
|
|
3,247
|
|
(3
|
)
|
%
|
1
|
|
%
|
7
|
|
%
|
1
|
|
%
|
|||
Subtotal Core Businesses
|
7,127
|
|
7,481
|
|
7,462
|
|
(5
|
)
|
%
|
(3
|
)
|
%
|
0
|
|
%
|
(2
|
)
|
%
|
|||
Divested Businesses
|
122
|
|
141
|
|
344
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|||
Worldwide
|
$
|
7,249
|
|
$
|
7,622
|
|
$
|
7,806
|
|
(5
|
)
|
%
|
(3
|
)
|
%
|
(2
|
)
|
%
|
(5
|
)
|
%
|
|
|
|
|
2012 versus 2011
|
2011 versus 2010
|
||||||||||||||||
|
Year Ended
December 31,
|
As Reported
Currency
Basis
|
Constant
Currency
Basis
|
As Reported
Currency
Basis
|
Constant
Currency
Basis
|
||||||||||||||||
(in millions)
|
2012
|
2011
|
2010
|
||||||||||||||||||
Interventional Cardiology
|
$
|
2,179
|
|
$
|
2,495
|
|
$
|
2,602
|
|
(13
|
)
|
%
|
(11
|
)
|
%
|
(4
|
)
|
%
|
(7
|
)
|
%
|
Cardiac Rhythm Management
|
1,908
|
|
2,087
|
|
2,180
|
|
(9
|
)
|
%
|
(7
|
)
|
%
|
(4
|
)
|
%
|
(7
|
)
|
%
|
|||
Endoscopy
|
1,252
|
|
1,187
|
|
1,079
|
|
5
|
|
%
|
7
|
|
%
|
10
|
|
%
|
6
|
|
%
|
|||
Peripheral Interventions
|
774
|
|
731
|
|
669
|
|
6
|
|
%
|
8
|
|
%
|
9
|
|
%
|
5
|
|
%
|
|||
Urology/Women’s Health
|
500
|
|
498
|
|
481
|
|
—
|
|
%
|
1
|
|
%
|
4
|
|
%
|
2
|
|
%
|
|||
Neuromodulation
|
367
|
|
336
|
|
304
|
|
9
|
|
%
|
9
|
|
%
|
11
|
|
%
|
10
|
|
%
|
|||
Electrophysiology
|
147
|
|
147
|
|
147
|
|
—
|
|
%
|
1
|
|
%
|
—
|
|
%
|
(2
|
)
|
%
|
|||
Subtotal Core Businesses
|
7,127
|
|
7,481
|
|
7,462
|
|
(5
|
)
|
%
|
(3
|
)
|
%
|
—
|
|
%
|
(2
|
)
|
%
|
|||
Divested Businesses
|
122
|
|
141
|
|
344
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|||
Worldwide
|
$
|
7,249
|
|
$
|
7,622
|
|
$
|
7,806
|
|
(5
|
)
|
%
|
(3
|
)
|
%
|
(2
|
)
|
%
|
(5
|
)
|
%
|
|
|
2012 Net Sales as compared to 2011
|
|
2011 Net Sales as compared to 2010
|
||||||||||||||||||||
|
|
Change
|
|
Estimated
Impact of
Foreign
Currency
|
|
Change
|
|
Estimated
Impact of
Foreign
Currency
|
||||||||||||||||
|
|
As Reported
Currency
Basis
|
|
Constant
Currency
Basis
|
|
|
As Reported
Currency
Basis
|
|
Constant
Currency
Basis
|
|
||||||||||||||
(in millions)
|
|
|
|
|
|
|
||||||||||||||||||
Interventional Cardiology
|
|
$
|
(316
|
)
|
|
$
|
(266
|
)
|
|
$
|
(50
|
)
|
|
$
|
(107
|
)
|
|
$
|
(180
|
)
|
|
$
|
73
|
|
Cardiac Rhythm Management
|
|
(179
|
)
|
|
(145
|
)
|
|
(34
|
)
|
|
(93
|
)
|
|
(144
|
)
|
|
51
|
|
||||||
Endoscopy
|
|
65
|
|
|
84
|
|
|
(19
|
)
|
|
108
|
|
|
69
|
|
|
39
|
|
||||||
Peripheral Interventions
|
|
43
|
|
|
56
|
|
|
(13
|
)
|
|
62
|
|
|
36
|
|
|
26
|
|
||||||
Urology/Women’s Health
|
|
2
|
|
|
5
|
|
|
(3
|
)
|
|
17
|
|
|
9
|
|
|
8
|
|
||||||
Neuromodulation
|
|
31
|
|
|
32
|
|
|
(1
|
)
|
|
32
|
|
|
31
|
|
|
1
|
|
||||||
Electrophysiology
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
(3
|
)
|
|
3
|
|
||||||
Subtotal Core Businesses
|
|
(354
|
)
|
|
(232
|
)
|
|
(122
|
)
|
|
19
|
|
|
(182
|
)
|
|
201
|
|
||||||
Divested Businesses
|
|
(19
|
)
|
|
(18
|
)
|
|
(1
|
)
|
|
(203
|
)
|
|
(206
|
)
|
|
3
|
|
||||||
Worldwide
|
|
$
|
(373
|
)
|
|
$
|
(250
|
)
|
|
$
|
(123
|
)
|
|
$
|
(184
|
)
|
|
$
|
(388
|
)
|
|
$
|
204
|
|
|
Year Ended
December 31,
|
|||
|
2012
|
2011
|
||
Gross profit - prior year
|
65.1
|
%
|
66.7
|
%
|
PROMUS® supply true-up
|
(0.6
|
)%
|
0.6
|
%
|
Neurovascular divestiture
|
—
|
%
|
(1.4
|
)%
|
Manufacturing cost reductions
|
1.4
|
%
|
—
|
%
|
Transition-related inventory charges (credits)
|
0.7
|
%
|
(0.7
|
)%
|
All other, including other inventory charges, other period expense and net impact of foreign currency
|
1.3
|
%
|
(0.3
|
)%
|
Sales mix and pricing
|
(0.3
|
)%
|
0.2
|
%
|
Gross profit - current year
|
67.6
|
%
|
65.1
|
%
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2012
|
|
2011
|
|
2010
|
|||||||||
|
|
|
|
% of Net
|
|
|
|
% of Net
|
|
|
|
% of Net
|
|||
(in millions)
|
|
$
|
|
Sales
|
|
$
|
|
Sales
|
|
$
|
|
Sales
|
|||
Selling, general and administrative expenses
|
|
2,535
|
|
|
35.0
|
|
2,487
|
|
|
32.6
|
|
2,580
|
|
|
33.1
|
Research and development expenses
|
|
886
|
|
|
12.2
|
|
895
|
|
|
11.7
|
|
939
|
|
|
12.0
|
Royalty expense
|
|
153
|
|
|
2.1
|
|
172
|
|
|
2.3
|
|
185
|
|
|
2.4
|
•
|
decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, product actions, and/or competitive technology developments;
|
•
|
declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies, and market and/or regulatory conditions that may cause significant launch delays or product recalls;
|
•
|
decreases in our profitability due to an inability to successfully implement and achieve timely and sustainable cost improvement measures consistent with our expectations, increases in our market-participant tax rate, and/or changes in tax laws;
|
•
|
negative developments in intellectual property litigation that may impact our ability to market certain products or increase our costs to sell certain products;
|
•
|
the level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;
|
•
|
the level of success in managing the growth of acquired companies, achieving sustained profitability consistent with our expectations, establishing government and third-party payer reimbursement, and increases in the costs and time necessary to integrate acquired businesses into our operations successfully;
|
•
|
changes in our reporting units or in the structure of our business as a result of future reorganizations or divestitures of assets or businesses;
|
•
|
increases in our market-participant risk-adjusted WACC; and
|
•
|
declines in revenue as a result of loss of key members of our sales force and other key personnel.
|
(1)
|
Includes primarily consulting fees, fixed asset write-offs and costs associated with contractual cancellations.
|
(2)
|
Comprised of other costs directly related to the restructuring program, including program management, accelerated depreciation, retention and infrastructure-related costs.
|
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
|
2012
|
2011
|
2010
|
||||||
Interest income
|
|
$
|
5
|
|
$
|
7
|
|
$
|
13
|
|
Foreign currency losses
|
|
(18
|
)
|
(12
|
)
|
(9
|
)
|
|||
Net gains (losses) on investments
|
|
37
|
|
27
|
|
(12
|
)
|
|||
Other expense, net
|
|
(2
|
)
|
(3
|
)
|
(6
|
)
|
|||
|
|
$
|
22
|
|
$
|
19
|
|
$
|
(14
|
)
|
|
|
Year Ended
December 31,
|
|||||
|
|
2012
|
2011
|
2010
|
|||
Reported tax rate
|
|
(1.0
|
)%
|
31.3
|
%
|
0.2
|
%
|
Impact of certain receipts/charges*
|
|
12.7
|
%
|
(12.0
|
)%
|
18.0
|
%
|
|
|
11.7
|
%
|
19.3
|
%
|
18.2
|
%
|
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
|
2012
|
2011
|
2010
|
||||||
Cash provided by operating activities
|
|
$
|
1,260
|
|
$
|
1,008
|
|
$
|
325
|
|
Cash provided by (used for) investing activities
|
|
(579
|
)
|
776
|
|
(468
|
)
|
|||
Cash used for financing activities
|
|
(744
|
)
|
(1,728
|
)
|
(508
|
)
|
|
|
|
|
||||||||||||||||||||||
(in millions)
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||
Senior notes
|
|
|
$
|
600
|
|
|
$
|
1,250
|
|
|
$
|
600
|
|
|
$
|
250
|
|
|
$
|
1,500
|
|
|
$
|
4,200
|
|
|
|
|
$
|
600
|
|
|
$
|
1,250
|
|
|
$
|
600
|
|
|
$
|
250
|
|
|
$
|
1,500
|
|
|
$
|
4,200
|
|
Note:
|
The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.
|
|
Covenant
Requirement
|
|
Actual as of
December 31, 2012
|
Maximum leverage ratio (1)
|
3.5 times
|
|
2.4 times
|
Minimum interest coverage ratio (2)
|
3.0 times
|
|
6.9 times
|
(1)
|
Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.
|
(2)
|
Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters.
|
|
|
|
||||||||||||||||||||||||||
(in millions)
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt obligations
|
|
|
|
$
|
600
|
|
|
$
|
1,250
|
|
|
$
|
600
|
|
|
$
|
250
|
|
|
$
|
1,500
|
|
|
$
|
4,200
|
|
||
Interest payments (1)
|
|
$
|
250
|
|
|
232
|
|
|
177
|
|
|
133
|
|
|
99
|
|
|
1,030
|
|
|
1,921
|
|
||||||
Operating lease obligations (1)
|
|
69
|
|
|
50
|
|
|
40
|
|
|
33
|
|
|
23
|
|
|
44
|
|
|
259
|
|
|||||||
Purchase obligations (1)
|
|
220
|
|
|
16
|
|
|
13
|
|
|
5
|
|
|
|
|
5
|
|
|
259
|
|
||||||||
Minimum royalty obligations (1)
|
|
2
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
8
|
|
|||||||
Unrecognized tax benefits
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
||||||||||||
|
|
$
|
565
|
|
|
$
|
899
|
|
|
$
|
1,481
|
|
|
$
|
772
|
|
|
$
|
373
|
|
|
$
|
2,581
|
|
|
$
|
6,671
|
|
(1)
|
In accordance with U.S. GAAP, these obligations relate to expenses associated with future periods and are not reflected in our consolidated balance sheets.
|
•
|
decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, product actions, and/or competitive technology developments;
|
•
|
declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies, and market and/or regulatory conditions that may cause significant launch delays or product recalls;
|
•
|
decreases in our profitability due to an inability to successfully implement and achieve timely and sustainable cost improvement measures consistent with our expectations, increases in our market-participant tax rate, and/or changes in tax laws;
|
•
|
negative developments in intellectual property litigation that may impact our ability to market certain products or increase our costs to sell certain products;
|
•
|
the level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;
|
•
|
the level of success in managing the growth of acquired companies, achieving sustained profitability consistent with our expectations, establishing government and third-party payer reimbursement, and increases in the costs and time necessary to integrate acquired businesses into our operations successfully;
|
•
|
changes in our reporting units or in the structure of our business as a result of future reorganizations or divestitures of assets or businesses;
|
•
|
increases in our market-participant risk-adjusted WACC; and
|
•
|
declines in revenue as a result of loss of key members of our sales force and other key personnel.
|
•
|
Goodwill and other intangible asset impairment charges - These amounts represent non-cash write-downs of our goodwill balances attributable to its (a) U.S. Cardiac Rhythm Management reporting unit in the third quarter of 2012, (b) Europe/Middle East/Africa (EMEA) reporting unit recorded in the second quarter of 2012, and (c) U.S. Cardiac Rhythm Management reporting unit recorded in the first quarter of 2011 and non-cash write-downs of certain other intangible asset balances. Management removes the impact of non-cash goodwill and other intangible asset impairment charges from our operating performance to assist in assessing our cash generated from operations. Management believes this is a critical metric for us in measuring our ability to generate cash and invest in our growth. Therefore, these charges are excluded from management's assessment of operating performance and are also excluded for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to the our past operating performance, particularly in terms of liquidity.
|
•
|
Acquisition- and divestiture related net credits - These adjustments consist of (a) acquisition-related gains on previously held investments, (b) contingent consideration fair value adjustments, (c) inventory step-up adjustments, (d) due diligence and other fees, exit costs and other costs and credits related to current and prior period acquisitions, (e) gains resulting from business divestitures and (f) fees and separation costs associated with business divestitures. The acquisition-related gains on previously held investments are non-recurring benefits associated with acquisitions completed in the second quarter and fourth quarters of 2012 and the first quarter of 2011. The contingent consideration adjustments represent accounting adjustments to state contingent consideration liabilities at their estimated fair value. These adjustments can be highly variable depending on the assessed likelihood and amount of future contingent consideration payments. The inventory step-up adjustment is a charge related to acquired inventory directly attributable to prior acquisitions and is not indicative of our on-going operations, or on-going cost of products sold. Due diligence, exit costs and other costs and credits include legal, tax, severance and other expenses and credits associated with prior acquisitions that are not representative of on-going operations. The divestiture-related net credits are related to the
|
•
|
Restructuring and restructuring-related charges - These adjustments represent primarily severance, costs to transfer production lines from one facility to another, and other direct costs associated with the Company's 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program. These expenses are excluded by management in assessing the our operating performance, as well as from our operating segments' measures of profit and loss used for making operating decisions and assessing performance. Accordingly, management excluded these charges for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.
|
•
|
Litigation-related charges - These adjustments include certain significant product liability and other litigation-related charges and credits. These amounts are excluded by management in assessing our operating performance, as well as from our operating segments' measures of profit and loss used for making operating decisions and assessing performance. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.
|
•
|
Discrete tax items - These items represent adjustments of certain tax positions, which were initially established in prior periods as a result of intangible asset impairment charges; acquisition-, divestiture-, restructuring- or litigation-related charges (credits). These adjustments do not reflect expected on-going operating results. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.
|
•
|
Amortization expense - Amortization expense is a non-cash charge and does not impact our liquidity or compliance with the covenants included in its credit facility agreement. Management removes the impact of amortization from our operating performance to assist in assessing our cash generated from operations. Management believes this is a critical metric for us in measuring our ability to generate cash and invest in our growth. Therefore, amortization expense is excluded from management's assessment of operating performance and is also excluded from the measures management uses to set employee compensation. Accordingly, management has excluded amortization expense for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance, particularly in terms of liquidity.
|
•
|
Changes in foreign currency exchange rates - The impact of changes in foreign currency exchange rates is highly variable and difficult to predict. Accordingly, management excludes the impact of changes in foreign currency exchange rates for purposes of reviewing regional and divisional revenue growth rates to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.
|
|
|
|
|
|
|
|
|
/s/ Michael F. Mahoney
|
|
/s/ Jeffrey D. Capello
|
|
||
|
|
|
|
|
||
|
|
Michael F. Mahoney
|
|
|
Jeffrey D. Capello
|
|
|
|
President and Chief Executive Officer
|
|
|
Executive Vice President and Chief
Financial Officer
|
|
|
Year Ended December 31,
|
||||||||
in millions, except per share data
|
2012
|
2011
|
2010
|
||||||
|
|
|
|
||||||
Net sales
|
$
|
7,249
|
|
$
|
7,622
|
|
$
|
7,806
|
|
Cost of products sold
|
2,349
|
|
2,659
|
|
2,599
|
|
|||
Gross profit
|
4,900
|
|
4,963
|
|
5,207
|
|
|||
|
|
|
|
||||||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative expenses
|
2,535
|
|
2,487
|
|
2,580
|
|
|||
Research and development expenses
|
886
|
|
895
|
|
939
|
|
|||
Royalty expense
|
153
|
|
172
|
|
185
|
|
|||
Amortization expense
|
395
|
|
421
|
|
513
|
|
|||
Goodwill impairment charges
|
4,350
|
|
697
|
|
1,817
|
|
|||
Intangible asset impairment charges
|
142
|
|
21
|
|
65
|
|
|||
Contingent consideration expense (benefit)
|
(6
|
)
|
7
|
|
2
|
|
|||
Acquisition-related milestone
|
|
|
|
(250
|
)
|
||||
Restructuring charges
|
136
|
|
89
|
|
116
|
|
|||
Litigation-related charges (credits)
|
192
|
|
48
|
|
(104
|
)
|
|||
Gain on divestiture
|
(15
|
)
|
(778
|
)
|
|
||||
|
8,768
|
|
4,059
|
|
5,863
|
|
|||
Operating income (loss)
|
(3,868
|
)
|
904
|
|
(656
|
)
|
|||
|
|
|
|
||||||
Other income (expense):
|
|
|
|
||||||
Interest expense
|
(261
|
)
|
(281
|
)
|
(393
|
)
|
|||
Other, net
|
22
|
|
19
|
|
(14
|
)
|
|||
Income (loss) before income taxes
|
(4,107
|
)
|
642
|
|
(1,063
|
)
|
|||
Income tax expense (benefit)
|
(39
|
)
|
201
|
|
2
|
|
|||
Net income (loss)
|
$
|
(4,068
|
)
|
$
|
441
|
|
$
|
(1,065
|
)
|
|
|
|
|
||||||
Net income (loss) per common share — basic
|
$
|
(2.89
|
)
|
$
|
0.29
|
|
$
|
(0.70
|
)
|
Net income (loss) per common share — assuming dilution
|
$
|
(2.89
|
)
|
$
|
0.29
|
|
$
|
(0.70
|
)
|
|
|
|
|
||||||
Weighted-average shares outstanding
|
|
|
|
||||||
Basic
|
1,406.7
|
|
1,509.3
|
|
1,517.8
|
|
|||
Assuming dilution
|
1,406.7
|
|
1,519.0
|
|
1,517.8
|
|
|
As of December 31,
|
||||||
in millions, except share and per share data
|
2012
|
|
2011
|
||||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
207
|
|
|
$
|
267
|
|
Trade accounts receivable, net
|
1,217
|
|
|
1,246
|
|
||
Inventories
|
884
|
|
|
931
|
|
||
Deferred income taxes
|
433
|
|
|
458
|
|
||
Prepaid expenses and other current assets
|
281
|
|
|
203
|
|
||
Total current assets
|
3,022
|
|
|
3,105
|
|
||
Property, plant and equipment, net
|
1,564
|
|
|
1,670
|
|
||
Goodwill
|
5,973
|
|
|
9,761
|
|
||
Other intangible assets, net
|
6,289
|
|
|
6,473
|
|
||
Other long-term assets
|
306
|
|
|
281
|
|
||
TOTAL ASSETS
|
$
|
17,154
|
|
|
$
|
21,290
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current debt obligations
|
$
|
4
|
|
|
$
|
4
|
|
Accounts payable
|
232
|
|
|
203
|
|
||
Accrued expenses
|
1,284
|
|
|
1,327
|
|
||
Other current liabilities
|
252
|
|
|
273
|
|
||
Total current liabilities
|
1,772
|
|
|
1,807
|
|
||
Long-term debt
|
4,252
|
|
|
4,257
|
|
||
Deferred income taxes
|
1,713
|
|
|
1,865
|
|
||
Other long-term liabilities
|
2,547
|
|
|
2,008
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value - authorized 50,000,000 shares, none issued and outstanding
|
|
|
|
|
|
||
Common stock, $0.01 par value - authorized 2,000,000,000 shares; issued 1,542,347,188 shares as of December 31, 2012 and 1,531,006,390 shares as of December 31, 2011
|
15
|
|
|
15
|
|
||
Treasury stock, at cost - 186,635,532 shares as of December 31, 2012 and 81,950,716 shares as of December 31, 2011
|
(1,092
|
)
|
|
(492
|
)
|
||
Additional paid-in capital
|
16,429
|
|
|
16,349
|
|
||
Accumulated deficit
|
(8,449
|
)
|
|
(4,381
|
)
|
||
Accumulated other comprehensive loss, net of tax:
|
|
|
|
||||
Foreign currency translation adjustment
|
(26
|
)
|
|
(58
|
)
|
||
Unrealized gain (loss) on derivative financial instruments
|
34
|
|
|
(48
|
)
|
||
Unrealized costs associated with certain retirement plans
|
(41
|
)
|
|
(32
|
)
|
||
Total stockholders’ equity
|
6,870
|
|
|
11,353
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
17,154
|
|
|
$
|
21,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|||||||||||
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Other
|
|||||||||||
|
|
Common Stock
|
|
Treasury
|
|
Paid-In
|
|
Accumulated
|
|
Comprehensive
|
|||||||||||||
in millions, except share data
|
|
Shares Issued
|
|
Par Value
|
|
Stock
|
|
Capital
|
|
Deficit
|
|
Income (Loss)
|
|||||||||||
Balance as of December 31, 2009
|
|
1,510,753,934
|
|
|
$
|
15
|
|
|
|
|
|
$
|
16,086
|
|
|
$
|
(3,757
|
)
|
|
$
|
(43
|
)
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
(1,065
|
)
|
|
|
||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(58
|
)
|
||||||||||
Net change in derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
||||||||||
Impact of stock-based compensation plans, net of tax
|
|
10,026,178
|
|
|
|
|
|
|
146
|
|
|
|
|
|
|||||||||
Balance as of December 31, 2010
|
|
1,520,780,112
|
|
|
$
|
15
|
|
|
|
|
|
$
|
16,232
|
|
|
$
|
(4,822
|
)
|
|
$
|
(129
|
)
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
441
|
|
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
||||||||||
Net change in derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
||||||||||
Net change in certain retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
||||||||
Impact of stock-based compensation plans, net of tax
|
|
10,226,278
|
|
|
|
|
|
|
117
|
|
|
|
|
|
|||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
|
$
|
(492
|
)
|
|
|
|
|
|
|
|
|
|
||||
Balance as of December 31, 2011
|
|
1,531,006,390
|
|
|
$
|
15
|
|
|
$
|
(492
|
)
|
|
$
|
16,349
|
|
|
$
|
(4,381
|
)
|
|
$
|
(138
|
)
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
(4,068
|
)
|
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
||||||||||
Net change in derivative financial instruments
|
|
|
|
|
|
|
|
|
|
|
|
82
|
|
||||||||||
Net change in certain retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
||||||||
Impact of stock-based compensation plans, net of tax
|
|
11,340,798
|
|
|
|
|
|
|
80
|
|
|
|
|
|
|||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
|
(600
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2012
|
|
1,542,347,188
|
|
|
$
|
15
|
|
|
$
|
(1,092
|
)
|
|
$
|
16,429
|
|
|
$
|
(8,449
|
)
|
|
$
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net (loss) income
|
|
$
|
(4,068
|
)
|
|
$
|
441
|
|
|
$
|
(1,065
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
32
|
|
|
(8
|
)
|
|
(58
|
)
|
|||
Net change in unrealized gains and losses on derivative financial instruments, net of tax
|
|
82
|
|
|
17
|
|
|
(28
|
)
|
|||
Net change in certain retirement plans
|
|
(9
|
)
|
|
(18
|
)
|
|
|
||||
Total other comprehensive (loss) income
|
|
105
|
|
|
(9
|
)
|
|
(86
|
)
|
|||
Total comprehensive (loss) income
|
|
$
|
(3,963
|
)
|
|
$
|
432
|
|
|
$
|
(1,151
|
)
|
|
Year Ended December 31,
|
||||||||
in millions
|
2012
|
2011
|
2010
|
||||||
Operating Activities
|
|
|
|
||||||
Net (loss) income
|
$
|
(4,068
|
)
|
$
|
441
|
|
$
|
(1,065
|
)
|
Adjustments to reconcile net income (loss) to cash provided by operating activities
|
|
|
|
||||||
Gain on sale of businesses
|
(15
|
)
|
(778
|
)
|
|
|
|||
Depreciation and amortization
|
683
|
|
717
|
|
816
|
|
|||
Deferred income taxes
|
(166
|
)
|
46
|
|
(110
|
)
|
|||
Stock-based compensation expense
|
108
|
|
128
|
|
150
|
|
|||
Goodwill impairment charges
|
4,350
|
|
697
|
|
1,817
|
|
|||
Intangible asset impairment charges
|
142
|
|
21
|
|
65
|
|
|||
Net (gains) losses on investments and notes receivable
|
(37
|
)
|
(27
|
)
|
12
|
|
|||
Contingent consideration (income) expense
|
(6
|
)
|
7
|
|
2
|
|
|||
Payment of contingent consideration in excess of amounts established in purchase accounting
|
(8
|
)
|
|
|
|||||
Other, net
|
(7
|
)
|
(7
|
)
|
11
|
|
|||
Increase (decrease) in cash flows from operating assets and liabilities:
|
|
|
|
||||||
Trade accounts receivable
|
37
|
|
42
|
|
52
|
|
|||
Inventories
|
66
|
|
(54
|
)
|
(5
|
)
|
|||
Other assets
|
(68
|
)
|
(60
|
)
|
132
|
|
|||
Accounts payable and accrued expenses
|
(131
|
)
|
(271
|
)
|
(1,148
|
)
|
|||
Other liabilities
|
380
|
|
106
|
|
(404
|
)
|
|||
Cash provided by operating activities
|
1,260
|
|
1,008
|
|
325
|
|
|||
|
|
|
|
||||||
Investing Activities
|
|
|
|
||||||
Property, plant and equipment
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(226
|
)
|
(304
|
)
|
(272
|
)
|
|||
Proceeds on disposals
|
16
|
|
16
|
|
5
|
|
|||
Acquisitions
|
|
|
|
||||||
Payments for acquisitions of businesses, net of cash acquired
|
(366
|
)
|
(370
|
)
|
(199
|
)
|
|||
Divestitures
|
|
|
|
||||||
Proceeds from business divestitures, net of costs
|
10
|
|
1,440
|
|
|
|
|||
Other investing activity
|
|
|
|
||||||
Payments for investments and acquisitions of certain technologies
|
(22
|
)
|
(11
|
)
|
(6
|
)
|
|||
Proceeds from investments and collections of notes receivable
|
9
|
|
5
|
|
4
|
|
|||
Cash (used for) provided by investing activities
|
(579
|
)
|
776
|
|
(468
|
)
|
|||
|
|
|
|
||||||
Financing Activities
|
|
|
|
||||||
Debt
|
|
|
|
||||||
Payments of contingent consideration amounts previously established in purchase accounting
|
(146
|
)
|
(7
|
)
|
(12
|
)
|
|||
Proceeds from long-term borrowings, net of debt issuance costs
|
|
|
|
973
|
|
||||
Payments on long-term borrowings
|
(10
|
)
|
(1,250
|
)
|
(1,500
|
)
|
|||
Proceeds from borrowings on credit facilities
|
371
|
|
565
|
|
200
|
|
|||
Payments on borrowings from credit facilities
|
(380
|
)
|
(565
|
)
|
(200
|
)
|
|||
Equity
|
|
|
|
||||||
Payments for acquisitions of treasury stock
|
(600
|
)
|
(492
|
)
|
|
|
|||
Proceeds from issuances of shares of common stock
|
21
|
|
21
|
|
31
|
|
|||
Cash used for financing activities
|
(744
|
)
|
(1,728
|
)
|
(508
|
)
|
|||
|
|
|
|
||||||
Effect of foreign exchange rates on cash
|
3
|
|
(2
|
)
|
|
|
|||
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(60
|
)
|
54
|
|
(651
|
)
|
|||
Cash and cash equivalents at beginning of period
|
267
|
|
213
|
|
864
|
|
|||
Cash and cash equivalents at end of period
|
$
|
207
|
|
$
|
267
|
|
$
|
213
|
|
|
|
|
|
||||||
Supplemental Information
|
|
|
|
||||||
Cash paid (received) for income taxes, net
|
$
|
97
|
|
$
|
138
|
|
$
|
(286
|
)
|
Cash paid for interest
|
255
|
|
277
|
|
328
|
|
|||
Fair value of contingent consideration recorded
|
465
|
|
287
|
|
69
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Beginning balance
|
|
$
|
30
|
|
|
$
|
43
|
|
|
$
|
55
|
|
Provision
|
|
8
|
|
|
9
|
|
|
15
|
|
|||
Settlements/ reversals
|
|
(12
|
)
|
|
(22
|
)
|
|
(27
|
)
|
|||
Ending balance
|
|
$
|
26
|
|
|
$
|
30
|
|
|
$
|
43
|
|
|
|
As of December 31, 2012
|
|
As of December 31, 2011
|
||||||||||||||||||||
(
in millions)
|
|
Projected
Benefit Obligation (PBO) |
|
Fair value of Plan Assets
|
|
Underfunded
PBO Recognized |
|
Projected
Benefit Obligation (PBO) |
|
Fair value of Plan Assets
|
|
Underfunded
PBO Recognized |
||||||||||||
Executive Retirement Plan
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
|
|
|
$
|
14
|
|
|
Guidant Retirement Plan (frozen)
|
|
131
|
|
|
87
|
|
|
44
|
|
|
118
|
|
|
75
|
|
|
43
|
|
||||||
Guidant Supplemental Retirement Plan (frozen)
|
|
34
|
|
|
—
|
|
|
34
|
|
|
32
|
|
|
|
|
32
|
|
|||||||
Guidant Healthcare Retirement Benefit Plan (frozen)
|
|
5
|
|
|
—
|
|
|
5
|
|
|
10
|
|
|
|
|
10
|
|
|||||||
International Retirement Plans
|
|
85
|
|
|
43
|
|
|
42
|
|
|
75
|
|
|
40
|
|
|
35
|
|
||||||
|
|
$
|
268
|
|
|
$
|
130
|
|
|
$
|
138
|
|
|
$
|
249
|
|
|
$
|
115
|
|
|
$
|
134
|
|
|
|
|
|
|
Long-Term
Healthcare
|
|
Rate of
|
|
|
Discount
Rate
|
|
Expected Return
on Plan Assets
|
|
Cost
Trend Rate
|
|
Compensation
Increase
|
|
Executive Retirement Plan
|
3.50
|
%
|
|
|
|
|
|
3.00%
|
Guidant Retirement Plan (frozen)
|
4.25
|
%
|
|
7.50%
|
|
|
|
|
Guidant Supplemental Retirement Plan (frozen)
|
4.00
|
%
|
|
|
|
|
|
|
Guidant Healthcare Retirement Benefit Plan (frozen)
|
1.75
|
%
|
|
|
|
5.00%
|
|
|
International Retirement Plans
|
1.00% - 4.00%
|
|
2.75% - 4.00%
|
|
|
|
3.00%
|
|
|
Year Ended December 31,
|
||||||
(in millions)
|
|
2012
|
|
2011
|
||||
Beginning fair value
|
|
$
|
115
|
|
|
$
|
113
|
|
Actual return on plan assets
|
|
11
|
|
|
—
|
|
||
Employer contributions
|
|
20
|
|
|
17
|
|
||
Benefits paid
|
|
(13
|
)
|
|
(13
|
)
|
||
Net transfers in (out)
|
|
—
|
|
|
(3
|
)
|
||
Foreign currency exchange
|
|
(3
|
)
|
|
1
|
|
||
Ending fair value
|
|
$
|
130
|
|
|
$
|
115
|
|
Cash, net of cash acquired
|
$
|
366
|
|
Fair value of contingent consideration
|
465
|
|
|
Fair value of prior interests
|
79
|
|
|
Fair value of debt assumed
|
9
|
|
|
|
$
|
919
|
|
Goodwill
|
$
|
563
|
|
Amortizable intangible assets
|
189
|
|
|
Indefinite-lived intangible assets
|
132
|
|
|
Other net assets
|
15
|
|
|
Deferred income taxes
|
20
|
|
|
|
$
|
919
|
|
|
Amount
Assigned
(in millions)
|
|
Weighted
Average Amortization Period
(in years)
|
|
Range of Risk-
Adjusted Discount Rates used in Purchase Price Allocation |
||
Amortizable intangible assets:
|
|
|
|
|
|
||
Technology-related
|
$
|
187
|
|
|
8
|
|
14% to 28%
|
Customer relationships
|
2
|
|
|
5
|
|
14%
|
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
||
Purchased research and development
|
132
|
|
|
|
|
14% to 28%
|
|
|
$
|
321
|
|
|
|
|
|
U.S.
|
$
|
292
|
|
EMEA
|
154
|
|
|
Inter-Continental
|
86
|
|
|
Japan
|
31
|
|
|
|
$
|
563
|
|
Cash, net of cash acquired
|
$
|
370
|
|
Fair value of contingent consideration
|
287
|
|
|
Prior investments
|
55
|
|
|
|
$
|
712
|
|
Goodwill
|
$
|
266
|
|
Amortizable intangible assets
|
97
|
|
|
Indefinite-lived intangible assets
|
470
|
|
|
Deferred income taxes
|
(121
|
)
|
|
|
$
|
712
|
|
|
Amount
Assigned
(in millions)
|
|
Weighted
Average Amortization Period
(in years)
|
|
Range of Risk-
Adjusted Discount Rates used in Purchase Price Allocation |
||
Amortizable intangible assets
|
|
|
|
|
|
||
Technology-related
|
$
|
97
|
|
|
7
|
|
23% - 25%
|
Indefinite-lived intangible assets
|
|
|
|
|
|
||
Purchased research and development
|
470
|
|
|
|
|
23% - 30%
|
|
|
$
|
567
|
|
|
|
|
|
|
|
|
||
(in millions)
|
|
Total
|
||
Cash
|
|
$
|
199
|
|
Fair value of contingent consideration
|
|
69
|
|
|
|
|
$
|
268
|
|
|
|
|
||
(in millions)
|
|
Total
|
||
Goodwill
|
|
$
|
81
|
|
Amortizable intangible assets
|
|
175
|
|
|
Indefinite-lived intangible assets
|
|
45
|
|
|
Other net assets
|
|
3
|
|
|
Deferred income taxes
|
|
(36
|
)
|
|
|
|
$
|
268
|
|
|
|
Amount Assigned
(in millions)
|
|
Weighted
Average Amortization Period
(in years)
|
|
Range of Risk-Adjusted Discount Rates used in Purchase Price
Allocation
|
||
Amortizable intangible assets
|
|
|
|
|
|
|
||
Technology-related
|
|
$
|
175
|
|
|
11.9
|
|
28.0% - 35.5%
|
|
|
|
|
|
|
|
||
Indefinite-lived intangible assets
|
|
|
|
|
|
|
||
Purchased research and development
|
|
45
|
|
|
|
|
29.0% - 36.0%
|
|
|
|
$
|
220
|
|
|
|
|
|
Balance as of December 31, 2010
|
$
|
(71
|
)
|
Amounts recorded related to new acquisitions
|
(287
|
)
|
|
Net fair value adjustments
|
(7
|
)
|
|
Payments made
|
7
|
|
|
Balance as of December 31, 2011
|
$
|
(358
|
)
|
Amounts recorded related to new acquisitions
|
(465
|
)
|
|
Net fair value adjustments
|
6
|
|
|
Payments made
|
154
|
|
|
Balance as of December 31, 2012
|
$
|
(663
|
)
|
Contingent Consideration Liability
|
Fair Value as of December 31, 2012
|
Valuation Technique
|
Unobservable Input
|
Range
|
R&D, Regulatory and Commercialization-based Milestones
|
$212 million
|
Probability Weighted Discounted Cash Flow
|
Discount Rate
|
0.9% - 2.4%
|
Probability of Payment
|
0% - 95%
|
|||
Projected Year of Payment
|
2013 - 2017
|
|||
Revenue-based Payments
|
$218 million
|
Discounted Cash Flow
|
Discount Rate
|
12% - 18%
|
Probability of Payment
|
65% - 100%
|
|||
Projected Year of Payment
|
2013 - 2018
|
|||
$233 million
|
Monte Carlo
|
Revenue Volatility
|
15% - 29%
|
|
Risk Free Rate
|
LIBOR Term Structure
|
|||
Projected Year of Payment
|
2013-2018
|
|
|
As of December 31, 2012
|
|
As of December 31, 2011
|
||||||||||||
|
|
Gross Carrying
|
|
Accumulated
Amortization/
|
|
Gross Carrying
|
|
Accumulated
Amortization/
|
||||||||
(in millions)
|
|
Amount
|
|
Write-offs
|
|
Amount
|
|
Write-offs
|
||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Technology-related
|
|
$
|
8,020
|
|
|
$
|
(3,005
|
)
|
|
$
|
7,823
|
|
|
$
|
(2,734
|
)
|
Patents
|
|
559
|
|
|
(352
|
)
|
|
539
|
|
|
(331
|
)
|
||||
Other intangible assets
|
|
810
|
|
|
(428
|
)
|
|
808
|
|
|
(376
|
)
|
||||
|
|
$
|
9,389
|
|
|
$
|
(3,785
|
)
|
|
$
|
9,170
|
|
|
$
|
(3,441
|
)
|
Unamortizable intangible assets
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
$
|
15,450
|
|
|
$
|
(9,477
|
)
|
|
$
|
14,888
|
|
|
$
|
(5,127
|
)
|
Technology-related
|
|
242
|
|
|
|
|
242
|
|
|
|
||||||
|
|
$
|
15,692
|
|
|
$
|
(9,477
|
)
|
|
$
|
15,130
|
|
|
$
|
(5,127
|
)
|
(in millions)
|
|
United States
|
|
EMEA
|
|
Japan
|
|
Inter-Continental
|
|
Total
|
||||||||||
Balance as of December 31, 2010
|
|
$
|
5,189
|
|
|
$
|
3,915
|
|
|
$
|
551
|
|
|
$
|
531
|
|
|
$
|
10,186
|
|
Purchase price adjustments
|
|
14
|
|
|
(10
|
)
|
|
2
|
|
|
|
|
6
|
|
||||||
Goodwill acquired
|
|
161
|
|
|
99
|
|
|
1
|
|
|
5
|
|
|
266
|
|
|||||
Goodwill written off
|
|
(697
|
)
|
|
|
|
|
|
|
|
(697
|
)
|
||||||||
Balance as of December 31, 2011
|
|
$
|
4,667
|
|
|
$
|
4,004
|
|
|
$
|
554
|
|
|
$
|
536
|
|
|
$
|
9,761
|
|
Purchase price adjustments
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||||
Goodwill acquired
|
|
292
|
|
|
154
|
|
|
31
|
|
|
86
|
|
|
563
|
|
|||||
Goodwill written off
|
|
(748
|
)
|
|
(3,602
|
)
|
|
—
|
|
|
|
|
(4,350
|
)
|
||||||
Balance as of December 31, 2012
|
|
$
|
4,209
|
|
|
$
|
556
|
|
|
$
|
585
|
|
|
$
|
623
|
|
|
$
|
5,973
|
|
•
|
decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, product actions, and/or competitive technology developments;
|
•
|
declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies, and market and/or regulatory conditions that may cause significant launch delays or product recalls;
|
•
|
decreases in our profitability due to an inability to successfully implement and achieve timely and sustainable cost improvement measures consistent with our expectations, increases in our market-participant tax rate, and/or changes in tax laws;
|
•
|
negative developments in intellectual property litigation that may impact our ability to market certain products or increase our costs to sell certain products;
|
•
|
the level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;
|
•
|
the level of success in managing the growth of acquired companies, achieving sustained profitability consistent with our expectations, establishing government and third-party payer reimbursement, and increases in the costs and time necessary to integrate acquired businesses into our operations successfully;
|
•
|
changes in our reporting units or in the structure of our business as a result of future reorganizations or divestitures of assets or businesses;
|
•
|
increases in our market-participant risk-adjusted WACC; and
|
•
|
declines in revenue as a result of loss of key members of our sales force and other key personnel.
|
|
|
United
|
|
|
|
|
|
Inter-
|
|
|
|||||
(in millions)
|
|
States
|
|
EMEA
|
|
Japan
|
|
Continental
|
|
Total
|
|||||
Accumulated write-offs as of December 31, 2010
|
|
(4,430
|
)
|
|
|
|
|
|
|
|
(4,430
|
)
|
|||
Goodwill written off
|
|
(697
|
)
|
|
|
|
|
|
|
|
(697
|
)
|
|||
Accumulated write-offs as of December 31, 2011
|
|
$
|
(5,127
|
)
|
|
|
|
|
|
|
|
$
|
(5,127
|
)
|
|
Goodwill written off
|
|
(748
|
)
|
|
(3,602
|
)
|
|
|
|
|
|
(4,350
|
)
|
||
Accumulated write-offs as of December 31, 2012
|
|
$
|
(5,875
|
)
|
|
(3,602
|
)
|
|
|
|
|
|
$
|
(9,477
|
)
|
Intangible Asset
|
Fair Value as of July 1, 2012
|
Valuation Technique
|
Unobservable Input
|
Range
|
In-Process R&D
|
$26 million
|
Income Approach - Excess Earnings Method
|
Discount Rate
|
20%-25%
|
Intangible Asset
|
Fair Value as of April 1, 2012
|
Valuation Technique
|
Unobservable Input
|
Range
|
In-Process R&D
|
$184 million
|
Income Approach - Excess Earnings Method
|
Discount Rate
|
20%
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Technology-related
|
|
|
|
|
$
|
9
|
|
|
$
|
65
|
|
|
Purchased research and development
|
|
$
|
142
|
|
|
12
|
|
|
—
|
|
||
|
|
$
|
142
|
|
|
$
|
21
|
|
|
$
|
65
|
|
|
Amount of Pre-tax
Gain (Loss)
Recognized in OCI
(Effective Portion)
|
|
Amount of Pre-tax
Gain (Loss)
Reclassified from
AOCI into Earnings
(Effective Portion)
|
|
Location in Statement of
Operations
|
||||
Year Ended December 31, 2012
|
|
|
|
|
|
||||
Interest rate hedge contracts
|
|
|
|
$
|
2
|
|
|
Interest expense
|
|
Currency hedge contracts
|
$
|
95
|
|
|
(39
|
)
|
|
Cost of products sold
|
|
|
$
|
95
|
|
|
$
|
(37
|
)
|
|
|
Year Ended December 31, 2011
|
|
|
|
|
|
||||
Interest rate hedge contracts
|
|
|
|
$
|
1
|
|
|
Interest expense
|
|
Currency hedge contracts
|
$
|
(66
|
)
|
|
(95
|
)
|
|
Cost of products sold
|
|
|
$
|
(66
|
)
|
|
$
|
(94
|
)
|
|
|
in millions
|
|
Year Ended
|
|
Location in Statement of
Operations
|
||||||||||
|
December 31,
|
|
||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
|
|||||||
Gain (loss) on currency hedge contracts
|
|
$
|
23
|
|
|
$
|
12
|
|
|
$
|
(77
|
)
|
|
Other, net
|
Gain (loss) on foreign currency transaction exposures
|
|
(41
|
)
|
|
(24
|
)
|
|
68
|
|
|
Other, net
|
|||
Net foreign currency gain (loss)
|
|
$
|
(18
|
)
|
|
$
|
(12
|
)
|
|
$
|
(9
|
)
|
|
|
|
|
As of
|
||||||
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
Location in Balance Sheet (1)
|
2012
|
|
2011
|
||||
Derivative Assets:
|
|
|
|
|
||||
Designated Hedging Instruments
|
|
|
|
|
||||
Currency hedge contracts
|
Prepaid and other current assets
|
$
|
25
|
|
|
$
|
31
|
|
Currency hedge contracts
|
Other long-term assets
|
63
|
|
|
20
|
|
||
|
|
88
|
|
|
51
|
|
||
Non-Designated Hedging Instruments
|
|
|
|
|
||||
Currency hedge contracts
|
Prepaid and other current assets
|
33
|
|
|
36
|
|
||
Total Derivative Assets
|
|
$
|
121
|
|
|
$
|
87
|
|
|
|
|
|
|
||||
Derivative Liabilities:
|
|
|
|
|
||||
Designated Hedging Instruments
|
|
|
|
|
||||
Currency hedge contracts
|
Other current liabilities
|
$
|
20
|
|
|
$
|
69
|
|
Currency hedge contracts
|
Other long-term liabilities
|
10
|
|
|
49
|
|
||
|
|
30
|
|
|
118
|
|
||
Non-Designated Hedging Instruments
|
|
|
|
|
||||
Currency hedge contracts
|
Other current liabilities
|
27
|
|
|
13
|
|
||
Total Derivative Liabilities
|
|
$
|
57
|
|
|
$
|
131
|
|
(1)
|
We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less.
|
•
|
Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.
|
•
|
Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.
|
•
|
Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.
|
|
As of December 31, 2012
|
|
As of December 31, 2011
|
||||||||||||||||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market and government funds
|
$
|
39
|
|
|
|
|
|
|
$
|
39
|
|
|
$
|
78
|
|
|
|
|
|
|
$
|
78
|
|
||||||||
Currency hedge contracts
|
|
|
$
|
121
|
|
|
|
|
121
|
|
|
|
|
$
|
87
|
|
|
|
|
87
|
|
||||||||||
|
$
|
39
|
|
|
$
|
121
|
|
|
|
|
|
$
|
160
|
|
|
$
|
78
|
|
|
$
|
87
|
|
|
|
|
$
|
165
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Currency hedge contracts
|
|
|
$
|
57
|
|
|
|
|
$
|
57
|
|
|
|
|
$
|
131
|
|
|
|
|
$
|
131
|
|
||||||||
Accrued contingent consideration
|
|
|
|
|
$
|
663
|
|
|
663
|
|
|
|
|
|
|
$
|
358
|
|
|
358
|
|
||||||||||
|
|
|
|
$
|
57
|
|
|
$
|
663
|
|
|
$
|
720
|
|
|
|
|
$
|
131
|
|
|
$
|
358
|
|
|
$
|
489
|
|
(in millions)
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||
Senior notes
|
|
|
$
|
600
|
|
|
$
|
1,250
|
|
|
$
|
600
|
|
|
$
|
250
|
|
|
$
|
1,500
|
|
|
$
|
4,200
|
|
|
|
|
$
|
600
|
|
|
$
|
1,250
|
|
|
$
|
600
|
|
|
$
|
250
|
|
|
$
|
1,500
|
|
|
$
|
4,200
|
|
|
Note:
|
|
The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.
|
|
Covenant
Requirement
|
|
December 31, 2012
|
Maximum leverage ratio (1)
|
3.5 times
|
|
2.4 times
|
Minimum interest coverage ratio (2)
|
3.0 times
|
|
6.9 times
|
(1)
|
Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.
|
(2)
|
Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters.
|
|
Amount
(in millions)
|
|
Issuance
Date
|
|
Maturity Date
|
|
Semi-annual
Coupon Rate
|
||
June 2014 Notes
|
$
|
600
|
|
|
June 2004
|
|
June 2014
|
|
5.450%
|
January 2015 Notes
|
850
|
|
|
December 2009
|
|
January 2015
|
|
4.500%
|
|
November 2015 Notes
|
400
|
|
|
November 2005
|
|
November 2015
|
|
5.500%
|
|
June 2016 Notes
|
600
|
|
|
June 2006
|
|
June 2016
|
|
6.400%
|
|
January 2017 Notes
|
250
|
|
|
November 2004
|
|
January 2017
|
|
5.125%
|
|
January 2020 Notes
|
850
|
|
|
December 2009
|
|
January 2020
|
|
6.000%
|
|
November 2035 Notes
|
350
|
|
|
November 2005
|
|
November 2035
|
|
6.250%
|
|
January 2040 Notes
|
300
|
|
|
December 2009
|
|
January 2040
|
|
7.375%
|
|
|
$
|
4,200
|
|
|
|
|
|
|
|
2013
|
$
|
69
|
|
2014
|
50
|
|
|
2015
|
40
|
|
|
2016
|
33
|
|
|
2017
|
23
|
|
|
Thereafter
|
44
|
|
|
|
|
|
|
|
$
|
259
|
|
|
|
|
Type of cost
|
Total estimated amount expected to
be incurred
|
Restructuring charges:
|
|
Termination benefits
|
$185 million to $210 million
|
Other (1)
|
$70 million to $90 million
|
Restructuring-related expenses:
|
|
Other (2)
|
$45 million to $55 million
|
|
$300 million to $355 million
|
(1)
|
Includes primarily consulting fees, fixed asset write-offs and costs associated with contractual cancellations.
|
(2)
|
Comprised of other costs directly related to the 2011 Restructuring plan, including the Expansion, such as program management, accelerated depreciation, retention and infrastructure-related costs.
|
Type of cost
|
Total amount incurred
|
Restructuring charges:
|
|
Termination benefits
|
$90 million
|
Fixed asset write-offs
|
$11 million
|
Other (1)
|
$51 million
|
Restructuring-related expenses:
|
|
Other (2)
|
$8 million
|
|
$160 million
|
(1)
|
Includes primarily consulting fees and costs associated with contractual cancellations.
|
(2)
|
Comprised of other costs directly related to the 2010 Restructuring plan, including accelerated depreciation and infrastructure-related costs.
|
Type of cost
|
Total estimated amount expected to be incurred
|
Restructuring charges:
|
|
Termination benefits
|
$36 million
|
|
|
Restructuring-related expenses:
|
|
Accelerated depreciation
|
$22 million
|
Transfer costs (1)
|
$74 million to $77 million
|
|
$132 million to $135 million
|
(1)
|
Consists primarily of costs to transfer product lines among facilities, including costs of transfer teams, freight, idle facility and product line validations.
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
Restructuring charges
|
$
|
79
|
|
|
|
|
|
|
$
|
14
|
|
|
$
|
43
|
|
|
$
|
136
|
|
||||
Restructuring-related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of products sold
|
|
|
|
|
|
$
|
8
|
|
|
|
|
|
|
8
|
|
||||||||
Selling, general and administrative expenses
|
|
|
$
|
2
|
|
|
|
|
|
|
14
|
|
|
16
|
|
||||||||
|
—
|
|
|
2
|
|
|
8
|
|
|
—
|
|
|
14
|
|
|
24
|
|
||||||
|
$
|
79
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
57
|
|
|
$
|
160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
2011 Restructuring plan
|
$
|
78
|
|
|
$
|
2
|
|
|
|
|
$
|
14
|
|
|
$
|
55
|
|
|
$
|
149
|
|
||
2010 Restructuring plan
|
1
|
|
|
|
|
|
|
|
|
2
|
|
|
3
|
|
|||||||||
Plant Network Optimization program
|
|
|
|
|
$
|
8
|
|
|
|
|
|
|
8
|
|
|||||||||
|
$
|
79
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
57
|
|
|
$
|
160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
Restructuring charges
|
$
|
55
|
|
|
|
|
|
|
|
|
$
|
34
|
|
|
$
|
89
|
|
||||||
Restructuring-related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of products sold
|
|
|
$
|
9
|
|
|
$
|
27
|
|
|
|
|
|
|
36
|
|
|||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
4
|
|
|
4
|
|
||||||||||
|
—
|
|
|
9
|
|
|
27
|
|
|
—
|
|
|
4
|
|
|
40
|
|
||||||
|
$
|
55
|
|
|
$
|
9
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
2011 Restructuring plan
|
$
|
21
|
|
|
|
|
|
|
|
|
$
|
14
|
|
|
$
|
35
|
|
||||||
2010 Restructuring plan
|
24
|
|
|
$
|
1
|
|
|
|
|
|
|
24
|
|
|
49
|
|
|||||||
Plant Network Optimization program
|
10
|
|
|
8
|
|
|
$
|
27
|
|
|
|
|
|
|
45
|
|
|||||||
|
$
|
55
|
|
|
$
|
9
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
Restructuring charges
|
$
|
70
|
|
|
|
|
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
116
|
|
||||
Restructuring-related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of products sold
|
|
|
$
|
7
|
|
|
$
|
41
|
|
|
|
|
|
|
48
|
|
|||||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|
5
|
|
|
5
|
|
||||||||||
|
|
|
7
|
|
|
41
|
|
|
|
|
5
|
|
|
53
|
|
||||||||
|
$
|
70
|
|
|
$
|
7
|
|
|
$
|
41
|
|
|
$
|
11
|
|
|
$
|
40
|
|
|
$
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
Termination
Benefits
|
|
Accelerated
Depreciation
|
|
Transfer
Costs
|
|
Fixed Asset
Write-offs
|
|
Other
|
|
Total
|
||||||||||||
2010 Restructuring plan
|
$
|
66
|
|
|
|
|
|
|
$
|
11
|
|
|
$
|
33
|
|
|
$
|
110
|
|
||||
Plant Network Optimization program
|
4
|
|
|
$
|
7
|
|
|
$
|
28
|
|
|
|
|
|
|
39
|
|
||||||
2007 Restructuring plan
|
|
|
|
|
13
|
|
|
|
|
7
|
|
|
20
|
|
|||||||||
|
$
|
70
|
|
|
$
|
7
|
|
|
$
|
41
|
|
|
$
|
11
|
|
|
$
|
40
|
|
|
$
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
2011
Restructuring
plan
|
|
2010
Restructuring
plan
|
|
Plant
Network
Optimization
|
|
Total
|
||||||||
Termination benefits
|
$
|
99
|
|
|
$
|
90
|
|
|
$
|
36
|
|
|
$
|
225
|
|
Fixed asset write-offs
|
14
|
|
|
11
|
|
|
|
|
25
|
|
|||||
Other
|
54
|
|
|
51
|
|
|
|
|
105
|
|
|||||
Total restructuring charges
|
167
|
|
|
152
|
|
|
36
|
|
|
355
|
|
||||
Accelerated depreciation
|
2
|
|
|
|
|
22
|
|
|
24
|
|
|||||
Transfer costs
|
|
|
|
|
74
|
|
|
74
|
|
||||||
Other
|
15
|
|
|
8
|
|
|
|
|
23
|
|
|||||
Restructuring-related expenses
|
17
|
|
|
8
|
|
|
96
|
|
|
121
|
|
||||
|
$
|
184
|
|
|
$
|
160
|
|
|
$
|
132
|
|
|
$
|
476
|
|
(in millions)
|
2011
Restructuring
plan
|
|
2010
Restructuring
plan
|
|
Plant
Network
Optimization
|
|
Total
|
||||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
||||||||
Termination benefits
|
$
|
60
|
|
|
$
|
4
|
|
|
$
|
24
|
|
|
$
|
88
|
|
Transfer costs
|
|
|
|
|
8
|
|
|
8
|
|
||||||
Other
|
53
|
|
|
|
|
|
|
|
53
|
|
|||||
|
$
|
113
|
|
|
$
|
4
|
|
|
$
|
32
|
|
|
$
|
149
|
|
|
|
|
|
|
|
|
|
||||||||
Program to Date
|
|
|
|
|
|
|
|
||||||||
Termination benefits
|
$
|
63
|
|
|
$
|
89
|
|
|
$
|
29
|
|
|
$
|
181
|
|
Transfer costs
|
|
|
|
|
73
|
|
|
73
|
|
||||||
Other
|
65
|
|
|
56
|
|
|
|
|
121
|
|
|||||
|
$
|
128
|
|
|
$
|
145
|
|
|
$
|
102
|
|
|
$
|
375
|
|
|
|
Restructuring Plan Termination Benefits
|
||||||||||||||
|
|
|
|
|
|
Plant
Network
|
|
|
||||||||
(in millions)
|
|
2011
|
|
2010
|
|
Optimization
|
|
Total
|
||||||||
Accrued as of December 31, 2009
|
|
|
|
|
|
$
|
22
|
|
|
$
|
22
|
|
||||
Charges
|
|
|
|
|
$
|
66
|
|
|
4
|
|
|
70
|
|
|||
Cash payments
|
|
|
|
|
(45
|
)
|
|
|
|
(45
|
)
|
|||||
Accrued as of December 31, 2010
|
|
|
|
|
21
|
|
|
26
|
|
|
47
|
|
||||
Charges
|
|
$
|
21
|
|
|
24
|
|
|
10
|
|
|
55
|
|
|||
Cash payments
|
|
(3
|
)
|
|
(39
|
)
|
|
(3
|
)
|
|
(45
|
)
|
||||
Accrued as of December 31, 2011
|
|
18
|
|
|
6
|
|
|
33
|
|
|
57
|
|
||||
Charges
|
|
78
|
|
|
1
|
|
|
—
|
|
|
79
|
|
||||
Cash payments
|
|
(60
|
)
|
|
(4
|
)
|
|
(24
|
)
|
|
(88
|
)
|
||||
Accrued as of December 31, 2012
|
|
$
|
36
|
|
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
48
|
|
|
|
As of
|
|||||
(in millions)
|
|
December 31, 2012
|
December 31, 2011
|
||||
Accounts receivable
|
|
$
|
1,336
|
|
$
|
1,362
|
|
Less: allowance for doubtful accounts
|
|
(88
|
)
|
(81
|
)
|
||
Less: allowance for sales returns
|
|
(31
|
)
|
(35
|
)
|
||
|
|
$
|
1,217
|
|
$
|
1,246
|
|
|
|
Year Ended
December 31,
|
||||||||
(in millions)
|
|
2012
|
2011
|
2010
|
||||||
Beginning balance
|
|
$
|
81
|
|
$
|
83
|
|
$
|
71
|
|
Net charges to expenses
|
|
14
|
|
11
|
|
27
|
|
|||
Utilization of allowances
|
|
(7
|
)
|
(13
|
)
|
(15
|
)
|
|||
Ending balance
|
|
$
|
88
|
|
$
|
81
|
|
$
|
83
|
|
|
|
As of
|
|||||
(in millions)
|
|
December 31, 2012
|
December 31, 2011
|
||||
Finished goods
|
|
$
|
598
|
|
$
|
637
|
|
Work-in-process
|
|
70
|
|
71
|
|
||
Raw materials
|
|
216
|
|
223
|
|
||
|
|
$
|
884
|
|
$
|
931
|
|
|
|
As of
|
|||||
(in millions)
|
|
December 31, 2012
|
December 31, 2011
|
||||
Land
|
|
$
|
81
|
|
$
|
111
|
|
Buildings and improvements
|
|
873
|
|
923
|
|
||
Equipment, furniture and fixtures
|
|
2,348
|
|
1,919
|
|
||
Capital in progress
|
|
218
|
|
230
|
|
||
|
|
3,520
|
|
3,183
|
|
||
Less: accumulated depreciation
|
|
1,956
|
|
1,513
|
|
||
|
|
$
|
1,564
|
|
$
|
1,670
|
|
|
|
As of
|
|||||
(in millions)
|
|
December 31, 2012
|
December 31, 2011
|
||||
Legal reserves
|
|
$
|
100
|
|
$
|
129
|
|
Payroll and related liabilities
|
|
452
|
|
466
|
|
||
Accrued contingent consideration
|
|
120
|
|
37
|
|
||
Other
|
|
612
|
|
695
|
|
||
|
|
$
|
1,284
|
|
$
|
1,327
|
|
|
|
As of
|
|||||
(in millions)
|
|
December 31, 2012
|
December 31, 2011
|
||||
Legal reserves
|
|
$
|
391
|
|
$
|
170
|
|
Accrued income taxes
|
|
1,215
|
|
1,095
|
|
||
Accrued contingent consideration
|
|
543
|
|
321
|
|
||
Other long-term liabilities
|
|
398
|
|
422
|
|
||
|
|
$
|
2,547
|
|
$
|
2,008
|
|
|
|
Year Ended December 31,
|
||||||||
(in millions)
|
|
2012
|
2011
|
2010
|
||||||
Domestic
|
|
$
|
(1,265
|
)
|
$
|
(437
|
)
|
$
|
(1,910
|
)
|
Foreign
|
|
(2,842
|
)
|
1,079
|
|
847
|
|
|||
|
|
$
|
(4,107
|
)
|
$
|
642
|
|
$
|
(1,063
|
)
|
|
|
Year Ended December 31,
|
|||||
|
|
2012
|
2011
|
2010
|
|||
U.S. federal statutory income tax rate
|
|
(35.0
|
)%
|
35.0
|
%
|
(35.0
|
)%
|
State income taxes, net of federal benefit
|
|
(0.2
|
)%
|
0.5
|
%
|
0.3
|
%
|
State law changes on deferred tax
|
|
|
|
(1.2
|
)%
|
|
|
Effect of foreign taxes
|
|
(3.7
|
)%
|
(63.7
|
)%
|
(20.4
|
)%
|
Non-deductible acquisition expenses
|
|
|
(1.9
|
)%
|
|
|
|
Research credit
|
|
|
(3.4
|
)%
|
(6.0
|
)%
|
|
Valuation allowance
|
|
0.3
|
%
|
(2.9
|
)%
|
2.5
|
%
|
Divestitures
|
|
|
25.4
|
%
|
|
||
Goodwill impairment charges
|
|
36.4
|
%
|
38.0
|
%
|
59.8
|
%
|
Non-deductible expenses
|
|
0.1
|
%
|
5.7
|
%
|
1.8
|
%
|
Other, net
|
|
1.1
|
%
|
(0.2
|
)%
|
(2.8
|
)%
|
|
|
(1.0
|
)%
|
31.3
|
%
|
0.2
|
%
|
|
|
|
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2012
|
|
2011
|
||||
Deferred Tax Assets:
|
|
|
|
|
||||
Inventory costs, intercompany profit and related reserves
|
|
$
|
136
|
|
|
$
|
181
|
|
Tax benefit of net operating loss and credits
|
|
497
|
|
|
440
|
|
||
Reserves and accruals
|
|
300
|
|
|
232
|
|
||
Restructuring-related charges and purchased research and development
|
|
13
|
|
|
20
|
|
||
Litigation and product liability reserves
|
|
48
|
|
|
53
|
|
||
Unrealized gains and losses on derivative financial instruments
|
|
|
|
|
22
|
|
||
Investment write-down
|
|
13
|
|
|
38
|
|
||
Stock-based compensation
|
|
171
|
|
|
219
|
|
||
Federal benefit of uncertain tax positions
|
|
157
|
|
|
141
|
|
||
Other
|
|
54
|
|
|
10
|
|
||
|
|
1,389
|
|
|
1,356
|
|
||
Less valuation allowance
|
|
(316
|
)
|
|
(362
|
)
|
||
|
|
1,073
|
|
|
994
|
|
||
Deferred Tax Liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
|
101
|
|
|
118
|
|
||
Unrealized gains and losses on derivative financial instruments
|
|
21
|
|
|
|
|||
Intangible assets
|
|
2,187
|
|
|
2,241
|
|
||
Other
|
|
1
|
|
|
14
|
|
||
|
|
2,310
|
|
|
2,373
|
|
||
Net Deferred Tax Liabilities
|
|
$
|
1,237
|
|
|
$
|
1,379
|
|
|
Location in
|
|
As of December 31,
|
||||||
Component
|
Balance Sheet
|
|
2012
|
|
2011
|
||||
Current deferred tax asset
|
Deferred income taxes
|
|
$
|
433
|
|
|
$
|
458
|
|
Non-current deferred tax asset
|
Other long-term assets
|
|
54
|
|
|
31
|
|
||
Deferred Tax Assets
|
|
|
487
|
|
|
489
|
|
||
Current deferred tax liability
|
Other current liabilities
|
|
11
|
|
|
3
|
|
||
Non-current deferred tax liability
|
Deferred income taxes
|
|
1,713
|
|
|
1,865
|
|
||
Deferred Tax Liabilities
|
|
|
1,724
|
|
|
1,868
|
|
||
Net Deferred Tax Liabilities
|
|
|
$
|
1,237
|
|
|
$
|
1,379
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
|
|
(restated)
|
|
|
||||||
Beginning Balance
|
|
$
|
987
|
|
|
$
|
965
|
|
|
$
|
1,038
|
|
Additions based on positions related to the current year
|
|
54
|
|
|
104
|
|
|
55
|
|
|||
Additions based on positions related to prior years
|
|
43
|
|
|
8
|
|
|
44
|
|
|||
Reductions for tax positions of prior years
|
|
(27
|
)
|
|
(72
|
)
|
|
(124
|
)
|
|||
Settlements with taxing authorities
|
|
(1
|
)
|
|
(3
|
)
|
|
(35
|
)
|
|||
Statute of limitation expirations
|
|
(4
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|||
Ending Balance
|
|
$
|
1,052
|
|
|
$
|
987
|
|
|
$
|
965
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cost of products sold
|
|
$
|
15
|
|
|
$
|
25
|
|
|
$
|
25
|
|
Selling, general and administrative expenses
|
|
69
|
|
|
74
|
|
|
93
|
|
|||
Research and development expenses
|
|
24
|
|
|
29
|
|
|
32
|
|
|||
|
|
108
|
|
|
128
|
|
|
150
|
|
|||
Less: income tax benefit
|
|
(32
|
)
|
|
(34
|
)
|
|
(55
|
)
|
|||
|
|
$
|
76
|
|
|
$
|
94
|
|
|
$
|
95
|
|
|
|
|
|
|
|
|
||||||
Net impact per common share - basic
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
Net impact per common share - assuming dilution
|
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Options granted (in thousands)
|
|
4,726
|
|
|
16,311
|
|
|
11,008
|
|
|||
Weighted-average exercise price
|
|
$
|
6.23
|
|
|
$
|
7.11
|
|
|
$
|
7.26
|
|
Weighted-average grant-date fair value
|
|
$
|
2.60
|
|
|
$
|
3.07
|
|
|
$
|
3.11
|
|
Black-Scholes Assumptions
|
|
|
|
|
|
|
||||||
Expected volatility
|
|
43
|
%
|
|
42
|
%
|
|
42
|
%
|
|||
Expected term (in years, weighted)
|
|
5.9
|
|
|
6.1
|
|
|
5.5
|
|
|||
Risk-free interest rate
|
|
0.95% - 1.15%
|
|
|
1.16% - 2.61%
|
|
|
1.52% - 2.93%
|
|
|
|
Stock Options
(in thousands)
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
(in years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding as of December 31, 2009
|
|
64,712
|
|
|
$
|
15
|
|
|
|
|
|
||
Granted
|
|
11,008
|
|
|
7
|
|
|
|
|
|
|||
Exercised
|
|
(719
|
)
|
|
7
|
|
|
|
|
|
|||
Cancelled/forfeited
|
|
(14,627
|
)
|
|
13
|
|
|
|
|
|
|||
Outstanding as of December 31, 2010
|
|
60,374
|
|
|
$
|
14
|
|
|
|
|
|
||
Granted
|
|
16,311
|
|
|
7
|
|
|
|
|
|
|||
Exercised
|
|
(18
|
)
|
|
7
|
|
|
|
|
|
|||
Cancelled/forfeited
|
|
(15,746
|
)
|
|
12
|
|
|
|
|
|
|||
Outstanding as of December 31, 2011
|
|
60,921
|
|
|
$
|
13
|
|
|
|
|
|
||
Granted
|
|
4,726
|
|
|
6
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Cancelled/forfeited
|
|
(10,766
|
)
|
|
15
|
|
|
|
|
|
|||
Outstanding as of December 31, 2012
|
|
54,881
|
|
|
$
|
12
|
|
|
5.7
|
|
$
|
—
|
|
Exercisable as of December 31, 2012
|
|
37,111
|
|
|
$
|
14
|
|
|
4.6
|
|
|
||
Expected to vest as of December 31, 2012
|
|
16,227
|
|
|
7
|
|
|
8.1
|
|
|
|||
Total vested and expected to vest as of December 31, 2012
|
|
53,338
|
|
|
$
|
12
|
|
|
5.7
|
|
$
|
—
|
|
|
|
Non-Vested
Stock Award
Units
(in thousands)
|
|
Weighted
Average
Grant-
Date Fair
Value
|
|||
Balance as of December 31, 2009
|
|
27,890
|
|
|
$
|
12
|
|
Granted
|
|
17,619
|
|
|
7
|
|
|
Vested (1)
|
|
(8,431
|
)
|
|
14
|
|
|
Forfeited
|
|
(3,794
|
)
|
|
10
|
|
|
Balance as of December 31, 2010
|
|
33,284
|
|
|
$
|
9
|
|
Granted
|
|
14,640
|
|
|
7
|
|
|
Vested (1)
|
|
(10,344
|
)
|
|
10
|
|
|
Forfeited
|
|
(4,004
|
)
|
|
6
|
|
|
Balance as of December 31, 2011
|
|
33,576
|
|
|
$
|
8
|
|
Granted
|
|
17,073
|
|
|
6
|
|
|
Vested (1)
|
|
(10,158
|
)
|
|
9
|
|
|
Forfeited
|
|
(3,898
|
)
|
|
7
|
|
|
Balance as of December 31, 2012
|
|
36,593
|
|
|
$
|
7
|
|
(1)
|
The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.
|
|
|
2012
|
|
2011
|
2010
|
||||||
|
|
Awards
|
|
Awards
|
Awards
|
||||||
Stock price on date of grant
|
|
$
|
6.28
|
|
|
$
|
7.16
|
|
$
|
7.41
|
|
Measurement period (in years)
|
|
3.0
|
|
|
3.0
|
|
3.0
|
|
|||
Risk-free rate
|
|
0.38
|
%
|
|
1.10
|
%
|
1.29
|
%
|
|
|
Unrecognized
Compensation
Cost
(in millions)(1)
|
|
Weighted
Average
Remaining
Vesting
Period
(in years)
|
||
Stock options
|
|
$
|
25
|
|
|
|
Non-vested stock awards
|
|
128
|
|
|
|
|
|
|
$
|
153
|
|
|
1.5
|
(1)
|
Amounts presented represent compensation cost, net of estimated forfeitures.
|
(shares in thousands)
|
|
2012
|
|
2011
|
|
2010
|
|||
Shares issued or to be issued
|
|
3,979
|
|
|
3,830
|
|
|
4,358
|
|
Range of purchase prices
|
|
$4.82 - $5.16
|
|
$4.81 - $6.22
|
|
$5.22 - $5.31
|
|
|
Year Ended
December 31, |
|||||
(in millions)
|
|
2012
|
2011
|
2010
|
|||
Weighted average shares outstanding - basic
|
|
1,406.7
|
|
1,509.3
|
|
1,517.8
|
|
Net effect of common stock equivalents
|
|
—
|
|
9.7
|
|
—
|
|
Weighted average shares outstanding - assuming dilution
|
|
1,406.7
|
|
1,519.0
|
|
1,517.8
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net sales
|
|
|
|
(restated)
|
|
(restated)
|
||||||
United States
|
|
$
|
3,756
|
|
|
$
|
4,010
|
|
|
$
|
4,215
|
|
EMEA
|
|
1,708
|
|
|
1,756
|
|
|
1,776
|
|
|||
Japan
|
|
827
|
|
|
842
|
|
|
863
|
|
|||
Inter-Continental
|
|
836
|
|
|
751
|
|
|
687
|
|
|||
Net sales allocated to reportable segments
|
|
7,127
|
|
|
7,359
|
|
|
7,541
|
|
|||
Sales generated from business divestitures
|
|
122
|
|
|
140
|
|
|
346
|
|
|||
Impact of foreign currency fluctuations
|
|
—
|
|
|
123
|
|
|
(81
|
)
|
|||
|
|
$
|
7,249
|
|
|
$
|
7,622
|
|
|
$
|
7,806
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Depreciation expense
|
|
|
|
(restated)
|
|
|
(restated)
|
|
||||
United States
|
|
$
|
73
|
|
|
$
|
85
|
|
|
$
|
96
|
|
EMEA
|
|
10
|
|
|
10
|
|
|
19
|
|
|||
Japan
|
|
10
|
|
|
9
|
|
|
10
|
|
|||
Inter-Continental
|
|
7
|
|
|
7
|
|
|
8
|
|
|||
Depreciation expense allocated to reportable segments
|
|
100
|
|
|
111
|
|
|
133
|
|
|||
Manufacturing operations
|
|
126
|
|
|
123
|
|
|
119
|
|
|||
Corporate expenses and currency exchange
|
|
62
|
|
|
62
|
|
|
51
|
|
|||
|
|
$
|
288
|
|
|
$
|
296
|
|
|
$
|
303
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Income (loss) before income taxes
|
|
|
|
(restated)
|
|
(restated)
|
||||||
United States
|
|
$
|
541
|
|
|
$
|
616
|
|
|
$
|
729
|
|
EMEA
|
|
669
|
|
|
740
|
|
|
756
|
|
|||
Japan
|
|
403
|
|
|
367
|
|
|
400
|
|
|||
Inter-Continental
|
|
265
|
|
|
271
|
|
|
250
|
|
|||
Operating income allocated to reportable segments
|
|
1,878
|
|
|
1,994
|
|
|
2,135
|
|
|||
Manufacturing operations
|
|
(276
|
)
|
|
(264
|
)
|
|
(305
|
)
|
|||
Corporate expenses and currency exchange
|
|
(242
|
)
|
|
(270
|
)
|
|
(269
|
)
|
|||
Goodwill and intangible asset impairment charges and acquisition-, divestiture-, litigation-, and restructuring-related net charges
|
|
(4,833
|
)
|
|
(135
|
)
|
|
(1,704
|
)
|
|||
Amortization expense
|
|
(395
|
)
|
|
(421
|
)
|
|
(513
|
)
|
|||
Operating income (loss)
|
|
(3,868
|
)
|
|
904
|
|
|
(656
|
)
|
|||
Other expense, net
|
|
(239
|
)
|
|
(262
|
)
|
|
(407
|
)
|
|||
|
|
$
|
(4,107
|
)
|
|
$
|
642
|
|
|
$
|
(1,063
|
)
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2012
|
|
2011
|
||||
Total assets
|
|
|
|
(restated)
|
|
|||
United States
|
|
$
|
1,716
|
|
|
$
|
1,851
|
|
EMEA
|
|
922
|
|
|
989
|
|
||
Japan
|
|
213
|
|
|
243
|
|
||
Inter-Continental
|
|
543
|
|
|
477
|
|
||
Total assets allocated to reportable segments
|
|
3,394
|
|
|
3,560
|
|
||
Goodwill
|
|
5,973
|
|
|
9,761
|
|
||
Other intangible assets
|
|
6,289
|
|
|
6,473
|
|
||
All other corporate and manufacturing operations assets
|
|
1,498
|
|
|
1,496
|
|
||
|
|
$
|
17,154
|
|
|
$
|
21,290
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net sales
|
|
|
|
|
|
|
||||||
Interventional Cardiology
|
|
$
|
2,179
|
|
|
$
|
2,495
|
|
|
$
|
2,602
|
|
Cardiac Rhythm Management
|
|
1,908
|
|
|
2,087
|
|
|
2,180
|
|
|||
Endoscopy
|
|
1,252
|
|
|
1,187
|
|
|
1,079
|
|
|||
Peripheral Interventions
|
|
774
|
|
|
731
|
|
|
669
|
|
|||
Urology/Women’s Health
|
|
500
|
|
|
498
|
|
|
481
|
|
|||
Neuromodulation
|
|
367
|
|
|
336
|
|
|
304
|
|
|||
Electrophysiology
|
|
147
|
|
|
147
|
|
|
147
|
|
|||
|
|
7,127
|
|
|
7,481
|
|
|
7,462
|
|
|||
Sales generated from divested businesses
|
|
122
|
|
|
141
|
|
|
344
|
|
|||
|
|
$
|
7,249
|
|
|
$
|
7,622
|
|
|
$
|
7,806
|
|
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
3,756
|
|
|
$
|
4,010
|
|
|
$
|
4,215
|
|
Japan
|
|
931
|
|
|
951
|
|
|
886
|
|
|||
Other foreign countries
|
|
2,440
|
|
|
2,520
|
|
|
2,361
|
|
|||
|
|
7,127
|
|
|
7,481
|
|
|
7,462
|
|
|||
Sales generated from divested businesses
|
|
122
|
|
|
141
|
|
|
344
|
|
|||
|
|
$
|
7,249
|
|
|
$
|
7,622
|
|
|
$
|
7,806
|
|
|
|
As of December 31,
|
||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Long-lived assets
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,065
|
|
|
$
|
1,141
|
|
|
$
|
1,188
|
|
Ireland
|
|
252
|
|
|
231
|
|
|
219
|
|
|||
Other foreign countries
|
|
247
|
|
|
298
|
|
|
290
|
|
|||
Property, plant and equipment, net
|
|
1,564
|
|
|
1,670
|
|
|
1,697
|
|
|||
Goodwill
|
|
5,973
|
|
|
9,761
|
|
|
10,186
|
|
|||
Other intangible assets
|
|
6,289
|
|
|
6,473
|
|
|
6,343
|
|
|||
|
|
$
|
13,826
|
|
|
$
|
17,904
|
|
|
$
|
18,226
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
Sept 30,
|
|
Dec 31,
|
||||||||
2012
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
1,866
|
|
|
$
|
1,828
|
|
|
$
|
1,735
|
|
|
$
|
1,821
|
|
Gross profit
|
|
1,235
|
|
|
1,250
|
|
|
1,177
|
|
|
1,238
|
|
||||
Operating income (loss)
|
|
196
|
|
|
(3,587
|
)
|
|
(594
|
)
|
|
115
|
|
||||
Net income (loss)
|
|
113
|
|
|
(3,578
|
)
|
|
(664
|
)
|
|
60
|
|
||||
Net income (loss) per common share - basic
|
|
$
|
0.08
|
|
|
$
|
(2.51
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.04
|
|
Net income (loss) per common share - assuming dilution
|
|
$
|
0.08
|
|
|
$
|
(2.51
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
0.04
|
|
2011
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
1,925
|
|
|
$
|
1,975
|
|
|
$
|
1,874
|
|
|
$
|
1,848
|
|
Gross profit
|
|
1,294
|
|
|
1,287
|
|
|
1,194
|
|
|
1,188
|
|
||||
Operating income
|
|
322
|
|
|
237
|
|
|
174
|
|
|
170
|
|
||||
Net income
|
|
46
|
|
|
146
|
|
|
142
|
|
|
107
|
|
||||
Net income per common share - basic
|
|
$
|
0.03
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
Net income per common share - assuming dilution
|
|
$
|
0.03
|
|
|
$
|
0.10
|
|
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
|
|
EXHIBIT
NO.
|
TITLE
|
|
|
|
|
|
|
|
3.1
|
|
Restated By-laws of the Company (incorporated herein by reference to Exhibit 3.1, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083).
|
|
|
|
3.2
|
|
Third Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.2, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).
|
|
|
|
4.1
|
|
Specimen Certificate for shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1, Registration No. 33-46980).
|
|
|
|
4.2
|
|
Description of Capital Stock contained in Exhibits 3.1 and 3.2.
|
|
|
|
4.3
|
|
Indenture dated as of June 25, 2004 between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank) (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated June 25, 2004, File No. 1-11083).
|
|
|
|
4.4
|
|
Indenture dated as of November 18, 2004 between the Company and J.P. Morgan Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated November 18, 2004, File No. 1-11083).
|
|
|
|
4.5
|
|
Form of First Supplemental Indenture dated as of April 21, 2006 (incorporated herein by reference to Exhibit 99.4, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
|
|
|
|
4.6
|
|
Form of Second Supplemental Indenture dated as of April 21, 2006 (incorporated herein by reference to Exhibit 99.6, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
|
|
|
|
4.7
|
|
5.45% Note due June 15, 2014 in the aggregate principal amount of $500,000,000 (incorporated herein by reference to Exhibit 4.2, Current Report on Form 8-K dated June 25, 2004, File No. 1-11083).
|
|
|
|
4.8
|
|
5.45% Note due June 15, 2014 in the aggregate principal amount of $100,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated June 25, 2004, File No. 1-11083).
|
|
|
|
4.9
|
|
Form of Global Security for the 5.125% Notes due 2017 in the aggregate principal amount of $250,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated November 18, 2004, File No. 1-11083).
|
|
|
|
4.10
|
|
Form of Global Security for the 5.50% Notes due 2015 in the aggregate principal amount of $400,000,000, and form of Notice to the holders thereof (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated November 17, 2005 and Exhibit 99.5, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
|
|
|
|
4.11
|
|
Form of Global Security for the 6.25% Notes due 2035 in the aggregate principal amount of $350,000,000, and form of Notice to holders thereof (incorporated herein by reference to Exhibit 4.2, Current Report on Form 8-K dated November 17, 2005 and Exhibit 99.7, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
|
|
|
|
4.12
|
|
Indenture dated as of June 1, 2006 between the Company and JPMorgan Chase Bank, N.A., as Trustee (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated June 9, 2006, File No. 1-11083).
|
|
|
|
4.13
|
|
Form of Global Security for the 6.40% Notes due 2016 in the aggregate principal amount of $600,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated June 9, 2006, File No. 1-11083).
|
|
|
|
4.14
|
|
4.500% Senior Note due January 15, 2015 in the aggregate principal amount of $850,000,000 (incorporated herein by reference to Exhibit 4.2, Current Report on Form 8-K dated December 10, 2009, File No. 1-11083).
|
|
|
|
4.15
|
|
6.000% Senior Note due January 15, 2020 in the aggregate principal amount of $850,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated December 10, 2009, File No. 1-11083).
|
|
|
|
4.16
|
|
7.375% Senior Note due January 15, 2040 in the aggregate principal amount of $300,000,000 (incorporated herein by reference to Exhibit 4.4, Current Report on Form 8-K dated December 10, 2009, File No. 1-11083).
|
|
|
|
10.1
|
|
Form of Amended and Restated Credit and Security Agreement dated as of November 7, 2007 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated November 7, 2007, File No. 1-11083).
|
|
|
|
10.2
|
|
Form of Amendment No. 1 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 6, 2008 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 1-11083).
|
|
|
|
10.3
|
|
Form of Amendment No. 2 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 5, 2009 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, File No. 1-11083).
|
|
|
|
10.4
|
|
Form of Amendment No. 3 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 4, 2010 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada. (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, File No. 1-11083).
|
|
|
|
10.5
|
|
Form of Amendment No. 4 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of October 29, 2010 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, Liberty Street Funding LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, The Bank of Nova Scotia and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.7, Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11083).
|
|
|
|
10.6
|
|
Form of Amendment No. 5 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 3, 2011 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, Liberty Street Funding LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch; The Bank of Nova Scotia and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).
|
|
|
|
10.7
|
|
Amendment No. 6 to Amended and Restated Credit and Security Agreement, Amendment #2 to Amended and Restated Receivables Sale Agreement and Restatement of Amended Fee Letter, dated as of June 29, 2012, by and among Boston Scientific Funding LLC; Boston Scientific Corporation; Old Line Funding, LLC; Royal Bank of Canada; Liberty Street Funding LLC; and The Bank of Nova Scotia (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 29, 2012, File No. 1-11083).
|
|
|
|
10.8
|
|
Form of Omnibus Amendment dated as of December 21, 2006 among the Company, Boston Scientific Funding Corporation, Variable Funding Capital Company LLC, Victory Receivables Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (Amendment No. 1 to Receivables Sale Agreement and Amendment No. 9 to Credit and Security Agreement) (incorporated herein by reference to Exhibit 10.2, Annual Report on 10-K for the year ended December 31, 2006, File No. 1-11083).
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10.9
|
|
Form of Amended and Restated Receivables Sale Agreement dated as of November 7, 2007 between the Company and each of its Direct or Indirect Wholly-Owned Subsidiaries that Hereafter Becomes a Seller Hereunder, as the Sellers, and Boston Scientific Funding LLC, as the Buyer (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated November 7, 2007, File No. 1-11083).
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10.10
|
|
Credit Agreement dated as of April 18, 2012 by and among Boston Scientific Corporation, the several lenders parties thereto, and Bank of America, N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated April 18, 2012, File No. 1-11083).
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10.11
|
|
License Agreement among Angiotech Pharmaceuticals, Inc., Cook Incorporated and the Company dated July 9, 1997, and related Agreement dated December 13, 1999 (incorporated herein by reference to Exhibit 10.6, Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-11083).
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10.12
|
|
Amendment between Angiotech Pharmaceuticals, Inc. and the Company dated November 23, 2004 modifying July 9, 1997 License Agreement among Angiotech Pharmaceuticals, Inc., Cook Incorporated and the Company (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated November 23, 2004, File No. 1-11083).
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10.13
|
|
Sale and Purchase Agreement dated October 28, 2010, as amended, between Boston Scientific Corporation and Stryker Corporation (incorporated herein by reference to Exhibit 10.11, Annual Report on Form 10-K for year ended December 31, 2010 and Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, File No.1-11083).
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10.14
|
|
Amendment No. 3 to Sale and Purchase Agreement dated November 1, 2011, between Boston Scientific Corporation and Stryker Corporation (incorporated herein by reference to Exhibit 10.13, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).
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10.15
|
|
Amendment No. 4 to Sale and Purchase Agreement dated December 1, 2011, between Boston Scientific Corporation and Stryker Corporation (incorporated herein by reference to Exhibit 10.14, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).
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10.16
|
|
Transaction Agreement, dated as of January 8, 2006, as amended, between Boston Scientific Corporation and Abbott Laboratories (incorporated herein by reference to Exhibit 10.47, Exhibit 10.48, Exhibit 10.49 and Exhibit 10.50, Annual Report on Form 10-K for year ended December 31, 2005 and Exhibit 10.1, Current Report on Form 8-K dated April 7, 2006, File No. 1-11083).
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10.17
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|
Form of Settlement Agreement and Non-Exclusive Patent Cross-License dated January 29, 2010 by and between Boston Scientific Corporation and Boston Scientific Scimed, Inc., and Johnson & Johnson (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated January 29, 2010, File No.1-11083).
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10.18
|
|
Form of Plea Agreement and Sentencing Stipulations executed as of February 24, 2010 (incorporated herein by reference to Exhibit 10.66, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).
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10.19
|
|
Form of Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and Boston Scientific Corporation (incorporated herein by reference to Exhibit 10.67, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).
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10.20
|
|
Decision and Order of the Federal Trade Commission in the matter of Boston Scientific Corporation and Guidant Corporation finalized August 3, 2006 (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, File No. 1-11083).
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10.21
|
|
Embolic Protection Incorporated 1999 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.1, Registration Statement on Form S-8, Registration No. 333-61060 and Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, File No. 1-11083).#
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10.22
|
|
Quanam Medical Corporation 1996 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.3, Registration Statement on Form S-8, Registration No. 333-61060 and Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, File No. 1-11083).#
|
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10.23
|
|
RadioTherapeutics Corporation 1994 Incentive Stock Plan, as amended (incorporated herein by reference to Exhibit 4.2, Registration Statement on Form S-8, Registration No. 333-76380 and Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, File No. 1-11083).#
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10.24
|
|
Guidant Corporation 1994 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.46, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
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|
10.25
|
|
Guidant Corporation 1996 Nonemployee Directors Stock Plan, as amended (incorporated herein by reference to Exhibit 10.47, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
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|
10.26
|
|
Guidant Corporation 1998 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.48, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
|
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|
10.27
|
|
Form of Guidant Corporation Option Grant (incorporated herein by reference to Exhibit 10.49, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
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|
10.28
|
|
Boston Scientific Corporation 2006 Global Employee Stock Ownership Plan, as amended and restated, effective July 1, 2011 (incorporated herein by reference to Exhibit 10.27, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).#
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|
10.29
|
|
Form of Amendment of the Boston Scientific Corporation Amended and Restated 2006 Global Employee Stock Ownership Plan (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, File No. 1-11083).#
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|
10.30
|
|
Boston Scientific Corporation 1992 Non-Employee Directors' Stock Option Plan, as amended (incorporated herein by reference to Exhibit 10.2, Annual Report on Form 10-K for the year ended December 31, 1996, Exhibit 10.3, Annual Report on Form 10-K for the year ended December 31, 2000 and Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, File No. 1-11083).#
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|
|
10.31
|
|
Boston Scientific Corporation Non-Employee Director Deferred Compensation Plan, as amended and restated, effective January 1, 2009 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated October 28, 2008, File No. 1-11083).#
|
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|
|
10.32
|
|
Form of Non-Qualified Stock Option Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.5, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
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|
|
10.33
|
|
Form of Restricted Stock Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.6, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
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|
|
10.34
|
|
Form of Restricted Stock Award Agreement (Non-Employee Directors) under the 2011 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
|
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|
10.35
|
|
Form of Boston Scientific Corporation Excess Benefit Plan, as amended (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 29, 2005 and Exhibit 10.4, Current Report on Form 8-K dated December 16, 2008, File No. 1-11083).#
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10.36
|
|
Form of Trust under the Boston Scientific Corporation Excess Benefit Plan (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated June 29, 2005, File No. 1-11083).#
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|
10.37
|
|
Boston Scientific Corporation Deferred Bonus Plan (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated May 11, 2010, File No. 1-11083).#
|
|
|
|
10.38
|
|
Boston Scientific Corporation Executive Retirement Plan as Amended and Restated, effective August 1, 2012 (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
|
|
|
|
10.39
|
|
Form of 2010 Performance Incentive Plan (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 15, 2009, File No. 1-11083).#
|
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|
|
10.40
|
|
Form of 2010 Performance Share Plan (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated December 15, 2009, File No. 1-11083).#
|
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|
|
10.41
|
|
Form of 2011 Performance Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated January 7, 2011, File No. 1-11083).#
|
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|
|
10.42
|
|
Form of 2011 Performance Share Program (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 14, 2010, File No. 1-11083).#
|
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|
|
10.43
|
|
Boston Scientific Corporation 2012 Annual Bonus Plan, effective as of January 1, 2012 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated February 28, 2012, File No. 1-11083).#
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|
|
10.44
|
|
Form of 2012 Total Shareholder Return Performance Share Program (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 16, 2011, File No. 1-11083).#
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|
|
10.45
|
|
Form of 2012 Free Cash Flow Performance Share Program (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated December 16, 2011, File No. 1-11083).#
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|
|
10.46
|
|
Boston Scientific Corporation 2013 Annual Bonus Plan, effective as of January 1, 2013 (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
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|
|
10.47
|
|
Boston Scientific Corporation 2013 Total Shareholder Return Performance Share Program (incorporated herein by reference to Exhibit 10.5, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
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|
|
10.48
|
|
Boston Scientific Corporation 2013 Free Cash Flow Performance Share Program (incorporated herein by reference to Exhibit 10.6, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
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|
|
10.49
|
|
Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated, effective as of January 1, 2011 (incorporated herein by reference to Exhibit 10.39, Annual Report on Form 10-K for year ended December 31, 2010, File No. 1-11083).#
|
|
|
|
10.50
|
|
Amendment to Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated, effective as of January 1, 2011 (incorporated herein by reference to Exhibit 10.44, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.51
|
|
Form of Second Amendment of Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
|
|
|
|
10.52
|
|
Form of Third Amendment of the Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, File No. 1-11083).#
|
|
|
|
10.53
|
|
Boston Scientific Corporation 1992 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.1, Annual Report on Form 10-K for the year ended December 31, 1996, Exhibit 10.2, Annual Report on Form 10-K for the year ended December 31, 2001, Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004 and Exhibit 10.3, Current Report on Form 8-K dated May 9, 2005, File No. 1-11083).#
|
|
|
|
10.54
|
|
Boston Scientific Corporation 1995 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.3, Annual Report on Form 10-K for the year ended December 31, 1996, Exhibit 10.5, Annual Report on Form 10-K for the year ended December 31, 2001, Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004 and Exhibit 10.3, Current Report on Form 8-K dated May 9, 2005, File No. 1-11083).#
|
|
|
|
10.55
|
|
Boston Scientific Corporation 2000 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.20, Annual Report on Form 10-K for the year ended December 31, 1999, Exhibit 10.18, Annual Report on Form 10-K for the year ended December 31, 2001, Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, Exhibit 10.3, Current Report on Form 8-K dated May 9, 2005, and Exhibit 10.3, Current Report on Form 8-K dated December 16, 2008, File No. 1-11083).#
|
|
|
|
10.56
|
|
Boston Scientific Corporation 2003 Long-Term Incentive Plan, as Amended and Restated, Effective June 1, 2008 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 1-11083).#
|
|
|
|
10.57
|
|
Boston Scientific Corporation 2011 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.49, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.58
|
|
Form of Non-Qualified Stock Option Agreement (vesting over three years) (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
|
|
|
10.59
|
|
Form of Non-Qualified Stock Option Agreement (vesting over four years) (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
|
|
|
10.60
|
|
Form of Non-Qualified Stock Option Agreement (vesting over two years) (incorporated herein by reference to Exhibit 10.20, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).#
|
|
|
|
10.61
|
|
Form of Non-Qualified Stock Option Agreement (Executive) (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
|
|
|
|
10.62
|
|
Form of Deferred Stock Unit Award Agreement (Executive) (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
|
|
|
|
10.63
|
|
Form of Non-Qualified Stock Option Agreement (Special) (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
|
|
|
|
10.64
|
|
Form of Non-Qualified Stock Option Agreement dated July 1, 2005 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated July 1, 2005, File No. 1-11083).#
|
|
|
|
10.65
|
|
Form of Stock Option Agreement (with one year service requirement for vesting upon Retirement) (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-K dated September 30, 2010, File No. 1-11083).#
|
|
|
|
10.66
|
|
Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
|
|
|
10.67
|
|
Form of Deferred Stock Unit Award Agreement (Special) (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
|
|
|
|
10.68
|
|
Form of Deferred Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
|
|
|
10.69
|
|
Form of Deferred Stock Unit Award Agreement (vesting over five years) (incorporated herein by reference to Exhibit 10.16, Annual Report on 10-K for the year ended December 31, 2006, File No. 1-11083).#
|
|
|
|
10.70
|
|
Form of Deferred Stock Unit Award Agreement (vesting over two years) (incorporated herein by reference to Exhibit 10.24, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).#
|
|
|
|
10.71
|
|
Form of Deferred Stock Unit Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.7, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
|
|
|
|
10.72
|
|
Form of Deferred Stock Unit Award Agreement dated July 1, 2005 (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated July 1, 2005, File No. 1-11083).#
|
|
|
|
10.73
|
|
Form of Deferred Stock Unit Award Agreement (with one year service requirement for vesting upon Retirement) (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11083).#
|
|
|
|
10.74
|
|
Form of Performance Share Unit Award Agreement (incorporated herein by reference to Exhibit 10.41, Annual Report on Form 10-K for year ended December 31, 2009, File No 1-11083).#
|
|
|
|
10.75
|
|
Form of Restricted Stock Award Agreement (Non-Employee Directors) under the 2003 and 2011 Long-Term Incentive Plans (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).#
|
|
|
|
10.76
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).#
|
|
|
|
10.77
|
|
Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).#
|
|
|
|
10.78
|
|
Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Total Shareholder Return) (incorporated herein by reference to Exhibit 10.70, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.79
|
|
Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Free Cash Flow) (incorporated herein by reference to Exhibit 10.71, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.80
|
|
Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (Special) (incorporated herein by reference to Exhibit 10.72, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.81
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan (Kucheman) (incorporated herein by reference to Exhibit 10.73, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.82
|
|
Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (Kucheman) (incorporated herein by reference to Exhibit 10.74, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.83
|
|
Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Kucheman - Total Shareholder Return) (incorporated herein by reference to Exhibit 10.75, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.84
|
|
Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Kucheman - Free Cash Flow) (incorporated herein by reference to Exhibit 10.76, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.85
|
|
Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (Kucheman - Special) (incorporated herein by reference to Exhibit 10.77, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.86
|
|
Form of Indemnification Agreement between the Company and certain Directors and Officers (incorporated herein by reference to Exhibit 10.61, Annual Report on Form 10-K for year ended December 31, 2010, File No. 1-11083).#
|
|
|
|
10.87
|
|
Form of Change in Control Agreement between Boston Scientific Corporation and certain Executive Officers (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated December 15, 2009, File No. 1-11083).#
|
|
|
|
10.88
|
|
Form of Severance Pay and Layoff Notification Plan as Amended and Restated effective as of November 1, 2007 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated November 1, 2007, File No. 1-11083).#
|
|
|
|
10.89
|
|
Boston Scientific Corporation Severance Pay and Layoff Notification Plan as Amended and Restated, effective as of January 1, 2012 (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated December 16, 2011, File No. 1-11083).#
|
|
|
|
10.90
|
|
First Amendment to the Boston Scientific Corporation Severance Pay and Layoff Notification Plan as Amended and Restated, effective August 1, 2012 (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
|
|
|
|
10.91
|
|
Boston Scientific Corporation U.S. Severance Plan for Exempt Employees, effective as of January 1, 2012 (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated December 16, 2011, File No. 1-11083).#
|
|
|
|
10.92
|
|
First Amendment to the Boston Scientific Corporation U.S. Severance Plan for Exempt Employees, effective August 1, 2012 (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
|
|
|
|
10.93
|
|
Form of Non-Qualified Stock Option Agreement dated February 24, 2009 between Boston Scientific Corporation and James R. Tobin (incorporated herein by reference to Exhibit 10.66, Annual Report on Form 10-K for year ended December 31, 2008, File No. 1-11083).#
|
|
|
|
10.94
|
|
Form of Transition and Retirement Agreement dated June 25, 2009 between Boston Scientific Corporation and James R. Tobin (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 22, 2009, File No. 1-11083).#
|
|
|
|
10.95
|
|
Form of Offer Letter between Boston Scientific Corporation and Sam R. Leno dated April 11, 2007 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated May 7, 2007, File No. 1-11083).#
|
|
|
|
10.96
|
|
Form of Deferred Stock Unit Award Agreement dated June 5, 2007 between Boston Scientific Corporation and Sam R. Leno (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for quarter ended June 30, 2007, File No. 1-11083).#
|
|
|
|
10.97
|
|
Form of Non-Qualified Stock Option Agreement dated June 5, 2007 between Boston Scientific Corporation and Sam R. Leno (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q dated June 30, 2007, File No. 1-11083).#
|
|
|
|
10.98
|
|
Form of Offer Letter between Boston Scientific Corporation and Jeffrey D. Capello dated May 16, 2008 (incorporated herein by reference to Exhibit 10.65, Annual Report on Form 10-K for year ended December 31, 2008, File No. 1-11083).#
|
|
|
|
10.99
|
|
Form of Offer Letter between Boston Scientific Corporation and J. Raymond Elliott dated June 22, 2009 (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated June 22, 2009, File No. 1-11083).#
|
|
|
|
10.100
|
|
Form of Performance Deferred Stock Unit Award Agreement between Boston Scientific Corporation and J. Raymond Elliott dated June 23, 2009 (incorporated herein by reference to Exhibit 10.68, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).#
|
|
|
|
10.101
|
|
Form of Retention Agreement between Boston Scientific Corporation and J. Raymond Elliott, effective as of July 13, 2009 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, File No. 1-11083).#
|
|
|
|
10.102
|
|
Form of Restricted Deferred Stock Unit Award Agreement between Boston Scientific Corporation and J. Raymond Elliott dated June 23, 2009 (incorporated herein by reference to Exhibit 10.69, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).#
|
|
|
|
10.103
|
|
Form of Letter Agreement dated September 16, 2011 between Boston Scientific Corporation and J. Raymond Elliott (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083).#
|
|
|
|
10.104
|
|
Form of Consulting Agreement dated December 12, 2011 between Boston Scientific Corporation and J. Raymond Elliott (incorporated herein by reference to Exhibit 10.96, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.105
|
|
Form of Offer Letter between Boston Scientific Corporation and Timothy A. Pratt dated April 9, 2008 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 1-11083).#
|
|
|
|
10.106
|
|
Form of Agreement and General Release of All Claims between Fredericus A. Colen and Boston Scientific Corporation dated April 23, 2010 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated April 23, 2010, File No. 1-11083).#
|
|
|
|
10.107
|
|
Form of Offer Letter dated September 6, 2011 between Boston Scientific Corporation and Michael F. Mahoney, as supplemented September 13, 2011 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083).#
|
|
|
|
10.108
|
|
Form of Amendment, dated February 14, 2012, to Offer Letter dated September 6, 2011 between Boston Scientific Corporation and Michael F. Mahoney, as supplemented September 13, 2011 (incorporated herein by reference to Exhibit 10.100, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.109
|
|
Form of Offer Letter dated September 6, 2011 between Boston Scientific Corporation and William H. Kucheman (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083).#
|
|
|
|
10.110
|
|
Form of Amendment, dated February 14, 2012, to Offer Letter dated September 6, 2011 between Boston Scientific Corporation and William H. Kucheman (incorporated herein by reference to Exhibit 10.102, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.111
|
|
Letter Agreement, dated October 30, 2012, between William H. Kucheman and Boston Scientific Corporation (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
|
|
|
|
10.112
|
|
Form of Consulting Agreement between William H. Kucheman and Boston Scientific Corporation (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
|
|
|
|
10.113*
|
|
Form of Offer Letter dated November 30, 2011 between Boston Scientific Corporation and Supratim Bose.#
|
|
|
|
10.114
|
|
Form of Retirement Agreement dated January 1, 2012 between Boston Scientific Corporation and Stephen F. Moreci (incorporated herein by reference to Exhibit 10.103, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.115
|
|
Form of Consulting Agreement dated January 12, 2012 between Boston Scientific Corporation and Stephen F. Moreci (incorporated herein by reference to Exhibit 10.104, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.116
|
|
Form of Retirement Agreement dated December 21, 2011 between Boston Scientific Corporation and Sam R. Leno (incorporated herein by reference to Exhibit 10.105, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
|
|
|
|
10.117
|
|
The Boston Scientific Deferred Compensation Option Program (incorporated herein by reference to Exhibit 4.1, Registration No. 333-98755).#
|
|
|
|
10.118*
|
|
Boston Scientific Corporation Domestic Relocation Policy Tier 5 Executive Officer Homeowner, effective January 2007.#
|
|
|
|
11*
|
|
Statement regarding computation of per share earnings (included in Note N – Weighted Average Shares Outstanding to the Company's 2012 consolidated financial statements for the year ended December 31, 2012 included in Item 8).
|
|
|
|
12*
|
|
Statement regarding computation of ratios of earnings to fixed charges.
|
|
|
|
21*
|
|
List of the Company's subsidiaries as of February 18, 2013.
|
|
|
|
23*
|
|
Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP.
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101*
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010; (ii) the Consolidated Statements of Financial Position as of December 31, 2012 and 2011; (iii) the Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2011 and 2010; (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010; (v) the notes to the Consolidated Financial Statements; and (vi) Schedule II - Valuation and Qualifying Accounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Jeffrey D. Capello
|
|
|
|
|
|
|
|
|
|
Jeffrey D. Capello
|
|
|
|
|
Executive Vice President and Chief
|
|
|
|
|
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Katharine T. Bartlett
|
|
|
|
|
|
|
|
|
|
Katharine T. Bartlett
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Bruce L. Byrnes
|
|
|
|
|
|
|
|
|
|
Bruce L. Byrnes
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Nelda J. Connors
|
|
|
|
|
|
|
|
|
|
Nelda J. Connors
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Kristina M. Johnson, Ph.D.
|
|
|
|
|
|
|
|
|
|
Kristina M. Johnson, Ph.D.
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Ernest Mario, Ph.D.
|
|
|
|
|
|
|
|
|
|
Ernest Mario, Ph. D.
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Michael F. Mahoney
|
|
|
|
|
|
|
|
|
|
Michael F. Mahoney
|
|
|
|
|
Director, President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ N.J. Nicholas, Jr.
|
|
|
|
|
|
|
|
|
|
N.J. Nicholas, Jr.
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Pete M. Nicholas
|
|
|
|
|
|
|
|
|
|
Pete M. Nicholas
|
|
|
|
|
Director, Founder, Chairman of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ Uwe E. Reinhardt, Ph.D.
|
|
|
|
|
|
|
|
|
|
Uwe E. Reinhardt, Ph.D.
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated: February 22, 2013
|
|
By:
|
|
/s/ John E. Sununu
|
|
|
|
|
|
|
|
|
|
John E. Sununu
|
|
|
|
|
Director
|
|
|
|
|
|
Description
|
|
Balance at
Beginning of Year |
|
Charges to
Costs and
Expenses (a)
|
|
Deductions to
Allowances for Uncollectible
Accounts (b)
|
|
Charges to
(Deductions from) Other Accounts (c) |
|
Balance at
End of Year
|
|||||||
Year Ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances for uncollectible accounts and sales returns and allowances
|
|
$
|
116
|
|
|
14
|
|
|
(7
|
)
|
|
(4
|
)
|
|
$
|
119
|
|
Year Ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances for uncollectible accounts and sales returns and allowances
|
|
$
|
125
|
|
|
11
|
|
|
(13
|
)
|
|
(7
|
)
|
|
$
|
116
|
|
Year Ended December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances for uncollectible accounts and sales returns and allowances
|
|
$
|
110
|
|
|
27
|
|
|
(15
|
)
|
|
3
|
|
|
$
|
125
|
|
2.1
|
You will receive a base salary
of 50,330 SGD gross per month.
|
2.2
|
Your salary shall be reviewed from time to time in accordance
|
3.
|
13
th
Month Wage Supplement
|
3.1
|
The Company pays a 13
th
month wage supplement at the end of the calendar year.
|
3.2
|
For any term of service of less than 12 months, the 13
th
month supplement shall be pro-rated. This will be calculated on the base salary which you are drawing at the time payment is made.
|
4.
|
Incentive
|
4.1
|
In addition, starting in 2012, you will be eligible for Boston Scientific Performance Incentive Plan (“PIP”) incentive earnings target of 60% of your total annual base salary including the 13
th
month' supplement, if performance targets are achieved. Your actual award will be based on your individual and company performance. Under the current incentive plan, you must be employed on the date the award is payable in order to be eligible for payment.
|
5.
|
Cash Sign-on
|
5.1
|
Boston Scientific will provide you with a lump-sum cash sign-on bonus of SGD 262,020 (less applicable withholding taxes), which will be paid at the time of your first paycheck (the “Initial Sign-On Bonus”). Except as otherwise set forth in this Letter, you must be employed by Boston Scientific to receive the Initial Sign-On Bonus. If you should leave Boston Scientific voluntarily prior to the first anniversary of your start date, you will be required to pay back the Initial Sign-On Bonus within 30 days of your departure.
|
6.
|
Long-Term Equity
|
6.1
|
New Hire Equity Grant
- As part of this offer of employment, we are recommending, subject to approval by the Compensation Committee of the Board of Directors, which we will seek immediately and expect to obtain prior to your anticipated start date, an equity incentive. The equity incentive will be in the form of 50% Non-Qualified Stock Options and 50% Deferred Stock Units (DSUs) having a total value of $800,000 (US Dollars) on the date of grant. Your award will be made pursuant to the 2011 Boston Scientific Long Term Incentive Plan. Our Long-Term Incentive Plans are designed to share the rewards of the business with individuals who most significantly contribute to the achievement of the Company's strategic and operating goals. The date of grant will be the first trading day of the month following date of hire and approval.
|
a.
|
Non-Qualified Stock Options: The option grant will provide you with the opportunity to purchase shares of Boston Scientific common stock. The number of stock options will be calculated using a Black Scholes calculation of the value of the options on the effective date of grant. The exercise price will be equal to the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. The option grant will vest in four equal annual installments beginning on the first anniversary of the date of grant and will expire on the 10
th
anniversary of the grant date. In all other respects the option grant will be subject to the provisions of the 2011 Long-Term Incentive Plan and Non-Qualified Stock Option Agreement. In accordance with the 2011 Long-Term Incentive Plan, any unvested stock options will accelerate upon your Retirement, Disability, death or a Change in Control of Boston Scientific (as those terms are defined in the 2011 Long-Term Incentive Plan) and remain exercisable until the expiration of the stated term of the stock option.
|
b.
|
DSU Award: An award of Deferred Stock Units reflects Boston
|
6.2
|
2012 Annual Equity Grant
- As part of this offer, during the normal annual executive review process you will be recommended to be granted an equity award having a total value of $400,000 (US Dollars) on the effective date of grant (“2012 Annual Equity Grant”). This award is inclusive of Boston Scientific annual equity to be granted to you under the 2012 Long Term Incentive Program. These awards will be made pursuant to the 2011 Boston Scientific Long Term Incentive Plan. Our Long Term Incentive Plans are designed to share the rewards of the business with individuals who most significantly contribute to the achievement of the Company's strategic and operating goals. The effective date of grant will be the date on which 2012 long-term incentive awards are made to senior executives of Boston Scientific generally under the 2012 Long Term Incentive Program, which under our policies is generally on the date of approval or the first open trading day following the date of approval, should the date of grant be in a closed trading window. Thereafter, your performance and entitlement to long term incentive compensation grants will be reviewed in the normal course, on an annual basis starting with the annual review process in 2013. Although the program and individual performance varies from year to year, we generally expect this position to have a range of equity between $500,000 (US Dollars) to $1,500,000 (US Dollars).
|
7.
|
Transport Allowance
|
7.1
|
You will be eligible for a transport allowance of 72,000 SGD per annum, or 6,000 SGD per month which covers petrol and parking. This will be paid directly to your account. The transportation allowance, being fixed and regular amount, is compensation income subject to withholding tax on compensation.
|
8.
|
Other Benefits and Terms
|
8.1
|
Your leave, medical and hospitalization benefits and other terms are summarized in the Employee Handbook which will be provided to you. You are covered under the benefits program for employees designated as
Managerial/Professional staff
.
|
9.1
|
During your probationary service, you or the Company shall be entitled to terminate your employment at any time by one party giving to the other one
(1) month's
notice in writing or one (1) month's base salary in lieu of notice.
|
9.2
|
After your confirmation, your employment may be terminated at any time by either party giving to the other one (1) months' written notice, or one (1) months'
base salary in lieu of notice.
|
9.3
|
Company shall be entitled to terminate your employment immediately upon written notice (but without prejudice to the rights and remedies of the Company for any breach of this Agreement and to your continuing obligations under this Agreement) in any of the following cases:
|
9.3.3
|
If you become bankrupt or have a receiving order made against you or make any general composition with your creditors.
|
9.4
|
Upon termination of employment for any reason, or at any other time requested by the Company, you shall promptly return all Company property to the Company.
|
9.5
|
Per the employment rules of the Company and subject to applicable law, you shall retire from the services of the Company upon attaining the prescribed retirement age.
|
10.1
|
Any notice required to be given in connection with your contract of employment shall be given in writing.
|
10.2
|
In the case of a notice given by the Company, such notice shall be valid if it is delivered personally to you or sent by registered post to your last known place of residence.
|
11.1
|
This Offer of Employment is contingent upon your present or previous employers releasing you from any advance notice of resignation as well as any restrictive and non-competition covenants which may affect or restrict the scope and obligations of your employment with the Company, as determined by the Company
|
11.2
|
This offer is contingent on background verification and references satisfactory to Boston Scientific.
|
12.4
|
You agree to promptly disclose to Company any inventions, original works of authorship, development, concepts, improvements or trade secrets, whether or not patentable or subject to copyright or similar laws, which you make during the period of your employment with the Company and which relate to the scope of your employment. You agree to assign all rights, title and interest in such intellectual properties to the Company, and will cooperate fully with respect to any filings or registrations the Company wishes to make to protect those properties.
|
13.1
|
You shall devote your full working time and ability to the business of the Company and its affiliated companies in accordance with the instructions you receive from the Company and consistent with the duties and responsibilities assigned to you.
|
13.2
|
You are prohibited from concluding any contracts binding the Company, whether in your own name or on behalf of any third party, unless you first secure written approval of the Company.
|
13.3
|
You agree that you will not, during the term of this agreement, become associated directly or indirectly with any business whose activities may be competitive with those of the Company, its employees, or its affiliated companies.
|
13.4
|
Publications or speeches by you which concern the activities or interests of the Company must be cleared in advance by your supervisor unless they are for the purposes of sales promotion for the Company or are otherwise within the scope of your usual functions.
|
14.1
|
As a member of the Executive Committee, you will be eligible for benefits under the Boston Scientific Executive Retirement Plan. As a member of the Executive Committee, if you “Retire” from Boston Scientific (as that term is defined in our Executive Retirement Plan), you may be eligible to receive certain benefits provided in that Plan, including a lump sum payment equal to 2.5 months of base salary times your years of service, subject to a maximum benefit of 36 months. A copy of Boston Scientific's Executive Retirement Plan is attached for your information.
|
15.
|
BOSTON SCIENTIFIC CHANGE IN CONTROL AND INDEMNIFICATION AGREEMENTS
|
15.1
|
In general, the Change in Control agreement entitles you as a member of our Executive Committee to a lump sum payment of three times your base salary and assumed on-plan incentive bonus if either your employment is terminated (other than for cause) or if your duties are diminished following a change in control of Boston Scientific. Indemnification by Boston Scientific is also extended to key executives for liability arising in the proper performance of one's responsibilities as an executive officer of Boston Scientific. A form of each agreement will be provided to you.
|
MOBILITY PHILOSOPHY
|
2
|
|
PURPOSE OF THE POLICY
|
2
|
|
ELIGIBILITY
|
2
|
|
APPLICATION OF THE POLICY
|
3
|
|
ADMINISTRATION
|
3
|
|
Getting Started
|
3
|
|
Interpretation and Policy Changes
|
3
|
|
Reimbursements and Payments
|
4
|
|
RELOCATION PROVISIONS
|
4
|
|
Lump Sum Payment for Temporary Living, Home search, and Miscellaneous Expenses
|
4
|
|
New Home Search
|
5
|
|
Departure Area Home Sale Assistance
|
7
|
|
Duplicate Housing Costs
|
9
|
|
Moving Household Goods
|
10
|
|
Final Trip to New Area
|
11
|
|
Spouse/Partner Career Assistance
|
12
|
|
Cost of Living Allowance for High-Cost Areas
|
12
|
|
POLICY PROVISION SUMMARY
|
13
|
|
TAX SUMMARY
|
14
|
|
ATTACHMENT: AGREEMENT TO REIMBURSE
|
15
|
|
▪
|
The commuting distance from the transferee's current residence to new place of employment must be at least 50 miles greater than the commuting distance from current residence to current place of employment. If the commuting distance is considered normal for the area, you may not be eligible for relocation provisions, even though the added distance may meet the 50-mile requirement.
|
▪
|
The transferee must work full time at the new location for at least thirty-nine (39) weeks within the first year after transfer for the move to meet IRS regulations.
|
▪
|
The relocation must be completed within one year of the transferee's transfer or hire date.
|
▪
|
All financial relocation provisions provided in connection with a change of residence will apply to one household unit. In situations where two or more transferees share the same household, they will receive relocation provisions for a single household move.
|
▪
|
Transferees will be required to sign an Agreement to Reimburse as part of their acceptance of the position requiring relocation (see Attachment). Transferees who voluntarily terminate their employment with the Company, or are terminated for cause, will be required to pay back expenses incurred by the Company for the transferee's relocation on this schedule: 100% of all relocation provisions and attorneys' fees if the employee terminates within one year of the date on which payment of relocation provisions is first made; and 50% of relocation provisions and attorney fees if the employee terminates within two years of the date on which payment of relocation provisions is first made.
|
•
|
You must sign the Agreement to Reimburse before any relocation payments can be made.
|
•
|
Transferees whose employment terminates due to a RIF (reduction in force), will have the agreement to reimburse waived and may either be eligible to receive some relocation payments or have some relocation provisions eliminated as outlined in the Companies “Standard Operating Procedure” for relocation payments following job elimination.
|
▪
|
A lump sum to offset living expenses for up to 60 days.
|
▪
|
An allotment which considers daily expenses specific to your plans, covering meals, lodging, rental car and child/elder care
|
•
|
You and your spouse may take one or two trips, based on need. The lump sum will be based on a maximum of ten days to look for housing in the destination area. You will receive:
|
▪
|
Reimbursement for air fare (coach class, 14-day advance booking including Saturday-night stay, when possible);
or
|
▪
|
Reimbursement for mileage based on the current corporate mileage rate if you choose to drive your personal car.
|
▪
|
Transportation, boarding of pets;
|
▪
|
Utility deposits;
|
▪
|
Driver's license fees;
|
▪
|
Car registration fees;
|
▪
|
Telephone/cable connection charges.
|
▪
|
State and local transfer taxes
|
▪
|
Attorney's fee for closing
|
▪
|
Tax stamps
|
▪
|
Title policy fee (lender and buyers) or legal fee for title insurance
|
▪
|
Appraisal fee required by lending institution
|
▪
|
Escrow agent's fee
|
▪
|
Credit report
|
▪
|
Loan application fee
|
▪
|
Survey, if required by lender
|
▪
|
Lender-required inspections
|
▪
|
Loan origination fees according to the schedule listed below. (Loan origination fees are a mortgage expense. They may include discount points, commitment fees, maximum loan charges, premium loan charges and other charges paid to a lender for the use of money.)
|
▪
|
Reasonable attorney or closing representative's fee
|
▪
|
Normal and customary broker's commission, not to exceed 7%
|
▪
|
Title search fees
|
▪
|
Deed Transfer Tax/documentary stamps
|
▪
|
Title policy insurance fee
|
▪
|
Courier fees
|
▪
|
Mortgage interest
|
▪
|
Real estate taxes
|
▪
|
Utilities
|
▪
|
Homeowner's insurance
|
▪
|
Homeowner Association dues
|
▪
|
Campers, motor homes, large recreational items
|
▪
|
Boats or trailers that exceed 14 feet in length
|
▪
|
Building supplies, workshops, firewood
|
▪
|
Pets
|
▪
|
Perishable items such as plants, alcohol, food
|
▪
|
Jewelry, valuables or collectibles of high value
|
▪
|
Items which cannot be transported due to carrier regulations (e.g., ammunition, explosives, aerosol containers)
|
▪
|
Disassembly/assembly of permanent fixtures (light fixtures, carpeting, draperies, television hookups, pool tables, etc.); however, these items will be shipped if removed by the homeowner
|
▪
|
Exclusive use of vehicles, expedited service, guaranteed space arrangements, extra pickups and deliveries; weekend or holiday pick-ups or deliveries
|
▪
|
Maid service, child care, house cleaning; tips
|
▪
|
The cost of storing household goods and personal effects for up to thirty (30) days;
|
▪
|
Delivery out of storage (one time).
|
▪
|
A partial shipment may be authorized to temporary accommodations; however, ultimate shipment of these goods to your permanent residence will be at your expense.
|
▪
|
Assessment and profiling
|
▪
|
Resume development
|
▪
|
Targeting of potential job sources, employers, recruiters and/or networking contacts
|
▪
|
Job search communications guidance and training
|
▪
|
Assistance in interviewing and follow-up
|
▪
|
Salary Negotiation
|
•
|
Year 1 - paid out at 100% of the increase
|
•
|
Year 2 - paid out at 50% of the increase
|
•
|
Year 3 - paid out at 30% of the increase
|
•
|
Year 4 - paid out at 20% of the increase
|
Provision
|
|
Coverage
|
|
Amount
|
|
How to Obtain
|
|
|
|
|
|
|
|
Home Search Trip
|
|
Travel for up to 2 trips; lump sum for 5 (maximum 10) days for expenses
|
|
Actual,
Documented travel; calculated lump sum for expenses
|
|
Submit documented Expense Report for airfare; request lump sum from Relocation Counselor
|
|
|
|
|
|
|
|
Lump Sum Payment
|
|
Lump sum for up to 60(days temp living + miscellaneous allowance of $7,500
|
|
Lump sum
|
|
Documentation of expenses not necessary; request payment from Relocation Counselor.
|
|
|
|
|
|
|
|
Return Trips
|
|
Reasonable cost for bi-weekly trips up to maximum of 4
|
|
Actual, documented expenses
|
|
Submit documented Expense Report
|
|
|
|
|
|
|
|
Home Sale Assistance:
Guaranteed/
Amended Sale Program
|
|
Reasonable closing expenses covered,
IF
instructions are followed.
|
|
Actual, documented expenses covered thru the WRRI program
|
|
Follow Relocation Counselor's instructions carefully;
Work with WRRI-approved broker;
Provide requested documentation and signed Contract of Sale.
|
|
|
|
|
|
|
|
Duplicate Housing
|
|
Up to maximum of 60 days
|
|
Actual, documented expenses
|
|
Submit documented Expense Report
|
|
|
|
|
|
|
|
New Home Purchase Costs
|
|
Required buyer's closing costs (per policy) + origination up to 1% of loan. Discount points based on sliding scale.
|
|
Actual, documented closing costs per policy. No documentation needed with direct billing thru preferred lender
|
|
Follow Relocation Counselor's instructions carefully;
Work with WRRI-approved broker;
Submit HUD closing statement to WRRI with Relocation Expense Report;
or
Borrow thru preferred lender for direct billing
|
|
|
|
|
|
|
|
Household Goods and Storage
|
|
Normal expenses for packing, shipment, insurance per policy; WRRI will book and manage shipment
|
|
Actual expenses covered thru WRRI program
|
|
WRRI will pay the mover and bill the Company directly for approved costs.
|
|
|
|
|
|
|
|
Final Trip
|
|
Transportation, lodging and meal expenses, per policy
|
|
Actual, documented expenses
|
|
Submit documentation of expenses to WRRI with Relocation Expense Report.
|
|
|
|
|
|
|
|
Spouse/ Domestic Partner Career Counseling
|
|
Anticipated costs to $1,500 maximum
|
|
Actual expenses to max paid by WRRI
|
|
Documentation of expenses not necessary with approval of services.
|
|
|
|
|
|
|
|
Living Cost Adjustment
|
|
If 8% higher based on Company-approved analysis;
2 x index, up to 4 yrs.
|
|
Determined by analysis, Paid through payroll.
|
|
WRRI will determine via third party provider
|
|
|
|
|
|
|
|
Tax Gross-up
|
|
Anticipated tax implications for certain reimbursables and payments
|
|
Paid by Company for transferee
|
|
Follow program and Relocation Counselor's instructions carefully; provide documentation requested.
|
Relocation Provision
|
Tax Status
|
Gross-Up Treatment
|
|
|
|
Home Search Lump Sum
Home Search Travel
Lump Sum Payment
Return Trip(s)
Purchase Closing Costs (excluding any Origination Fee)
Final Trip Meals, Mileage >IRS Limitation
Spouse/Partner Career Assistance
|
Subject to Gross-up
(Taxable)
|
Grossed-up
|
|
|
|
Home Marketing Assistance
Homesale Assistance Program
|
Business Expense
(Non-Taxable)
|
Not Applicable
|
|
|
|
Household Goods Shipment
Up to 2 Cars Shipment
Up to 30 Days Storage
Final Trip Travel, Lodging, Mileage <IRS Limitation
|
Excludable
(Non-Taxable)
|
Not Applicable
|
|
|
|
Origination Fee/Discount Points
|
Not subject to Gross-up
|
Not Grossed-up
|
|
|
|
Cost of Living Allowance
|
Not subject to Gross-up
(Taxable)
|
|
|
|
|
Duplicate Housing Costs
Home Sale Bonus
|
No taxes withheld at time of payment
(Taxable)
Not subject to gross-up
(Taxable; taxes withheld)
|
Adjustment at year end to include gross-up on components that are not deductible.
Not Grossed-up
|
|
|
|
YOUR RESPONSIBILITY:
To substantiate the various moving expense deductions that you will have to itemize on your tax return, it is important that you retain all supporting documents and receipts. You should consult with your own tax advisor on all tax matters.
|
I.
|
ATTACHMENT: AGREEMENT TO REIMBURSE
|
•
|
100% of all Relocation Provisions (and 100% attorney's fees, if applicable) will be repaid if my resignation or discharge occurs within 365 calendar days following the date on which payment of Relocation Provisions is first made.
|
•
|
50% of all Relocation Provisions (and 100% of attorney's fees, if applicable) will be repaid if my resignation or discharge occurs within 366 to 730 calendar days from the date on which payment of Relocation Provisions is first made.
|
|
|
Year Ended December 31,
|
|||||||||||||
in millions
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
Fixed charges
|
|
|
|
|
|
||||||||||
Interest expense and amortization of debt issuance costs (a)
|
$
|
261
|
|
$
|
281
|
|
$
|
393
|
|
$
|
407
|
|
$
|
468
|
|
Interest portion of rental expense
|
27
|
|
18
|
|
18
|
|
20
|
|
18
|
|
|||||
Total fixed charges
|
$
|
288
|
|
$
|
299
|
|
$
|
411
|
|
$
|
427
|
|
$
|
486
|
|
|
|
|
|
|
|
||||||||||
Earnings
|
|
|
|
|
|
||||||||||
Income (loss) before income taxes
|
$
|
(4,107
|
)
|
$
|
642
|
|
$
|
(1,063
|
)
|
$
|
(1,308
|
)
|
$
|
(2,031
|
)
|
Fixed charges, per above
|
288
|
|
299
|
|
411
|
|
427
|
|
486
|
|
|||||
Total earnings (deficit), adjusted
|
$
|
(3,819
|
)
|
$
|
941
|
|
$
|
(652
|
)
|
$
|
(881
|
)
|
$
|
(1,545
|
)
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges (b)
|
|
3.15
|
|
|
|
|
|||||||||
|
|
|
|
|
|
(1)
|
Registration Statement (Form S-4 Nos. 333-22581 and 333-131608) of Boston Scientific Corporation, and
|
(2)
|
Registration Statements (Form S-8 Nos. 333-25033, 333-25037, 333-76380, 333-36636, 333-61056, 333-61060, 333-98755, 333-111047, 333-131608, 333-133569, 333-134932, 333-151280, 333-174620, and 333-174622) of Boston Scientific Corporation;
|
1
|
I have reviewed this Annual Report on Form 10-K of Boston Scientific Corporation;
|
|
|
|
|
2
|
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;
|
|
|
|
|
3
|
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;
|
|
|
|
|
4
|
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:
|
|
|
|
|
|
a)
|
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;
|
|
|
|
|
b)
|
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;
|
|
|
|
|
c)
|
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
|
|
|
|
|
d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
|
5
|
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):
|
|
|
|
|
|
a)
|
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
|
|
|
|
|
b)
|
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.
|
Date: February 22, 2013
|
|
/s/
Michael F. Mahoney
|
|
||
|
|
Michael F. Mahoney
|
|
||
|
|
Chief Executive Officer
|
|
1
|
I have reviewed this Annual Report on Form 10-K of Boston Scientific Corporation;
|
|
|
|
|
2
|
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;
|
|
|
|
|
3
|
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;
|
|
|
|
|
4
|
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:
|
|
|
|
|
|
a)
|
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;
|
|
|
|
|
b)
|
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;
|
|
|
|
|
c)
|
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
|
|
|
|
|
d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
|
5
|
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):
|
|
|
|
|
|
a)
|
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
|
|
|
|
|
b)
|
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.
|
Date: February 22, 2013
|
|
/s/ Jeffrey D. Capello
|
|
||
|
|
Jeffrey D. Capello
|
|
||
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(1)
|
the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Boston Scientific Corporation.
|
|
|
|
By:
|
/s/
Michael F. Mahoney
|
|
|
Michael F. Mahoney
|
|
|
Chief Executive Officer
|
|
|
|
|
|
February 22, 2013
|
|
|
(1)
|
the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Boston Scientific Corporation.
|
|
|
|
By:
|
/s/ Jeffrey D. Capello
|
|
|
Jeffrey D. Capello
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
February 22, 2013
|
|