This document provides a summary of Boston Scientific Corporation's consolidated financial statements and results of operations for the years ended December 31, 2002 and 2001. Key highlights include:
- Net sales increased 9% to $2.919 billion in 2002 driven by growth in endoscopy and coronary stent products.
- Gross profit increased to $2.049 billion in 2002 due to sales growth and cost reductions from global operations plans.
- Net income was $373 million in 2002 compared to a net loss of $54 million in 2001, impacted by special charges in both years.
- Research and development expenses increased to support new products like drug-eluting stents and embolic protection devices.
- International sales grew 8%
- Embraer delivered 23 commercial and 53 executive aircraft in Q4 2012, bringing full-year deliveries to 106 commercial and 99 executive aircraft.
- Revenue for Q4 2012 was $1.9 billion and $6.2 billion for the full year 2012, in line with guidance. EBIT margin for Q4 was 12.0% and 9.9% for the full year, surpassing guidance.
- Net income for Q4 2012 was $123.2 million and $347.8 million for the full year. Cash generation was strong, increasing Embraer's net cash position to $312.9 million.
This document provides an overview and analysis of Illinois Tool Works Inc.'s financial results for 2003, 2002 and 2001. It discusses revenues, operating income, margins and factors affecting performance for the company overall and within its five business segments. The key points are:
- Consolidated revenues increased 6% in 2003 due to currency effects and acquisitions, while base business revenues declined slightly.
- Operating income increased 8% in 2003 due to cost savings, currency effects and acquisitions, despite declines in base business.
- Engineered Products-North America saw a 1% revenue increase in 2003 but an 8% drop in operating income due to base business declines.
- Engineered Products-International saw a 20
Citigroup reported record net income of $15.28 billion for 2002, an 8% increase over 2001. Net income per share also rose 8% to $2.94. Core income for the year was a record $13.65 billion, or $2.63 per share. However, fourth quarter net income declined 37% to $2.43 billion due to a $1.55 billion legal settlement charge. Core income fell 32% to $2.44 billion. Revenue grew 7% for the full year to $75.76 billion but was flat in the fourth quarter at $18.93 billion.
AIG Second Quarter 2008 Earnings Press Releasefinance2
- AIG reported a net loss of $5.36 billion for Q2 2008 compared to net income of $4.28 billion in Q2 2007. The losses were driven by unrealized market valuation losses on credit default swaps and other-than-temporary impairment charges.
- For the first six months of 2008, AIG's net loss was $13.16 billion compared to net income of $8.41 billion in the first six months of 2007.
- AIG raised $20 billion in capital through the issuance of common stock, equity units, and fixed maturity securities to strengthen its financial capacity.
- Indian markets continued their losing streak for the eighth straight day, with key indices down around 2.6% as global markets tumbled on negative news.
- Fears of the crisis spreading beyond the Eurozone to the US and China weighed on investor sentiment.
- Metals and banking stocks saw heavy losses while the market breadth was weak. FIIs were net sellers of equities worth Rs. 7.43 billion.
Bank of America reported fourth quarter 2006 results. Key highlights include:
- Net income of $5.26 billion, up 34% from fourth quarter 2005. Excluding merger charges, net income was $5.41 billion, up 37%.
- Global Consumer & Small Business Banking earnings grew 8% over fourth quarter 2005 to $10.63 billion in revenue, driven by increases in net interest income and noninterest income.
- Credit quality remained stable, with the provision for credit losses down 7% from fourth quarter 2005.
- The company achieved earnings growth while completing two large acquisitions, focusing on expense management and maintaining a strong capital position.
This document is Danaher Corporation's quarterly report filed with the SEC for the second quarter of 2005. It includes Danaher's consolidated condensed balance sheets, statements of earnings, and statements of cash flows for the periods ended July 1, 2005 and July 2, 2004. Some key details include that Danaher's sales increased over the comparable prior year period to $1.9 billion for the quarter and $3.8 billion for the six months. Net earnings increased by $47 million for the quarter and $90 million for the six months compared to 2004.
Embraer released its first quarter 2012 results. Key highlights include:
- Deliveries of 21 commercial and 13 executive jets, surpassing deliveries in Q1 2011.
- Revenues of $1.16 billion and gross margin of 23.2% for the quarter.
- EBIT margin of 7.4% and EBITDA margin of 12.8% for the quarter, in line with expectations.
- Net income of $62.7 million and earnings per share of $0.3463 for the quarter.
- Net cash position of $301.8 million at the end of the quarter.
- Embraer delivered 23 commercial and 53 executive aircraft in Q4 2012, bringing full-year deliveries to 106 commercial and 99 executive aircraft.
- Revenue for Q4 2012 was $1.9 billion and $6.2 billion for the full year 2012, in line with guidance. EBIT margin for Q4 was 12.0% and 9.9% for the full year, surpassing guidance.
- Net income for Q4 2012 was $123.2 million and $347.8 million for the full year. Cash generation was strong, increasing Embraer's net cash position to $312.9 million.
This document provides an overview and analysis of Illinois Tool Works Inc.'s financial results for 2003, 2002 and 2001. It discusses revenues, operating income, margins and factors affecting performance for the company overall and within its five business segments. The key points are:
- Consolidated revenues increased 6% in 2003 due to currency effects and acquisitions, while base business revenues declined slightly.
- Operating income increased 8% in 2003 due to cost savings, currency effects and acquisitions, despite declines in base business.
- Engineered Products-North America saw a 1% revenue increase in 2003 but an 8% drop in operating income due to base business declines.
- Engineered Products-International saw a 20
Citigroup reported record net income of $15.28 billion for 2002, an 8% increase over 2001. Net income per share also rose 8% to $2.94. Core income for the year was a record $13.65 billion, or $2.63 per share. However, fourth quarter net income declined 37% to $2.43 billion due to a $1.55 billion legal settlement charge. Core income fell 32% to $2.44 billion. Revenue grew 7% for the full year to $75.76 billion but was flat in the fourth quarter at $18.93 billion.
AIG Second Quarter 2008 Earnings Press Releasefinance2
- AIG reported a net loss of $5.36 billion for Q2 2008 compared to net income of $4.28 billion in Q2 2007. The losses were driven by unrealized market valuation losses on credit default swaps and other-than-temporary impairment charges.
- For the first six months of 2008, AIG's net loss was $13.16 billion compared to net income of $8.41 billion in the first six months of 2007.
- AIG raised $20 billion in capital through the issuance of common stock, equity units, and fixed maturity securities to strengthen its financial capacity.
- Indian markets continued their losing streak for the eighth straight day, with key indices down around 2.6% as global markets tumbled on negative news.
- Fears of the crisis spreading beyond the Eurozone to the US and China weighed on investor sentiment.
- Metals and banking stocks saw heavy losses while the market breadth was weak. FIIs were net sellers of equities worth Rs. 7.43 billion.
Bank of America reported fourth quarter 2006 results. Key highlights include:
- Net income of $5.26 billion, up 34% from fourth quarter 2005. Excluding merger charges, net income was $5.41 billion, up 37%.
- Global Consumer & Small Business Banking earnings grew 8% over fourth quarter 2005 to $10.63 billion in revenue, driven by increases in net interest income and noninterest income.
- Credit quality remained stable, with the provision for credit losses down 7% from fourth quarter 2005.
- The company achieved earnings growth while completing two large acquisitions, focusing on expense management and maintaining a strong capital position.
This document is Danaher Corporation's quarterly report filed with the SEC for the second quarter of 2005. It includes Danaher's consolidated condensed balance sheets, statements of earnings, and statements of cash flows for the periods ended July 1, 2005 and July 2, 2004. Some key details include that Danaher's sales increased over the comparable prior year period to $1.9 billion for the quarter and $3.8 billion for the six months. Net earnings increased by $47 million for the quarter and $90 million for the six months compared to 2004.
Embraer released its first quarter 2012 results. Key highlights include:
- Deliveries of 21 commercial and 13 executive jets, surpassing deliveries in Q1 2011.
- Revenues of $1.16 billion and gross margin of 23.2% for the quarter.
- EBIT margin of 7.4% and EBITDA margin of 12.8% for the quarter, in line with expectations.
- Net income of $62.7 million and earnings per share of $0.3463 for the quarter.
- Net cash position of $301.8 million at the end of the quarter.
This document summarizes Microsoft's accounting policies and procedures. It discusses how the company prepares its financial statements according to generally accepted accounting principles in the US. It also describes Microsoft's policies for revenue recognition, cost of revenue, research and development costs, advertising costs, income taxes, financial instruments, and use of derivatives.
Nordion Third Quarter Fiscal 2012 Earnings Conference CallNordion
Nordion reported third quarter 2012 earnings. Revenue was $67.1 million. Targeted Therapies revenue grew 13% year-over-year due to new TheraSphere account growth. Sterilization Technologies revenue was flat as higher Co-60 shipments in Q3 offset lower volumes. Medical Isotopes revenue declined due to planned and unplanned shutdowns of the NRU reactor impacting volumes. Nordion remains focused on establishing a leadership position in interventional oncology and maintaining value in its sterilization and medical isotopes businesses.
This document provides quarterly financial data for Citigroup, including income statements, balance sheets, ratios, and other metrics. Some key details:
- For Q3 2003, income from continuing operations was $4.691 billion, up 27% from Q3 2002. Net income was $4.691 billion, up 20% from a year ago.
- Capital ratios like Tier 1 and Total Capital were all above requirements at the end of Q3 2003, with Tier 1 at 9.5% and Total Capital at 12.6%.
- Total assets increased to over $1.208 trillion in Q3 2003, up 17% from a year ago. Stockholders' equity rose
- Credco is a credit card company that provides financial summaries for 2005-2001 including revenues, provisions for losses, interest expense, taxes, and net income.
- Key assets include credit card receivables and loans, while key funding sources are commercial paper, medium and long-term debt securities, and bank credit facilities.
- Credco aims to maintain high credit ratings to ensure access to capital markets, and uses proceeds from debt to invest in liquid assets like Treasury securities for backup liquidity.
FMC Technologies had a successful year in 2004 with revenue increasing 20% and earnings per share up 63%. The company's energy businesses performed well by capitalizing on growth in oil and gas activity, with the subsea systems business increasing sales to over $1 billion. However, some challenges included losses on an offshore contract in Algeria and lower sales and profits in the food processing equipment business due to hurricanes damaging the Florida citrus crop. Overall the company increased its order backlog 26% while reducing debt, positioning it well for continued growth.
SPX Corporation 4th Quarter and Full Year 2008 Results finance40
The document summarizes the Q4 2008 and full year 2008 results for a company with global infrastructure, process equipment, and diagnostic tools segments. Key highlights include 7% organic revenue growth and 21% adjusted EPS growth in Q4, and 6% organic revenue growth and 35% adjusted EPS growth for the full year. The company achieved these results through continued focus on its long-term strategy, disciplined capital allocation, and integration of acquisitions. Guidance for 2009 forecasts adjusted EPS of $5.40-$5.80 and free cash flow of $230-$270 million.
The document provides an earnings review and business update for Duke Energy Corporation for the second quarter of 2004. It summarizes key financial results including EPS of $0.46 for the quarter. It highlights positive contributions from various business segments as well as progress on debt reduction goals. Special items for the quarter including settlement gains and charges are also outlined.
This document is Lincoln Financial Group's statistical report for the fourth quarter of 2007. It provides financial highlights and key metrics for Lincoln's individual and employer markets segments, investment management business, and international operations in the UK. The report includes income statements, balance sheets, sales and account value data to analyze Lincoln's financial performance.
The document is a financial report from Lincoln Financial Group for the third quarter of 2008. It provides key financial highlights including income from operations by business segment. Total income from operations was $315.8 million for the quarter, down 13.6% from the prior year. After excluding realized losses and other items, net income was $148.4 million, a decrease of 55% from the previous year.
This document is a statistical report from Lincoln Financial Group for the second quarter of 2008. It includes:
- Financial highlights showing income from operations by segment, with total income from operations of $341.8 million, down 8% from the second quarter of 2007.
- Consolidated statements of income and balance sheets for the periods.
- Segment data including income statements, account value roll forwards, sales and other operational metrics for Individual Markets (Life Insurance and Annuities), Employer Markets (Defined Contribution, Executive Benefits, Group Protection), Investment Management, Lincoln UK, and Other Operations.
- Tables of contents, analyst coverage, and explanatory notes on definitions and accounting treatments.
This document is a Form 8-K filed by YRC Worldwide Inc. with the Securities and Exchange Commission on February 13, 2006. It summarizes that YRC is revising its previously reported diluted earnings per share for the three and twelve months ended December 31, 2005 due to an accounting error related to foreign currency entries at its Canadian subsidiary Reimer Express. The revision has no impact on operating income. YRC also reports lower than estimated capital expenditures for 2005.
This document is Aon Corporation's quarterly report (Form 10-Q) filed with the SEC for the quarter ending September 30, 2008. It includes Aon's condensed consolidated financial statements and notes. The financial statements show that for the quarter, Aon's revenue was $1.8 billion, income from continuing operations was $153 million, and net income was $117 million. For the nine months ended September 30, 2008, revenue was $5.7 billion, income from continuing operations was $494 million, and net income was $1.5 billion. The report provides Aon's required quarterly disclosures to the SEC and investors including financial position, results of operations, cash flows, risks and legal proceedings
Fidelity National Information Services reported strong financial results for 2007, with revenue increasing 15.1% to a record $4.8 billion and adjusted earnings per share growing 16.2% to $2.44. The company's Transaction Processing Services and Lender Processing Services divisions both experienced double-digit revenue growth. International revenues increased over 40% driven by expansions in Europe, Asia, and Brazil. Successful implementations of new systems and platforms contributed to organic revenue growth of 11%, exceeding projections.
This document summarizes CNO Financial Group's financial and operating results for the 4th quarter of 2012 ending December 31, 2012. It discusses growth in core earnings and sales across all business segments. CNO continued investing in distribution and new product offerings while maintaining strong capital levels and returning value to shareholders through stock repurchases and dividends. The outlook expects further sales growth through expansion of locations, agents, and products in 2013.
Example consolidated financial statements 2012 finalGrant Thornton
The consolidated income statement summarizes the Group's revenue, expenses and profits for the year ended 31 December 2012. Total revenue was CU206.2 million, with operating profit of CU21.6 million. After accounting for finance costs, share of profits from associates, and income tax expense, profit for the year was CU12.7 million.
This document is an amendment to Fifth Third Bancorp's previously filed Form 10-K for the fiscal year ended December 31, 2006. It amends Item 9A regarding controls and procedures and Item 15 on exhibits and financial statements. It restates the consolidated statements of cash flows. The amendment was filed to reflect the restatement of the cash flow statements as discussed in Note 29 of the financial statements. No other changes were made except to Items 8 and 9A.
This document provides a summary of Virgin Media's financial results for the third quarter of 2007. It discusses improvements in customer and revenue growth metrics compared to previous quarters. Specifically, it notes record quarterly gross additions and reduced churn. It also summarizes growth in the company's broadband, TV, telephony, mobile, and business services segments. The document concludes with discussions of operating cash flow, revenue, and net debt levels.
The document discusses Monsanto's strategy to more than double its gross profit from seeds and traits by 2012 through growing its corn and soybean seed platforms globally. Key points include:
1) Seeds and traits gross profit is targeted to grow to $7.3-7.5 billion by 2012 while Roundup gross profit declines.
2) Monsanto aims to increase its share of key seed markets including the US corn market where DEKALB brand share is targeted at 30-34% by 2012.
3) Significant opportunities remain to expand biotech traits internationally, especially for corn and cotton in top markets like Brazil and Argentina.
4) Corn seed and traits gross profit is targeted to
CIT Group reported earnings for Q3 2008. Key points:
- Revenues were down from non-spread income like loan sales and syndications due to challenging market conditions.
- Credit costs increased as the economic outlook darkened, with charge-offs expected to be higher in 2009 than 2008.
- Actions were taken to improve liquidity, including debt repayments and new funding facilities. However, new business originations were down due to tighter underwriting.
- Vendor Finance underperformed and a restructuring is underway to improve profitability, while Trade and Transportation Finance continued strong performance.
Monsanto's corn seeds and traits generated 56% of sales and 62% of gross profit in 2008. Key products include DEKALB hybrid corn seed, Roundup Ready corn traits which provide herbicide tolerance, and YieldGard traits which provide insect protection. YieldGard traits have been adopted on over 100 million acres since 1997 and reduce the need for insecticide applications. Roundup Ready traits have been adopted on over 150 million acres since 1998 and simplify weed control. New triple-stack traits combine herbicide tolerance and insect protection.
This document summarizes Virgin Media's financial and operational results for the first quarter of 2008. Key highlights include continued strong growth in broadband and TV customers, record-low cable churn of 1.2%, and stable cable ARPU despite non-recurring benefits in the previous quarter. OCF was £324 million for Q1 2008, up slightly from the previous quarter. Cash capex was £125 million for network upgrades and expansion.
The document is Boston Scientific's 2000 annual report. It discusses the company's mission to improve patient care through less invasive medical devices and procedures. It summarizes progress made in 2000, including FDA clearances, clinical trials, patents, and plans to increase R&D spending. It also details initiatives to strengthen innovation and operational excellence, such as consolidating R&D and quality teams, hiring new leaders, and implementing a global operations plan.
This document summarizes Microsoft's accounting policies and procedures. It discusses how the company prepares its financial statements according to generally accepted accounting principles in the US. It also describes Microsoft's policies for revenue recognition, cost of revenue, research and development costs, advertising costs, income taxes, financial instruments, and use of derivatives.
Nordion Third Quarter Fiscal 2012 Earnings Conference CallNordion
Nordion reported third quarter 2012 earnings. Revenue was $67.1 million. Targeted Therapies revenue grew 13% year-over-year due to new TheraSphere account growth. Sterilization Technologies revenue was flat as higher Co-60 shipments in Q3 offset lower volumes. Medical Isotopes revenue declined due to planned and unplanned shutdowns of the NRU reactor impacting volumes. Nordion remains focused on establishing a leadership position in interventional oncology and maintaining value in its sterilization and medical isotopes businesses.
This document provides quarterly financial data for Citigroup, including income statements, balance sheets, ratios, and other metrics. Some key details:
- For Q3 2003, income from continuing operations was $4.691 billion, up 27% from Q3 2002. Net income was $4.691 billion, up 20% from a year ago.
- Capital ratios like Tier 1 and Total Capital were all above requirements at the end of Q3 2003, with Tier 1 at 9.5% and Total Capital at 12.6%.
- Total assets increased to over $1.208 trillion in Q3 2003, up 17% from a year ago. Stockholders' equity rose
- Credco is a credit card company that provides financial summaries for 2005-2001 including revenues, provisions for losses, interest expense, taxes, and net income.
- Key assets include credit card receivables and loans, while key funding sources are commercial paper, medium and long-term debt securities, and bank credit facilities.
- Credco aims to maintain high credit ratings to ensure access to capital markets, and uses proceeds from debt to invest in liquid assets like Treasury securities for backup liquidity.
FMC Technologies had a successful year in 2004 with revenue increasing 20% and earnings per share up 63%. The company's energy businesses performed well by capitalizing on growth in oil and gas activity, with the subsea systems business increasing sales to over $1 billion. However, some challenges included losses on an offshore contract in Algeria and lower sales and profits in the food processing equipment business due to hurricanes damaging the Florida citrus crop. Overall the company increased its order backlog 26% while reducing debt, positioning it well for continued growth.
SPX Corporation 4th Quarter and Full Year 2008 Results finance40
The document summarizes the Q4 2008 and full year 2008 results for a company with global infrastructure, process equipment, and diagnostic tools segments. Key highlights include 7% organic revenue growth and 21% adjusted EPS growth in Q4, and 6% organic revenue growth and 35% adjusted EPS growth for the full year. The company achieved these results through continued focus on its long-term strategy, disciplined capital allocation, and integration of acquisitions. Guidance for 2009 forecasts adjusted EPS of $5.40-$5.80 and free cash flow of $230-$270 million.
The document provides an earnings review and business update for Duke Energy Corporation for the second quarter of 2004. It summarizes key financial results including EPS of $0.46 for the quarter. It highlights positive contributions from various business segments as well as progress on debt reduction goals. Special items for the quarter including settlement gains and charges are also outlined.
This document is Lincoln Financial Group's statistical report for the fourth quarter of 2007. It provides financial highlights and key metrics for Lincoln's individual and employer markets segments, investment management business, and international operations in the UK. The report includes income statements, balance sheets, sales and account value data to analyze Lincoln's financial performance.
The document is a financial report from Lincoln Financial Group for the third quarter of 2008. It provides key financial highlights including income from operations by business segment. Total income from operations was $315.8 million for the quarter, down 13.6% from the prior year. After excluding realized losses and other items, net income was $148.4 million, a decrease of 55% from the previous year.
This document is a statistical report from Lincoln Financial Group for the second quarter of 2008. It includes:
- Financial highlights showing income from operations by segment, with total income from operations of $341.8 million, down 8% from the second quarter of 2007.
- Consolidated statements of income and balance sheets for the periods.
- Segment data including income statements, account value roll forwards, sales and other operational metrics for Individual Markets (Life Insurance and Annuities), Employer Markets (Defined Contribution, Executive Benefits, Group Protection), Investment Management, Lincoln UK, and Other Operations.
- Tables of contents, analyst coverage, and explanatory notes on definitions and accounting treatments.
This document is a Form 8-K filed by YRC Worldwide Inc. with the Securities and Exchange Commission on February 13, 2006. It summarizes that YRC is revising its previously reported diluted earnings per share for the three and twelve months ended December 31, 2005 due to an accounting error related to foreign currency entries at its Canadian subsidiary Reimer Express. The revision has no impact on operating income. YRC also reports lower than estimated capital expenditures for 2005.
This document is Aon Corporation's quarterly report (Form 10-Q) filed with the SEC for the quarter ending September 30, 2008. It includes Aon's condensed consolidated financial statements and notes. The financial statements show that for the quarter, Aon's revenue was $1.8 billion, income from continuing operations was $153 million, and net income was $117 million. For the nine months ended September 30, 2008, revenue was $5.7 billion, income from continuing operations was $494 million, and net income was $1.5 billion. The report provides Aon's required quarterly disclosures to the SEC and investors including financial position, results of operations, cash flows, risks and legal proceedings
Fidelity National Information Services reported strong financial results for 2007, with revenue increasing 15.1% to a record $4.8 billion and adjusted earnings per share growing 16.2% to $2.44. The company's Transaction Processing Services and Lender Processing Services divisions both experienced double-digit revenue growth. International revenues increased over 40% driven by expansions in Europe, Asia, and Brazil. Successful implementations of new systems and platforms contributed to organic revenue growth of 11%, exceeding projections.
This document summarizes CNO Financial Group's financial and operating results for the 4th quarter of 2012 ending December 31, 2012. It discusses growth in core earnings and sales across all business segments. CNO continued investing in distribution and new product offerings while maintaining strong capital levels and returning value to shareholders through stock repurchases and dividends. The outlook expects further sales growth through expansion of locations, agents, and products in 2013.
Example consolidated financial statements 2012 finalGrant Thornton
The consolidated income statement summarizes the Group's revenue, expenses and profits for the year ended 31 December 2012. Total revenue was CU206.2 million, with operating profit of CU21.6 million. After accounting for finance costs, share of profits from associates, and income tax expense, profit for the year was CU12.7 million.
This document is an amendment to Fifth Third Bancorp's previously filed Form 10-K for the fiscal year ended December 31, 2006. It amends Item 9A regarding controls and procedures and Item 15 on exhibits and financial statements. It restates the consolidated statements of cash flows. The amendment was filed to reflect the restatement of the cash flow statements as discussed in Note 29 of the financial statements. No other changes were made except to Items 8 and 9A.
This document provides a summary of Virgin Media's financial results for the third quarter of 2007. It discusses improvements in customer and revenue growth metrics compared to previous quarters. Specifically, it notes record quarterly gross additions and reduced churn. It also summarizes growth in the company's broadband, TV, telephony, mobile, and business services segments. The document concludes with discussions of operating cash flow, revenue, and net debt levels.
The document discusses Monsanto's strategy to more than double its gross profit from seeds and traits by 2012 through growing its corn and soybean seed platforms globally. Key points include:
1) Seeds and traits gross profit is targeted to grow to $7.3-7.5 billion by 2012 while Roundup gross profit declines.
2) Monsanto aims to increase its share of key seed markets including the US corn market where DEKALB brand share is targeted at 30-34% by 2012.
3) Significant opportunities remain to expand biotech traits internationally, especially for corn and cotton in top markets like Brazil and Argentina.
4) Corn seed and traits gross profit is targeted to
CIT Group reported earnings for Q3 2008. Key points:
- Revenues were down from non-spread income like loan sales and syndications due to challenging market conditions.
- Credit costs increased as the economic outlook darkened, with charge-offs expected to be higher in 2009 than 2008.
- Actions were taken to improve liquidity, including debt repayments and new funding facilities. However, new business originations were down due to tighter underwriting.
- Vendor Finance underperformed and a restructuring is underway to improve profitability, while Trade and Transportation Finance continued strong performance.
Monsanto's corn seeds and traits generated 56% of sales and 62% of gross profit in 2008. Key products include DEKALB hybrid corn seed, Roundup Ready corn traits which provide herbicide tolerance, and YieldGard traits which provide insect protection. YieldGard traits have been adopted on over 100 million acres since 1997 and reduce the need for insecticide applications. Roundup Ready traits have been adopted on over 150 million acres since 1998 and simplify weed control. New triple-stack traits combine herbicide tolerance and insect protection.
This document summarizes Virgin Media's financial and operational results for the first quarter of 2008. Key highlights include continued strong growth in broadband and TV customers, record-low cable churn of 1.2%, and stable cable ARPU despite non-recurring benefits in the previous quarter. OCF was £324 million for Q1 2008, up slightly from the previous quarter. Cash capex was £125 million for network upgrades and expansion.
The document is Boston Scientific's 2000 annual report. It discusses the company's mission to improve patient care through less invasive medical devices and procedures. It summarizes progress made in 2000, including FDA clearances, clinical trials, patents, and plans to increase R&D spending. It also details initiatives to strengthen innovation and operational excellence, such as consolidating R&D and quality teams, hiring new leaders, and implementing a global operations plan.
This document summarizes the financial results and position of Boston Scientific for 2003. Key points include:
- Net sales increased 19% to $3.476 billion, driven by sales of the TAXUS drug-eluting stent in international markets.
- Gross profit margin increased 220 basis points to 72.4% due to cost improvements and a favorable sales mix.
- Operating expenses grew to support new product launches like TAXUS. R&D expenses increased to 13% of sales to support the drug-eluting stent program.
- Net income was $472 million or $0.56 per share. Management expects significant sales growth in 2004 following the U.S. launch of TAXUS.
This document summarizes the financial results and position of Boston Scientific for 2003. Key points include:
- Net sales increased 19% to $3.476 billion, driven by sales of the TAXUS drug-eluting stent in international markets.
- Gross profit margin increased 220 basis points to 72.4% due to cost improvements and a favorable sales mix.
- Operating expenses grew to support new product launches like TAXUS. R&D expenses increased to 13% of sales to support the drug-eluting stent program.
- Net income was $472 million or $0.56 per share. Management expects significant sales growth in 2004 following the U.S. launch of TAXUS.
This document provides an overview and analysis of Illinois Tool Works Inc.'s financial results for 2003, 2002 and 2001. It discusses revenues, operating income, margins and factors affecting performance for the company overall and within its five business segments. The company saw overall revenue growth of 6% in 2003 driven by currency translation and acquisitions, while base business revenues declined slightly. Operating income increased 8% due to cost savings and currency effects, despite declines in base business.
This document summarizes Boston Scientific's consolidated financial statements for 2004. Key highlights include:
- Net sales increased 62% to $5.6 billion in 2004, largely driven by sales of the company's drug-eluting stent, TAXUS. TAXUS stent sales were $2.1 billion in 2004.
- Gross profit increased to $4.3 billion in 2004 from $2.5 billion in 2003. Gross margin improved to 77% due to a shift toward higher-margin drug-eluting stents.
- Net income increased to $1.1 billion in 2004 from $472 million in 2003. Reported results included after-tax charges of $332 million in 2004 and
This document summarizes Boston Scientific's consolidated financial statements for 2004. Key highlights include:
- Net sales increased 62% to $5.6 billion in 2004, largely driven by sales of the company's drug-eluting stent, TAXUS. TAXUS stent sales were $2.1 billion in 2004.
- Gross profit increased to $4.3 billion in 2004 from $2.5 billion in 2003. Gross margin improved to 77% due to a shift toward higher-margin drug-eluting stents.
- Net income increased to $1.1 billion in 2004 from $472 million in 2003. Reported results included after-tax charges of $332 million in 2004 and
Schering-Plough is a global pharmaceutical company focused on developing new therapies. In 2001, the company faced manufacturing compliance issues but also gained approval for several new products. Key events included the approval and launch of the non-sedating antihistamine Clarinex in the US and EU, and the approval of PEG-Intron/Rebetol combination therapy for hepatitis C. Schering-Plough also continued advancing its research pipeline and filed 12 new marketing applications. However, net income declined due to a $500 million provision related to resolving manufacturing compliance issues.
This document is Boston Scientific's 2006 consolidated financial statements. It includes sections such as management's discussion and analysis of financial condition and results of operations, consolidated statements of operations, balance sheets, cash flows, notes to the financial statements, and other financial data. In 2006, Boston Scientific acquired Guidant Corporation, becoming a major provider in the cardiac rhythm management business with annual sales of over $7.8 billion. However, the acquisition and integration resulted in significant one-time charges, leading to a reported net loss of $3.6 billion for the year. Cash flow from operations remained strong at $1.8 billion.
This document provides financial information for Universal Health Services, Inc. and Subsidiaries, including:
- Net revenues increased 15% in 2002 and 27% in 2001, primarily due to revenue growth at existing facilities and acquisitions of new facilities.
- Operating income increased 17% in 2002 and 23% in 2001. Overall operating margins were 15.8% in 2002, 15.6% in 2001, and 16.0% in 2000.
- The majority of revenues come from acute care facilities and behavioral health services facilities. Acute care facilities accounted for 82-84% of revenues over the periods reported.
This document provides an overview of Universal Health Services' financial performance in 2002. Key points:
- Net revenues increased 15% to $3.26 billion in 2002 compared to 2001, driven by revenue growth at existing and acquired facilities.
- Operating income increased 17% to $516 million in 2002. Overall operating margins were 15.8% in 2002, compared to 15.6% in 2001.
- Net income increased to $175.4 million in 2002 from $99.7 million in 2001, primarily due to increased operating income from existing and acquired facilities.
- Acute care services revenues grew 10% at existing US/Puerto Rico facilities in 2002, driven by a 6.9
- Illinois Tool Works Inc. (ITW) is a worldwide manufacturer of engineered products and systems organized into 5 segments: Engineered Products—North America, Engineered Products—International, Specialty Systems—North America, Specialty Systems—International, and Leasing and Investments.
- ITW focuses on key performance metrics like revenues, income, margins, and applies an "80/20 simplification process" to focus on the most important parts of the business.
- Across segments, results varied in 2002 from 2001 - some saw income increases from cost improvements and acquisitions while others faced revenue declines from slower end markets.
- Illinois Tool Works Inc. (ITW) is a worldwide manufacturer of engineered products and systems organized into 5 segments: Engineered Products—North America, Engineered Products—International, Specialty Systems—North America, Specialty Systems—International, and Leasing and Investments.
- ITW focuses on key performance metrics like revenues, income, margins, and applies an "80/20 simplification process" to focus on the most important parts of the business.
- Across segments, results varied in 2002 from 2001 - some saw income increases from cost improvements and acquisitions while others faced revenue declines from slower end markets.
Boston Scientific announced financial results for the first quarter of 2009. Key highlights include:
- Worldwide sales of cardiac rhythm management products increased 9%, including a 13% rise in ICD sales. US CRM sales grew 11%, with a 14% increase in ICDs.
- The company expanded its worldwide drug-eluting stent market share to 44% and increased its US market share to 50%.
- Net sales were $2.01 billion, in line with guidance. Adjusted earnings per share were $0.19, at the high end of guidance range.
- For the second quarter, the company estimates net sales of $1.96-2.08 billion and adjusted EPS
Computer Sciences Corporation (CSC) reported financial results for the first quarter of fiscal year 2003, ended June 28, 2002. Revenues increased 2% to $2.76 billion compared to the same period last year. Net income was $79.0 million and earnings per share were $0.46. Both CSC's global commercial outsourcing and U.S. federal opportunity pipelines remain healthy. U.S. federal government revenues grew 17.6% to $791.7 million, comprising 29% of total revenue. Global commercial revenues declined 3.3% to $1.97 billion, reflecting a slowdown in consulting demand partially offset by outsourcing growth. CSC will continue efforts to control costs
Merck announced its 2006 financial results, reporting solid revenue growth. Key points:
- Vaccines, SINGULAIR, ZETIA and VYTORIN drove full-year revenue increases. Launches of GARDASIL and JANUVIA provide a platform for continued growth in 2007.
- Full-year 2006 earnings per share were $2.52 excluding certain charges, and $2.03 as reported. Fourth-quarter earnings per share were $0.50 and $0.22, respectively.
- Merck reaffirmed its guidance for 2007 earnings per share between $2.51-$2.59 excluding charges, and $2.36-$2.49 as reported.
This annual report summarizes the financial performance of W.R. Berkley Corporation in 2002. Key points include:
- Net income, total revenues, premiums written, and underwriting profit all reached record highs in 2002.
- All four domestic operating segments (specialty, alternative markets, reinsurance, and regional) contributed significantly to growth through higher premium volumes and earnings.
- The company benefited from industry trends of higher insurance prices, improved terms and conditions, and a contraction of overall industry capacity amidst widespread balance sheet problems facing competitors.
The Timken Company maintained profitability in 1999 despite weaknesses in many markets. The company achieved its third highest sales ever and reduced inventory days for the third consecutive year. Looking ahead, Timken is transforming its organization into a more global business with new leadership and a broader product portfolio to fuel growth and take advantage of improving business conditions in 2000.
The document discusses The Shaw Group's 2002 annual report. It describes how in 2002 Shaw significantly expanded its capabilities through the acquisition of The IT Group, adding environmental, infrastructure, and homeland security services. This made Shaw a stronger competitor able to handle more issues for more customers. The acquisition helped drive record financial results in 2002, with revenues increasing 106% to over $3.2 billion and net income up 61% to $98.4 million. Looking ahead, Shaw aims to continue growing in areas like power sector maintenance and environmental markets as well as expanding internationally, especially in China.
Royal DSM is a global science-based company that connects competences in life sciences and materials sciences to create solutions in health, nutrition and materials. DSM uses "Bright Science" to create "Brighter Living" by addressing global challenges and driving economic, environmental and social progress. DSM believes its continued success depends on creating shared value for all stakeholders through innovation that allows customers to provide better solutions regarding people, planet and profit.
McKesson HBOC is a global healthcare company providing pharmaceutical and medical supplies, information solutions, pharmacy automation, and sales and marketing services. It serves over 25,000 pharmacies, 5,000 hospitals, 35,000 physician practices, and other healthcare organizations. The company has experienced over 20% revenue growth annually from its supply chain management and information technology businesses. McKesson HBOC aims to continue growing these businesses and finding new ways to help customers reduce costs and improve patient care through organizational changes, new initiatives, and strategic partnerships.
Duke Energy 04-29-04_PMA_DLH_1Q04_Earnings_Reviewfinance21
The document provides an earnings review for Duke Energy Corporation for the first quarter of 2004. It summarizes key financial highlights including reported EPS of $0.36 and EPS excluding special items of $0.32. It reviews performance across Duke Energy's business segments, noting solid earnings from regulated businesses and improved results from field services. It also discusses special items including a $325 million pre-tax loss from the anticipated sale of Southeast generation assets. The document indicates progress on financial plans including $200 million in debt reductions and $1.5 billion in asset sale proceeds to date.
Similar to boston scientific2002_annual_financial (20)
This document provides an overview and highlights of Virgin Media's performance in the fourth quarter of 2006. It discusses the company's achievements over the last 12 months including the Telewest merger and Virgin Mobile acquisition. The fourth quarter saw revenue growth across all segments, strong net additions, and continued ARPU and customer care improvements. Priorities for 2007 include delivering on the new Virgin brand, targeting competitor customers, driving efficiency and improving customer care.
This document provides an overview of Virgin Media's performance in the fourth quarter of 2006. It discusses the company's achievements over the past year including the Telewest merger and Virgin Mobile acquisition. The highlights of Q4 2006 include revenue growth across all segments, strong broadband and TV subscriber additions, and increased triple play penetration. Priorities for 2007 include delivering on the new Virgin brand, targeting competitor customers, driving efficiency and improving customer care.
Virgin Media reported its financial results for the first quarter of 2007. Key highlights include:
1) Strong growth in broadband, TV and mobile contract customers due to compelling offers and marketing campaigns promoting bundled services. However, fixed line customers continued to decline due to increased competition.
2) ARPU was slightly down due to lower fixed line usage, but triple play penetration and Old NTL ARPU increased, pointing to continued ARPU growth.
3) Customer churn improved to 1.6% due to more rigorous credit policies and efficient sales channels, while Sky basics had a minimal impact in Q1.
4) Mobile contract growth remained strong through cable cross-sell, while pre-pay declined season
This document summarizes Virgin Media's performance in the first quarter of 2007. It discusses Virgin Media's progress on key priorities such as brand strength, targeting competitors, cable integration, and cross-sell opportunities. Financial metrics like revenue, customer additions and disconnects, and ARPU are also reviewed. Challenges from increased competition and the impact of Sky's new "Basics" package are addressed.
This document provides a summary of Virgin Media's financial performance in the second quarter of 2007. It discusses declines in revenue due to customer churn related to the loss of Sky basics channels, but notes improving trends in areas like TV and broadband. Key points highlighted include strong growth in video on demand usage, successful bundling of products, expansion of high speed broadband services, and continued strength in the mobile business. The summary also previews upcoming content initiatives and their potential to further drive customer growth and engagement.
This document summarizes Virgin Media's financial performance in the second quarter of 2007. Key points include: losses of Sky basic channels impacted customer churn but TV performance was better than expected; strong mobile contract sales and bundling of products continued; and while ARPU was affected by retention activities, cash flow outlook remains strong. The document provides details on customer additions and disconnects, growth of triple play bundling, and increases in video on demand usage.
This document provides a summary of Virgin Media's financial results for the third quarter of 2007. It notes significant improvements in customer and revenue growth metrics compared to previous quarters. Revenue was up slightly from the second quarter due to growth in the consumer, business services, content, and mobile segments. Operating cash flow also increased due to lower costs and certain one-time benefits. However, proactive investment in customer growth was also noted as impacting operating cash flow. Net debt remained substantial as of the end of the third quarter.
The document summarizes an UBS media conference by Acting CEO Neil Berkett of Virgin Media on December 5, 2007. Berkett discussed Virgin Media's transformation through integration, re-engineering growth initiatives. He highlighted opportunities in premium TV, basic pay-TV, free DTV and contract mobile. Berkett also outlined Virgin Media's network advantages in speed and reach, and strategies to increase customer value through volume, ARPU and tenure. Mobile was discussed as an important driver of consumer value through cross-selling. Valuable tax assets were also noted.
The document summarizes an UBS media conference by Acting CEO Neil Berkett of Virgin Media on December 5, 2007. Berkett discussed Virgin Media's transformation through integration, re-engineering growth initiatives, and building the platform for growth. He highlighted opportunities in premium TV, basic pay-TV, free DTV, broadband, and mobile services. Berkett also covered Virgin Media's network advantages, content assets, tax assets, and the significant potential asset value of the company's network, consumer base, mobile business, and content.
This document provides a summary of Virgin Media's financial and operational results for the first quarter of 2008. Key highlights include continued strong growth in broadband and TV customers, record-low cable churn of 1.2%, and stable cable ARPU despite non-recurring benefits in the previous quarter. OCF increased slightly compared to last quarter. Capex remained high at 13.7% of revenue to support network upgrades including faster broadband speeds. Revenue declined slightly due to seasonal factors in certain business units.
This document provides a summary of Virgin Media's performance in the second quarter of 2008. It discusses financial results including operating cash flow growth and SG&A reductions. It also reviews operational metrics such as subscriber growth, churn rates, broadband and TV services. Virgin Media saw increased revenue and profitability in Q2 2008 compared to the same period last year.
This document provides a summary of Virgin Media's performance in the second quarter of 2008. It discusses financial results including operating cash flow growth and SG&A reductions. It also reviews operational metrics such as subscriber growth, churn rates, broadband and TV services. Virgin Media saw increased revenue and profitability in Q2 2008 compared to the prior year through lower churn, higher triple-play penetration and a focus on quality customer growth. The company believes its cable network gives it advantages over DSL providers that will increase further after investments are completed.
This document provides a summary of Virgin Media's financial results for the third quarter of 2008. It reports that Virgin Media continued to see growth in key metrics such as on-net customer additions, broadband and TV subscriber growth, and improving triple play penetration. ARPU increased through price increases, cross-selling, and upselling efforts. Mobile contract customer growth was strong through cross-selling to cable customers. Content revenues increased for VMtv but declined for Sit-Up. Overall revenue was flat, while operating cash flow and margins declined slightly compared to last year. Capital expenditures remained high to continue network upgrades and expand service offerings.
This document provides a summary of Virgin Media's financial results for the third quarter of 2008. It reports that Virgin Media continued to see growth in key metrics such as on-net customer additions, broadband and TV subscriber growth, and improving triple play penetration. ARPU increased through price increases, cross-selling, and upselling efforts. Mobile contract customer growth was strong through cross-selling to cable customers. Content revenue increased for VMtv but declined for Sit-Up. Overall revenue was flat, while operating cash flow and margins declined slightly compared to last year. Capital expenditures remained high to continue network investments.
The document discusses Virgin Media's strategy to leverage its network advantages for renewed growth. Key points include plans to: 1) lead in next generation broadband through upgrades to 10Mbps and beyond; 2) lead the on-demand TV revolution through growing video on demand usage and iPlayer views; and 3) leverage mobile as a third screen through bundling mobile services. Virgin Media also aims to build a more efficient customer focused organization through an operational transformation program targeting over £120m in annual cost savings by 2012.
The document discusses Virgin Media's strategy to leverage its network advantages for renewed growth. It aims to lead in next generation broadband, lead the on-demand TV revolution, and leverage mobile as a third screen. Virgin Media has the best broadband economics due to its high market share and lower costs. It is focusing on upgrading customers to higher broadband tiers, growing on-demand TV and video usage, and integrating mobile offerings. The company expects operational transformation to deliver over £120 million in annual cost savings by 2012.
The document provides an agenda and overview for an investor and analyst day being held by Virgin Media in London on November 13, 2008. It includes:
1) A disclaimer stating that forward-looking statements in the document involve risks and uncertainties that could cause actual results to differ materially.
2) An agenda for the day's presentations on Virgin Media's strategy, growth initiatives, network strengths, financial structure and regulatory progress.
3) Introductions of the senior management team who will be presenting.
The document provides an agenda and overview for an investor and analyst day being held by Virgin Media in London on November 13, 2008. It includes:
1) A disclaimer stating that forward-looking statements in the document involve risks and uncertainties that could cause actual results to differ materially.
2) An agenda for the day's presentations on Virgin Media's strategy, growth initiatives, network strengths, financial structure and regulatory progress.
3) Biographies and photos of Virgin Media's management team, including the CEO and heads of key business units.
This document provides an overview of Virgin Media's financial and operational results for the fourth quarter of 2008. Key highlights include consumer revenue growth for the second straight quarter, a 10% reduction in SG&A expenses compared to Q4 2007, and record broadband, TV, and contract mobile customers. Operational metrics such as churn and the percentage of triple play customers also improved compared to prior year. The company continued focusing on quality growth through initiatives such as improving broadband tier mix and enriching TV content.
This document provides an overview of Virgin Media's financial and operational results for the fourth quarter of 2008. Key highlights include consumer revenue growth for the second straight quarter, a 10% reduction in SG&A expenses compared to Q4 2007, and record broadband, TV, and contract mobile customers. Operational metrics such as churn and the percentage of triple play customers also improved compared to prior year. The company continued focusing on quality growth through initiatives such as improving broadband tier mix and enriching TV content.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
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[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
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5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
1. 2002
Consolidated Financial Statements
BOSTON SCIENTIFIC AND SUBSIDIARIES
FINANCIAL TABLE OF CONTENTS
Management’s discussion and analysis of financial condition and results of operations 2
Consolidated statements of operations 17
Consolidated balance sheets 18
Consolidated statements of stockholders’ equity 20
Consolidated statements of cash flows 21
Notes to consolidated financial statements 22
Report of independent auditors 48
Five-year selected financial data 49
Quarterly results of operations 50
Market for the Company’s common stock and related matters 51
2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview technology; and a reduction in income tax expense as a result
of a tax refund of previously paid taxes. The reported results
Boston Scientific Corporation (Boston Scientific or the for 2001 include after-tax charges of $377 million, which
Company) is a worldwide developer, manufacturer and include provisions for: purchased research and development
marketer of medical devices that are used in a broad range of related to acquisitions consummated in 2001; costs associated
interventional medical specialties. The Company’s mission is with the Company’s global operations plan; a provision for
to improve the quality of patient care and the productivity of excess inventory due to declining demand for the NIR®
health care delivery through the development and advocacy coronary stent technology; and a write-down of intangible
of less-invasive medical devices and procedures. This is assets related to discontinued technology platforms. Exclusive
accomplished through the continuing refinement of existing of these charges, net income for 2002 was $413 million,
products and procedures and the investigation and develop- or $1.00 per share (diluted), as compared to net income of
ment of new technologies that can reduce risk, trauma, cost, $323 million, or $0.80 per share (diluted), in 2001.
procedure time and the need for aftercare. The Company’s
approach to innovation combines internally developed
products and technologies with those obtained externally
Net Sales
through strategic acquisitions and alliances.
United States (U.S.) revenues increased approximately
The Company’s products are used in a broad range of interven-
10 percent to $1,756 million during 2002. U.S. revenues
tional medical specialties, including interventional cardiology,
increased primarily due to revenue growth in the Company’s
peripheral intervention, neurovascular intervention, electro-
Endosurgery product lines, increased sales of the Cutting
physiology, vascular surgery, gastroenterology, gynecology,
Balloon® catheter, and the launch of the Company’s internally
oncology and urology.
developed Express2™ coronary stent in the U.S., offset by
decreases in NIR® coronary stent sales.
International revenues increased approximately 8 percent
Results of Operations
to $1,163 million during 2002. The increase in international
Financial Summary revenues for the year ended December 31, 2002 was primarily
due to growth in the Company’s Endoscopy product lines and
Years Ended December 31, 2002 and 2001
increased sales of coronary stents within the Company’s
Net sales for the year ended December 31, 2002 were $2,919 Europe and Inter-Continental operating segments, partially
offset by decreases in NIR® coronary stent sales in Japan.
million as compared to $2,673 million in 2001. For the year
ended December 31, 2002, the impact of foreign currency
Worldwide coronary stent sales declined approximately 8
fluctuations was not material. The reported net income for
percent to $318 million during 2002 due to the lack of
2002 was $373 million, or $0.90 per share (diluted), as compared
physician acceptance of the NIR® coronary stent platform
to a reported net loss of $54 million, or $0.13 per share, in
and competitive product launches. In September 2002, the
2001. The reported results for 2002 include net after-tax
Company launched its Express2 coronary stent system in
charges of $40 million, which include provisions for: purchased
the U.S. The product has been well received in the market,
research and development primarily associated with the
increasing the Company’s domestic coronary stent market
acquisitions of Enteric Medical Technologies, Inc. (EMT) and
share to greater than 20 percent during the fourth quarter of
Smart Therapeutics, Inc. (Smart); costs associated with the
2002. The Company anticipates the launch of its Express2
Company’s recently completed global operations plan; an
coronary stent system in Japan in the third quarter of 2003.
endowment to fund a newly created philanthropic foundation;
special credits for net amounts received in connection with
settlements of litigation related to rapid exchange catheter
2
BOSTON SCIENTIFIC AND SUBSIDIARIES
3. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Gross Profit
The following table provides sales by region and relative
change on an actual and constant foreign currency basis for
Gross profit increased to $2,049 million, or 70.2 percent of net
the years ended December 31, 2002 and 2001, respectively.
sales, in 2002 from $1,754 million, or 65.6 percent of net sales,
in 2001. The increase in gross profit in 2002 was primarily due
December 31, Change
to the increase in net sales, a $33 million reduction in costs
At At
actual constant related to the global operations plan and a $49 million provision
currency currency
recorded in 2001 for excess NIR® coronary stent inventories.
2002 2001 basis basis
(in millions)
Excluding these charges, gross profit percentage improved
United States $ 1,756 $ 1,598 10% 10% to 71.2 percent in 2002 from 69.8 percent in 2001 due to oper-
Europe 442 365 21% 15%
ational cost improvements achieved through the Company’s
Japan 494 522 (5%) (3%)
global operations plan and to shifts in the Company’s product
Inter-Continental 227 188 21% 27%
sales mix toward higher margin products, primarily the Express™
Worldwide $ 2,919 $ 2,673 9% 9%
coronary stent, partially offset by higher margin revenue
declines in Japan.
The following table provides worldwide sales by division
and relative change on an actual and constant foreign
currency basis for the years ended December 31, 2002
Selling, General and Administrative Expenses
and 2001, respectively.
Selling, general and administrative expenses as a percentage
December 31, Change
of net sales decreased to 34 percent in 2002 from 35 percent
At At
in 2001 and increased approximately $76 million to $1,002
actual constant
currency currency
million in 2002. The increase in expenses in 2002 is primarily
2002 2001 basis basis
(in millions)
attributable to costs incurred to expand and to strengthen
the Company’s SCIMED field sales force in Europe and the
SCIMED $ 1,709 $ 1,608 6% 6%
EPT 101 82 23% 22% Endosurgery field sales force in the U.S.
Target 169 151 12% 11%
Cardiovascular $ 1,979 $ 1,841 7% 8%
Amortization Expense
Medi-tech $ 231 $ 212 9% 11%
Endoscopy 513 451 14% 13%
Amortization expense decreased to $72 million in 2002 from
Urology 196 169 16% 16%
$136 million in 2001 and decreased as a percentage of net
Endosurgery $ 940 $ 832 13% 13%
sales to 2 percent from 5 percent. The decrease in 2002 is
primarily a result of the adoption of Financial Accounting
Worldwide $ 2,919 $ 2,673 9% 9%
Standards Board Statement No. 142, Goodwill and Other
Intangible Assets. As a result of adoption of Statement No.
The Company’s international operating regions and divisions
142, the Company realized a pre-tax benefit of approximately
are managed on a constant currency basis, while market risk
$46 million of amortization reductions for goodwill and
from changes in currency exchange rates is managed at the
indefinite-lived intangible assets in 2002. This benefit was
corporate level.
partially offset by amortization of intangible assets related to
businesses acquired in 2002 and 2001. The decrease is also
a result of a $24 million pre-tax write-down of intangible
assets in the second quarter of 2001 related to discontinued
technology platforms. During 2002, the Company completed
3
BOSTON SCIENTIFIC AND SUBSIDIARIES
4. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
impairment reviews required by Statement No. 142; the demonstrated promising results by dramatically reducing
Company did not recognize any impairment charges as a restenosis. The proprietary polymer on the stent allows for
result of these reviews. controlled delivery of paclitaxel. Paclitaxel is a multifunctional
microtubular inhibitor that controls platelets, smooth muscle
cells and white blood cells, all of which are believed to
contribute to restenosis. The Company initiated the TAXUS
Royalties
program in 1997.
During 2002, royalties remained at approximately 1 percent of
The TAXUS I trial confirmed safety and reported zero throm-
net sales. The Company expects that its royalty expenses will
bosis and zero restenosis. Clinical follow-up through 12 months
increase in 2003 primarily due to royalties payable on sales of
continues to show favorable results. The TAXUS II trial studied
the Company’s TAXUS™ paclitaxel-eluting stent system.
the treatment of de novo coronary lesions and demonstrated
both safety and efficacy using slow- and moderate-release
formulations. Significant improvements were seen for clinical,
Research and Development Expenses
angiographic and intravascular measures of stent performance
compared with the bare metal control stent. The TAXUS III trial
Research and development expenses increased to $343
is a single-arm registry examining the feasibility of implanting
million in 2002 from $275 million in 2001 and increased as a
up to two paclitaxel-eluting stents for the treatment of in-stent
percentage of net sales to 12 percent from 10 percent. The
restenosis. The trial enrolled patients with complex vascular
investment in research and development dollars reflects
disease having recurrent occlusion in a stent, who have an
spending on new product development programs as well as
increased probability of restenosis. Final six-month results
regulatory compliance and clinical research. The increase in
from the TAXUS III trial confirmed safety and reported no
research and development expense during 2002 is primarily
stent thromboses. The TAXUS IV trial completed enrollment
attributable to investment in the development of and clinical
in August 2002 and nine-month follow-up is underway.
trials relating to the Company’s TAXUS drug-eluting stent pro-
TAXUS IV is a pivotal study designed to assess the safety and
gram and to investment in development programs acquired
efficacy of the slow-release formulation to support regulatory
in connection with the Company’s business combinations
filings for U.S. product commercialization; the Company plans
consummated in 2001, primarily related to the Embolic
on completing its Pre-Market Approval submission to the U.S.
Protection, Inc. (EPI) Filterwire™ embolic protection device.
Food and Drug Administration (FDA) by the end of the second
The Company spent approximately $60 million and $30
quarter of 2003. The TAXUS V trial has received conditional
million on its drug-eluting stent program in 2002 and 2001,
approval from the FDA to enroll patients and will study a higher
respectively. In addition, the Company spent approximately
risk patient population than TAXUS IV, including patients with
$30 million and $10 million on its EPI Filterwire platform in
disease in smaller vessels and longer lesions. TAXUS VI is
2002 and 2001, respectively. The Company currently antici-
studying patients with complex coronary artery disease and
pates research and development expenses as a percentage
completed enrollment in January 2003. Boston Scientific has
of net sales to remain at approximately 12 percent in 2003,
also initiated a transitional registry program (WISDOM) in a
including $100 million of estimated spending on its drug-
number of countries as part of a limited commercial launch
eluting stent program and $15 million of spending on its EPI
of its TAXUS paclitaxel-eluting stent system. A European
Filterwire platform.
post-market registry (Milestone II) is expected to begin in the
The TAXUS clinical program is a series of studies designed first quarter of 2003.
to collect data on Boston Scientific’s proprietary polymer-
based, paclitaxel-eluting stent technology for reducing
coronary restenosis, the growth of neointimal tissue within
an artery after angioplasty and stenting. Prior studies have
4
BOSTON SCIENTIFIC AND SUBSIDIARIES
5. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interest Expense and Other, Net $377 million, which include a provision for purchased research
and development related to acquisitions consummated in
Interest expense decreased to $43 million in 2002 from $59 2001; costs associated with the Company’s global operations
million in 2001. The overall decrease in interest expense is plan; a provision for excess inventory due to declining demand
primarily attributable to lower average interest rates. Other, for the current NIR® coronary stent technology; and a write-
net, was an expense of approximately $18 million in 2002 and down of intangible assets related to discontinued technology
income of approximately $3 million in 2001. The change is platforms. The reported results for 2000 include after-tax
primarily due to a charitable donation of $18 million made charges of $47 million, which include costs associated with
during 2002 to fund the newly created Boston Scientific the Company’s global operations plan and a provision for
Foundation and to net losses of approximately $3 million excess NIR® coronary stent inventory. Exclusive of these
related to the Company’s equity investment portfolio. The charges, net income for 2001 was $323 million, or $0.80 per
Boston Scientific Foundation is a philanthropic organization share (diluted), as compared to net income of $420 million,
whose mission is to improve the health of individuals and or $1.03 per share, in 2000.
communities, and to enhance educational opportunities.
Net Sales
Tax Rate
U.S. revenues increased approximately 1 percent to $1,598
The Company’s reported tax rate was 32 percent and 223 million during 2001, while international revenues decreased
percent in 2002 and 2001, respectively. The decrease was approximately 1 percent to $1,075 million. U.S. revenues
primarily due to a reduction in net special charges in 2002 increased due to revenue growth in the Company’s product
and a refund of previously paid taxes, which resulted in a lines, including revenue generated by businesses acquired
reduction of income tax expense of $15 million. The Com- in 2001, offset by decreases in coronary stent sales.
pany’s effective tax rate, excluding the impact of after-tax International revenues were negatively impacted by approxi-
special charges and credits, decreased to 29 percent in 2002 mately $92 million of foreign exchange fluctuations. The
from 30 percent in 2001. Management currently estimates decrease in international revenues was also due to declines
that the 2003 effective tax rate will be approximately 27 in NIR® coronary stent sales. The reductions to international
percent. The decreases are primarily attributable to shifts sales were partially offset by growth in the Company’s
in the mix between the Company’s U.S. and international product lines, including sales of products available through
businesses. The effective tax rate could be positively or acquisitions, and the launch of the Company’s internally
negatively impacted by changes in the geographic mix of the developed Express™ coronary stent in European and other
Company’s income or by future acquisitions, if any. international markets.
Years Ended December 31, 2001 and 2000 Gross Profit
Net sales for the year ended December 31, 2001 were Gross profit decreased to $1,754 million and 65.6 percent of
$2,673 million as compared to $2,664 million in 2000. net sales in 2001 from $1,832 million and 68.8 percent of net
Without the adverse impact of approximately $92 million sales in 2000. The decline in gross profit in 2001 is primarily
arising from foreign currency fluctuations, net sales for 2001 due to a pre-tax provision recorded in 2001 of $49 million for
increased 4 percent. The reported net loss for 2001 was excess NIR® coronary stent inventory. The excess position was
$54 million, or $0.13 per share, as compared to reported net driven primarily by declining demand for the NIR® coronary
income of $373 million, or $0.91 per share (diluted), in 2000. stent technology. The Company recorded a pre-tax provision
The reported results for 2001 include after-tax charges of of $5 million for excess NIR® coronary stent inventory in 2000.
5
BOSTON SCIENTIFIC AND SUBSIDIARIES
6. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Gross profit for the year ended December 31, 2001 was also trials related to, new products, including the Company’s
Express™ coronary stent platform, its TAXUS™ drug-eluting
negatively impacted by $62 million of pre-tax expenses asso-
ciated with the Company’s global operations plan, as compared stent program, its carotid program and programs acquired
to $11 million of such expenses in 2000. Excluding these in connection with the Company’s business combinations
charges, the gross profit percentage improved to 69.8 percent consummated in 2001.
in 2001 from 69.4 percent in 2000 due to operational cost
improvements and the Company’s hedging activities.
Interest Expense and Other, Net
Interest expense decreased to $59 million in 2001 from $70
Selling, General and Administrative Expenses
million in 2000. The overall decrease in interest expense is
Selling, general and administrative expenses as a percentage primarily attributable to lower average interest rates. Other
of net sales increased to 35 percent of sales in 2001 from income, net, decreased to approximately $3 million in 2001
33 percent in 2000 and increased approximately $59 million from approximately $17 million in 2000. The change is
to $926 million in 2001. The increase in expenses in 2001 is primarily due to net gains recognized on sales of available-
primarily attributable to costs associated with the businesses for-sale securities in 2000 and to net gains recorded on
acquired in 2001 and incremental costs incurred to strengthen derivative financial instruments in 2000.
the Company’s field sales force.
Tax Rate
Amortization Expense
The Company’s reported tax rate was 223 percent and
Amortization expense increased to $136 million in 2001 from 29 percent in 2001 and 2000, respectively. The increase
$91 million in 2000 and increased as a percentage of net was primarily due to an increase in special charges in 2001.
sales to 5 percent from 3 percent. The increase in 2001 is The Company’s effective tax rate, excluding the impact
primarily a result of a $24 million write-down of intangible of in-process research and development related to the 2001
assets related to discontinued technology platforms and acquisitions and restructuring-related charges, was 30 per-
amortization of intangible assets related to businesses cent for both 2001 and 2000.
acquired in 2001.
Global Operations Strategy Update
Royalties
During 2000, the Company approved and committed to a
During 2001, royalties remained at approximately 1 percent global operations plan consisting of a series of strategic
of net sales. initiatives designed to increase productivity and enhance
innovation. The plan includes manufacturing process and
supply chain programs and a plant optimization initiative. The
plant optimization initiative has created a better allocation of
Research and Development Expenses
the Company’s resources by forming a more effective network
Research and development expenses increased to $275 of manufacturing and research and development facilities.
million in 2001 from $199 million in 2000 and increased as a
During the second quarter of 2002, the Company substantial-
percentage of net sales to 10 percent from 7 percent. The
ly completed the plant optimization initiative. The Company
increase in research and development is primarily due to
recorded pre-tax expenses of approximately $23 million as
increased funding for the development of, and the clinical
6
BOSTON SCIENTIFIC AND SUBSIDIARIES
7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Litigation Settlements
cost of sales in 2002 primarily related to transition costs
associated with the plant optimization plan and to abnormal
During the third quarter of 2002, the Company entered into
production variances related to underutilized plant capacity. In
an agreement to settle a number of patent infringement
addition, during the second quarter of 2002, the Company
lawsuits between the Company and Medtronic, Inc.
recorded a $6 million pre-tax charge to cost of sales for sev-
(Medtronic). The settlement resolved the Company’s damage
erance and related costs associated with its global operations
claims against Medtronic arising out of a German court case
strategy. The approximately 250 affected employees included
and a U.S. arbitration proceeding involving Medtronic rapid
manufacturing, manufacturing support and management
exchange stent delivery systems and angioplasty dilatation
employees. The reductions resulted from the Company’s
balloon catheters. In accordance with the settlement
continued achievement of operational efficiencies within its
agreement, during the third quarter of 2002, Medtronic paid
plant network and its continued effort to manage costs.
the Company approximately $175 million to settle damage
During 2001, the Company recorded pre-tax expenses of
award claims for past infringement. In addition, during the
approximately $62 million as cost of sales, primarily related to
third quarter of 2002, the Company recorded a net charge of
transition costs and accelerated depreciation on fixed assets
approximately $76 million for settlement of litigation related
whose useful lives were reduced as a result of the initiative.
to rapid exchange catheter technology.
During 2000, the Company recorded a $58 million pre-tax
special charge for severance and related costs associated
with the displacement of the approximately 1,700 manufac-
turing, manufacturing support and management employees Purchased Research and Development
under the plan. In addition, the Company recorded pre-tax
During 2002, the Company paid approximately $187 million in
expenses of $11 million during 2000 related to transition
cash to acquire Smart Therapeutics, Inc. (Smart), BEI Medical
costs and accelerated depreciation. At December 31, 2002,
Systems Company, Inc. and Enteric Medical Technologies, Inc.
the Company had made cash outlays of approximately $160
(EMT). During 2001, the Company paid approximately $620
million since the inception of the global operations strategy
million in cash and issued approximately 1.9 million shares
and had approximately $4 million of accrued severance and
valued at $40 million to acquire RadioTherapeutics Corporation,
related costs remaining associated with its global operations
Cardiac Pathways Corporation, Interventional Technologies,
strategy initiatives. The accrued costs are expected to be
Inc. (IVT), Quanam Medical Corporation, Catheter Innovations,
paid by the end of 2003.
Inc. and Embolic Protection, Inc. (EPI). These acquisitions are
During 2002, the Company achieved pre-tax operating intended to strengthen the Company’s leadership position in
savings, relative to the plan’s base year of 1999, of interventional medicine. The acquisitions were accounted for
approximately $220 million. The Company estimates that using the purchase method of accounting. The consolidated
the global operations plan will achieve future pre-tax financial statements include the operating results for each
operating savings, relative to the base year, of approximately acquired entity from its respective date of acquisition. Pro forma
$250 million in annualized savings in 2003 and thereafter. information is not presented, as the acquired companies’
These savings will be realized primarily as reduced cost of results of operations prior to their date of acquisition are not
sales. Savings to date have been partially offset by price material, individually or in the aggregate, to the Company.
erosion and the effects of foreign currency fluctuations
The purchase price recorded for each acquisition has been
relative to the base year. Additionally, the Company continues
allocated to the assets acquired and liabilities assumed based
to use the majority of these savings to fund its increased
on their fair values at the date of acquisition. The estimated
investment in research and development.
excess of purchase price over the fair value of the net tangible
assets acquired was allocated to identifiable intangible assets,
as valued by an independent appraiser using information and
assumptions provided by management. Based upon these
7
BOSTON SCIENTIFIC AND SUBSIDIARIES
8. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
valuations, the Company recorded charges of approximately and development amounts so determined represent the fair
$85 million in 2002 and $282 million in 2001 to account for value at the date of acquisition and do not exceed the amount
purchased research and development. The valuation of pur- a third party would pay for the projects.
chased research and development, for which management
The most significant projects, relative to the purchased
is primarily responsible, represents the estimated fair value
research and development charge recorded in connection
at the date of acquisition related to in-process projects. As of
with the acquisitions consummated in 2002, are EMT’s
the date of acquisition, the in-process projects had not yet
Enteryx™ technology for the treatment of gastroesophageal
reached technological feasibility and had no alternative future
reflux disease (GERD) and Smart’s atherosclerosis stent,
uses. The primary basis for determining the technological
which collectively represent approximately 82 percent of the
feasibility of these projects is obtaining regulatory approval
2002 in-process value. Enteryx is a patented liquid polymer
to market the product. Accordingly, the value attributable
for the treatment of GERD. The atherosclerosis stent is a
to these projects, which had not yet obtained regulatory
self-expanding nitinol stent designed to treat narrowing of
approval, was expensed in conjunction with the acquisition.
the arteries around the brain. As of the date of acquisition, the
If the projects are not successful or completed in a timely
projects were expected to be completed and the products
manner, the Company may not realize the financial benefits
commercially available on a worldwide basis within one to
expected for these projects.
four years, with an estimated cost to complete of approxi-
The income approach was used to establish the fair values mately $2 million to $13 million.
of purchased research and development. This approach
The most significant projects, relative to the purchased
establishes fair value by estimating the after-tax cash flows
research and development charge recorded in connection
attributable to the in-process project over its useful life and
with the acquisitions consummated in 2001, are IVT’s next-
then discounting these after-tax cash flows back to a present
generation Cutting Balloon® catheter, the next-generation
value. Revenue estimates were based on estimates of rele-
Infiltrator® transluminal drug-delivery catheter and EPI’s next-
vant market sizes, expected market growth rates, expected
generation embolic protection devices, which collectively
trends in technology and expected product introductions
represent approximately 63 percent of the 2001 in-process
by competitors. In arriving at the value of the in-process
value. The Cutting Balloon is a novel balloon angioplasty device
research and development projects, the Company consid-
with mounted scalpels that relieve stress in the artery, reducing
ered, among other factors, the in-process project’s stage of
the force necessary to expand the vessel. This contributes
completion, the complexity of the work completed as of the
to less inadvertent arterial trauma and injury as compared to
acquisition date, the costs already incurred, the projected
standard balloon angioplasty. The Infiltrator transluminal drug-
costs to complete, the contribution of core technologies and
delivery catheter is designed to deliver therapeutic agents
other acquired assets, the expected introduction date and
directly into the wall of the artery with high levels of efficiency.
the estimated useful life of the technology. The discount rate
The embolic protection devices are filters that are mounted
used to arrive at a present value as of the date of acquisition
on a guidewire and are used to capture embolic material that
was based on the time value of money and medical technol-
is dislodged during cardiovascular interventions. As of the date
ogy investment risk factors. For the purchased research and
of acquisition, the projects were expected to be completed
development programs acquired in connection with the 2002
and the products to be commercially available on a worldwide
acquisitions, risk-adjusted discount rates ranging from 17
basis within one to four years, with an estimated cost to
percent to 26 percent were utilized to discount the projected
complete of approximately $30 million to $45 million.
cash flows. For the purchased research and development
programs acquired in connection with the 2001 acquisitions,
The Company’s acquired research and development projects
risk-adjusted discount rates ranging from 16 percent to 28
are generally progressing in line with the estimates set forth
percent were utilized to discount the projected cash flows.
above, with the exception of IVT’s next-generation Infiltrator
The Company believes that the estimated purchased research
transluminal drug-delivery catheter project. Due to alternative
8
BOSTON SCIENTIFIC AND SUBSIDIARIES
9. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
drug-delivery products available to the Company, the Company availability of a competitor’s technology, third-party intellec-
has reduced its future revenue projections for this product. tual property, the outcome of litigation and the availability
The Company expects to continue to pursue this and other of inventory to meet customer demand. A more gradual
research and development projects acquired in connection physician adoption rate may limit the number of procedures
with its business combinations and believes it has a reason- in which the technology may be used and the price at which
able chance of completing the projects. institutions may be willing to purchase the technology.
Together, these and other factors contribute to the uncertainty
surrounding the evolution of the drug-eluting stent market
and the Company’s position in it.
Outlook
It is expected that one of the Company’s competitors will
The worldwide coronary stent market is dynamic and highly
launch a drug-eluting stent into the U.S. market in the first half
competitive with significant market share volatility. The intro-
of 2003, while the Company’s drug-eluting stent product is
duction of drug-eluting stents is likely to have a significant
expected to be launched in the U.S. in late 2003. In addition,
impact on the market size for coronary stents and on the
several of the Company’s competitors are expected to launch
distribution of market share across the industry. The Company
bare metal stent products into the U.S. market during 2003.
believes drug-eluting stent technology represents one of the
Until the Company launches its drug-eluting stent product, it
largest market opportunities in the history of the medical
is likely that its U.S. coronary stent business will be subject to
device industry. It is estimated that the annual worldwide
significant share and price pressure; however, the Company
market for coronary stents, including drug-eluting stents,
expects to achieve growth in its U.S. coronary stent busi-
may grow to $5 billion by 2005, compared to approximately
ness in 2003 as compared to 2002. During the first quarter
$2.2 billion today. Although the Company believes it is
of 2003, the Company received CE Mark approval for its TAXUS
positioned to be one of only two early entrants in this
paclitaxel-eluting stent system, and launched the product in
market, uncertainties exist about the rate of development
Europe and other international markets. The Company plans
and size of this new market.
to launch its drug-eluting stent product in Japan in early 2005,
The Company believes it is poised to take advantage of the subject to regulatory approvals.
drug-eluting stent opportunity for a variety of reasons, including
As the health care environment continues to undergo rapid
its more than five years of scientifically rigorous research and
change, management expects that it will continue to focus
development, the promising clinical results of its TAXUS™ pro-
on strategic initiatives and make additional investments in
gram, the combined strength of the components of its tech-
existing relationships. During 2002 and 2001, the Company
nology, its overall market leadership, and the largest sales force
consummated several business acquisitions and strategic
in interventional cardiology. In addition, in order to capitalize
alliances. Management believes it has developed a sound
on this opportunity, the Company is making significant invest-
plan to integrate these businesses. The failure to success-
ments in its sales, clinical and manufacturing capabilities.
fully integrate these businesses could impair the Company’s
Recognizing the promise and benefits of drug-eluting stents, ability to realize the strategic and financial objectives of these
physicians are expected to rapidly adopt this new technology. transactions. In connection with these and other acquisitions
In addition, initial reimbursement rates have already been set consummated during the last five years, the Company has
in the United States. acquired numerous in-process research and development
platforms. As the Company continues to undertake strategic
The Company’s success with drug-eluting stents, and its initiatives, it is reasonable to assume that it will acquire
ability to improve operating margins, could be adversely additional in-process research and development platforms.
affected by more gradual physician adoption rates, changes
in reimbursement policies, delayed or limited regulatory Uncertainty remains with regard to future changes within the
approvals, unexpected variations in clinical results, the earlier health care industry. The trend toward managed care and
9
BOSTON SCIENTIFIC AND SUBSIDIARIES
10. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Critical Accounting Policies
economically motivated and more sophisticated buyers in the
U.S. may result in continued pressure on selling prices of
The preparation of financial statements in conformity with
certain products and compression of gross margins. Further,
accounting principles generally accepted in the United States
the U.S. marketplace is increasingly characterized by con-
requires management to make estimates and assumptions
solidation among health care providers and purchasers of
that affect the reported amounts of assets and liabilities
medical devices who prefer to limit the number of suppliers
and disclosure of contingent assets and liabilities at the date
from which they purchase medical products. There can be
of the financial statements, and the reported amounts of
no assurance that these entities will continue to purchase
revenues and expenses. Actual results could differ from
products from the Company.
those estimates. The Company has formal accounting policies
International markets are also being affected by economic in place including those that address critical and complex
pressure to contain reimbursement levels and health care costs. accounting areas. Note A to the consolidated financial state-
The Company’s profitability from its international operations ments describes the significant accounting policies used in
the preparation of the consolidated financial statements. The
may be limited by risks and uncertainties related to economic
most significant areas involving management judgments and
conditions in these regions, regulatory and reimbursement
estimates are described below.
approvals, competitive offerings, infrastructure development,
rights to intellectual property and the ability of the Company to
Revenue Recognition: The Company recognizes revenue
implement its overall business strategy. Any significant changes
from the sale of its products when the products are shipped
in the competitive, political, regulatory, reimbursement or
to its customers unless a consignment arrangement exists.
economic environment where the Company conducts inter-
Revenue from consignment customers is recognized based
national operations may have a material impact on revenues
on product usage indicating sales are complete. The Company
and profits, especially in Japan, given its high profitability
allows its customers to return certain products for credit.
relative to its contribution to revenues. The Company’s Japan
The Company also allows customers to return defective or
business is expected to be under continued pressure, partic-
damaged products for credit or replacement. The Company’s
ularly in coronary stents, due to competitive product offerings
estimates for sales returns, rebates and discounts are based
and the lack of physician acceptance of the NIR® coronary
upon contractual commitments and historical trends and are
stent platform. The Company anticipates the launch of its
recorded as a reduction to revenue.
Express2™ coronary stent system in Japan in the third quarter
of 2003. Deterioration in the Japanese and /or emerging Intangible Assets: Intangible assets are recorded at his-
markets economies may impact the Company’s ability to torical cost. Intangible assets acquired in a business combi-
grow its business and to collect its accounts receivable in nation, including purchased research and development, are
international markets. Additionally, the trend in countries around recorded under the purchase method of accounting at their
the world toward more stringent regulatory requirements for estimated fair values at the date of acquisition. The fair
product clearance, changing reimbursement models and values of acquired intangible assets are determined by an
more vigorous enforcement activities has generally caused independent appraiser using information and assumptions
or may cause medical device manufacturers to experience provided by management. Goodwill represents the excess
more uncertainty, greater risk and higher expenses. purchase price over the fair value of the net tangible and
intangible assets acquired.
These factors may impact the rate at which the Company can
grow. However, management believes that it is positioning The Company’s intangible assets are amortized using the
the Company to take advantage of opportunities that exist in straight-line method over their useful lives, as applicable, as
the markets it serves. follows: patents, 3 to 20 years; licenses, 2 to 20 years; definite-
lived core and developed technology, 3 to 25 years; other
intangibles, various. In the first quarter of 2002, the Company
10
BOSTON SCIENTIFIC AND SUBSIDIARIES
11. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
certain conditions, costs of defense when such costs are
ceased amortization of its excess of cost over net assets
probable and estimable. Otherwise, such costs are expensed
acquired (goodwill) and certain other indefinite-lived intan-
as incurred. As of December 31, 2002, the potential exposure
gible assets in accordance with Statement No. 142. The
for litigation-related accruable costs is estimated to range
Company had $827 million and $765 million of net intangible
from $4 million to $10 million. The Company’s total accrual for
assets that are subject to amortization at December 31, 2002
litigation-related reserves as of December 31, 2002 and 2001
and 2001, respectively, and $1,540 million and $1,299 million
was approximately $4 million and $6 million, respectively. As
of goodwill and other indefinite-lived intangible assets at
of December 31, 2002, the range of loss for reasonably pos-
December 31, 2002 and 2001, respectively.
sible contingencies that can be estimated is not material.
The Company reviews intangible assets at least annually to
Income Taxes: The Company utilizes the asset and liability
determine if any adverse conditions exist that would indicate
method for accounting for income taxes. Under this method,
impairment. Conditions that would trigger an impairment
deferred tax assets and liabilities are determined based on
assessment include, but are not limited to, a significant
differences between financial reporting and tax bases of
adverse change in legal factors or business climate that
assets and liabilities. Deferred tax assets and liabilities are
could affect the value of an asset or an adverse action or
measured using the enacted tax rates and laws that will be
assessment by a regulator. If the carrying amount of an
in effect when the differences are expected to reverse.
asset exceeds the sum of its undiscounted cash flows, the
carrying value is written down to fair value in the period
The Company has recognized net deferred tax assets aggre-
identified. Fair value is calculated as the present value of
gating $68 million at December 31, 2002 and $131 million
estimated future cash flows using a risk-adjusted discount
at December 31, 2001. The assets relate principally to the
rate. Goodwill is reviewed at least annually for impairment
establishment of inventory and product-related reserves,
utilizing the two-step business unit approach prescribed
purchased research and development and net operating loss
under Statement No. 142. Indefinite-lived intangible assets
carryforwards. In light of the Company’s historical financial
are reviewed at least annually for impairment by calculating
performance, the Company believes that these assets will
the fair value of the intangible assets and comparing these
be substantially recovered.
amounts to the related carrying values.
In addition, the Company operates within multiple taxing
Inventories: Inventories are stated at the lower of first-in,
jurisdictions and is subject to audit in these jurisdictions.
first-out cost or market. Provisions for excess inventory are
These audits can involve complex issues, which may require
primarily based on management’s estimates of forecasted
an extended period of time to resolve. In management’s
sales levels. A significant decline in demand for the Com-
opinion, adequate provisions for income taxes have been
pany’s products as compared to forecasted amounts may
made for all years. The Company expects to settle some of
result in the recording of additional provisions for excess
these audits over the next several quarters. As these audits
inventory in the future. Provisions for inventory located
are settled the Company will adjust previous estimates for
in the Company’s manufacturing and distribution facilities
accrued taxes.
are recorded as cost of sales. Generally, write-downs of
consignment inventory are charged to selling, general and
administrative expenses.
Legal Costs: The Company is involved in various lawsuits,
including patent infringement and product liability suits, from
time to time in the normal course of business. In some
cases, the claimants seek damages, as well as other relief,
which, if granted, could require significant expenditures. The
Company accrues costs of settlement, damages and, under
11
BOSTON SCIENTIFIC AND SUBSIDIARIES
12. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources At December 31, 2002, the revolving credit facilities totaled
approximately $1.6 billion, consisting of a $1 billion credit facility
Cash generated by operations provides a major source of funds that terminates in May 2003 and a $600 million credit facility
for the growth of the Company, including working capital, that terminates in August 2006. The revolving credit facilities
additions to property, plant and equipment, acquisitions and also support the Company’s commercial paper borrowings.
strategic alliances. Cash provided by operating activities The revolving credit facilities require the Company to main-
increased to $736 million in 2002 from $490 million in 2001. tain a specific ratio of consolidated total debt (as defined) to
The increase is primarily due to the growth in the Company’s consolidated earnings before interest, taxes, depreciation
earnings before special charges, cash received in connection and amortization (EBITDA) (as defined) of less than or equal
with litigation settlements, changes in deferred income taxes to 3.5 to 1. The ratio was approximately 1.1 to 1 at December
and continued improvement of inventory management. In 31, 2002 compared to 1.9 to 1 at December 31, 2001. In
addition, the Company received approximately $107 million addition, the revolving credit facilities require the Company to
during 2002 in connection with the issuance of shares pur- maintain a specific ratio of consolidated EBITDA (as defined)
suant to its stock option and employee stock purchase plans. to consolidated interest expense (as defined) of greater than
Cash proceeds during the period were primarily used to fund or equal to 3.5 to 1. The ratio was approximately 19.6 to 1 at
acquisitions, strategic alliances, capital expenditures and to December 31, 2002 compared to 10.4 to 1 at December 31,
reduce the Company’s borrowings. 2001. The Company intends to refinance its $1 billion credit
facility terminating in May 2003 with a new credit facility of
During 2002, the Company significantly improved its finan-
up to $1 billion having similar terms and conditions.
cial position by reducing its net debt (debt net of cash and
cash equivalents) to $658 million at December 31, 2002 from In August 2002, the Company entered into a revolving credit
$1,024 million at the end of 2001. As of December 31, 2002, and security facility providing for up to $200 million of
net debt represented 19 percent of capital (total stockholders’ additional borrowing capacity secured by the Company’s
equity plus total debt) as compared to 32 percent of capital as domestic trade accounts receivable. The maximum amount
of December 31, 2001. Cash and cash equivalents totaled available for borrowing under this facility changes based
$277 million at December 31, 2002, compared to $180 million upon the amount of eligible receivables, concentration of
at December 31, 2001. The Company had $285 million and eligible receivables and other factors. At December 31, 2002,
$275 million of working capital at December 31, 2002 and $197 million was outstanding under this facility and bore
2001, respectively. The Company’s working capital position at interest at 1.89 percent. Certain significant changes in the
December 31, 2002, relative to December 31, 2001, was quality of the Company’s receivables may cause an amorti-
affected by an increase in accrued liabilities, a reduction of zation event under this facility. An amortization event may
short-term debt and increases in the Company’s cash balances require the Company to immediately repay borrowings under
held at subsidiaries outside the U.S. The Company’s accrued the facility. The financing structure required the Company
liabilities at December 31, 2002 include $195 million of acqui- to create a wholly owned entity, which is consolidated by
sition obligations, which were paid in the first quarter of 2003. the Company. This entity purchases U.S. trade accounts
receivable from the Company and then borrows from two
The Company had approximately $88 million and $99 million
third-party financial institutions using these receivables as
of commercial paper outstanding at December 31, 2002 and
collateral. The transactions remain on the Company’s balance
2001, respectively, at weighted average interest rates of
sheet because the Company has the right to prepay any
1.50 percent and 2.33 percent, respectively. In addition,
borrowings outstanding, allowing the Company to retain
the Company had approximately $113 million and $547 million
effective control over the receivables. Accordingly, pledged
in unsecured revolving credit facility borrowings outstanding
receivables and the corresponding borrowings are included
at December 31, 2002 and 2001, respectively, at weighted
as trade accounts receivable, net and long-term debt, respec-
average interest rates of 0.58 percent and 1.95 percent,
tively, on the accompanying consolidated balance sheets.
respectively.
12
BOSTON SCIENTIFIC AND SUBSIDIARIES
13. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has the ability to refinance a portion of its short- Japanese credit facilities at an interest rate of 1.38 percent
term debt on a long-term basis through its revolving credit at December 31, 2002, compared to $8 million in borrowings
facilities. The Company expects a minimum of $320 million at an interest rate of 1.38 percent at December 31, 2001.
of its bank obligations will remain outstanding beyond the At December 31, 2002, approximately $102 million of notes
next twelve months and, accordingly, has classified this portion receivable were discounted at average interest rates of approx-
as long-term borrowings at December 31, 2002, compared to imately 1.38 percent compared to $88 million of discounted
$471 million of bank obligations classified as long-term at notes receivable at average interest rates of approximately
December 31, 2001. 1.38 percent at December 31, 2001.
The Company had $500 million of senior notes (the Notes) Certain of the Company’s 2001 and 2002 business combi-
outstanding at December 31, 2002. The Notes mature in nations involve contingent consideration. These payments
March 2005, bear a semi-annual coupon of 6.625 percent, would be allocated to specific intangible asset categories
and are not redeemable prior to maturity or subject to any or assigned to excess of cost over net assets acquired, as
sinking fund requirements. During 2001, the Company applicable, as if the consideration had been paid as of the
entered into a fixed to floating interest rate swap to hedge date of acquisition. Payment of the additional consideration is
changes in the fair value of the Notes, which the Company generally contingent upon the acquired companies’ reaching
elected to terminate in October 2002. At the date of termi- certain performance milestones, including achieving specified
nation, the fair value of the swap and cash received was revenue levels, product development targets or obtaining
approximately $13 million. The Company will amortize the regulatory approvals. At December 31, 2002, the Company
$13 million adjustment to the carrying amount of the Notes had an accrual for acquisition obligations of $195 million that
into earnings on a straight-line basis through the maturity was paid during the first quarter of 2003. In addition, the
date of the Notes. The carrying amount of the Notes was maximum potential amount of future contingent consideration
approximately $511 million and $485 million at December 31, (undiscounted) that the Company could be required to make
2002 and 2001, respectively. associated with its 2001 and 2002 business combinations is
approximately $500 million, some of which may be payable in
During the first quarter of 2002, the Company repaid 6 billion the Company’s common stock. The milestones associated
Japanese yen (translated to approximately $45 million at the with this contingent consideration must be reached in certain
date of repayment and $46 million at December 31, 2001) of future periods ranging from 2003 through 2007. The specified
borrowings outstanding with a syndicate of Japanese banks. revenue levels associated with the maximum future contin-
In addition, the Company had approximately 800 million gent payments is approximately $800 million.
Japanese yen (translated to approximately $6 million) at
December 31, 2002 and 1 billion Japanese yen (translated The Company has future minimum rental commitments under
to approximately $7 million) at December 31, 2001 of bor- noncancelable capital and operating lease agreements of
rowings outstanding from a Japanese bank used to finance $176 million as of December 31, 2002. The related lease
a facility construction project. The interest rate on the borrow- agreements expire on various dates over the next fifteen
ings is 2.1 percent and semi-annual principal payments are years. The Company expects to make payments of $41
due through 2012. million under its noncancelable capital and operating lease
agreements during 2003.
The Company has uncommitted Japanese credit facilities
with several commercial banks, which provided for borrow- The Company is authorized to purchase on the open market
ings and promissory notes discounting of up to 14.5 billion and in private transactions up to approximately 60 million
Japanese yen (translated to approximately $122 million) at shares of the Company’s common stock. Stock repurchased
December 31, 2002 and up to 15 billion Japanese yen (trans- would principally be used to satisfy the Company’s obligations
lated to approximately $115 million) at December 31, 2001. pursuant to its equity incentive plans, but may also be used
There were $7 million in borrowings outstanding under the for general corporate purposes, including acquisitions. As of
13
BOSTON SCIENTIFIC AND SUBSIDIARIES
14. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 2002, a total of approximately 38 million shares The Company recorded $15 million of assets and $27 million
of the Company’s common stock have been repurchased. of liabilities to recognize the fair value of these instruments
During the first quarter of 2003, the Company repurchased at December 31, 2002, compared to $76 million of assets
approximately 4.5 million shares at an aggregate cost of and no liabilities at December 31, 2001. A 10 percent
$189 million. appreciation in the U.S. dollar’s value relative to the hedged
currencies would increase the derivative instruments’ fair
Additionally, the Company expects to incur capital expendi- value by $75 million and $70 million at December 31, 2002
tures of approximately $200 million during 2003. The Com- and 2001, respectively. A 10 percent depreciation in the
pany expects that its cash and cash equivalents, marketable U.S. dollar’s value relative to the hedged currencies would
securities, cash flows from operating activities and borrowing decrease the derivative instruments’ fair value by $91 million
capacity will be sufficient to meet its projected operating and $70 million at December 31, 2002 and 2001, respectively.
cash needs over the next twelve months, including capital Any increase or decrease in the fair value of the Company’s
expenditures, rental commitments, tax payments, stock currency exchange rate sensitive derivative instruments
repurchases, acquisition-related payments and other strate- would be substantially offset by a corresponding decrease
gic initiatives. or increase in the fair value of the hedged underlying asset,
liability or cash flow.
The Company’s earnings and cash flow exposure to interest
Market Risk Disclosures
rates consists of fixed and floating rate debt instruments
The Company operates globally, and its earnings and cash that are denominated primarily in U.S. dollars and Japanese
flow are exposed to market risk from changes in currency yen. The Company uses interest rate derivative instruments
exchange rates and interest rates. The Company addresses to manage its exposure to interest rate movements and to
these risks through a risk management program that includes reduce borrowing costs by converting floating rate debt into
the use of derivative instruments. The program is operated fixed rate debt or fixed rate debt into floating rate debt. The
pursuant to documented corporate risk management Company had interest rate derivative instruments outstanding
policies. The Company does not enter into any derivative in the notional amounts of $63 million and $557 million at
transactions for speculative purposes. Gains and losses on December 31, 2002 and 2001, respectively. The Company
derivative instruments substantially offset losses and gains recorded an immaterial amount of other long-term liabilities
on underlying hedged exposures. Furthermore, the Company to recognize the fair value of these instruments at December
manages its credit exposure to nonperformance on such 31, 2002, compared to $15 million of other long-term
derivative instruments by entering into contracts with a liabilities at December 31, 2001. A 100 basis point change in
diversified group of major financial institutions to limit the global interest rates would not have resulted in a material
amount of credit exposure to any one institution. change in the derivative instruments’ fair values at December
31, 2002 or 2001. Any increase or decrease in the fair value of
Currency risk consists primarily of foreign currency denom- the Company’s interest rate sensitive derivative instruments
inated firm commitments, forecasted foreign currency would be substantially offset by a corresponding decrease or
denominated intercompany and third-party transactions, and increase in the fair value of the hedged underlying liability.
net investments in certain subsidiaries. The Company uses
both non-derivative (primarily foreign currency denominated
borrowings) and derivative instruments to manage its earnings
and cash flow exposure to changes in currency exchange
rates. The Company had currency derivative instruments
outstanding in the notional amounts of $1,318 million and
$864 million at December 31, 2002 and 2001, respectively.
14
BOSTON SCIENTIFIC AND SUBSIDIARIES
15. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Legal Matters Cautionary Statements for Purposes of the
Safe Harbor Provisions of the Private Securities
The Company is involved in various legal proceedings, including Litigation Reform Act of 1995
patent infringement and product liability suits, from time to
time in the normal course of business. In management’s This report contains forward-looking statements. The
opinion, the Company is not currently involved in any legal Company desires to take advantage of the safe harbor
proceeding other than those specifically identified in Note L provisions of the Private Securities Litigation Reform Act of
to the consolidated financial statements contained herein, 1995 and is including this statement for the express
which, individually or in the aggregate, could have a material purpose of availing itself of the protections of the safe harbor
effect on the financial condition, operations and/or cash flows with respect to all forward-looking statements. Forward-
of the Company. Additionally, legal costs associated with looking statements discussed in this report include, but
asserting the Company’s patent portfolio and defending are not limited to, statements with respect to, and the
against claims that the Company’s products infringe the Company’s performance may be affected by:
intellectual property of others are significant, and legal costs
• volatility in the coronary stent market, competitive offerings
associated with non-patent litigation and compliance activi-
and the timing of submission for and receipt of regulatory
ties are rising. Depending on the prevalence, significance and
approvals to market TAXUS™ drug-eluting stents and other
complexity of these matters, the Company’s legal provision
coronary and peripheral stent platforms;
could be adversely affected in the future.
• the Company’s ability to launch the Express2™ coronary
Further, product liability claims against the Company may
stent in the Japanese market in the third quarter of 2003
be asserted in the future related to events not known to
and the TAXUS drug-eluting stent in the U.S. and Japanese
management at the present time. As a result of current
markets in late 2003 and early 2005, respectively;
economic factors impacting the insurance industry, during
the third quarter of 2002, the Company elected to become
• the impact and timing of the introduction of drug-eluting
substantially self-insured with respect to general and product
stents on the size and distribution of share within the
liability claims. Losses for claims in excess of the limits of
coronary stent market in the U.S. and around the world;
purchased insurance would be recorded at the time and to
the extent they are probable and estimable. Management • the Company’s ability to capitalize on the opportunity in
believes that the Company’s risk management practices, the drug-eluting stent market for significant growth in
including limited insurance coverage, are reasonably ade- revenue and earnings and to supply sufficient inventory
quate to protect against anticipated general and product to meet customer demand;
liability losses. However, unanticipated catastrophic losses
• the Company’s ability to achieve growth in its worldwide and
could have a material adverse impact on the Company’s
domestic coronary stent business in the face of competi-
financial position, results of operations and liquidity.
tive pressure and the introduction of drug-eluting stents;
• the continued decline in NIR® coronary stent sales in Japan
and changes in the mix of the Company’s coronary stent
platforms;
• the development and introduction of competing or techno-
logically advanced products by the Company’s competitors;
• the Company’s ability to achieve estimated operating savings
and operating efficiencies from the global operations plan;
15
BOSTON SCIENTIFIC AND SUBSIDIARIES
16. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• the ability of the Company to manage accounts receivable • the effect of litigation, risk management practices and
and gross margins and to react effectively to the changing compliance activities on the Company’s loss contingency,
managed care environment, reimbursement models and legal provision and cash flow; and
worldwide economic and political conditions;
• the impact of stockholder, patent, product liability, Federal
• the Company’s ability to integrate the acquisitions con- Trade Commission, Medinol Ltd. and other litigation, as
summated in 2001 and 2002 and the Company’s other well as the ultimate outcome of the U.S. Department of
strategic alliances; Justice investigation.
• the Company’s ability to generate anticipated revenues Several important factors, in addition to the specific factors
and other benefits associated with the 2001 and 2002 discussed in connection with each forward-looking statement
acquisitions and strategic alliances and to fund related individually, could affect the future results and growth rates
contingent payments; of the Company and could cause those results and rates to
differ materially from those expressed in the forward-looking
• management’s decisions relating to investments in research statements contained in this report. These additional factors
and development at anticipated levels in 2003, including include, among other things, future economic, competitive,
$100 million of spending on its drug-eluting stent program reimbursement and regulatory conditions, new product
and $15 million of spending on its EPI Filterwire™ platform; introductions, demographic trends, third-party intellectual
property, financial market conditions and future business
• the Company’s ability to successfully complete planned
decisions of the Company and its competitors, all of which
clinical trials and to develop and launch products on a
are difficult or impossible to predict accurately and many of
timely basis within cost estimates, including products
which are beyond the control of the Company. Therefore, the
resulting from purchased research and development;
Company wishes to caution each reader of this report to
consider carefully these factors as well as the specific factors
• the Company’s ability to position itself as one of two early
discussed with each forward-looking statement in this report
entrants in the drug-eluting stent market and to take advan-
and as disclosed in the Company’s filings with the Securities
tage of opportunities that exist in the markets it serves;
and Exchange Commission. These factors, in some cases,
• the timing, size and nature of strategic initiatives, market have affected, and in the future (together with other factors)
opportunities and research and development platforms could affect, the ability of the Company to implement its
available to the Company and the ultimate success of business strategy and may cause actual results to differ
these initiatives; materially from those contemplated by the statements
expressed in this report.
• the Company’s ability to reduce its effective tax rate for
2003 to 27 percent, to settle tax audits favorably and to
substantially recover its net deferred tax assets;
• the ability of the Company to meet its projected cash
needs, to refinance expiring credit facilities and to maintain
its borrowings beyond the next twelve months;
• risks associated with international operations;
• the potential effect of foreign currency fluctuations on
revenues, expenses and resulting margins;
16
BOSTON SCIENTIFIC AND SUBSIDIARIES
17. CONSOLIDATED STATEMENTS OF OPERATIONS
Consolidated Statements of Operations (in millions, except per share data)
(IN MILLIONS, EXCEPT PER SHARE DATA)
Year Ended December 31, 2002 2001 2000
Net sales $ 2,919 $ 2,673 $ 2,664
Cost of products sold 870 919 832
Gross profit 2,049 1,754 1,832
Selling, general and administrative expenses 1,002 926 867
Amortization expense 72 136 91
Royalties 36 35 37
Research and development expenses 343 275 199
Purchased research and development 85 282
Restructuring charges 58
Litigation settlements, net (99)
1,439 1,654 1,252
Operating income 610 100 580
Other income (expense):
Interest expense (43) (59) (70)
Other, net (18) 3 17
Income before income taxes 549 44 527
Income taxes 176 98 154
Net income (loss) $ 373 $ (54) $ 373
Net income (loss) per common share – basic $ 0.92 $ (0.13) $ 0.92
Net income (loss) per common share – assuming dilution $ 0.90 $ (0.13) $ 0.91
(see notes to consolidated financial statements)
17
BOSTON SCIENTIFIC AND SUBSIDIARIES
18. CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
December 31, 2002 2001
Assets
Current assets:
Cash and cash equivalents $ 277 $ 180
Trade accounts receivable, net 435 370
Inventories 243 303
Deferred income taxes 168 174
Prepaid expenses and other current assets 85 79
Total current assets 1,208 1,106
Property, plant and equipment, net 636 592
Excess of cost over net assets acquired 1,168 928
Technology – core, net 553 541
Technology – developed, net 217 221
Patents, net 316 264
Licenses and other intangibles, net 113 110
Investments 210 154
Other assets 29 58
$ 4,450 $ 3,974
(see notes to consolidated financial statements)
18
BOSTON SCIENTIFIC AND SUBSIDIARIES
19. CONSOLIDATED BALANCE SHEETS except share and per share data)
Consolidated Balance Sheets (in millions,
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
December 31, 2002 2001
Liabilities and Stockholders’ Equity
Current liabilities:
Commercial paper $ 88 $ 99
Bank obligations 132
Accounts payable 66 54
Accrued expenses 639 421
Income taxes payable 102 115
Other current liabilities 28 10
Total current liabilities 923 831
Long-term debt 847 973
Deferred income taxes 100 43
Other long-term liabilities 113 112
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $ .01 par value – authorized 50,000,000 shares,
none issued and outstanding
Common stock, $ .01 par value – authorized 600,000,000 shares,
414,882,413 shares issued at December 31, 2002 and 2001 4 4
Additional paid-in capital 1,250 1,225
Treasury stock, at cost – 3,490,451 shares at December 31, 2002
and 9,628,790 shares at December 31, 2001 (54) (173)
Deferred compensation (10)
Retained earnings 1,394 1,031
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment (119) (131)
Unrealized (loss) gain on available-for-sale securities, net (2) 25
Unrealized (loss) gain on derivative financial instruments, net (4) 44
Minimum pension liability (2)
Total stockholders’ equity 2,467 2,015
$ 4,450 $ 3,974
(see notes to consolidated financial statements)
19
BOSTON SCIENTIFIC AND SUBSIDIARIES