MARLBOROUGH, Mass.,
Feb. 4, 2016 /PRNewswire/ -- Boston Scientific
Corporation (NYSE: BSX) generated sales of $1.978 billion during the fourth quarter ended
December 31, 2015. This represents 10 percent operational
revenue growth (constant currency basis, excluding divested
businesses) and 5 percent revenue growth on a reported basis, all
compared to the prior year period. The company achieved
adjusted earnings per share of $0.26
for the period, compared to $0.22 a
year ago, and reported a GAAP loss of $(0.11) per share, compared to a GAAP loss of
$(0.23) a year ago.
For the year ended December 31, 2015, the company achieved
full year sales of $7.477 billion,
representing 8 percent operational revenue growth and 1 percent
revenue growth on a reported basis. The company delivered full year
adjusted earnings per share of $0.93,
compared to $0.84 in 2014 and
reported a GAAP loss of $(0.18) per
share, compared to a GAAP loss of $(0.09) in the prior year period.
"Our accomplishments in 2015 demonstrate our continued momentum
and track record of consistent performance across our businesses
and geographies," said Mike Mahoney,
president and chief executive officer, Boston Scientific. "The
products and programs we brought to market through organic
development and acquisitions, complemented by our innovative
pipeline and continued global expansion, will benefit even more
patients in 2016 and beyond."
Fourth quarter financial results and recent
developments:
- Achieved fourth quarter sales of $1.978
billion, compared to the company's guidance range of
$1.970 to $2.010 billion,
representing 10 percent operational revenue growth and 5 percent
revenue growth on a reported basis, all compared to the prior year
period.
- Grew organic revenue 5 percent in the fourth quarter over the
prior year period. Organic revenue growth excludes the impact of
sales from divested businesses, changes in foreign currency
exchange rates and sales from the acquisition of the American
Medical Systems (AMS) male urology portfolio.
- Delivered fourth quarter adjusted earnings per share of
$0.26, compared to the guidance range
of $0.23 to $0.25 per share, and
reported a GAAP loss of $(0.11) per
share compared to the company's guidance range of $0.10 to $0.13 per share, primarily due to
litigation-related charges.
- Achieved fourth quarter operational revenue growth of 23
percent in MedSurg (7 percent organic), 7 percent operational and
organic revenue growth in Cardiovascular, and flat sales on an
operational and organic basis in Rhythm Management, all on a
constant currency basis over the prior year period.
- Delivered strong operational revenue growth across all three
major regions. Achieved 12 percent growth in the U.S. (5 percent
organic), 10 percent growth in Europe (5 percent organic) and 7 percent
growth (6 percent organic) in AMEA (Asia, Middle
East and Africa), all on a
constant currency basis over the prior year period. Delivered 16
percent operational revenue growth (15 percent organic) in Emerging
Markets.
- Launched the SYNERGY™ Stent System in the United States and Japan and initiated the EVOLVE Short DAPT
clinical trial to assess the duration of dual anti-platelet therapy
(DAPT) in patients receiving a bioabsorbable polymer drug-eluting
stent. Gained SYNERGY™ reimbursement in France, the largest drug-eluting stent market
in Europe by revenue.
- Completed enrollment in REPRISE-III, a randomized, controlled
trial designed to support U.S. regulatory approval for the
Lotus™ Valve System for Transcatheter Aortic Valve Replacement
(TAVR).*
- Acquired the interventional radiology portfolio of CeloNova
Biosciences, including its portfolio of drug-eluting microspheres
designed to be loaded with chemotherapy drugs for delivery to
malignant tumors and other spherical embolic products for uterine
fibroids, among other conditions.**
- Launched the AngioJet™ ZelanteDVT™ Thrombectomy Catheter to
treat deep vein thrombosis (DVT) in large-diameter upper and lower
limb peripheral veins, in the United
States and Europe.
- Launched the LithoVue™ Single-Use Digital Flexible Ureteroscope
for minimally invasive endoscopic procedures to diagnose and treat
stones and other conditions of the kidney, ureter and bladder, in
the U.S. and Europe.
- Received CE mark for and began the European launch of the
next-generation WATCHMAN FLX™ Left Atrial Appendage Closure Device,
which is designed with a lower profile, a closed end and may be
fully recaptured and repositioned.***
- Unveiled data demonstrating a 70 percent greater reduction in
back pain relief for patients using the Precision Spectra™ Spinal
Cord Stimulator System compared to the previous generation
Precision Plus™ system.
- Announced a collaboration with Accenture Digital Health to
offer hospitals ADVANTICS™ Care Pathway Transformation, a
data-driven digital health solution to help improve outcomes and
reduce costs to treat patients with chronic cardiovascular
conditions.
* In the U.S., the Lotus Valve System is an investigational
device and not available for sale. It is CE marked in the
European Union.
** Drug-eluting microspheres designed to be loaded with
chemotherapy drugs for delivery to cancerous tumors are currently
not available for sale in the U.S.
*** The WATCHMAN FLX Device is not available for sale in the U.S.
It is CE marked in the European Union.
Worldwide sales for the fourth quarter:
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Change
|
|
|
December
31,
|
|
As Reported
Basis
|
|
Less: Impact
of
Foreign Currency
|
|
Constant Currency
Basis
|
in
millions
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
$
|
525
|
|
$
|
523
|
|
|
0
|
%
|
|
$
|
(33)
|
|
(6)
|
%
|
|
6
|
|
%
|
|
Peripheral Interventions
|
231
|
|
222
|
|
|
4
|
%
|
|
(13)
|
|
(6)
|
%
|
|
10
|
|
%
|
|
Cardiovascular
|
756
|
|
745
|
|
|
1
|
%
|
|
(46)
|
|
(6)
|
%
|
|
7
|
|
%
|
|
Cardiac
Rhythm Management
|
440
|
|
468
|
|
|
(6)
|
%
|
|
(24)
|
|
(5)
|
%
|
|
(1)
|
|
%
|
|
Electrophysiology
|
61
|
|
59
|
|
|
3
|
%
|
|
(3)
|
|
(5)
|
%
|
|
8
|
|
%
|
|
Rhythm
Management
|
501
|
|
527
|
|
|
(5)
|
%
|
|
(27)
|
|
(5)
|
%
|
|
0
|
|
%
|
|
Endoscopy
|
343
|
|
340
|
|
|
1
|
%
|
|
(21)
|
|
(6)
|
%
|
|
7
|
|
%
|
|
Urology
and Pelvic Health
|
237
|
|
140
|
|
|
69
|
%
|
|
(14)
|
|
(8)
|
%
|
|
77
|
|
%
|
|
Neuromodulation
|
141
|
|
134
|
|
|
5
|
%
|
|
(2)
|
|
(2)
|
%
|
|
7
|
|
%
|
|
MedSurg
|
721
|
|
614
|
|
|
18
|
%
|
|
(37)
|
|
(5)
|
%
|
|
23
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
1,978
|
|
1,886
|
|
|
5
|
%
|
|
(110)
|
|
(5)
|
%
|
|
10
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divested
Businesses
|
—
|
|
1
|
|
|
N/A
|
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Net
Sales
|
$
|
1,978
|
|
$
|
1,887
|
|
|
5
|
%
|
|
$
|
(110)
|
|
(5)
|
%
|
|
10
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
Sales growth rates
that exclude the impact of sales from divested businesses and/or
changes in foreign currency exchange rates are not prepared in
accordance with U.S. GAAP. An explanation of the company's use of
these non-GAAP financial measures is included in the exhibits
attached to this news release.
|
On a consolidated GAAP basis, net loss for the fourth quarter of
2015 was $142 million, or
$(0.11) per share. These results
included acquisition- and divestiture-, litigation-, and
restructuring and restructuring-related net charges, discrete tax
items and amortization expense of $504
million (after-tax) or $0.37
per share. Adjusted net income for the fourth quarter of 2015,
excluding these net charges, was $362
million, or $0.26 per
share.
On a consolidated GAAP basis, net loss for the fourth quarter of
2014 was $299 million, or
$(0.23) per share. These results
included intangible asset impairment charges, acquisition- and
divestiture-, litigation-, and restructuring and
restructuring-related net charges, discrete tax items and
amortization expense, of $602 million
(after-tax) or $0.45 per
share. Adjusted net income for the fourth quarter of 2014,
excluding these net charges, was $303
million, or $0.22 per
share.
Worldwide sales for the full year:
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Change
|
|
|
December
31,
|
|
As Reported
Basis
|
|
Less: Impact
of
Foreign Currency
|
|
Constant Currency
Basis
|
in
millions
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
$
|
2,033
|
|
$
|
2,057
|
|
|
(1)
|
%
|
|
$
|
(174)
|
|
(8)
|
%
|
|
7
|
%
|
|
Peripheral Interventions
|
904
|
|
850
|
|
|
6
|
%
|
|
(60)
|
|
(7)
|
%
|
|
13
|
%
|
|
Cardiovascular
|
2,937
|
|
2,907
|
|
|
1
|
%
|
|
(234)
|
|
(8)
|
%
|
|
9
|
%
|
|
Cardiac
Rhythm Management
|
1,807
|
|
1,912
|
|
|
(5)
|
%
|
|
(117)
|
|
(6)
|
%
|
|
1
|
%
|
|
Electrophysiology
|
233
|
|
227
|
|
|
2
|
%
|
|
(14)
|
|
(7)
|
%
|
|
9
|
%
|
|
Rhythm
Management
|
2,040
|
|
2,139
|
|
|
(5)
|
%
|
|
(131)
|
|
(6)
|
%
|
|
1
|
%
|
|
Endoscopy
|
1,306
|
|
1,323
|
|
|
(1)
|
%
|
|
(96)
|
|
(7)
|
%
|
|
6
|
%
|
|
Urology
and Pelvic Health
|
693
|
|
535
|
|
|
30
|
%
|
|
(35)
|
|
(6)
|
%
|
|
36
|
%
|
|
Neuromodulation
|
501
|
|
472
|
|
|
6
|
%
|
|
(9)
|
|
(2)
|
%
|
|
8
|
%
|
|
MedSurg
|
2,500
|
|
2,330
|
|
|
7
|
%
|
|
(140)
|
|
(6)
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
7,477
|
|
7,376
|
|
|
1
|
%
|
|
(505)
|
|
(7)
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divested
Businesses
|
—
|
|
4
|
|
|
N/A
|
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Net
Sales
|
$
|
7,477
|
|
$
|
7,380
|
|
|
1
|
%
|
|
$
|
(505)
|
|
(7)
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
Sales growth rates
that exclude the impact of sales from divested businesses and/or
changes in foreign currency exchange rates are not prepared in
accordance with U.S. GAAP. An explanation of the company's use of
these non-GAAP financial measures is included in the exhibits
attached to this news release.
|
On a consolidated GAAP basis, net loss for the full year 2015
was $239 million, or $(0.18) per share. These results included
intangible asset impairment charges, acquisition- and divestiture-,
litigation-, restructuring and restructuring-related charges,
pension termination charges, debt extinguishment charges, discrete
tax items and amortization expense, of $1.506 billion (after-tax) or $1.11 per share. Adjusted net income for the
full year 2015, excluding these net charges, was $1.267 billion, or $0.93 per share.
On a consolidated GAAP basis, net loss for the full year 2014
was $119 million, or $(0.09) per share. These results included
intangible asset impairment charges, litigation-, restructuring and
restructuring-related charges, acquisition- and divestiture-related
net credits, discrete tax items and amortization expense, of
$1.248 billion (after-tax) or
$0.93 per share. Adjusted net
income for the full year 2014, excluding these net charges, was
$1.129 billion, or $0.84 per share.
Guidance for Full Year and First Quarter 2016
The company estimates revenue for the full year 2016 to be in a
range of $7.900 to $8.100 billion,
which versus the prior year period, represents a growth range of
approximately 6 to 8 percent on a reported basis, a growth range of
approximately 7 to 10 percent on an operational basis, and a growth
range of approximately 4 to 7 percent on an organic basis. The
company estimates income on a GAAP basis in a range of $0.62 to $0.67 per share, and adjusted earnings,
excluding acquisition- and divestiture-, restructuring- and
restructuring-related charges, and amortization expense, in a range
of $1.03 to $1.07 per share.
The company estimates sales for the first quarter of 2016 in a
range of $1.890 to $1.940
billion. The company estimates earnings on a GAAP basis
in a range of $0.11 to $0.13 per
share. Adjusted earnings, excluding acquisition- and
divestiture-, restructuring- and restructuring-related charges, and
amortization expense, are estimated in a range of $0.23 to $0.25 per share.
Conference Call Information
Boston Scientific management will be discussing these results
with analysts on a conference call today at 8:00 a.m. (ET). The company will webcast the call
to interested parties through its website:
www.bostonscientific.com. Please see the website for details on how
to access the webcast. The webcast will be available for
approximately one year on the Boston Scientific website.
About Boston Scientific
Boston Scientific transforms lives through innovative medical
solutions that improve the health of patients around the
world. As a global medical technology leader for more than 35
years, we advance science for life by providing a broad range of
high performance solutions that address unmet patient needs and
reduce the cost of healthcare. For more information, visit
www.bostonscientific.com and connect on Twitter and
Facebook.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of
1934. Forward-looking statements may be identified by words
like "anticipate," "expect," "project," "believe," "plan,"
"estimate," "intend" and similar words. These forward-looking
statements are based on our beliefs, assumptions and estimates
using information available to us at the time and are not intended
to be guarantees of future events or performance. These
forward-looking statements include, among other things, statements
regarding our expected net sales, GAAP, operational and organic
revenue growth rates, GAAP earnings and adjusted earnings for the
first quarter and full year 2016; our financial performance; our
business plans; and our positioning for revenue and earnings
growth. If our underlying assumptions turn out to be
incorrect, or if certain risks or uncertainties materialize, actual
results could vary materially from the expectations and projections
expressed or implied by our forward-looking statements. These
risks and uncertainties, in some cases, have affected and in the
future could affect our ability to implement our business strategy
and may cause actual results to differ materially from those
contemplated by the statements expressed in this press
release. As a result, readers are cautioned not to place undue
reliance on any of our forward-looking statements.
Risks and uncertainties that may cause such differences include,
among other things: future economic, political, competitive,
reimbursement and regulatory conditions; new product introductions
and the market acceptance of those products; markets for our
products; expected pricing environment; expected procedural
volumes; the closing and integration of acquisitions; clinical
trial results; demographic trends; intellectual property rights;
litigation; financial market conditions; the execution and effect
of our restructuring program; the execution and effect of our
business strategy, including our cost-savings and growth
initiatives; and future business decisions made by us and our
competitors. New risks and uncertainties may arise from time
to time and are difficult to predict. All of these factors are
difficult or impossible to predict accurately and many of them are
beyond our control. For a further list and description of
these and other important risks and uncertainties that may affect
our future operations, see Part I, Item IA - Risk
Factors in our most recent Annual Report on Form 10-K filed
with the Securities and Exchange Commission, which we may update in
Part II, Item 1A - Risk Factors in Quarterly Reports on
Form 10-Q we have filed or will file hereafter. We disclaim
any intention or obligation to publicly update or revise any
forward-looking statement to reflect any change in our expectations
or in events, conditions, or circumstances on which those
expectations may be based, or that may affect the likelihood that
actual results will differ from those contained in the
forward-looking statements. This cautionary statement is
applicable to all forward-looking statements contained in this
press release.
Use of Non-GAAP Financial Information
A reconciliation of the company's non-GAAP financial measures to
the corresponding GAAP measures, and an explanation of the
company's use of these non-GAAP financial measures, is
included in the exhibits attached to this news release.
CONTACT:
|
|
Media:
|
Tom
Keppeler
|
|
508-683-6585
(office)
|
|
Media
Relations
|
|
Boston Scientific
Corporation
|
|
tom.keppeler@bsci.com
|
|
|
Investors:
|
Susan Lisa,
CFA
|
|
508-683-5565
(office)
|
|
Investor
Relations
|
|
Boston Scientific
Corporation
|
|
investor_relations@bsci.com
|
BOSTON SCIENTIFIC
CORPORATION
|
CONDENSED
CONSOLIDATED GAAP RESULTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
in millions,
except per share data
|
2015
|
2014
|
|
2015
|
2014
|
|
|
|
|
|
|
Net sales
|
$
|
1,978
|
|
$
|
1,887
|
|
|
$
|
7,477
|
|
$
|
7,380
|
|
Cost of products
sold
|
573
|
|
560
|
|
|
2,173
|
|
2,210
|
|
Gross
profit
|
1,405
|
|
1,327
|
|
|
5,304
|
|
5,170
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative expenses
|
777
|
|
752
|
|
|
2,873
|
|
2,902
|
|
Research and
development expenses
|
244
|
|
208
|
|
|
876
|
|
817
|
|
Royalty
expense
|
17
|
|
25
|
|
|
70
|
|
111
|
|
Amortization
expense
|
135
|
|
111
|
|
|
495
|
|
438
|
|
Intangible asset
impairment charges
|
—
|
|
18
|
|
|
19
|
|
195
|
|
Contingent
consideration expense (benefit)
|
37
|
|
37
|
|
|
123
|
|
(85)
|
|
Restructuring
charges
|
10
|
|
32
|
|
|
26
|
|
69
|
|
Litigation-related
charges (credits)
|
456
|
|
637
|
|
|
1,105
|
|
1,036
|
|
Pension termination
charges
|
—
|
|
—
|
|
|
44
|
|
—
|
|
Gain on
divestiture
|
—
|
|
—
|
|
|
—
|
|
(12)
|
|
|
1,676
|
|
1,820
|
|
|
5,631
|
|
5,471
|
|
Operating income
(loss)
|
(271)
|
|
(493)
|
|
|
(327)
|
|
(301)
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(59)
|
|
(54)
|
|
|
(284)
|
|
(216)
|
|
Other, net
|
(8)
|
|
(7)
|
|
|
(39)
|
|
8
|
|
Income
(loss) before income taxes
|
(338)
|
|
(554)
|
|
|
(650)
|
|
(509)
|
|
Income tax expense
(benefit)
|
(196)
|
|
(255)
|
|
|
(411)
|
|
(390)
|
|
Net income
(loss)
|
$
|
(142)
|
|
$
|
(299)
|
|
|
$
|
(239)
|
|
$
|
(119)
|
|
|
|
|
|
|
|
Net income (loss)
per common share - basic
|
$
|
(0.11)
|
|
$
|
(0.23)
|
|
|
$
|
(0.18)
|
|
$
|
(0.09)
|
|
Net income (loss)
per common share - assuming dilution
|
$
|
(0.11)
|
|
$
|
(0.23)
|
|
|
$
|
(0.18)
|
|
$
|
(0.09)
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
|
|
|
Basic
|
1,345.9
|
|
1,326.8
|
|
|
1,341.2
|
|
1,324.3
|
|
Assuming
dilution
|
1,345.9
|
|
1,326.8
|
|
|
1,341.2
|
|
1,324.3
|
|
BOSTON SCIENTIFIC
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
As
of
|
|
December
31,
|
|
December
31,
|
in millions,
except share data
|
2015
|
|
2014
|
|
(unaudited)
|
|
(restated*)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
319
|
|
|
$
|
587
|
|
Trade accounts
receivable, net
|
1,275
|
|
|
1,183
|
|
Inventories
|
1,016
|
|
|
946
|
|
Deferred and prepaid
income taxes
|
496
|
|
|
447
|
|
Other current
assets
|
365
|
|
|
443
|
|
Total current
assets
|
3,471
|
|
|
3,606
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,490
|
|
|
1,507
|
|
Goodwill
|
6,473
|
|
|
5,898
|
|
Other intangible
assets, net
|
6,194
|
|
|
5,606
|
|
Other long-term
assets
|
505
|
|
|
407
|
|
TOTAL
ASSETS
|
$
|
18,133
|
|
|
$
|
17,024
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current debt
obligations
|
$
|
3
|
|
|
$
|
403
|
|
Accounts
payable
|
209
|
|
|
262
|
|
Accrued
expenses
|
1,970
|
|
|
1,950
|
|
Other current
liabilities
|
248
|
|
|
231
|
|
Total current
liabilities
|
2,430
|
|
|
2,846
|
|
|
|
|
|
Long-term
debt
|
5,674
|
|
|
3,841
|
|
Deferred income
taxes
|
735
|
|
|
1,214
|
|
Other long-term
liabilities
|
2,974
|
|
|
2,666
|
|
|
|
|
|
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 2,000,000,000 shares -
|
|
|
|
issued 1,594,213,786
shares as of December 31, 2015 and
|
|
|
|
1,575,018,236 shares
as of December 31, 2014
|
16
|
|
|
16
|
|
Treasury stock, at
cost - 247,566,270 shares as of December 31, 2015
|
|
|
|
and 247,566,270
shares as of December 31, 2014
|
(1,717)
|
|
|
(1,717)
|
|
Additional paid-in
capital
|
16,860
|
|
|
16,703
|
|
Accumulated
deficit
|
(8,927)
|
|
|
(8,689)
|
|
Accumulated other
comprehensive income (loss), net of tax
|
88
|
|
|
144
|
|
Total stockholders'
equity
|
6,320
|
|
|
6,457
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
18,133
|
|
|
$
|
17,024
|
|
*Certain prior year balances related to debt issuance costs have
been restated to reflect our adoption of Accounting Standards
Codification Update No. 2015-03, Interest-Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs. Amounts reclassified from other long-term assets to
long-term debt were not material.
BOSTON SCIENTIFIC
CORPORATION
|
NON-GAAP NET INCOME
AND NET INCOME PER COMMON SHARE RECONCILIATIONS
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31, 2015
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax
Impact
(a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
(338)
|
|
|
$
|
196
|
|
|
$
|
(142)
|
|
|
$
|
(0.11)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition- and
divestiture-related net charges (b)
|
|
83
|
|
|
(16)
|
|
|
67
|
|
|
0.05
|
*
|
Restructuring and
restructuring-related net charges (c)
|
|
26
|
|
|
(4)
|
|
|
22
|
|
|
0.02
|
*
|
Litigation-related
net charges
|
|
456
|
|
|
(165)
|
|
|
291
|
|
|
0.21
|
*
|
Discrete tax
items
|
|
—
|
|
|
(9)
|
|
|
(9)
|
|
|
(0.01)
|
*
|
Amortization
expense
|
|
135
|
|
|
(2)
|
|
|
133
|
|
|
0.10
|
*
|
Adjusted net
income
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
362
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
*Assumes dilution of
21.3 million shares for the three months ended December 31,
2015 for all or a portion of these non-GAAP Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2014
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax
Impact
(a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
(554)
|
|
|
$
|
255
|
|
|
$
|
(299)
|
|
|
$
|
(0.23)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Intangible asset
impairment charges
|
|
18
|
|
|
(3)
|
|
|
15
|
|
|
0.01
|
**
|
Acquisition- and
divestiture-related net charges (d)
|
|
69
|
|
|
(8)
|
|
|
61
|
|
|
0.05
|
**
|
Restructuring and
restructuring-related net charges (e)
|
|
48
|
|
|
(11)
|
|
|
37
|
|
|
0.03
|
**
|
Litigation-related
net charges
|
|
637
|
|
|
(228)
|
|
|
409
|
|
|
0.30
|
**
|
Discrete tax
items
|
|
—
|
|
|
(17)
|
|
|
(17)
|
|
|
(0.01)
|
**
|
Amortization
expense
|
|
111
|
|
|
(14)
|
|
|
97
|
|
|
0.07
|
**
|
Adjusted net
income
|
|
$
|
329
|
|
|
$
|
(26)
|
|
|
$
|
303
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
**Assumes dilution of
23.3 million shares for the three months ended December 31,
2014 for all or a portion of these non-GAAP Adjustments
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts are
tax effected at the company's effective tax rate, unless the amount
is a significant unusual or infrequently occurring item in
accordance with FASB Accounting Standards Codification section
740-270-30, "General Methodology and Use of Estimated Annual
Effective Tax Rate."
|
(b) In the three
months ended December 31, 2015, pre-tax acquisition- and
divestiture-related net charges were $83 million, of which $25
million was recorded in cost of products sold, $15 million was
recorded in selling, general and administrative expenses, $6
million was recorded in research and development, and $37 million
was recorded as contingent consideration expense.
|
(c) In the three
months ended December 31, 2015, pre-tax restructuring charges were
$10 million and pre-tax restructuring- related charges were $16
million, of which $11 million was recorded in cost of products sold
and $5 million was recorded in selling, general and administrative
expenses.
|
(d) In the three
months ended December 31, 2014, pre-tax acquisition- and
divestiture-related net charges were $69 million, of which charges
of $11 million were recorded in cost of products sold, charges of
$21 million were recorded in selling, general and administrative
expenses and $37 million was recorded as contingent consideration
expense.
|
(e) In the three
months ended December 31, 2014, pre-tax restructuring charges were
$32 million and pre-tax restructuring- related charges were $16
million, of which $9 million was recorded in cost of products sold
and $7 million was recorded in selling, general and administrative
expenses.
|
An explanation of the
company's use of these non-GAAP financial measures is provided at
the end of this document.
|
BOSTON SCIENTIFIC
CORPORATION
|
NON-GAAP NET INCOME
AND NET INCOME PER COMMON SHARE RECONCILIATIONS
|
(Unaudited)
|
|
|
|
Year Ended
December 31, 2015
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax
Impact
(a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
(650)
|
|
|
$
|
411
|
|
|
$
|
(239)
|
|
|
$
|
(0.18)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Intangible asset
impairment charges
|
|
19
|
|
|
(3)
|
|
|
16
|
|
|
0.01
|
*
|
Acquisition- and
divestiture-related net charges (b)
|
|
255
|
|
|
(33)
|
|
|
222
|
|
|
0.17
|
*
|
Restructuring and
restructuring-related net charges (c)
|
|
83
|
|
|
(14)
|
|
|
69
|
|
|
0.05
|
*
|
Litigation-related
net charges
|
|
1,105
|
|
|
(400)
|
|
|
705
|
|
|
0.52
|
*
|
Pension termination
charges
|
|
44
|
|
|
(16)
|
|
|
28
|
|
|
0.02
|
*
|
Debt extinguishment
charges (d)
|
|
45
|
|
|
(16)
|
|
|
29
|
|
|
0.02
|
*
|
Discrete tax
items
|
|
—
|
|
|
(9)
|
|
|
(9)
|
|
|
(0.01)
|
*
|
Amortization
expense
|
|
495
|
|
|
(49)
|
|
|
446
|
|
|
0.33
|
*
|
Adjusted net
income
|
|
$
|
1,396
|
|
|
$
|
(129)
|
|
|
$
|
1,267
|
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
|
|
*Assumes dilution of
21.5 million shares for the twelve months ended December 31,
2015 for all or a portion of these non-GAAP Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2014
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax
Impact
(a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
(509)
|
|
|
$
|
390
|
|
|
$
|
(119)
|
|
|
$
|
(0.09)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Intangible asset
impairment charges
|
|
195
|
|
|
(30)
|
|
|
165
|
|
|
0.12
|
**
|
Acquisition- and
divestiture-related net credits (e)
|
|
(10)
|
|
|
(24)
|
|
|
(34)
|
|
|
(0.03)
|
**
|
Restructuring and
restructuring-related net charges (f)
|
|
117
|
|
|
(27)
|
|
|
90
|
|
|
0.07
|
**
|
Litigation-related
net charges
|
|
1,036
|
|
|
(377)
|
|
|
659
|
|
|
0.49
|
**
|
Discrete tax
items
|
|
—
|
|
|
(17)
|
|
|
(17)
|
|
|
(0.01)
|
**
|
Amortization
expense
|
|
438
|
|
|
(53)
|
|
|
385
|
|
|
0.29
|
**
|
Adjusted net
income
|
|
$
|
1,267
|
|
|
$
|
(138)
|
|
|
$
|
1,129
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
**Assumes dilution of
23.7 million shares for the twelve months ended December 31,
2014 for all or a portion of these non-GAAP Adjustments
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts are
tax effected at the company's effective tax rate, unless the amount
is a significant unusual or infrequently occurring item in
accordance with FASB Accounting Standards Codification section
740-270-30, "General Methodology and Use of Estimated Annual
Effective Tax Rate."
|
(b) In the twelve
months ended December 31, 2015, pre-tax acquisition- and
divestiture-related net charges were $255 million, of which $49
million was recorded in cost of products sold, $53 million was
recorded in selling, general and administrative expenses, $26
million was recorded in research and development, $123 million was
recorded as contingent consideration expense, and $4 million was
recorded as interest expense.
|
(c) In the twelve
months ended December 31, 2015, pre-tax restructuring charges were
$26 million and pre-tax restructuring- related charges were $57
million, of which $31 million was recorded in cost of products sold
and $26 million was recorded in selling, general and administrative
expenses.
|
(d) Debt
extinguishment charges are recorded in interest expense.
|
(e) In the twelve
months ended December 31, 2014, pre-tax acquisition- and
divestiture-related net credits were $10 million, of which charges
of $23 million were recorded in cost of products sold, charges of
$83 million were recorded in selling, general and administrative
expenses, $85 million was recorded as a contingent consideration
benefit, $12 million was recorded as a gain on divestiture and $19
million was recorded as gains on previously held equity interests
within Other, net.
|
(f) In the twelve
months ended December 31, 2014, pre-tax restructuring charges were
$69 million and pre-tax restructuring- related charges were $48
million, of which $24 million was recorded in cost of products sold
and $24 million was recorded in selling, general and administrative
expenses.
|
An explanation of the
company's use of these non-GAAP financial measures is provided at
the end of this document.
|
|
BOSTON SCIENTIFIC
CORPORATION
|
SEGMENT
INFORMATION
|
(Unaudited)
|
|
SEGMENT NET
SALES*
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
in
millions
|
|
2015
|
2014
|
|
Change
|
|
2015
|
2014
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interventional
Cardiology
|
|
$
|
584
|
|
$
|
549
|
|
|
6
|
%
|
|
$
|
2,242
|
|
$
|
2,092
|
|
|
7
|
%
|
Peripheral
Interventions
|
|
252
|
|
230
|
|
|
10
|
%
|
|
975
|
|
861
|
|
|
13
|
%
|
Cardiovascular
|
|
836
|
|
779
|
|
|
7
|
%
|
|
3,217
|
|
2,953
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cardiac
Rhythm Management
|
|
477
|
|
481
|
|
|
(1)
|
%
|
|
1,934
|
|
1,922
|
|
|
1
|
%
|
Electrophysiology
|
|
66
|
|
61
|
|
|
8
|
%
|
|
248
|
|
228
|
|
|
9
|
%
|
Rhythm
Management
|
|
543
|
|
542
|
|
|
0
|
%
|
|
2,182
|
|
2,150
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy
|
|
378
|
|
354
|
|
|
7
|
%
|
|
1,422
|
|
1,343
|
|
|
6
|
%
|
Urology
and Pelvic Health
|
|
256
|
|
145
|
|
|
77
|
%
|
|
735
|
|
542
|
|
|
36
|
%
|
Neuromodulation
|
|
144
|
|
135
|
|
|
7
|
%
|
|
512
|
|
474
|
|
|
8
|
%
|
MedSurg
|
|
778
|
|
634
|
|
|
23
|
%
|
|
2,669
|
|
2,359
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
|
2,157
|
|
1,955
|
|
|
10
|
%
|
|
8,068
|
|
7,462
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divested
Businesses
|
|
—
|
|
1
|
|
|
N/A
|
|
|
—
|
|
4
|
|
|
N/A
|
|
Foreign
Currency
|
|
(179)
|
|
(69)
|
|
|
N/A
|
|
|
(591)
|
|
(86)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Net
Sales
|
|
$
|
1,978
|
|
$
|
1,887
|
|
|
5
|
%
|
|
$
|
7,477
|
|
$
|
7,380
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
INCOME*
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
in
millions
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Segment operating
income
|
|
|
|
|
|
|
|
|
Cardiovascular
|
|
$
|
240
|
|
|
$
|
202
|
|
|
$
|
972
|
|
|
$
|
767
|
|
Rhythm
Management
|
|
76
|
|
|
80
|
|
|
328
|
|
|
289
|
|
MedSurg
|
|
266
|
|
|
210
|
|
|
856
|
|
|
746
|
|
Operating income
allocated to reportable segments
|
|
582
|
|
|
492
|
|
|
2,156
|
|
|
1,802
|
|
Corporate expenses
and currency exchange
|
|
(153)
|
|
|
(102)
|
|
|
(486)
|
|
|
(308)
|
|
Intangible asset
impairment charges; pension termination charges; acquisition-,
divestiture-, restructuring-, and litigation-related net charges
and credits
|
|
(565)
|
|
|
(772)
|
|
|
(1,502)
|
|
|
(1,357)
|
|
Amortization
expense
|
|
(135)
|
|
|
(111)
|
|
|
(495)
|
|
|
(438)
|
|
Operating income
(loss)
|
|
$
|
(271)
|
|
|
$
|
(493)
|
|
|
$
|
(327)
|
|
|
$
|
(301)
|
|
|
|
|
|
|
|
|
|
|
*We measure and
evaluate our reportable segments based on segment net sales and
operating income, excluding the impact of changes in foreign
currency and sales from divested businesses. Sales generated from
reportable segments and divested businesses, as well as operating
results of reportable segments and corporate expenses, are based on
internally-derived standard currency exchange rates, which may
differ from year to year, and do not include intersegment profits.
We exclude from segment operating income certain corporate-related
expenses and certain transactions or adjustments that our chief
operating decision maker considers to be non-recurring and/or
non-operational, such as amounts related to intangible asset
impairment charges; acquisition and divestiture-, restructuring-
and litigation-related net charges and credits; pension termination
charges; and amortization expense. Although we exclude these
amounts from segment operating income, they are included in
reported consolidated operating income (loss) and are included
in the reconciliation above.
|
BOSTON SCIENTIFIC
CORPORATION
|
WORLDWIDE CARDIAC
RHYTHM MANAGEMENT (CRM) SALES
|
(Unaudited)
|
|
Three Months
Ended
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(in
millions)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
Defibrillator
systems
|
|
$
|
202
|
|
|
$
|
114
|
|
|
$
|
316
|
|
|
$
|
215
|
|
|
$
|
124
|
|
|
$
|
339
|
|
Pacemaker
systems
|
|
58
|
|
|
66
|
|
|
124
|
|
|
60
|
|
|
69
|
|
|
129
|
|
CRM
products
|
|
$
|
260
|
|
|
$
|
180
|
|
|
$
|
440
|
|
|
$
|
275
|
|
|
$
|
193
|
|
|
$
|
468
|
|
Year
Ended
|
|
|
|
Year
Ended
|
|
Year
Ended
|
(in
millions)
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
U.S.
|
|
International
|
|
Total
|
|
U.S.
|
|
International
|
|
Total
|
Defibrillator
systems
|
|
$
|
858
|
|
|
$
|
455
|
|
|
$
|
1,313
|
|
|
$
|
867
|
|
|
$
|
513
|
|
|
$
|
1,380
|
|
Pacemaker
systems
|
|
239
|
|
|
255
|
|
|
494
|
|
|
255
|
|
|
277
|
|
|
532
|
|
CRM
products
|
|
$
|
1,097
|
|
|
$
|
710
|
|
|
$
|
1,807
|
|
|
$
|
1,122
|
|
|
$
|
790
|
|
|
$
|
1,912
|
|
BOSTON SCIENTIFIC
CORPORATION
|
SEGMENT AND REGIONAL
NET SALES
|
(Unaudited)
|
|
Q4 2015 Segment
Revenue Growth as compared to Q4 2014
|
|
|
MedSurg
|
Cardiovascular
|
Rhythm
Management
|
Total
BSC
|
Percentage change
in net sales, as reported
|
18
|
%
|
1
|
%
|
(5)
|
%
|
5
|
%
|
Less: Impact of
Foreign Currency Fluctuations
|
(5)
|
%
|
(6)
|
%
|
(5)
|
%
|
(5)
|
%
|
Percentage change
in net sales, constant currency
|
23
|
%
|
7
|
%
|
0
|
%
|
10
|
%
|
Less: Impact of AMS
acquisition
|
16
|
%
|
0
|
%
|
0
|
%
|
5
|
%
|
Percentage change
in net sales, organic
|
7
|
%
|
7
|
%
|
0
|
%
|
5
|
%
|
Q4 2015 Regional
Revenue Growth as compared to Q4 2014
|
|
|
U.S.
|
Europe
|
AMEA
|
Emerging
Markets*
|
Percentage change
in net sales, as reported
|
12
|
%
|
(2)
|
%
|
(1)
|
%
|
3
|
%
|
Less: Impact of
Foreign Currency Fluctuations
|
—
|
%
|
(12)
|
%
|
(8)
|
%
|
(13)
|
%
|
Percentage change
in net sales, constant currency
|
12
|
%
|
10
|
%
|
7
|
%
|
16
|
%
|
Less: Impact of AMS
acquisition
|
7
|
%
|
5
|
%
|
1
|
%
|
1
|
%
|
Percentage change
in net sales, organic
|
5
|
%
|
5
|
%
|
6
|
%
|
15
|
%
|
*We define Emerging Markets as including certain countries that
we believe have strong growth potential based on their economic
conditions, healthcare sectors, and our global capabilities.
Currently, we include 20 countries in our definition of Emerging
Markets.
An explanation of the company's use of these non-GAAP financial
measures is provided at the end of this document.
BOSTON SCIENTIFIC
CORPORATION
|
ESTIMATED REVENUE
NON-GAAP GROWTH RATES AND NON-GAAP NET INCOME PER COMMON SHARE
RECONCILIATIONS
|
(Unaudited)
|
|
Full Year 2016
Estimated Revenue Growth Rates
|
|
|
Full Year 2016
Estimate
|
|
(Low)
|
(High)
|
Estimated GAAP
sales growth
|
6
|
%
|
8
|
%
|
Less: Estimated
Impact of Foreign Currency Fluctuations
|
(1)
|
%
|
(2)
|
%
|
Estimated sales
growth, constant currency
|
7
|
%
|
10
|
%
|
Less: Impact of AMS
acquisition
|
3
|
%
|
3
|
%
|
Estimated sales
growth, organic
|
4
|
%
|
7
|
%
|
Q1 and Full Year
2016 EPS Guidance
|
|
|
Q1 2016
Estimate
|
|
Full Year 2016
Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
GAAP
results
|
$
|
0.11
|
|
$
|
0.13
|
|
|
$
|
0.62
|
|
$
|
0.67
|
|
|
|
|
|
|
|
Estimated acquisition
and divestiture-related net charges
|
0.02
|
|
0.02
|
|
|
0.05
|
|
0.04
|
|
Estimated
restructuring and restructuring-related charges
|
0.01
|
|
0.01
|
|
|
0.02
|
|
0.02
|
|
Estimated
amortization expense
|
0.09
|
|
0.09
|
|
|
0.34
|
|
0.34
|
|
|
|
|
|
|
|
Adjusted
results
|
$
|
0.23
|
|
$
|
0.25
|
|
|
$
|
1.03
|
|
$
|
1.07
|
|
|
|
|
|
|
|
An explanation of the company's use of these non-GAAP financial
measures is provided at the end of this document.
Use of Non-GAAP Financial Measures
To supplement our financial statements presented on a GAAP
basis, we disclose certain non-GAAP financial measures, including
adjusted net income and adjusted net income per share that exclude
certain amounts, and revenue growth rates that exclude the impact
of sales from divested businesses, changes in foreign currency
exchange rates and/or the impact of recent acquisitions with
significant sales. These non-GAAP financial measures are not in
accordance with generally accepted accounting principles in
the United States.
The GAAP financial measure most directly comparable to adjusted
net income is GAAP net income and the GAAP financial measure most
directly comparable to adjusted net income per share is GAAP net
income per share. To calculate revenue growth rates that exclude
the impact of changes in foreign currency exchange rates, we
convert actual net sales from local currency to U.S. dollars using
constant foreign currency exchange rates in the current and prior
period. The GAAP financial measure most directly comparable to this
non-GAAP financial measure and the non-GAAP financial measures that
excludes sales from divested businesses and/or the impacts of
recent acquisitions with significant sales is growth rate
percentages using net sales on a GAAP basis. Reconciliations of
each of these non-GAAP financial measures to the corresponding GAAP
financial measure are included in the accompanying schedules.
Management uses these supplemental non-GAAP financial measures
to evaluate performance period over period, to analyze the
underlying trends in our business, to assess our performance
relative to our competitors, and to establish operational goals and
forecasts that are used in allocating resources. In addition,
management uses these non-GAAP financial measures to further its
understanding of the performance of our operating segments. With
the exception of the impact of recent acquisitions with significant
sales, the adjustments excluded from our non-GAAP financial
measures are consistent with those excluded from our operating
segments' measures of net sales and profit or loss. These
adjustments are excluded from the segment measures that are
reported to our chief operating decision maker that are used to
make operating decisions and assess performance.
We believe that presenting adjusted net income and adjusted net
income per share that exclude certain amounts, and revenue growth
rates that exclude the impact of sales from divested businesses,
changes in foreign currency exchange rates and/or the impact
of recent acquisitions with significant sales, in addition to the
corresponding GAAP financial measures, provides investors greater
transparency to the information used by management for its
financial and operational decision-making and allows investors to
see our results "through the eyes" of management. We further
believe that providing this information assists our investors in
understanding our operating performance and the methodology used by
management to evaluate and measure such performance.
The following is an explanation of each of the adjustments that
management excluded as part of these non-GAAP financial measures
for the three and twelve months ended December 31, 2015 and
2014, and for the forecasted three month period ending March 31, 2016 and for the full year ending
December 31, 2016, as well as reasons for excluding each of
these individual items:
Adjusted Net Income and Adjusted Net Income per
Share:
- Intangible asset impairment charges - These charges represent
non-cash write-downs of certain intangible asset balances during
2015 and 2014. We remove the impact of non-cash impairment charges
from our operating performance to assist in assessing our cash
generated from operations. We believe this is a critical metric for
us in measuring our ability to generate cash and invest in our
growth. Therefore, these charges are excluded from management's
assessment of operating performance and are also excluded for
purposes of calculating these non-GAAP financial measures to
facilitate an evaluation of our current operating performance and a
comparison to our past operating performance, particularly in terms
of liquidity.
- Acquisition- and divestiture-related net charges (credits) -
These adjustments consist of (a) contingent consideration fair
value adjustments; (b) gains on previously held investments; (c)
purchased and/or funded in-process research and development
expenses incurred outside of a business combination; (d) due
diligence, other fees, inventory step-up amortization, and
integration and exit costs; and (e) separation costs and gains
primarily associated with the sale of our Neurovascular business in
January 2011. The contingent consideration adjustments represent
accounting adjustments to state contingent consideration
liabilities at their estimated fair value. These adjustments can be
highly variable depending on the assessed likelihood and amount of
future contingent consideration payments. Due diligence, other
fees, inventory step-up amortization, and integration and exit
costs include legal, tax, severance and other expenses associated
with prior and potential future acquisitions and divestitures that
can be highly variable and not representative of ongoing
operations. Separation costs and gains on the sale of a business
unit primarily represent those associated with the Neurovascular
divestiture and are not representative of ongoing operations.
Accordingly, management excluded these amounts for purposes of
calculating these non-GAAP financial measures to facilitate an
evaluation of our current operating performance and a comparison to
our past operating performance.
- Restructuring and restructuring-related net charges (credits) -
These adjustments represent primarily severance and other direct
costs associated with our 2014 Restructuring program. These costs
are excluded by management in assessing our operating performance,
as well as from our operating segments' measures of profit and loss
used for making operating decisions and assessing performance.
Accordingly, management excluded these costs for purposes of
calculating these non-GAAP financial measures to facilitate an
evaluation of our current operating performance and a comparison to
our past operating performance.
- Litigation-related net charges (credits) - These adjustments
include certain significant product liability and other
litigation-related charges and credits. These amounts are excluded
by management in assessing our operating performance, as well as
from our operating segments' measures of profit and loss used for
making operating decisions and assessing performance. Accordingly,
management excluded these amounts for purposes of calculating these
non-GAAP financial measures to facilitate an evaluation of our
current operating performance and a comparison to our past
operating performance.
- Debt extinguishment charges - This item represents premiums,
accelerated amortization of debt issuance costs and investor
discount costs net of interest rate hedge gains related to the
early extinguishment of $1.0 billion
of public senior notes during the second quarter of 2015. These
adjustments are not expected to recur and do not reflect expected
ongoing operating results. Accordingly, management excluded these
amounts for purposes of calculating these non-GAAP financial
measures to facilitate an evaluation of our current operating
performance and a comparison to our past operating
performance.
- Pension termination charges - This item represents charges
associated with the termination of the Guidant Retirement Plan, a
frozen defined benefit plan. These charges are not expected to
recur after 2015 and do not reflect expected ongoing operating
results. Accordingly, management has excluded these amounts for
purposes of calculating these non-GAAP financial measures to
facilitate an evaluation of our current operating performance and a
comparison to our past operating performance.
- Amortization expense - Amortization expense is a non-cash
expense and does not impact our liquidity or compliance with the
financial covenants included in our credit facility or our term
loan facility agreements. Management removes the impact of
amortization from our operating performance to assist in assessing
our cash generated from operations. We believe this is a critical
metric for measuring our ability to generate cash and invest in our
growth. Therefore, amortization expense is excluded from
management's assessment of operating performance and is also
excluded from our operating segments' measures of profit and loss
used for making operating decisions and assessing performance.
Accordingly, management has excluded amortization expense for
purposes of calculating these non-GAAP financial measures to
facilitate an evaluation of our current operating performance,
particularly in terms of liquidity.
- Discrete tax items - These items represent adjustments of
certain tax positions, which were initially established in prior
periods in conjunction with the purchase accounting for an
acquisition or as a result of intangible asset impairment charges;
acquisition-, divestiture-, restructuring- or litigation-related
charges or credits. These adjustments do not reflect expected
on-going operating results. Accordingly, management excluded these
amounts for purposes of calculating these non-GAAP financial
measures to facilitate an evaluation of our current operating
performance and a comparison to our past operating
performance.
Revenue Growth Rates Excluding the Impact of Sales from
Divested Businesses, Changes in Foreign Currency Exchange Rates
and/or the Impact of Recent Acquisitions with Significant
Sales
- Sales from divested businesses are primarily associated with
the Neurovascular divestiture and are not representative of ongoing
operations. The impact of changes in foreign currency exchange
rates is highly variable and difficult to predict. The impact of
recent acquisitions with significant sales in the current period
and no prior period equivalent may distort our presentation of
operating performance. Accordingly, management excludes the impact
of sales from divested businesses, changes in foreign currency
exchange rates and/or the impacts of recent acquisitions with
significant sales for purposes of reviewing revenue growth rates to
facilitate an evaluation of our current operating performance and a
comparison to our past operating performance.
Adjusted net income and adjusted net income per share that
exclude certain amounts, and revenue growth rates that exclude the
impact of sales from divested businesses, changes in foreign
currency exchange rates and/or the impacts of recent acquisitions
with significant sales, are not in accordance with U.S. GAAP and
should not be considered in isolation from or as a replacement for
the most directly comparable GAAP financial measures. Further,
other companies may calculate these non-GAAP financial measures
differently than we do, which may limit the usefulness of those
measures for comparative purposes.
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SOURCE Boston Scientific Corporation