Boston Scientific Announces Results for Second Quarter Ended June 30, 2007
PRNewswire-FirstCall
NATICK, Mass.
(NYSE:BSX)

NATICK, Mass., July 20 /PRNewswire-FirstCall/ -- Boston Scientific Corporation (NYSE: BSX) today announced financial results for the second quarter ended June 30, 2007, as well as guidance for net sales and earnings per share (EPS) for the third quarter of 2007.

  Highlights
  -- Recorded net sales of $2.071 billion, GAAP EPS of $0.08 and adjusted*
     EPS of $0.18
  -- Delivered operating results in the upper half of the Company's sales
     and EPS ranges
  -- Achieved double-digit year-over-year sales growth in all three
     Endosurgery businesses
  -- Launched TAXUS® Express2™ in Japan
  -- Resolved CRM warning letter
  -- Reached agreement to settle Guidant Multi-District Litigation lawsuits
  -- Marked three years of DES market leadership in the U.S.

Net sales for the second quarter of 2007 were $2.071 billion as compared to $2.110 billion for the second quarter of 2006 and $2.086 billion for the first quarter of 2007. On a pro-forma basis - as though the Company had acquired Guidant on January 1, 2006 - net sales for the second quarter of 2006 were $2.213 billion. The second quarter 2007 operating results include the Company's Cardiac Rhythm Management (CRM) and Cardiac Surgery businesses, which were acquired as part of Guidant on April 21, 2006. Worldwide sales of the Company's CRM group for the second quarter of 2007 were $524 million, which included $377 million of implantable cardioverter defibrillator (ICD) sales, as compared to CRM sales of $539 million for the first quarter of 2007, which included $398 million of ICD sales. U.S. CRM sales for the second quarter of 2007 were $332 million, which included $253 million of ICD sales, as compared to U.S. CRM sales of $349 million for the first quarter of 2007, which included $273 million of ICD sales. International CRM sales for the second quarter of 2007 were $192 million, which included $124 million of ICD sales, as compared to International CRM sales of $190 million for the first quarter of 2007, which included $125 million of ICD sales.

On a pro-forma basis, worldwide CRM sales for the second quarter of 2006 were $529 million, which included $383 million of ICD sales. Pro-forma U.S. CRM sales for the second quarter of 2006 were $354 million, which included $273 million of ICD sales. Pro-forma International CRM sales for the second quarter of 2006 were $175 million, which included $110 million of ICD sales.

Worldwide sales of the Company's drug-eluting coronary stent systems for the second quarter of 2007 were $437 million as compared to $647 million for the second quarter of 2006 and $468 million for the first quarter of 2007. U.S. sales of drug-eluting coronary stent systems for the second quarter of 2007 were $249 million as compared to $429 million for the second quarter of 2006 and $293 million for the first quarter of 2007. International sales of drug-eluting stent systems for the second quarter of 2007 were $188 million as compared to $218 million for the second quarter of 2006 and $175 million for the first quarter of 2007. Worldwide sales of coronary stent systems for the second quarter of 2007 were $498 million as compared to $681 million for the second quarter of 2006 and $527 million for the first quarter of 2007. U.S. sales of coronary stent systems for the second quarter of 2007 were $275 million as compared to $440 million for the second quarter of 2006 and $317 million for the first quarter of 2007. International sales of coronary stent systems for the second quarter of 2007 were $223 million as compared to $241 million for the second quarter of 2006 and $210 million for the first quarter of 2007.

GAAP net income for the second quarter of 2007 was $115 million, or $0.08 per share, on 1.5 billion weighted average shares outstanding. GAAP results for the second quarter of 2007 included net special charges (after-tax) of $9 million, or less than $0.01 per share, which consisted primarily of charges attributable to investment portfolio activity, integration of the Guidant acquisition and discrete tax items. GAAP net loss for the second quarter of 2006 was $4.262 billion, or $3.21 per share. GAAP results for the second quarter of 2006 included net special charges (after-tax) of $4.541 billion, or $3.42 per share.

Adjusted net income for the quarter, excluding net special charges and amortization and stock compensation expense, was $271 million, or $0.18 per share. Adjusted net income for the second quarter of 2006, excluding net special charges and amortization and stock compensation expense, was $412 million, or $0.31 per share.

"We made progress in a number of key areas during the quarter," said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "Most important, we made progress on quality throughout the organization, including the resolution of the CRM warning letter. Both the DES and CRM markets showed signs of stabilizing, but neither has returned to the level we believe they eventually will. We launched TAXUS Express2 in Japan, and we are off to a strong start in that market with impressive sales. Our Endosurgery group posted another solid quarter, with double-digit growth in all three of its businesses. Overall, we continue to move in the right direction."

Guidance for Third Quarter 2007

The Company estimates net sales for the third quarter of 2007 of between $2.0 billion and $2.1 billion. The Company estimates EPS on a GAAP basis of between $0.03 and $0.08 per share. In the past, the reconciliation between GAAP and adjusted EPS has excluded net special charges, amortization and stock compensation expense. Beginning in the third quarter, the Company will exclude only acquisition-related charges and amortization expense. Using this definition, the Company estimates adjusted EPS to range between $0.12 and $0.17 per share for the third quarter. Using this definition, adjusted EPS for the second quarter would have been $0.16 per share.

Boston Scientific officials will be discussing these results with analysts on a conference call at 8:30 am. (ET) Friday, July 20, 2007. The Company will webcast the call to all interested parties through its website: http://www.bostonscientific.com/. Please see the website for details on how to access the webcast. The webcast will be available for one year on the Boston Scientific website.

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: http://www.bostonscientific.com/.

This press release contains forward-looking statements. The Company wishes to caution the reader of this press release that actual results may differ from those discussed in the forward-looking statements and may be adversely affected by, among other things, risks associated with new product development and introduction, clinical trials, regulatory approvals, competitive offerings, intellectual property, litigation, integration of acquired companies, the Company's overall business strategy, and other factors described in the Company's filings with the Securities and Exchange Commission.

Use of non-GAAP Financial Information

* In the past, the reconciliation between GAAP and adjusted EPS has excluded net special charges, amortization and stock compensation expense. Beginning in the third quarter, the Company will exclude only acquisition- related charges and amortization expense.

To supplement Boston Scientific's consolidated condensed financial statements presented on a GAAP basis, the Company discloses certain non-GAAP measures that exclude certain charges, including non-GAAP net income/loss and non-GAAP net income/loss per diluted share. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measures is included in the accompanying schedules. In addition, an explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures". Additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP.

   CONTACT:
   Paul Donovan
   508-650-8541 (office)
   508-667-5165 (mobile)
   Media Relations
   Boston Scientific Corporation

   Dan Brennan
   508-650-8538 (office)
   617-459-2703 (mobile)
   Investor Relations
   Boston Scientific Corporation



                        BOSTON SCIENTIFIC CORPORATION
                    CONDENSED GAAP RESULTS OF OPERATIONS
                                 (Unaudited)

                                                      Three Months Ended
                                                           June 30,
  In millions, except per share data                2007              2006

  Net sales                                       $2,071            $2,110
  Cost of products sold                              563               677
  Gross profit                                     1,508             1,433

  Selling, general and administrative
   expenses                                          752               728
  Research and development expenses                  275               283
  Royalty expense                                     51                65
  Amortization expense                               158               165
  Purchased research and development                  (8)            4,117
                                                   1,228             5,358
  Operating income/(loss)                            280            (3,925)

  Other income/(expense):
  Interest expense                                  (146)             (111)
  Other, net                                          (8)             (150)

  Income/(loss) before income taxes                  126            (4,186)
  Income taxes                                        11                76

  Net income/(loss)                                 $115           $(4,262)


  Net income/(loss) per common share -
   assuming dilution                               $0.08            $(3.21)

  Weighted average shares outstanding -
   assuming dilution                             1,499.9           1,326.8



                       BOSTON SCIENTIFIC CORPORATION
    NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS
                                (Unaudited)

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                                           Three Months      Three Months
                                              Ended             Ended
                                          June 30, 2007     June 30, 2006
                                                 Impact             Impact
                                                   per      Net       per
                                            Net  diluted  income/   diluted
  In millions, except per share data      income  share    (loss)    share
  GAAP results                             $115   $0.08   $(4,262)  $(3.21)
  Non-GAAP adjustments:
    Purchase accounting adjustments                         4,424     3.33
    Acquisition-related and other costs       9                96     0.07 *
    AAA program cancellation charges                          (31)   (0.02)*
    Investment portfolio activity            14    0.01        52     0.04 *
    Amortization and stock-based
     compensation expense                   147    0.10       133     0.10 *
    Discrete income tax items               (14)  (0.01)
  Adjusted results                         $271   $0.18      $412     0.31 *

  * Calculated by assuming option dilution of 19.8 million shares



                                                    Three Months Ended
                                                          June 30,
                                                   2007              2006
  Purchase accounting adjustments
    Purchased research and development                              $4,184
    Step-up value of inventory sold (a)                                185
                                                                     4,369
    Income tax expense (f)                                              55
  Purchase accounting adjustments, net
   of tax                                                           $4,424

  Acquisition-related and other costs:
    Integration costs (b)                           $12                $33
    Fair-value adjustment for the sharing
     of proceeds feature of the Abbott
     stock purchase (c)                                                 87
    Charitable donation  (c)                                             5
                                                     12                125
    Income tax benefit (f)                           (3)               (29)
  Acquisition-related and other costs,
   net of tax                                        $9                $96

  AAA program cancellation charges:
    Purchased research and development                                $(67)
    Facility costs and severance (d)                                    31
    Amortization expense                                                23
                                                                       (13)
    Income tax benefit (f)                                             (18)
  AAA program cancellation charges, net of tax                        $(31)

  Investment portfolio activity
    Investment portfolio activity (c)                $23               $67
    Amortization expense                               4
    Purchased research and development                (8)
                                                      19                67
    Income tax benefit (f)                            (5)              (15)
  Investment portfolio activity, net of tax          $14               $52

  Amortization and stock-based
   compensation expense:
    Amortization expense                            $154              $142
    Stock-based compensation expense (e)              32                31
                                                     186               173
    Income tax benefit (f)                           (39)              (40)
  Amortization and stock-based
   compensation expense, net of tax                 $147              $133


  (a) Recorded to cost of products sold.
  (b) Recorded $8 million in 2007 to selling, general and administrative
  expenses, $2 million to cost of products sold and $2 million to research
  and development expenses; recorded $32 million in 2006 to selling,
  general and administrative expenses, and $1 million to research and
  development expenses.
  (c) Recorded to other, net.
  (d) Recorded to research and development expenses.
  (e) Recorded $21 million in 2007 to selling, general and administrative
  expenses, $7 million to research and development expenses and $4 million
  to cost of products sold; recorded $23 million in 2006 to selling,
  general and administrative expenses, $6 million to research and
  development expenses and $2 million to cost of products sold.
  (f) Charges are tax effected at the Company's anticipated effective tax
  rate, unless the item is unusual or infrequently occurring in accordance
  with APB No. 30, "Reporting the Results of Operations-Reporting the
  Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
  and Infrequently Occurring Events and Transactions."



                        BOSTON SCIENTIFIC CORPORATION
                    CONDENSED GAAP RESULTS OF OPERATIONS
                                 (Unaudited)


                                                       Six Months Ended
                                                           June 30,
  In millions, except per share data                2007              2006

  Net sales                                       $4,157            $3,730
  Cost of products sold                            1,131             1,051
  Gross profit                                     3,026             2,679

  Selling, general and administrative expenses     1,487             1,198
  Research and development expenses                  564               469
  Royalty expense                                    103               120
  Amortization expense                               312               203
  Purchased research and development                  (3)            4,117
                                                   2,463             6,107
  Operating income/(loss)                            563            (3,428)

  Other income/(expense):
    Interest expense                                (287)             (148)
    Other, net                                        10              (179)

  Income/(loss) before income taxes                  286            (3,755)
  Income taxes                                        51               175

  Net income/(loss)                                 $235           $(3,930)


  Net income/(loss) per common share -
   assuming dilution                               $0.16            $(3.66)

  Weighted average shares outstanding -
   assuming dilution                             1,498.9           1,074.0



                       BOSTON SCIENTIFIC CORPORATION
    NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS
                                (Unaudited)

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                                         Six Months        Six Months
                                            Ended            Ended
                                        June 30, 2007    June 30, 2006
                                                Impact             Impact
                                                 per       Net      per
                                         Net   diluted   income/   diluted
  In millions, except per share data   income   share     (loss)   share
  GAAP results                           $235   $0.16   $(3,930)  $(3.66)
  Non-GAAP adjustments:
    Purchase accounting adjustments                      $4,424     4.12
    Acquisition-related and
     other costs                           24    0.02        96     0.09 **
    AAA program cancellation charges                        (31)   (0.03)**
    Investment portfolio activity          19    0.01        81     0.07 **
    Amortization and stock-based
     compensation expense                 296    0.20       187     0.17 **
    Discrete income tax items              (8)  (0.01)
  Adjusted results                       $566   $0.38      $827    $0.76 **

  ** Calculated by assuming option dilution of 14.5 million shares


                                                     Six Months Ended
                                                          June 30,
                                                   2007              2006
  Purchase accounting adjustments
    Purchased research and development                              $4,184
    Step-up value of inventory sold (a)                                185
                                                                     4,369
    Income tax expense (f)                                              55
  Purchase accounting adjustments, net of tax                       $4,424

  Acquisition-related and other costs:
    Integration costs (b)                           $24                $33
    Fair-value adjustment for the sharing
     of proceeds feature of the Abbott
     stock purchase (c)                               8                 87
    Charitable donation (c)                                              5
                                                     32                125
    Income tax benefit (f)                           (8)               (29)
  Acquisition-related and other costs,
   net of tax                                       $24                $96


  AAA program cancellation charges:
    Purchased research and development                                $(67)
    Facility costs and severance (d)                                    31
    Amortization expense                                                23
                                                                       (13)
  Income tax benefit (f)                                               (18)
  AAA program cancellations charges, net of tax                       $(31)


  Investment portfolio activity
    Investment portfolio activity (c)                $23              $105
    Amortization expense                               4
    Purchased research and development                (3)
                                                      24               105
    Income tax benefit (f)                            (5)              (24)
  Investment portfolio activity, net of tax          $19               $81


  Amortization and stock-based
   compensation expense:
    Amortization expense                            $308              $180
    Stock-based compensation expense (e)              66                63
                                                     374               243
    Income tax benefit (f)                           (78)              (56)
  Amortization and stock-based
   compensation expense, net of tax                 $296              $187


  (a) Recorded to cost of products sold.
  (b) Recorded $17 million in 2007 to selling, general and administrative
  expenses, $4 million to cost of products sold and $3 million to research
  and development expenses; recorded $32 million in 2006 to selling,
  general and administrative expenses, and $1 million to research and
  development
  (c) Recorded to other, net.
  (d) Recorded to research and development expenses.
  (e) Recorded $44 million in 2007 to selling, general and administrative
  expenses, $14 million to research and development expenses and $8 million
  to cost of products sold; recorded $43 million in 2006 to selling,
  general and administrative expenses, $12 million to research and
  development expenses and $8 million to cost of products sold.
  (f) Charges are tax effected at the Company's anticipated effective tax
  rate, unless the item is unusual or infrequently occurring in accordance
  with APB No. 30, "Reporting the Results of Operations-Reporting the
  Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
  and Infrequently Occurring Events and Transactions."



                        BOSTON SCIENTIFIC CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

                                                   June 30,         Dec. 31,
  In millions                                        2007               2006

  Assets
  Current assets:
    Cash and cash equivalents                       $1,514            $1,668
    Trade accounts receivable, net                   1,508             1,424
    Inventories                                        837               749
    Deferred income taxes                              607               583
    Other current assets                               470               477
      Total current assets                           4,936             4,901

  Property, plant and equipment, net                 1,779             1,726
  Investments                                          535               596
  Other assets                                         199               237
  Intangible assets, net                            23,816            23,636
                                                   $31,265           $31,096

  Liabilities and Stockholders' Equity
    Current liabilities:
    Borrowings due within one year                    $654                $7
    Accounts payable and accrued expenses            1,888             2,067
    Other current liabilities                          427               556
      Total current liabilities                      2,969             2,630

  Long-term debt                                     8,250             8,895
  Deferred income taxes                              2,683             2,784
  Other long-term liabilities                        1,561             1,489

  Stockholders' equity                              15,802            15,298
                                                   $31,265           $31,096



                        BOSTON SCIENTIFIC CORPORATION
                               WORLDWIDE SALES
                                 (Unaudited)

                                         Three Months Ended
                                               June 30           Change
                                                              As
                                                           Reported Constant
                                                           Currency Currency
  In millions                               2007      2006  Basis    Basis

  DOMESTIC                                $1,220    $1,315     (7%)    (7%)


    Europe                                   451       431      5%     (2%)
    Japan                                    192       149     28%     36%
    Inter-Continental                        208       215     (3%)    (8%)
    INTERNATIONAL                            851       795      7%      4%


  WORLDWIDE                               $2,071    $2,110     (2%)    (3%)


                                         Three Months Ended
                                               June 30           Change
                                                              As
                                                           Reported Constant
                                                           Currency Currency
  In millions                               2007      2006  Basis    Basis

    Interventional Cardiology               $767      $964    (20%)   (21%)
    Peripheral Interventions / Vascular
     Surgery                                 161       168     (5%)    (6%)
    Electrophysiology                         36        33     12%     11%
    Neurovascular                             88        82      6%      5%
    Cardiac Surgery                           48        38     27%     27%
    Cardiac Rhythm Management                524       436     20%     18%
  CARDIOVASCULAR                           1,624     1,721     (6%)    (7%)

    Oncology                                  59        52     12%     11%
    Endoscopy                                208       189     10%      9%
    Urology                                  100        90     11%     11%
  ENDOSURGERY                                367       331     11%     10%

  NEUROMODULATION                             80        58     36%     34%

  WORLDWIDE                               $2,071    $2,110     (2%)    (3%)

  Certain amounts in the tables above may not sum or recalculate due to
  rounding of individual components.



                        BOSTON SCIENTIFIC CORPORATION
                               WORLDWIDE SALES
                                 (Unaudited)

                                          Six Months Ended
                                               June 30           Change
                                                              As
                                                           Reported Constant
                                                           Currency Currency
  In millions                               2007      2006  Basis    Basis

  DOMESTIC                                $2,490    $2,306      8%      8%


    Europe                                   914       745     23%     14%
    Japan                                    351       283     24%     29%
    Inter-Continental                        402       396      1%     (2%)
  INTERNATIONAL                            1,667     1,424     17%     12%


  WORLDWIDE                               $4,157    $3,730     11%     10%


                                          Six Months Ended
                                               June 30           Change
                                                              As
                                                           Reported Constant
                                                           Currency Currency
  In millions                               2007      2006  Basis    Basis

    Interventional Cardiology             $1,570    $1,913    (18%)   (19%)
    Peripheral Interventions / Vascular
     Surgery                                 315       352    (11%)   (12%)
    Electrophysiology                         73        67      9%      8%
    Neurovascular                            179       162     10%      8%
    Cardiac Surgery                           97        38    159%    158%
    Cardiac Rhythm Management              1,062       436    144%    139%
  CARDIOVASCULAR                           3,296     2,968     11%      9%

    Oncology                                 115       106      8%      7%
    Endoscopy                                409       369     11%      9%
    Urology                                  195       180      9%      8%
  ENDOSURGERY                                719       655     10%      8%

  NEUROMODULATION                            142       107     32%     31%

  WORLDWIDE                               $4,157    $3,730     11%     10%


  Certain amounts in the tables above may not sum or recalculate due to
  rounding of individual components.



                       BOSTON SCIENTIFIC CORPORATION
NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS - THREE MONTHS ENDED
                              JUNE 30, 2007
                                (Unaudited)

                                    Q2 2007 Net Sales as compared to Q2 2006

                                                  Change
                                         As Reported   Constant  Estimated
                                           Currency    Currency  Impact of
                                            Basis       Basis    Foreign
                                                                 Currency
  In millions

  DOMESTIC                                    $(95)       $(95)

    Europe                                     $20         $(8)       $28
    Japan                                       43          54        (11)
    Inter-Continental                           (7)        (18)        11
  INTERNATIONAL                                 56          28         28

  WORLDWIDE                                   $(39)       $(67)       $28


                                        Q2 2007 Net Sales as compared to Q2
                                                       2006

                                                  Change
                                         As Reported   Constant  Estimated
                                           Currency    Currency  Impact of
                                            Basis       Basis    Foreign
                                                                 Currency
  In millions

    Interventional Cardiology                $(197)      $(203)        $6
    Peripheral Interventions/Vascular
     Surgery                                    (7)        (11)         4
    Electrophysiology                            3           3
    Neurovascular                                6           4          2
    Cardiac Surgery                             10          10
    Cardiac Rhythm Management                   88          79          9
  CARDIOVASCULAR                               (97)       (118)        21

    Oncology                                     7           6          1
    Endoscopy                                   19          16          3
    Urology                                     10           9          1
  ENDOSURGERY                                   36          31          5

  NEUROMODULATION                               22          20          2

  WORLDWIDE                                   $(39)       $(67)       $28


    Actual calculation of the percentage change in net sales on a constant
    currency basis may differ slightly due to rounding of amounts in the
    tables above.

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                       BOSTON SCIENTIFIC CORPORATION
  NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS - SIX MONTHS ENDED
                               JUNE 30, 2007
                                (Unaudited)

                                        Q2 2007 Net Sales as compared to Q2
                                                       2006

                                                  Change
                                         As Reported   Constant  Estimated
                                           Currency    Currency  Impact of
                                            Basis       Basis    Foreign
                                                                 Currency
  In millions

  DOMESTIC                                    $184        $184

    Europe                                    $169        $104        $65
    Japan                                       68          82        (14)
    Inter-Continental                            6          (9)        15
  INTERNATIONAL                                243         177         66

  WORLDWIDE                                   $427        $361        $66


                                    Q2 2007 Net Sales as compared to Q2 2006

                                                  Change
                                         As Reported   Constant  Estimated
                                           Currency    Currency  Impact of
                                            Basis       Basis    Foreign
                                                                 Currency
  In millions


    Interventional Cardiology                $(343)      $(364)       $21
    Peripheral Interventions/Vascular
     Surgery                                   (37)        (43)         6
    Electrophysiology                            6           5          1
    Neurovascular                               17          13          4
    Cardiac Surgery                             59          59
    Cardiac Rhythm Management                  626         605         21
  CARDIOVASCULAR                               328         275         53

    Oncology                                     9           7          2
    Endoscopy                                   40          32          8
    Urology                                     15          14          1
  ENDOSURGERY                                   64          53         11

  NEUROMODULATION                               35          33          2

  WORLDWIDE                                   $427        $361        $66


    Actual calculation of the percentage change in net sales on a constant
    currency basis may differ slightly due to rounding of amounts in the
    tables above.

NOTE - An explanation of the ways in which Boston Scientific management uses these non-GAAP measures to evaluate its business, the substance behind Boston Scientific management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Boston Scientific management compensates for those limitations, and the substantive reasons why Boston Scientific management believes that these non-GAAP measures provide useful information to investors is included in the exhibit labeled "Use of Non-GAAP Financial Measures."

                      BOSTON SCIENTIFIC CORPORATION
Q2 2007 AND ESTIMATED Q3 2007 NON-GAAP NET INCOME PER SHARE RECONCILIATION
                               (Unaudited)

                                    Net Income per Share - Assuming Dilution

                                        Q2 Results  Q3 Estimate  Q3 Estimate
                                         (Actual)      (Low)       (High)
  GAAP results                             $0.08       $0.03       $0.08

  Estimated amortization expense            0.08        0.08        0.08
  Estimated acquisition-related charges     0.00        0.01        0.01

  Adjusted results                         $0.16       $0.12       $0.17

  Beginning in the third quarter of 2007, the Company will exclude only
  acquisition-related charges  (if any) and amortization expense from its
  non-GAAP measure of net income per share.  The above chart reconciles
  Boston Scientific's estimated third quarter 2007 GAAP to non-GAAP net
  income per share and actual second quarter 2007 GAAP to non-GAAP net
  income per share using this definition of its adjusted results.

  An explanation of the ways in which Boston Scientific management
  uses these non-GAAP measures to evaluate its business, the substance
  behind Boston Scientific management's decision to use these non-GAAP
  measures, the material limitations associated with the use of these non-
  GAAP measures, the manner in which Boston Scientific management
  compensates for those limitations, and the substantive reasons why Boston
  Scientific management believes that these non-GAAP measures provide
  useful information to investors is included in the exhibit labeled "Use
  of Non-GAAP Financial Measures."


  Use of Non-GAAP Financial Measures

To supplement Boston Scientific's consolidated condensed financial statements presented on a GAAP basis, the Company discloses certain non-GAAP measures that exclude certain charges, including non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.

The GAAP measure most comparable to non-GAAP net income is GAAP net income and the GAAP measure most comparable to non-GAAP net income per diluted share is GAAP net income per diluted share. Reconciliations of each of these non- GAAP financial measures to the corresponding GAAP measure are included in the accompanying schedules.

To calculate regional and divisional revenue growth rates that exclude the impact of foreign exchange, the Company converts actual current-period net sales from local currency to U.S. dollars using constant foreign exchange rates. The GAAP measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue. A reconciliation of this non-GAAP financial measure to the corresponding GAAP measure is included in the accompanying schedules.

Use and Economic Substance of Non-GAAP Financial Measures Used by Boston Scientific

Management uses these supplemental non-GAAP measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, following the Company's acquisition of Guidant, and the related increase in the Company's debt, management has heightened its focus on cash generation and debt pay down. Management uses these non-GAAP measures for the three and six month periods ending June 30, 2007 and June 30, 2006 as the basis for assessing the ability of the underlying business to generate cash and pay down debt. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company's operating segments. The adjustments excluded from the Company's non-GAAP measures are consistent with those excluded from its reportable segments' measure of profit or loss. These adjustments are excluded from the segment measures that are reported to the Company's chief operating decision maker and are used to make operating decisions and assess performance.

The following is an explanation of each of the adjustments that management excluded as part of its non-GAAP measures for the three and six month periods ending June 30, 2007 and June 30, 2006, as well as reasons for excluding each of these individual items:

  -- Purchase accounting adjustments - For the three and six month periods
     ending June 30, 2006, these adjustments primarily consisted of
     purchased research and development attributable to the Guidant
     acquisition and the step-up value of acquired Guidant inventory sold
     during the period. Purchased research and development is a non-cash
     charge and does not impact the Company's liquidity or compliance with
     the covenants included in its debt agreements. Following the Company's
     acquisition of Guidant, and the related increase in the Company's debt,
     management has heightened its focus on cash generation and debt pay
     down. Management removes the impact of purchased research and
     development from the Company's operating performance to assist in
     assessing the Company's cash generated from operations. Management
     believes this is a critical metric for the Company in measuring the
     Company's ability to generate cash and pay down debt. The step-up value
     of acquired inventory is a cost directly attributable to the Guidant
     acquisition and is not indicative of the Company's on-going operations,
     or on-going cost of products sold. Accordingly, management excluded
     these charges for purposes of calculating these non-GAAP measures to
     facilitate an evaluation of the Company's current operating performance
     and comparison to the Company's past operating performance.

  -- Acquisition-related and other costs - For the three and six month
     periods ending June 30, 2007 and June 30, 2006, these adjustments
     primarily consisted of integration costs associated with the Guidant
     acquisition that are non-capitalized expenses and the fair value
     adjustment related to the sharing of proceeds feature of the Abbott
     stock purchase. The integration costs associated with the Guidant
     acquisition do not reflect expected future operating expenses. The fair
     value adjustment related to the sharing of proceeds feature of the
     Abbott stock purchase is not indicative of the Company's on-going
     operations and is not used by management to assess the Company's
     performance, or compare the Company's performance to prior periods.
     Accordingly, management excluded these charges for purposes of
     calculating these non-GAAP measures to facilitate an evaluation of the
     Company's current operating performance and comparison to the Company's
     past operating performance.

  -- AAA program cancellation charges - For the three and six month periods
     ending June 30, 2006, these adjustments primarily consisted of a credit
     to purchased research and development, facility and severance costs
     associated with the program termination, and amortization expense
     associated with an impairment charge on the remaining intangible
     assets. Purchased research and development is a non-cash item and does
     not impact the Company's liquidity or compliance with the covenants
     included in its debt agreements. Following the Company's acquisition of
     Guidant, and the related increase in the Company's debt, management has
     heightened its focus on cash generation and debt pay down. Management
     removes the impact of purchased research and development from the
     Company's operating performance to assist in assessing the Company's
     cash generated from operations. Management believes this is a critical
     metric for the Company in measuring the Company's ability to generate
     cash and pay down debt. The facility and severance costs do not reflect
     expected future operating expenses and Boston Scientific management
     excludes them in assessing current operating performance. The charge
     associated with the write-off of the related intangible assets is a
     non-cash charge and is not reflective of future operating performance.
     Accordingly, management excluded these charges for purposes of
     calculating these non-GAAP measures to facilitate an evaluation of the
     Company's current operating performance and comparison to the Company's
     past operating performance.

  -- Investment portfolio activity - For the three and six month periods
     ending June 30, 2007 and June 30, 2006, these adjustments primarily
     represent net investment write-downs to reflect declines in the fair
     value of certain of the Company's strategic alliances below the
     Company's carrying value for the impacted investments; a net credit to
     purchase research and development; and amortization expense associated
     with a write-down of an intangible asset. Investment write-downs are
     highly variable and difficult to predict. In addition, investment
     write-downs are non-cash charges and do not impact the Company's
     liquidity or compliance with the covenants included in its debt
     agreements. Following the Company's acquisition of Guidant, and the
     related increase in the Company's debt, management has heightened its
     focus on cash generation and debt pay down. Management removes the
     impact of these charges from the Company's operating performance to
     assist in assessing the Company's cash generated from operations.
     Management believes this is a critical metric for the Company in
     measuring the Company's ability to generate cash and pay down debt.
     Purchased research and development is a non-cash item and does not
     impact the Company's liquidity or compliance with the covenants
     included in its debt agreements. The amortization expense associated
     with the write-down of an intangible asset is a non-cash charge and is
     not reflective of future operating performance. Accordingly, management
     excluded these charges for purposes of calculating these non-GAAP
     measures to facilitate an evaluation of the Company's current operating
     performance and comparison to the Company's past operating performance.

  -- Amortization and stock compensation expense - The amount of
     amortization and stock compensation expense vary based on decisions
     made at the corporate level and the expenses are not necessarily
     reflective of operating performance. In addition, amortization and
     stock compensation expense are non-cash charges and do not impact the
     Company's liquidity or compliance with the covenants included in its
     debt agreements. Further, following the Company's acquisition of
     Guidant, and the related increase in the Company's debt, management has
     heightened its focus on cash generation and debt pay down. Management
     removes the impact of stock compensation and amortization from the
     Company's operating performance to assist in assessing the Company's
     cash generated from operations. Management believes this is a critical
     metric for the Company in measuring the Company's ability to generate
     cash and pay down debt. Therefore, amortization and stock compensation
     expense are excluded from management's assessment of operating
     performance and are also excluded from the measures management uses to
     set employee compensation. Accordingly, management believes this may be
     useful information to users of its financial statements and therefore
     has excluded these charges for purposes of calculating these non-GAAP
     measures to facilitate an evaluation of the Company's current operating
     performance, particularly in terms of liquidity.

  -- Discrete income tax items - For the three and six month periods ending
     June 30, 2007, these items relate to the reversal of previously
     established accruals and the establishment of new accruals
     for certain tax exposures associated with prior periods. These
     adjustments are highly variable and difficult to predict. Accordingly,
     management excluded these items for purposes of calculating these non-
     GAAP measures to facilitate an evaluation of the Company's current
     operating performance and comparison to the Company's past operating
     performance.

  -- Foreign exchange on net sales - The impact of foreign exchange is
     highly variable and difficult to predict. Accordingly, management
     excludes the impact of foreign exchange for purposes of reviewing
     regional and divisional revenue growth rates to facilitate an
     evaluation of the Company's current operating performance and
     comparison to the Company's past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

Non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange may have limitations as analytical tools, and these non-GAAP measures should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are:

  -- Items such as purchased research and development, the fair value
     adjustment related to the sharing of proceeds feature of the Abbott
     stock purchase and the net write-down of certain of the Company's
     investments reflect economic costs to the Company and are not reflected
     in non-GAAP net income and non-GAAP net income per diluted share.

  -- Items such as Guidant integration costs, facility and severance costs
     and discrete income tax items that are excluded from non-GAAP net
     income and non-GAAP net income per diluted share can have a material
     impact on cash flows and GAAP net income and net income per diluted
     share.

  -- Items such as amortization of purchased intangible assets, though not
     directly affecting Boston Scientific's cash flow position, represent a
     reduction in value of intangible assets over time. The expense
     associated with this reduction in value is not included in Boston
     Scientific's non-GAAP net income or non-GAAP net income per diluted
     share and therefore these measures do not reflect the full economic
     effect of the reduction in value of those intangible assets.

  -- Items such as stock compensation expense, though not directly affecting
     the Company's cash flow position, represent compensation cost under
     GAAP. Stock compensation expense is not included in non-GAAP net income
     or non-GAAP net income per diluted share and therefore these measures
     do not reflect the full economic cost of compensating employees.

  -- Revenue growth rates stated on a constant currency basis, by their
     nature, exclude the impact of foreign exchange, which may have a
     material impact on GAAP net sales.

  -- Other companies may calculate non-GAAP net income, non-GAAP net income
     per diluted share, or regional and divisional revenue growth rates that
     exclude the impact of foreign exchange differently than Boston
     Scientific does, limiting the usefulness of those measures for
     comparative purposes.

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures

Boston Scientific compensates for the limitations on its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company's performance. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit a critical one, of the Company's performance.

The Company provides detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure in the accompanying schedules, and Boston Scientific encourages investors to review these reconciliations.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that providing non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange in addition to the related GAAP measures provides investors with greater transparency to the information used by Boston Scientific management for the three and six month periods ending June 30, 2007 and June 30, 2006 in its financial and operational decision- making and allows investors to see Boston Scientific's results "through the eyes" of management. The Company further believes that providing this information better enables Boston Scientific's investors to understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Disclosure of these non- GAAP financial measures also facilitates comparisons of Boston Scientific's operating performance with the performance of other companies in its industry that supplement their GAAP results with non-GAAP financial measures.

Non-GAAP Financial Measures Beginning in the Third Quarter of 2007

Beginning in the third quarter of 2007, the Company will exclude only acquisition-related charges (if any) and amortization expense from its non- GAAP measure of net income and its non-GAAP measure of net income per diluted share. Acquisition-related charges would include items discussed above in the "Purchase accounting adjustments" and "Acquisition-related and other costs".

SOURCE: Boston Scientific Corporation

CONTACT: Paul Donovan, Media Relations, +1-508-650-8541 (office),
+1-508-667-5165 (mobile), or Dan Brennan, Investor Relations, +1-508-650-8538
(office), +1-617-459-2703 (mobile), both of Boston Scientific Corporation

Web site: http://www.bostonscientific.com/

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