36th Annual JP Morgan Healthcare Conference/media/Files/B/...8 Diversified in Large Global Markets...

36th Annual JP Morgan Healthcare Conference

Mike MahoneyChairman & Chief Executive Officer

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Safe Harbor for Forward-Looking Statements

This presentation 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. If our underlying assumptions turn out to be

incorrect, or if certain risks or uncertainties materialize, actual results could differ materially from the expectations and projections expressed or

implied by our forward-looking statements.

Factors that may cause such differences can be found in our most recent Form 10-K and Forms 10-Q filed or to be filed with the Securities and

Exchange Commission under the headings “Risk Factors” and “Safe Harbor for Forward-Looking Statements.” Accordingly, you are cautioned

not to place undue reliance on any of our forward-looking statements. We disclaim any intention or obligation to publicly update or revise any

forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which they may be based, or

that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.

Non-GAAP Measures:This document contains non-GAAP measures (denoted with *) in talking about our company’s performance. The reconciliations of those non-

GAAP measures to their most comparable GAAP measures are contained within this document including appendices attached to the end of this

presentation.

Financial Disclaimers:

Operational growth rates are non-GAAP measures that exclude the impact of changes in foreign currency exchange rates. Organic growth

rates are non-GAAP measures that exclude the impact of changes in foreign currency exchange rates and the sales from significant acquisitions

(Symetis SA, the American Medical Systems male urology portfolio and EndoChoice Holdings, Inc.) in the relevant periods.

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 have 20 countries in our definition of Emerging Markets.

Market Estimates:

Unless noted otherwise, all references to market sizes, market share positions, and market growth rates are BSX internal estimates.

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Regulatory Disclaimers

Product Regulatory Disclaimer

Implantable Cardiac Monitor Device under development. Not available for use or sale worldwide.

EMPOWER™ Leadless Pacer Device under development. Not available for use or sale worldwide.

Apama RF Balloon Catheter Device under development. Not available for use or sale worldwide.

DrectSense™ Technology Device under development. Not available for use or sale worldwide.

Ranger™ Drug-Coated BalloonCE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.

Drug Eluting Stent – Below-the-knee indication Device under development. Not available for use or sale worldwide.

Eluvia™ Drug eluting self-expanding SFA stentCE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.

Lotus Edge™ U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.

ACURATE™ Self Expanding Valve PlatformCE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.

WATCHMAN™ FLX Pending CE Mark. Not available for use or sale in the U.S.

4

Our Mission and Values

CaringMeaningful Innovation

High PerformanceGlobal

CollaborationDiversity Winning Spirit

Boston Scientific is dedicated to

transforming lives through innovative

medical solutions that improve the health

of patients around the world.

5

What to Expect from BSX

• Track record of delivering revenue and EPS growth faster than peer group

– Q4 2017 sales growth1: 8% operational*, 7% organic* vs Q4 2016 organic* comp of 10%

– FY 2017 sales growth1: 8% operational*, 7% organic* vs FY 2016 organic* comp of 10%

– FY 2017 profitability and EPS2: +100 bps adj. OM*, +11-14 adj. EPS growth*

– 2015-2017E: organic revenue* CAGR1 +7% and adjusted EPS CAGR2 +14-15%

• Driving category leadership and expanding globally with scale & capabilities in emerging markets

– Gaining share globally via portfolio innovation and economic value drivers

• Diversified & durable growth profile + investing to lead in multiple new high growth markets

– Diversified portfolio today + entering new high-growth markets totaling ~$15B in 2021E

• Strong execution and shareholder value creation: More to come in 2018-2020 and beyond

– 2018E-20E: organic rev.* CAGR +5-8%, adj. OM* gains, flat mid-teens tax rate, EPS CAGR +DD

– Strong adj. free cash flow*: est. $6.3B cumulative in years 2018-2020 with limited contingencies

6$0.3B, +14%

Boston Scientific At-A-Glance

2017 Revenue1 and Operational Growth1*: (Total company: $9.0B, 8%; Organic Growth* 7%)

Rhythm Management

Interventional Cardiology

Structural Heart

Peripheral Interventions

$2.4B, +6%

$1.1B, +7%

$275M+2

CRM Electrophysiology

$1.9B, +2%

Endoscopy

Urology & Pelvic Health

Neuromodulation

$1.6B, +12%

$0.6B, +14%

$1.1B, +12%

7

Reported Revenue, Y/Y operational* growth

Y/Y Organic* growth rates

18.9%

20.2%

22.3%

24.1%

2013 2014 2015 2016 2017E

25% –25.25%

$7.1

$7.4 $7.5

$8.4

$9.0

2013 2014 2015 2016 2017

+2%+6%

+8%

+12%

+8%

+4%+5%

+10%

+7%

$0.73

$0.84

$0.93

$1.11

2013 2014 2015 2016 2017E

+11%

+15%

+11%

+20%

+11%-14%

$1.24 -$1.27

High Performance Culture and Track Record

Adjusted EPS*RevenueAdjusted Operating

Margin*

Sales growth consistent > mkt

7% organic CAGR ’15-’17E

Delivering on margin

expansion goals

Consistent double digit EPS growth:

14-15% CAGR ’15-’17E

1 2 2

8

Diversified in Large Global Markets While Investing

in Higher Growth Segments

Business2017E

Market Size

2017E

Market

Growth

2020E

Market Size

’17 - ’20E

Market

CAGRKey Investment Areas, New Markets

Ca

rdio

va

scu

lar

Cardiology $7.5B 1% $8B 0-1% Complex PCI, PCI Guidance, Heart Failure

Structural Heart $4B 21% $6B 15-20% TAVR, LAAC, Mitral Replace & Repair

Peripheral $6B 6% $7.5B 6-8% Drug-Eluting, Oncology, Venous, CLI

Rh

yth

m

Mg

mt.

CRM + Diagnostics $10B 1% $10B 0-2% S-ICD/Leadless, Diagnostics, Heart Failure

EP $4B 12% $6B 9-11% Mapping, Navigation, Therapeutic Solutions

Me

dSu

rg

Endoscopy $5B 5% $6B 5-6% Endo-Luminal Surgery, Visualization, Pulmonary

Urology & PH $3.5B 5% $4.5B 5-6% Stone, Prostate, ER, OAB, Globalization

Neuromodulation $3B 14% $4B 10-15% Pain, Brain, Movement Disorders

WW Total ~$43B 4-5% ~$50B 5-6% Continuing to invest in higher growth areas

9

2017

Sales1Market

~ 2021EGrowth Accelerators

$275M+ ~$6B• WATCHMAN global expansion• ACURATE – TAVR • LOTUS – TAVR

~$50M ~$2B• Visualization• Cancer• Overactive Bladder

~$50M ~$2B

• Pathology • Infection Prevention

• Endo-Luminal Surgery

40%+

growth~$1B

• DBS for PD, Tremor• Other indications 2020+

~$50M ~$2B

• Eluvia – DES• Ranger – DCB • Critical Limb Ischemia (CLI)

IC: TAVR + LAAC

PI Drug Eluting

Endo new markets

Uro/PH new markets

Neuromod - Brain

~$15B<$500M

--- ~$2BRhythm Management

• Apama RF PVI Balloon for AFib• Implantable Cardiac Monitor (ICM)

• HeartLogic™ Heart Failure Alert

Expanding Today into Multiple New High Growth

Markets That Approach ~$15B 2021E

10

Urology and

Pelvic HealthNeuromodulation Endoscopy

Vercise™ Deep Brain

Stimulation Platform1st directional system for

Parkinson’s, dystonia, &

tremor globally

Spectra WaveWriter ™

SCS SystemFirst platform to combine

paresthesia and sub-

perception therapies

Additional investments for therapies in stroke and

Alzheimer’s Disease

Biliary LeadershipLeveraging clinical

innovations and core

portfolio iterations

Endo-Luminal Surgery Emerging alternative to surgical resection; initial focus on GI tract cancers

SpyGlass DS™

VisualizationMinimally invasive, single-

use digital

cholangioscope

Women’s Health Expanding portfolio

technologies &

global footprint

Men’s Health & BPH

Greenlight XPS ™ Laser

Therapy SystemCategory leadership,

market & geographic

expansion

Stone Disease &

LithoVue™ Single-Use

UreteroscopeLeading platform, next

gen technology, and

expanding globally

MedSurg:

Category Leadership & Growth Drivers

Infection Prevention &

Pathology ServicesSolutions for Ambulatory

Surgery Center market

11

Cardiovascular:


Peripheral

Interventions

Interventional

CardiologyStructural Heart

Complex PCIMultiple new product

launches in key

growth areas

Synergy™ &

line extensionsContinued DES

leadership

Polaris™: IVUS &

Comet™ FFRGlobal leader in IVUS and

expanding into FFR

market

Mitral Valve

Replace & RepairFuture focus area

TAVR Portfolio• ACURATE AS ™ supra-

annular , top-down

deployment

• LOTUS Edge™ intra-

annular, fully reversible

Watchman™

LAAC DeviceExpanding utilization &

market indications

Interventional OncologyPortfolio additions +

significant opportunity in

Emerging Markets

AngioJet Zelante ™ DVT

CatheterFoundation for complete

venous portfolio

Comprehensive Drug-

eluting Technologies• Eluvia ™ DES built

for the SFA

• Ranger ™ DCB

• Pursuing DES for CLI

12

Rhythm Management:


ElectrophysiologyCore CRM Diagnostics

Emblem™ MRI S-ICD Continued positive

outcomes and ongoing

clinical science

Resonate ™ HV FamilyNext gen platform

compatible with

HeartLogic™ plus

EnduraLife, MSP and MRI

mCRM ™

Modular CRM:

EMBLEM™ S-ICD with

EMPOWER™ leadless

pacer

Connected PatientsPortfolio of cardiac

monitoring products and

services

Implantable Cardiac

Monitor Developing arrhythmia

monitoring device

HeartLogic™

Drive share with 70%

sensitivity in detecting HF

events at median 34

days prior to event

Apama RF PVI Balloon

Catheter SystemDifferentiated, multi-

electrode, single shot RF

therapy for pulmonary

vein isolation

Therapeutic Catheters• DirectSense™

technology

• Force Sensing

technology

Rhythmia™ HDxSecond gen mapping &

navigation platform

13

Strong Product Pipeline Supports

Long Range Plan Growth Targets

2020E / 2021E

Coronary Therapies

• Synergy DES line extensions

Structural Heart

• WATCHMAN FLX – U.S.

• ACURATE neo AS – U.S./Japan

• ACURATE – size matrix expansion

• **LOTUS size matrix expansion

Peripheral Interventions

• Ranger SFA DCB – U.S.

• Drug eluting stent – Critical Limb Ischemia

CRM/EP

• Leadless Pacing/modular CRM – EU

• Force Sensing Catheter – U.S.

Endo

• EUS Guided Pulmonary BX – U.S./EU

• Axios expanded Indications – U.S.

Urology/Pelvic Health

• Multiple launches in Stone

• Multiple launches in Men’s Health

• Next Gen Greenlight fiber for BPH

NMD

• SCS & DBS Next Gen – U.S./EU

2018E 2019E

Coronary Therapies• Synergy DES line extensions• Multiple launches in Complex PCI

Structural Heart• WATCHMAN FLX – EU• WATCHMAN – Japan• ACURATE – Int’l expansion• **LOTUS U.S. & EU

Peripheral Interventions• Eluvia SFA DES - U.S.

• Interventional Oncology Embolic Coils

CRM/EP• ICM Monitoring & Dx• Force Sensing Catheter – EU• Apama RF PVI Balloon – EU

Endo• SpyGlass Next Gen

Urology/Pelvic Health• LithoVue Next Gen • 5 additional launches in Stone

Neuromodulation• Expanded DBS platform

Coronary Therapies

• 5 launches in Complex PCI

Structural Heart

• ACURATE – OUS Expansion

• ACURATE neo AS – EU

CRM/EP

• Resonate with HeartLogic HF Alert

• Rhythmia HDx w/ LUMIPOINT ™

• DirectSense Rx Catheter – EU/U.S.

Endoscopy

• Endo-Luminal Surgery tools

• Axios Transluminal Stent – Japan

Urology/Pelvic Health

• 4 launches in Stone

Neuromodulation

• WaveWriter SCS System

• Vercise DBS system – U.S.

**Intend to launch Lotus in the U.S. & EU in 2019 pending final testing & regulatory approvals

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Estimated Market Growth Rates

Diversified and Durable Growth Profile

Low

Growth

35%

Moderate

Growth

50%

Low

Growth

46%

Moderate

Growth

47%

2017 Revenue Mix1

$9.0B2020E Revenue Mix2012 Revenue Mix

$7.2B

High Growth Mkt (10%+ CAGR): SCS, TAVR, LAAC, EP, DBS, PI Drug Eluting, ICM

High

Growth

7% High

Growth

15%

Low

Growth

25%

Moderate

Growth

50%

High

Growth

25%

Low Growth Mkt (0 - 3% CAGR): Pacers, Defibrillators, DES

Moderate Growth Mkt (4 - 9% CAGR): Endo, UroPH, PI (ex DES & DCB), Int. Oncology, IC (ex. SH, DES)

15

Emerging Markets

Partnerships

China & India:

Partnerships & VC investments

Latin America:

Expanding access

Emerging Markets Estimated to Exceed $1B

in 2018 and Drive ~150bps Growth thru 2020E

2013 2017E 2020E

$625M

$900M

$1.4B

Emerging Markets

Operational Revenue*

Emerging Markets Growth

Drivers & Key Capabilities

• Global orientation

• New launches, portfolio

registration

• Expanding commercial

capabilities

• Portfolio diversification

• New R&D and physician training

capabilities

• New Malaysia manufacturing and

distribution facility

Tsinghua

University

CardioYASeguridad y calidad, de corazón

1

16

Compelling opportunity beyond 2020 for 30%+ adjusted OM*

2013 2014 2015 2016 2017E2 2020E

25%-

25.25%24.1%

30+%

22.3%

20.2%

18.9%

~+300 bps

SG&A productivity

Accretive new products

Launches & commercial scale

of key products

R&D efficiencies

5-10% annual standard cost improvements

Track Record of Driving Operating Margin Expansion

AND Significant Future Opportunity

28%

Longer Term Goal

17

Strong Cash Flow Generation Outlook

AND Limited Reserved Contingencies 2018-2020E

Strong Free Cash Flow*: 2016-2020EImproved Ability to Deploy

Cumulative Free Cash Flow*

** Based on adjusted free cash flow. Refer to non-GAAP reconciliations

80% 90%

2015-2017E: ~$4.8B

2018E-2020E: ~$6.3B

10%

Reserved Contingencies**

M&A or Returning Cash to Shareholders

20%10%

2016 2017E 2018E 2019E 2020E

$1.6B

~$1.75B

~$1.9B

~$2.1B

~$2.3B

18

Post Tax Reform

Estimated Effective Tax Rate*

2017E 2018E 2019E 2020E 2023E

Tax Reform Impact Brings Greater Financial Flexibility

AND Increased Earnings Power

Full access to OUS cash

All estimated tax rates are adjusted and exclude discrete tax items, such as the benefit related to adoption of ASU 2016-09

• Greater financial flexibility

• Increased earnings power

Pre Tax Reform

Expected Effective Tax Rate*

Full access to OUS cash

through 2018

Partial access to OUS cash 2019+

15%16%

17%

20%

2017E 2018E 2019E 2020E 2023E

14%

Expected increase of 100 bps

per year for access to OUS cash

14%

~16%~15%

19

2017E2015-2017E

CAGRGoals2018E

Goals2019 & 2020E

2018E-2020ECAGR

Organic Revenue* 7% 1 +7% +5-6% +5-8% +5-8%

OperationalRevenue*

8% 1 +9% -- Est. additional +100 bps -- +6-9%

Adjusted Op. Margin*

25%-25.25% 2~175 bps

Improvement annually

+50-75bps

w/MDET repeal

+~25bps

w/MDET reinstated

~100+ bps

Improvement annually28% in 2020

Effective Tax Rate* 14% 2 ~16% ~15%

Adjusted EPS* Growth 11%-14% 2 +14-15%

Consistent and Strong Financial Outlook

-------Double digit goal --------

20

What to Expect from BSX

• Track record of delivering revenue and EPS growth faster than peer group

– Q4 2017 sales growth1: 8% operational* , 7% organic* vs Q4 2016 organic* comp of 10%

– FY 2017 sales growth1: 8% operational*, 7% organic* vs FY 2016 organic* comp of 10%

– FY 2017 profitability and EPS2: +100 bps adj. OM*, +11-14 adj. EPS growth*

– 2015-2017E: organic revenue* CAGR1 +7% and adjusted EPS CAGR2 +14-15%

• Driving category leadership and expanding globally with scale & capabilities in emerging markets

– Gaining share globally via portfolio innovation and economic value drivers

• Diversified & durable growth profile + investing to lead in multiple new high growth markets

– Diversified portfolio today + entering new high-growth markets totaling ~$15B in 2021E

• Strong execution and shareholder value creation: More to come in 2018-2020 and beyond

– 2018E-20E: organic rev.* CAGR +5-8%, adj. OM* gains, flat mid-teens tax rate, EPS CAGR +DD

– Strong adj. free cash flow*: est. $6.3B cumulative in years 2018-2020 with limited contingencies

21

Recent Awards and Recognitions Reflect

Winning Spirit Culture that Drives Results

Recognized for progressive life/work

policies and programs

Ranked #35 based on employee ratings

Ranked #16 in the U.S.Ranked #3 on U.S. Large

Company list

Scored 100% for the 4th consecutive year

Scored 100% for the 2nd year in a row

Highest recognition for Guard/Reserve

employee support

Ranked 6th inindustry category

22

Appendix A

Detailed Growth Drivers by Business

23

Endoscopy:


Overview BSX Growth Drivers

• Cholangioscopy accelerationSpyGlass DS is the first and only minimally invasive, single use,

single operator digital cholangioscope

• GI-focused pathology solutionsGI specialized pathology services and dedicated

commercial team servicing $600M ASC opportunity

• Infection prevention expansionEnhanced safety for patients and healthcare providers in

$775M global market

• Endo-Luminal Surgery replacing open proceduresSafer, less costly, minimally invasive alternatives to traditional

surgery• Growing leadership in Endoscopic Ultrasound (EUS) therapeutics

Portfolio expansion and new indications for Axios, the world’s

first transluminal stent

Market Size (2017E)

~$3B

Market Growth (2017E)

+5%

2017-2020 est. CAGR

+5%-6%

BSX 20171

Operational Growth*+12%

Share Position #1

24

Urology and Pelvic Health:



• Innovate across all franchises

Add to our core portfolio along with developing clinical and

economic evidence; evolve commercial model to meet

demands of global healthcare market

• Expand globally

Lead with stone portfolio to gain critical mass and

commercial presence; then selectively launch additional

franchises in regional markets

• Enter attractive adjacent markets

Evolve our portfolio with new adjacencies and tools that

add value beyond our current portfolio, differentiated by

excellent medical education

Market Size (2017E)

~$3.5B


+5%

2017-2020 est. CAGR

+5%-6%

BSX 20171


Share Position #1

25

Neuromodulation:



• Spectra Wavewriter ™ SCS System

First and only SCS system able to combine paresthesia and

sub-perception therapies

• Comprehensive SCS Platform with MultiWave ™

Personalized therapy with neural targeting algorithm

(Illumina 3D ™) and lead portfolio

• Cosman RF Ablation

Treatment options for pain patients

• Vercise ™ Deep Brain Stimulation Platform

First MICC-based directional system

• International expansion

Under-penetrated market opportunity in both pain and brain

Market Size (2017E)

~$2.5B


+14%

2017-2020 est. CAGR

+10%-15%

BSX 20171


Share Position #2

26

Coronary Therapies:



• Coronary Therapies

Diversify coronary revenue to higher growth, less price

sensitive product lines through portfolio execution

• Stents

Protect DES leadership position with tiered portfolio and

Synergy line extensions

• Complex PCI

Multiple launches of new Complex PCI specialty products

• PCI Guidance

Expand footprint into $400M FFR market and maintain

leadership in IVUS

Market Size (2017E)

~$7.5B


+1%

2017-2020 est. CAGR

+0%-1%

BSX 20171

Operational Growth*

+6%(including SH)

Share Position #1

27

Structural Heart:



• Watchman™ LAAC Device

Expanding market with excellent outcomes, therapy

development and expanding indications

• ACURATE neo™ Aortic Valve System

Global expansion through commercial integration, a

unique feature set and outstanding clinical outcomes

• LOTUS Edge™ Aortic Valve System

Differentiated TAVR platform providing complete control

and lowest PVL

• Mitral Replace and Repair

Expand valve portfolio into $3B potential new market

opportunity

Market Size (2017E w/Mitral)

~$4B


+21%

2017-2020 est. CAGR

+15%-20%

Share Position #3

28

Peripheral Interventions:



• Drug Eluting Technologies for PAD

Differentiated portfolio backed by unparalleled clinical

program

• Expanding Interventional Oncology Solutions

Significant opportunity in Emerging Markets

• Complete Deep Venous Portfolio

Large, underpenetrated market

• Critical Limb Ischemia

Only company pursuing DES Below The Knee

• Breadth of portfolio across disease states

Mindshare with physicians and contracting advantage

Market Size (2017E)

~$6B


+6%

2017-2020 est. CAGR

+6%-8%

BSX 20171


Share Position #1

29

Cardiac Rhythm Management:



• RESONATE ™ HV Family of Devices

Next gen platform with HeartLogic™ Heart Failure Alert,

MRI, MSP (CRT-D), and EnduraLife

• HeartLogic Heart Failure Alert

Drive share with diagnostic that offers 70% sensitivity in

detecting HF events at median 34 days prior to event

• EMBLEM™ MRI S-ICD

First and only S-ICD with continued positive outcomes and

ongoing clinical science

• mCRM™ (modular CRM)

EMBLEM ™ S-ICD with EMPOWER ™ leadless pacer

• Implantable Cardiac Monitor

Diagnostic-only device – target launch H1:2019E

Market Size (2017E)

~$10B


1%

2017-2020 est. CAGR

0%-2%

BSX 20171


Share PositionWW #3

US #2

30

Electrophysiology:



• RHYTHMIA HDx ™ System

Second gen Mapping and Navigation system

Rhythmia HDx with LUMIPOINT ™ software module

• Navigation and MiFi Ablation Catheters

Full portfolio of navigation and non-navigation enabled

therapeutic catheters

• DirectSense™ Technology

Launching now in Europe and H1:2018E in the US

• Force Sensing Technology

Expands therapeutic portfolio in $800M market opportunity –

EU launch 2019E

• Apama RF PVI Balloon Catheter System

Differentiated, multi-electrode single shot RF therapy to

address fast growing ~$500M market

Market Size (2017E)

~$4B


+12%

2017-2020 est. CAGR

+9%-11%

BSX 20171


Share Position #4

31

Appendix B

References and Non-GAAP Reconciliations

32

References

*Non-GAAP measure; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please

refer to Appendix A of this document.

1Based on preliminary, unaudited sales results issued January 9, 2018

2Based on guidance issued October 26, 2017

33

Supplemental Non-GAAP Disclosures

(Low) (High) (Low) (High)

Estimated GAAP EPS $0.71 $0.75 180% 196%

Estimated acquisition-related net charges 0.01 0.00

Estimated restructuring and restructuring-related charges 0.06 0.06

Estimated amortization expense 0.35 0.35

Investment impairment charges 0.02 0.02

Litigation-related charges 0.09 0.09

Estimated Adjusted EPS $1.24 $1.27 11% 14%

Less: Estimated impact of foreign currency fluctuations -0.08 -0.07 -7% -7%

Estimated Adjusted EPS, excluding FX $1.32 $1.34 18% 21%

Full Year 2017 Estimate Estimated Growth

Revenue Growth Q4 20171 Q4 2016

Revenue growth, as reported 9.9% 11%

Less: Impact of foreign currency fluctuations 1.8% 0%

Operational Revenue Growth 8.1% 11%

Less: Impact of significant acquisitions 3.0% 1%

Organic Revenue Growth 6.8% 10%

Revenue Growth 2015-20171 (CAGR) 20171 2016 2015 2014 2013

Revenue growth, as reported 7% 7.9% 12% 1% 3% -1%

Less: Impact of foreign currency fluctuations -2% 0.1% 0% -7% -3% -3%

Operational Revenue Growth 9% 7.8% 12% 8% 6% 2%

Less: Impact of significant acquisitions 2% 1.2% 2% 3% 2%

Organic Revenue Growth 7% 6.6% 10% 5% 4%

34


35


Interv entional Cardiology 6.2% 0.1% 6.1%

Peripheral Interv entions 6.5% -0.1% 6.6%

Cardiovascular 6.3% 0.0% 6.3%

Cardiac Rhythm Management 2.5% 0.2% 2.3%

Electrophysiology 14.5% 0.1% 14.4%

Rhythm Management 3.9% 0.2% 3.7%

Endoscopy 12.4% 0.1% 12.3%

Urology & Pelv ic Health 11.8% 0.2% 11.6%

Neuromodulation 14.2% 0.1% 14.1%

MedSurg 12.5% 0.1% 12.4%

Total Company 7.9% 0.1% 7.8% 1.2% 6.6%

Revenue (in billions ) As Reported Less: FX Impact Operational*

Total Company 9.0 -0.1 9.1

FY2017 Preliminary / Unaudited Net Sales

FY2017 Preliminary / Unaudited Net Sales Growth as compared to FY2016

As Reported

Less: Impact of Foreign

Currency Operational*

Less: Impact of

Significant Acquisitions Organic*

36


Emerging Markets Revenue (in millions) 2013

Revenue, as reported 589$

Less: Impact of foreign currency fluctuations (36)

Operational Revenue 625$

Emerging Markets Revenue (in millions) 2017E

Estimated Revenue, reported 917$

Less: Impact of foreign currency fluctuations (8)

Estimated Operational Revenue 925$

Emerging Markets Revenue (in billions) 2020E

Estimated Revenue, reported 1.4$

Less: Impact of foreign currency fluctuations -

Estimated Operational Revenue 1.4$

Emerging Market Revenue CAGR 2017E-2020E 15%

37

The following is an explanation of the adjustments that management excluded from GAAP measures to calculate the following forward-looking non-GAAP financial measures:

Adjusted Gross Margin: Excludes from GAAP gross margin the impacts of forecasted acquisition- and divestiture- and restructuring-related charges or credits.

Adjusted SG&A: Excludes from GAAP SG&A the impacts of forecasted acquisition- and divestiture- and restructuring-related charges or credits.

Adjusted R&D: Excludes from GAAP R&D the impacts of forecasted acquisition- and divestiture- and restructuring-related charges or credits.

Adjusted Operating Margin: Excludes from GAAP operating margin the impacts of forecasted acquisition- and divestiture-and restructuring- and restructuring-related charges or credits, and amortization expense.

Adjusted Tax Rate: Excludes from GAAP tax rate the tax impacts related to forecasted acquisition- and divestiture- and restructuring- and restructuring-related charges or credits, and amortization expense.

Adjusted Free Cash Flow: Adjusts GAAP operating cash flow to include the impacts of forecasted capital expenditures and excludes the impact of estimated after-tax acquisition- and divestiture-, restructuring- and litigation-payments.

Please refer to our Safe Harbor for forward-looking statements disclosure in conjunction with any forward looking information presented within.


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36th Annual JP Morgan Healthcare Conference/media/Files/B/...8 Diversified in Large Global Markets...

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