Boston Scientific (BSX) 10-K 26 Feb 10 2009 FY Annual report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Millions, except Share data	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	BOSTON SCIENTIFIC CORP
Entity Central Index Key	0000885725
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$14,700
Entity Common Stock, Shares Outstanding		1,511,368,790

Consolidated Statements of Oper

Consolidated Statements of Operations (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statements of Operations [Abstract]
Net sales	$8,188	$8,050	$8,357
Cost of products sold	2,576	2,469	2,342
Gross profit	5,612	5,581	6,015
Operating expenses:
Selling, general and administrative expenses	2,635	2,589	2,909
Research and development expenses	1,035	1,006	1,091
Royalty expense	191	203	202
Loss on program termination	16
Amortization expense	511	543	620
Goodwill impairment charges		2,613
Other intangible asset impairment charges	12	177	21
Purchased research and development	21	43	85
Acquisition-related milestone		(250)
Gain on divestitures		(250)
Loss on assets held for sale			560
Restructuring charges	63	78	176
Litigation-related net charges	2,022	334	365
Total operating expenses	6,506	7,086	6,029
Operating loss	(894)	(1,505)	(14)
Other income (expense):
Interest expense	(407)	(468)	(570)
Other, net	(7)	(58)	15
Loss before income taxes	(1,308)	(2,031)	(569)
Income tax (benefit) expense	(283)	5	(74)
Net loss	($1,025)	($2,036)	($495)
Net loss per common share
Basic	-0.68	-1.36	-0.33
Assuming dilution	-0.68	-1.36	-0.33
Weighted-average shares outstanding:
Basic	1507.9	1498.5	1486.9
Assuming dilution	1507.9	1498.5	1486.9

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$864	$1,641
Trade accounts receivable, net	1,375	1,402
Inventories	920	853
Deferred income taxes	572	911
Prepaid expenses and other current assets	330	645
Total current assets	4,061	5,452
Property, plant and equipment, net	1,728	1,728
Goodwill	12,404	12,421
Other intangible assets, net	6,731	7,244
Other long-term assets	253	294
TOTAL ASSETS	25,177	27,139
Current liabilities:
Current debt obligations	3	2
Accounts payable	212	239
Accrued expenses	2,609	2,612
Other current liabilities	198	380
Total current liabilities	3,022	3,233
Long-term debt	5,915	6,743
Deferred income taxes	1,875	2,262
Other long-term liabilities	2,064	1,727
Stockholders' equity:
Common stock, $ .01 par value - authorized 2,000,000,000 shares; issued 1,510,753,934 shares as of December 31, 2009 and 1,501,635,679 shares as of December 31, 2008	15	15
Additional paid-in capital	16,086	15,944
Accumulated deficit	(3,757)	(2,732)
Accumulated other comprehensive loss, net of tax:
Foreign currency translation adjustment	8	(13)
Unrealized loss on derivative financial instruments	(37)	(26)
Unrealized costs associated with certain retirement plans	(14)	(14)
Total stockholders' equity	12,301	13,174
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$25,177	$27,139

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Stockholders' equity:
Preferred stock, par value	0.01	0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Common stock, par value	0.01	0.01
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	1,510,753,934	1,501,635,679

Consolidated Statements of Stoc

Consolidated Statements of Stockholders Equity (USD $)
In Millions, except Share data	Common Stock	Additional Paid-In Capital	Deferred Cost, ESOP	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Comprehensive Income (Loss)	Total
Beginning Balance, Shares at Dec. 31, 2006	1,486,403,445		2,557,303
Beginning Balance at Dec. 31, 2006	$15	$15,792	($58)	($334)	($174)	$57
Comprehensive income
Net loss					(495)		(495)	(495)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment						38	38
Net change in derivative financial instruments						(91)	(91)
Net change in certain retirement amounts						5	5
Cumulative effect adjustment for adoption of Interpretation No. 48					(26)
Common stock issued for acquisitions		(52)		142
Impact of stock-based compensation plans, net of tax		61		192
Impact of stock-based compensation plans, net of tax, Shares	4,831,466
401 (k) ESOP transactions		(13)	36
401 (k) ESOP transactions, Shares			(1,605,737)
Other					2
Ending Balance at Dec. 31, 2007	15	15,788	(22)		(693)	9	(543)
Ending Balance, Shares at Dec. 31, 2007	1,491,234,911		951,566
Comprehensive income
Net loss					(2,036)		(2,036)	(2,036)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment						(67)	(67)
Net change in available-for-sale investments						(16)	(16)
Net change in derivative financial instruments						33	33
Net change in certain retirement amounts						(12)	(12)
Impact of stock-based compensation plans, net of tax		166
Impact of stock-based compensation plans, net of tax, Shares	10,400,768
401 (k) ESOP transactions		(10)	22
401 (k) ESOP transactions, Shares			(951,566)
Other					(3)
Ending Balance at Dec. 31, 2008	15	15,944			(2,732)	(53)	(2,098)	13,174
Ending Balance, Shares at Dec. 31, 2008	1,501,635,679
Comprehensive income
Net loss					(1,025)		(1,025)	(1,025)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment						21	21
Net change in derivative financial instruments						(11)	(11)
Impact of stock-based compensation plans, net of tax		142
Impact of stock-based compensation plans, net of tax, Shares	9,118,255
Ending Balance at Dec. 31, 2009	$15	$16,086			($3,757)	($43)	($1,015)	$12,301
Ending Balance, Shares at Dec. 31, 2009	1,510,753,934

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating Activities
Net loss	($1,025)	($2,036)	($495)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	834	864	918
Deferred income taxes	(64)	(334)	(386)
Stock-based compensation expense	144	138	122
Goodwill impairment charges		2,613
Other intangible asset impairment charges	12	177	21
Net (gains) losses on investments and notes receivable	(9)	78	54
Purchased research and development	21	43	85
Other non-cash acquistion- and divestiture-related (credits) charges		(250)	568
Increase (decrease) in cash flows from operating assets and liabilities, excluding the effect of acquisitions and divestitures:
Accounts receivable, net	1	96	(72)
Inventories	(92)	(120)	(30)
Other assets	276	(21)	(43)
Accounts payable and accrued expenses	462	392	45
Other liabilities	278	(416)	125
Other, net	(3)	(8)	22
Cash provided by operating activities	835	1,216	934
Property, plant and equipment
Purchases	(312)	(362)	(363)
Proceeds on disposals	5	2	30
Acquisitions
Payments for acquisitions of businesses, net of cash acquired	(4)	(21)	(13)
Payments relating to prior period acquisitions	(523)	(675)	(248)
Other investing activity
Proceeds from business divestitures		1,287
Payments for investments in and acquisitions of certain technologies	(50)	(56)	(123)
Proceeds from sales of investments and collections of notes receivable	91	149	243
Cash (used for) provided by investing activities	(793)	324	(474)
Debt
Payments on notes payable, capital leases and long-term borrowings	(2,825)	(1,175)	(1,000)
Proceeds from long-term borrowings, net of debt issuance costs	1,972
Net (payments on) proceeds from borrowings on credit and security facilities		(250)	246
Equity
Proceeds from issuances of shares of common stock	33	71	132
Payments related to issuance of shares of common stock to Abbott Laboratories			(60)
Excess tax benefit relating to stock options		4	2
Cash used for financing activities	(820)	(1,350)	(680)
Effect of foreign exchange rates on cash	1	(1)	4
Net (decrease) increase in cash and cash equivalents	(777)	189	(216)
Cash and cash equivalents at beginning of year	1,641	1,452	1,668
Cash and cash equivalents at end of year	864	1,641	1,452
SUPPLEMENTAL INFORMATION:
Cash paid for income taxes, net of tax refunds	46	416	475
Cash paid for interest	364	414	543
Non-cash investing activities:
Stock and stock equivalents issued for acquisitions			90
Non-cash financing activities:
Capital lease arrangements			$31

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Significant Accounting Policies [Abstract]
Significant Accounting Policies	Note ASignificant Accounting Policies Principles of Consolidation Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries. Through December31, 2009, we assessed the terms of our investment interests to determine if any of our investees met the definition of a variable interest entity (VIE)in accordance with accounting standards effective through that date, and would have consolidated any VIEs in which we were the primary beneficiary. Our evaluation considered both qualitative and quantitative factors and various assumptions, including expected losses and residual returns. As of December31, 2009 and 2008, based on these assessments, we did not consolidate any VIEs. In December2009, the Financial Accounting Standards Board (FASB)issued Accounting Standards Codification (ASC)Update No.2009-17, Consolidations (Topic 810) Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, which formally codifies FASB Statement No.167, Amendments to FASB Interpretation No.46(R). Update No. 2009-17 and Statement No.167 amend Interpretation No.46(R), Consolidation of Variable Interest Entities, to require that an enterprise perform an analysis to determine whether the enterprises variable interests give it a controlling financial interest in a VIE. The analysis identifies the primary beneficiary of a VIE as the enterprise that has both 1) the power to direct activities of a VIE that most significantly impact the entitys economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Update No.2009-17 eliminated the quantitative approach previously required for determining the primary beneficiary of a VIE and requires ongoing reassessments of whether an enterprise is the primary beneficiary. We are required to adopt Update No.2009-17 for our first quarter ending March31, 2010. We do not believe the adoption of Update No.2009-17 will have a significant impact on our future results of operations or financial position. We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50percent or less of the voting stock and the entity is not a variable interest entity in which we are the primary beneficiary. We record these investments initially at cost, and adjust the carrying amount to reflect our share of the earnings or losses of the investee, including all adjustments similar to those made in preparing consolidated financial statements. We account for investments in entities over which we do not have the ability to exercise significant influence under the cost method of accounting. In the first quarter of 2008, we completed the divestiture of certain non-strategic businesses. Our operating results for the year ended December31, 2008 include the results of these businesses through the date of separation. Our operating results for the year ended December31, 2007 include a full year of results of these businesses. Refer to Note F Divestitures for a description of these business divestitures. Basis of Prese

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information
	12 Months Ended Dec. 31, 2009 USD / shares
Supplemental Balance Sheet Information [Abstract]
Supplemental Balance Sheet Information	Note BSupplemental Balance Sheet Information Components of selected captions in our accompanying consolidated balance sheets are as follows: As of December 31, (in millions) 2009 2008 Trade accounts receivable, net Accounts receivable $ 1,485 $ 1,533 Less: allowances (110 ) (131 ) $ 1,375 $ 1,402 Inventories Finished goods $ 671 $ 586 Work-in-process 69 104 Raw materials 180 163 $ 920 $ 853 Sales of the PROMUS everolimus-eluting stent system represented approximately eight percent of our total net sales in 2009. We are currently reliant on Abbott Laboratories for our supply of everolimus-eluting stent systems in the U.S. and Japan. Our supply agreement with Abbott for everolimus-eluting stent systems in these regions extends through the end of the second quarter of 2012. At present, we believe that our supply of everolimus-eluting stent systems from Abbott and our current launch plans for our next-generation internally-manufactured everolimus-eluting stent system in these regions is sufficient to meet customer demand. However, any production or capacity issues that affect Abbotts manufacturing capabilities or our process for forecasting, ordering and receiving shipments may impact the ability to increase or decrease our level of supply in a timely manner; therefore, our supply of everolimus-eluting stent systems supplied to us by Abbott may not align with customer demand, which could have an adverse effect on our operating results. In the fourth quarter of 2009, we launched our internally developed and manufactured next-generation everolimus-eluting stent system, our PROMUS Element stent system, in our EMEA region and certain Inter-Continental countries, and expect to launch this product in the U.S. and Japan in mid-2012. Further, the price we pay for our supply of everolimus-eluting stent systems from Abbott is determined by contracts with Abbott and is based, in part, on previously fixed estimates of Abbotts manufacturing costs for everolimus-eluting stent systems and third-party reports of our average selling price of these stent systems. Amounts paid pursuant to this pricing arrangement are subject to a retroactive adjustment approximately every two years based on Abbotts actual costs to manufacture these stent systems for us and our average selling price of everolimus-eluting stent systems supplied to us by Abbott. As of December 31, (in millions) 2009 2008 Property, plant and equipment, net Land $ 118 $ 116 Buildings and improvements 936 865 Equipment, furniture and fixtures 1,941 1,824 Capital in progess 271 305 3,266 3,110 Less: accumulated depreciation (1,538 ) (1,382 ) $ 1,728 $ 1,728 Accrued expenses Legal reserves $ 1,453 $ 924 Acquisition-related obligations 6 520 Payroll and related liabilities 472 438 Ot

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note C Fair Value Measurements Derivative Instruments and Hedging Activities We develop, manufacture and sell medical devices globally and our earnings and cash flows are exposed to market risk from changes in currency exchange rates and interest rates. We address these risks through a risk management program that includes the use of derivative financial instruments, and operate the program pursuant to documented corporate risk management policies. We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No.133, Accounting for Derivative Instruments and Hedging Activities). In accordance with Topic 815, for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. The accounting for changes in the fair value (i.e. gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to Topic 815. Currency Hedging We are exposed to currency risk consisting primarily of foreign currency denominated monetary assets and liabilities, forecasted foreign currency denominated intercompany and third party transactions and net investments in certain subsidiaries. We manage our exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. We use both derivative instruments (currency forward and option contracts), and non-derivatives (primarily European manufacturing operations) to reduce the risk that our earnings and cash flows associated with these foreign currency denominated balances and transactions will be adversely affected by currency exchange rate changes. Designated Foreign Currency Hedges All of our designated currency hedge contracts outstanding as of December31, 2009 and December31, 2008 were cash flow hedges under Topic 815 intended to protect the U.S. dollar value of our forecasted foreign currency denominated transactions. We record the effective portion of any change in the fair value of foreign currency cash flow hedges in other comprehensive income (OCI)until the related third-party transaction occurs. Once the related third-party transaction occurs, we reclassify the effective portion of any related gain or loss on the foreign currency cash flow hedge to earnings. In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, we would reclassify the amount of any gain or loss on the related cash flow hedge to e

Acquisitions

Acquisitions
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions [Abstract]
Acquisitions	Note DAcquisitions We did not consummate any material acquisitions during 2009. During 2008, we paid approximately $40 million in cash to acquire CryoCor, Inc. and Labcoat, Ltd. During 2007, we paid approximately $100 million through a combination of cash and common stock to acquire EndoTex Interventional Systems, Inc. and $70million in cash to acquire Remon Medical Technologies, Inc. Our consolidated financial statements include the operating results for each acquired entity from its respective date of acquisition. We do not present pro forma information for these acquisitions given the immateriality of their results to our consolidated financial statements. 2008 Acquisitions In December2008, we completed the acquisition of the assets of Labcoat, Ltd., for a purchase price of $17million, net of cash acquired. Labcoat is developing a novel technology for coating drug-eluting stents. In May2008, we completed our acquisition of 100percent of the fully diluted equity of CryoCor, Inc., and paid a cash purchase price of $21million, net of cash acquired. CryoCor is developing products using cryogenic technology for use in treating atrial fibrillation. The acquisition was intended to allow us to further pursue therapeutic solutions for atrial fibrillation in order to advance our existing CRM and Electrophysiology product lines. 2007 Acquisitions In January2007, we completed our acquisition of 100percent of the fully diluted equity of EndoTex Interventional Systems, Inc., a developer of stents used in the treatment of stenotic lesions in the carotid arteries. We issued approximately five million shares of our common stock valued at $90 million and paid approximately $10million in cash, in addition to our previous investments of approximately $40million, to acquire the remaining interests of EndoTex. In addition, we may be required to pay future consideration that is contingent upon the achievement of certain performance-related milestones. The acquisition was intended to expand our carotid artery disease technology portfolio. In August2007, we completed our acquisition of 100percent of the fully diluted equity of Remon Medical Technologies, Inc. Remon is a development-stage company focused on creating communication technology for medical device applications. We paid approximately $70million in cash, net of cash acquired, in addition to our previous investments of $3million, to acquire the remaining interests of Remon. We may also be required to make future payments contingent upon the achievement of certain performance-related milestones. The acquisition was intended to expand our sensor and wireless communication technology portfolio and complement our existing CRM product line. Payments Related to Prior Period Acquisitions Certain of our acquisitions involve the payment of contingent consideration. Payment of the additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels, achieving product development targets or obtaining regulatory approvals. In August2007, we entered an agreement to amend our 2004 merger agre

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangible Assets [Abstract]
Goodwill and Other Intangible Assets	Note E Goodwill and Other Intangible Assets The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization as of December31, 2009 and 2008 is as follows: As of December 31, 2009 As of December 31, 2008 Gross Carrying Accumulated Gross Carrying Accumulated (in millions) Amount Amortization Amount Amortization Amortizable intangible assets Technology core $ 6,563 $ (1,128 ) $ 6,564 $ (854 ) Technology developed 1,029 (808 ) 1,026 (664 ) Patents 548 (305 ) 564 (264 ) Other intangible assets 807 (266 ) 791 (210 ) $ 8,947 $ (2,507 ) $ 8,945 $ (1,992 ) Unamortizable intangible assets Goodwill $ 12,404 $ 12,421 Technology core 291 291 $ 12,695 $ 12,712 Goodwill Impairment Charges During the fourth quarter of 2008, the decline in our stock price and our market capitalization created an indication of potential impairment of our goodwill balance. Therefore, we performed an interim impairment test and recorded a $2.613billion goodwill impairment charge associated with our acquisition of Guidant Corporation. As a result of economic conditions and the related increase in volatility in the equity and credit markets, which became more pronounced starting in the fourth quarter of 2008, our estimated risk-adjusted WACC increased 150 basis points from 9.5percent during our 2008 second quarter annual goodwill impairment assessment to 11.0percent during our 2008 fourth quarter interim impairment assessment. This change, along with reductions in market demand for products in our U.S. CRM reporting unit relative to our assumptions at the time of the Guidant acquisition, were the key factors contributing to the impairment charge. At the time of the Guidant acquisition in 2006, we expected average U.S. net sales growth rates in the mid-teens; however, due to changes in end market demand, we reduced our estimates of average U.S. CRM sales growth rates to the mid-to-high single digits. Our estimated market participant WACC decreased 50 basis points from 11.0percent during our 2008 fourth quarter interim impairment assessment to 10.5 percent during our 2009 second quarter annual goodwill impairment assessment, and our other significant assumptions remained largely consistent. Our 2009 goodwill impairment test did not identify any reporting units whose carrying values exceeded implied fair values. See Note A Significant Accounting Policies for further discussion of our policies and methodologies related to goodwill impairment testing. Other Intangible Asset Impairment Charges During 2009, we recorded other intangible asset impairment charges of $12million, associated primarily with lower than anticipated market penetration of one of our Urology technology offerings. During 2008, we reduced our future

Divestitures

Divestitures
	12 Months Ended Dec. 31, 2009 USD / shares
Divestitures [Abstract]
Divestitures	Note F Divestitures During 2007, we determined that our Auditory, Cardiac Surgery, Vascular Surgery, Venous Access, and Fluid Management businesses, as well as our TriVascular Endovascular Aortic Repair (EVAR)program, were no longer strategic to our on-going operations. Therefore, we initiated the process of selling these businesses in 2007, and completed their sale in the first quarter of 2008, as discussed below. We received gross proceeds of approximately $1.3billion from these divestitures. Management committed to a plan to sell each of these businesses in 2007 and, pursuant to ASC Topic 360, we adjusted the carrying value of the disposal groups to their fair value, less cost to sell (if lower than the carrying value) during 2007, and recognized a related loss of $560million in our accompanying consolidated statements of operations. The combined 2007 revenues associated with the disposal groups were $553million, or seven percent of our net sales. Auditory In August2007, we entered an agreement to amend our 2004 merger agreement with the principal former shareholders of Advanced Bionics Corporation. The acquisition of Advanced Bionics included potential earnout payments that were contingent primarily on the achievement of future performance milestones, with certain milestones tied to profitability. The amended agreement provided for a new schedule of consolidated, fixed payments to the former Advanced Bionics shareholders, consisting of $650million that was paid upon closing in January2008, and $500million paid in March2009. These payments represent the final payments made to Advanced Bionics. Following the approval by the former shareholders in 2007, we accrued the fair value of these amounts, as the payment of this consideration was determinable beyond a reasonable doubt. The fair value of these payments, determined to be $1.115billion, was recorded as an increase to goodwill. In conjunction with the amended merger agreement, in January2008, we completed the sale of a controlling interest in our Auditory business and drug pump development program, acquired with Advanced Bionics in 2004, to entities affiliated with the principal former shareholders of Advanced Bionics for an aggregate purchase price of $150million in cash. To adjust the carrying value of the disposal group to its fair value, less costs to sell, we recorded a loss of approximately $367 million in 2007, representing primarily a write-down of goodwill. Under the terms of the agreement, we retained an equity interest in the limited liability company formed for purposes of operating the Auditory business and, in 2009, received proceeds of $40million from the sale of this investment. Cardiac Surgery and Vascular Surgery In January2008, we completed the sale of our Cardiac Surgery and Vascular Surgery businesses to the Getinge Group for net cash proceeds of approximately $700million. To adjust the carrying value of the Cardiac Surgery and Vascular Surgery disposal group to its fair value, less costs to sell, we recorded a loss of $193million in 2007, representing primarily the write-down of goodwill. We acquired the Cardiac Surgery business in April2006 w

Investments and Notes Receivabl

Investments and Notes Receivable
	12 Months Ended Dec. 31, 2009 USD / shares
Investments and Notes Receivable [Abstract]
Investments and Notes Receivable	Note G Investments and Notes Receivable We had investments of $66million as of December31, 2009 and $113million as of December31, 2008. We have historically entered a significant number of alliances with publicly traded and privately held entities in order to broaden our product technology portfolio and to strengthen and expand our reach into existing and new markets. During 2007, in connection with our strategic initiatives, we announced our intent to sell the majority of our investment portfolio in order to monetize those investments determined to be non-strategic. In June2008, we signed definitive agreements with Saints Capital and Paul Capital Partners to sell the majority of our investments in, and notes receivable from, certain publicly traded and privately held entities for gross proceeds of approximately $140million. In connection with these agreements, we received proceeds of $95million in 2008, and an additional $45million in 2009. In addition, we received proceeds of $46million in 2009 and $54million in 2008 from other transactions to monetize certain other non-strategic investments. In 2009, we recorded gains of $23million and other-than-temporary impairments of $14million associated with our investment portfolio. Gains and losses associated with our investments and notes receivable are recorded in other, net within our consolidated statements of operations. In addition, we recorded losses of $6million associated with our equity method investments. As of December31, 2009, we held investments with a book value of $8million that we accounted for under the equity method of accounting. In 2008, we recorded other-than-temporary impairments of $130million associated with our investment portfolio, and gains of $52million related to the sale of non-strategic investments. The other-than-temporary impairments included $127million related to non-strategic investments and notes receivable which we had sold or intended to sell, and $3million related to our strategic equity investments. We also recognized other costs of $5million associated with the Saints and Paul agreements. We recorded losses of $10million, reported in other, net, in our accompanying consolidated statements of operations associated with our equity method investments. As of December 31, 2008, we held investments with a book value of $45million that we accounted for under the equity method of accounting. In 2007, we recorded other-than-temporary impairments of $119million related to our investments and notes receivable, and recorded gains of $65million associated with the sale of equity investments and collection of notes receivable. We recorded $13million of purchased research and development associated with the initial application of the equity method of accounting to certain investments in 2007. Other income (expense)associated with equity method adjustments in 2007 was less than $1million in the aggregate. We had notes receivable from certain portfolio companies of approximately $40million as of December31, 2009 and $46million as of December31, 2008. In addition, as of December31, 2008, we had approximately $20million of cost method investments

Restructuring-related Activitie

Restructuring-related Activities
	12 Months Ended Dec. 31, 2009 USD / shares
Restructuring-related Activities [Abstract]
Restructuring-related Activities	Note H Restructuring-related Activities On an on-going basis, we monitor the dynamics of the economy, the healthcare industry, and the markets in which we compete; and we continue to assess opportunities for improved operational effectiveness and efficiency, and better alignment of expenses with revenues, while preserving our ability to make the investments in quality, research and development projects, capital and our people that are essential to our long-term success. As a result of these assessments, we have undertaken various restructuring initiatives to focus our business, diversify and reprioritize our product portfolio and redirect research and development and other spending toward higher payoff products in order to enhance our growth potential. These initiatives are described below. In October2007, our Board of Directors approved, and we committed to, an expense and head count reduction plan (the 2007 Restructuring plan), which resulted in the elimination of approximately 2,300 positions worldwide. We are providing affected employees with severance packages, outplacement services and other appropriate assistance and support. The plan is intended to bring expenses in line with revenues as part of our initiatives to enhance short- and long-term shareholder value. Key activities under the plan include the restructuring of several businesses, corporate functions and product franchises in order to better utilize resources, strengthen competitive positions, and create a more simplified and efficient business model; the elimination, suspension or reduction of spending on certain RD projects; and the transfer of certain production lines among facilities. We initiated these activities in the fourth quarter of 2007. The transfer of production lines contemplated under the 2007 Restructuring plan will continue throughout 2010; all other major activities under the plan were completed as of December31, 2009. We expect that the execution of this plan will result in total pre-tax expenses of approximately $425million to $435million. We have recorded related costs of $407million since the inception of the plan, and are recording a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations. We expect the plan to result in cash payments of approximately $375million to $385million, of which we have made payments of $330million to date. The following provides a summary of our expected total costs associated with the plan by major type of cost: Total estimated amount expected to Type of cost be incurred Restructuring charges: Termination benefits $205 million to $210 million Fixed asset write-offs $31 million Other (1) $65 million Restructuring-related expenses: Retention incentives $66 million Accelerated depreciation $18 million Transfer costs (2) $40 million to $45 million $4.25 million to $435 million (1) Consists primarily of consulting fees, contractual cancellations, relocation costs and other costs. (2) Consists primarily of costs to transfer prod

Borrowings and Credit Arrangeme

Borrowings and Credit Arrangements
	12 Months Ended Dec. 31, 2009 USD / shares
Borrowings and Credit Arrangements [Abstract]
Borrowings and Credit Arrangements	Note I Borrowings and Credit Arrangements The following are the components of our debt obligations as of December31, 2009 and 2008: As of December 31, (in millions) 2009 2008 Current debt obligations $ 3 $ 2 Term loan 2,825 Abbott loan 900 900 Senior notes 5,050 3,050 Fair value adjustment (1) (5 ) (8 ) Discounts (32 ) (30 ) Other 2 6 Long-term debt obligations 5,915 6,743 $ 5,918 $ 6,745 (1) Represents net unamortized losses related to interest rate contracts to hedge the fair value of certain of our senior notes. See Note C Fair Value Measurements for further discussion regarding the accounting treatment for these contracts. As of December31, 2009, the debt maturity schedule for the significant components of our debt obligations, is as follows: (in millions) 2010 2011 2012 2013 2014 Thereafter Total Abbott Laboratories loan $ 900 $ 900 Senior notes 850 $ 600 $ 3,600 5,050 $ 1,750 $ 600 $ 3,600 $ 5,950 Note: The table above does not include discounts associated with our Abbott loan and senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes. Term Loan and Revolving Credit Facility In April2006, to finance the cash portion of our acquisition of Guidant Corporation, we borrowed a $5.0billion five-year term loan and established a $2.0billion, five-year revolving credit facility. Use of borrowings under the revolving credit facility is unrestricted and the borrowings are unsecured. There were no amounts borrowed under this facility as of December31, 2009 and 2008. We prepaid $1.0billion of the term loan during 2007, $1.175billion in 2008, and, in 2009, prepaid $2.825billion, satisfying all remaining maturities under the term loan. There were no penalties or premiums associated with these prepayments. Our revolving credit facility agreement requires that we maintain certain financial covenants, as follows: Actual as of Covenant December 31, Requirement 2009 Maximum leverage ratio (1) 3.5 times 2.7 times Minimum interest coverage ratio (2) 3.0 times 5.3 times (1) Ratio of total debt to consolidated EBITDA, as defined by the agreement, as amended, for the preceding four consecutive fiscal quarters. (2) Ratio of consolidated EBITDA, as defined by the agreement, as amended, to interest expense for the preceding four consecutive fiscal quarters. In February2009, we amended this agreement to increase flexibility under our financial covenants. The amendment provided for an exclusion from the calculation of consolidated EBITDA, as defined by the amended agreement, through the credit agreement maturity in April2011, of up to $346million in restructurin

Leases

Leases
	12 Months Ended Dec. 31, 2009 USD / shares
Leases [Abstract]
Leases	Note J Leases Rent expense amounted to $102million in 2009, $92million in 2008, and $72million in 2007. Our obligations under noncancelable capital leases were not material as of December31, 2009 and 2008. Future minimum rental commitments as of December31, 2009 under other noncancelable lease agreements are as follows (in millions): 2010 $ 76 2011 68 2012 52 2013 36 2014 22 Thereafter 62 $ 316

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	Note K Income Taxes Our loss (income)before income taxes consisted of the following: Year Ended December 31, (in millions) 2009 2008 2007 Domestic $ (1,102 ) $ (3,018 ) $ (1,294 ) Foreign (206 ) 987 725 $ (1,308 ) $ (2,031 ) $ (569 ) The related (benefit)provision for income taxes consisted of the following: Year Ended December 31, (in millions) 2009 2008 2007 Current Federal $ (173 ) $ 110 $ 99 State (18 ) 27 46 Foreign (2 ) 189 167 (193 ) 326 312 Deferred Federal (115 ) (279 ) (345 ) State (15 ) (20 ) (20 ) Foreign 40 (22 ) (21 ) (90 ) (321 ) (386 ) $ (283 ) $ 5 $ (74 ) The reconciliation of income taxes at the federal statutory rate to the actual (benefit)provision for income taxes is as follows: 2009 2008 2007 U.S. federal statutory income tax rate (35.0 )% (35.0 )% (35.0 )% State income taxes, net of federal benefit 0.0 % 0.4 % 4.0 % State law changes on deferred tax (2.4 )% Effect of foreign taxes (20.0 )% (5.9 )% (41.9 )% Non-deductible acquisition expenses 0.5 % 0.5 % 5.4 % Research credit (1.3 )% (0.5 )% (2.4 )% Valuation allowance 5.1 % 2.9 % 19.6 % Divestitures (4.8 )% (9.9 )% 33.2 % Intangible asset impairments 46.5 % Legal settlement 33.3 % Section199 (2.2 )% Other, net 3.0 % 1.2 % 6.3 % (21.6 )% 0.2 % (13.0 )% Significant components of our deferred tax assets and liabilities are as follows: As of December 31 (in millions) 2009 2008 Deferred Tax Assets: Inventory costs, intercompany profit and related reserves $ 184 $ 297 Tax benefit of net operating loss and credits 363 293 Reserves and accruals 242 392 Restructuring-related charges and purchased research and development 80 115 Litigation and product liability reserves 323 188 Unrealized gains and losses on financial instruments 22 15 Investment writedown 33 59 Stock-based compensation 94 87 Federal benefit of uncertain tax positions 135 117 Other 17 34 1,493 1,597 Less valuation allowance (329 ) (252 ) 1,164 1,345 Deferred Tax Liabilities: Property, plant and equipment 58 52 Intangible assets 2,357 2,617 Litigation settlement 24 25 Other 6 2 2,445 2,696 Net Deferred Tax Liabilities $ (1,281 ) $ (1,351 ) As of Decem

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note L Commitments and Contingencies The medical device market in which we primarily participate is largely technology driven. Physician customers, particularly in interventional cardiology, have historically moved quickly to new products and new technologies. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. However, intellectual property litigation is inherently complex and unpredictable. Furthermore, appellate courts can overturn lower court patent decisions. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These forces frequently drive settlement not only of individual cases, but also of a series of pending and potentially related and unrelated cases. In addition, although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies. Several third parties have asserted that our current and former stent systems infringe patents owned or licensed by them. We have similarly asserted that stent systems or other products sold by our competitors infringe patents owned or licensed by us. Adverse outcomes in one or more of the proceedings against us could limit our ability to sell certain stent products in certain jurisdictions, or reduce our operating margin on the sale of these products and could have a material adverse effect on our financial position, results of operations or liquidity. In particular, although our recent settlements with Johnson Johnson resolved 17 litigation matters, as discussed below, we continue to be involved in patent litigation with Johnson Johnson relating to drug eluting stent delivery systems. We have each asserted that products of the other infringe patents owned or exclusively licensed by each of us. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operation or liquidity. In the normal course of business, product liability, securities and commercial claims are asserted against us. Similar claims may be asserted against us in the future related to events not known to management at the present time. We are substantially self-insured with respect to product liability claims, and maintain an insurance policy providing limited coverage against securities claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, product recalls, securities litigation, an

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity [Abstract]
Stockholders' Equity	Note M Stockholders Equity Preferred Stock We are authorized to issue 50million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders. As of December31, 2009 and 2008, we had no shares of preferred stock issued or outstanding. Common Stock We are authorized to issue 2.0billion shares of common stock, $.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, and to share ratably in our assets legally available for distribution to our stockholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the directors and can control our management and affairs. We did not repurchase any shares of our common stock during 2009, 2008 or 2007. Approximately 37million shares remain under previous share repurchase authorizations. Repurchased shares are available for reissuance under our equity incentive plans and for general corporate purposes, including acquisitions and alliances. There were no shares in treasury as of December31, 2009 or 2008.

Stock Ownership Plans

Stock Ownership Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Stock Ownership Plans [Abstract]
Stock Ownership Plans	Note N Stock Ownership Plans Employee and Director Stock Incentive Plans On May6, 2008, our shareholders approved an amendment and restatement of our 2003 Long-Term Incentive Plan (LTIP), increasing the number of shares of our common stock available for issuance under the plan by 70million shares. Together with our 2000 LTIP, the plans provide for the issuance of up to 160million shares of common stock. Shares reserved for future equity awards under our stock incentive plans totaled approximately 109 million as of December31, 2009. Together, the Plans cover officers, directors, employees and consultants and provide for the grant of various incentives, including qualified and nonqualified options, deferred stock units, stock grants, share appreciation rights, performance-based awards and market-based awards. The Executive Compensation and Human Resources Committee of the Board of Directors, consisting of independent, non-employee directors, may authorize the issuance of common stock and authorize cash awards under the plans in recognition of the achievement of long-term performance objectives established by the Committee. Nonqualified options issued to employees are generally granted with an exercise price equal to the market price of our stock on the grant date, vest over a four-year service period, and have a ten-year contractual life. In the case of qualified options, if the recipient owns more than ten percent of the voting power of all classes of stock, the option granted will be at an exercise price of 110percent of the fair market value of our common stock on the date of grant and will expire over a period not to exceed five years. Non-vested stock awards (awards other than options) issued to employees are generally granted with an exercise price of zero and typically vest in four to five equal installments over a five-year service period. These awards represent our commitment to issue shares to recipients after a vesting period. Upon each vesting date, such awards are no longer subject to risk of forfeiture and we issue shares of our common stock to the recipient. We generally issue shares for option exercises and non-vested stock from our treasury, if available. The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December31, 2009, 2008 and 2007: Year Ended December 31, (in millions) 2009 2008 2007 Cost of products sold $ 22 $ 21 $ 19 Selling, general and administrative expenses 89 88 76 Research and development expenses 33 29 27 144 138 122 Less: income tax benefit (45 ) (41 ) (35 ) $ 99 $ 97 $ 87 Net loss per common share basic $ 0.07 $ 0.06 $ 0.06 Net loss per common share assuming dilution $ 0.07 $ 0.06 $ 0.06 Stock Options We generally use the Black-Scholes option-pricing model to calculate the grant-date fair value of our stock options granted to employees under our stock incentive plans. We calculated the fair value

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	Note O Earnings per Share We generated net losses in 2009, 2008 and 2007. Our weighted-average shares outstanding for earnings per share calculations excludes common stock equivalents of 8.0million for 2009, 5.8 million for 2008, and 13.1million for 2007 due to our net loss position in these years. Weighted-average shares outstanding, assuming dilution, also excludes the impact of 48million stock options for 2009, 51million stock options for 2008, and 43million for 2007, due to the exercise prices of these stock options being greater than the average fair market value of our common stock during the year.

Segment Reporting

Segment Reporting
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Reporting [Abstract]
Segment Reporting	Note P Segment Reporting During 2009, we reorganized our international structure to provide more direct sales focus in the marketplace. Accordingly, we have revised our reportable segments to reflect the way we currently manage and view our business and have reclassified below previously reported segment results to be consistent with the 2009 presentation. Each of our reportable segments generates revenues from the sale of medical devices. As of December31, 2009, we had four reportable segments based on geographic regions: the United States; EMEA, consisting of Europe, the Middle East and Africa; Japan; and Inter-Continental, consisting of Asia Pacific and the Americas. The reportable segments represent an aggregate of all operating divisions within each segment. We measure and evaluate our reportable segments based on segment net sales and operating income. We exclude from segment operating income certain corporate and manufacturing-related expenses, as our corporate and manufacturing functions do not meet the definition of a segment, as defined by ASC Topic 280, Segment Reporting (formerly FASB Statement No.131, Disclosures about Segments of an Enterprise and Related Information). In addition, certain transactions or adjustments that our Chief Operating Decision Maker considers to be non-recurring and/or non-operational, such as amounts related to goodwill and intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related activities; as well as amortization expense, are excluded from segment operating income. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income and are included in the reconciliation below. We manage our international operating segments on a constant currency basis. Sales generated from reportable segments and divested businesses, as well as operating results of reportable segments and expenses from manufacturing operations, are based on internally derived standard currency exchange rates, which may differ from year to year, and do not include intersegment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographic distribution that would occur if the segments were not interdependent. A reconciliation of the totals reported for the reportable segments to the applicable line items in our accompanying consolidated statements of operations is as follows: Year Ended December 31, (in millions) 2009 2008 2007 (restated) (restated) Net sales United States $ 4,675 $ 4,487 $ 4,522 EMEA 1,827 1,816 1,783 Japan 844 807 826 Inter-Continental 719 667 677 Net sales allocated to reportable segments 8,065 7,777 7,808 Sales generated from divested businesses 8 66 555 Impact of foreign currency fluctuations 115 207 (6 ) $ 8,188 $ 8,050 $ 8,357 Depreciation ex

New Accounting Standards

New Accounting Standards
	12 Months Ended Dec. 31, 2009 USD / shares
New Accounting Standards [Abstract]
New Accounting Standards	Note Q New Accounting Standards Standards Implemented In June2009, the FASB issued Statement No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (codified within ASC Topic 105, Generally Accepted Accounting Principles), which establishes the FASB Accounting Standards Codification (ASC)as the single source of authoritative U.S. GAAP. The Codification supersedes all previous non-SEC accounting and reporting standards. We adopted Statement No.168 for our third quarter ended September30, 2009 and have conformed all references to accounting literature in this Annual Report to the appropriate reference within the Codification. All new authoritative guidance is issued in the form of ASC Updates. We have provided dual-referencing for those standards that we adopted prior to the issuance of the Codification. The adoption of this standard did not have any impact on our financial position or results of operations. Statement No.165 (codified within ASC Topic 855) In May2009, the FASB issued Statement No.165, Subsequent Events (codified within ASC Topic 855, Subsequent Events), which establishes general standards of accounting for and disclosure of events occurring after the balance sheet date, but before the financial statements are issued or available to be issued. We adopted Statement No.165 for our second quarter ended June30, 2009. Its adoption did not impact our results of operations or financial condition. Refer to Note A Significant Accounting Policies for more information regarding our evaluation of subsequent events. Statement No.161 (codified within ASC Topic 815) In March2008, the FASB issued Statement No.161, Disclosures about Derivative Instruments and Hedging Activities, (codified within ASC Topic 815, Derivatives and Hedging), which amends Statement No.133, Accounting for Derivative Instruments and Hedging Activities, by requiring expanded disclosures about an entitys derivative instruments and hedging activities. Statement No.161 requires increased qualitative, quantitative, and credit-risk disclosures, including (a)how and why an entity uses derivative instruments, (b)how derivative instruments and related hedged items are accounted for under Statement No.133 and its related interpretations, and (c)how derivative instruments and related hedged items affect an entitys financial position and financial performance. We adopted Statement No.161 as of our first quarter ended March31, 2009. Refer to Note C Fair Value Measurements for more information. Statement No.141(R) (codified within ASC Topic 805) In December2007, the FASB issued Statement No.141(R), Business Combinations (codified within ASC Topic 805, Business Combinations), a replacement for Statement No.141. Statement No.141(R) retains the fundamental requirements of Statement No.141, but requires the recognition of all assets acquired and liabilities assumed in a business combination at their fair values as of the acquisition date. It also requires, for acquisitions involving contingent consideration, the recognition of a liability equal to the expected fair value of future contingent payments

Valuation and Qualifying Accoun

Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Valuation and Qualifying Accounts [Abstract]
VALUATION AND QUALIFYING ACCOUNTS	X. Schedule Of Valuation And Qualifying Accounts Disclosure ScheduleII VALUATION AND QUALIFYING ACCOUNTS (in millions) Deductions to Balance at Charges to Allowances for Charges to Beginning of Costs and Uncollectible (Deductions from) Balance at Description Year Expenses Accounts (a) Other Accounts (b) End of Year Year Ended December31, 2009: Allowances for uncollectible accounts and sales returns and allowances $ 131 27 (14 ) (34 ) $ 110 Year Ended December31, 2008: Allowances for uncollectible accounts and sales returns and allowances $ 137 8 (11 ) (3 ) $ 131 Year Ended December31, 2007: Allowances for uncollectible accounts and sales returns and allowances $ 135 15 (13 ) $ 137 (a) Uncollectible amounts written off. (b) Represents charges for sales returns and allowances, net of actual sales returns.