SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

-----------
FORM 10-Q
-----------

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______

0-26038
Commission file number

ResMed Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

98-0152841
(IRS Employer Identification No)

14040 Danielson St
Poway CA 92064-6857
United States Of America
(Address of principal executive offices)

(858) 746 2400
(Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [ x ] No [ ]

As of December 31, 2001, 32,163,417 shares of Common Stock ($0.004 par value)
were outstanding.
- -1-

RESMED INC. AND SUBSIDIARIES
INDEX

PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of December 31, 3
2001 and June 30, 2001 (unaudited)

Condensed Consolidated Statements of Income (unaudited) for 4
the Three Months Ended December 31, 2001 and 2000 and
the Six Months Ended December 31, 2001 and 2000

Condensed Consolidated Statements of Cash Flows (unaudited) 5
for the Six Months Ended December 31, 2001 and 2000

Notes to Unaudited Condensed Consolidated Financial 6
Statements

Item 2. Management's Discussion and Analysis of Financial 15
Conditions and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk 19

PART II OTHER INFORMATION

Item 1. Legal Proceedings 20

Item 2. Changes in Securities and Use of Proceeds 20

Item 3. Defaults Upon Senior Securities 20

Item 4. Submission of Matters to a Vote of Security Holders 20

Item 5. Other Information 20

Item 6. Exhibits and Reports on Form 8-K 20

Signatures 21

- -2-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(in US$ thousands, except share data)
December 31, June 30,
2001 2001

ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 64,047 $ 40,136
Marketable securities - available-for-sale. . . . . . . . . . . . . . . . 72,804 62,616
Accounts receivable, net of allowance for doubtful accounts of
945 at December 31, 2001 and $892 at June 30, 2001 . . . . . . . . . . . 36,820 32,248
Inventories (Note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . 33,479 29,994
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 5,222 4,152
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . 13,421 8,736
-------------- ----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 225,793 177,882
-------------- ----------

Property, plant and equipment, net of accumulated amortization
of $24,551 at December 31, 2001 and $19,930 at June 30, 2001. . . . . . . 60,370 55,092
Patents, net of accumulated amortization of $1,274 at December 31, 2001
and $1,030 at June 30, 2001 . . . . . . . . . . . . . . . . . . . . . . . 2,142 1,390
Goodwill (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,213 47,870
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,906 5,856
-------------- ----------
Total non-current assets. . . . . . . . . . . . . . . . . . . . . . . . . 125,631 110,208
-------------- ----------
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 351,424 $ 288,090
============== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,768 $ 7,971
Accrued expenses and other liabilities. . . . . . . . . . . . . . . . . . 22,701 16,751
Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,965 8,888
-------------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 37,434 33,610
-------------- ----------
Non current liabilities:
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,926 4,114
Convertible subordinated notes. . . . . . . . . . . . . . . . . . . . . . 180,000 150,000
-------------- ----------
Total non current liabilities . . . . . . . . . . . . . . . . . . . . . . 185,926 154,114
-------------- ----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223,360 187,724
-------------- ----------
Stockholders' equity:
Preferred Stock, $0.01 par value,
2,000,000 shares authorized; none issued. . . . . . . . . . . . . . . . . - -
Series A Junior Participating Preferred Stock, $0.01 par value,
250,000 shares authorized; none issued. . . . . . . . . . . . . . . . . . - -
Common stock, $0.004 par value, 100,000,000 shares authorized;
Issued and outstanding 32,163,417 at December 31, 2001 and
31,478,780 at June 30, 2001 . . . . . . . . . . . . . . . . . . . . . . . 129 126
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . 60,886 52,675
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,454 77,137
Accumulated other comprehensive loss (Note 5 ). . . . . . . . . . . . . . (27,405) (29,572)
-------------- ----------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . 128,064 100,366
-------------- ----------
Commitments and contingencies (Note 8). . . . . . . . . . . . . . . . . . - -
-------------- ----------
Total liabilities and stockholders' equity. . . . . . . . . . . . . . . . $ 351,424 $ 288,090
============== ==========

See accompanying notes to unaudited condensed consolidated financial statements.
- -3-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(in US$ thousands, except per share data)

Three Months Ended Six Months Ended
December 31 December 31,
2001 2000 2001 2000
----------------- -----------------

Net revenue. . . . . . . . . . . . . $48,924 $34,366 $95,053 $65,448
Cost of sales. . . . . . . . . . . . 17,087 11,345 32,383 21,340
------- ------- ------- -------
Gross profit . . . . . . . . . . . . 31,837 23,021 62,670 44,108
------- ------- ------- -------

Operating expenses:
Selling, general and administrative. 14,774 10,724 29,059 20,315
Research and development . . . . . . 3,617 2,505 6,978 4,894
------- ------- ------- -------
Total operating expenses . . . . . . 18,391 13,229 36,037 25,209
------- ------- ------- -------
Income from operations . . . . . . . 13,446 9,792 26,633 18,899
------- ------- ------- -------

Other income (expense), net:
Interest income (expense), net . . . (833) 105 (1,568) 103
Government grants. . . . . . . . . . - 72 - 72
Other, net . . . . . . . . . . . . . (79) 498 38 1,381
------- ------- ------- -------
Total other income (expense), net. . (912) 675 (1,530) 1,556
------- ------- ------- -------

Income before income taxes . . . . . 12,534 10,467 25,103 20,455

Income taxes . . . . . . . . . . . . (3,755) (3,569) (7,786) (6,977)
------- ------- ------- -------
Net income . . . . . . . . . . . . . $ 8,779 $ 6,898 $17,317 $13,478
======= ======= ======= =======

Basic earnings per share . . . . . . $ 0.27 $ 0.22 $ 0.54 $ 0.44
Diluted earnings per share . . . . . $ 0.26 $ 0.21 $ 0.51 $ 0.41

Basic shares outstanding (000's) . . 32,043 31,037 31,882 30,923
Diluted shares outstanding (000's) . 34,293 33,222 34,193 33,150

See accompanying notes to unaudited condensed consolidated financial statements.
- -4-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in US$ thousands)

Six Months Ended
December 31,
2001 2000

Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,317 $ 13,478

Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . 4,461 3,743
Amortization of deferred borrowing costs. . . . . . . . . . . . . . . . . . . 629 -
Provision for service warranties. . . . . . . . . . . . . . . . . . . . . . . 71 50
Foreign currency options revaluations . . . . . . . . . . . . . . . . . . . . 953 463
Changes in operating assets and liabilities:
Accounts receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . (3,725) (4,550)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,306) (4,352)
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . (4,267) (1,729)
Accounts payable, accrued expenses and other liabilities. . . . . . . . . . . 4,486 4,932
--------- --------
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . 15,619 12,035
--------- --------

Cash flows from investing activities:
Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . (9,453) (22,335)
Patents registration costs. . . . . . . . . . . . . . . . . . . . . . . . . . (627) (267)
Purchase of non-trading investments . . . . . . . . . . . . . . . . . . . . . (2,339) (1,704)
Business acquisitions, net of cash acquired of $369 (Note 7). . . . . . . . . (6,544) -
Purchases of marketable securities - available-for-sale . . . . . . . . . . . (239,813) (17,263)
Proceeds from sale or maturity of marketable securities - available for sale. 230,204 19,654
--------- --------
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . (28,572) (21,915)
--------- --------

Cash flows provided by financing activities:
Proceeds from issuance of common stock, net . . . . . . . . . . . . . . . . . 8,214 4,537
Proceeds from borrowings, net of borrowing costs. . . . . . . . . . . . . . . 28,402 10,000
Repayment of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . - (5,500)
--------- --------
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . 36,616 9,037
--------- --------
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . 248 (550)
--------- --------
Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . 23,911 (1,393)

Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . 40,136 18,250
--------- --------
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . $ 64,047 $ 16,857
========== =========
Supplemental disclosure of cash flow information:
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,733 $ 5,837
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600 285
Fair value of assets acquired on acquisition. . . . . . . . . . . . . . . . . $ 2,634 -
========== =========
Liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,131) -
Goodwill on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,410 -
---------- ---------
Cash paid for acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . 6,913 -
---------- ---------

See accompanying notes to unaudited condensed consolidated financial statements.
- -5-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) Organization and Basis of Presentation
------------------------------------------

ResMed Inc. (the Company), is a Delaware Corporation formed in March 1994
as a holding company for the ResMed Group. The Company designs,
manufactures and markets devices for the evaluation and treatment of sleep
disordered breathing, primarily obstructive sleep apnea. The Company's
principal manufacturing operations are located in Australia. Other major
distribution and sales sites are located in the United States, the United
Kingdom, France, Germany, Sweden and Singapore.

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three months ended December 31, 2001 and the six months ended December
31, 2001 are not necessarily indicative of the results that may be expected
for the year ending June 30, 2002.

(2) Summary of Significant Accounting Policies
----------------------------------------------

(a) Basis of Consolidation
------------------------

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant inter-company
transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management estimates and assumptions that affect amounts reported in the
financial statements and accompanying notes. Actual results could differ
from management's estimates.

(b) Revenue Recognition
--------------------

Revenue on product sales is recorded at the time of shipment. Royalty
revenue from license agreements is recorded when earned. Service revenue
received in advance from service contracts is initially capitalized
recognized as revenue over the life of the service contract. Revenue from
sale of marketing and distribution rights is initially deferred and
recognized as revenue over the life of the contract.
- -6-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------

Cash equivalents include certificates of deposit, commercial paper, and
other highly liquid investments stated at cost, which approximates market.
Investments with original maturities of 90 days or less are considered to
be cash equivalents for purposes of the condensed consolidated financial
statements.

(d) Inventories
-----------

Inventories are stated at the lower of cost, determined principally by the
first-in, first-out method, or net realizable value.

(e) Property, Plant and Equipment
--------------------------------

Property, plant and equipment is recorded at cost. Depreciation expense is
computed using the straight-line method over the estimated useful lives of
the assets, generally two to ten years. Straight-line and accelerated
methods of depreciation are used for tax purposes. Maintenance and repairs
are charged to expense as incurred.

(f) Patents
-------

The registration costs for new patents are capitalized and amortized over
the estimated useful life of the patent, generally five years. In the event
of a patent being superseded, the unamortized costs are written off
immediately.

(g) Foreign Currency
-----------------

The consolidated financial statements of the Company's non-US subsidiaries
are translated into US dollars for financial reporting purposes. Assets and
liabilities of non-US subsidiaries whose functional currencies are other
than the US dollar are translated at period end exchange rates and revenue
and expense transactions are translated at average exchange rates for the
period. Cumulative translation adjustments are recognized as part of
"Comprehensive Income", as described in Note 5, and are included in
accumulated other comprehensive loss on the condensed consolidated balance
sheet until such time as the subsidiary is sold or substantially or
completely liquidated. Gains and losses on transactions, denominated in
other than the functional currency of the entity, are reflected in
operations.

(h) Research and Development
--------------------------

All research and development costs are expensed in the period incurred.

- -7-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------

(i) Earnings Per Share
--------------------

The weighted average shares used to calculate basic earnings per share was
32,043,000 and 31,037,000 for the three-month periods ended December 31,
2001 and 2000, respectively, and 31,882,000 and 30,923,000 for the
six-month periods ended December 31, 2001 and 2000 respectively. The
difference between basic earnings per share and diluted earnings per share
is attributable to the impact of outstanding stock options during the
periods presented. Stock options had the effect of increasing the number of
shares used in the calculation (by application of the treasury stock
method) by 2,250,000 and 2,185,000 for the three-month periods ended
December 31, 2001 and 2000, respectively, and by 2,311,000 and 2,227,000
for the six-month periods ended December 31, 2001 and 2000, respectively.

(j) Financial Instruments
----------------------

The carrying value of financial instruments, such as cash and cash
equivalents, marketable securities available-for-sale, accounts
receivable, government grants, foreign currency option contracts, short
term debt, taxes payable and accounts payable approximate their fair value.
The Company does not hold or issue financial instruments for trading
purposes.

(k) Foreign Exchange Risk Management
-----------------------------------

The Company enters into foreign currency call options in managing its
foreign exchange risk. The purpose of the Company's foreign currency
hedging activities is to protect the Company from adverse exchange rate
fluctuations with respect to net cash movements resulting from the sales of
products to foreign customers and Australian manufacturing activities. The
Company enters into foreign currency option contracts to hedge anticipated
sales and manufacturing costs denominated in principally Australian dollars
and Euros. The terms of such foreign currency option contracts generally do
not exceed three years.

Unrealized gains or losses are recognized as incurred in the consolidated
balance sheets as either other assets or other liabilities and are recorded
within other income, net on the Company's condensed consolidated statements
of income. Unrealized gains and losses on currency derivatives are
determined based on dealer quoted prices.

As of July 1, 2000 the Company adopted Statement of Financial Accounting
Standards No 133, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS 133), which standardizes the accounting for derivative
instruments. Under the restrictive definition of hedge effectiveness
contained in SFAS 133, the Company's hedging contracts do not have hedge
effectiveness and are therefore marked to market with resulting gains or
losses being recognized in earnings in the period of change.
- -8-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------

(k) Foreign Exchange Risk Management, Continued
-----------------------------------------------

The Company is exposed to credit-related losses in the event of
non-performance by counter parties to financial instruments. The credit
exposure of foreign exchange options at December 31, 2001 was $1,467,000
which represents the positive fair value of options held by the Company.

The Company held foreign currency option contracts with notional amounts
totaling $173,250,000 and $223,752,000 at December 31, 2001 and June 30,
2001, respectively to hedge foreign currency items. These contracts mature
at various dates prior to June 2003.

(l) Income Taxes
-------------

The Company accounts for income taxes under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

(m) Marketable Securities
----------------------

Management determines the appropriate classification of its investments in
debt and equity securities at the time of purchase and re-evaluates such
determination at each balance sheet date. Debt securities for which the
Company does not have the intent or ability to hold to maturity are
classified as available for sale. Securities available-for-sale are carried
at fair value, with the unrealized gains and losses, net of tax, reported
in accumulated other comprehensive income (loss).

At December 31, 2001 and June 30, 2001, the Company's investments in debt
securities were classified on the condensed consolidated balance sheets as
marketable securities available-for-sale. These investments are diversified
among high credit quality securities in accordance with the Company's
investment policy.

The amortized cost of debt securities classified as available for sale is
adjusted for amortization of premiums and accretion of discounts to
maturity. Such amortization and interest are included in interest income
(expense). Realized gains and losses are included in other income or
expense. The cost of securities sold is based on the specific
identification method.

- -9-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(2) Summary of Significant Accounting Policies, Continued
----------------------------------------------------------

(n) Warranty
--------
Estimated future warranty costs related to products are accrued to
operations in the period in which the related revenue is recognized.

(o) Impairment of Long-Lived Assets
----------------------------------
The Company periodically evaluates the carrying value of long-lived assets
to be held and used, including certain identifiable intangible assets, when
events and circumstances indicate that the carrying amount of an asset may
not be recovered. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net
undiscounted cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceed
the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell.

(3) Accounting Changes
-------------------

In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and
Other Intangible Assets. As allowed under the Standard, the Company has
adopted SFAS 142 effective July 1, 2001. SFAS 142 requires goodwill and
intangible assets with indefinite useful lives to no longer be amortized,
but instead be tested for impairment at least annually.

With the adoption of SFAS 142, the Company reassessed the useful lives and
residual values of all acquired intangible assets to make any necessary
amortization period adjustments. Based on that assessment, only goodwill
was determined to have an indefinite useful life and no adjustments were
made to the amortization period or residual values of other intangible
assets.

In accordance with SFAS 142 the Company has completed its initial
assessment of goodwill impairment. The results of the review indicated that
no impaired goodwill currently exists.

Effective July 1, 2001, the Company adopted SFAS No. 141, "Business
Combinations". SFAS 141 requires that the purchase method of accounting be
used for all business combinations initiated after June 30, 2001. The
Company has evaluated the impact of SFAS 141 and believes that it will not
have a material impact on the results of operations, financial position and
liquidity of the Company.

- -10-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(3) Accounting Changes, Continued
-------------------------------

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it
is incurred if reasonable estimate of fair value can be made. The
associated asset retirement costs would be capitalized as part of the
carrying amount of the long-lived asset and depreciated over the life of
the asset. The liability is accreted at the end of each period through
charges to operating expense. If the obligation is settled for other than
the carrying amount of the liability, the Company will recognize a gain or
loss on settlement. The provisions of SFAS No. 143 are effective for fiscal
years beginning after June 15, 2002. The Company has not yet determined the
impact, if any, of adoption of SFAS No. 143.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." For long-lived assets to be
held and used, SFAS No. 144 retains the requirements of SFAS No. 121 to (a)
recognize an impairment loss only if the carrying amount of a long-lived
asset is not recoverable from its undiscounted cash flows and (b) measure
an impairment loss as the difference between the carrying amount and fair
value. Further, SFAS No. 144 eliminates the requirement to allocate
goodwill to long-lived assets to be tested for impairment, describes a
probability-weighted cash flow estimation approach to deal with situations
in which alternative courses of action to recover the carrying amount of a
long-lived asset are under consideration or a range is estimated for the
amount of possible future cash flows, and establishes a "primary-asset"
approach to determine the cash flow estimation period. For long-lived
assets to be disposed of other than by sale (e.g. assets abandoned,
exchanged or distributed to owners in a spin-off), SFAS No. 144 requires
that such assets be considered held and used until disposed of. Further, an
impairment loss should be recognized at the date an asset is exchanged for
a similar productive asset or distributed to owners in a spin-off if the
carrying amount exceeds its fair value.

- -11-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(4) Inventories
-----------

Inventories were comprised of the following at December 31, 2001 and June
30, 2001:

(In $US thousands) December 31, June 30,
2001 2001

Raw materials. . . $ 7,102 $ 7,584
Work in progress . 441 98
Finished goods . . 25,936 22,312
------------- ---------
$ 33,479 $ 29,994
------------- ---------

(5) Comprehensive Income
---------------------

As of July 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income", which established standards for the reporting and
display of comprehensive income and its components in the financial
statements.

The table below presents other comprehensive (income) loss:

(In US$thousands) Foreign Unrealized Accumulated Other
Currency Gains on Comprehensive
Items Securities Loss

Beginning balance, July 1, 2001. . $ 29,572 - $ 29,572
Current period change. . . . . . . (1,785) (382) (2,167)
---------- ----------- -------------------
Ending balance, December 31, 2001. $ 27,787 (382) $ 27,405
---------- ----------- -------------------

The Company does not provide for US income taxes on foreign currency
translation adjustments since it does not provide for such taxes on
undistributed earnings of foreign subsidiaries. Accumulated other
comprehensive loss at December 31, 2001 and June 30, 2001 consisted of
foreign currency translation adjustments with net debit balances of $27.8
million and $29.6 million, respectively and unrealized gains on securities
of $382,000 (net of tax of $197,000) and zero, respectively.

(6) Goodwill and Other Intangible Assets
----------------------------------------

As described in Note 3, the Company adopted SFAS 142 on July 1, 2001. The
following table reconciles the prior year's reported operating income and
net income to their respective pro-forma balances adjusted to exclude
goodwill amortization expense which is no longer recorded under SFAS 142.
- -12-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------

RESMED INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(6) Goodwill and Other Intangible Assets, Continued
----------------------------------------------------

(In US$ thousands, Three months ended Six months ended
except per share amounts) December 31 December 31
2001 2000 2001 2000

Operating Income:
- -----------------
Reported income from operations . . . . . $13,446 $9,792 $26,633 $18,899
Add back: goodwill amortization . . . . . - 139 - 292
------- ------ ------- -------
Adjusted income from operations . . . . . $13,446 $9,931 $26,633 $19,191
------- ------ ------- -------

Net Income:
- -----------

Reported net income . . . . . . . . . . . $ 8,779 $6,898 $17,317 $13,478
Add back: goodwill amortization after tax - 139 - 292
------- ------ ------- -------
Adjusted net income . . . . . . . . . . . $ 8,779 $7,037 $17,317 $13,770
------- ------ ------- -------

Basic Earnings per share:
- ------------------------

Reported basic earnings per share . . . . $ 0.27 $ 0.22 $ 0.54 $ 0.44
Goodwill amortization after tax . . . . . - - - $ 0.01
------- ------ ------- -------
Adjusted basic earnings per share . . . . $ 0.27 $ 0.22 $ 0.54 $ 0.45
------- ------ ------- -------

Diluted Earnings per share:
- --------------------------

Reported diluted earnings per share . . . $ 0.26 $ 0.21 $ 0.51 $ 0.41
Goodwill amortization after tax . . . . . - - - $ 0.01
------- ------ ------- -------
Adjusted diluted earnings per share . . . $ 0.26 $ 0.21 $ 0.51 $ 0.42
------- ------ ------- -------

Changes in the carrying amount of goodwill for the six months ended
December 31, 2001, were as follows:

(In US$thousands)
Balance at June 30, 2001 . . . . . . . . . . $47,870
Foreign currency translation adjustments . . 1,933
Goodwill on acquisition of Labhardt (Note 7) 3,993
Contingent goodwill payment for MAP (Note 7) 1,417
-------
Balance at December 31, 2001 . . . . . . . . $55,213
-------

Other intangible assets amounted to $2.1 million (net of accumulated
amortization of $1.3 million) and $1.4 million (net of accumulated
amortization of $1.0 million) at December 31, 2001 and June 30, 2001,
respectively. These intangible assets consist of patents and are amortized
over the estimated useful life of the patent, generally five years. There
are no expected residual values related to these intangible assets.
- -13-

(7) Business Acquisition
---------------------
On November 15, 2001 the Company acquired all the common stock of Labhardt
AG, its Swiss distributor, for total cash consideration, including
acquisition costs, of $5.5 million.

The acquisition has been accounted for as a purchase and accordingly, the
results of operations of Labhardt AG have been included in the Company's
consolidated financial statements from November 15, 2001. The excess of the
purchase price over the fair value of the net identifiable assets acquired
of $1.5 million has been recorded as goodwill.

During the quarter, the Company paid an amount of $1.4 million as final
consideration associated with the purchase of MAP Medizin-Technologie GmbH
on February 16, 2001. The amount has been recorded as goodwill.

(8) Commitments and Contingencies
-------------------------------

We are currently engaged in litigation relating to the enforcement and
defense of certain of our patents. In January 1995, we filed a complaint in
the United States District Court for the Southern District of California
seeking monetary damages from and injunctive relief against Respironics for
alleged infringement of three ResMed patents. In February 1995, Respironics
filed a complaint in the United States District Court for the Western
District of Pennsylvania against us seeking a declaratory judgment that
Respironics does not infringe claims of these patents and that our patents
are invalid and unenforceable. The two actions were combined and are
proceeding in the United States District Court for the Western District of
Pennsylvania. In June 1996, we filed an additional complaint against
Respironics for infringement of a fourth ResMed patent, and that complaint
was consolidated with the earlier action. As of this date, Respironics has
brought three partial summary judgment motions for non-infringement of the
ResMed patents; the Court has granted each of the motions. In December
1999, in response to the Court's ruling on Respironics' third summary
judgment motion, the parties jointly stipulated to a dismissal of charges
of infringement under the fourth ResMed patent, with us reserving the right
to reassert the charges in the event of a favorable ruling on appeal. We
intend to appeal the summary judgment rulings after a final judgment in the
consolidated litigation has been entered in the District Court proceedings.

In January 2001, our subsidiary MAP Medizin-Technologie GmbH filed a
lawsuit with the Regional Court in Munich against Hofrichter
Medizintechnick GmbH seeking an injuction regarding the sale of certain
flow generators as well as damages for the unauthorized and infringing use
of one of our trademarks and utility patent. On May 4, 2001, MAP obtained a
favorable judgment from the Civil Chamber of Munich Court that enjoined the
defendant from using MAP's patent, which judgment has been appealed.

While we are prosecuting the above actions, there can be no assurance that
we will be successful.
- -14-

PART I - FINANCIAL INFORMATION Item 1
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS

NET REVENUE
- ------------
Net revenue increased for the three months ended December 31, 2001 to $48.9
million from $34.4 million, for the three months ended December 31, 2000, an
increase of $14.6 million or 42%. For the six-month period ended December 31,
2001 net revenue increased to $95.1 million from $65.4 million for the six-month
period ended December 31, 2000, an increase of $29.6 million or 45%. Both the
three-month and six-month increases in net revenue were attributable to an
increase in unit sales of the Company's flow generators and accessories in both
domestic and international markets and also to the acquisition of MAP
Medizin-Technologie GmbH "MAP". Net revenue in North and Latin America
increased to $24.3 million from $18.9 million for the quarter, and to $45.9
million from $36.3 million for the six-month periods ended December 31, 2001 and
2000 respectively. Net revenue in international markets increased to $24.6
million from $15.5 million for the quarter, and to $49.2 million from $29.1
million for the six-month periods ended December 31, 2001 and 2000,
respectively.

GROSS PROFIT
- -------------
Gross profit increased for the three months ended December 31, 2001 to $31.8
million from $23.0 million for the three months ended December 31, 2000, an
increase of $8.8 million or 38%. Gross profit as a percentage of net revenue
decreased for the quarter ended December 31, 2001 to 65% from 67% for the
quarter ended December 31, 2000 reflecting the impact of a relative shift in the
geographical sales mix, with relatively higher sales in the lower margin
domestic market.

For the six-month period ended December 31, 2001 gross profit increased to $62.7
million from $44.1 million in the same period of fiscal 2001, an increase of
$18.6 million or 42%. Gross profit as a percentage of net revenue decreased for
the six-month period ended December 31, 2000 to 66% from 67% for the six months
ended December 31, 2000. This decline also resulted from a relative shift in
the geographical sales mix.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- ------------------------------------------------
Selling, general and administrative expenses increased for the three months
ended December 31, 2001 to $14.8 million from $10.7 million for the three months
ended December 31, 2000, an increase of $4.1 million or 38%. As a percentage of
net revenue, selling, general and administrative expenses for the three months
ended December 31, 2001 declined to 30.2% from 31.2% for the three months ended
December 31, 2000. The increase in selling, general and administrative expenses
was primarily due to an increase in the number of sales and administrative
personnel and other expenses related to the increase in Company sales, including
SG&A expenses associated with MAP's operations.

Selling, general and administrative expenses for the six months ended December
31, 2001 increased to $29.1 million from $20.3 million for the six months ended
December 31, 2000, an increase of $8.8 million or 43%. As a percentage of net
revenue selling, general and administration expenses declined to 30.6% for the
six months ended December 31, 2001 from 31.0% in the six months ended December
31, 2000.

- -15

RESEARCH AND DEVELOPMENT EXPENSES
- ------------------------------------
Research and development expenses increased for the three months ended December
31, 2001 to $3.6 million from $2.5 million for the three months ended December
31, 2000, an increase of $1.1 million or 44%. As a percentage of net revenue,
research and development expenses increased to 7.4% for the three months ended
December 31, 2001 compared to 7.3% for the three months ended December 31, 2000.
The increase in research and development expenses was due to increased salaries
associated with an increase in personnel and increased charges for consulting
fees, clinical trials and technical assessments incurred to facilitate
development of new products, and also included research and development
expenditure undertaken by MAP.

For the six-month period ended December 31, 2001 research and development
expenses increased to $7.0 million from $4.9 million for the same period in
fiscal 2001, an increase of $2.1 million or 43%. As a percentage of net
revenue, research and development expenses was 7.3% for the six months ended
December 31, 2001 compared to 7.5% for the six months ended December 31, 2000.
The increase in research and development expenses was due to increased salaries
associated with an increase in personnel and increased charges for consulting
fees, clinical trials and technical assessments incurred to facilitate
development of new products, and also included research and development
expenditure undertaken by MAP.

OTHER INCOME (EXPENSE), NET
- ------------------------------
Other income (expenses), net, decreased for the three months ended December 31,
2001 to net expense of $0.9 million from net income of $0.7 million for the
three months ended December 31, 2000. The increase in other expense primarily
reflects increased interest expense associated with the convertible debt issue
in June 2001, partially offset by interest income from cash and marketable
securities.

Other income (expenses), net decreased for the six months ended December 31,
2001 to net expense of $1.5 million from net income of $1.5 million for the six
months ended December 31, 2000. The increase in other expense was attributable
to increased interest expense associated with the convertible debt issue in June
2001 and significant reduction in net foreign currency exchange gains.

INCOME TAXES
- -------------
The Company's effective income tax rate declined to approximately 30.0% for the
three months ended December 31, 2001 from approximately 34.1% for the three
months ended December 31, 2000 and for the six-month period ended December 31,
2001 declined to 31.0% from 34.1% for the six-month period ended December 31,
2000. The lower tax rate was primarily due to the lowering of the corporate tax
rate in Australia from 34% to 30% effective from July 1, 2001. The Company also
benefits from a 125% tax deduction on R&D expenditure undertaken in Australia,
which further reduces the effective tax rate on Australian sourced income.

- -16-

LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
As of December 31, 2001 and June 30, 2001, the Company had cash and cash
equivalents and marketable securities available-for-sale of approximately $136.9
million and $102.8 million, respectively. The Company's working capital
approximated $188.4 million and $144.3 million, at December 31, 2001 and June
30, 2001, respectively.

During the six months ended December 31, 2001, the Company generated cash of
$15.6 million from operations, primarily as a result of increased profit from
operations offset by increases in inventory and accounts receivable balances.
During the six months ended December 31, 2000 approximately $12.0 million of
cash was generated by operations.

The Company's capital expenditures for the six-month periods ended December 31,
2001 and 2000 aggregated $9.5 million and $22.3 million respectively. The
majority of the expenditures in the six-month period ended December 31, 2001
related to a deposit for the purchase of land in Sydney described below, a
computer system upgrade and acquisition of production tooling and equipment.
The reduction in expenditures in the six month period ended December 31, 2001
compared to the six months ended December 31, 2000 reflects the capital
expenditure of $17.2 million on the company's US headquarters in Poway,
California in July 2000. As a result of these capital expenditures, the
Company's December 31, 2001 balance sheet reflects net property plant and
equipment of approximately $60.4 million at December 31, 2001 compared to $55.1
million at June 30, 2001.

On July 3, 2001, the Company received $30.0 million in over allotments for its
4% convertible subordinated notes issue. This increased the total amount of
convertible subordinated notes issued to $180.0 million.

On November 15, 2001, the Company acquired all the common stock of Labhardt AG,
its Swiss distributor, for total consideration, including acquisition costs, of
$5.5 million. The acquisition has been accounted for as a purchase and
accordingly, the results of operations of Labhardt AG have been included in the
Company's consolidated financial statements from November 15, 2001. The excess
of the purchase price over the fair value of the net identifiable assets
acquired of $1.5 million has been recorded as goodwill.

During the quarter, the Company paid an amount of $1.4 million as final
consideration associated with the purchase of MAP on February 16, 2001. The
amount has been recorded as goodwill.

The Company has paid an initial deposit of $2.4 million associated with the
purchase of a 30-acre site at Norwest Business Park, located northwest of
Sydney, Australia. The land cost, staged over an 18-month period, is
approximately $21 million and the Company expects the first building, a
manufacturing facility, to be operational on this site in 2003. New research
and development and office facilities are expected to be completed in 2004. It
is estimated that the building costs will be approximately $22.5 million and
anticipate that this cost will eventually be more than half offset by the sale
of the Company's existing Sydney facility. The purchase will be funded from
existing cash reserves.
- -17-

PART I - FINANCIAL INFORMATION Item 2
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS

The results of the Company's international operations are affected by changes in
exchange rates between currencies. Changes in exchange rates may negatively
affect the Company's consolidated net revenue and gross profit margins from
international operations. The Company is exposed to the risk that the dollar
value equivalent of anticipated cash flows will be adversely affected by changes
in foreign currency exchange rates. The Company manages this risk through
foreign currency option contracts.

The Company expects to satisfy all of its short-term liquidity requirements
through a combination of cash on hand and cash generated from operations.

- -18-

PART I - FINANCIAL INFORMATION Item 3
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY MARKET RISK
- -------------------------------
The Company's functional currency is the US dollar although the Company
transacts business in various foreign currencies including a number of major
European currencies as well as the Australian dollar. The Company has
significant foreign currency exposure through both its Australian manufacturing
activities and international sales operations.
The Company has established a foreign currency hedging program using purchased
currency options to hedge foreign-currency-denominated financial assets,
liabilities and manufacturing expenditures. The goal of this hedging program is
to economically guarantee or lock in the exchange rates on the Company's foreign
currency exposures denominated in Euro's and the Australian dollar. Under this
program, increases or decreases in the Company's foreign-currency-denominated
financial assets, liabilities, and firm commitments are partially offset by
gains and losses on the hedging instruments.
The Company does not use foreign currency forward exchange contracts or
purchased currency options for trading purposes.
The table below provides information about the Company's foreign currency
derivative financial instruments and presents such information in US dollar
equivalents. The table summarizes information on instruments and transactions
that are sensitive to foreign currency exchange rates, including foreign
currency call options held at December 31, 2001. The table presents the
notional amounts and weighted average exchange rates by contractual maturity
dates for the Company's foreign currency derivative financial instruments.
These notional amounts generally are used to calculate payments to be exchanged
under the options contracts.

Fiscal Year Fair Value
(In US$ thousands) 2002 2003 Total Assets/(Liabilities)
------------------- ------------------- ------------------ ---------------------
December 31 June 30
2001 2001

Foreign Exchange Call
Options

(Receive AUS$/Pay US$)
Option amount . . . . . $75,000 $54,000 $129,000 $588 $577
Average contractual . . AUS $1 = USD 0.581 AUS $1 = USD 0.549 AUS $1 = USD 0.567
exchange rate

(Receive AUS$/Pay Euro)
Option amount . . . . . $7,537 $36,713 $44,250 $879 $20
Average contractual . . AUS $1 = Euro 0.610 AUS $1 = Euro 0.591 AUS $1 = Euro 0.594
exchange rate

INTEREST RATE RISK
- --------------------
We are exposed to risk associated with changes in interest rates affecting the
return on investments.
At December 31, 2001, we maintained a portion of our cash and cash equivalents
in financial instruments with original maturities of three months or less. We
maintain a short-term investment portfolio containing financial instruments in
which the majority of funds invested have original maturities of greater than
three months but less than twelve months. The financial instruments,
principally comprised of corporate obligations, are subject to interest rate
risk and will decline in value if interest rates increase.
A hypothetical 100 basis point change in interest rates during the three months
ended December 31, 2001, would have resulted in approximately $0.3 million
change in pre-tax income. In addition, the value of our marketable securities
would change by approximately $0.5 million following a hypothetical 100 basis
point change in interest rates. We do not use derivative financial instruments
in our investment portfolio.

- -19-

PART II - FINANCIAL INFORMATION Item 1-6
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES

Item 1 Legal Proceedings
See Note 8 to the Condensed Consolidated Financial Statements

Item 2 Changes in Securities and Use of Proceeds
None

Item 3 Defaults Upon Senior Securities
None

Item 4 Submission of Matters to a Vote of Security Holders
None

Item 5 Other Information
None

Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None

- -20-

PART II - FINANCIAL INFORMATION Signatures
- --------------------------------------------------------------------------------
RESMED INC. AND SUBSIDIARIES
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ResMed Inc.

/S/ PETER C FARRELL
- --------------------------------------------
Peter C Farrell
President and Chief Executive Officer

/S/ ADRIAN M SMITH
- --------------------------------------------
Adrian M Smith
Vice President Finance and Chief Financial Officer