10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, or

For the fiscal year ended December 31, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-11083

BOSTON SCIENTIFIC CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	04-2695240
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

300 BOSTON SCIENTIFIC WAY, MARLBOROUGH, MASSACHUSETTS 01752-1234

(Address of principal executive offices) (zip code)

(508) 683-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.01 PAR VALUE PER SHARE	NEW YORK STOCK EXCHANGE
(Title of each class)	(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes: þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes: o No þ

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: þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorted period that the registrant was required to submit and post such files). Yes: þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

      Large accelerated filer þ Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes: o No þ

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately $16.8 billion based on the last reported sale price of $12.77 of the registrant’s common stock on the New York Stock Exchange on June 30, 2014, the last business day of the registrant’s most recently completed second fiscal quarter. (For this computation, the registrant has excluded the market value of all shares of common stock of the registrant reported as beneficially owned by executive officers, directors and the director emeritus of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the registrant.)

The number of shares outstanding of the registrant’s common stock as of January 30, 2015 was 1,330,512,367.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I		3
ITEM 1.	BUSINESS	3
ITEM 1A.	RISK FACTORS	19
ITEM 1B.	UNRESOLVED STAFF COMMENTS	31
ITEM 2.	PROPERTIES	31
ITEM 3.	LEGAL PROCEEDINGS	32
ITEM 4.	MINE SAFETY DISCLOSURES	32
PART II		32
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	32
ITEM 6.	SELECTED FINANCIAL DATA	35
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	60
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	62
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	123
ITEM 9A.	CONTROLS AND PROCEDURES	123
ITEM 9B.	OTHER INFORMATION	123
PART III		124
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	124
ITEM 11.	EXECUTIVE COMPENSATION	124
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	124
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	124
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	124
PART IV		124
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	125
SIGNATURES		135

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PART I

ITEM 1. BUSINESS

The Company

Boston Scientific Corporation is a worldwide developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties. Our mission is to transform lives through innovative medical solutions that improve the health of patients around the world. When used in this report, the terms “we,” “us,” “our” and “the Company” mean Boston Scientific Corporation and its divisions and subsidiaries.

Our history began in the late 1960s when our co-founder, John Abele, acquired an equity interest in Medi-tech, Inc., a research and development company focused on developing alternatives to surgery. In 1969, Medi-tech introduced a family of steerable catheters used in some of the first less-invasive procedures performed. In 1979, John Abele joined with Pete Nicholas to form Boston Scientific Corporation, which indirectly acquired Medi-tech. This acquisition began a period of active and focused marketing, new product development and organizational growth. Since then, we have advanced the practice of less-invasive medicine by helping physicians and other medical professionals treat a variety of diseases and conditions and improve patients’ quality of life by providing alternatives to surgery and other medical procedures that are typically traumatic to the body.

Our net sales have increased substantially since our formation. Our growth has been fueled in part by strategic acquisitions designed to improve our ability to take advantage of growth opportunities in the medical device industry. Our strategic acquisitions have helped us to add promising new technologies to our pipeline and to offer one of the broadest product portfolios in the world for use in less-invasive procedures. We believe that the depth and breadth of our product portfolio has also enabled us to compete more effectively in the current healthcare environment that seeks to improve outcomes and lower cost, while navigating managed care, large buying groups, government contracting, hospital consolidation, and international expansion and will continue to assist us in navigating through the complexities of the global healthcare market.

Business Strategy

The following are our five strategic imperatives:

• Strengthen Execution to Grow Share

We believe that our success is driven by our ability to consistently deliver initiatives that grow profitability and market share. We focus on improving the speed and performance of our business units by adding new capabilities, processes, and innovative technologies.

• Expand into High Growth Adjacencies

We seek to diversify our product portfolio by aligning our research and development spend and our business development investment toward higher growth opportunities. We focus on executing on our committed growth adjacencies while increasing our access to developing technologies and solutions. Through this diversification we expect to increase our opportunity for growth in areas that complement our core businesses.

• Drive Global Expansion

By expanding our global commercial presence, we seek to increase revenue and market share, and strengthen our relationships with leading physicians and their clinical research programs. We focus on expanding into emerging markets and building new capabilities and innovative commercial models in countries whose economies and healthcare sectors are growing rapidly.

• Fund the Journey to Fuel Growth

We are driving continuous improvement to expand our profitability, optimizing our manufacturing cost structure, reducing our corporate infrastructure and re-allocating spending to support our growth initiatives.

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• Develop Key Capabilities

We are developing key capabilities that enable us to deliver economic and customer focused products and solutions aligned to the needs of the marketplace. We are globally focused on building a culture of empowerment and engagement while enhancing the diversity of our workforce.

We believe that our execution of these strategic imperatives will drive innovation, accelerate profitable revenue growth and increase stockholder value.

Products

During 2014, our products were offered for sale by seven core businesses - Interventional Cardiology, Cardiac Rhythm Management (CRM), Endoscopy, Peripheral Interventions (PI), Urology and Women’s Health, Neuromodulation, and Electrophysiology (EP). In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). We continued to generate sales from the Neurovascular business pursuant to our supply and distribution agreements with Stryker through mid-2013, when these agreements substantially completed.

During 2014, we derived 28 percent of our sales from our Interventional Cardiology business, 26 percent of our sales from our CRM business, 18 percent of our sales from our Endoscopy business, 12 percent of our sales from our PI business, seven percent of our sales from our Urology and Women’s Health business, six percent of our sales from our Neuromodulation business, and three percent of our sales from our EP business. Our 2014 sales from the Neurovascular business that we sold to Stryker were immaterial.

The following section describes certain of our product offerings:

Cardiovascular

Interventional Cardiology

Drug-Eluting Coronary Stent Systems

Our broad, innovative product offerings have enabled us to become a leader in the interventional cardiology market. This leadership is due in large part to our drug-eluting coronary stent product offerings. Coronary stents are tiny, mesh tubes used in the treatment of coronary artery disease, which are implanted in patients to prop open arteries and facilitate blood flow to and from the heart. We believe we have further enhanced the outcomes associated with the use of coronary stents, particularly the processes that lead to restenosis (the growth of neointimal tissue within an artery after angioplasty and stenting), through product development and scientific research of drug-eluting stent systems. We market a broad portfolio of internally-developed and self-manufactured drug-eluting stents including the Promus PREMIER™, Promus® Element™ and Promus® Element™ Plus everolimus-eluting stents. In addition, in Europe we market the SYNERGY™ Everolimus-Eluting Platinum Chromium Coronary Stent System featuring an ultra-thin abluminal (outer) bioabsorbable polymer coating. The SYNERGY Stent is unique in that both its proprietary polymer and everolimus drug coating dissipate by three months. This innovation has the potential to improve post-implant vessel healing and will eliminate long-term polymer exposure, which is a possible cause of late adverse events.

Core Coronary Technology

We market a broad line of products used to treat patients with atherosclerosis, a principal cause of coronary artery obstructive disease, which is characterized by a thickening of the walls of the coronary arteries and a narrowing of arterial openings caused by the progressive development of deposits of plaque. Our product offerings include balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, crossing and re-entry devices for the treatment of chronically occluded coronary vessels and diagnostic catheters used in percutaneous transluminal coronary angioplasty (PTCA) procedures.

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Intravascular Imaging

We market a family of intravascular catheter-directed ultrasound imaging catheters and systems for use in coronary arteries and heart chambers as well as certain peripheral vessels. Our latest Intravascular Ultrasound Imaging catheter, OptiCross™ has been launched in all major markets worldwide. The iLab® Ultrasound Imaging System continues as our flagship console and is compatible with our full line of imaging catheters, and our new Polaris^® software, designed to run on the iLab System, has been approved in Japan, the United States (U.S.), and Europe and is currently launching in select markets. The iLab System is designed to enhance the diagnosis and treatment of blocked vessels and heart disorders. Further, these systems have been placed in cardiology labs worldwide, which provide an installed base through which we expect to launch new products, including an integrated Fractional Flow Reserve (FFR) device.

Structural Heart Therapy

In January 2011, we acquired Sadra Medical, Inc. (Sadra). Through the acquisition of Sadra, we have developed a fully repositionable and retrievable device for transcatheter aortic valve replacement (TAVR) to treat patients with severe aortic stenosis. In March 2011, we completed the acquisition of Atritech, Inc. (Atritech). Atritech developed a novel device designed to close the left atrial appendage in patients with atrial fibrillation (AF) who are at risk for ischemic stroke.

See Interventional Cardiology within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Peripheral Interventions

We sell various products designed to treat patients with peripheral disease (disease which appears in blood vessels other than in the heart and in the biliary tree), including a broad line of medical devices used in percutaneous transluminal angioplasty (PTA) and peripheral vascular stenting. Our peripheral product offerings include stents, balloon catheters, wires, peripheral embolization devices and vena cava filters. Our peripheral angioplasty balloon technology includes our next-generation Mustang™ PTA balloon; our Coyote™ balloon catheter, a highly deliverable and ultra-low profile balloon dilatation catheter designed for a wide range of peripheral angioplasty procedures; and our Charger™ PTA Balloon Catheter, a 0.035” percutaneous transluminal angioplasty balloon catheter designed for post-stent dilatation as well as conventional balloon angioplasty to open blocked peripheral arteries. With our Coyote, Mustang and Charger devices, we offer balloons across all size platforms. Our peripheral stent technology includes our EPIC™ self-expanding nitinol stent system, our Carotid WALLSTENT® stent system, and our Innova™ self-expanding stent system. In addition, we market our 0.035" Rubicon^TM Support Catheter and our Direxion^TM torqueable microcatheter in both the U.S. and Europe. We have also launched in Europe a catheter-based renal denervation system for the treatment of uncontrolled hypertension, which we obtained through our acquisition of Vessix Vascular, Inc. (Vessix) in 2012. In addition, we are currently conducting a study designed to evaluate the safety and performance of the self-expanding Innova™ drug-eluting stent system designed to treat Superficial Femoral Artery (SFA) lesions.

During the third quarter of 2014, we completed the acquisition of the Interventional Division of Bayer AG (Bayer). We believe that this acquisition enhances our ability to offer physicians and healthcare systems a more complete portfolio of solutions to treat challenging vascular conditions. The addition of Bayer's strong commercial organization and innovative technologies supports our strategy to provide a comprehensive portfolio of leading solutions to treat peripheral vascular disease. The transaction includes the leading AngioJet® Thrombectomy System and the Fetch® 2 Aspiration Catheter, which are used in endovascular procedures to remove blood clots from blocked arteries and veins, and the JetStream® Atherectomy System, used in an innovative and fast-growing therapy to remove plaque and thrombi from diseased arteries.

We also sell products designed to treat patients with non-vascular disease (disease that appears outside the blood system). Our non-vascular suite of products includes biliary stents, drainage catheters and micro-puncture sets designed to treat, diagnose and ease various forms of benign and malignant tumors. We continue to market our extensive line of Interventional Oncology product solutions, including the recently launched Renegade® HI-FLO™ Fathom® microcatheter and guidewire system and Interlock™ - 35 Fibered IDC™ Occlusion System for peripheral embolization.

See Peripheral Interventions within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

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Rhythm Management

Cardiac Rhythm Management

We develop, manufacture and market a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities, including:

• Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including the world's first and only commercially available subcutaneous implantable cardiac defibrillator - the S-ICD® System, and implantable cardiac resynchronization therapy defibrillator (CRT-D) systems used to treat heart failure; and

• Implantable pacemaker systems used to manage slow or irregular heart rhythms (bradycardia), including implantable cardiac resynchronization therapy pacemaker (CRT-P) systems used to treat heart failure.

In addition, many of our implantable device systems include our remote LATITUDE® Patient Management System, which enables physicians to monitor device performance remotely, allowing for more frequent monitoring in order to guide treatment decisions.

We market our INGENIO™ family of pacemaker systems in the U.S., Europe, and Japan. Our INGENIO™ and ADVANTIO™ pacemakers are approved in Europe and Japan for use in patients in need of a magnetic resonance imaging (MRI) scan. Our cardiac resynchronization therapy pacemaker product offerings include our INVIVE™ system, which is built on the same platform as our high voltage cardiac resynchronization therapy defibrillator, is enabled for remote patient monitoring, and includes features that promote ease of use.

During 2012, we completed the acquisition of Cameron Health, Inc. (Cameron). Cameron developed the world's first and only commercially available subcutaneous implantable cardiac defibrillator - the S-ICD® System, which we believe is a differentiated technology. The S-ICD® system has Conformité Européenne (CE) Mark and U.S. Food and Drug Administration (FDA) approval. With this technology, we are able to offer our physician customers an entirely new option to treat their patients who are at risk for sudden cardiac arrest without touching the heart or invading the vasculature.

In the fourth quarter of 2013, we received CE Mark approval and performed the first implants of our X4 line of quadripolar CRT-D systems, including AUTOGEN™ X4, DYNAGEN™ X4, and INOGEN™ X4 cardiac resynchronization therapy defibrillators, a suite of ACUITY™ X4 quadripolar LV leads and the ACUITY™ PRO lead delivery system. At the same time, we received CE Mark for a new MINI line and a new EL (extended longevity) line of ICDs. MINI is the world’s smallest, thinnest ICD and EL is the world’s longest lasting ICD due to our proprietary EnduraLife™ Battery Technology. Lastly, DYNAGEN™ X4, INOGEN™ X4, DYNAGEN™ MINI, and INOGEN™ MINI were FDA approved and launched in the U.S. in the second quarter of 2014, while the EL line was launched in the U.S. in the first quarter of 2015.

See Cardiac Rhythm Management within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Electrophysiology

Within our Electrophysiology business, we develop less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart. Included in our product offerings are steerable RF ablation catheters, intracardiac ultrasound catheters, diagnostic catheters, delivery sheaths, and other accessories. Our products include the market leading Blazer® line of temperature ablation catheters, designed to deliver enhanced performance and responsiveness. Our cooled ablation portfolio includes our closed-loop irrigated catheter, the Chilli II® cooled ablation catheter, and CE Mark approved Blazer™ Open-Irrigated ablation catheter with a unique Total Tip Cooling™ Design. Our comprehensive diagnostic catheter portfolio includes Blazer Dx-20™, Dynamic Tip™ and Viking™ catheters. In 2013, we received FDA approval for the IntellaTip MiFi^TM XP catheter, with MicroFidelity sensor technology, representing a new generation of high-resolution ablation catheters for treatment of atrial flutter. We have a full capital equipment product offering, including our LabSystem Pro Recording System, the Rhythmia Mapping System, Maestro radio frequency (RF) generators, and the MetriQ pump (CE Mark approved).

See Electrophysiology within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

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MedSurg

Endoscopy

Gastroenterology

We are dedicated to transforming the lives of patients by advancing the diagnosis and treatment of a broad range of pulmonary and gastrointestinal conditions with less invasive technologies. Common disease states include esophageal disorders, gastrointestinal (GI) strictures and bleeding, biliary disease and conditions, as well as esophageal, biliary, pancreatic and colon cancer. Some of our product offerings include:

• Our Spyglass® System, which is the first and only single-operator cholangioscopy system that offers clinicians direct visualization of the pancreatico-biliary system and includes therapeutic devices for managing biliary stones and strictures.

• Our WallFlex® Colonic Stents, which have been shown to reduce patient postoperative length of stay. Our WallFlex® Biliary RX Stents provide relief for pancreatic cancer patients receiving chemotherapy before undergoing surgery through pre-operative drainage of the bile duct. Our WallFlex® Esophageal Stents deliver luminal patency in patients with esophageal strictures.

• Our Resolution® Clip, a market-leading technology used to provide hemostasis and closure within the GI System.

• Our Expect™ Aspiration Needle, which is a flexible and highly visible needle used with endoscopic ultrasound enabling physicians to target and sample lesions in the GI system with a high degree of accuracy.

• Our exclusive line of RX Biliary System™ devices that are designed to provide greater access and control for physicians to diagnose and treat challenging conditions of the bile ducts, such as removing gallstones, opening obstructed bile ducts and obtaining biopsies in suspected tumors.

We continue to conduct clinical research to determine if our clinical data can support expanded indications and thus benefit additional patients.

Interventional Bronchoscopy

We market devices to diagnose, treat and ease pulmonary disease systems within the airway and lungs. Our products are designed to help perform biopsies, retrieve foreign bodies from the airway, open narrowings of an airway, stop internal bleeding, and ease symptoms of some types of airway cancers. Our product line includes pulmonary biopsy forceps, transbronchial aspiration needles, cytology brushes and tracheobronchial stents used to dilate narrowed airway passages or for tumor management. In 2010, we completed our acquisition of Asthmatx, Inc. (Asthmatx), which added to our Endoscopy portfolio a less-invasive, catheter-based bronchial thermoplasty procedure for the treatment of severe persistent asthma. The Alair^® Bronchial Thermoplasty System, developed by Asthmatx, has CE Mark, China Food and Drug Administration and U.S. FDA approval and is the first device-based asthma treatment approved by the FDA. We expect that the Alair technology will continue to strengthen our existing offering of pulmonary devices and contribute to future sales growth and diversification of the Endoscopy business.

See Endoscopy within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Urology and Women’s Health

Our Urology and Women’s Health business develops, manufactures and sells devices to treat various urological and gynecological disorders. Within our Urology business, we sell a variety of products designed to treat patients with urinary stone disease and benign prostatic hyperplasia (BPH). We offer a full line of stone management products, including ureteral stents, wires, lithotripsy devices, stone retrieval devices, sheaths, balloons and catheters. Within our Women's Health business, we market a range of devices for the treatment of conditions such as female urinary incontinence, pelvic floor reconstruction (rebuilding of the anatomy to its original state), menorrhagia (excessive menstrual bleeding), and uterine fibroids and polyps. We offer a full breadth of mid-urethral sling products, sling materials, graft materials, pelvic floor reconstruction kits, and suturing devices. We market our Genesys Hydro ThermAblator® (HTA) system, an ablation system designed to ablate the endometrial lining of the uterus in premenopausal women with menorrhagia. In the U.S., we are in the process of launching the Symphion System™ for the removal of intrauterine fibroids and polyps.

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See Urology and Women’s Health within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Neuromodulation

Within our Neuromodulation business, we market the Precision® and Precision Spectra^TM Spinal Cord Stimulator (SCS) systems, used for the management of chronic pain. These systems manage chronic pain by applying an electrical signal to mask pain signals traveling from the spinal cord to the brain. Our leads portfolio includes the CoverEdge™ family of 32-contact surgical leads, with more contacts than any other marketed lead; the Infinion™ 16 Percutaneous Lead, the world's only 16-contact percutaneous lead; and our Linear™ 3-4 and Linear 3-6 Percutaneous Leads. These leads are for use with our 2- and 4-port SCS pulse generators, and provide the broadest range of configurations in the industry, engineered to provide more pain relief to a broader spectrum of patients. The Precision Spectra^TM SCS System is the world's first and only SCS system with 32 contacts and 32 dedicated power sources and is designed to provide improved pain relief to a wide range of patients who suffer from chronic pain. We believe that we continue to have a technology advantage compared to our competitors with proprietary features such as Multiple Independent Current Control and our Illumina™ 3D proprietary programming software, which together are intended to allow the physician to target specific areas of pain and customize stimulation of nerve fibers more precisely.

We continue to research ways to expand the range of stimulation options available to patients with chronic pain. We are currently conducting two large scale prospective clinical trials exploring stimulation with multiple new waveforms, based on the Precision® and Precision Spectra™ platforms: our ACCELERATE study evaluating high-rate (10kHz) stimulation, and the WHISPER study

exploring a proprietary sub-perception stimulation waveform.

See Neuromodulation within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Innovation

Our approach to innovation combines internally-developed products and technologies with those we may obtain externally through strategic acquisitions and alliances. Our research and development efforts are focused largely on the development of next-generation and novel technology offerings across multiple programs and divisions. In addition, we have undertaken strategic acquisitions to help enable us to continue to be a leader in the medical device industry. We expect to continue to invest in our core franchises, and also investigate opportunities to further expand our presence in, and diversify into, strategic growth adjacencies. During the last several years, we have closed multiple acquisitions to strengthen our core franchises and expand into high growth adjacencies. There can be no assurance that technologies developed internally or acquired through acquisitions and alliances will achieve technological feasibility, obtain regulatory approvals or gain market acceptance, and any delay in the development or approval of these technologies may adversely impact our ability to drive future growth.

Research and Development

Our investment in research and development is critical to driving our future growth. We expended $817 million on research and development in 2014, $861 million in 2013, and $886 million in 2012. Our investment in research and development reflects the following:

• regulatory compliance, clinical science, and internal research and development programs, as well as other programs obtained through our strategic acquisitions and alliances; and

• engineering efforts that incorporate customer feedback into continuous improvement efforts for currently marketed and next-generation products.

We have directed our development efforts toward regulatory compliance and innovative technologies designed to expand current markets or enter adjacent markets. We are transforming the way we conduct research and development and are scrutinizing our cost structure, which we believe will enable increased development activity and faster concept to market timelines. Our approach to new product design and development is through focused, cross-functional teams. We believe that our formal process for technology and product development aids in our ability to offer and manufacture innovative products in a consistent and timely manner. Involvement of the research and development, clinical, quality, regulatory, manufacturing and marketing teams early in the process is the cornerstone of our product development cycle. We believe this collaboration allows these teams to concentrate resources on the most viable and clinically relevant new products and technologies, and focus on bringing them to market in a timely and cost-effective manner. In addition to internal development, we work with hundreds of leading research institutions, universities and clinicians around the world to develop, evaluate and clinically test our products. We believe our future success will depend upon the strength of these development efforts.

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Marketing and Sales

During 2014, we marketed our products to approximately 25,000 hospitals, clinics, outpatient facilities and medical offices in the U.S. and across over 110 countries worldwide. The majority of our net sales are derived from countries in which we have direct sales organizations. We also have a network of distributors and dealers who offer our products in certain countries and markets, which accounts for our remaining sales. We expect to continue to leverage our infrastructure in markets where commercially appropriate and use third parties in those markets where it is not economical or strategic to establish or maintain a direct presence. No single institution accounted for more than ten percent of our net sales in 2014 or 2013; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our net sales. We have a dedicated corporate sales organization in the U.S. focused principally on selling to major buying groups and integrated healthcare networks. We consistently strive to understand and exceed the expectations of our customers. Each of our businesses maintains dedicated sales forces and marketing teams focused on physicians who specialize in the diagnosis and treatment of different medical conditions. We believe that this focused disease state management enables us to develop highly knowledgeable and dedicated sales representatives and to foster collaborative relationships with physicians. We believe that we have positive working relationships with physicians and others in the medical industry, which enable us to gain a detailed understanding of new therapeutic and diagnostic alternatives and to respond quickly to the changing needs of physicians and their patients.

International Operations

International net sales accounted for approximately 47 percent of our net sales in 2014. Maintaining and expanding our international presence is an important component of our long-term growth strategy. Through our international presence, we seek to increase net sales and market share, leverage our relationships with leading physicians and their clinical research programs, accelerate the time to bring new products to market, and gain access to worldwide technological developments that we can implement across our product lines. In addition, we are investing in infrastructure in emerging markets in order to introduce products and strengthen our sales capabilities in these countries.

As of December 31, 2014, we had six international manufacturing facilities, including three in Ireland, two in Costa Rica and one in Puerto Rico. Approximately 57 percent of our products manufactured in 2014 were produced at these facilities. Additionally, we maintain international research and development capabilities in Ireland and China and are establishing capabilities in India. We operate physician training centers in France, Japan, and China, and we are currently developing physician training centers in India and South Africa.

Manufacturing and Raw Materials

We are focused on continuously improving our supply chain effectiveness, strengthening our manufacturing processes and increasing operational efficiencies within our organization. We believe by sourcing global manufacturing by technology capabilities, we are able to leverage our existing resources and concentrate on the development and commercial launch of new products and the enhancement of existing products. We continue to implement new systems designed to provide improved quality, reliability and service, greater efficiency and lower supply chain costs, and have substantially increased our focus on process controls and validations, supplier controls, distribution controls and providing our operations teams with the training and tools necessary to drive continuous improvement in product quality. In addition, we remain focused on examining our operations and general business activities to identify cost-improvement opportunities in order to enhance our operational effectiveness.

Our products are designed and manufactured in technology centers around the world, either by us or third parties. In most cases, the manufacturing of each of our product families is concentrated in one location. We consistently monitor our inventory levels, manufacturing and distribution capabilities, and maintain recovery plans to address potential disruptions that we may encounter. However, significant interruptions in the manufacturing of our products for an extended duration may result in loss of market share, which could adversely affect our results of operations and financial condition.

Many components used in the manufacture of our products are readily fabricated from commonly available raw materials or off-the-shelf items available from multiple supply sources; however, certain items are custom made to meet our specifications. We believe that in most cases, redundant capacity exists at our suppliers and that alternative sources of supply are available or could be developed within a reasonable period of time. We also have an on-going program to identify single-source components and to develop alternative back-up supplies and we regularly readdress the adequacy and abilities of our suppliers to meet our needs.

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In certain cases we may not be able to quickly establish additional or replacement suppliers for specific materials, components or products, largely due to the regulatory approval system and the complex nature of our manufacturing processes and those of our suppliers. A reduction or interruption in supply, an inability to develop and validate alternative sources if required, or a significant increase in the price of raw materials, components or products could adversely affect our operations and financial condition, particularly materials or components related to our CRM products and drug-eluting stent systems. In addition, many of our products require sterilization prior to sale and we utilize a mix of internal resources and contract sterilizers to perform this service. We believe we have capabilities sufficient to sterilize our products; however, to the extent we or our third-party sterilizers are unable to sterilize our products, whether due to capacity, availability of materials for sterilization, regulatory or other constraints, we may be unable to transition to other contract sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have an adverse impact on our operations.

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (SEC) has promulgated rules applicable to public companies that use certain minerals and metals, known as conflict minerals, in their products. The rules require us to undertake measures to understand the origin and, as need be, source of conflict minerals within our supply chain and to disclose, among other things, those measures and whether or not any such conflict minerals originated from the Democratic Republic of the Congo and adjoining countries. These requirements could, directly or indirectly, adversely affect the sourcing, availability and pricing of such minerals if they are found to be sourced from that region.

Quality Assurance

We are committed to providing high quality products to our customers. Our quality system starts with the initial product specification and continues through the design of the product, component specification process and the manufacturing, sale and servicing of the product. Our quality system is intended to build in quality and process control and to utilize continuous improvement concepts throughout the product life. These systems are designed to enable us to satisfy the various international quality system regulations, including those of the FDA with respect to products sold in the U.S. All of our manufacturing facilities, and our U.S. and European distribution centers, are certified under the ISO13485 quality system standard, established by the International Standards Organization, for medical devices, which requires, among other items, an implemented quality system that applies to component quality, supplier control, product design and manufacturing operations. This certification can be obtained only after a complete audit of a company’s quality system by an independent outside auditor. Maintenance of the certification requires that these facilities undergo periodic re-examination.

Environmental Regulation and Management

We are subject to various environmental laws, directives and regulations both in the U.S. and abroad. Our operations, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. We do not believe that compliance with environmental laws will have a material impact on our capital expenditures, earnings or competitive position. However, given the scope and nature of these laws, there can be no assurance that environmental laws will not have a material impact on our results of operations. We assess potential environmental contingent liabilities on a regular basis. At present, we are not aware of any such liabilities that would have a material impact on our business.

We believe that sound environmental, health and safety performance contributes to our competitive strength while benefiting our customers, shareholders and employees. We are focused on continuous improvement in these areas by reducing pollution, the depletion of natural resources, and our overall environmental footprint. Specifically, we are working to optimize energy and resource usage, ultimately reducing greenhouse gas emissions and waste. We are certified to the FTSE4Good Corporate Social Responsibility Index, managed by The Financial Times and the London Stock Exchange, which measures the performance of companies that meet globally recognized standards of corporate responsibility. This certification recognizes our dedication to those standards, and it places us in a select group of companies with a demonstrated commitment to responsible business practices and sound environmental policies.

We have completed an initiative and obtained ISO 14001:2004 certification at our major manufacturing plants and Tier 1 distribution centers around the world. In addition, in 2014, our Corporate Headquarters in Marlborough, Massachusetts was certified to the ISO14001:2004 standard. ISO 14001:2004 is a globally recognized standard for Environmental Management Systems, established by the International Standards Organization, which provides a voluntary framework to identify key environmental aspects associated with our business. Using this environmental management system and the specific attributes of our certified locations in the U.S., Ireland, Costa Rica and the Netherlands, we continue to improve our environmental performance and reduce our environmental footprint.

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Competition

We encounter significant competition across our product lines and in each market in which we sell our products from various companies, some of which may have greater financial and marketing resources than we do. Our primary competitors include Abbott Laboratories; Medtronic, Inc.; St. Jude Medical, Inc.; and Cook Medical; as well as a wide range of medical device companies that sell a single or limited number of competitive products or participate in only a specific market segment. We also face competition from non-medical device companies, such as pharmaceutical companies, which may offer alternative therapies for disease states intended to be treated using our products.

We believe that our products and solutions compete primarily on their ability to deliver both clinical and economic outcomes for our customers; while also continuing to safely and effectively perform diagnostic and therapeutic procedures in a less-invasive manner, as well as to provide ease of use, comparative effectiveness, reliability and physician familiarity. In the current environment of managed care, economically-motivated buyers, consolidation among healthcare providers, increased competition and declining reimbursement rates, we have been increasingly required to compete on the basis of price, value, reliability and efficiency. We believe the current global economic conditions and healthcare reform measures could continue to put additional competitive pressure on us, including on our average selling prices, overall procedure rates and market sizes. We recognize that our continued competitive success will depend upon our ability to: offer products and solutions that offer differentiated clinical and economic outcomes; create or acquire innovative, scientifically advanced technologies; apply our technology and solutions cost-effectively and with superior quality across product lines and markets; develop or acquire proprietary products and solutions; attract and retain skilled personnel; obtain patent or other protection for our products; obtain required regulatory and reimbursement approvals; continually enhance our quality systems; manufacture and successfully market our products and solutions either directly or through outside parties; and supply sufficient inventory to meet customer demand.

Medical Device Regulatory Approvals

The medical devices that we manufacture and market are subject to regulation by numerous worldwide regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing development, testing, manufacturing, labeling, marketing and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, based on the risk level of the device.

In the U.S., authorization to commercially distribute a new device generally can be met in one of three ways. The first process requires that a premarket notification (510(k)) be made to the FDA to demonstrate that the device is as safe and effective as, or substantially equivalent to, a legally marketed device, the “predicate” device. Applicants must submit performance data to establish substantial equivalence. In some instances, data from human clinical trials must also be submitted in support of a 510(k) premarket notification. If so, these data must be collected in a manner that conforms to the applicable Investigational Device Exemption (IDE) regulations. The FDA must issue a decision finding substantial equivalence before commercial distribution can occur. Changes to cleared devices that could not significantly affect the safety or effectiveness of the device can generally be made without additional 510(k) premarket notifications; otherwise, a new 510(k) is required.

The second process requires the submission of a premarket approval (PMA) application to the FDA to demonstrate that the device is safe and effective for its intended use. This approval process applies to most Class III devices, and generally requires clinical data to support the safety and effectiveness of the device, obtained in adherence with IDE requirements. The FDA will approve the PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose, and that the proposed manufacturing is in compliance with the Quality System Regulation (QSR). For novel technologies, the FDA will generally seek input from an advisory panel of medical experts and seek their views on the safety, effectiveness and benefit-risk of the device. The PMA process is generally more detailed, lengthier and more expensive than the 510(k) process.

The third process requires that an application for a Humanitarian Device Exemption (HDE) be made to the FDA for the use of a Humanitarian Use Device (HUD). An HUD is intended to benefit patients by treating or diagnosing a disease or condition that affects, or is manifested in, fewer than 4,000 individuals in the U.S. per year. The application submitted to the FDA for an HDE is similar in both form and content to a PMA application, but is exempt from the effectiveness requirements of a PMA. The HUD provision of the regulation provides an incentive for the development of devices for use in the treatment or diagnosis of diseases affecting smaller patient populations.

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In the European Union, we are required to comply with applicable medical device directives (including the Medical Devices Directive and the Active Implantable Medical Devices Directive) and obtain CE Mark certification in order to market medical devices. The CE Mark is applied following approval from an independent notified body or declaration of conformity. It is an international symbol of adherence to quality assurance standards and compliance with applicable European Medical Devices Directives. We are also required to comply with the regulations of each other country where we commercialize products, such as the requirement that we obtain approval from the Japanese Ministry of Health, Labor and Welfare (MHLW) and China Food and Drug Administration before we can launch new products in Japan and China, respectively.

The FDA and other worldwide regulatory agencies and competent authorities actively monitor compliance to local laws and regulations through review and inspection of design and manufacturing practices, record keeping, reporting of adverse events, labeling and promotional practices. The FDA can ban certain medical devices; detain or seize adulterated or misbranded medical devices; order repair, replacement or refund of these devices; and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA may also enjoin and restrain a company for certain violations of the Food, Drug and Cosmetic Act and the Safe Medical Devices Act pertaining to medical devices, or initiate action for criminal prosecution of such violations. Regulatory agencies and authorities in the countries where we do business can halt production in or distribution within their respective country, or otherwise take action in accordance with local laws and regulations.

International sales of medical devices manufactured in the U.S. that are not approved by the FDA for use in the U.S., or that are banned or deviate from lawful performance standards, are subject to FDA export requirements. Exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated. Frequently, regulatory approval may first be obtained in a foreign country prior to application in the U.S. due to differing regulatory requirements; however, other countries, such as China for example, require approval in the country of origin first. Most countries outside of the U.S. require that product approvals be recertified on a regular basis, generally every five years. The recertification process requires that we evaluate any device changes and any new regulations or standards relevant to the device and, where needed, conduct appropriate testing to document continued compliance. Where recertification applications are required, they must be approved in order to continue selling our products in those countries.

Our global regulatory environment is becoming increasingly stringent, and unpredictable, which could increase the time, cost and complexity of obtaining regulatory approvals for our products. Several countries that did not have regulatory requirements for medical devices have established such requirements in recent years and other countries have expanded, or plan to expand, on existing regulations. Certain regulators are requiring local clinical data in addition to global clinical data. While harmonization of global regulations has been pursued, requirements continue to differ significantly among countries. We expect that the global regulatory environment will continue to evolve, which could impact our ability to obtain or maintain future approvals for our products, or could increase the cost and time to obtain or maintain such approvals in the future.

Government Affairs

We maintain a global Government Affairs presence, headquartered in Washington D.C., to actively monitor and advocate on myriad legislation and policies impacting us, both on a domestic and an international front. The Government Affairs office works closely with members of Congress and committee staff, the White House and Administration offices, state legislatures and regulatory agencies, and governments overseas on issues affecting our business. Our proactive approach and depth of political and policy expertise are aimed at having our positions heard by federal, state and global decision-makers, while also advancing our business objectives by educating policymakers on our positions, key priorities and the value of our technologies. The Government Affairs office also manages our political action committee and works closely with trade groups on issues affecting our industry and healthcare in general.

Healthcare Policies

Political, economic and regulatory influences around the world continue subjecting the healthcare industry to potential fundamental changes that could substantially affect our results of operations. Government and private sector initiatives related to limiting the growth of healthcare costs (including price regulation); coverage and payment policies; comparative effectiveness of therapies; technology assessments; and health care delivery structure reforms, are continuing in many countries where we do business. We believe that these changes are causing the marketplace to put increased emphasis on the delivery of treatments that can reduce costs, improve efficiencies, and/or increase patient access. Although we believe our less-invasive products and technologies generate favorable clinical outcomes, value and cost efficiency, the resources necessary to demonstrate value to our customers, patients, payors, and other stakeholders may be significant and may take a longer period of time to gain widespread adoption. In addition, the impact to our business of the United States’ Patient Protection and Affordable Care Act's (ACA) provisions related to coverage expansion, payment reforms, and delivery system changes remains uncertain.

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In addition, the federal government, as part of the ACA, and certain state governments have enacted laws aimed at increasing transparency in relationships between medical device, biologics and pharmaceutical companies and healthcare professionals (HCPs). As a result, we are required by law to report many types of payments made and items of value provided to HCPs licensed by certain states. In addition, certain foreign jurisdictions are currently acting to implement similar laws. Failure to adhere to our policies, comply with required laws or implement adequate policies and practices to address changes to legal and regulatory requirements could have a negative impact on our results of operations.

We expect that pricing of medical devices will remain under pressure as governments and purchasers implement payment reforms such as prospective payment systems for hospital care, value-based purchasing, and accountable care organizations (ACOs). We also expect marketplace changes to place pressure on medical device pricing as hospitals consolidate and large group purchasing organizations, hospital networks and other groups that seek to aggregate purchasing power continue to take shape globally. Similarly, governments are increasing the use of tenders, placing pressure on medical device pricing.

In addition, patients and clinicians are becoming more informed on the risks and benefits of alternative treatments as comparative effectiveness research findings are beginning to be disseminated. Therefore, we believe that compelling clinical and economic data will become increasingly important to demonstrate efficacy and justify the economic benefits of technology purchases.

See Healthcare Policies within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report for additional information.

Third-Party Coverage and Reimbursement

Our products are purchased principally by hospitals, physicians and other healthcare providers around the world that typically bill various third-party payors, including governmental programs (e.g., Medicare and Medicaid in the U.S.), private insurance plans and managed care programs, for the healthcare services provided to their patients.

Third-party payors and governments may provide or deny coverage for certain technologies and associated procedures based on independently determined assessment criteria. Reimbursement decisions by payors for these services are based on a wide range of methodologies that may reflect the services' assessed resource costs, clinical outcomes and economic value. These reimbursement methodologies and decisions confer different, and sometimes conflicting, levels of financial risk and incentives to healthcare providers and patients, and these methodologies and decisions are subject to frequent refinements. Third-party payors are also increasingly adjusting reimbursement rates, often downwards, and challenging the prices charged for medical products and services. There can be no assurance that our products will be automatically covered by third-party payors, that reimbursement will be available or, if available, that the third-party payors' coverage policies will not adversely affect our ability to sell our products profitably.

Proprietary Rights and Patent Litigation

We rely on a combination of patents, trademarks, trade secrets and non-disclosure agreements to protect our intellectual property. We generally file patent applications in the U.S. and foreign countries where patent protection for our technology is appropriate and available. As of December 31, 2014, we held more than16,000 patents, and had approximately 6,200 patent applications pending worldwide that cover various aspects of our technology. In addition, we hold exclusive and non-exclusive licenses to a variety of third-party technologies covered by patents and patent applications. There can be no assurance that pending patent applications will result in the issuance of patents, that patents issued to or licensed by us will not be challenged or circumvented by competitors, or that these patents will be found to be valid or sufficiently broad to protect our technology or to provide us with a competitive advantage. In the aggregate, these intellectual property assets and licenses are of material importance to our business; however, we believe that no single patent, technology, trademark, intellectual property asset or license, except for those relating to our drug-eluting coronary stent systems, is material in relation to our business as a whole.

We rely on non-disclosure and non-competition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary technology. There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information or that third parties will not otherwise gain access to our trade secrets and proprietary knowledge.

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There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry, particularly in the areas in which we compete. We continue to defend ourselves against claims and legal actions alleging infringement of the patent rights of others. Adverse determinations in any patent litigation could subject us to significant liabilities to third parties, require us to seek licenses from third parties, and, if licenses are not available, prevent us from manufacturing, selling or using certain of our products, which could have a material adverse effect on our business. Additionally, we may find it necessary to initiate litigation to enforce our patent rights, to protect our trade secrets or know-how and to determine the scope and validity of the proprietary rights of others. Patent litigation can be costly and time-consuming, and there can be no assurance that our litigation expenses will not be significant in the future or that the outcome of litigation will be favorable to us. Accordingly, we may seek to settle some or all of our pending litigation, particularly to manage risk over time. Settlement may include cross licensing of the patents that are the subject of the litigation as well as our other intellectual property and may involve monetary payments to or from third parties.

We maintain insurance policies providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. See Item 3 and Note K – Commitments and Contingencies to our 2014 consolidated financial statements included in Item 8 of this Annual Report for a discussion of intellectual property and other litigation and proceedings in which we are involved. In management’s opinion, we are not currently involved in any legal proceeding other than those specifically identified in Note K, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows.

Risk Management

We have an Enterprise Risk Management (ERM) program in which we provide coordinated oversight, control and continuous improvement of processes and tools used to identify and manage business risk. On an annual basis, we reassess our risks based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) ERM framework in the areas of strategic risk, financial risk, external risk, operational risk and compliance risk with the goal of achieving our business strategies and objectives. This assessment, which engages key individuals from our Board of Directors and management, provides increased visibility and alignment of the risks we face, and seeks to improve the effectiveness of our overall risk management.

Current Economic Climate

Our results of operations could be substantially affected by global economic factors and local operating and economic conditions. Our customers may experience financial difficulties or be unable to borrow money to fund their operations which may adversely impact their ability or decision to purchase our products, particularly capital equipment, or to pay for our products they do purchase on a timely basis, if at all. We cannot predict to what extent global economic conditions, including the increased focus on healthcare systems and costs in the U.S. and abroad may negatively impact our average selling prices, our net sales and profit margins, procedural volumes and reimbursement rates from third-party payors.

Employees

As of December 31, 2014, we had approximately 24,000 employees, including approximately 11,000 in operations; 7,000 in selling, marketing and distribution; 3,000 in clinical, regulatory and research and development; and 3,000 in administration. Of these employees, we employed approximately 12,000 outside the U.S., approximately 7,000 of whom are in the manufacturing operations function. We believe that the continued success of our business will depend, in part, on our ability to attract and retain qualified personnel, and we are committed to developing our people and providing them with opportunities to contribute to our growth and success.

Community Outreach

We are committed to transforming lives and making a positive impact on the communities in which we live and work. We bring this commitment to life by supporting global, national and local health and education initiatives, striving to improve patient advocacy, adhering to strong ethical standards that deliver on our commitments, and minimizing our impact on the environment. A prominent example of our ongoing commitment to patients is our Close the Gap program, which aims to eliminate treatment disparities in underserved patient populations to ensure all patients - regardless of age, gender, race, ethnicity or primary language - receive access to quality health care.

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To achieve this goal, Close the Gap increases awareness and access to care in communities at high risk for cardiovascular, gastrointestinal, and pulmonary diseases, engages with healthcare providers about barriers to treatment in underserved patient populations and advocates for measures that help ensure all patients receive the care they need. By sponsoring programs and executing educational programs through community partnerships in the community, our Close the Gap program has helped these messages reach more than one million people to date.

Through the Boston Scientific Foundation, established in 2001, we fund non-profit organizations in our local U.S. communities. Community grants focus on increasing access to quality healthcare and improving educational opportunities, particularly related to science, technology, engineering and math (STEM) education.

Seasonality

Our worldwide sales do not reflect any significant degree of seasonality; however, customer purchases have historically been lower in the third quarter of the year, as compared to other quarters. This reflects, among other factors, lower demand during summer months in the northern hemisphere, particularly in European countries.

Available Information

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available free of charge on our website (www.bostonscientific.com) as soon as reasonably practicable after we electronically file the material with or furnish it to the U.S. SEC. Printed copies of these posted materials are also available free of charge to stockholders who request them in writing from Investor Relations, 300 Boston Scientific Way, Marlborough, MA 01752-1234. Information on our website or linked to our website is not incorporated by reference into this Annual Report.

Safe Harbor for Forward-Looking Statements

Certain statements that we may make from time to time, including statements contained in this Annual Report and information incorporated by reference into this Annual Report, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements. Except as required by law, we do not intend to update any forward-looking statements even if new information becomes available or other events occur in the future.

The forward-looking statements in this Annual Report are based on certain risks and uncertainties, including the risk factors described in Item 1A under the heading “Risk Factors” and the specific risk factors discussed below and in connection with forward-looking statements throughout this Annual Report, which could cause actual results to vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the forward-looking statements. These additional factors include, among other things, future political, economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation and governmental investigations; financial market conditions; and future business decisions made by us and our competitors, all of which are difficult or impossible to predict accurately and many of which are beyond our control. We caution each reader of this Annual Report to consider carefully these factors.

The following are some of the important risk factors that could cause our actual results to differ materially from our expectations in any forward-looking statements. For further discussion of these and other risk factors, see Item 1A - Risk Factors.

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Our Businesses

• Our ability to increase CRM net sales, including for both new and replacement units, expand the market and capture market share;

• The volatility of the coronary stent market and our ability to increase our drug-eluting stent systems net sales, including with respect to our SYNERGY™, PROMUS® Element™ and Promus PREMIER™ stent systems, and capture market share;

• The on-going impact on our business, including CRM and coronary stent businesses, of physician alignment to hospitals, governmental investigations and audits of hospitals, and other market and economic conditions on the overall number of procedures performed, including with respect to the drug-eluting coronary stent market, the average number of stents used per procedure, and average selling prices;

• Competitive offerings and related declines in average selling prices for our products, particularly our drug-eluting coronary stent systems and our CRM products;

• The performance of, and physician and patient confidence in, our products and technologies, including our coronary drug-eluting stent systems and CRM products, or those of our competitors;

• The impact and outcome of ongoing and future clinical trials, including coronary stent and CRM clinical trials, and market studies undertaken by us, our competitors or other third parties, or perceived product performance of our or our competitors' products;

• Variations in clinical results, reliability or product performance of our and our competitor's products;

• Our ability to acquire or develop, launch and supply new or next-generation products and technologies worldwide and across our businesses in line with our commercialization strategies in a timely and successful manner, including our S-ICD® system and the acquisition and integration of the Interventional Division of Bayer AG and IoGyn, Inc.;

• The effect of consolidation and competition in the markets in which we do business, or plan to do business;

• Disruption in the manufacture or supply of certain components, materials or products, or the failure to timely secure alternative manufacturing or additional or replacement components, materials or products;

• Our ability to retain and attract key personnel, including in our cardiology and CRM sales force and other key cardiology and CRM personnel;

• The impact of enhanced requirements to obtain regulatory approval in the U.S. and around the world, including the associated timing and cost of product approval;

• The impact of increased pressure on the availability and rate of third-party reimbursement for our products and procedures in the U.S. and around the world, including with respect to the timing and costs of creating and expanding markets for new products and technologies; and

• Risk associated with counterparty default on our derivative financial instruments.

Regulatory Compliance and Litigation

• The impact of healthcare policy changes and legislative or regulatory efforts in the U.S. and around the world to modify product approval or reimbursement processes, including a trend toward demonstrating clinical outcomes, comparative effectiveness and cost efficiency, as well as the impact of other healthcare reform legislation;

• Risks associated with our regulatory compliance and quality systems and activities in the U.S. and around the world, including meeting regulatory standards applicable to manufacturing and quality processes;

• Our ability to minimize or avoid future field actions or FDA warning letters relating to our products and processes and the on-going inherent risk of potential physician advisories related to medical devices;

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• The impact of increased scrutiny of and heightened global regulatory enforcement facing the medical device industry arising from political and regulatory changes, economic pressures or otherwise, including under U.S. Anti-Kickback Statute, U.S. False Claims Act and similar laws in other jurisdictions; U.S. Foreign Corrupt Practices Act (FCPA) and/or similar laws in other jurisdictions, and U.S. and foreign export control, trade embargo and custom laws;

• Costs and risks associated with litigation;

• The effect of our litigation and risk management practices, including self-insurance, and compliance activities on our loss contingencies, legal provision and cash flows;

• The impact of, diversion of management attention as a result of, and costs to cooperate with, litigate and/or resolve, governmental investigations and our class action, product liability, contract and other legal proceedings; and

• Risks associated with a failure to protect our intellectual property rights and the outcome of patent litigation.

Innovation and Certain Growth Initiatives

• The timing, size and nature of our strategic growth initiatives and market opportunities, including with respect to our internal research and development platforms and externally available research and development platforms and technologies, and the ultimate cost and success of those initiatives and opportunities;

• Our ability to complete planned clinical trials successfully, obtain regulatory approvals and launch new and next generation products in a timely manner consistent with cost estimates, including the successful completion of in-process projects from in-process research and development;

• Our ability to identify and prioritize our internal research and development project portfolio and our external investment portfolio on profitable revenue growth opportunities as well as to keep them in line with the estimated timing and costs of such projects and expected revenue levels for the resulting products and technologies;

• Our ability to successfully develop, manufacture and market new products and technologies in a timely manner and the ability of our competitors and other third parties to develop products or technologies that render our products or technologies noncompetitive or obsolete;

• The impact of our failure to succeed at or our decision to discontinue, write-down or reduce the funding of any of our research and development projects, including in-process projects from in-process research and development, in our growth adjacencies or otherwise;

• Dependence on acquisitions, alliances or investments to introduce new products or technologies and to enter new or adjacent growth markets, and our ability to fund them or to fund contingent payments with respect to those acquisitions, alliances and investments; and

• The failure to successfully integrate and realize the expected benefits from the strategic acquisitions, alliances and investments we have consummated or may consummate in the future.

International Markets

• Our dependency on international net sales to achieve growth, including in emerging markets;

• The impact of changes in our international structure and leadership;

• Risks associated with international operations and investments, including the timing and collectibility of customer payments, political and economic conditions, protection of our intellectual property, compliance with established and developing U.S. and foreign legal and regulatory requirements, including FCPA and similar laws in other jurisdictions and U.S. and foreign export control, trade embargo and custom laws, as well as changes in reimbursement practices and policies;

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• Our ability to maintain or expand our worldwide market positions in the various markets in which we compete or seek to compete, including through investments in product diversification and emerging markets such as Brazil, Russia, India and China;

• Our ability to execute and realize anticipated benefits from our investments in emerging markets; and

• The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses and resulting margins.

Liquidity

• Our ability to generate sufficient cash flow to fund operations, capital expenditures, global expansion initiatives, any litigation settlements and judgments, share repurchases and strategic investments and acquisitions as well as maintaining our investment grade ratings and managing our debt levels and covenant compliance;

• Our ability to access the public and private capital markets when desired and to issue debt or equity securities on terms reasonably acceptable to us;

• The unfavorable resolution of open tax matters, exposure to additional tax liabilities and the impact of changes in U.S. and international tax laws;

• The impact of examinations and assessments by domestic and international taxing authorities on our tax provision, financial condition or results of operations; and

• Our ability to collect outstanding and future receivables and/or sell receivables under our factoring programs.

Cost Reduction and Optimization Initiatives

• Risks associated with significant changes made or expected to be made to our organizational and operational structure, pursuant to our 2014 Restructuring plan and our 2011 Restructuring plan as expanded as well as any further restructuring or optimization plans we may undertake in the future, and our ability to recognize benefits and cost reductions from such programs; and

• Business disruption and employee distraction as we execute our global compliance program, restructuring and optimization plans and divestitures of assets or businesses and implement our other strategic and cost reduction initiatives.

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ITEM 1A. RISK FACTORS

In addition to the other information contained in this Annual Report and the exhibits hereto, the following risk factors should be considered carefully in evaluating our business. Our business, financial condition, cash flows or results of operations could be materially adversely affected by any of these risks. This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements set forth at the end of Item 1 of this Annual Report. Additional risks not presently known to us or that we currently deem immaterial may also adversely affect our business, financial condition, cash flows or results of operations.

We face intense competition and may not be able to keep pace with the rapid technological changes in the medical devices industry, which could have an adverse effect on our business, financial condition or results of operations.

The medical device markets in which we primarily participate are highly competitive. We encounter significant competition across our product lines and in each market in which our products are sold from various medical device companies, some of which may have greater financial and marketing resources than we do, including as a result of consolidation among our competitors in the healthcare industry. Our primary competitors include Abbott Laboratories; Medtronic, Inc.; St. Jude Medical, Inc. and Cook Medical, as well as a wide range of medical device companies that sell a single or limited number of competitive products or which participate in only a specific market segment. We also face competition from non-medical device companies, including pharmaceutical companies, which may offer alternative therapies for disease states intended to be treated using our products.

Additionally, the medical device markets in which we primarily participate are characterized by extensive research and development, and rapid technological change. Developments by other companies of new or improved products, processes or technologies may make our products or proposed products obsolete or less competitive and may negatively impact our net sales. We are required to devote continued efforts and financial resources to develop or acquire scientifically advanced technologies and products, apply our technologies cost-effectively across product lines and markets, obtain patent and other protection for our technologies and products, obtain required regulatory and reimbursement approvals and successfully manufacture and market our products consistent with our quality standards. If we fail to develop or acquire new products or enhance existing products, it could have a material adverse effect on our business, financial condition or results of operations.

Declines in average selling prices for our products, particularly our drug-eluting coronary stent systems, may materially adversely affect our results of operations.

We have experienced pricing pressures across many of our businesses due to competitive activity, increased market power of our customers as the healthcare industry consolidates, economic pressures experienced by our customers, and the impact of managed care organizations and other third-party payors. Any declines in average selling prices of our products due to pricing pressures may have an adverse impact on our results of operations.

We derive a significant portion of our net sales from the sale of drug-eluting coronary stent systems and CRM products. Declines in market size, average selling prices, procedural volumes, and our share of the markets in which we compete; increased competition; market perceptions of studies published by third parties; or product launch delays may materially adversely affect our results of operations and financial condition.

Net sales from drug-eluting coronary stent systems represented approximately 16 percent of our consolidated net sales during 2014. In 2014, the launch of our PREMIER drug-eluting stent in the U.S. and Japan contributed to an increase in our share of the U.S. and global drug-eluting stent markets.  We estimate that the global market for drug-eluting stents grew slightly in 2014 due to increased procedure volumes partially offset by price declines. There can be no assurance that these and other factors will not further impact our share of the U.S. or worldwide drug-eluting stent markets, that we will regain or gain share of the U.S. or worldwide drug-eluting stent markets, or that the size of the U.S. drug-eluting stent market will reach previous levels or will not decline further, all of which could materially adversely affect our results of operations or financial condition. In addition, a delay in the timing of the launch of next-generation products, the overall performance of, and continued physician confidence in, those products may result in a further decline in our market share and have an adverse impact on our results of operations.

Net sales from our CRM group represented approximately 26 percent of our consolidated net sales in 2014. Our CRM net sales increasedone percent in 2014 primarily driven by increases in our denovo ICD market share and our new line of defibrillators; partially offset by lower volumes of replacement procedures and implantable cardiac resynchronization therapy defibrillator market share losses in certain regions. There can be no assurance that the size of the CRM market will increase above existing levels or that we will be able to continue to increase our CRM market share or increase our net sales in a timely manner, if at all. Decreases in market size or our share of the CRM market and decreases in net sales from our CRM products could have a significant impact on our financial condition or results of operations. Further, variability in the timing of the launch of next-generation products may

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result in excess or expired inventory positions and future inventory charges, or may result in a loss of market share and adversely impact our results of operations.

Consolidation in the healthcare industry could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments, which could have an adverse effect on our business, financial condition or results of operations.

Because healthcare costs have risen significantly over the past decade, numerous initiatives and reforms by legislators, regulators and third-party payors to curb these costs have catalyzed a consolidation trend in the healthcare industry to aggregate purchasing power. As the healthcare industry consolidates, competition to provide products and services to industry participants has become and will continue to become more intense. This in turn has resulted in greater pricing pressures, decreased average selling prices, and the exclusion of certain suppliers from important market segments as group purchasing organizations, independent delivery networks and large single accounts continue to use their market power to consolidate purchasing decisions for hospitals. We expect that market demand, government regulation, third-party coverage and reimbursement policies, government contracting requirements, and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers, which may increase competition, exert further downward pressure on the prices of our products and may adversely impact our business, financial condition or results of operations.

We are subject to a number of market, business, financial, legal and regulatory risks and uncertainties with respect to our international operations that could have a material impact on our business, financial condition or results of operations.

International net sales accounted for approximately 47 percent of our global net sales in 2014, with sales from emerging markets accounting for approximately ten percent. An important part of our growth strategy is to continue pursuing growth opportunities in net sales and market share outside of the U.S. by expanding global presence, including in in emerging markets. Our international operations are subject to a number of market, business and financial risks and uncertainties, including those related to political and economic instability; foreign currency exchange and interest rate fluctuations; competitive products offerings; local changes in health care financing and payment systems and health care delivery systems; local product preferences and requirements, including preferences for local manufacturers; workforce instability; less; intellectual property protection in certain countries than exists in the United States; and, in certain foreign countries, longer accounts receivable cycles. Such risks and uncertainties may adversely impact our ability to implement our growth strategy in these markets and, as a result, our sales growth market share and operating profits from our international operations may be adversely affected.

Our international operations are subject to established and developing legal and regulatory requirements for medical devices in each country in which our products are marketed and sold. Most foreign countries have medical device regulations. Further, most countries outside of the U.S. require product approvals be renewed or recertified on a regular basis in order to continue to be marketed and sold there. In addition, several countries that previously did not have regulatory requirements for medical devices have established such requirements in recent years and other countries have expanded, or plan to expand, on existing regulations, including requiring local clinical data in addition to global clinical data. These factors have caused or may cause us to experience more uncertainty, risk, expense and delay in commercializing products in certain foreign jurisdictions, which could affect our ability to obtain approvals for our products in those jurisdictions and adversely impact our net sales, market share and operating profits from our international operations.

Further, international markets are increasingly being affected by economic pressure to contain healthcare costs, which can lead to lower reimbursement rates for either our products directly or procedures in which are our products are used. Governments and payers may also institute changes in health care delivery systems that may reduce funding for services or encourage greater scrutiny of health care costs. In addition, certain international markets may also be affected by foreign government efforts to reference reimbursement rates in other countries. All of these types of changes may ultimately reduce selling prices of our products, which may adversely impact our net sales, market share and operating profits from our international operations.

In addition, our international operations are subject to other established and developing U.S. and foreign legal and regulatory requirements, including the U.S. Foreign Corrupt Practices Act (FCPA) and/or similar laws in other countries; and U.S. and foreign import and export controls and licensing requirements, trade protection and embargo measures and customs laws. Global businesses, including those in the medical device industry, are facing increasing scrutiny of, and heightened enforcement efforts with respect to, their international operations. Any alleged or actual failure to comply with legal and regulatory requirements may subject us to government scrutiny, civil and/or criminal proceedings, sanctions and other liabilities, which may have a material adverse effect on our international operations, financial condition, results of operations and/or liquidity.

Any significant changes in the political and economic, financial, competitive, legal and regulatory or reimbursement conditions where we conduct, or plan to expand, our international operations may have a material impact on our business, financial condition or results of operations.

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If we are unable to manage our debt levels, maintain investment grade credit ratings at the three ratings agencies, or experience a disruption in our cash flows it could have an adverse effect on our cost of borrowing, financial condition or results of operations.

As part of our strategy to maximize stockholder value we use financial leverage to reduce our cost of capital. Our outstanding debt balance was at $4.262 billion as of December 31, 2014 and $4.240 billion as of December 31, 2013. In February 2012, Moody's Investors Service upgraded our corporate credit rating to Baa3, an investment-grade rating, and in July 2011, Fitch Ratings upgraded our corporate credit rating to BBB-, an investment-grade rating. In addition, Standard & Poor's Ratings Services has maintained an investment-grade corporate credit rating for us since 2009. We believe these ratings reflect the strength of our product portfolio and cash flows, the reduction of our debt, and our improved financial fundamentals. Our inability to maintain investment grade credit ratings at the three ratings agencies, however, could increase our cost of borrowing funds in the future. Delays in our product development and new product launches, disruption in our cash flow or our ability to continue to effectively manage our debt levels could have an adverse effect on our cost of borrowing, financial condition or results of operations. In addition, our credit and security facilities contains covenants that require us to maintain specified financial ratios and place other limits on our business. If we are unable to satisfy these covenants, we may be required to obtain waivers from our lenders and no assurance can be made that our lenders would grant such waivers on favorable terms or at all, and we could be required to repay any borrowings on demand.

We may record future goodwill impairment charges or other asset impairment charges related to one or more of our global reporting units, which could materially adversely impact our results of operations.

We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. We assess goodwill for impairment at the reporting unit level and, in evaluating the potential for impairment of goodwill, we make assumptions regarding estimated revenue projections, growth rates, cash flows and discount rates. In the second quarter of 2014, we performed our annual goodwill impairment test for all of our reporting units. In conjunction with our annual test, the fair value of each reporting unit exceeded its carrying value. Therefore, it was deemed not necessary to proceed to the second step of the impairment test.

We identified our global Neuromodulation and global Electrophysiology reporting units as being at higher risk of potential failure of the first step of the goodwill impairment test in future reporting periods. As of the date of our annual goodwill impairment test, our global Neuromodulation reporting unit had excess fair value over carrying value of approximately 55 percent and held $1.356 billion of allocated goodwill. As of the date of our annual goodwil impairment test, our global Electrophysiology reporting unit had excess fair value over carrying value of approximately 38 percent and held $292 million of allocated goodwill. During the fourth quarter of 2014, due to changes in our expectations of the timing and amount of future revenue and cash flow related to our Electrophysiology reporting unit, we performed an interim goodwill impairment test on this reporting unit. Based on this assessment, we concluded that the fair value of the Electrophysiology reporting unit exceeded its carrying value; however the level of excess fair value over the carrying value had declined to approximately 26 percent.Our global Cardiac Rhythm Management (CRM) reporting unit had a fair value approximately equal to its carrying value; however, due to goodwill impairment charges in prior years, no goodwill remains within our CRM reporting unit. Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses could result in future impairments of goodwill within our reporting units including global CRM. Further, the recoverability of our CRM-related amortizable intangibles ($4.097 billion globally as of December 31, 2014) is sensitive to future cash flow assumptions and our global CRM business performance. The $4.097 billion of CRM-related amortizable intangibles is at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. An impairment of a material portion of our CRM-related amortizable intangibles carrying value would occur if the second step of the amortizable intangible test is required in a future reporting period. Refer to Critical Accounting Policies and Estimates within our Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 of this Annual Report on Form 10-K for a discussion of key assumptions used in our testing.

On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets. Relatively small declines in the future performance and cash flows of a reporting unit or asset group, changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses, or small changes in other key assumptions, may result in the recognition of significant asset impairment charges, which could have a material adverse impact on our results of operations.

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Failure to integrate acquired businesses into our operations successfully could adversely affect our business, financial condition and operating results.

As part of our strategy to realign our business portfolio, we completed several acquisitions in 2014, 2013 and 2012 in our strategic growth areas and may pursue additional acquisitions in the future. Our integration of the operations of acquired businesses requires significant efforts, including the coordination of information technologies, research and development, sales and marketing, operations, manufacturing, quality systems and finance. These efforts result in additional expenses and involve significant amounts of management's time. Some of the factors that could affect the success of our acquisitions include, among others, the strength of the acquired companies' underlying technology and ability to execute, results of clinical trials, regulatory approvals and reimbursement levels of the acquired products and related procedures, the continued performance of critical transition services, our ability to adequately fund acquired in-process research and development projects and retain key employees, and our ability to achieve synergies with our acquired companies, such as increasing sales of our products, achieving cost savings and effectively combining technologies to develop new products. In addition, foreign acquisitions involve unique risks, including those related to integration of operations across different geographies, cultures, and languages; currency risks; and risks associated with the economic, political, and regulatory environment in specific countries. Our failure to manage successfully and coordinate the growth of the combined acquired companies could have an adverse impact on our business and our future growth. In addition, we cannot be certain that the businesses we acquire will become profitable or remain so and if our acquisitions are not successful, we may record related asset impairment charges in the future.

We may not be successful in our strategy relating to future strategic acquisitions of, investments in, or alliances with, other companies and businesses, which have been a significant source of historical growth for us, and will be key to our diversification into new markets and technologies.

Our strategic acquisitions, investments and alliances are intended to further expand our ability to offer customers effective, high quality medical devices that satisfy their interventional needs. If we are unsuccessful in our acquisitions, investments and alliances, we may be unable to grow our business. These acquisitions, investments and alliances have been a significant source of our growth. The success of our strategy relating to future acquisitions, investments or alliances will depend on a number of factors, including:

• our ability to identify suitable opportunities for acquisition, investment or alliance, if at all;

• the ability of our due diligence process to uncover potential issues with target companies;

• our ability to finance any future acquisition, investment or alliance on terms acceptable to us, if at all;

• whether we are able to complete an acquisition, investment or alliance on terms that are satisfactory to us, if at all;

• our ability to successfully integrate and operate acquired businesses;

• our ability to comply with applicable laws and regulations, including foreign laws and regulations; and

• intellectual property and litigation related to newly acquired technologies.

Any potential future acquisitions we consummate may be dilutive to our earnings and may require additional debt or equity financing, depending on their size or nature.

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We may not realize the expected benefits from our restructuring and optimization initiatives; our long-term expense reduction programs may result in an increase in short-term expense; and our efforts may lead to unintended consequences.

On an on-going basis we monitor the dynamics of the economy, the healthcare industry and the markets in which we compete and assess opportunities for improved operational effectiveness and efficiency and to better align expenses with revenues, while preserving our ability to make investments in research and development projects, capital and our people that we believe are important to our long-term success. As a result of these assessments, we have undertaken various restructuring and optimization initiatives in order to enhance our growth potential and position us for long-term success. For example, in October 2013, we announced a restructuring initiative (the “2014 Restructuring plan”) intended to build on the progress we have made to address financial pressures in a changing global marketplace, further strengthen our operational effectiveness and efficiency and support new growth investments. Key activities under the 2014 Restructuring plan include continued implementation of our ongoing plant network optimization strategy (aimed at simplifying our manufacturing plant structure, reducing manufacturing costs and improving gross margins); continued focus on driving operational efficiencies; and ongoing business and commercial model changes. Other activities under the plan involve rationalizing organizational reporting structures to streamline various functions, eliminate bureaucracy, increase productivity and better align resources to business strategies and marketplace dynamics. Activities under the plan were initiated in the fourth quarter of 2013 and are expected to be substantially completed by the end of 2015.We estimate that the 2014 Restructuring plan will result in total pre-tax charges of approximately $250 million to $300 million and reduce gross annual pre-tax operating expenses by approximately $175 million to $225 million by the end of 2015. We expect a substantial portion of the savings to be reinvested in strategic growth initiatives. Expense reduction initiatives under the plan include various cost and efficiency improvement measures, which may include workforce reductions; the transfer of certain production lines and/or the closure of certain facilities and other efforts to streamline and better align resources of our business, among other actions. These measures could yield unintended consequences, such as distraction of our management and employees, business disruption, attrition beyond any planned reduction in workforce, inability to attract or retain key personnel, and reduced employee productivity. Attrition beyond any planned reduction in workforce or a material decrease in employee morale or productivity could negatively affect our business, sales, financial condition and results of operations. In addition, workforce reductions may subject us to the risk of litigation, which could result in substantial cost. Moreover, our restructuring and optimization initiatives result in charges and expenses that impact our operating results. We cannot guarantee that the activities under the 2014 Restructuring plan or other restructuring and optimization initiatives that we may undertake in the future will result in the desired efficiencies and estimated cost savings.

Current domestic and international economic conditions could adversely affect our cash flows and results of operations.

Uncertainty about global economic conditions, including as a result of credit and sovereign debt issues, has caused and may continue to cause disruption in the financial markets, including diminished liquidity and credit availability. These conditions may adversely affect our suppliers, leading them to experience financial difficulties or to be unable to borrow money to fund their operations, which could cause disruptions in our ability to produce our products. Our customers may experience financial difficulties or be unable to borrow money to fund their operations, which may adversely impact their ability or decision to purchase our products, particularly capital equipment, or to pay for our products they do purchase on a timely basis, if at all. In addition, we have accounts receivable factoring programs in certain European countries. Continued deterioration of the global economy or increase in sovereign debt issues may impact our ability to transfer receivables to third parties in certain of those countries in the future. Third parties such as banks offering factoring programs in these countries are looking to reduce their exposure levels to government owned or supported debt. This could result in terminations of, or changes to the costs or credit limits of our existing factoring programs. Such terminations or changes could have a negative impact on our cash flow and days sales outstanding. Within Italy, Spain, and Portugal the number of days our receivables are outstanding continue to be above historical levels; however, the total balance outstanding for greater than 365 days has declined in the past 12 months.While we believe we have adequate allowances for doubtful accounts related to these accounts receivables, there can be no assurance that further deterioration in the global economy or increase in sovereign debt issues may not prevent collection of these accounts receivables and adversely affect our cash flows and results of operations.

The strength and timing of economic recovery remains uncertain and there can be no assurance that there will not be further deterioration in the global economy. Accordingly, we cannot predict to what extent global economic conditions, including sovereign debt issues and increased focus on healthcare systems and costs in the U.S. and abroad, may continue to negatively impact our average selling prices, net sales and profit margins, procedural volumes and reimbursement rates from third party payors. In addition, conditions in the financial markets and other factors beyond our control may adversely affect our ability to borrow money in the credit markets, access the capital markets and to obtain financing for acquisitions or other general corporate and commercial purposes.

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Healthcare policy changes, including healthcare reform legislation, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Political, economic and regulatory influences are subjecting the healthcare industry to potential fundamental changes that could substantially affect our results of operations. Government and private sector initiatives limiting the growth of healthcare costs (including price regulation), coverage and payment policies, comparative effectiveness of therapies, technology assessments and healthcare delivery structure reforms, are continuing in many countries where we do business. We believe that these changes are causing the marketplace to put increased emphasis on the delivery of more treatments that can reduce costs, improve efficiencies, and/or increase patient access. Although we believe our less-invasive products and technologies generate favorable clinical outcomes, value and cost efficiency, the resources necessary to demonstrate value to our customers, patients, payors, and other stakeholders may be significant and may take a longer period of time to gain widespread adoption. Moreover, there can be no assurance that our strategies will succeed for every product.

The Patient Protection and Affordable Care Act and Health Care and Education Affordability Reconciliation Act of 2010 were enacted into law in the U.S. in March 2010. As a U.S. headquartered company with significant sales in the United States, the medical device tax included in this law has materially affected us. The law imposed on medical device manufacturers a 2.3 percent excise tax on U.S. sales of Class I, II and III medical devices beginning in January 2013. Other provisions of this law, including comparative effectiveness research, pilot programs to evaluate alternative payment methodologies and other changes to the payment systems, could meaningfully change the way healthcare is developed and delivered, and may adversely affect our business and results of operations.

We cannot predict the specific healthcare programs and regulations that will be ultimately implemented by regional and national governments globally. However, any changes that lower reimbursements for either our products and/or procedures using our products, reduce medical procedure volumes or increase cost containment pressures on us or others in the healthcare sector could adversely affect our business and results of operations.

Healthcare cost containment pressures, government payment and delivery system reforms, changes in private payer policies, and marketplace consolidations could decrease the demand for our products, the prices which customers are willing to pay for those products and the number of procedures performed using our devices, which could have an adverse effect on our business, financial condition or results of operations.

Our products are purchased principally by hospitals, physicians and other healthcare providers around the world that typically bill various third-party payors, including governmental programs (e.g., Medicare and Medicaid in the United States) and private health plans, for the healthcare services provided to their patients. The ability of customers to obtain appropriate reimbursement for their products and services from private and governmental third-party payors is critical to the success of medical technology companies because it affects which products customers purchase and the prices they are willing to pay. Reimbursement varies by country and can significantly impact the acceptance of new products and technologies. Even if we develop a promising new product, we may find limited demand for the product unless reimbursement approval is obtained from private and governmental third-party payors. Further legislative or administrative reforms to the reimbursement systems in the United States, Japan, or other countries in a manner that significantly reduces reimbursement for procedures using our medical devices or denies coverage for those procedures, including price regulation, competitive bidding and tendering, coverage and payment policies, comparative effectiveness of therapies, technology assessments and managed-care arrangements, could have a material adverse effect on our business, financial condition or results of operations.

Third-party payors for hospital services globally continue to implement policies to contain healthcare costs. The introduction of cost containment incentives, combined with closer scrutiny of healthcare expenditures by both private health insurers and employers, has resulted in increased discounts and contractual adjustments to hospital charges for services performed, led to increased physician employment by hospitals in the U.S. hospital consolidation, and shifted services to the outpatient setting. Initiatives to limit the increase of healthcare costs, including price regulation, are also underway in several countries in which we do business. Hospitals or physicians may respond to these cost-containment pressures by substituting lower cost products or other therapies for our products, which could have a material adverse effect on our business, financial condition or results of operations.

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We are subject to extensive and dynamic medical device regulation, which may impede or hinder the approval or sale of our products and, in some cases, may ultimately result in an inability to obtain approval of certain products or may result in the recall or seizure of previously approved products.

Our products, marketing, sales and development activities and manufacturing processes are subject to extensive and rigorous regulation by the FDA pursuant to the Federal Food, Drug, and Cosmetic Act (FDC Act), by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies. Under the FDC Act, medical devices must receive FDA clearance or approval before they can be commercially marketed in the U.S. In the European Union, we are required to comply with applicable medical device directives (including the Medical Devices Directive and the Active Implantable Medical Devices Directive) and obtain CE Mark certification in order to market medical devices. The CE Mark is applied following approval from an independent notified body or declaration of conformity. The process of obtaining marketing approval or clearance from the FDA or by comparable agencies in foreign countries for new products, or with respect to enhancements or modifications to existing products, could:

• take a significant period of time;

• require the expenditure of substantial resources;

• involve rigorous pre-clinical and clinical testing, as well as increased post-market surveillance;

• require changes to products; and

• result in limitations on the indicated uses of products.

In addition, exported devices are subject to the regulatory requirements of each country to which the device is exported. Some countries do not have medical device regulations, but in most foreign countries, medical devices are regulated. Frequently, regulatory approval may first be obtained in a foreign country prior to application in the U.S. due to differing regulatory requirements; however, other countries, such as China for example, require approval in the country of origin or legal manufacturer first. Most countries outside of the U.S. require that product approvals be renewed or recertified on a regular basis, generally every four to five years. The renewal or recertification process requires that we evaluate any device changes and any new regulations or standards relevant to the device and conduct appropriate testing to document continued compliance. Where renewal or recertification applications are required, they may need to be renewed and/or approved in order to continue selling our products in those countries. There can be no assurance that we will receive the required approvals for new products or modifications to existing products on a timely basis or that any approval will not be subsequently withdrawn or conditioned upon extensive post-market study requirements.

Our global regulatory environment is becoming increasingly stringent, and unpredictable, which could increase the time, cost and complexity of obtaining regulatory approvals for our products, as well as the clinical and regulatory costs of supporting those approvals. Several countries that did not have regulatory requirements for medical devices have established such requirements in recent years and other countries have expanded on existing regulations. Certain regulators are exhibiting less flexibility and are requiring local preclinical and clinical data in addition to global data. While harmonization of global regulations has been pursued, requirements continue to differ significantly among countries. We expect this global regulatory environment will continue to evolve, which could impact our ability to obtain future approvals for our products, or could increase the cost and time to obtain such approvals in the future.

The FDA and other worldwide regulatory agencies actively monitor compliance with local laws and regulations through review and inspection of design and manufacturing practices, recordkeeping, reporting of adverse events, labeling and promotional practices. The FDA can ban certain medical devices; detain or seize adulterated or misbranded medical devices; order repair, replacement or refund of these devices; and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA may also enjoin and restrain a company for certain violations of the FDC Act and the Safe Medical Devices Act pertaining to medical devices, or initiate action for criminal prosecution of such violations. International sales of medical devices manufactured in the U.S. that are not approved by the FDA for use in the U.S., or that are banned or deviate from lawful performance standards, are subject to FDA export requirements.

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Regulations regarding the development, manufacture and sale of medical devices are evolving and subject to future change. We cannot predict what impact, if any, those changes might have on our business. Failure to comply with regulatory requirements could have a material adverse effect on our business, financial condition and results of operations. Later discovery of previously unknown problems with a product or manufacturer could result in fines, delays or suspensions of regulatory clearances, seizures or recalls of products, physician advisories or other field actions, operating restrictions and/or criminal prosecution. We may also initiate field actions as a result of a failure to strictly comply with our internal quality policies. The failure to receive product approval clearance on a timely basis, suspensions of regulatory clearances, seizures or recalls of products, physician advisories or other field actions, or the withdrawal of product approval by the FDA or by comparable agencies in foreign countries could have a material adverse effect on our business, financial condition or results of operations.

Our products are continually subject to clinical trials conducted by us, our competitors or other third parties, the results of which may be unfavorable, or perceived as unfavorable by the market, and could have a material adverse effect on our business, financial condition or results of operations.

As a part of the regulatory process of obtaining marketing clearance for new products, we conduct and participate in numerous clinical trials with a variety of study designs, patient populations and trial endpoints. Unfavorable or inconsistent clinical data from existing or future clinical trials conducted by us, by our competitors or by third parties, or the market's perception of this clinical data, may adversely impact our ability to obtain product approvals, our position in, and share of, the markets in which we participate and our business, financial condition, results of operations or future prospects.

Our future growth is dependent upon the development of new products and enhancement of existing products, which requires significant research and development, clinical trials and regulatory approvals, all of which are very expensive and time-consuming and may not result in commercially viable products.

In order to develop new products and enhance existing products, we focus our research and development programs largely on the development of next-generation and novel technology offerings across multiple programs and businesses. The development of new products and enhance existing products requires significant investment in research and development, clinical trials and regulatory approvals. The results of our product development efforts may be affected by a number of factors, including our ability to anticipate customer needs, innovate, and develop new products, complete clinical trials, obtain regulatory approvals and reimbursement in the United States and abroad, manufacture products in a cost-effective manner, obtain appropriate intellectual property protection for our products, and gain and maintain market approval of our products. There can be no assurance that any products now in development or that we may seek to develop in the future will achieve technological feasibility, obtain regulatory approval or gain market acceptance. If we are unable to develop and launch new products and enhanced products, our ability to maintain or expand our market position in the markets in which we participate may be materially adversely impacted. Further, we are continuing to investigate, and have completed several acquisitions that involve opportunities to further expand our presence in, and diversify into priority growth areas by accessing new products and technologies. There can be no assurance that our investments will be successful or we will be able to access new products and technologies on terms favorable to us, or that these products and technologies will achieve commercial feasibility, obtain regulatory approval or gain market acceptance. A delay in the development or approval of new products and technologies or our decision to reduce our investments may adversely impact the contribution of these technologies to our future growth.

The medical device industry and its customers are experiencing greater scrutiny and regulation by governmental authorities and are often the subject of numerous investigations, often involving marketing and other business practices or product quality issues including device recalls or advisories. These investigations could result in the commencement of civil and criminal proceedings; imposition of substantial fines, penalties and administrative remedies, including corporate integrity agreements, stipulated judgments or exclusion; diversion of our employees and management's attention; imposition of administrative costs and have an adverse effect on our financial condition, results of operations and liquidity; and may lead to greater governmental regulation in the future.

The medical devices we design, develop, manufacture and market are subject to rigorous regulation by the FDA and numerous other federal, state and foreign governmental authorities. These authorities continue to highly scrutize our industry. We have received subpoenas and other requests for information from Congress and other state and federal governmental agencies, including, among others, the U.S. Department of Justice, the Office of Inspector General of the Department of Health and Human Services (HHS), and the Department of Defense, as well foreign governments and agencies. We have also received subpoenas and other requests for information from comparable international governmental agencies. These request and/or subpoenas relate primarily to financial arrangements with healthcare providers, regulatory compliance and product promotional practices. We have cooperated with these subpoenas and other requests for information, and expect to continue to do so in the future. We cannot predict when the matters will be resolved, the outcome of these matters or their impact on us, and cooperation may involve significant costs, including document production costs. An adverse outcome in one or more of these matters could include the commencement of an investigation, civil and criminal proceedings; substantial fines, penalties and administrative remedies, including exclusion from

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government reimbursement programs, entry into Corporate Integrity Agreements (CIAs) with governmental agencies and amendments to existing CIAs. In addition, resolution of any of these matters could involve the imposition of additional and costly compliance obligations. For example, in 2009, we entered into a civil settlement with the DOJ regarding the DOJ's investigation relating to certain post-market surveys conducted by Guidant Corporation before we acquired Guidant in 2006. As part of the settlement, we entered into a CIA with the Office of Inspector General for HHS, which requires various provisions, including enhancements to certain compliance procedures related to financial arrangements with healthcare providers. Cooperation with requests and investigations from external agencies result in employee resource costs and diversion of employee focus. If any requests or investigations continue over a long period of time, could divert the attention of management from the day-to-day operations of our business and impose significant additional administrative burdens on us. These potential consequences, as well as any adverse outcome from these requests or investigations, could have a material adverse effect on our financial condition, results of operations and liquidity.

In addition, certain foreign governments, state governments (including that of Massachusetts, where we are headquartered) and the U.S. federal government have enacted legislation aimed at increasing transparency of our interactions with healthcare providers. As an example, compliance with the U.S. Physician Payment Sunshine Act requires us by law to disclose payments and other transfers of value to all U.S. physicians and U.S. teaching hospitals at the U.S. federal level made after August 1, 2013. Any failure to comply with these legal and regulatory requirements could impact our business. In addition, we have and may continue to devote substantial additional time and financial resources to further develop and implement enhanced structure, policies, systems and processes to comply with enhanced legal and regulatory requirements, which may also impact our business.

Further, Supreme Court case law has clarified that the FDA's authority over medical devices preempts certain state tort laws, but recently federal appeals courts have determined that some state tort law claims remain, and legislation has been introduced at the federal level to allow state intervention, all of which could lead to increased and inconsistent regulation at the state level.

Changes in tax laws, unfavorable resolution of tax contingencies, or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and/or liquidity.

We are subject to income taxes as well as non-income based taxes, in both the U.S. and various foreign jurisdictions. We are subject to on-going tax audits in various jurisdictions. Tax authorities may disagree with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision and have established contingency reserves for material, known tax exposures, including potential tax audit adjustments related to transfer pricing methodology disputes.

We have received Notices of Deficiency from the IRS reflecting proposed audit adjustments for Guidant Corporation for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. Subsequent to issuing these Notices, the IRS conceded a portion of its original assessment. The total incremental tax liability now asserted by the IRS for the applicable periods is $1.162 billion plus interest. The primary issue in dispute for all years is the transfer pricing in connection with the technology license agreements between domestic and foreign subsidiaries of Guidant. In addition, the IRS has proposed adjustments in connection with the financial terms of our Transaction Agreement with Abbott Laboratories pertaining to the sale of Guidant's vascular intervention business to Abbott in April 2006. We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment and we believe that the IRS has exceeded its authority by attempting to adjust the terms of our negotiated third-party agreement with Abbott. In addition, we believe that the IRS positions with regard to these matters are inconsistent with the applicable tax laws and the existing Treasury regulations.

We believe we have meritorious defenses for our tax filings and we have filed, or will timely file, petitions with the U.S. Tax Court contesting the Notices of Deficiency for the tax years in challenge. No payments on the net assessment would be required until the dispute is definitively resolved, which, based on experiences of other companies, could take several years. The IRS is currently examining the 2008 through 2010 tax years of Boston Scientific. During the first quarter of 2014 we were notified by the IRS of their intent to propose significant adjustments to our tax returns for these tax years based upon the same transfer pricing methodologies that are currently being contested in U.S. Tax Court for our tax years prior to 2008. As with the prior years, we disagree with the transfer pricing methodologies being applied by the IRS and we expect to contest any adjustments received through applicable IRS and judicial procedures, as appropriate. We believe that our income tax reserves associated with these matters are adequate and the final resolution will not have a material impact on our financial condition or results of operations. However, final resolution is uncertain and could have a material impact on our financial condition or results of operations.

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There can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves, and the actual outcomes of these disputes and other tax audits could have a material impact on our results of operations or financial condition. Additionally, changes in tax laws or tax rulings could materially impact our effective tax rate. For example, proposals for fundamental U.S. corporate tax reform, if enacted, could have a significant adverse impact on our future results of operations. In addition, effective January 1, 2013 the Patient Protection and Affordable Care Act imposed a 2.3 percent excise tax on medical device manufacturers on U.S. sales of Class I, II and III medical devices. We recorded $72 million and $73 million of expenses within our selling, general and administrative expenses during 2014 and 2013, respectively, as a result of this excise tax.

We may not effectively be able to protect our intellectual property or other sensitive data, which could have a material adverse effect on our business, financial condition or results of operations.

The medical device market in which we primarily participate is largely technology driven. Physician customers 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 and appellate courts can overturn lower court decisions. Furthermore, as our business increasingly relies on technology systems and infrastructure, our intellectual property, other proprietary technology and other sensitive data are potentially vulnerable to loss, damage or misappropriation.

Competing parties in our industry 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 product offerings infringe patents owned or licensed by them. We have similarly asserted that 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 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 condition, results of operations or liquidity.

Patents and other proprietary rights are and will continue to be essential to our business, and our ability to compete effectively with other companies will be dependent upon the proprietary nature of our technologies. We rely upon trade secrets, know-how, continuing technological innovations, strategic alliances and licensing opportunities to develop, maintain and strengthen our competitive position. We pursue a policy of generally obtaining patent protection in both the U.S. and abroad for patentable subject matter in our proprietary devices and attempt to review third-party patents and patent applications to the extent publicly available in order to develop an effective patent strategy, avoid infringement of third-party patents, identify licensing opportunities and monitor the patent claims of others. We currently own numerous U.S. and foreign patents and have numerous patent applications pending. We also are party to various license agreements pursuant to which patent rights have been obtained or granted in consideration for cash, cross-licensing rights or royalty payments. No assurance can be made that any pending or future patent applications will result in the issuance of patents, that any current or future patents issued to, or licensed by, us will not be challenged or circumvented by our competitors, or that our patents will not be found invalid. In addition, we may have to take legal action in the future to protect our patents, trade secrets or know-how or to assert them against claimed infringement by others. Any legal action of that type could be costly and time consuming and no assurances can be made that any lawsuit will be successful. We are generally involved as both a plaintiff and a defendant in a number of patent infringement and other intellectual property-related actions. The invalidation of key patents or proprietary rights that we own, or an unsuccessful outcome in lawsuits to protect our intellectual property, could have a material adverse effect on our business, financial condition or results of operations.

In addition, the laws of certain countries in which we market, and plan on manufacturing some of our products in the near future, do not protect our intellectual property rights to the same extent as the laws of the United States. If we are unable to protect our intellectual property in these countries, it could have a material adverse effect on our business, financial condition or results of operations.

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Furthermore, our intellectual property, other proprietary technology and other sensitive data are potentially vulnerable to loss, damage or misappropriation from system malfunction, computer viruses, unauthorized access to our data or misappropriation or misuse thereof by those with permitted access, and other events. While we have invested to protect our intellectual property and other data, and continue to work diligently in this area, there can be no assurance that our precautionary measures will prevent breakdowns, breaches, cyber-attacks or other events. Such events could have a material adverse effect on our reputation, business, financial condition or results of operations.

Pending and future intellectual property litigation could be costly and disruptive to us.

We operate in an industry that is susceptible to significant intellectual property litigation and, in recent years, it has been common for companies in the medical device field to aggressively challenge the patent rights of other companies in order to prevent the marketing of new devices. We are currently the subject of various patent litigation proceedings and other proceedings described in more detail under Item 3. Legal Proceedings and Note K- Commitments and Contingencies to our 2014 consolidated financial statements included in Item 8 of this Annual Report. Intellectual property litigation is expensive, complex and lengthy and its outcome is difficult to predict. 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 condition, results of operation or liquidity. Pending or future patent litigation may result in significant royalty or other payments or injunctions that can prevent the sale of products and may significantly divert the attention of our technical and management personnel. In the event that our right to market any of our products is successfully challenged, we may be required to obtain a license on terms which may not be favorable to us, if at all. If we fail to obtain a required license or are unable to design around a patent, our business, financial condition or results of operations could be materially adversely affected.

Pending and future product liability claims and other litigation, including private securities litigation, shareholder derivative suits and contract litigation, may adversely affect our financial condition and results of operations or liquidity.

The design, manufacture and marketing of medical devices of the types that we produce entail an inherent risk of product liability claims. Many of the medical devices that we manufacture and sell are designed to be implanted in the human body for long periods of time or indefinitely. A number of factors could result in an unsafe condition or injury to, or death of, a patient with respect to these or other products that we manufacture or sell, including physician technique and experience in performing the surgical procedure, component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information. These factors could result in product liability claims, a recall of one or more of our products or a safety alert relating to one or more of our products. Product liability claims may be brought by individuals or by groups seeking to represent a class.

We are currently the subject of product liability litigation proceedings and other proceedings described in more detail under Item 3. Legal Proceedings and Note K- Commitments and Contingencies to our 2014 consolidated financial statements included in Item 8 of this Annual Report. The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify. Plaintiffs in these types of lawsuits often seek recovery of very large or indeterminate amounts, including not only actual damages, but also punitive damages. The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time. In addition, the cost to defend against any future litigation may be significant. Product liability claims, securities and commercial litigation and other litigation in the future, regardless of the outcome, could have a material adverse effect on our financial condition, results of operations or liquidity. Additionally, we maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The fact that we do not maintain third-party insurance coverage for all categories of losses increases our exposure to unanticipated claims and adverse decisions and these losses could have a material adverse effect on our financial condition, results of operations or liquidity.

Any failure to meet regulatory quality standards applicable to our manufacturing and quality processes could have an adverse effect on our business, financial condition and results of operations.

As a medical device manufacturer, we are required to register our establishments and list our devices with the FDA and are subject to periodic inspection by the FDA for compliance with its Quality System Regulation requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures. In addition, the Federal Medical Device Reporting regulations require us to provide information to the FDA whenever there is evidence that reasonably suggests that a device may have caused or contributed to a death or serious injury or, if a malfunction were to occur, could cause or contribute to a death or serious injury. Compliance with applicable regulatory requirements is subject to continual review and is monitored rigorously through periodic inspections by the FDA which may result in observations on Form 483, and in some cases warning letters, that require corrective action. In the European Community, we are required to maintain certain International Standards Organization (ISO) certifications in order to sell our products and must undergo periodic inspections by

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notified bodies to obtain and maintain these certifications. Many other countries in which we do business have requirements similar to those of the US or the EU, and other foreign governments or agencies may subject us to periodic inspections as well.If we, or our manufacturers, fail to adhere to quality system regulations or ISO requirements, this could delay production of our products and lead to fines, difficulties in obtaining regulatory clearances, recalls, enforcement actions, including injunctive relief or consent decrees, or other consequences, which could, in turn, have a material adverse effect on our financial condition or results of operations.

Interruption of our manufacturing operations could adversely affect our results of operations and financial condition.

Our products are designed and manufactured in technology centers around the world, either by us or third parties. In most cases, the manufacturing of our products is concentrated in one or a few locations. Factors such as a failure to follow specific internal protocols and procedures, equipment malfunction, environmental factors or damage to one or more of our facilities could adversely affect our ability to manufacture our products. In the event of an interruption in manufacturing, we may be unable to quickly move to alternate means of producing affected products or to meet customer demand. In the event of a significant interruption, for example, as result of a failure to follow regulatory protocols and procedures, we may experience lengthy delays in resuming production of affected products due primarily to needs for regulatory approvals. As a result, we may experience loss of market share, which we may be unable to recapture, and harm to our reputation, which could adversely affect our results of operations and financial condition.

Disruptions in the supply of the materials and components used in manufacturing our products or the sterilization of our products by third-party vendors could adversely affect our results of operations and financial condition.

We purchase many of the materials and components used in manufacturing our products from third-party vendors. Certain of these materials and components are purchased from single sources due to quality considerations, expertise, costs or constraints resulting from regulatory requirements. In certain cases we may not be able to establish additional or replacement vendors for such materials or components in a timely or cost effective manner, largely as a result of FDA regulations that require validation of materials and components prior to their use in our products and the complex nature of our and many of our vendors' manufacturing processes. A reduction or interruption in the supply of materials and components used in manufacturing our products; an inability to timely develop and validate alternative sources if required; or a significant increase in the price of such materials or components could adversely affect our results of operations and financial condition, particularly materials or components related to our CRM products and drug-eluting stent systems.

In addition, many of our products require sterilization prior to sale and we utilize a mix of internal resources and contract sterilizers to perform this service. To the extent we or our contract sterilizers are unable to sterilize our products, whether due to capacity, availability of materials for sterilization, regulatory or other constraints, we may be unable to transition to other contract sterilizer, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have an adverse impact on our results of operations and financial condition.

Moreover, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission (SEC) promulgated new rules applicable to public companies like us that use certain minerals and metals, known as conflict minerals, in their products. The rules require us to undertake measures to understand the origin and, as need be, source of conflict minerals within our supply chain and to disclose, among other things, those measures and whether or not any such conflict minerals originated from the Democratic Republic of the Congo and adjoining countries. These requirements could, directly or indirectly, adversely affect the sourcing, availability and pricing of such minerals if they are found to be sourced from that region. In addition, we will incur additional costs to comply with the requirements, including with respect to measures undertaken to understand the origin and, as need be, source of conflict minerals used in our products.

We rely on the proper function, availability and security of information technology systems to operate our business and a cyber-attack or other breach of these systems could have a material adverse effect on our business, financial condition or results of operations.

We rely on information technology systems to process, transmit, and store electronic information in our day-to-day operations. Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, or other significant disruption. Our information systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the increasing need to protect patient and customer information, and changing customer patterns. In addition, third parties may attempt to hack into our products to obtain data relating to patients with our products or our proprietary information. Any failure by us to maintain or protect our information technology systems and data integrity, including from cyber-attacks, intrusions or other breaches, could result in the unauthorized access to patient data and personally identifiable information, theft

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of intellectual property or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations. Any of these events, in turn, may cause us to lose existing customers, have difficulty preventing, detecting, and controlling fraud, have disputes with customers, physicians, and other health care professionals, be subject to legal claims and liability, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach or theft of intellectual property, or suffer other adverse consequences, any of which could have a material adverse effect on our business, financial condition or results of operations.

Our share price has been volatile and may fluctuate, and accordingly, the value of an investment in our common stock may also fluctuate.

Stock markets in general, and our common stock in particular, have experienced significant price and volume volatility over recent years. The market price and trading volume of our common stock may continue to be subject to significant fluctuations due to factors described under this Item 1A entitled “Risk Factors,” as well as economic and geopolitical conditions general, and also to variability in the prevailing sentiment regarding our operations or business prospects, as well as, among other things, changing investment priorities of our stockholders. Since the market price of our common stock fluctuates significantly, stockholders may not be able sell their shares at attractive prices.

If we are unable to attract, retain and focus key personnel, it could have an adverse effect on our business, financial condition and results from operations.

We constantly monitor the dynamics of the economy, the healthcare industry and the markets in which we compete; and we continue to assess opportunities to improve operational effectiveness and better align expenses with revenues, while preserving our ability to make needed investments, research and development projects, capital and our people that we believe are essential to our long-term success. In our industry, there is substantial competition for key personnel in the regions in which we operate and we may face increased competition for such employees, particularly in emerging markets as the trend toward globalization continues. If we are unable to attract key personnel in a timely manner, including key sales and other personnel who have critical industry experience and relationships in the regions in which we operate, including in emerging markets, it may have an adverse effect on our business and our ability to drive growth, including through execution of our strategic initiatives. Furthermore, some of the key personnel for whom we compete have post-employment arrangements with their current or former employer that may impact our ability to hire them or expose us and them to claims. In addition, if we are unable to retain and focus our existing key personnel it may have an adverse effect on our business, financial condition and results from operations. Moreover, we recently completed changes in our senior management structure, which may lead to inefficiencies in our ability to execute our strategic, cost-reduction and efficiency initiatives, which may have an adverse effect on our business and results of operations.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

Our world headquarters is located in Marlborough, Massachusetts, with additional support provided from regional headquarters located in Singapore and Voisins-le-Bretonneux, France. As of December 31, 2014, our principal manufacturing and technology centers were located in Minnesota, California, and Indiana within the U.S; as well as internationally in Ireland, Costa Rica and Puerto Rico. Our products are distributed worldwide from customer fulfillment centers in Massachusetts, The Netherlands and Japan. As of December 31, 2014, we maintained 12 principal manufacturing facilities, including six in the U.S., three in Ireland, two in Costa Rica, and one in Puerto Rico, as well as various distribution and technology centers around the world. Many of these facilities produce and manufacture products for more than one of our divisions and include research facilities. The following is a summary of our facilities as of December 31, 2014 (in approximate square feet):

	Owned *	Leased **	Total
U.S.	4,488,000	1,381,000	5,869,000
International	1,512,000	1,092,000	2,604,000
	6,000,000	2,473,000	8,473,000

* Includes our principal manufacturing facilities in Minnesota, Ireland, Puerto Rico and one facility in Costa Rica; our customer fulfillment centers in Massachusetts, The Netherlands and Japan; and our global headquarters location in Marlborough, Massachusetts.

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** Includes our principal manufacturing facilities in California, Indiana, and one facility in Costa Rica; and our regional headquarters located in Singapore and Voisins-le-Bretonneux, France.

We regularly evaluate the condition and capacity of our facilities to ensure they are suitable for the development, manufacturing, and marketing of our products, and provide adequate capacity for current and expected future needs. Further, our 2014 restructuring plan continues the implementation of our ongoing Plant Network Optimization (PNO) strategy, which is intended to simplify our manufacturing plant structure by transferring certain productions lines among facilities. Refer to Restructuring Initiatives within Results of Operations included in Item 7 of this Annual Report and Note H – Restructuring-related Activities to our 2014 consolidated financial statements included in Item 8 of this Annual Report.

ITEM 3. LEGAL PROCEEDINGS

See Note K – Commitments and Contingencies to our 2014 consolidated financial statements included in Item 8 of this Annual Report and incorporated herein by reference.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol “BSX.” The following table provides the market range for the closing price of our common stock for each of the last eight quarters based on reported sales prices on the NYSE.

2014	High		Low
First Quarter	$	13.98	$	11.91
Second Quarter	13.77		12.58
Third Quarter	13.29		11.81
Fourth Quarter	13.68		11.37
2013
First Quarter	$	7.81	$	5.89
Second Quarter	9.64		7.09
Third Quarter	11.99		9.15
Fourth Quarter	12.38		11.18

Holders

The closing price of our common stock on January 30, 2015 was $14.81. As of January 30, 2015, there were 12,650 holders of record of our common stock.

Dividends

We did not pay a cash dividend in 2014 or 2013, and currently do not intend to pay cash dividends. We may consider declaring and paying a cash dividend in the future; however, there can be no assurance that we will do so.

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Securities Authorized for Issuance under Equity Compensation Plans

Please see Item 12 "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" under Part III of this Annual Report for information on where to find information required by Item 201(d) of Regulation S-K.

Purchases of Equity Securities by the Issuer and Affiliated Purchases

During 2014, we used $125 million of cash generated from operations to repurchase approximately 10 million shares of our common stock pursuant to our share repurchase authorizations and during 2013, we used $500 million of cash generated from operations to repurchase approximately 51 million shares of our common stock pursuant to our share repurchase authorizations discussed in Note L - Stockholders' Equity to our 2014 consolidated financial statements contained in Item 8 of this Annual Report.

The following table provides information with respect to purchases by Boston Scientific Corporation of equity securities that are registered by us pursuant to Section 12 of the Exchange Act, during the fourth quarter of 2014:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs *	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
10/01/14 - 10/31/14	—	$	—	—	$	534,535,954
11/01/14 - 11/30/14	—	—		—	534,535,954
12/01/14 - 12/31/14	—	—		—	534,535,954
Total	—	$	—	—	$	534,535,954
On January 25, 2013, our Board of Directors approved a new program authorizing the repurchase of up to $1.0 billion of our common stock. As of December 31, 2014, we had approximately $535 million remaining available under the 2013 share repurchase program.

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Stock Performance Graph

The graph below compares the five-year total return to stockholders on our common stock with the return of the Standard & Poor’s (S&P) 500 Stock Index and the S&P Health Care Equipment Index. The graph assumes $100 was invested in our common stock and in each of the named indices on December 31, 2009, and that all dividends were reinvested.

Note: The stock price performance shown on the graph above is not indicative of future price performance. This graph shall not be deemed "filed" for purposes of Section18 of the Exchange Act or otherwise subject to the liabilities of that section nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.

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ITEM 6. SELECTED FINANCIAL DATA

FIVE-YEAR SELECTED FINANCIAL DATA

(in millions, except per share data)

Operating Data

Year Ended December 31,	2014			2013			2012			2011		2010
Net sales	$	7,380		$	7,143		$	7,249		$	7,622	$	7,806
Gross profit	5,170			4,969			4,900			4,963		5,207
Total operating expenses	5,471			4,849			8,768			4,059		5,863
Operating income (loss)	(301		)	120			(3,868		)	904		(656		)
Income (loss) before income taxes	(509		)	(223		)	(4,107		)	642		(1,063		)
Net income (loss)	(119		)	(121		)	(4,068		)	441		(1,065		)
Net income (loss) per common share:
Basic	$	(0.09	)	$	(0.09	)	$	(2.89	)	$	0.29	$	(0.70	)
Assuming dilution	$	(0.09	)	$	(0.09	)	$	(2.89	)	$	0.29	$	(0.70	)

Balance Sheet Data

As of December 31,	2014		2013		2012		2011		2010
Cash, cash equivalents and marketable securities	$	587	$	217	$	207	$	267	$	213
Working capital	760		1,187		1,250		1,298		1,006
Total assets	17,042		16,571		17,154		21,290		22,128
Borrowings (short-term)	403		3		4		4		504
Borrowings (long-term)	3,859		4,237		4,252		4,257		4,934
Stockholders’ equity	6,457		6,539		6,870		11,353		11,296
Book value per common share*	$	4.86	$	4.95	$	5.07	$	7.84	$	7.43

*Book value per common share is calculated using shares outstanding as of December 31, for each year, respectively shown.

The data above include certain charges (credits) recorded in conjunction with goodwill and other intangible asset impairments, acquisitions, divestitures, restructuring and restructuring-related activities, debt extinguishment charges and/or litigation. The data above should be read in conjunction with our consolidated financial statements, including the notes thereto, included in Item 8 of this Annual Report, as well as prior year Form 10-K filings.

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ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report.

Executive Summary

Financial Highlights and Trends

In 2014, we generated net sales of $7.380 billion, as compared to $7.143 billion in 2013, an increase of $237 million, or three percent. Our net sales were unfavorably impacted by $99 million from foreign currency fluctuations in 2014, as compared to 2013 and sales related to our divested Neurovascular business declined$54 million in 2014. Refer to Note C - Divestitures included in Item 8 of this Annual Report for additional information on the Neurovascular divestiture. Excluding the impact of foreign currency and sales from divested businesses, our net sales increased $390 million, or six percent, as compared to the prior year. This increase was due primarily to constant currency increases in net sales from our Interventional Cardiology business of $97 million, from our Electrophysiology business of $74 million, from our Endoscopy business of $66 million, and from our Peripheral Interventions business of $56 million.¹ Refer to the Business and Market Overview section for further discussion of our sales results.

Our reported net loss in 2014 was $119 million, or $0.09 per share, and was driven primarily by litigation-related charges of $600 million ($386 million after-tax) recorded for the settlement agreement reached with Johnson & Johnson on February 13, 2015. See Note K - Commitments and Contingencies included in Item 8 of this Annual Report for additional information on the settlement agreement. Our reported results for 2014 included intangible asset impairment charges; acquisition- and divestiture-related net credits; restructuring- and litigation-related charges; discrete tax items; and amortization expense (after-tax) of $1.248 billion, or $0.93 per share. Excluding these items, net income for 2014 was $1.129 billion, or $0.84 per share¹.

Our reported net loss in 2013 was $121 million, or $0.09 per share. Our reported results for 2013 included goodwill and intangible asset impairment charges; acquisition- and divestiture-related net charges; restructuring- and litigation-related charges; debt extinguishment charges; discrete tax items; and amortization expense (after-tax) of $1.112 billion, or $0.82 per share. Excluding these items, net income for 2013 was $991 million, or $0.73 per share¹. The following is a reconciliation of our results of operations prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) to those adjusted results considered by management. Refer to Results of Operations for a discussion of each reconciling item:

	Year Ended December 31, 2014
				Tax						Impact per
in millions, except per share data	Pre-Tax			Impact			After-Tax			share
GAAP net income (loss)	$	(509	)	$	390		$	(119	)	$	(0.09	)
Non-GAAP adjustments:
Intangible asset impairment charges	195			(30		)	165			0.12			*
Acquisition- and divestiture-related net credits	(10		)	(24		)	(34		)	(0.03		)	*
Restructuring-related charges	117			(27		)	90			0.07			*
Litigation-related charges	1,036			(377		)	659			0.49			*
Discrete tax items	—			(17		)	(17		)	(0.01		)	*
Amortization expense	438			(53		)	385			0.29			*
Adjusted net income	$	1,267		$	(138	)	$	1,129		$	0.84

* Assumes dilution of 23.7 million shares for the year ended December 31, 2014 for all or a portion of these non-GAAP adjustments.

¹Sales growth rates that exclude the impact of sales from divested businesses and/or changes in foreign currency exchange rates and net income and net income per share excluding certain items required by GAAP are not prepared in accordance with U.S. GAAP. Refer to Additional Information in this Item 7 for a discussion of management’s use of these non-GAAP financial measures.

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	Year Ended December 31, 2013
				Tax						Impact per
in millions, except per share data	Pre-Tax			Impact			After-Tax			share
GAAP net income (loss)	$	(223	)	$	102		$	(121	)	$	(0.09	)
Non-GAAP adjustments:
Goodwill and other intangible asset impairment charges	476			(8		)	468			0.35			**
Acquisition- and divestiture-related net charges	1			3			4			0.00			**
Restructuring-related charges	124			(36		)	88			0.07			**
Litigation-related charges	221			(72		)	149			0.11			**
Debt extinguishment charges	70			(26		)	44			0.03			**
Discrete tax items	—			(7		)	(7		)	(0.01		)	**
Amortization expense	410			(44		)	366			0.27			**
Adjusted net income	$	1,079		$	(88	)	$	991		$	0.73

** Assumes dilution of 19.5 million shares for the year ended December 31, 2013 for all or a portion of these non-GAAP adjustments.

Cash generated by operating activities was $1.269 billion in 2014, as compared to $1.110 billion in 2013. Our cash generated from operations continues to be a significant source of funds for investing in our growth and returning value to shareholders by buying back shares of our common stock pursuant to our share repurchase authorizations discussed in Note L - Stockholders' Equity to our 2014 consolidated financial statements contained in Item 8 of this Annual Report. During 2014, we used $125 million of cash generated from operations to repurchase approximately 10 million shares of our common stock, as compared to 2013 in which $500 million of cash generated from operations was used to repurchase approximately 51 million shares of our common stock. As of December 31, 2014, we had total debt of $4.262 billion, cash and cash equivalents of $587 million and working capital of $760 million. We hold investment-grade ratings with all three major credit-rating agencies. We believe our investment grade credit profile reflects the size and diversity of our product portfolio, our leading share position in several of our served markets, our strong cash flow, our solid financial fundamentals and our financial strategy.

Business and Market Overview

Cardiovascular

Interventional Cardiology

Our Interventional Cardiology division develops, manufactures and markets technologies for diagnosing and treating coronary artery disease and other cardiovascular disorders. Product offerings include coronary stents, including drug-eluting and bare metal stent systems, balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, crossing and re-entry devices for the treatment of chronically occluded coronary vessels, diagnostic catheters used in percutaneous transluminal coronary angioplasty procedures, and intravascular ultrasound (IVUS) imaging systems. We also offer structural heart products in certain international markets, which include a device for transcatheter aortic valve replacement and a device designed to close the left atrial appendage in patients with atrial fibrillation that are at risk for ischemic stroke.

In May 2014, we launched our Promus PREMIER™ Everolimus-Eluting Platinum Chromium Coronary Stent System in Japan, following regulatory approval by the Japanese Ministry of Health, Labor and Welfare (MHLW). We had previously launched this technology in Europe and select other geographies during the first quarter of 2013, and in the U.S. during the fourth quarter of 2013. The Promus PREMIER™ Stent System is designed to provide physicians improved drug-eluting stent performance in treating patients with coronary artery disease, and features a unique customized platinum chromium alloy stent architecture and an enhanced stent delivery system. We also market our next generation SYNERGY™ Everolimus-Eluting Platinum Chromium Coronary Stent System in select European and other Conformité Européenne (CE) Mark countries, which features an ultra-thin abluminal (outer) bioabsorbable polymer coating. During 2014, we continued to expand our commercial launch of this technology in Europe. The EVOLVE II clinical trial, which is designed to further assess the safety and effectiveness of the SYNERGY Stent System and support U.S. Food and Drug Administration (FDA) and Japanese regulatory approvals for this technology, released results in November 2014. The results demonstrated the SYNERGY stent system met its primary endpoint in this non-inferiority study, which evaluated the one-year rate of target lesion failure. We expect FDA approval of this technology in late 2015.

Our worldwide net sales of Interventional Cardiology products were $2.057 billion for the year ended December 31, 2014, or approximately 28 percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of Interventional Cardiology products increased$60 million, or three percent, in 2014, as compared to 2013. Excluding the impact

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of changes in foreign currency exchange rates, which had a $37 million negative impact on our Interventional Cardiology net sales in 2014, as compared to 2013, net sales of these products increased $97 million, or five percent.

Our drug-eluting coronary stent system sales represent a significant portion of our Interventional Cardiology net sales. The following are the components of our worldwide drug-eluting coronary stent system sales:

	Year Ended						Year Ended
(in millions)	December 31, 2014						December 31, 2013
	U.S.		International		Total		U.S.		International		Total
Drug-eluting coronary stents	$	486	$	665	$	1,151	$	448	$	665	$	1,113

The year-over-year increase in our worldwide Interventional Cardiology net sales was primarily related to sales of our Promus PREMIER™ Stent System in the U.S. and Japan, our SYNERGY™ Everolimus-Eluting Platinum Chromium Coronary Stent System in select European and other CE Mark countries, our structural heart products in international markets, including the Lotus™ transcatheter aortic valve replacement system and the WATCHMAN^® left atrial appendage closure device, along with operational growth in our other cardiology product lines, including our OptiCross™ Coronary Imaging Catheter, iLab^® Intravascular Ultrasound Imaging System, and Polaris^® Imaging System.

Our structural heart product offerings include our Lotus™ Valve System, a device for transcatheter aortic valve replacement and our WATCHMAN^® device designed to close the left atrial appendage in patients with atrial fibrillation who are at risk for ischemic stroke. The Lotus™ Valve System consists of a stent-mounted tissue valve prosthesis and catheter delivery system for guidance and placement of the valve. In October 2013, we received CE Mark approval and launched the Lotus™ Valve System in Europe. In September 2014, we initiated the REPRISE III clinical trial with first patient enrollment. The initiation of the REPRISE III clinical trial marks the beginning of the process required to support FDA premarket approval. The WATCHMAN^® Left Atrial Appendage Closure Technology (WATCHMAN^®) is the first device studied in a randomized clinical trial to offer an alternative to warfarin, and is marketed in CE Mark countries and other international countries. In the U.S., we completed the 18 month follow-up PREVAIL trial and final five year follow-up in the PROTECT AF trial to evaluate the safety and efficacy of the WATCHMAN^® device in patients with nonvalvular atrial fibrillation versus long-term warfarin therapy and are working towards approval of the device. On October 8, 2014, the FDA Circulatory Device Panel of the Medical Devices Advisory Committee (the Panel) voted favorably (six yes to five no, with one abstention) that the benefits of the WATCHMAN^® device outweigh the risks. The Panel also voted favorably (12 yes to zero no) on the reasonable assurance of safety while voting unfavorably (six yes to seven no, Chairman vote as tie-breaker) on the question of reasonable assurance of effectiveness. We are committed to working with the FDA to address the Panel’s comments and recommendations. We estimate FDA approval of this technology in the first half of 2015.

Peripheral Interventions

Our Peripheral Interventions (PI) product offerings include stents, balloon catheters, wires, peripheral embolization devices and other devices used to diagnose and treat peripheral vascular disease. Our worldwide net sales of PI products were $850 million for the year ended December 31, 2014, or approximately 12 percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of PI products increased$41 million, or five percent, in 2014, as compared to 2013. Excluding the impact from changes in foreign currency exchange rates, which had a $15 million negative impact on our worldwide PI net sales in 2014, as compared to 2013, net sales of these products increased $56 million, or seven percent. The year-over-year increase in worldwide PI net sales was primarily driven by growth in our core PI franchise, particularly our interventional oncology franchise, as well as revenues from the Interventional Division of Bayer AG (Bayer).

On August 29, 2014, we completed the acquisition of the Interventional Division of Bayer for $414 million in cash. We believe that this acquisition enhances our ability to offer physicians and healthcare systems a more complete portfolio of solutions to treat challenging vascular conditions. The addition of Bayer's strong commercial organization and innovative technologies supports our strategy to provide a comprehensive portfolio of leading solutions to treat peripheral vascular disease. The transaction includes the leading AngioJet® Thrombectomy System and the Fetch® 2 Aspiration Catheter, which are used in endovascular procedures to remove blood clots from blocked arteries and veins, and the JetStream® Atherectomy System, used in an innovative and fast-growing therapy to remove plaque and thrombi from diseased arteries.

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During the fourth quarter of 2012, we completed the acquisition of Vessix, a developer of catheter-based renal denervation systems for the treatment of resistant hypertension. Through the acquisition of Vessix, we added a highly differentiated technology to our hypertension strategy and launched this technology in Europe in May 2013. We have seen a slowdown in the resistant hypertension market in Europe following the failure of a competitor's large randomized clinical trial, which was announced during the first quarter of 2014. During the first half of 2014, based on a careful examination of the available data, we determined that additional clinical research was required before we pursue a large, global pivotal trial. In December 2014, we agreed upon a study protocol with the FDA for an innovative Investigational Device Exemption trial called REDUCE-HTN REINFORCE. The trial is designed to isolate the effects of our Vessix renal denervation system while minimizing the impact of multiple medications and patient compliance. As a result of changes in our clinical strategy and lower estimates of the European and global hypertension markets, we reduced our expectations for future revenue and recorded impairment charges related to the Vessix technology intangible assets during 2014. See Note D - Goodwill and Other Intangible Assets included in Item 8 of this Annual Reportfor further details.

Rhythm Management

Cardiac Rhythm Management

Our CRM division develops, manufactures and markets a variety of implantable devices including implantable cardioverter defibrillator systems and pacemaker systems that monitor the heart and deliver electricity to treat cardiac abnormalities. Our worldwide net sales of CRM products were $1.912 billion for the year ended December 31, 2014, or approximately 26 percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of CRM products increased$26 million, or one percent, in 2014, as compared to 2013. Excluding the impact of changes in foreign currency exchange rates, which had a $14 million negative impact on our CRM net sales in 2014, as compared to 2013, net sales of these products increased $40 million, or two percent. The year-over-year increase in worldwide CRM net sales was primarily driven by increases in our denovo ICD market share as a result of our subcutaneous implantable cardiac defibrillator (S-ICD) technology and our new line of defibrillators; partially offset by lower volumes of replacement procedures and implantable cardiac resynchronization therapy defibrillator (CRT-D) market share losses in certain regions.

The following are the components of our worldwide CRM net sales:

	Year Ended						Year Ended
(in millions)	December 31, 2014						December 31, 2013
	U.S.		International		Total		U.S.		International		Total
Defibrillator systems	$	867	$	513	$	1,380	$	850	$	505	$	1,355
Pacemaker systems	255		277		532		267		264		531
CRM products	$	1,122	$	790	$	1,912	$	1,117	$	769	$	1,886

In February 2014, our European business initiated the full launch of our new X4 line of quadripolar CRT-D systems, including the AUTOGEN™ X4, DYNAGEN™ X4, and INOGEN™ X4 cardiac resynchronization therapy defibrillators (CRT-Ds), a suite of ACUITY™ X4 quadripolar LV leads and the ACUITY™ PRO lead delivery system. In addition, in April 2014, we received FDA approval for the DYNAGEN™ MINI and INOGEN™ MINI ICDs, the smallest fully-powered standard longevity ICD on the market,as well as the DYNAGEN™ X4 and INOGEN™ X4 CRT-Ds. These new defibrillators were launched in the U.S. during the second quarter of 2014 and our global roll-out of this new line of defibrillators will continue into 2015. In addition, our new EL (extended longevity) line of ICDs, was launched in the U.S. in the first quarter of 2015. We also completed U.S. phase I enrollment in our Quadripolar lead clinical trial in the fourth quarter of 2014. We expect FDA approval of this lead in the first half of 2016.

Our pacemaker system net sales remained relatively flat during 2014, as compared to 2013. Our international pacemaker business grew primarily due to the continued adoption of our INGENIO™ family of pacemakers.This was offset by a decline in the U.S. pacemaker business primarily driven by price erosion. We are encouraged by physician feedback on our next generationIngevity family of magnetic resonance imaging (MRI) compatible pacing leads in select international markets. Ingevity™ MRI pacing leads are part of the ImageReady™ MR-conditional pacemaker system, which includes VITALIO™ MRI, FORMIO™ MRI, ADVANTIO™ MRI and INGENIO™ MRI pulse generators. When used with the LATITUDE™ NXT Patient Management System, these devices wirelessly monitor patients for conditions such as atrial arrhythmias. We commenced the U.S. Investigational Device Exemption (IDE) trial for the Ingevity™ MRI pacing lead during February 2013. During the second half of 2014, we also received FDA approval of our new ACCOLADE™ family of pacemakers, the second generation of INGENIO pacemakers, and cardiac resynchronization therapy pacemakers, including a quadripolar header design. We expect to initiate a full launch of this technology in 2015.

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During the second quarter of 2012, we completed the acquisition of Cameron Health, Inc. (Cameron). Cameron developed the world's first and only commercially available subcutaneous implantable cardioverter defibrillator, the S-ICD® System, which we believe is a differentiated technology that will provide us the opportunity to both increase our market share in the existing ICD market and expand that market over time. The first generation S-ICD® System has received CE Mark and FDA approval. We became supply constrained in early 2013 and were only able to provide a very limited supply of S-ICD® systems during the second and third quarters of 2013. During the fourth quarter of 2013, we resumed our launch of our S-ICD® System and have seen strong physician and patient interest in this differentiated technology. We are also developing the Emblem S-ICD® System, a next generation S-ICD® System that is smaller in size and offers improved battery longevity and remote monitoring capabilities. We expect to receive regulatory approvals and to initiate a full launch of the Emblem S-ICD® technology in Europe and the U.S. by the end of 2015.

Electrophysiology

Our Electrophysiology business develops less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart. Our leading products include the Blazer™ line of ablation catheters, designed to deliver enhanced performance and responsiveness. Our worldwide net sales of Electrophysiology products were $227 million for the year ended December 31, 2014, or approximately three percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of Electrophysiology products increased$72 million, or 47 percent, in 2014, as compared to 2013. Excluding the impact from changes in foreign currency exchange rates, which had a $2 million negative impact on our Electrophysiology net sales in 2014, as compared to 2013, net sales of these products increased $74 million, or 48 percent. The year-over-year increase in worldwide Electrophysiology net sales was driven by our acquisition of the electrophysiology business of C.R. Bard Inc. (Bard EP), which we completed on November 1, 2013. Through our acquisition of Bard EP, we obtained a strong commercial team and complementary portfolio of ablation catheters, diagnostic tools, and electrophysiology recording systems, which we believe allows us to better serve the global Electrophysiology market through a more comprehensive portfolio offering and sales infrastructure.

During the fourth quarter of 2012, we completed the acquisition of Rhythmia Medical, Inc. (Rhythmia), a developer of next-generation mapping and navigation solutions for use in cardiac catheter ablations and other electrophysiology procedures, including atrial fibrillation and atrial flutter. During the third quarter of 2014, we initiated our limited launch of the Rhythmia next-generation mapping and navigation solution in both the U.S. and Europe.

We believe that the Rhythmia and Bard EP acquisitions, as well as our other expected product launches, will help to position us to participate more competitively in the growing Electrophysiology market.

MedSurg

Endoscopy

Our Endoscopy division develops and manufactures devices to treat a variety of medical conditions including diseases of the digestive and pulmonary systems. Our worldwide net sales of Endoscopy products were $1.323 billion for the year ended December 31, 2014, or approximately 18 percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of Endoscopy products increased$43 million, or three percent, in 2014, as compared to 2013. Excluding the impact from changes in foreign currency exchange rates, which had a negative $23 million impact on our Endoscopy net sales in 2014, as compared to 2013, net sales of these products increased $66 million, or five percent. The year-over-year increase in worldwide Endoscopy net sales was primarily driven by growth across several of our key product franchises, including our biliary device franchise with continued growth of our Expect^TM Endoscopic Ultrasound Aspiration Needle and our metal stent franchise driven by our Biliary WallFlex® product family, and our hemostasis franchise with products such as our Resolution Clip for gastrointestinal bleeding.

Urology and Women’s Health

Our Urology and Women’s Health division develops and manufactures devices to treat various urological and gynecological disorders. Our worldwide net sales of Urology and Women's health products were $535 million for the year ended December 31, 2014, or approximately seven percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of Urology and Women's health products increased$30 million, or six percent, in 2014, as compared to 2013. Excluding the impact from changes in foreign currency exchange rates, which had a negative $7 million impact on our Urology and Women's health net sales in 2014, as compared to 2013, net sales of these products increased $37 million, or seven percent. The year -over-year increase in worldwide Urology and Women's Health net sales was primarily attributable to growth in our Urology franchise as we continue to expand our international business.

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On May 7, 2014, we completed the acquisition of the remaining fully diluted equity of IoGyn, Inc. (IoGyn). IoGyn has developed the Symphion^TM System, a next generation system for hysteroscopic intrauterine tissue removal including fibroids (myomas) and polyps. In March 2014, IoGyn received U.S. FDA approval for the system and in October 2014, we launched the system in the United States.

Neuromodulation

Our Neuromodulation business offers the Precision® and Precision Spectra^TM Spinal Cord Stimulator systems, used for the management of chronic pain. Our worldwide net sales of Neuromodulation products were $472 million for the year ended December 31, 2014, or approximately six percent of our consolidated net sales for the year ended December 31, 2014. Our worldwide net sales of Neuromodulation products increased$19 million, or four percent, in 2014, as compared to 2013. Excluding the impact from changes in foreign currency exchange rates, which had a negative $1 million impact on our Neuromodulation net sales in 2014, as compared to 2013, net sales of these products increased $20 million, or five percent. The year-over-year increase in our worldwide Neuromodulation net sales was primarily driven by sales of our Precision Spectra System. The Precision Spectra System is the world's first and only spinal cord stimulation (SCS) system with 32 contacts and 32 dedicated power sources and is designed to provide improved pain relief to a wide range of patients who suffer from chronic pain. Significant changes to Medicare reimbursement for physician office trialing of SCS systems went into effect January 1, 2014, resulting in slower trialing volumes, which are typically a leading indicator of total SCS market growth. Due to these changes in reimbursement and lower market growth rates, as well as the higher prior year growth connected with the 2013 launch of Precision Spectra™, our revenue growth rate slowed throughout 2014.

We have CE Mark approval for use of our Vercise™ Deep Brain Stimulation (DBS) System for the treatment of Parkinson's disease, Tremor and intractable primary and secondary dystonia, a neurological movement disorder characterized by involuntary muscle contractions, in Europe. During 2013, we began our U.S. pivotal trial for the treatment of Parkinson's disease. We believe we have an exciting opportunity in DBS with the Vercise™ DBS System, which is designed to selectively stimulate targeted areas of the brain to customize therapy for patients and minimize side effects of unwanted stimulation.

Emerging Markets

As part of our strategic imperatives to drive global expansion, described in Item 1 of this Annual Report, we are seeking to grow net sales and market share by expanding our global presence, including in Emerging Markets. We define Emerging Markets as including 20 developing countries that we believe have strong growth potential based on their economic conditions, healthcare sectors, and our global capabilities. We are seeking to expand our presence and strengthen relationships in order to grow net sales and market share within our Emerging Markets, and we have increased our investment in infrastructure in these countries in order to maximize opportunities. Our Emerging Markets revenue grew 12 percent, as compared to the prior year, and was approximately ten percent of our consolidated net sales in 2014.

Neurovascular Divestiture

In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation for a purchase price of $1.500 billion in cash. We received $1.450 billion during 2011, $10 million during 2012, $30 million during 2013 and the final amount due to us in 2014. After the sale of our Neurovascular business to Stryker, we provided transitional services through a transition services agreement, and also manufactured and supplied products to Stryker through a supply agreement. These transition services and supply agreements substantially ended during 2013. Our sales related to our divested Neurovascular business have declined as the various transition services and supply agreements have terminated. We expect revenue from our divested Neurovascular business to be immaterial in 2015. Due to our continuing involvement in the operations of the Neurovascular business, the divestiture does not meet the criteria for presentation as a discontinued operation. Divestiture-related gains or charges are excluded by management for purposes of evaluating operating performance. See Results of Operations below and Note C - Divestitures to our 2014 consolidated financial statements included in Item 8 of this Annual Report for additional information.

Restructuring Initiatives

On an on-going basis, we monitor the dynamics of the economy, the healthcare industry, and the markets in which we compete; and we assess opportunities for improved operational effectiveness and efficiency and to better align expenses with revenues, while preserving our ability to make the investments in research and development projects, capital, our people and other programs that we believe are important to drive our growth. As a result of these assessments, we have undertaken various restructuring initiatives in order to enhance our growth potential and position us for long-term success. Additional information can be found in Results of Operations below and Note H – Restructuring-related Activities to our 2014 consolidated financial statements included in Item 8 of this Annual Report.

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Healthcare Policies

Political, economic and regulatory influences around the world continue subjecting the healthcare industry to potential fundamental changes that could substantially affect our results of operations. Government and private sector initiatives related to limiting the growth of healthcare costs (including price regulation); coverage and payment policies; comparative effectiveness of therapies; technology assessments; and health care delivery structure reforms, are continuing in many countries where we do business. We believe that these changes are causing the marketplace to put increased emphasis on the delivery of treatments that can reduce costs, improve efficiencies, and/or increase patient access. Although we believe our less-invasive products and technologies generate favorable clinical outcomes, value and cost efficiency, the resources necessary to demonstrate value to our customers, patients, payors, and other stakeholders may be significant and may take a longer period of time to gain widespread adoption.

The Patient Protection and Affordable Care Act and Health Care and Education Affordability Reconciliation Act were enacted into law in the U.S. in 2010. Certain provisions of the law have yet to be implemented and there are many programs and requirements for which the details have not yet been fully established or consequences not yet fully understood; therefore, it is unclear what the full impact will be from the law. The legislation imposes on medical device manufacturers a 2.3 percent excise tax on U.S. sales of Class I, II and III medical devices beginning in January 2013. We recorded $72 million and $73 million in 2014 and 2013, respectively, within our selling, general and administrative expenses. Other provisions of this law, including Medicare provisions aimed at improving quality and decreasing costs, comparative effectiveness research, an independent payment advisory board, and pilot programs to evaluate alternative payment methodologies, could meaningfully change the way healthcare is developed and delivered, and will place a significant emphasis on clinical and economic data to demonstrate efficacy and justify the economic benefits of technology purchases.

We expect that pricing of medical devices will remain under pressure as alternative payment reform such as prospective payment systems for hospital care, value-based purchasing, and accountable care organizations (ACOs) continue to take shape globally. Some governments also seek to limit the growth of healthcare costs through price regulation. Implementation of cost containment initiatives and healthcare reforms in significant markets such as the U.S., Japan and Europe and other markets may limit the price of, or the level at which reimbursement is provided for, our products, which in turn may influence a hospital’s or physician's selection of products used to treat patients. In addition, in Japan, the government reviews reimbursement rate benchmarks every two years, which may significantly reduce reimbursement for procedures using our medical devices or deny coverage for those procedures. We expect the next reimbursement rate update in Japan to be completed and take effect for the majority of our businesses during the second quarter of 2016.

Any changes in government policies that lower reimbursement for our products or reduce medical procedure volumes in countries in which we conduct business could adversely affect our business and results of operations. We cannot predict the specific healthcare programs and regulations that will be ultimately implemented by regional and national governments globally.

Results of Operations

Net Sales

Effective January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. We have three new global reportable segments comprised of Cardiovascular, Rhythm Management, and MedSurg. We have restated the 2012 information to conform to our new segment presentation.

We manage our global businesses on a constant currency basis, and we manage market risk from currency exchange rate changes at the corporate level. Management excludes the impact of changes in foreign currency exchange rates for purposes of reviewing revenue growth rates to facilitate an evaluation of current operating performance and comparison to past operating performance. To calculate revenue growth rates that exclude the impact of changes in foreign currency exchange rates, we convert current period and prior period net sales from local currency to U.S. dollars using standard internal currency exchange rates held constant for each year.

The following table provides our worldwide net sales by global business and the relative change on an as reported and constant currency basis. Net sales that exclude the impact of changes in foreign currency exchange rates and net sales from divested businesses are not financial measures prepared in accordance with U.S. GAAP and should not be considered in isolation from, or as a replacement for, the most directly comparable GAAP financial measure. Refer to Additional Information of this Item 7 for a further discussion of management’s use of this non-GAAP financial measure.

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							2014 versus 2013				2013 versus 2012
	Year Ended December 31,						As Reported Currency Basis		Constant Currency Basis		As Reported Currency Basis		Constant Currency Basis
(in millions)	2014		2013		2012
			(restated)		(restated)
Interventional Cardiology	$	2,057	$	1,997	$	2,179	3	%	5	%	(8	)%	(6	)%
Peripheral Interventions	850		809		787		5	%	7	%	3	%	5	%
Cardiovascular	2,907		2,806		2,966		4	%	5	%	(5	)%	(3	)%
Cardiac Rhythm Management	1,912		1,886		1,908		1	%	2	%	(1	)%	—	%
Electrophysiology	227		155		147		47	%	48	%	5	%	6	%
Rhythm Management	2,139		2,041		2,055		5	%	6	%	(1	)%	—	%
Endoscopy	1,323		1,280		1,239		3	%	5	%	3	%	7	%
Urology and Women’s Health	535		505		500		6	%	7	%	1	%	3	%
Neuromodulation	472		453		367		4	%	5	%	23	%	24	%
MedSurg	2,330		2,238		2,106		4	%	5	%	6	%	9	%
Subtotal Core Businesses	7,376		7,085		7,127		4	%	6	%	(1	)%	2	%
Divested Businesses	4		58		122		(91	)%	(91	)%	(53	)%	(52	)%
Worldwide	$	7,380	$	7,143	$	7,249	3	%	5	%	(1	)%	1	%

We restated worldwide sales for the twelve months ended December 31, 2013 and the twelve months ended December 31, 2012 to reflect the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014, which amounts were not material.

The constant currency growth rates in the table above can be recalculated from our net sales by reportable segment as presented in Note O - Segment Reporting to our 2014 consolidated financial statements contained in Item 8 of this Annual Report. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. Refer to Executive Summary for further discussion of our net sales and a comparison of our 2014 and 2013 net sales.

In 2013, we generated net sales of $7.143 billion, as compared to $7.249 billion in 2012, a decrease of $106 million, or one percent. Our net sales were unfavorably impacted by $156 million from foreign currency fluctuations in 2013 as compared to 2012 and sales related to our divested Neurovascular business declined $64 million in 2013. Excluding the impact of foreign currency and sales from divested businesses, our net sales increased $114 million, or two percent, as compared to the prior year. This increase was due primarily to constant currency increases in net sales from our Endoscopy business of $87 million, from our Neuromodulation business of $87 million, and from our Peripheral Interventions business of $41 million. These increases were partially offset by a constant currency decrease in net sales from our Interventional Cardiology business of $121 million.

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Gross Profit

Our gross profit was $5.170 billion in 2014, $4.969 billion in 2013, and $4.900 billion in 2012. As a percentage of net sales, our gross profit increased to 70.1 percent in 2014, as compared to 69.6 percent in 2013 and 67.6 percent in 2012. The following is a reconciliation of our gross profit margins and a description of the drivers of the change from period to period:

	Year Ended December 31,
	2014		2013
Gross profit - prior year	69.6	%	67.6	%
Manufacturing cost reductions	1.8	%	1.9	%
Neurovascular divestiture	0.4	%	0.5	%
Sales mix and pricing	(1.5	)%	(0.9	)%
All other, including other inventory charges, other period expense and net impact of foreign currency	(0.2	)%	0.5	%
Gross profit - current year	70.1	%	69.6	%

The increase in our gross profit margin for 2014, as compared to 2013, primarily resulted from manufacturing cost reductions as a result of our restructuring and other process improvement programs, as well as the positive impacts of lower sales related to our divested businesses, as these sales are at significantly lower gross profit margins. Partially offsetting these factors was the negative impact of pricing related primarily to sales of our drug-eluting stent and CRM products, as well as changes in the mix of our product sales. In addition, during the second quarter of 2013, we recorded a $16 million credit to cost of products sold related to the final retroactive pricing adjustment pursuant to our PROMUS® supply arrangement with Abbott for historical purchases of PROMUS® stent systems, the impact of which is included in the "all other" caption in the table above.

The increase in our gross profit margin for 2013, as compared to 2012, is primarily the result of cost reductions from our restructuring and process improvement programs. Our gross profit margin was also positively impacted by lower sales related to our divested businesses. In addition, our 2013 gross profit margins were positively impacted by the final retroactive pricing adjustment pursuant to our PROMUS® supply arrangement with Abbott, which is included in the "all other" caption in the table above. Partially offsetting these factors was the negative impact of pricing and sales mix related primarily to sales of our drug-eluting stent and CRM products.

Operating Expenses

The following table provides a summary of certain of our operating expenses:

	Year Ended December 31,
	2014			2013			2012
		% of Net			% of Net			% of Net
(in millions)	$	Sales		$	Sales		$	Sales
Selling, general and administrative expenses	2,902	39.3	%	2,674	37.4	%	2,535	35.0	%
Research and development expenses	817	11.1	%	861	12.0	%	886	12.2	%
Royalty expense	111	1.5	%	140	2.0	%	153	2.1	%

Selling, General and Administrative (SG&A) Expenses

In 2014, our SG&A expenses increased $228 million, or nine percent, as compared to 2013, and were 190basis points higher as a percentage of net sales. This increase was driven primarily by SG&A increases related to business combinations that we have completed over the last several years, product launches and other commercial and corporate programs, variable employee-related benefits and our expansion efforts in emerging markets, partially offset by declines in spending as a result of our restructuring and other cost reduction initiatives.

In 2013, our SG&A expenses increased $139 million, or five percent, as compared to 2012, and were 240basis points higher as a percentage of net sales. This increase was driven primarily by our increased investment related to acquisitions, strategic growth initiatives, and expansion efforts in emerging markets, as well as $73 million of expense associated with the new excise tax on U.S. sales of Class I, II and III medical devices that went into effect January 1, 2013. Partially offsetting these increases were declines in spending as a result of our restructuring and other cost reduction initiatives and the impact of changes in foreign currency exchange rates.

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Research and Development (R&D) Expenses

In 2014, our R&D expenses decreased $44 million, or five percent, as compared to 2013, and were 90basis points lower as a percentage of net sales. The decrease was due primarily to the benefits from our initiatives to transform our research and development efforts to be more effective and cost efficient, as well as the timing of certain R&D programs. We remain committed to advancing medical technologies and investing in meaningful research and development projects across our businesses in order to maintain a healthy pipeline of new products that we believe will contribute to profitable sales growth.

In 2013, our R&D expenses decreased $25 million, or approximately three percent, as compared to 2012, and were 20basis points lower as a percentage of net sales. The decrease was due primarily to our cost reduction initiatives associated with our restructuring programs and the benefits from our strategy to transform our research and development efforts to be more effective and cost efficient. Partially offsetting the decrease was R&D funding for our acquisitions.

Royalty Expense

In 2014, our royalty expense decreased $29 million, or 21 percent, as compared to 2013, and was 50basis points lower as a percentage of net sales. The decrease relates primarily to the renegotiation of a royalty agreement in the second quarter of 2014 that resulted in a lower royalty rate structure.

In 2013, our royalty expense decreased $13 million, or nine percent, as compared to 2012, and was tenbasis points lower as a percentage of net sales. The decrease related primarily to lower sales of our royalty-bearing products within our Interventional Cardiology business.

Amortization Expense

Our amortization expense was $438 million in 2014, as compared to $410 million in 2013, an increase of $28 million or seven percent. This increase was due primarily to amortizable intangible assets acquired during the fourth quarter of 2013 and during 2014.

Amortization expense was $410 million in 2013, as compared to $395 million in 2012, an increase of $15 million or four percent. This increase was due primarily to intangible assets associated with acquisitions we completed in the fourth quarter of 2012 and the electrophysiology business of C.R. Bard, Inc., which we acquired in the fourth quarter of 2013.

Amortization expense is excluded by management for purposes of evaluating operating performance and assessing liquidity.

Goodwill & Intangible Asset Impairment Charges

We have recorded intangible asset impairment charges, including impairments of in-process research and development, of $195 million in 2014, $53 million in 2013 and $142 million in 2012.

In 2013, we recorded a goodwill impairment charge of $423 million following our reorganization from geographic regions to global business units on January 1, 2013. In 2012, we recorded total goodwill impairment charges of $4.350 billion, the majority of which related to our former Europe, Middle East and Africa (EMEA) reporting unit. No goodwill impairment charges were recorded in 2014.

See Note D - Goodwill and Other Intangible Assets to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K, for additional details related to our goodwill and intangible asset impairment charges.

Refer to Critical Accounting Estimates for a discussion of key assumptions used in our goodwill and intangible asset impairment testing and future events that could have a negative impact on the recoverability of our goodwill and amortizable intangible assets. Goodwill impairment charges and intangible asset impairment charges are excluded by management for purposes of evaluating operating performance and assessing liquidity.

Contingent Consideration Expense

We recorded a net benefit related to the change in fair value of our contingent consideration liabilities of $85 million in 2014, a net expense of $4 million in 2013 and a net benefit of $6 million in 2012. See Note B – Acquisitions to our 2014 consolidated financial statements contained in Item 8 of this Annual Report for further discussion of our contingent consideration expense associated with our acquisitions. Contingent consideration expense is excluded by management for purposes of evaluating operating performance.

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Restructuring-related Activities and Charges

We recorded restructuring charges pursuant to our restructuring plan of $69 million during 2014, $101 million during 2013, and $136 million during 2012. In addition, we recorded expenses within other lines of out accompanying consolidated statements of operations related to our restructuring initiatives of $48 million during 2014, $23 million during 2013, and $24 million during 2012.

2014 Restructuring Plan

As of December 31, 2014, we have recorded costs of $142 million under the 2014 Restructuring Plan, of which $94 million has been recorded as restructuring charges and the remaining portion has been recorded through other lines within our consolidated statement of operations. We estimate that the 2014 Restructuring plan will result in total pre-tax charges of approximately $250 million to $300 million and reduce gross annual pre-tax operating expenses by approximately $175 million to $225 million by the end of 2015, which is when we expect the plan will be substantially complete. We expect a substantial portion of the savings to be reinvested in strategic growth initiatives.

Other Restructuring Plans

Our other restructuring plans, including our 2011 Restructuring Plan, 2010 Restructuring Plan and our Plant Optimization Program were substantially completed in years prior to 2014.

We made cash payments of $112 million in 2014, $141 million in 2013, and $149 million in 2012 associated with our restructuring initiatives. Restructuring and restructuring-related costs are excluded by management for purposes of evaluating operating performance.

See Note H - Restructuring-related Activities to our 2014 consolidated financial statements included in Item 8 of this Annual Report for additional details on our restructuring plans and activities.

Litigation-related Charges and Credits

We recorded net litigation-related charges in the amount of $1.036 billion, $221 million and $192 million, during 2014, 2013 and 2012, respectively. The charges recorded in 2014 included a $600 million charge related to the agreement between our subsidiary, Guidant Corporation (Guidant) and Johnson & Johnson signed on February 13, 2015, to settle the breach of merger agreement lawsuit brought by Johnson & Johnson, stemming from our acquisition of Guidant. In exchange, we have agreed to make aggregate payments totaling $600 million to Johnson & Johnson. These charges are excluded by management for purposes of evaluating operating performance. We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our debt covenants. See Note K - Commitments and Contingencies to our 2014 consolidated financial statements contained in Item 8 of this Annual Report for additional discussion of our litigation-related matters.

Gain on Divestiture

In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation. We recorded a pre-tax gain of $12 million during 2014, a gain of $38 million during 2013 and a gain of $15 million during 2012 associated with the transaction. These divestiture-related gains are excluded by management for purposes of evaluating operating performance.

Interest Expense

Our interest expense decreased to $216 million in 2014, as compared to $324 million in 2013. The decrease was primarily due to $70 million of debt extinguishment charges, representing premiums, accelerated amortization of debt issuance costs and investor discount costs net of accelerated amortization of interest rate hedge gains related to the early extinguishment of $1.450 billion of debt during the third quarter of 2013. Debt extinguishment charges are excluded by management for purposes of evaluating operating performance. Our average borrowing rate was 4.8 percent in 2014, as compared to 6.9 percent in 2013, which includes the impact of the debt extinguishment charges. Refer to Liquidity and Capital Resources and Note F – Borrowings and Credit Arrangements to our 2014 consolidated financial statements contained in Item 8 of this Annual Report for information regarding our debt obligations.

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Our interest expense increased to $324 million in 2013, as compared to $261 million in 2012. The increase was primarily due to $70 million of debt extinguishment charges discussed above, which were recorded during the third quarter of 2013. Including the debt extinguishment charges, our average borrowing rate was 6.9 percent in 2013 and 5.5 percent in 2012.

Other, net

Our other, net reflected income of $8 million in 2014, expense of $19 million in 2013, and income of $22 million in 2012. The following are the components of other, net:

	Year Ended December 31,
(in millions)	2014			2013			2012
Interest income	$	5		$	6		$	5
Foreign currency losses	(18		)	(11		)	(18		)
Net gains (losses) on investments	27			(9		)	37
Other expense, net	(6		)	(5		)	(2		)
	$	8		$	(19	)	$	22

During 2014, we recognized gains of $19 million associated with the acquisition of IoGyn, Inc. related to previously held investments and other net gains related to our investment portfolio of $8 million. During 2013, we recognized losses on investments of $9 million due to $7 million in investment impairments and $2 million for equity method adjustments on investments. During 2012, we recognized gains of $39 million associated with Cameron in which we held prior equity interests, which were partially offset by net losses of $2 million related to our investment portfolio. The acquisition-related gains from previously held investments are excluded by management for purposes of evaluating operating performance.

Tax Rate

The following table provides a summary of our reported tax rate:

	Year Ended December 31,
	2014		2013		2012
Reported tax rate	76.7	%	46.0	%	(1.0	)%
Impact of certain receipts/charges*	(64.5	)%	(35.4	)%	12.7	%
	12.2	%	10.6	%	11.7	%

*These receipts/charges are taxed at different rates than our effective tax rate.

The change in our reported tax rate for 2014, as compared to 2013 and 2012, relates primarily to the impact of certain receipts and charges that are taxed at different rates than our effective tax rate. In 2014, these receipts and charges included intangible asset impairment charges, acquisition- and divestiture-related net credits, and litigation- and restructuring-related charges. Our reported tax rate for 2014 was also affected by discrete tax items primarily related to resolution of various uncertain tax positions resulting from the expiration of the statute of limitations for assessing tax in certain jurisdictions and benefit due to change in uncertain tax positions due to a favorable court ruling, offset by a charge due to translation gain on previously taxed income. In 2013, these receipts and charges included goodwill and intangible asset impairment charges, acquisition- and divestiture-related net charges, litigation- and restructuring-related charges, and debt extinguishment charges. Our reported tax rate for 2013 was also affected by discrete tax items related primarily to the resolution of various uncertain tax positions resulting from the expiration of the statute of limitations for assessing tax in certain jurisdictions and benefit due to reinstatement of certain tax legislation that has been retroactively applied. In 2012, these receipts and charges included goodwill and intangible asset impairment charges, acquisition- and divestiture-related net credits, and litigation- and restructuring-related charges. Our reported tax rate for 2012 was also affected by discrete tax items related primarily to the resolution of an uncertain tax position resulting from an unfavorable court ruling. Excluding the impact of these receipts and charges in 2014, 2013 and 2012, the change in our reported tax rate between years is primarily the result of shifts in the geographic mix of our business.

We have received Notices of Deficiency from the IRS reflecting proposed audit adjustments for Guidant Corporation for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. We believe we have meritorious defenses for our tax filings and we have filed, or will timely file, petitions with the U.S. Tax Court contesting the Notices of Deficiency for the tax years in challenge. No payments on the net assessment would be required until the dispute is definitively resolved, which, based on experiences of other companies, could take several years. The IRS is currently examining the 2008 through 2010 tax

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years of Boston Scientific. During 2014, we received a Revenue Agent Report from the Internal Revenue Service (IRS) reflecting significant proposed audit adjustments for our 2008, 2009, and 2010 tax years based upon the same transfer pricing methodologies that are currently being contested in the U.S. Tax Court for our tax years 2001-2007. As with prior years, we disagree with the transfer pricing methodologies being applied by the IRS and we expect to contest any adjustments received through appropriate IRS and judicial procedures, as appropriate. We believe that our income tax reserves associated with these matters are adequate as of December 31, 2014. However, final resolution is uncertain and could have a material impact on our financial condition, results of operations or cash flows. Also, in connection with the IRS issues, a number of agreed adjustments were contained in the IRS report and no tax was paid on these amounts as the U.S. Tax Court case is still pending. However, the amounts were reclassified from our uncertain tax positions to long-term payable as these items have been agreed to and are no longer uncertain.

See Note J - Income Taxes to our 2014 consolidated financial statements included in Item 8 of this Annual Report for additional details on our tax rate and our tax court disputes.

Liquidity and Capital Resources

Based on our current business plan, we believe our existing balance of cash and cash equivalents, future cash generated from operations and access to capital markets and revolving credit facility will be sufficient to fund our operations, invest in our infrastructure, pay our legal-related liabilities, fund possible mergers and/or acquisitions, service our existing debt and return value to investors through potential share repurchases for the next twelve months. On February 13, 2015, we signed an agreement with Johnson & Johnson to settle the breach of merger agreement lawsuit brought by Johnson & Johnson against Guidant, stemming from our acquisition of Guidant. As a result of the settlement agreement, Johnson & Johnson agreed to dismiss permanently its action without acknowledgment of liability by Guidant. In exchange, we have agreed to make aggregate payments totaling $600 million to Johnson & Johnson. Under the terms of the agreement, we agreed to pay Johnson & Johnson $300 million within 10 days of the date of the agreement and an additional $300 million within 60 days of the date of the agreement. We expect to fund these payments through cash on hand, cash from our continuing operations and our revolving credit facility. See Note K - Commitments and Contingencies for additional information on the settlement agreement.

As of December 31, 2014, we had $587 million of cash and cash equivalents on hand, comprised of $151 million invested in money market and government funds and $436 million in short-term time deposits and interest bearing and non-interest bearing bank accounts. We invest excess cash on hand in short-term financial instruments that earn market interest rates while mitigating principal risk through instrument and counterparty diversification as well as what we believe to be prudent instrument selection. We limit our direct exposure to securities in any one industry or issuer. We also have full access to our $2.000 billion revolving credit facility and $300 million of available borrowings under our credit and security facility secured by our U.S. trade receivables, both described below.

The following provides a summary and description of our net cash inflows (outflows) for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
(in millions)	2014			2013			2012
Cash provided by operating activities	$	1,269		$	1,110		$	1,280
Cash used for investing activities	(745		)	(475		)	(579		)
Cash used for financing activities	(150		)	(624		)	(764		)

Operating Activities

During 2014, we generated $1.269 billion from operating activities, as compared to $1.110 billion in 2013, an increase of $159 million or 14 percent. This increase was primarily due to reductions in our accounts receivable due to a government funded settlement of outstanding receivables in Spain during 2014 and lower payments related to interest and costs associated with debt extinguishment; partially offset by increases in our inventory levels and higher payments related to contingent consideration.

During 2013, we generated $1.110 billion from operating activities, as compared to $1.280 billion in 2012, a decrease of $170 million, or 13 percent. This decrease was primarily due to the impact of increased levels of accounts receivable of approximately $100 million, costs related to debt extinguishment of approximately $70 million and net payments associated with litigation of approximately $50 million; partially offset by a final cash receipt associated with our Promus® supply agreement with Abbott.

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Investing Activities

During 2014, cash used for investing activities was $745 million. Our investing activities included $486 million of payments for the acquisitions of IoGyn, and the Interventional Division of Bayer, net of cash acquired. Cash used for investing activities also included purchases of property, plant and equipment of $259 million. This was partially offset by proceeds related to our divested businesses of $12 million.

During 2013, cash used for investing activities was $475 million. Our investing activities included capital expenditures of $245 million and a $274 million payment for the acquisition of C.R. Bard's electrophysiology business. These expenditures were partially offset by $53 million of proceeds received from the sale of our Natick, Massachusetts headquarters in 2013.

During 2012, cash used for investing activities was $579 million. Our investing activities included capital expenditures of $226 million and payments for the acquisitions of Cameron Health Inc., Bridgepoint Medical Inc., Rhythmia Medical Inc., and Vessix Vascular Inc., totaling $366 million.

Financing Activities

Our cash flows from financing activities reflect issuances and repayments of debt, proceeds from stock issuances related to our equity incentive programs and repurchases of common stock pursuant to our authorized repurchase programs, discussed in Note L - Stockholders' Equity to our 2014 consolidated financial statements included in Item 8 of this Annual Report. Additionally, our financing activities included $34 million of contingent payments in 2014, $160 million of payments in 2013 and $146 million of payments in 2012 associated with our previous acquisitions.

Our liquidity plans are subject to a number of risks and uncertainties, including those described in Item 1A. Risk Factors of this Annual Report, some of which are outside our control. Macroeconomic conditions, adverse litigation outcomes and other risk and uncertainties that could limit our ability to successfully execute our business plans and adversely affect our liquidity plans.

Debt

We hold investment-grade ratings with all three major credit-rating agencies. We believe our investment grade credit profile reflects the size and diversity of our product portfolio, our leading share position in several of our served markets, our strong cash flow, our solid financial fundamentals and our financial strategy.

We had total debt of $4.262 billion as of December 31, 2014 and $4.240 billion as of December 31, 2013 which consisted of the following:

Credit Facilities

We maintain a $2.000 billion revolving credit facility, maturing in April 2017, with a global syndicate of commercial banks. There were no amounts borrowed under our revolving credit facility as of December 31, 2014 or December 31, 2013.

We also maintain a $300 million credit and security facility secured by our U.S. trade receivables maturing in June 2015, subject to further extension. We had no borrowings outstanding under this facility as of December 31, 2014 and December 31, 2013.

Term Loan

In August 2013, we entered into a new $400 million, unsecured term loan facility. We had $400 million outstanding under this facility as of December 31, 2014.

Our revolving credit facility and our term loan facility require that we maintain certain financial covenants as outlined in Note F - Borrowings and Credit Agreements to our 2014 consolidated financial statements contained in Item 8 of this Annual Report. As of and through December 31, 2014, we were in compliance with the required covenants. Any inability to maintain compliance with these covenants could require us to seek to renegotiate the terms of our credit facility or seek waivers from compliance with these covenants, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers.

Senior Notes

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We had senior notes outstanding of $3.800 billion as of December 31, 2014 and 2013. Our senior notes are publicly registered securities, are redeemable prior to maturity and are not subject to any sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to borrowings under our credit and security facility and liabilities of our subsidiaries.

The debt maturity schedule for the significant components of our debt obligations as of December 31, 2014 is as follows:

(in millions)	2015		2016		2017		2018		2019		Thereafter		Total
Senior Notes	$	400	$	600	$	250	$	600	$	—	$	1,950	$	3,800
Term Loan	—		80		80		240		—		—		400
	$	400	$	680	$	330	$	840	$	—	$	1,950	$	4,200

Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.

Other Arrangements

We have accounts receivable factoring programs in certain European countries that we account for as sales under ASC Topic 860, Transfers and Servicing. These agreements provide for the sale of accounts receivable to third parties, without recourse, of up to approximately $363 million as of December 31, 2014. We de-recognized $167 million of receivables as of December 31, 2014 at an average interest rate of 3.2 percent, and $146 million as of December 31, 2013 at an average interest rate of 3.3 percent. In addition, we have uncommitted credit facilities with a commercial Japanese bank that provide for borrowings, promissory notes discounting and receivables factoring of up to 21.000 billion Japanese yen (approximately $175 million as of December 31, 2014). We de-recognized $134 million of notes receivable as of December 31, 2014 at an average interest rate of 1.8 percent and $147 million of notes receivable as of December 31, 2013 at an average interest rate of 1.8 percent.

As of December 31, 2014, we had outstanding letters of credit of $59 million, as compared to $78 million as of December 31, 2013, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2014 and 2013, none of the beneficiaries had drawn upon the letters of credit or guarantees.

For additional details related to our debt, including our revolving credit facility, term loan, senior notes and other arrangements, see Note F - Borrowings and Credit Arrangements to our 2014 consolidated financial statements included in Item 8 of this Annual Report.

Equity

During 2014 we received $60 million in proceeds from stock issuances related to our stock option and employee stock purchase plans, as compared to $74 million in 2013 and $21 million2012. Proceeds from the exercise of employee stock options and employee stock purchases vary from period to period based upon, among other factors, fluctuations in the trading price of our common stock and in the exercise and stock purchase patterns of employees.

We repurchased 10 million shares of our common stock for $125 million during 2014, 51 million shares for $500 million during 2013, and 105 million shares for $600 million during 2012. As of December 31, 2014, we had remaining approximately $535 million authorized under our 2013 share repurchase program. There were approximately 248 million shares in treasury as of December 31, 2014 and 238 million shares in treasury as of December 31, 2013.

Stock-based compensation expense related to our stock equity compensation and ownership plans was $103 million in 2014, $105 million in 2013, and $108 million in 2012. Stock-based compensation expense varies from period to period based upon, among other factors: the timing, number and fair value of awards granted during the period; forfeiture levels related to unvested awards; and employee contributions to our employee stock purchase plan.

Contractual Obligations and Commitments

The following table provides a summary of certain information concerning our obligations and commitments to make future payments, and is based on conditions in existence as of December 31, 2014.

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(in millions)	2015		2016		2017		2018		2019		Thereafter		Total
Long-term debt obligations	$	400	$	680	$	330	$	840	$	—	$	1,950	$	4,200
Interest payments (1)	220		175		144		134		116		934		1,723
Litigation Settlements	600		—		—		—		—		—		600
Lease obligations (1)	59		51		34		25		21		28		218
Purchase obligations (1)	183		17		—		—		1		5		206
Minimum royalty obligations (1)	2		2		4		7		10		29		54
Unrecognized tax benefits	4		—		—		—		—		—		4
	$	1,468	$	925	$	512	$	1,006	$	148	$	2,946	$	7,005

(1) In accordance with U.S. GAAP, these obligations relate to expenses associated with future periods and are not reflected in our consolidated balance sheets.

The amounts in the table above with respect to lease obligations represent amounts pursuant to contractual arrangements for the lease of property, plant and equipment used in the normal course of business. Litigation settlements relate to the settlement agreement between Guidant and Johnson & Johnson, signed on February 13, 2015. Purchase obligations relate primarily to non-cancellable inventory commitments and capital expenditures entered in the normal course of business. Royalty obligations reported above represent minimum contractual obligations under our current royalty agreements. The table above does not reflect unrecognized tax benefits of $1.047 billion the timing of which is uncertain. Refer to Note J – Income Taxes to our 2014 consolidated financial statements included in Item 8 of this Annual Report for more information on these unrecognized tax benefits.

With certain of our acquisitions, we acquired in-process research and development projects that require future funding to complete the projects. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We estimate that the total remaining cost to complete the in-process research and development projects we acquired is between $100 million and $150 million. Net cash inflows from the projects currently in development are expected to commence in 2015 through 2018, following the respective launches of these technologies in the U.S., Europe and Japan regions. Certain of our acquisitions also involve the potential payment of contingent consideration. The table above does not reflect any such obligations, as the timing and amounts are uncertain. See Note B – Acquisitions to our 2014 consolidated financial statements included in Item 8 of this Annual Report for the estimated maximum potential amount of future contingent consideration we could be required to pay associated with prior acquisitions and the fair value of our contingent consideration liabilities as of December 31, 2014.

Legal Matters

For a discussion of our material legal proceedings see Note K – Commitments and Contingencies to our 2014 consolidated financial statements included in Item 8 of this Annual Report.

Critical Accounting Estimates

Our financial results are affected by the selection and application of accounting policies. We have adopted accounting policies to prepare our consolidated financial statements in conformity with U.S. GAAP.

To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. We consider estimates to be critical if (i) we are required to make assumptions about material matters that are uncertain at the time of estimation or if (ii) materially different estimates could have been made or it is reasonably likely that the accounting estimate will change from period to period. The following are areas considered to be critical and require management’s judgment: Revenue Recognition, Bad Debt Reserves, Inventory Provisions, Valuation of Contingent Consideration Liabilities and Intangible Assets (including CRM-related Amortizable Intangible Assets), Goodwill Valuation, Legal and Product Liability Accruals and Income Taxes.

See Note A-Significant Accounting Policies to our 2014 consolidated financial statements included in Item 8 of this Annual Report for additional information related to our accounting policies and our consideration of these areas critical accounting areas. In addition, see Note D - Goodwill and Other Intangible Assets for further discussion on the valuation of goodwill and intangibles (including CRM-related amortizable intangibles), Note J -Income Taxes for further discussion on income tax related matters and Note K - Commitments and Contingencies for further discussion on legal and product liability matters.

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Revenue Recognition

We allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record these amounts as a reduction of revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount to be returned when the next-generation products are shipped to the customer. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to sales returns and could cause actual returns to differ from these estimates.

Many of our CRM product offerings combine the sale of a device with our LATITUDE^® Patient Management System, which represents a future service obligation. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. We do not have vendor specific objective evidence of selling price available related to our future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method. The use of alternative estimates of fair value could result in a different amount of revenue deferral.

Inventory Provisions

We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory.

Valuation of Intangible Assets and Contingent Consideration Liabilities

We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. Further, for those arrangements that involve potential future contingent consideration, we record on the date of acquisition a liability equal to the fair value of the estimated additional consideration we may be obligated to make in the future. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. The use of alternative valuation assumptions, including estimated revenue projections; growth rates; cash flows and discount rates and alternative estimated useful life assumptions, or probabilities surrounding the achievement of clinical, regulatory or revenue-based milestones could result in different purchase price allocations, amortization expense, and contingent consideration expense in current and future periods.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. If an impairment indicator exists, we test the intangible asset for recoverability. If the carrying value of the intangible asset is not recoverable,we will write the carrying value down to fair value in the period identified. We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. In addition, we test our indefinite-lived intangible assets at least annually for impairment and reassess their classification as indefinite-lived assets; and, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other. If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value.

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Valuation of CRM-related Amortizable Intangible Assets

Certain of our amortizable intangible assets that relate to our CRM business are at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. Key assumptions we have made in determining the recoverability of these assets include how we grouped our assets for purposes of measuring cash flows, the estimated life of those cash flows and our expectations for the amount of cash flows generated by these assets over their remaining useful life.

For purposes of testing the CRM-related amortizable intangible assets, we grouped the intangible assets with the other assets and liabilities of the global CRM reporting unit, as a result of having identified the CRM reporting unit as the lowest level of identifiable cash flows because our CRM core technology, which is the primary asset within the CRM asset group, is utilized by all CRM revenue-generating products. As a result, we include cash flows generated by our CRM products in our recoverability analysis through the core technology useful life, which is estimated to end in 2031. We determined the useful life of the core technology based on our expectation of the period during which the technology is expected to contribute to the cash flows of our business. Our core technology represents know-how, patented and unpatented technology, testing methodologies and hardware that is integral to our current and future CRM product generations. This core technology includes battery and capacitor technology, lead technology, software algorithms and interfacing for shocking and pacing used in each therapy franchise.

The recoverability of our CRM-related amortizable intangible assets is sensitive to future cash flow assumptions and our global CRM business performance. The amount of future cash flows within our recoverability analysis include our future projections of revenue, expenses and capital expenditures, which are based on our most recent operational budgets, long range strategic plans and other estimates. These future cash flow assumptions consider the significant investments we have made to renew the CRM reporting unit's product portfolio within its existing core franchises and to develop what we believe to be unique innovative solutions that utilize our core technology; the increased impact to the CRM reporting unit from emerging markets; and demographic trends toward an aging population. Further, while our CRM revenue declined in 2012 and 2013 as a result of factors specific to our CRM business and contraction in the overall CRM market; our CRM business grew one percent in 2014, we believe our CRM revenue will experience low growth over the remaining useful life of our CRM amortizing intangible assets.

We continue to perform thorough reviews of the CRM market and our recent business results within the market, and consider the impacts on future expectations of performance to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life of our CRM-related amortizable intangible assets.

Goodwill Valuation

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In performing the assessment, we utilize the two-step approach prescribed under ASC Topic 350, Intangibles-Goodwill and Other (Topic 350). The first step requires a comparison of the carrying value of the reporting units, as defined, to the fair value of these units. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operating segments, and then assess whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. For our 2014 and 2013 annual impairment assessment we identified seven reporting units, including Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health and Neuromodulation.

During 2014, 2013, and 2012, we used only the income approach, specifically the DCF method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units.

In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows

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within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted-average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows.

If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value.

Although we use consistent methodologies in developing the assumptions and estimates underlying the fair value calculations used in our impairment tests, these estimates are uncertain by nature and can vary from actual results. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows and discount rates could result in different fair value estimates.

In the second quarter of 2014, we performed our annual goodwill impairment test for all of our reporting units. In conjunction with our annual test, the fair value of each reporting unit exceeded its carrying value. Therefore, it was deemed not necessary to proceed to the second step of the impairment test. As a result of the 2014 annual goodwill impairment test, we identified our global Neuromodulation and global Electrophysiology reporting units as being at higher risk of potential failure of the first step of the goodwill impairment test in future reporting periods. As of the date of our annual goodwill impairment test, our global Neuromodulation reporting unit had excess fair value over carrying value of approximately 55 percent and held $1.356 billion of allocated goodwill. As of the date of our annual goodwill impairment test, our global Electrophysiology reporting unit had excess fair value over carrying value of approximately 38 percent and held $292 million of allocated goodwill. During the fourth quarter of 2014, due to changes in our expectations of the timing and amount of future revenue and cash flow related to our Electrophysiology reporting unit, we performed an interim goodwill impairment test on this reporting unit. Based on this assessment, we concluded that the fair value of the Electrophysiology reporting unit exceeded its carrying value; however the level of excess fair value over the carrying value had declined to approximately 26 percent. Our global Cardiac Rhythm Management (CRM) reporting unit had a fair value approximately equal to its carrying value; however, due to goodwill impairment charges in prior years, no goodwill remains within our CRM reporting unit. Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses could result in future impairments of goodwill within our reporting units including global CRM.

On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets. The key variables that drive the cash flows of our reporting units and amortizable intangibles are estimated revenue growth rates and levels of profitability. Terminal value growth rate assumptions, as well as the WACC rate applied are additional key variables for reporting unit cash flows. These assumptions are subject to uncertainty, including our ability to grow revenue and improve profitability levels. Relatively small declines in the future performance and cash flows of a reporting unit or asset group or small changes in other key assumptions may result in the recognition of significant goodwill or intangible asset impairment charges. For example, based on the interim goodwill assessment performed on our Electrophysiology reporting unit during the fourth quarter of 2014, keeping all other variables constant, an increase in the WACC applied of 50 basis points combined with a 100 basis point decrease in the terminal value growth rate would require that we perform the second step of the goodwill impairment test. As of the date of our annual goodwill impairment test, keeping all other variables constant, an increase in the WACC applied of 100 basis points combined with a 150 basis points decrease in the terminal value growth rate would require that we perform the second step of the goodwill impairment test for our global Neuromodulation reporting unit. The estimates used for our future cash flows and discount rates represent management's best estimates, which we believe to be reasonable, but future declines in business performance may impair the recoverability of our goodwill and intangible asset balances.

Legal and Product Liability Accruals

In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. Litigation and product liability matters are inherently uncertain and the outcomes of individual matters are difficult to predict and quantify. As such, significant judgment

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is required in determining our legal and product liability accruals. Our estimates related to our legal and product liability accruals may change as additional information becomes available to us, including information related to the nature or existence of claims against us; trial court or appellate proceedings; and mediation, arbitration or settlement proceedings.

Income Taxes

We provide for potential amounts due in various tax jurisdictions. In the ordinary course of conducting business in multiple countries and tax jurisdictions, there are many transactions and calculations where the ultimate tax outcome is uncertain. Judgment is required in determining our worldwide income tax provision. In our opinion, we have made adequate provisions for income taxes for all years subject to audit.

New Accounting Pronouncements

See Note Q - New Accounting Pronouncements to our 2014 consolidated financial statements included in Item 8 of this Annual Report for additional information on Standards Implemented and Standards to be Implemented.

Additional Information

Use of Non-GAAP Financial Measures by Boston Scientific

To supplement our consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures, including adjusted net income and adjusted net income per share that exclude certain amounts, and revenue growth rates that exclude the impact of sales from divested businesses and/or changes in foreign currency exchange rates. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States.

The GAAP financial measure most directly comparable to adjusted net income is GAAP net income and the GAAP financial measure most directly comparable to adjusted net income per share is GAAP net income per share. To calculate revenue growth rates that exclude the impact of changes in foreign currency exchange rates, we convert actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior period. The GAAP financial measure most directly comparable to this non-GAAP financial measure and the non-GAAP financial measure that excludes sales from divested businesses is growth rate percentages using net sales on a GAAP basis. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP financial measure are included in the accompanying schedules.

Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP financial measures to further its understanding of the performance of our operating segments. The adjustments excluded from our non-GAAP financial measures are consistent with those excluded from our operating segments’ measures of net sales and profit or loss. These adjustments are excluded from the segment measures that are reported to our chief operating decision maker that are used to make operating decisions and assess performance.

We believe that presenting adjusted net income, adjusted net income per share, and revenue growth rates that exclude certain amounts, such as sales from divested businesses and/or the impact of changes in foreign currency exchange rates, in addition to the corresponding GAAP financial measures, provides investors greater transparency to the information used by management for its financial and operational decision-making and allows investors to see our results “through the eyes” of management. We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance.

The following is an explanation of each of the adjustments that management excluded as part of these non-GAAP financial measures as well as reasons for excluding each of these individual items:

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Adjusted Net Income and Adjusted Net Income per Share

• Goodwill and other intangible asset impairment charges - This amount represents (a) non-cash write-downs of certain intangible asset balances during 2014, 2013, and 2012; a non-cash write-down of our goodwill balance attributable to our global Cardiac Rhythm Management reporting unit in the first quarter of 2013; a non-cash write-down of our goodwill balance attributable to our former U.S. Cardiac Rhythm Management reporting unit in the third quarter of 2012; and a non-cash write-down of our goodwill balance attributable to our former EMEA reporting unit in the second quarter of 2012. We remove the impact of non-cash impairment charges from our operating performance to assist in assessing our cash generated from operations. We believe this is a critical metric for us in measuring our ability to generate cash and invest in our growth. Therefore, these charges are excluded from management's assessment of operating performance and are also excluded for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance, particularly in terms of liquidity.

• Acquisition- and divestiture related net charges (credits) - These adjustments consist of (a) contingent consideration fair value adjustments; (b) gains on previously held equity interests; (c) due diligence, other fees and exit costs; and (d) separation costs and gains primarily associated with the sale of our Neurovascular business in January 2011. The contingent consideration adjustments represent accounting adjustments to state contingent consideration liabilities at their estimated fair value. These adjustments can be highly variable depending on the assessed likelihood and amount of future contingent consideration payments. Due diligence, other fees and exit costs include legal, tax, severance and other expenses associated with prior and potential future acquisitions and divestitures that can be highly variable and not representative of on-going operations. Separation costs and gains on the sale of a business unit primarily represent those associated with the Neurovascular divestiture and are not representative of on-going operations. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

• Restructuring and restructuring-related charges - These adjustments represent primarily severance and other direct costs associated with our 2014 Restructuring program and 2011 Restructuring program. These costs are excluded by management in assessing our operating performance, as well as from our operating segments' measures of profit and loss used for making operating decisions and assessing performance. Accordingly, management excluded these costs for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

• Litigation-related charges - These adjustments include certain significant product liability and other litigation-related charges and credits. These amounts are excluded by management in assessing our operating performance, as well as from our operating segments' measures of profit and loss used for making operating decisions and assessing performance. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

• Discrete tax items - These items represent adjustments of certain tax positions, which were initially established in prior periods in conjuction with the purchase accounting for an acquisition or as a result of intangible asset impairment charges; acquisition-, divestiture-, restructuring- or litigation-related charges or credits. These adjustments do not reflect expected on-going operating results. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

• Debt extinguishment charge - This item represents premiums, accelerated amortization of debt issuance costs and investor discount costs net of interest rate hedge gains related to the early extinguishment of $1.450 billion of debt during the third quarter of 2013. We believe these are infrequently occuring charges and do not reflect expected on-going results. Accordingly, management excluded these amounts for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

• Amortization expense - Amortization expense is a non-cash expense and does not impact our liquidity or compliance with the covenants included in our credit facility agreement. Management removes the impact of amortization from our operating performance to assist in assessing our cash generated from operations. We believe this is a critical metric for measuring our ability to generate cash and invest in our growth. Therefore, amortization expense is excluded from management's assessment of operating performance and is also excluded from the measures management uses to set employee compensation. Accordingly, management has excluded amortization expense for purposes of calculating these non-GAAP financial measures to facilitate an evaluation of our current operating performance, particularly in terms of liquidity.

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Revenue Growth Rates Excluding the Impact of Sales from Divested Businesses and/or Changes in Foreign Currency Exchange Rates

• Sales from divested businesses and/or changes in foreign currency exchange rates - Sales from divested businesses are primarily associated with the Neurovascular divestiture and are not representative of on-going operations. The impact of changes in foreign currency exchange rates is highly variable and difficult to predict. Accordingly, management excludes the impact of sales from divested businesses and/or changes in foreign currency exchange rates for purposes of reviewing revenue growth rates to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

Adjusted net income, adjusted net income per share and revenue growth rates that exclude certain amounts, such as the sales from divested businesses and/or the impact of changes in foreign currency exchange rates, are not in accordance with U.S. GAAP and should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Further, other companies may calculate these non-GAAP financial measures differently than we do, which may limit the usefulness of those measures for comparative purposes.

Rule 10b5-1 Trading Plans by Executive Officers

Periodically, certain of our executive officers adopt written stock trading plans in accordance with Rule 10b5-1 under the Exchange Act and our own Stock Trading Policy. A Rule 10b5-1 Trading Plan is a written document that pre-establishes the amount, prices and dates (or formulas for determining the amounts, prices and dates) of future purchases or sales of our stock, including shares issued upon exercise of stock options or vesting of deferred stock units. These plans are entered into at a time when the person is not in possession of material non-public information about the Company.

On November 7, 2014, David A. Pierce, our Senior Vice President and President, Endoscopy, entered into a Rule 10b5-1 Trading Plan. Mr. Pierce’s plan covers the sale of 17,561 shares of our stock held by him and the sale of shares of our stock to be acquired upon (A) exercise of 50,931 stock options, (B) vesting of deferred stock units representing 23,236 shares (the amount to be sold will be net of shares withheld to satisfy applicable tax withholding obligations upon vesting) and (C) vesting of the 2012 Free Cash Flow Performance Share Units representing 20,701 shares and the 2012 Total Stockholder Return Performance Share Units¹ (in each case the amount to be sold will be the total amount of shares issued net of shares withheld to satisfy applicable tax withholding obligations upon vesting). Transactions under Mr. Pierce’s plan are based upon pre-established dates and stock price thresholds. Mr. Pierce’s plan will terminate on the earlier of (among other things) December 31, 2015 and the date all shares subject to the plan have been sold. Any transaction under Mr. Pierce’s plan will be disclosed publicly through appropriate filings with the Securities and Exchange Commission.

On November 7, 2014, Karen Prange, our Senior Vice President and President, Urology and Women’s Health, entered into a Rule 10b5-1 Trading Plan. Ms. Prange’s plan covers the sale of 19,753 shares of our stock held by her and the sale of shares of our stock to be acquired upon vesting of deferred stock units representing 31,685 shares (the amount to be sold will be net of shares withheld to satisfy applicable tax withholding obligations upon vesting). Transactions under Ms. Prange’s plan are based upon pre-established dates and stock price thresholds. Ms. Prange’s plan will terminate on the earlier of (among other things) December 31, 2015 and the date all shares subject to the plan have been sold. Any transaction under Ms. Prange’s plan will be disclosed publicly through appropriate filings with the Securities and Exchange Commission.

On November 19, 2014, Michael P. Phalen, our Executive Vice President and President, MedSurg, entered into a Rule 10b5-1 Trading Plan. Mr. Phalen’s plan covers the sale of 41,085 shares of our stock held by him and the sale of shares of our stock to be acquired upon (A) exercise of 139,773 stock options, (B) vesting of deferred stock units representing 32,304 shares (the amount to be sold will be net of shares withheld to satisfy applicable tax withholding obligations upon vesting) and (C) vesting of the 2012 Free Cash Flow Performance Share Units representing 41,401 shares and the 2012 Total Stockholder Return Performance Share Units¹ (in each case the amount to be sold will be the total amount of shares issued net of shares withheld to satisfy applicable tax withholding obligations upon vesting). Transactions under Mr. Phalen’s plan are based upon pre-established dates and stock price thresholds. Mr. Phalen’s plan will terminate on the earlier of (among other things) December 31, 2015 and the date all shares subject to the plan have been sold. Any transaction under Mr. Phalen’s plan will be disclosed publicly through appropriate filings with the Securities and Exchange Commission.

_____________________

¹ The number of shares to be awarded to a participant under the Company’s 2012 Total Shareholder Return Performance Share Plan, if any, will be determined by the Executive Compensation and Human Resources Committee of the Board of Directors following December 31, 2014.

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Management’s Annual Report on Internal Control over Financial Reporting

As the management of Boston Scientific Corporation, we are responsible for establishing and maintaining adequate internal control over financial reporting. We designed our internal control process to provide reasonable assurance to management and the Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

We assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control–Integrated Framework (2013 framework). Based on our assessment, we believe that, as of December 31, 2014, our internal control over financial reporting is effective at a reasonable assurance level based on these criteria.

Ernst & Young LLP, an independent registered public accounting firm, has issued an audit report on the effectiveness of our internal control over financial reporting. This report in which they expressed an unqualified opinion is included below.

/s/ Michael F. Mahoney		/s/ Daniel J. Brennan
	Michael F. Mahoney		Daniel J. Brennan
	President and Chief Executive Officer		Executive Vice President and Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Boston Scientific Corporation

We have audited Boston Scientific Corporation’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Boston Scientific Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Boston Scientific Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Boston Scientific Corporation as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2014 of Boston Scientific Corporation and our report dated February 25, 2015 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Boston, Massachusetts

February 25, 2015

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ITEM 7A.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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. We operate the program pursuant to documented corporate risk management policies. We do not enter derivative transactions for speculative purposes. Gains and losses on derivative financial instruments substantially offset losses and gains on underlying hedged exposures. Furthermore, we manage our exposure to counterparty risk on derivative instruments by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions.

Our currency risk consists primarily of foreign currency denominated firm commitments, forecasted foreign currency denominated intercompany and third-party transactions and net investments in certain subsidiaries. We use both nonderivative (primarily European manufacturing operations) and derivative instruments to manage our earnings and cash flow exposure to changes in currency exchange rates. We had currency derivative instruments outstanding in the contract amount of $4.648 billion as of December 31, 2014 and $4.516 billion as of December 31, 2013. We recorded $419 million of other assets and $36 million of other liabilities to recognize the fair value of these derivative instruments as of December 31, 2014, as compared to $264 million of other assets and $55 million of other liabilities as of December 31, 2013. A ten percent appreciation in the U.S. dollar’s value relative to the hedged currencies would increase the derivative instruments’ fair value by $210 million as of December 31, 2014 and $257 million as of December 31, 2013. A ten percent depreciation in the U.S. dollar’s value relative to the hedged currencies would decrease the derivative instruments’ fair value by $257 million as of December 31, 2014 and by $314 million as of December 31, 2013. Any increase or decrease in the fair value of our currency exchange rate sensitive derivative instruments would be substantially offset by a corresponding decrease or increase in the fair value of the hedged underlying asset, liability or forecasted transaction, resulting in minimal impact on our consolidated statements of operations.

Our interest rate risk relates primarily to U.S. dollar borrowings partially offset by U.S. dollar cash investments. We have historically used interest rate derivative instruments to manage our earnings and cash flow exposure to changes in interest rates. We entered into interest rate derivative contracts having a notional amount of $450 million in the fourth quarter of 2013 to convert fixed-rate debt associated with certain of our senior notes into floating-rate debt. We recorded $25 million of other assets and no amount of other liabilities to recognize the fair value of these derivative instruments as of December 31, 2014. We recorded $1 million of other assets and $8 million of other liabilities to recognize the fair value of these derivative instruments as of December 31, 2013. A one-percentage point increase in interest rates would have decreased the derivative instruments’ fair value by $35 million as of December 31, 2014 and by $37 million as of December 31, 2013. A one-percentage point decrease in interest rates would have increased the derivative instruments’ fair value by $39 million as of December 31, 2014 and by $41 million as of December 31, 2013. As of December 31, 2014, $3.387 billion of our outstanding debt obligations was at fixed interest rates, representing approximately 80 percent of our total debt.

See Note E – Fair Value Measurements to our 2014 consolidated financial statements contained in Item 8 of this Annual Report for further information regarding our derivative financial instruments.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Boston Scientific Corporation

We have audited the accompanying consolidated balance sheets of Boston Scientific Corporation as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(a)2. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Boston Scientific Corporation at December 31, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Boston Scientific Corporation’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2015 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Boston, Massachusetts

February 25, 2015

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
in millions, except per share data	2014			2013			2012
Net sales	$	7,380		$	7,143		$	7,249
Cost of products sold	2,210			2,174			2,349
Gross profit	5,170			4,969			4,900
Operating expenses:
Selling, general and administrative expenses	2,902			2,674			2,535
Research and development expenses	817			861			886
Royalty expense	111			140			153
Amortization expense	438			410			395
Goodwill impairment charges	—			423			4,350
Intangible asset impairment charges	195			53			142
Contingent consideration expense (benefit)	(85		)	4			(6		)
Restructuring charges	69			101			136
Litigation-related charges	1,036			221			192
Gain on divestiture	(12		)	(38		)	(15		)
	5,471			4,849			8,768
Operating income (loss)	(301		)	120			(3,868		)
Other income (expense):
Interest expense	(216		)	(324		)	(261		)
Other, net	8			(19		)	22
Income (loss) before income taxes	(509		)	(223		)	(4,107		)
Income tax (benefit) expense	(390		)	(102		)	(39		)
Net income (loss)	$	(119	)	$	(121	)	$	(4,068	)
Net income (loss) per common share — basic	$	(0.09	)	$	(0.09	)	$	(2.89	)
Net income (loss) per common share — assuming dilution	$	(0.09	)	$	(0.09	)	$	(2.89	)
Weighted-average shares outstanding
Basic	1,324.3			1,341.2			1,406.7
Assuming dilution	1,324.3			1,341.2			1,406.7

See notes to the consolidated financial statements.

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BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of December 31,
in millions, except share and per share data	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	587		$	217
Trade accounts receivable, net	1,183			1,307
Inventories	946			897
Deferred and prepaid income taxes	447			288
Other current assets	443			302
Total current assets	3,606			3,011
Property, plant and equipment, net	1,507			1,546
Goodwill	5,898			5,693
Other intangible assets, net	5,606			5,950
Other long-term assets	425			371
TOTAL ASSETS	$	17,042		$	16,571
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current debt obligations	$	403		$	3
Accounts payable	262			246
Accrued expenses	1,950			1,348
Other current liabilities	231			227
Total current liabilities	2,846			1,824
Long-term debt	3,859			4,237
Deferred income taxes	1,214			1,402
Other long-term liabilities	2,666			2,569
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 50,000,000 shares, none issued and outstanding
Common stock, $0.01 par value - authorized 2,000,000,000 shares; issued 1,575,018,236 shares as of December 31, 2014 and1,560,302,634 shares as of December 31, 2013	16			16
Treasury stock, at cost - 247,566,270 shares as of December 31, 2014 and 238,006,570 shares as of December 31, 2013	(1,717		)	(1,592		)
Additional paid-in capital	16,703			16,579
Accumulated deficit	(8,689		)	(8,570		)
Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(38		)	(16		)
Unrealized gain on derivative financial instruments	219			141
Unrealized costs associated with certain retirement plans	(37		)	(19		)
Total stockholders’ equity	6,457			6,539
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,042		$	16,571

See notes to the consolidated financial statements.

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BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

												Accumulated
							Additional					Other
	Common Stock			Treasury			Paid-In		Accumulated			Comprehensive
in millions, except share data	Shares Issued	Par Value		Stock			Capital		Deficit			Income (Loss)
Balance as of December 31, 2011	1,531,006,390	$	15	$	(492	)	$	16,349	$	(4,381	)	$	(138	)
Comprehensive loss
Net loss									(4,068		)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment												32
Net change in derivative financial instruments												82
Net change in certain retirement plans												(9		)
Impact of stock-based compensation plans, net of tax	11,340,798						80
Acquisition of treasury stock				(600		)
Balance as of December 31, 2012	1,542,347,188	$	15	$	(1,092	)	$	16,429	$	(8,449	)	$	(33	)
Comprehensive loss
Net loss									(121		)
Other comprehensive income, net of tax
Foreign currency translation adjustment												10
Net change in derivative financial instruments												107
Net change in certain retirement plans												22
Impact of stock-based compensation plans, net of tax	17,955,446	1					150
Acquisition of treasury stock				(500		)
Balance as of December 31, 2013	1,560,302,634	$	16	$	(1,592	)	$	16,579	$	(8,570	)	$	106
Comprehensive loss
Net loss									(119		)
Other comprehensive income, net of tax
Foreign currency translation adjustment												(22		)
Net change in derivative financial instruments												78
Net change in certain retirement plans												(18		)
Impact of stock-based compensation plans, net of tax	14,715,602	—					124
Acquisition of treasury stock				(125		)
Balance as of December 31, 2014	1,575,018,236	$	16	$	(1,717	)	$	16,703	$	(8,689	)	$	144

See notes to the consolidated financial statements.

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BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Year Ended December 31,
(in millions)	2014			2013			2012
Net income (loss)	$	(119	)	$	(121	)	$	(4,068	)
Other comprehensive income (loss):
Foreign currency translation adjustment	(22		)	10			32
Net change in unrealized gains and losses on derivative financial instruments, net of tax	78			107			82
Net change in unrealized costs associated with certain retirement plans	(18		)	22			(9		)
Total other comprehensive income (loss)	38			139			105
Total comprehensive income (loss)	$	(81	)	$	18		$	(3,963	)

See notes to the consolidated financial statements.

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BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
in millions	2014			2013			2012
Operating Activities
Net income (loss)	$	(119	)	$	(121	)	$	(4,068	)
Adjustments to reconcile net income (loss) to cash provided by operating activities
Gain on sale of businesses	(12		)	(38		)	(15		)
Depreciation and amortization	725			689			683
Deferred and prepaid income taxes	(397		)	(223		)	(166		)
Stock-based compensation expense	103			105			108
Goodwill impairment charges	—			423			4,350
Intangible asset impairment charges	195			53			142
Net losses (gains) on investments and notes receivable	(27		)	9			(37		)
Contingent consideration expense (benefit)	(85		)	4			(6		)
Payment of contingent consideration in excess of amounts established in purchase accounting	(103		)	(5		)	(8		)
Other, net	27			31			(7		)
Increase (decrease) in cash flows from operating assets and liabilities:
Trade accounts receivable	53			(101		)	37
Inventories	(81		)	(7		)	66
Other assets	(33		)	91			(68		)
Accounts payable and accrued expenses	620			(9		)	(111		)
Other liabilities	403			209			380
Cash provided by operating activities	1,269			1,110			1,280
Investing Activities
Property, plant and equipment
Purchases of property, plant and equipment	(259		)	(245		)	(226		)
Proceeds on disposals	—			53			16
Acquisitions
Payments for acquisitions of businesses, net of cash acquired	(486		)	(274		)	(366		)
Divestitures
Proceeds from business divestitures, net of costs	12			30			10
Other investing activity
Payments for investments and acquisitions of certain technologies	(26		)	(44		)	(22		)
Proceeds from investments and collections of notes receivable	14			5			9
Cash used for investing activities	(745		)	(475		)	(579		)
Financing Activities
Debt
Payments of contingent consideration amounts previously established in purchase accounting	(34		)	(160		)	(146		)
Proceeds from long-term borrowings, net of debt issuance costs	—			1,440			—
Payments on long-term borrowings	—			(1,450		)	(10		)
Proceeds from borrowings on credit facilities	810			340			371
Payments on borrowings from credit facilities	(810		)	(340		)	(380		)
Equity
Payments for acquisitions of treasury stock	(125		)	(500		)	(600		)
Cash used to net share settle employee equity awards	(51		)	(28		)	(20		)
Proceeds from issuances of shares of common stock	60			74			21
Cash used for financing activities	(150		)	(624		)	(764		)
Effect of foreign exchange rates on cash	(4		)	(1		)	3
Net increase (decrease) in cash and cash equivalents	370			10			(60		)
Cash and cash equivalents at beginning of period	217			207			267
Cash and cash equivalents at end of period	$	587		$	217		$	207
Supplemental Information
Cash paid for income taxes, net	$	74		$	67		$	97
Cash paid for interest	221			329			255
Fair value of contingent consideration recorded in purchase accounting	3			—			467

See notes to the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries, after the elimination of intercompany transactions. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE). For any VIEs, we perform an analysis to determine whether our variable interests give us 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 entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial or operating interests in any VIEs and therefore did not consolidate any VIEs during the years ended December 31, 2014, 2013, and 2012.

On January 3, 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). Due to our continuing involvement in the operations of the Neurovascular business following the divestiture, the divestiture did not meet the criteria for presentation as a discontinued operation and, therefore, the results of the Neurovascular business are included in our results of operations for all periods presented. Refer to Note C – Divestitures for a description of this business divestiture.

Basis of Presentation

The accompanying consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-K and Regulation S-X.

Reclassifications

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units. As such, we have reclassified certain prior year amounts to conform to the current year’s presentation. We also restated segment information for the prior periods for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014. See Note D - Goodwill and Other Intangible Assets and Note O – Segment Reporting for further details.

Additionally, certain prior year cash outflows from net share settling employee equity awards to satisfy their tax withholding requirement have been reclassified from an operating activity to a financing activity within our consolidated statements of cash flows. Amounts reclassified from operating to financing activities were not material.

In addition, we restated components of our tabular disclosures of our deferred tax assets and liabilities along with our tabular rollforward of unrecognized tax benefit from prior year’s presentation, to include certain deferred tax assets that have been recorded net of valuation allowance and uncertain tax position. This restatement was performed to better present our overall deferred tax inventory and unrecognized tax positions but had no material impact on the prior year presentations of our consolidated statement of operation or consolidated balance sheet. See Note J - Income Taxes for further details.

Finally, we restated segment information for the prior periods based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange rate fluctuations. Refer to Note O - Segment Reporting for further details.

Subsequent Events

We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our financial statements. On February 13, 2015, we signed an agreement with Johnson & Johnson to settle the breach of merger agreement lawsuit brought by Johnson & Johnson against Guidant Corporation (Guidant), stemming from our acquisition of Guidant. As a result of the settlement agreement, Johnson & Johnson has agreed to dismiss permanently its action without acknowledgment of liability by Guidant. In exchange, we have agreed to make aggregate payments totaling $600 million to Johnson & Johnson. This settlement is considered a material recognized subsequent event and has been reflected appropriately in our accompanying consolidated financial statements. See Note K– Commitments and Contingencies for futher details.

In addition, those items requiring disclosure (unrecognized subsequent events) in the financial statements have been disclosed accordingly. See Note K– Commitments and Contingencies for further details.

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Accounting Estimates

To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. Refer to Critical Accounting Estimates included in Item 7 of this Annual Report for further discussion.

Cash and Cash Equivalents

We record cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk to principal, and we limit our direct exposure to securities in any one industry or issuer. We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents.

We record available-for-sale investments at fair value and exclude unrealized gains and temporary losses on available-for-sale securities from earnings, reporting such gains and losses, net of tax, as a separate component of stockholders’ equity, until realized. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instrument contracts and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. We provide credit, in the normal course of business, to hospitals, healthcare agencies, clinics, doctors' offices and other private and governmental institutions and generally do not require collateral. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on historical information and management's best estimates. Amounts determined to be uncollectible are written off against this reserve. We recorded write-offs of uncollectible accounts receivable of $15 million in 2014, $12 million in 2013, and $7 million in 2012. We are not dependent on any single institution and no single customer accounted for more than ten percent of our net sales in 2014, 2013, and 2012 or accounts receivable at December 31, 2014 or 2013; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our U.S. net sales.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers in Southern Europe, specifically Greece, Italy, Spain and Portugal are subject to an increased number of days outstanding relative to other countries prior to payment. Historically, receivable balances with certain publicly-owned hospitals in these countries accumulate over a period of time and are then subsequently settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2014, if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write-offs of uncollectible amounts may increase. As of December 31, 2014, our net receivables in these countries greater than 180 days past due totaled approximately $26 million, of which approximately $11 million were past due greater than 365 days.

Revenue Recognition

We generate revenue primarily from the sale of single-use medical devices, and present revenue net of sales taxes in our consolidated statements of operations. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. We consider revenue to be realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectibility is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers, unless we are required to provide additional services, and provided we can form an estimate for sales returns. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE^® Patient Management System, which represents a future service obligation. We do not have vendor specific objective evidence of selling price available related to our

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future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method.

We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer.

We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above.

Warranty Obligations

We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary.

Changes in our product warranty accrual during 2014, 2013, and 2012 consisted of the following (in millions):

	Year Ended December 31,
	2014			2013			2012
Beginning balance	$	28		$	26		$	30
Provision	9			12			8
Settlements/ reversals	(12		)	(10		)	(12		)
Ending balance	$	25		$	28		$	26

Inventories

We state inventories at the lower of first-in, first-out cost or market. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory. Approximately 40 percent of our finished goods inventory as of December 31, 2014 and December 31, 2013 was at customer locations pursuant to consignment arrangements or held by sales representatives.

Property, Plant and Equipment

We state property, plant, equipment, and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings and improvements over a 20 to 40 year life; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease. Depreciation expense was $287 million in 2014, $279 million in 2013, and $288 million in 2012.

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Valuation of Business Combinations

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs.

In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones.

Indefinite-lived Intangibles, including In-Process Research and Development

Our indefinite-lived intangible assets that are not subject to amortization include acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine, and in-process research and development intangible assets acquired in a business combination. Our in-process research and development represents intangible assets acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify in-process research and development acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated in-process research and development intangible asset.

We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets; in addition, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other. If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value.

We use the income approach to determine the fair values of our in-process research and development. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors: the in-process projects’ stage of completion; the complexity of the work completed as of the acquisition date; the costs already incurred; the projected costs to complete; the contribution of other acquired assets; the expected regulatory path and introduction dates by region; and the estimated useful life of the technology. We apply a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition. See Note D - Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including in-process research and development during 2014, 2013, and 2012.

For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date.

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Amortization and Impairment of Intangible Assets

We record intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; definite-lived technology-related, five to 25 years; customer relationships, five to 25 years; other intangible assets, various.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.

We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). See Note D - Goodwill and Other Intangible Assets for more information related to impairments of intangible assets during 2014, 2013, and 2012.

For patents developed internally, we capitalize costs incurred to obtain patents, including attorney fees, registration fees, consulting fees, and other expenditures directly related to securing the patent.

Goodwill Valuation

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units for goodwill impairment testing purposes. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three new global reportable segments consisting of: Cardiovascular, Rhythm Management, and MedSurg. We determined our new global reporting units by identifying our operating segments and assessing whether any components of these segments constituted a business for which discrete financial information is available and whether segment management regularly reviews the operating results of any components. Through this process, we identified the following new global reporting units as of January 1, 2013: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health, and Neuromodulation. The discussion below for 2014 and 2013 relates to our global business reporting units and for 2012 relates to our former regional reporting units.

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In performing the assessment, we utilize the two-step approach prescribed under ASC Topic 350, Intangibles-Goodwill and Other (Topic 350). The first step requires a comparison of the carrying value of the reporting units, as defined, to the fair value of these units. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operating segments, and then assess whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. For our 2014 and 2013 annual impairment assessment we identified seven reporting units, including Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health and Neuromodulation. For our 2012 impairment assessments, we identified six reporting units within the U.S., including our CRM, Neuromodulation, Endoscopy, Urology and Women's Health, Electrophysiology, and Cardiovascular (consisting of Interventional Cardiology and Peripheral Interventions) franchises, which in aggregate comprised the U.S. reportable segment. In addition, we identified four international reporting units, including Europe, Middle East and Africa (EMEA); Japan; Asia Pacific; and the Americas.

When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from the respective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations, and would

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be considered in determining its fair value, are allocated to the individual reporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit.

During 2014, 2013, and 2012, we used only the income approach, specifically the Discounted Cash Flow (DCF) method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units.

In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows.

If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value. If we were unable to complete the second step of the test prior to the issuance of our financial statements and an impairment loss was probable and could be reasonably estimated, we would recognize our best estimate of the loss in our current period financial statements and disclose that the amount is an estimate. We would then recognize any adjustment to that estimate in subsequent reporting periods, once we have finalized the second step of the impairment test. See Note D - Goodwill and Other Intangible Assets for discussion of our goodwill impairment charges.

Investments in Publicly Traded and Privately Held Entities

We account for our publicly traded investments as available-for-sale securities based on the quoted market price at the end of the reporting period. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. 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. The book value of investments that we accounted for under the equity method of accounting was $10 million as of December 31, 2014 and $18 million as of December 31, 2013. We account for investments in entities in which we have less than a 20 percent ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee in accordance with ASC Topic 325, Investments - Other. The aggregate carrying amount of our cost method investments was $27 million as of December 31, 2014 and $20 million as of December 31, 2013. In addition, we had notes receivable from certain companies that we account for under the cost method of $17 million as of December 31, 2014 and $13 million as of December 31, 2013, which are accounted for in accordance with ASC Topic 320, Investments - Debt and Equity Securities.

Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a significant deterioration in earnings performance; recent financing rounds at reduced valuations; a significant adverse change in the regulatory, economic or technological environment of an investee; or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying

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value, the investment is impaired and we make a determination as to whether the impairment is other-than-temporary. We deem an impairment to be other-than-temporary unless we have the ability and intent to hold an investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. Impairment losses on our investments are included in other, net in our consolidated statements of operations.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2014 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2014, the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $7.7 billion. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

We provide for potential amounts due in various tax jurisdictions. In the ordinary course of conducting business in multiple countries and tax jurisdictions, there are many transactions and calculations where the ultimate tax outcome is uncertain. Judgment is required in determining our worldwide income tax provision. In our opinion, we have made adequate provisions for income taxes for all years subject to audit. Although we believe our estimates are reasonable, the final outcome of open tax matters may be different from that which we have reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results. See Note J - Income Taxes for further information and discussion of our income tax provision and balances.

Legal and Product Liability Costs

In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. See Note K - Commitments and Contingencies for discussion of our individual material legal proceedings.

Costs Associated with Exit Activities

We record employee termination costs in accordance with ASC Topic 712, Compensation - Nonretirement and Postemployment Benefits, if we pay the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of our established severance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and we can reasonably estimate the liability. We account for employee termination benefits that represent a one-time benefit in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. We record such costs into expense over the employee’s future service period, if any.

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Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased, consultant fees and impairments of long-lived assets. The costs are expensed in accordance with ASC Topic 420 and ASC Topic 360, Property, Plant, and Equipment and are included in restructuring charges in our consolidated statement of operations. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, and costs to transfer product lines among facilities are included within costs of products sold and selling, general and administrative expenses in our consolidated statement of operations. See Note H - Restructuring-Related Activities for further information and discussion of our restructuring plans.

Translation of Foreign Currency

We translate all assets and liabilities of foreign subsidiaries from local currency into U.S. dollars using the year-end exchange rate, and translate revenues and expenses at the average exchange rates in effect during the year. We show the net effect of these translation adjustments in our consolidated financial statements as a component of accumulated other comprehensive income. For any significant foreign subsidiaries located in highly inflationary economies, we would re-measure their financial statements as if the functional currency were the U.S. dollar. We did not record any highly inflationary economy translation adjustments in 2014, 2013 or 2012.

Foreign currency transaction gains and losses are included in other, net in our consolidated statements of operations, net of losses and gains from any related derivative financial instruments. We recognized net foreign currency transaction losses of $18 million in 2014, $11 million in 2013, and $18 million in 2012.

Financial Instruments

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging, and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. 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. Refer to Note E – Fair Value Measurements for more information on our derivative instruments.

Shipping and Handling Costs

We generally do not bill customers for shipping and handling of our products. Shipping and handling costs of $100 million in 2014, $97 million in 2013, and $105 million in 2012 are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Research and Development

We expense research and development costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles,includingIn-Process Research and Development for our policy regarding in-process research and development acquired in connection with our business combinations and asset purchases.

Employee Retirement Plans

Following our 2006 acquisition of Guidant, we sponsor the Guidant Retirement Plan, a frozen noncontributory defined benefit plan covering a select group of current and former employees. The funding policy for the plan is consistent with U.S. employee benefit and tax-funding regulations. Plan assets, which are maintained in a trust, consist primarily of fixed-income instruments. The Guidant Retirement Plan was terminated effective December 1, 2014. The plan was partially frozen as of September 25, 1995 and completely frozen as of May 31, 2007. As a result, in general, no employees have been eligible to become a participant in the plan after September 25, 1995 and participants ceased earning additional benefits under the plan after September 25, 1995 or May 31, 2007. We expect to finalize the termination process and settle the majority of the plan’s obligations by the end of 2015. Further, we sponsor the Guidant Supplemental Retirement Plan, a frozen, nonqualified defined benefit plan for certain former officers and employees of Guidant. The Guidant Supplemental Retirement Plan was funded through a Rabbi Trust that contains segregated company assets used to pay the benefit obligations related to the plan. In addition, certain current and former employees of Guidant were eligible to receive a portion of their healthcare retirement benefits under a frozen defined benefit plan; this plan was terminated effective December 31, 2014.

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In addition, we maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and division presidents and certain persons that may have served in these roles. Participants may retire with unreduced benefits once retirement conditions have been satisfied. We also maintain retirement plans covering certain international employees.

We use a December 31 measurement date for these plans and record the underfunded portion as a liability, recognizing changes in the funded status through other comprehensive income (OCI). The outstanding obligation as of December 31, 2014 and 2013 is as follows:

	As of December 31, 2014						As of December 31, 2013
(in millions)	Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized		Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized
Executive Retirement Plan	$	13	$	—	$	13	$	10	$	—	$	10
Guidant Retirement Plan (frozen)	148		140		8		120		114		6
Guidant Supplemental Retirement Plan (frozen)	34		—		34		31		—		31
Guidant Healthcare Retirement Benefit Plan (frozen)	—		—		—		3		—		3
International Retirement Plans	90		51		39		84		52		32
	$	285	$	191	$	94	$	248	$	166	$	82

The value of the Rabbi Trust assets used to pay the Guidant Supplemental Retirement Plan benefits included in our accompanying consolidated financial statements was approximately $14 million as of December 31, 2014 and $17 million as of December 31, 2013.

The critical assumptions associated with our employee retirement plans as of December 31, 2014 are as follows:

		Expected Return on Plan Assets	Rate of
	Discount Rate		Compensation Increase
Executive Retirement Plan	3.50%		3.00%
Guidant Retirement Plan (frozen)	4.00%	5.50%
Guidant Supplemental Retirement Plan (frozen)	4.00%
International Retirement Plans	1.00% - 2.20%	2.75% - 4.10%	3.00% - 6.78%

We base our discount rate on the rates of return available on high-quality bonds with maturities approximating the expected period over which benefits will be paid. The rate of compensation increase is based on historical and expected rate increases. We base our rate of expected return on plan assets on historical experience, our investment guidelines and expectations for long-term rates of return.

A rollforward of the changes in the fair value of plan assets for our funded retirement plans during 2014 and 2013 is as follows:

	Year Ended December 31,
(in millions)	2014			2013
Beginning fair value	$	166		$	130
Actual return on plan assets	26			25
Employer contributions	16			32
Benefits paid	(11		)	(15		)
Net transfers in (out)	—			—
Foreign currency exchange	(6		)	(6		)
Ending fair value	$	191		$	166

We also sponsor a voluntary 401(k) Retirement Savings Plan for eligible employees. We match 200 percent of employee elective deferrals for the first two percent of employee eligible compensation, and 50 percent of employee elective deferrals greater than two percent, but not exceeding six percent, of employee eligible compensation. Total expense for our matching contributions to the plan was $63 million in 2014, $59 million in 2013, and $63 million in 2012.

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Net Income (Loss) per Common Share

We base net income (loss) per common share upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options whose effect would be anti-dilutive from the calculation.

NOTE B – ACQUISITIONS

Our consolidated financial statements include the operating results for each acquired entity from its respective date of acquisition. We do not present pro forma financial information for these acquisitions given their results are not material to our consolidated financial statements. Transaction costs associated with these acquisitions were expensed as incurred and are not material for the years ended December 31, 2014, 2013, and 2012.

2014 Acquisitions

Interventional Business of Bayer AG

On August 29, 2014, we completed the acquisition of the Interventional Division of Bayer AG (Bayer), for a total cash consideration of $414 million. We believe that this acquisition enhances our ability to offer physicians and healthcare systems a more complete portfolio of solutions to treat challenging vascular conditions. The transaction includes the AngioJet® Thrombectomy System and the Fetch® 2 Aspiration Catheter, which are used in endovascular procedures to remove blood clots from blocked arteries and veins, and the JetStream® Atherectomy System, used to remove plaque and thrombi from diseased arteries. We are integrating the operations of the Bayer business with our Peripheral Intervention and Interventional Cardiology divisions.

IoGyn, Inc.

On May 7, 2014, we completed the acquisition of the remaining fully diluted equity of IoGyn, Inc. (IoGyn). Prior to the acquisition, we held a 28 percent minority interest in IoGyn in addition to notes receivable of approximately $8 million. Total consideration was comprised of a net cash payment of $65 million at closing to acquire the remaining 72 percent of IoGyn equity and repay outstanding debt. IoGyn has developed the Symphion^TM System, a next generation system for hysteroscopic intrauterine tissue removal including fibroids (myomas) and polyps. In March 2014, IoGyn received U.S. Food & Drug Administration (FDA) approval for the system and in October 2014, we began a limited market release of the system in the United States. We are integrating the operations of the IoGyn business with our gynecological surgery business, which is part of our Urology and Women’s Health division.

In addition, we completed other acquisitions during 2014 for total consideration of $7 million cash at closing plus contingent consideration of up to $4 million.

Purchase Price Allocation

We accounted for these acquisitions as business combinations and, in accordance with ASC Topic 805, Business Combinations, we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate preliminary purchase price for Bayer and IoGyn acquisitions are as follows (in millions):

Cash, net of cash acquired	$	479
Fair value of prior interests	31
	$	510

Total consideration for the 2014 acquisitions included cash payments of $510 million, net of cash acquired, at closing of the transaction.

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In addition, prior to the acquisition of IoGyn, we had an equity interest in IoGyn and held $8 million of notes receivables. We re-measured our previously held investments to their estimated acquisition-date fair value of $31 million and recorded a gain of $19 million in other, net, in the accompanying consolidated statements of operations during the second quarter of 2014. We measured the fair values of the previously held investments based on the liquidation preferences and priority of the equity interest and debt, including accrued interest.

The following summarizes the aggregate preliminary purchase price allocation for Bayer and IoGyn as of December 31, 2014:

Goodwill	$	210
Amortizable intangible assets	263
Inventory	23
Property, Plant and Equipment	17
Prepaid Transaction Service Agreement	5
Other net assets	(1		)
Deferred income taxes	(7		)
	$	510

We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	233	10 - 14	14 - 18 %
Customer Relationships	29		10	18%
Other intangible assets	1		2	14%
	$	263

We believe that the estimated intangible asset values represent the fair value at the date of acquisition and do not exceed the amount a third party would pay for the assets. These fair value measurements are based on significant unobservable inputs, including management estimates and assumptions and, accordingly, are classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurements and Disclosures.

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, the majority of which is deductible for tax purposes. Goodwill was established due primarily to cost synergies expected to be gained from the integration of the businesses into our existing operations, as well as revenue and cash flow projections associated with future technologies, and has been allocated to our reportable segments based on the relative expected benefit. See Note D - Goodwill and Other Intangible Assets for more information related to goodwill allocated to our reportable segments.

2013 Acquisition

On November 1, 2013, we completed the acquisition of the electrophysiology business of C.R. Bard Inc. (Bard EP), for $274 million in cash. This acquisition added a strong commercial team and complementary portfolio of ablation catheters, diagnostic tools, and electrophysiology recording systems, which we believe will allow us to better serve the global Electrophysiology market through a more comprehensive portfolio offering and sales infrastructure.

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Purchase Price Allocation

We accounted for this acquisition as a business combination and, in accordance with Financial Accounting Standards Board ASC Topic 805, Business Combinations, we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate preliminary purchase price for the acquisition consummated in 2013 are as follows (in millions):

Cash, net of cash acquired	$	274
Fair value of contingent consideration	—
Fair value of prior interests	—
Fair value of debt assumed	—
	$	274

The following summarizes the aggregate purchase price allocation for the 2013 acquisition (in millions):

Goodwill	$	140
Amortizable intangible assets	112
Indefinite-lived intangible assets	—
Other net assets	19
Deferred income taxes	3
	$	274

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, the majority of which is deductible for tax purposes.

We allocated a portion of the purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	82	10	11.5%
Customer relationships	30		7	11.5%
	$	112

2012 Acquisitions

Cameron Health, Inc.

On June 8, 2012, we completed the acquisition of the remaining equity of Cameron Health, Inc. (Cameron). Cameron has developed the world's first and only commercially available subcutaneous implantable cardioverter defibrillator - the S-ICD® system. We have integrated the operations of the Cameron business into our CRM business. Total consideration included an initial $150 million cash payment at closing of the transaction, a payment of $150 million upon FDA approval of the S-ICD® system, which was paid to the former shareholders of Cameron after the receipt of FDA approval during the fourth quarter of 2012, and up to an additional $1.050 billion of potential payments upon achievement of specified revenue-based milestones over a six-year period following FDA approval.

BridgePoint Medical, Inc.

On October 4, 2012, we completed the acquisition of 100 percent of the fully diluted equity of BridgePoint Medical, Inc. (BridgePoint), a developer of catheter-based systems to treat coronary chronic total occlusions (CTOs). We have integrated the operations of the BridgePoint business into our Interventional Cardiology division. Total consideration included an initial $20 million at closing of the transaction and up to an additional $90 million of revenue-based earnouts and milestones through 2016.

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Rhythmia Medical, Inc.

On October 8, 2012, we completed the acquisition of 100 percent of the fully diluted equity of Rhythmia Medical, Inc. (Rhythmia). Rhythmia is a developer of next-generation mapping and navigation solutions for use in cardiac catheter ablations and other electrophysiology procedures, including atrial fibrillation and atrial flutter. We have integrated the operations of the Rhythmia business into our Electrophysiology division. Total consideration included an initial $90 million at closing of the transaction and up to an additional $175 million of regulatory and revenue-based milestones and earnouts through 2017.

Vessix Vascular, Inc.

On November 19, 2012, we completed the acquisition of 100 percent of the fully diluted equity of Vessix Vascular, Inc. (Vessix). Vessix is a developer of a therapy to treat uncontrolled hypertension, or high blood pressure. We have integrated the operations of the Vessix business into our Peripheral Interventions division. Total consideration included an initial $125 million at closing of the transaction and up to an additional $300 million of clinical and revenue-based milestones and earnouts through 2016.

Purchase Price Allocation

The components of the aggregate purchase price for the acquisitions consummated in 2012 are as follows (in millions):

Cash, net of cash acquired	$	367
Fair value of contingent consideration	467
Fair value of prior interests	79
Fair value of debt assumed	9
	$	922

Total consideration for the 2012 acquisitions included $367 million of initial cash payments, net of cash acquired, at closing of the transactions, with potential payments of up to an additional $1.615 billion based upon achievement of certain regulatory- and commercialization-related milestones and revene-based milestones and earnouts through 2018. As of the respective acquisition dates, we recorded total contingent consideration liabilities of $467 million, representing the estimated fair value of the contingent consideration we expected to pay to the former shareholders of the acquired companies. The fair value of the contingent consideration liabilities was estimated by discounting, to present value, contingent payments expected to be made. In certain circumstances, we utilized a probability-weighted approach or monte carlo revenue simulation model to determine the fair value of contingent consideration.

Prior to the acquisition of Cameron, we had an equity interest in Cameron and held $40 million of notes receivable. We re-measured our previously held investments to their estimated acquisition-date fair value of $79 million and recorded a gain of $39 million in other, net in the accompanying consolidated statements of operations during the second quarter of 2012. We measured the fair values of the previously held investments based on the liquidation preferences and priority of the equity interests and debt, including accrued interest. In addition, we prepaid the assumed debt obligation of Cameron for approximately $9 million during the second quarter of 2012.

The following summarizes the aggregate purchase price allocation for the 2012 acquisitions (in millions):

Goodwill (non-deductible for tax purposes)	$	566
Amortizable intangible assets	189
Indefinite-lived intangible assets	132
Other net assets	15
Deferred income taxes	20
	$	922

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, which is non-deductible for tax purposes.

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We allocated a portion of the final purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	187	8	14 - 28%
Customer relationships	2		5	14%
Indefinite-lived intangible assets:
In-process research and development	132			14 - 28%
	$	321

Our technology-related intangible assets consist of technical processes, intellectual property, and institutional understanding with respect to products and processes that we will leverage in future products or processes and will carry forward from one product generation to the next. We used the income approach to derive the fair value of the technology-related intangible assets, and are amortizing them on a straight-line basis over their assigned estimated useful lives.

Customer relationships represent the estimated fair value of the non-contractual customer and distributor relationships. Customer relationships are direct relationships with physicians and hospitals performing procedures with the acquired products, and distributor relationships are relationships with third parties used to sell products, both as of the acquisition date. These relationships were valued separately from goodwill as there is a history and pattern of conducting relationships with the customers and distributors on a contractual basis. We used the replacement cost and lost profits methodology to derive the fair value of the customer relationships. The customer relationships intangible assets are being amortized on a straight-line basis over their assigned estimated useful lives.

Contingent Consideration

Certain of our acquisitions involve contingent consideration arrangements. Payment of 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 accordance with U.S. GAAP, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations.

We recorded a net benefit related to the change in fair value of our contingent consideration liabilities of $85 million during 2014, a net expense related to the change in fair value of our contingent consideration liabilities of $4 million during 2013, and a net benefit related to the change in fair value of our contingent consideration liabilities of $6 million during 2012. We made contingent consideration payments of $137 million, $165 million and $154 million in 2014, 2013 and 2012, respectively.

Changes in our contingent consideration liability were as follows (in millions):

Balance as of December 31, 2012	$	663
Amounts recorded related to new acquisitions	—
Other amounts recorded related to prior acquisitions	(1		)
Fair value adjustment	4
Contingent payments related to prior period acquisition	(165		)
Balance as of December 31, 2013	$	501
Amounts recorded related to new acquisitions	3
Other amounts recorded related to prior acquisitions	(8		)
Fair value adjustment	(85		)
Contingent payments related to prior period acquisition	(137		)
Balance as of December 31, 2014	$	274

As of December 31, 2014, the maximum amount of future contingent consideration (undiscounted) that we could be required to make associated with our acquisitions is approximately $1.908 billion.

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Increases or decreases in the fair value of our contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory-, revenue- or commercialization-based milestones. The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs:

Contingent Consideration Liability	Fair Value as of December 31, 2014	Valuation Technique	Unobservable Input	Range
R&D, Regulatory and Commercialization-based Milestones	$85 million	Probability Weighted Discounted Cash Flow	Discount Rate	1.1%
			Probability of Payment	84% - 95%
			Projected Year of Payment	2015
Revenue-based Payments	$55 million	Discounted Cash Flow	Discount Rate	11.5% - 15%
			Probability of Payment	0% - 100%
			Projected Year of Payment	2015 - 2018
	$134 million	Monte Carlo	Revenue Volatility	11% - 13%
			Risk Free Rate	LIBOR Term Structure
			Projected Year of Payment	2015 - 2018

Contingent consideration liabilities are remeasured to fair value each reporting period using projected revenues, discount rates, probabilities of payment and projected payment dates. Projected contingent payment amounts related to R&D, regulatory- and commercialization-based milestones and certain revenue-based milestones are discounted back to the current period using a discounted cash flow model. Other revenue-based payments are valued using a monte carlo valuation model, which simulates future revenues during the earn out-period using management's best estimates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. Increases in projected revenues and probabilities of payment may result in higher fair value measurements. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs in isolation may result in a significantly lower or higher fair value measurement.

NOTE C – DIVESTITURES

In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation for a purchase price of $1.500 billion in cash. We received $1.450 billion during 2011, an additional $10 million during 2012, $30 million during 2013 and we received the final amount due to us in 2014. At the time of divestiture, due to our continuing involvement in the operations of the Neurovascular business following the transaction, the divestiture did not meet the criteria for presentation as a discontinued operation. Our sales related to our divested Neurovascular business have declined as the various transition services and supply agreements have terminated.

We recorded a gain of $12 million during 2014, a gain of $38 million during 2013 and a gain of $15 million during 2012 associated with the transaction.

We recorded revenue related to the Neurovascular business following its divestiture of $4 million in 2014, $58 million in 2013 and $122 million in 2012.

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NOTE D – 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 and accumulated write-offs of goodwill as of December 31, 2014 and 2013 is as follows:

	As of December 31, 2014					As of December 31, 2013
	Gross Carrying		Accumulated Amortization/			Gross Carrying		Accumulated Amortization/
(in millions)	Amount		Write-offs			Amount		Write-offs
Amortizable intangible assets
Technology-related	$	8,406	$	(3,697	)	$	8,272	$	(3,342	)
Patents	519		(342		)	513		(326		)
Other intangible assets	875		(533		)	845		(479		)
	$	9,800	$	(4,572	)	$	9,630	$	(4,147	)
Unamortizable intangible assets
Goodwill	$	15,798	$	(9,900	)	$	15,593	$	(9,900	)
Technology-related	197		—			197		—
	$	15,995	$	(9,900	)	$	15,790	$	(9,900	)

In addition, we had $181 million and $270 million of in-process research and development intangible assets as of December 31, 2014 and December 31, 2013, respectively.

Our technology-related intangible assets that are not subject to amortization represent technical processes, intellectual property and/or institutional understanding acquired through business combinations that are fundamental to the on-going operations of our business and have no limit to their useful life. Our technology-related intangible assets that are not subject to amortization are comprised primarily of certain acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine. We assess our indefinite-lived intangible assets at least annually for impairment and reassess their classification as indefinite-lived assets. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other.

2013 Reorganization

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. To determine the amount of goodwill within our new global reporting units, on a relative fair value basis we reallocated $1.764 billion of goodwill previously allocated to our former EMEA, Asia Pacific, Japan, and Americas international reporting units to our new global reporting units. In addition, we reallocated the goodwill previously allocated to the former U.S. divisional reporting units to each respective new global reporting unit, with the exception of the goodwill allocated to the former U.S. Cardiovascular reporting unit. The $2.380 billion of goodwill allocated to the former U.S. Cardiovascular reporting unit was reallocated between the new global Interventional Cardiology and global Peripheral Interventions reporting units on a relative fair value basis.

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The following represents our goodwill balance by new global reportable segment. We restated the prior period information to conform to the current presentation:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Balance as of December 31, 2012	$	3,249		$	577		$	2,147		$	5,973
Purchase price adjustments	3			—			—			3
Goodwill acquired	—			140			—			140
Goodwill written off	—			(423		)	—			(423		)
Balance as of December 31, 2013	$	3,252		$	294		$	2,147		$	5,693
Purchase price adjustments	(2		)	(4		)	(2		)	(8		)
Goodwill acquired	169			—			44			213
Goodwill written off	—			—			—			—
Other changes in carrying amount*	7			$	—		(7		)	—
Balance as of December 31, 2014	$	3,426		$	290		$	2,182		$	5,898

*In 2014, we reallocated $7 million of goodwill between Cardiovascular and MedSurg as a result of the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014.

The 2014 and 2013 purchase price adjustments relate primarily to adjustments in taxes payable and deferred income taxes, including changes in the liability for unrecognized tax benefits.

2014 Goodwill Impairment Testing

We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist.

In the second quarter of 2014, we performed our annual goodwill impairment test for all of our reporting units, in accordance with ASC Topic 350, Intangibles-Goodwill and Other. In conjunction with our annual test, the fair value of each reporting unit exceeded its carrying value. Therefore, it was deemed not necessary to proceed to the second step of the impairment test. As a result of the 2014 annual goodwill impairment test, we identified our global Neuromodulation and global Electrophysiology reporting units as being at higher risk of potential failure of the first step of the goodwill impairment test in future reporting periods. As of the date of our annual goodwill impairment test, our global Neuromodulation reporting unit had excess fair value over carrying value of approximately 55 percent and held $1.356 billion of allocated goodwill. As of the date of our annual goodwill impairment test, our global Electrophysiology reporting unit had excess fair value over carrying value of approximately 38 percent and held $292 million of allocated goodwill. During the fourth quarter of 2014, due to changes in our expectations of the timing and amount of future revenue and cash flow related to our Electrophysiology reporting unit, we performed an interim goodwill impairment test on this reporting unit. Based on this assessment, we concluded that the fair value of the Electrophysiology reporting unit exceeded its carrying value; however the level of excess fair value over the carrying value had declined to approximately 26 percent.As of our annual goodwill impairment test date, our global Cardiac Rhythm Management (CRM) reporting unit had a fair value approximately equal to its carrying value; however, due to goodwill impairment charges in prior years, no goodwill remains within our CRM reporting unit. Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses could result in future impairments of goodwill within our reporting units including global CRM. Further, the recoverability of our CRM-related amortizable intangibles ($4.097 billion globally as of December 31, 2014) is sensitive to future cash flow assumptions and our global CRM business performance. The $4.097 billion of CRM-related amortizable intangibles is at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. An impairment of a material portion of our CRM-related amortizable intangibles carrying value would occur if the second step of the amortizable intangible test is required in a future reporting period.

On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets. The key variables that drive the cash flows of our reporting units and amortizable intangibles are estimated revenue growth rates and levels of profitability. Terminal value growth rate assumptions, as well as the Weighted Average Cost of Capital (WACC) rate applied are additional key variables for reporting unit cash flows. These assumptions are subject to uncertainty, including our ability to grow revenue and improve profitability levels. Relatively small declines in the future performance and cash flows of a reporting unit or asset group or small changes in other key assumptions may result in the recognition of significant goodwill or intangible asset impairment charges. For example, based on the interim goodwill assessment performed on our Electrophysiology reporting unit during the fourth quarter of 2014, keeping all other variables constant, an increase in the WACC applied of 50 basis points combined with a 100 basis point decrease in the terminal

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value growth rate would require that we perform the second step of the goodwill impairment test. As of the date of our annual goodwill impairment test, keeping all other variables constant, an increase in the WACC applied of 100 basis points combined with a 150 basis points decrease in the terminal value growth rate would require that we perform the second step of the goodwill impairment test for our global Neuromodulation reporting unit. The estimates used for our future cash flows and discount rates represent management's best estimates, which we believe to be reasonable, but future declines in business performance may impair the recoverability of our goodwill and intangible asset balances.

Future events that could have a negative impact on the levels of excess fair value over carrying value of our reporting units and/or amortizable intangible assets include, but are not limited to:

• decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, reductions in reimbursement levels, product actions, and/or competitive technology developments;

• declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies, product actions, and market and/or regulatory conditions that may cause significant launch delays or product recalls;

• decreases in our forecasted profitability due to an inability to successfully implement and achieve timely and sustainable cost improvement measures consistent with our expectations, increases in our market-participant tax rate, and/or changes in tax laws;

• negative developments in intellectual property litigation that may impact our ability to market certain products or increase our costs to sell certain products;

• the level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;

• the level of success in managing the growth of acquired companies, achieving sustained profitability consistent with our expectations, establishing government and third-party payer reimbursement, supplying the market, and increases in the costs and time necessary to integrate acquired businesses into our operations successfully;

• changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses; and

• increases in our market-participant risk-adjusted WACC.

Negative changes in one or more of these factors, among others, could result in additional impairment charges.

2013 Charges

Following our reorganization from regions to global business units and our reallocation of goodwill on a relative fair value basis as of January 1, 2013, we conducted the first step of the goodwill impairment test for all global reporting units. As of January 1, 2013, the fair value of each global reporting unit exceeded its carrying value, with the exception of the global CRM reporting unit. We tested the global CRM intangible assets in conjunction with the second step of the goodwill test on the global CRM reporting unit, and recorded a non-cash goodwill impairment charge of $423 million ($421 million after-tax) to write down the goodwill to its implied fair value as of January 1, 2013 as a result of this analysis. The primary driver of this impairment charge was our reorganization from geographic regions to global business units as of January 1, 2013, which changed the composition of our reporting units. As a result of the reorganization, any goodwill allocated to the global CRM reporting unit was no longer supported by the cash flows of other businesses. Under our former reporting unit structure, the goodwill allocated to our regional reporting units was supported by the cash flows from all businesses in each international region. The hypothetical tax structure of the global CRM business and the global CRM business discount rate applied were also contributing factors to the goodwill impairment charge.

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2012 Charges

In the second quarter of 2012, we performed our annual goodwill impairment test for all of our reporting units and concluded that the goodwill within our former EMEA reporting unit was impaired and recorded a charge of $3.602 billion ($3.579 billion after-tax). As a result of revised estimates developed during our annual strategic planning process and analysis performed in conjunction with our annual goodwill impairment test, we concluded that the revenue growth rates projected for the EMEA reporting unit were slightly lower than our previous estimates primarily driven by macro-economic factors and our performance in the European market. We updated short-term operating projections based on our most recent strategic plan for EMEA prepared by management. We reduced the EMEA long-term growth rates and terminal value growth rate projections and increased the discount rate within our 15-year DCF model for EMEA by approximately 100 basis points due to increased risk associated with our projections in this market primarily as a result of economic uncertainty in Europe. In addition, our expectations for future growth and profitability were lowered as compared to our previous estimates and reflected declines in average selling prices and volume pressures due to austerity measures.

In the third quarter of 2012, we performed an interim goodwill impairment test and recorded a non-cash $748 million (pre- and after-tax) charge associated with our former U.S. Cardiac Rhythm Management (U.S. CRM) reporting unit, primarily driven by a reduction in the estimated size of the U.S. CRM market, related adjustments to our business and other competitive factors, which led to lower projected U.S. CRM results compared to prior forecasts. The U.S. CRM market is dynamic, highly competitive and difficult to forecast; in the third quarter of 2012, we lowered our projections for the U.S. CRM market size and our future revenue levels within this market, primarily to reflect changes in expectations of average selling prices and unit growth, adjustments to our business and other competitive factors. The increased pricing pressure and lower unit volumes were primarily due to physician alignment with hospitals, efforts to reduce health care costs, focus on appropriate device usage, replacement volumes and competition, and were more impactful to the U.S. CRM business than previously estimated. In addition, we adjusted certain elements of our business and shifted investments to focus on areas expected to provide the highest future growth and financial return. As a result of these factors, we reduced the compound annual revenue growth rate of our 15 year DCF model for the U.S. CRM reporting unit by approximately 250 basis points.

The following is a rollforward of accumulated goodwill write-offs by global reportable segment:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Accumulated write-offs as of December 31, 2012	$	(1,479	)	$	(6,537	)	$	(1,461	)	$	(9,477	)
Goodwill written off	—			(423		)	—			(423		)
Accumulated write-offs as of December 31, 2013	$	(1,479	)	$	(6,960	)	(1,461		)	$	(9,900	)
Goodwill written off	—			—			—			—
Accumulated write-offs as of December 31, 2014	$	(1,479	)	$	(6,960	)	$	(1,461	)	$	(9,900	)

Intangible Asset Impairment Charges

On a quarterly basis, we monitor for events or other potential indicators of impairment that would warrant an interim impairment test of our intangible assets. The recoverability of our CRM-related amortizable intangibles ($4.097 billion globally as of December 31, 2014) are sensitive to changes in future cash flow assumptions and our global CRM business performance. The $4.097 billion of CRM-related amortizable intangibles are at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. An impairment of a material portion of our CRM-related amortizable intangibles carrying value would occur if the second step of the amortizable intangible test is required in a future reporting period. See Goodwill Impairment Charges above for discussion of future events that could have a negative impact on the levels of excess fair value over carrying value of our CRM-related amortizable intangible assets.

2014 Charges

During the fourth quarter of 2014, as a result of revised estimates in conjunction with our annual operating plan, we performed an interim impairment test of in-process research and development projects associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded an impairment charge of $18 million to write-down the balances of these in-process projects to their fair value, which was determined to be zero.

During the third quarter of 2014, we performed our annual impairment test of all in-process research and development projects, and our indefinite lived core technology assets. Based on the results of our annual test, we recorded total impairment charges of $4 million to write-down the balances of certain in-process projects to their fair value. In addition, as a result of revised estimates

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in conjunction with our annual operating plan, we performed an interim impairment test of core technology associated with certain of our acquisitions, and recorded an impairment charge of $8 million, for a total of $12 million of impairment charges in the third quarter of 2014.

During the second quarter of 2014, as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects and core technology associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded impairment charges of $110 million in the second quarter of 2014. As a result of changes in our clinical strategy and lower estimates of the European and global hypertension markets, and the resulting amount of future revenue and cash flows associated with the technology acquired from Vessix, we recorded impairment charges of $67 million related to technology intangible assets during the second quarter of 2014. In addition, in the second quarter of 2014, due to revised expectations and timing as a result of the announcement of a third FDA Circulatory System Devices Panel, we recorded impairment charges of $35 million related to the in-process research and development intangible assets acquired from Atritech, Inc. (Atritech). We also recorded an additional $8 million intangible asset impairment charge associated with changes in the amount of the expected cash flows related to certain other acquired in-process research and development projects.

During the first quarter of 2014, as a result of lower estimates of the resistant hypertension market following the announcement of data from a competitor's clinical trial, we performed an interim impairment test of our in-process research and development projects and core technology associated with our acquisition of Vessix. The impairment assessments were based upon probability-weighted cash flows of potential future scenarios. Based on our impairment assessment, and lower expected future cash flows associated with our Vessix-related intangible assets, we recorded impairment charges of $55 million in the first quarter of 2014 to write-down the balance of these intangible assets to their fair value.

2013 Charges

During the second quarter of 2013 as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects associated with certain of our acquisitions. Based on the results of our impairment analyses, we revised our expectations of the market size related to Sadra Medical, Inc. (Sadra), and the resulting timing and amount of future revenue and cash flows associated with the technology acquired from Sadra. As a result of these changes, we recorded pre-tax impairment charges of $51 million to write-down the balance of these intangible assets to their fair value during the second quarter of 2013. During the second quarter of 2013, we also recorded an additional $2 million intangible asset impairment charge associated with changes in the amount of the expected cash flows related to certain other acquired in-process research and development projects.

2012 Charges

During the third quarter of 2012, we performed our annual impairment test of all in-process research and development projects, and our indefinite lived core technology assets. Based on the results of our annual test, we recorded total impairment charges of $13 million to write-down the balances of certain in-process projects to their fair value. These charges were primarily due to increased expectations in the cost to bring an in-process project to market in a certain geographic region and lower future revenue expectations associated with an in-process project.

During the second quarter of 2012, as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects associated with our acquisition of Sadra. Based on our impairment analysis, we revised our expectations of the required effort, time and cost involved in completing the in-process projects and bringing the related products to market. As a result of these changes, we recorded an impairment charge of $129 million to write-down the balance of these intangible assets to their fair value during the second quarter of 2012.

We recorded these amounts in the intangible asset impairment charges caption in our accompanying consolidated statements of operations.

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The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs:

Intangible Asset	Valuation Date	Fair Value	Valuation Technique	Unobservable Input	Rate
In-Process R&D	September 30, 2014	$16 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
In-Process R&D	June 30, 2014	$83 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
Core Technology	June 30, 2014	$8 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	March 31, 2014	$6 million	Income Approach - Excess Earnings Method	Discount Rate	20%
Core Technology	March 31, 2014	$64 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	June 30, 2013	$178 million	Income Approach - Excess Earnings Method	Discount Rate	16.5%
In-Process R&D	September 30, 2012	$26 million	Income Approach - Excess Earnings Method	Discount Rate	20 - 25%
In-Process R&D	June 30, 2012	$184 million	Income Approach - Excess Earnings Method	Discount Rate	20%

The intangible asset category and associated write downs recorded in 2014, 2013 and 2012 were as follows:

	Year Ended December 31,
(in millions)	2014		2013		2012
Technology-related	$	107	$	—	$	—
In-process research and development	88		53		142
	$	195	53		$	142

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Estimated amortization expense for each of the five succeeding fiscal years based upon our intangible asset portfolio as of December 31, 2014 is as follows:

	Estimated Amortization Expense
Fiscal Year	(in millions)
2015	$	470
2016	469
2017	467
2018	464
2019	460

NOTE E – 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 foreign 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. 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 exchange rates on a consolidated basis to take advantage of offsetting transactions. We use both derivative instruments (currency forward and option contracts), and non-derivative transactions (primarily European manufacturing and distribution 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 foreign currency exchange rate changes.

Designated Foreign Currency Hedges

All of our designated currency hedge contracts outstanding as of December 31, 2014 and December 31, 2013 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 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 no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. We had currency derivative instruments designated as cash flow hedges outstanding in the contract amount of $2.178 billion as of December 31, 2014 and $2.564 billion as of December 31, 2013.

We recognized net gains of $105 million during 2014 on our cash flow hedges, as compared to $36 million of net gains during 2013, and $39 million of net losses during 2012. All currency cash flow hedges outstanding as of December 31, 2014 mature within 36 months. As of December 31, 2014, $217 million of net gains, net of tax, were recorded in accumulated other comprehensive income (AOCI) to recognize the effective portion of the fair value of any currency derivative instruments that are, or previously were, designated as foreign currency cash flow hedges, as compared to net gains of $139 million as of December 31, 2013. As of December 31, 2014, $128 million of net gains, net of tax, may be reclassified to earnings within the next twelve months.

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The success of our hedging program depends, in part, on forecasts of transaction activity in various currencies (primarily Japanese yen, Euro, British pound sterling, Australian dollar and Canadian dollar). We may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activity during periods of currency volatility. In addition, changes in foreign currency exchange rates related to any unhedged transactions may impact our earnings and cash flows.

Non-designated Foreign Currency Contracts

We use currency forward contracts as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These currency forward contracts are not designated as cash flow, fair value or net investment hedges under Topic 815; are marked-to-market with changes in fair value recorded to earnings; and are entered into for periods consistent with currency transaction exposures, generally less than one year. We had currency derivative instruments not designated as hedges under Topic 815 outstanding in the contract amount of $2.470 billion as of December 31, 2014 and $1.952 billion as of December 31, 2013.

Interest Rate Hedging

Our interest rate risk relates primarily to U.S. dollar borrowings, partially offset by U.S. dollar cash investments. We have historically used interest rate derivative instruments to manage our earnings and cash flow exposure to changes in interest rates by converting fixed-rate debt into floating-rate debt or floating-rate debt into fixed-rate debt.

We designate these derivative instruments either as fair value or cash flow hedges under Topic 815. We record changes in the value of fair value hedges in interest expense, which is generally offset by changes in the fair value of the hedged debt obligation. Interest payments made or received related to our interest rate derivative instruments are included in interest expense. We record the effective portion of any change in the fair value of derivative instruments designated as cash flow hedges as unrealized gains or losses in OCI, net of tax, until the hedged cash flow occurs, at which point the effective portion of any gain or loss is reclassified to earnings. We record the ineffective portion of our cash flow hedges in interest expense. In the event the hedged cash flow does not occur, or it becomes no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time.

In the fourth quarter of 2013, we entered into interest rate derivative contracts having a notional amount of $450 million to convert fixed-rate debt into floating-rate debt, which we designated as fair value hedges, and had $450 million outstanding as of December 31, 2014. We assessed at inception, and re-assess on an ongoing basis, whether the interest rate derivative contracts are highly effective in offsetting changes in the fair value of the hedged fixed rate debt. In 2014, we recognized in interest expense, a $29 million loss on our hedged debt obligations, compared to a $7 million gain on our hedged debt obligation in 2013. We also recognized, in interest expenses, a $29 million gain on the related interest rate derivative contracts during 2014, compared to an $8 million loss on these contracts during 2013. This resulted in net gain of less than $1 million recorded in earning due to ineffectiveness in 2014 and a net loss of $1 million recorded in earnings due to ineffectiveness in 2013.

In prior years, we terminated certain interest rate derivative contracts, including fixed-to-floating interest rate contracts, designated as fair value hedges, and floating-to-fixed treasury locks designated as cash flow hedges. We began amortizing the gains and losses of these derivative instruments upon termination into earnings as a reduction of interest expense over the remaining term of the hedged debt, in accordance with Topic 815. The carrying amount of certain of our senior notes included unamortized gains of $45 million as of December 31, 2014 and $54 million as of December 31, 2013, and unamortized losses of $2 million as of December 31, 2014 and $2 million as of December 31, 2013, related to the fixed-to-floating interest rate contracts. In addition, we had pre-tax net gains within AOCI related to terminated floating-to-fixed treasury locks of $2 million as of December 31, 2014 and $3 million as of December 31, 2013. The gains that we recognized in earnings related to previously terminated interest rate derivatives were $9 million in 2014, $10 million in 2013, and $11 million in 2012. As of December 31, 2014, $9 million of net gains may be reclassified to earnings within the next twelve months from amortization of our previously terminated interest rate derivative contracts.

Counterparty Credit Risk

We do not have significant concentrations of credit risk arising from our derivative financial instruments, whether from an individual counterparty or a related group of counterparties. We manage our concentration of counterparty credit risk on our derivative instruments by limiting acceptable counterparties to a diversified group of major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to each counterparty, and by actively monitoring their credit ratings and outstanding fair values on an on-going basis. Furthermore, none of our derivative transactions are subject to collateral or other security arrangements and none contain provisions that are dependent on our credit ratings from any credit rating agency.

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We also employ master netting arrangements that reduce our counterparty payment settlement risk on any given maturity date to the net amount of any receipts or payments due between us and the counterparty financial institution. Thus, the maximum loss due to credit risk by counterparty is limited to the unrealized gains in such contracts net of any unrealized losses should any of these counterparties fail to perform as contracted. Although these protections do not eliminate concentrations of credit risk, as a result of the above considerations, we do not consider the risk of counterparty default to be significant.

Fair Value of Derivative Instruments

The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying consolidated statements of operations during 2014, 2013 and 2012 (in millions):

	Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)			Location in Statement of Operations
Year Ended December 31, 2014
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	227		105			Cost of products sold
	$	227	$	106
Year Ended December 31, 2013
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	207		36			Cost of products sold
	$	207	$	37
Year Ended December 31, 2012
Interest rate contracts	$	—	$	2		Interest expense
Currency hedge contracts	95		(39		)	Cost of products sold
	$	95	$	(37	)

We recognized a gain of less than $1 million in 2014, a loss of $1 million in 2013 and a de minimus amount in 2012 in earnings, related to the ineffective portion of our hedging relationships.

Net gains and losses on currency hedge contracts not designated as hedging instruments were offset by net losses and gains from foreign currency transaction exposures, as shown in the following table:

in millions										Location in Statement of Operations
	Year Ended December 31,
	2014			2013			2012
Gain (loss) on currency hedge contracts	$	52		$	45		$	23		Other, net
Gain (loss) on foreign currency transaction exposures	(70		)	(56		)	(41		)	Other, net
Net foreign currency gain (loss)	$	(18	)	$	(11	)	$	(18	)

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Topic 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative instruments using the framework prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering the estimated amount we would receive or pay to transfer these instruments at the reporting date and by taking into account current interest rates, foreign currency exchange rates, the creditworthiness of the counterparty for assets, and our creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of December 31, 2014, we have classified all of our derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by Topic 820, as discussed below, because these observable inputs are available for substantially the full term of our derivative instruments.

The following are the balances of our derivative assets and liabilities as of December 31, 2014 and December 31, 2013:

		As of
		December 31,		December 31,
(in millions)	Location in Balance Sheet (1)	2014		2013
Derivative Assets:
Designated Hedging Instruments
Currency hedge contracts	Other current assets	$	178	$	117
Currency hedge contracts	Other long-term assets	141		120
Interest rate contracts	Other current assets	3		1
Interest rate contracts	Other long-term assets	22		—
		344		238
Non-Designated Hedging Instruments
Currency hedge contracts	Other current assets	100		27
Total Derivative Assets		$	444	$	265
Derivative Liabilities:
Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	$	1	$	13
Currency hedge contracts	Other long-term liabilities	—		19
Interest rate contracts	Other long-term liabilities	—		8
		1		40
Non-Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	35		23
Total Derivative Liabilities		$	36	$	63

(1) We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less.

Other Fair Value Measurements

Recurring Fair Value Measurements

On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices, where available. Where quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

• Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.

• Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

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• Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2014 and December 31, 2013:

	As of December 31, 2014								As of December 31, 2013
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market and government funds	$	151	$	—	$	—	$	151	$	38	$	—	$	—	$	38
Currency hedge contracts	—		419		—		419		—		264		—		264
Interest rate contracts	—		25		—		25		—		1		—		1
	$	151	$	444	$	—	$	595	$	38	$	265	$	—	$	303
Liabilities
Currency hedge contracts	$	—	$	36	$	—	$	36	$	—	$	55	$	—	$	55
Accrued contingent consideration	—		—		274		274		—		—		501		501
Interest rate contracts	—		—		—		—		—		8		—		8
	$	—	$	36	$	274	$	310	$	—	$	63	$	501	$	564

Our investments in money market and government funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as cash and cash equivalents within our accompanying consolidated balance sheets, in accordance with U.S. GAAP and our accounting policies.

In addition to $151 million invested in money market and government funds as of December 31, 2014, we had $255 million in short-term time deposits and $181 million in interest bearing and non-interest bearing bank accounts. In addition to $38 million invested in money market and government funds as of December 31, 2013, we had $31 million in short-term time deposits and $148 million in interest bearing and non-interest bearing bank accounts.

Our recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to our contingent consideration liability. Refer to Note B - Acquisitions for a discussion of the changes in the fair value of our contingent consideration liability.

Non-Recurring Fair Value Measurements

We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods subsequent to initial recognition. The fair value of a cost method investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. The aggregate carrying amount of our cost method investments was $27 million as of December 31, 2014 and $20 million as of December 31, 2013.

During 2014 and 2013, we recorded charges of $195 million and $476 million, respectively, to adjust our goodwill and certain other intangible asset balances to their fair value. Refer to Note D - Goodwill and Other Intangible Assets, for further detailed information related to these charges and significant unobservable inputs.

The fair value of our outstanding debt obligations was $4.613 billion as of December 31, 2014 and $4.602 billion as of December 31, 2013, which was determined by using quoted market prices for our publicly-registered senior notes, classified as Level 1 within the fair value hierarchy. Refer to Note F – Borrowings and Credit Arrangements for a discussion of our debt obligations.

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NOTE F – BORROWINGS AND CREDIT ARRANGEMENTS

We had total debt of $4.262 billion as of December 31, 2014 and $4.240 billion as of December 31, 2013. The debt maturity schedule for the significant components of our debt obligations as of December 31, 2014 is as follows:

(in millions)	2015		2016		2017		2018		2019		Thereafter		Total
Senior notes	$	400	$	600	$	250	$	600	$	—	$	1,950	$	3,800
Term loan	—		80		80		240		—		—		400
	$	400	$	680	$	330	$	840	$	—	$	1,950	$	4,200

Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.

Revolving Credit Facility

We maintain a $2.000 billion revolving credit facility, maturing in April 2017, with a global syndicate of commercial banks. Eurodollar and multicurrency loans under this revolving credit facility bear interest at LIBOR plus an interest margin of between 0.875 percent and 1.475 percent, based on our corporate credit ratings and consolidated leverage ratio (1.275 percent, as of December 31, 2014). In addition, we are required to pay a facility fee based on our credit ratings, consolidated leverage ratio, and the total amount of revolving credit commitments, regardless of usage, under the agreement (0.225 percent, as of December 31, 2014). There were no amounts borrowed under our revolving credit facility as of December 31, 2014 or December 31, 2013.

Our revolving credit facility agreement in place as of December 31, 2014 requires that we maintain certain financial covenants, as follows:

	Covenant Requirement	Actual as of December 31, 2014
Maximum leverage ratio (1)	3.5 times	2.4 times
Minimum interest coverage ratio (2)	3.0 times	8.2 times

(1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.

(2) Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters.

The credit agreement provides for an exclusion from the calculation of consolidated EBITDA, as defined by the agreement, through the credit agreement maturity, of any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of December 31, 2014, we had $116 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreement, are excluded from the calculation of consolidated EBITDA and any new debt issued to fund any tax deficiency payments is excluded from consolidated total debt, as defined in the agreement, provided that the sum of any excluded net cash litigation payments and any new debt issued to fund any tax deficiency payments shall not exceed $2.300 billion in the aggregate. As of December 31, 2014, we had approximately $2.107 billion of the combined legal and debt exclusion remaining. As of and through December 31, 2014, we were in compliance with the required covenants.

Any inability to maintain compliance with these covenants could require us to seek to renegotiate the terms of our credit facility or seek waivers from compliance with these covenants, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers.

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Term Loan

In August 2013, we entered into a $400 million, unsecured term loan facility. Term loan borrowings under this facility bear interest at LIBOR plus an interest margin of between 1.0 percent and 1.75 percent (currently 1.5 percent), based on our corporate credit ratings and consolidated leverage ratio. The term loan borrowings are payable over a five-year period, with quarterly principal payments of $20 million commencing in the first quarter of 2016 and the remaining principal amount due at the final maturity date in August 2018, and are repayable at any time without premium or penalty. Our term loan facility requires that we comply with certain covenants, including financial covenants with respect to maximum leverage and minimum interest coverage; the maximum leverage ratio requirement is 3.5 times, our actual leverage ratio as of December 31, 2014 is 2.4 times and the minimum interest coverage ratio requirement is 3.0 times, our actual interest coverage ratio as of December 31, 2014 is 8.2 times. We had $400 million outstanding under this facility as of December 31, 2014 and December 31, 2013.

Senior Notes

We had senior notes outstanding of $3.800 billion as of December 31, 2014 and December 31, 2013, respectively. In August 2013, we issued $600 million of 2.650% senior notes due in 2018, and $450 million of 4.125% senior notes due in 2023. In September 2013, we used the proceeds, together with borrowings under our new $400 million term loan facility, to prepay $600 million of senior notes maturing in June 2014 and $850 million maturing in January 2015. We recorded a charge in the interest expense caption of our consolidated statements of operations of $70 million for premiums, accelerated amortization of debt issuance costs and investor discount costs net of accelerated amortization of interest rate hedge gains related to the early debt extinguishment. Our senior notes are publicly registered securities, are redeemable prior to maturity and are not subject to any sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to borrowings under our credit and security facility and liabilities of our subsidiaries (see Other Arrangements below).

Our senior notes consist of the following as of December 31, 2014:

	Amount (in millions)		Issuance Date	Maturity Date	Semi-annual Coupon Rate
November 2015 Notes	$	400	November 2005	November 2015	5.500%
June 2016 Notes	600		June 2006	June 2016	6.400%
January 2017 Notes	250		November 2004	January 2017	5.125%
October 2018 Notes	600		August 2013	October 2018	2.650%
January 2020 Notes	850		December 2009	January 2020	6.000%
October 2023 Notes	450		August 2013	October 2023	4.125%
November 2035 Notes	350		November 2005	November 2035	6.250%
January 2040 Notes	300		December 2009	January 2040	7.375%
	$	3,800

Our $2.2 billion of senior notes issued in 2009 and 2013 contain a change-in-control provision, which provides that each holder of the senior notes may require us to repurchase all or a portion of the notes at a price equal to 101 percent of the aggregate repurchased principal, plus accrued and unpaid interest, if a rating event, as defined in the indenture, occurs as a result of a change-in-control, as defined in the indenture. Any other credit rating changes may impact our borrowing cost, but do not require us to repay any borrowings.

The interest rate payable on our November 2015 Notes is currently 6.25 percent and the interest rate payable on our November 2035 Notes is currently 7.00 percent. Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2015 and November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2015 and November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher.

Other Arrangements

We also maintain a $300 million credit and security facility secured by our U.S. trade receivables maturing in June 2015, subject to further extension. The credit and security facility requires that we maintain a maximum leverage covenant consistent with our revolving credit facility. The maximum leverage ratio requirement is 3.5 times and our actual leverage ratio as of December 31, 2014 is 2.4 times. We had no borrowings outstanding under this facility as of December 31, 2014 and December 31, 2013.

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We have accounts receivable factoring programs in certain European countries that we account for as sales under ASC Topic 860, Transfers and Servicing. These agreements provide for the sale of accounts receivable to third parties, without recourse, of up to approximately $363 million as of December 31, 2014. We have no retained interests in the transferred receivables, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. We de-recognized $167 million of receivables as of December 31, 2014 at an average interest rate of 3.2 percent, and $146 million as of December 31, 2013 at an average interest rate of 3.3 percent.

In addition, we have uncommitted credit facilities with a commercial Japanese bank that provide for borrowings, promissory notes discounting and receivables factoring of up to 21.0 billion Japanese yen (approximately $175 million as of December 31, 2014). We de-recognized $134 million of notes receivable as of December 31, 2014 at an average interest rate of 1.8 percent and $147 million of notes receivable as of December 31, 2013 at an average interest rate of 1.8 percent. De-recognized accounts and notes receivable are excluded from trade accounts receivable, net in the accompanying consolidated balance sheets.

As of December 31, 2014, we had outstanding letters of credit of $59 million, as compared to $78 million as of December 31, 2013, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2014 and 2013, none of the beneficiaries had drawn upon the letters of credit or guarantees; accordingly, we have not recognized a related liability for our outstanding letters of credit in our consolidated balance sheets as of December 31, 2014 or 2013. We believe we will generate sufficient cash from operations to fund these payments and intend to fund these payments without drawing on the letters of credit.

NOTE G – LEASES

Rent expense amounted to $76 million in 2014, $77 million in 2013 and $80 million in 2012.

Future minimum rental commitments as of December 31, 2014 under all noncancelable lease agreements, including capital leases, were as follows (in millions):

2015	$	59
2016	51
2017	34
2018	25
2019	21
Thereafter	28
	$	218

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 research and development projects, capital, our people and other programs that we believe are important to drive our growth. As a result of these assessments, we have undertaken various restructuring initiatives in order to enhance our growth potential and position us for long-term success. These initiatives are described below.

2014 Restructuring Plan

On October 22, 2013, our Board of Directors approved, and we committed to, a restructuring initiative (the 2014 Restructuring plan). The 2014 Restructuring plan is intended to build on the progress we have made to address financial pressures in a changing global marketplace, further strengthen our operational effectiveness and efficiency and support new growth investments. Key activities under the plan include continued implementation of our ongoing Plant Network Optimization (PNO) strategy, continued focus on driving operational efficiencies and ongoing business and commercial model changes. The PNO strategy is intended to simplify our manufacturing plant structure by transferring certain production lines among facilities. Other activities involve rationalizing organizational reporting structures to streamline various functions, eliminate bureaucracy, increase productivity and better align resources to business strategies and marketplace dynamics. These activities were initiated in the fourth quarter of 2013 and are expected to be substantially completed by the end of 2015.

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We estimate that the implementation of the 2014 Restructuring plan will result in total pre-tax charges of approximately $250 million to $300 million, and approximately $235 million to $285 million of these charges are expected to result in future cash outlays, of which we have made payments of $93 million to date. We have recorded related costs of $142 million 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 statement of operations. The following table provides a summary of our estimates of costs associated with the 2014 Restructuring plan by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$115 million to $135 million
Other (1)	$25 million to $35 million
Restructuring-related expenses:
Other (2)	$110 million to $130 million
	$250 million to $300 million

(1) Consists primarily of consultant fees and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2014 Restructuring plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities.

2011 Restructuring Plan

On July 26, 2011, our Board of Directors approved, and we committed to, a restructuring initiative (the 2011 Restructuring plan) designed to strengthen operational effectiveness and efficiencies, increase competitiveness and support new investments, thereby increasing shareholder value. Key activities under the 2011 Restructuring plan included standardizing and automating certain processes and activities; relocating select administrative and functional activities; rationalizing organizational reporting structures; leveraging preferred vendors; and other efforts to eliminate inefficiency. Among these efforts, we expanded our ability to deliver best-in-class global shared services for certain functions and divisions at several locations in emerging markets. This action was intended to enable us to grow our global commercial presence in key geographies and take advantage of many cost-reducing and productivity-enhancing opportunities. In addition, we undertook efforts to streamline various corporate functions, eliminate bureaucracy, increase productivity and better align corporate resources to our key business strategies. On January 25, 2013, our Board of Directors approved, and we committed to, an expansion of the 2011 Restructuring plan (the Expansion). The Expansion was intended to further strengthen our operational effectiveness and efficiencies and support new investments. Activities under the 2011 Restructuring plan were initiated in the third quarter of 2011 and all activities, including those related to the Expansion, were substantially completed by the end of 2013.

The 2011 Restructuring plan, including the Expansion, is estimated to result in total pre-tax charges of approximately $289 million to $292 million, and approximately $287 million to $291 million of these charges are expected to result in cash outlays, of which we have made payments of $287 million to date. We have recorded related costs of $289 million since the inception of the plan, and recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations.

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The following provides a summary of our expected total costs associated with the 2011 Restructuring plan, including the Expansion, by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$138 million to $141 million
Other (1)	$112 million
Restructuring-related expenses:
Other (2)	$39 million
	$289 million to $292 million

(1) Includes primarily consulting fees, net fixed asset write-offs and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2011 Restructuring plan, including the Expansion, such as program management, accelerated depreciation, retention and infrastructure-related costs.

2010 Restructuring Plan

On February 6, 2010, our Board of Directors approved, and we committed to, a series of management changes and restructuring initiatives (the 2010 Restructuring plan) designed to focus our business, drive innovation, accelerate profitable revenue growth and increase both accountability and shareholder value. Key activities under the plan included the restructuring of certain of our businesses and corporate functions; the re-alignment of our international structure to reduce our administrative costs and invest in expansion opportunities including significant investments in emerging markets; and the re-prioritization and diversification of our product portfolio. Activities under the 2010 Restructuring plan were initiated in the first quarter of 2010 and were complete by the end of 2012.

The execution of the 2010 Restructuring plan resulted in total pre-tax charges of $160 million, and required cash outlays of $145 million. We have recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations.

The following provides a summary of our costs associated with the 2010 Restructuring plan by major type of cost:

Type of Cost	Total amount incurred
Restructuring charges:
Termination benefits	$90 million
Fixed asset write-offs	$11 million
Other (1)	$51 million
Restructuring-related expenses:
Other (2)	$8 million
	$160 million

(1) Includes primarily consulting fees and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2010 Restructuring plan, including accelerated depreciation and infrastructure-related costs.

Plant Network Optimization (PNO) Program

In January 2009, our Board of Directors approved, and we committed to, a PNO program, intended to simplify our manufacturing plant structure by transferring certain production lines among facilities and by closing certain other facilities. The program was intended to improve our overall gross profit margins. Activities under the PNO program were initiated in the first quarter of 2009 and were substantially completed during 2012.

The Plant Network Optimization program resulted in total pre-tax charges of $126 million, and resulted in cash outlays of $103 million. We have recorded a portion of these expenses as restructuring charges and the remaining portion through cost of products sold within our consolidated statements of operations.

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The following provides a summary of our costs associated with the Plant Network Optimization program by major type of cost:

Type of cost	Total amount incurred
Restructuring charges:
Termination benefits	$30 million
Restructuring-related expenses:
Accelerated depreciation	$22 million
Transfer costs (1)	$74 million
	$126 million

(1) Consists primarily of costs to transfer product lines among facilities, including costs of transfer teams, freight, idle facility and product line validations.

In aggregate, we recorded restructuring charges pursuant to our restructuring plans of $69 million during 2014, $101 million during 2013, and $136 million during 2012. In addition, we recorded expenses within other lines of our accompanying consolidated statements of operations related to our restructuring initiatives of $48 million during 2014, $23 million during 2013, and $24 million during 2012.

The following presents these costs by major type and line item within our accompanying consolidated statements of operations, as well as by program:

Year Ended December 31, 2014
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
Restructuring charges	$	42	$	—	$	—	$	27	$	69
Restructuring-related expenses:
Cost of products sold	—		—		24		—		24
Selling, general and administrative expenses	—		5		—		19		24
	—		5		24		19		48
	$	42	$	5	$	24	$	46	$	117
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
2014 Restructuring plan	$	41	$	5	24		$	43	$	113
2011 Restructuring plan	1		—		—		3		4
2010 Restructuring plan	—		—		—		—		—
Plant Network Optimization program	—		—		—		—		—
	$	42	$	5	$	24	$	46	$	117

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Year Ended December 31, 2013
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
Restructuring charges	$	60		$	—	$	—	$	(15	)	$	56	$	101
Restructuring-related expenses:
Selling, general and administrative expenses	—			3		—		—			20		23
	—			3		—		—			20		23
	$	60		$	3	$	—	$	(15	)	$	76	$	124
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
2014 Restructuring plan	$	29		$	—	$	—	$	—		$	1	$	30
2011 Restructuring plan	37			3		—		(15		)	75		100
2010 Restructuring plan	—			—		—		—			—		—
Plant Network Optimization program	(6		)	—		—		—			—		(6		)
	$	60		$	3	$	—	$	(15	)	$	76	$	124

Year Ended December 31, 2012
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
Restructuring charges	$	79	$	—	$	—	$	14	$	43	$	136
Restructuring-related expenses:
Cost of products sold	—		—		8		—		—		8
Selling, general and administrative expenses	—		2		—		—		14		16
	—		2		8		—		14		24
	$	79	$	2	$	8	$	14	$	57	$	160
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
2011 Restructuring plan	$	78	$	2	$	—	$	14	$	55	$	149
2010 Restructuring plan	1		—		—		—		2		3
Plant Network Optimization program	—		—		8		—		—		8
	$	79	$	2	$	8	$	14	$	57	$	160

Termination benefits represent amounts incurred pursuant to our on-going benefit arrangements and amounts for “one-time” involuntary termination benefits, and have been recorded in accordance with ASC Topic 712, Compensation – Non-retirement Postemployment Benefits and ASC Topic 420, Exit or Disposal Cost Obligations (Topic 420). We expect to record additional termination benefits related to our restructuring initiatives in 2015 when we identify with more specificity the job classifications, functions and locations of the remaining headcount to be eliminated. Other restructuring costs, which represent primarily consulting fees, are being recorded as incurred in accordance with Topic 420. Accelerated depreciation is being recorded over the adjusted remaining useful life of the related assets, and production line transfer costs are being recorded as incurred.

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We have incurred cumulative restructuring charges related to our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program of $526 million and restructuring-related costs of $191 million since we committed to each plan. The following presents these costs by major type and by plan:

(in millions)	2014 Restructuring plan		2011 Restructuring plan			2010 Restructuring plan		Plant Network Optimization		Total
Termination benefits	$	69	$	138		$	90	$	30	$	327
Fixed asset write-offs	—		(1		)	11		—		10
Other	25		113			51		—		189
Total restructuring charges	94		250			152		30		526
Accelerated depreciation	5		5			—		22		32
Transfer costs	24		—			—		74		98
Other	19		34			8		—		61
Restructuring-related expenses	48		39			8		96		191
	$	142	$	289		$	160	$	126	$	717

We made cash payments of $112 million in 2014 associated with restructuring initiatives pursuant to these plans, and have made total cash payments of $628 million related to our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program since committing to each plan. Each of these payments was made using cash generated from operations, and are comprised of the following:

(in millions)	2014 Restructuring plan		2011 Restructuring plan		2010 Restructuring plan		Plant Network Optimization		Total
Year Ended December 31, 2014
Termination benefits	$	31	$	9	$	—	$	—	$	40
Transfer costs	24		—		—		—		24
Other	38		10		—		—		48
	$	93	$	19	$	—	$	—	$	112
Program to Date
Termination benefits	31		$	133	$	90	$	30	$	284
Transfer costs	24		—		—		73		97
Other	38		154		55		—		247
	$	93	$	287	$	145	$	103	$	628

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Our restructuring liability is primarily comprised of accruals for termination benefits. The following is a rollforward of the termination benefit liability associated with our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program, since the inception of the respective plan, which is reported as a component of accrued expenses included in our accompanying consolidated balance sheets:

	Restructuring Plan Termination Benefits
										Plant Network
(in millions)	2014			2011			2010			Optimization			Total
Accrued as of December 31, 2011	$	—		$	18		$	6		$	33		$	57
Charges	—			78			1			—			79
Cash payments	—			(60		)	(4		)	(24		)	(88		)
Accrued as of December 31, 2012	—			36			3			9			48
Charges	29			37			—			(6		)	60
Cash payments	—			(61		)	—			(1		)	(62		)
Other	—			—			(3		)	(2		)	(5		)
Accrued as of December 31, 2013	29			12			—			—			41
Charges	41			1			—			—			42
Cash payments	(31		)	(9		)	—			—			(40		)
Accrued as of December 31, 2014	$	39		$	4		$	—		$	—		$	43

In addition to our accrual for termination benefits, we had a $6 million liability as of December 31, 2014 and a $8 million liability as of December 31, 2013 for other restructuring-related items.

NOTE I – SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of selected captions in our accompanying consolidated balance sheets are as follows:

Trade accounts receivable, net

	As of
(in millions)	December 31, 2014			December 31, 2013
Accounts receivable	$	1,288		$	1,419
Less: allowance for doubtful accounts	(76		)	(81		)
Less: allowance for sales returns	(29		)	(31		)
	$	1,183		$	1,307

The following is a rollforward of our allowance for doubtful accounts for 2014, 2013 and 2012:

	Year Ended December 31,
(in millions)	2014			2013			2012
Beginning balance	$	81		$	88		$	81
Net charges to expenses	10			5			14
Utilization of allowances	(15		)	(12		)	(7		)
Ending balance	$	76		$	81		$	88

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Inventories

	As of
(in millions)	December 31, 2014		December 31, 2013
Finished goods	$	649	$	598
Work-in-process	97		90
Raw materials	200		209
	$	946	$	897

Property, plant and equipment, net

	As of
(in millions)	December 31, 2014		December 31, 2013
Land	$	80	$	81
Buildings and improvements	944		917
Equipment, furniture and fixtures	2,633		2,461
Capital in progress	189		211
	3,846		3,670
Less: accumulated depreciation	2,339		2,124
	$	1,507	$	1,546

Accrued expenses

	As of
(in millions)	December 31, 2014		December 31, 2013
Legal reserves	$	694	$	84
Payroll and related liabilities	512		488
Accrued contingent consideration	158		148
Other	586		628
	$	1,950	$	1,348

Other long-term liabilities

	As of
(in millions)	December 31, 2014		December 31, 2013
Accrued income taxes	$	1,231	$	1,283
Legal reserves	883		523
Accrued contingent consideration	116		353
Other long-term liabilities	436		410
	$	2,666	$	2,569

NOTE J – INCOME TAXES

Our income (loss) before income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2014			2013			2012
Domestic	$	(1,263	)	$	(774	)	$	(1,265	)
Foreign	754			551			(2,842		)
	$	(509	)	$	(223	)	$	(4,107	)

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The related benefit for income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2014			2013			2012
Current
Federal	$	(2	)	$	46		$	33
State	(5		)	(9		)	—
Foreign	111			105			139
	104			142			172
Deferred
Federal	(458		)	(212		)	(204		)
State	(23		)	(17		)	(7		)
Foreign	(13		)	(15		)	—
	(494		)	(244		)	(211		)
	$	(390	)	$	(102	)	$	(39	)

The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows:

	Year Ended December 31,
	2014		2013		2012
U.S. federal statutory income tax rate	(35.0	)%	(35.0	)%	(35.0	)%
State income taxes, net of federal benefit	(6.5	)%	(7.9	)%	(0.2	)%
Effect of foreign taxes	(29.1	)%	(63.4	)%	(3.7	)%
Acquisition-related	(7.5	)%	3.5	%	—	%
Research credit	(7.0	)%	(12.2	)%	—	%
Valuation allowance	4.0	%	(12.0	)%	0.3	%
Goodwill impairment charges	—	%	65.2	%	36.4	%
Compensation-related	0.7	%	1.7	%	0.3	%
Non-deductible expenses	1.9	%	9.0	%	(0.2	)%
Uncertain domestic tax positions	2.0	%	7.0	%	0.8	%
Other, net	(0.2	)%	(1.9	)%	0.3	%
	(76.7	)%	(46.0	)%	(1.0	)%

We had net deferred tax liabilities of $799 million as of December 31, 2014 and $1.140 billion as of December 31, 2013. Gross deferred tax liabilities of $2.096 billion as of December 31, 2014 and $2.203 billion as of December 31, 2013 relate primarily to intangible assets acquired in connection with our prior acquisitions. Gross deferred tax assets of $1.297 billion as of December 31, 2014 and $1.063 billion as of December 31, 2013 relate primarily to the establishment of inventory and product-related reserves; litigation, product liability and other reserves and accruals; compensation related accruals; net operating loss carryforwards and tax credit carryforwards; and the federal benefit of uncertain tax positions.

We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

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Significant components of our deferred tax assets and liabilities are as follows:

	As of December 31,
(in millions)	2014			2013
				(restated)
Deferred Tax Assets:
Inventory costs and related reserves	$	46		$	50
Tax benefit of net operating loss and credits	525			647
Reserves and accruals	232			221
Restructuring-related charges and purchased research and development	20			17
Litigation and product liability reserves	556			198
Investment write-down	4			15
Compensation related	150			143
Federal benefit of uncertain tax positions	178			166
Other	36			39
	1,747			1,496
Less valuation allowance	(450		)	(433		)
	1,297			1,063
Deferred Tax Liabilities:
Property, plant and equipment	67			78
Unrealized gains and losses on derivative financial instruments	146			80
Intangible assets	1,883			2,045
	2,096			2,203
Net Deferred Tax Liabilities	799			1,140
Prepaid on intercompany profit	69			66
Total Net Deferred Tax Liabilities and Prepaid on Intercompany Profit	$	730		$	1,074

Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions):

	Location in	As of December 31,
Component	Balance Sheet	2014		2013
Current deferred tax asset and prepaid on intercompany profit	Deferred and prepaid income taxes	$	447	$	288
Non-current deferred tax asset	Other long-term assets	39		42
Deferred Tax Assets and Prepaid on Intercompany Profit		486		330
Current deferred tax liability	Other current liabilities	2		2
Non-current deferred tax liability	Deferred income taxes	1,214		1,402
Deferred Tax Liabilities		1,216		1,404
Net Deferred Tax Liabilities and Prepaid on Intercompany Profit		$	730	$	1,074

As of December 31, 2014, we had U.S. tax net operating loss carryforwards and tax credits, the tax effect of which was $335 million, as compared to $351 million as of December 31, 2013. In addition, we had foreign tax net operating loss carryforwards and tax credits, the tax effect of which was $304 million as of December 31, 2014, as compared to $313 million as of December 31, 2013. These tax attributes will expire periodically beginning in 2015. After consideration of all positive and negative evidence, we believe that it is more likely than not that a portion of the deferred tax assets will not be realized. As a result, we established a valuation allowance of $450 million as of December 31, 2014 and $433 million as of December 31, 2013, representing an increase of $17 million. The increase in the valuation allowance as of December 31, 2014, as compared to December 31, 2013, is attributable

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primarily due to increase in certain deferred tax assets that are more likely than not that we will not be realizable. The income tax impact of the unrealized gain or loss component of other comprehensive income and stockholders' equity was a charge of $21 million in 2014, a charge of $76 million in 2013, and a charge of $70 million in 2012.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2014 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2014, the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $7.7 billion. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

We obtain tax incentives through Free Trade Zone Regime offered in Costa Rica which allows 100% exemption from income tax in the first eight years of operations and 50% exemption in the following four years. This tax incentive resulted in income tax savings of $7 million for 2014, $6 million for 2013, and $7 million for 2012. The tax incentive for 100% exemption from income tax is expected to expire in 2023. The impact of per share earnings is immaterial for 2014, 2013 and 2012.

As of December 31, 2014, we had $1.047 billion of gross unrecognized tax benefits, of which a net $903 million, if recognized, would affect our effective tax rate. As of December 31, 2013, we had $1.102 billion of gross unrecognized tax benefits, of which a net $941 million, if recognized, would affect our effective tax rate. As of December 31, 2012, we had $1.088 billion of gross unrecognized tax benefits, of which a net $919 million, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	Year Ended December 31,
	2014			2013			2012
				(restated)			(restated)
Beginning Balance	$	1,102		$	1,088		$	1,022
Additions based on positions related to the current year	44			59			54
Additions based on positions related to prior years	3			43			45
Reductions for tax positions of prior years	(87		)	(42		)	(28		)
Settlements with taxing authorities	(5		)	(15		)	(1		)
Statute of limitation expirations	(10		)	(31		)	(4		)
Ending Balance	$	1,047		$	1,102		$	1,088

We are subject to U.S. Federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U.S. federal income tax matters through 2000, all foreign income tax matters through 2002 and substantially all material state and local income tax matters through 2005.

We have received Notices of Deficiency from the IRS reflecting proposed audit adjustments for Guidant for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. Subsequent to issuing these Notices, the IRS conceded a portion of its original assessment. The total incremental tax liability now asserted by the IRS for the applicable periods is $1.162 billion plus interest. The primary issue in dispute for all years is the transfer pricing in connection with the technology license agreements between domestic and foreign subsidiaries of Guidant. In addition, the IRS has proposed adjustments in connection with the financial terms of our Transaction Agreement with Abbott Laboratories pertaining to the sale of Guidant's vascular intervention business to Abbott in April 2006. We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment and we believe that the IRS has exceeded its authority by attempting to adjust the terms of our negotiated third-party agreement with Abbott. In addition, we believe that the IRS positions with regard to these matters are inconsistent with the applicable tax laws and the existing Treasury regulations.

We believe we have meritorious defenses for our tax filings and we have filed, or will timely file, petitions with the U.S. Tax Court contesting the Notices of Deficiency for the tax years in challenge. No payments on the net assessment would be required until the dispute is definitively resolved, which, based on experiences of other companies, could take several years. The IRS is currently examining the 2008 through 2010 tax years of Boston Scientific. During 2014, we received a Revenue Agent Report from the Internal Revenue Service (IRS) reflecting significant proposed audit adjustments for our 2008, 2009, and 2010 tax years based upon the same transfer pricing methodologies that are currently being contested in the U.S. Tax Court for our tax years 2001-2007.  As with prior years, we disagree with the transfer pricing methodologies being applied by the IRS and we expect to contest any adjustments received through appropriate IRS and judicial procedures, as appropriate. We believe our income tax reserves associated with these matters are adequate as of December 31, 2014. However, final resolution is uncertain and could have a

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material impact on our financial condition, results of operations, or cash flows. Also, in connection with the IRS issues, a number of agreed adjustments were contained in the IRS report, however no tax was paid on these amounts as there are outstanding tax receivables from the IRS that are currently being withheld due to the U.S. Tax Court case. As these agreed items are no longer uncertain, the amounts were reclassified from our uncertain tax positions to long-term, which are netted against the longer term receivables.

We recognize interest and penalties related to income taxes as a component of income tax expense. We had $443 million accrued for gross interest and penalties as of December 31, 2014 and $402 million as of December 31, 2013. The increase in gross interest and penalties was the result of $41 million recognized in our consolidated statements of operations. We recognized $26 million of interest and penalties related to income taxes in 2014, recognized $22 million in 2013 and recognized $34 million in 2012.

It is reasonably possible that within the next 12 months we will resolve multiple issues including transfer pricing and transactional related issues with foreign, federal and state taxing authorities, in which case we could record a reduction in our balance of unrecognized tax benefits of up to $8 million.

NOTE K – COMMITMENTS AND CONTINGENCIES

The medical device market in which we primarily participate is largely technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Over the years, there has been litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. 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 for individual cases, but also for a series of pending and potentially related and unrelated cases. 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.

During recent years, we successfully negotiated closure of several long-standing legal matters and have received favorable legal rulings in several other matters; however, there continues to be outstanding intellectual property litigation. 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 operations and/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 maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities and commercial litigation, and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our financial position, results of operations and/or liquidity.

In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local government agencies in the United States and other countries in which we operate. From time to time we are the subject of qui tam actions and governmental investigations often involving regulatory, marketing and other business practices. These qui tam actions and governmental investigations could result in the commencement of civil and criminal proceedings, substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity.

In accordance with ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

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Our accrual for legal matters that are probable and estimable was $1.577 billion as of December 31, 2014 and $607 million as of December 31, 2013, and includes certain estimated costs of settlement, damages and defense. The increase in our legal accrual was primarily due to litigation-related charges recorded during the year. During 2014, 2013 and 2012, we recorded litigation-related charges in the amount of $1.036 billion, $221 million, and $192 million, respectively. The charges recorded in 2014 included $600 million related to the settlement agreement between our subsidiary, Guidant and Johnson & Johnson signed on February 13, 2015. We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our debt covenants.

In management's opinion, we are not currently involved in any legal proceedings other than those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be estimated.

Patent Litigation

On September 22, 2009, Cordis Corporation, Cordis LLC and Wyeth Corporation filed a complaint for patent infringement against Abbott Laboratories, Abbott Cardiovascular Systems, Inc., Boston Scientific Scimed, Inc. and us alleging that the PROMUS® coronary stent system, supplied to us by Abbott, infringes a patent (the Llanos patent) owned by Cordis and Wyeth. The suit was filed in the U.S. District Court for the District of New Jersey seeking monetary and injunctive relief. In August 2010, Cordis filed an amended complaint to add an additional patent and in September 2010, we filed counterclaims of invalidity and non-infringement. On October 26, 2011, the District Court granted Cordis' motion to add the Promus Element stent system to the case. On February 6, 2012, the District Court granted our motion to stay the action until the conclusion of the reexaminations against the Llanos patents that are pending in the U.S. Patent and Trademark Office.

On May 19, 2005, G. David Jang, M.D. filed suit against us alleging breach of contract relating to certain patent rights covering stent technology. The suit was filed in the U.S. District Court for the Central District of California seeking monetary damages and rescission of contract. After a Markman ruling relating to the Jang patent rights, Dr. Jang stipulated to the dismissal of certain claims alleged in the complaint with a right to appeal and the parties subsequently agreed to settle the other claims. In May 2007, Dr. Jang filed an appeal with respect to the remaining patent claims and in July 2008, the Court of Appeals vacated the District Court's consent judgment and remanded the case back to the District Court for further clarification. In August 2011, the District Court entered a stipulated judgment that we did not infringe the Jang patent. Dr. Jang filed an appeal on September 21, 2011 and on August 22, 2012, the Court of Appeals vacated the District Court's judgment and remanded the case to the District Court for further proceedings. On April 18, 2014, the case was stayed pending consideration of an interlocutory appeal. On September 16, 2014, the Court of Appeals for the Federal Circuit denied our request for an interlocutory appeal. A trial is scheduled to begin on June 22, 2015.

On May 17, 2010, Dr. Luigi Tellini filed suit against us and certain of our subsidiaries, Guidant Italia S.r.l. and Boston Scientific S.p.A., in the Civil Tribunal in Milan, Italy alleging certain of our Cardiac Rhythm Management products infringe an Italian patent (the Tellini patent) owned by Dr. Tellini and seeking monetary damages. In January 2011, Dr. Tellini refiled amended claims after his initial claims were dismissed without prejudice to refile.

On September 27, 2010, Boston Scientific Scimed, Inc., Boston Scientific Ltd., Endovascular Technologies, Inc. and we filed suit against Taewoong Medical, Co., Ltd., Standard Sci-Tech, Inc., EndoChoice, Inc. and Sewoon Medical Co., Ltd for infringement of three patents on stents for use in the GI system (the Pulnev and Hankh patents) and against Cook Medical Inc. (and related entities) for infringement of the same three patents and an additional patent (the Thompson patent). The suit was filed in the U.S. District Court for the District of Massachusetts seeking monetary damages and injunctive relief. In December 2010, we amended our complaint to add infringement of six additional Pulnev patents. In January 2011, the defendants filed a counterclaim of invalidity and unenforceability. In December 2011, we amended the complaint to add Chek-Med Systems d/b/a GI Supply as a defendant.

On February 18, 2014, Atlas IP, LLC filed a complaint in the United States District Court for the Southern District of Florida alleging that the sale of our LATITUDE® Patient Management System and implantable devices that communicate with the LATITUDE® device infringe a patent owned by Atlas. On July 9, 2014, the District Court granted our motion to transfer venue to the United States District Court for the District of Minnesota. On January 12, 2015, Atlas dismissed its complaint.

On September 22, 2014, The Board of Trustees for the University of Alabama filed a complaint in the United States District Court for the Northern District of Alabama alleging that the sale of our cardiac resynchronization therapy devices infringe a patent owned by the University of Alabama.

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On October 14, 2014, MK Optics, LLC filed a complaint in the United States District Court for the District of Delaware alleging that the sale of our Spyglass Direct Visualization System infringes a patent owned by MK Optics.

Product Liability Litigation

Fewer than ten individual lawsuits remain pending in various state and federal jurisdictions against Guidant alleging personal injuries associated with defibrillators or pacemakers involved in certain 2005 and 2006 product communications. Further, we are aware of approximately 30 Guidant product liability lawsuits pending in international jurisdictions associated with defibrillators or pacemakers, including devices involved in the 2005 and 2006 product communications. Six of these suits are pending in Canada and were filed as class actions, four of which are stayed pending the outcome of two lead class actions. On April 10, 2008, the Justice of Ontario Court certified a class of persons in whom defibrillators were implanted in Canada and a class of family members with derivative claims. On May 8, 2009, the Justice of Ontario Court certified a class of persons in whom pacemakers were implanted in Canada and a class of family members with derivative claims. In each case, these matters generally seek monetary damages from us. The parties in the defibrillator class action have reached an agreement in principle to settle the matter for approximately $3 million. The presiding judge approved the settlement at a hearing on March 24, 2014. We paid the initial required payments during the second quarter of 2014 and funded the publication of the settlement notice during the third quarter of 2014.

As of February 24, 2015, there were over 25,000 product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse pending against us. The cases are pending in various federal and state courts in the United States and include eight putative class actions. There were also fewer than 20 cases in Canada, inclusive of three putative class actions, and fewer than 10 claims in the United Kingdom. Generally, the plaintiffs allege personal injury associated with use of our transvaginal surgical mesh products. The plaintiffs assert design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. Over 2,500 of the cases have been specially assigned to one judge in state court in Massachusetts. On February 7, 2012, the Judicial Panel on Multi-District Litigation (MDL) established MDL-2326 in the U.S. District Court for the Southern District of West Virginia and transferred the federal court transvaginal surgical mesh cases to MDL-2326 for coordinated pretrial proceedings. During the fourth quarter of 2013, we received written discovery requests from certain state attorneys general offices regarding our transvaginal surgical mesh products. We have responded to those requests. We have established a product liability accrual for known and estimated future cases and claims asserted against us as well as costs of defense thereof associated with our transvaginal surgical mesh products. While we believe that our accrual associated with this matter is adequate, changes to this accrual may be required in the future as additional information becomes available. We intend to vigorously contest the cases and claims asserted against us; however, the final resolution is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Initial trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products.

Governmental Investigations and Qui Tam Matters

On June 27, 2008, the Republic of Iraq filed a complaint against our wholly-owned subsidiary, BSSA France, and 92 other defendants in the U.S. District Court of the Southern District of New York. The complaint alleges that the defendants acted improperly in connection with the sale of products under the United Nations Oil for Food Program. The complaint also alleges Racketeer Influenced and Corrupt Organizations Act (RICO) violations, conspiracy to commit fraud and the making of false statements and improper payments, and it seeks monetary and punitive damages. On February 6, 2013, the District Court dismissed the complaint with prejudice on standing and jurisdictional grounds. On September 18, 2014, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s decision to dismiss the complaint with prejudice. On October 2, 2014, the plaintiff filed a petition for rehearing en banc. On December 2, 2014, the Second Circuit denied the petition for rehearing en banc.

On March 12, 2010, we received a Civil Investigative Demand (CID) from the Civil Division of the U.S. Department of Justice (DOJ) requesting documents and information relating to reimbursement advice offered by us relating to certain CRM devices. We are cooperating with the request.

On August 3, 2012, we were served with a qui tam complaint that had previously been filed under seal against Boston Scientific Neuromodulation Corp. in the U.S. District Court for the District of New Jersey on March 2, 2011. On August 8, 2012, we learned that the federal government had previously declined to intervene in this matter. The relators’ complaint, now unsealed, alleges that Boston Scientific Neuromodulation Corp. violated the federal and various states' false claims acts through submission of fraudulent bills for implanted devices, under-reporting of certain adverse events, and promotion of off-label uses. On September 10, 2012, the relators filed an amended complaint revising and restating certain of the claims in the original complaint. Our motion to dismiss, filed subsequently, was denied on May 31, 2013, and on June 28, 2013, we answered the amended complaint and brought certain

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counterclaims arising from relators’ unauthorized removal of documents from the business during their employments, which the relators moved to dismiss on July 22, 2013. The Court denied relators’ motion to dismiss the counterclaims on September 4, 2014.

On May 5, 2014, we were served with a subpoena from the U.S. Department of Health and Human Services, Office of the Inspector General. The subpoena seeks information relating to the launch of the Cognis and Teligen line of devices in 2008, the performance of those devices from 2007 to 2009, and the operation of the Physician Guided Learning Program. We are cooperating with this request.

On July 11, 2014, we were served with a subpoena from the U.S. Attorney for the District of New Jersey. The subpoena seeks information relating to BridgePoint Medical, Inc., which we acquired in October 2012, including information relating to its sale of CrossBoss^® and Stingray^® products, educational and training activities that relate to those sales and our acquisition of BridgePoint Medical. We are cooperating with this request.

On February 23, 2015, a judge for the Court of Modena (Italy) ordered a trial for Boston Scientific SpA and three of its employees, as well as numerous other defendants charged in criminal proceedings.  The charges arise from allegations that the defendants made improper donations to certain health care providers and other employees of the Hospital of Modena in order to induce them to conduct unauthorized clinical trials, as well as related government fraud in relation to the financing of such clinical trials.  We deny these allegations and intend to defend ourselves vigorously.  An initial trial hearing has been scheduled for October 28, 2015.

Other Proceedings

On September 25, 2006, Johnson & Johnson filed a lawsuit against us, Guidant and Abbott Laboratories in the U.S. District Court for the Southern District of New York. The complaint alleges that Guidant breached certain provisions of the amended merger agreement between Johnson & Johnson and Guidant (Merger Agreement) as well as the implied duty of good faith and fair dealing. The complaint further alleges that Abbott and we tortiously interfered with the Merger Agreement by inducing Guidant's breach. The complaint seeks certain factual findings, damages in an amount no less than $5.5 billion and attorneys' fees, costs, and interest. In August 2007, the judge dismissed the tortious interference claims against us and Abbott and the implied duty of good faith and fair dealing claim against Guidant. On June 20, 2011, Guidant filed a motion for summary judgment, and the hearing on this motion was held on July 25, 2012. On July 7, 2014, the judge denied Guidant’s motion. The bench trial was held in November and December. On February 13, 2015, the parties reached a settlement agreement pursuant to which Guidant will make aggregate payments to Johnson & Johnson totaling $600 million, we agreed that neither we nor our affiliates will commence, or assist any third party in commencing, proceedings of any kind, against Johnson & Johnson or its affiliates for patent infringement or seeking any remedy for patent infringement based on Johnson & Johnson or its affiliates making, having made, using, selling, offering for sale or importing the S.M.A.R.T^®, S.M.A.R.T^® Control^®, and S.M.A.R.T^® Flex stent products and Johnson & Johnson has agreed to dismiss its actions against Guidant with prejudice.

On October 5, 2007, Dr. Tassilo Bonzel filed a complaint against Pfizer, Inc. and our Schneider subsidiaries and us in the District Court in Kassel, Germany alleging that a 1995 license agreement related to a catheter patent is invalid under German law and seeking monetary damages. In June 2009, the District Court dismissed all but one of Dr. Bonzel's claims and in October 2009, he added new claims. We opposed the addition of the new claims. The District Court ordered Dr. Bonzel to select the claims he would pursue and in January 2011, he made that selection. A hearing was held on March 28, 2014 and a decision was made to take evidence at a hearing to be set at a later date. On January 23, 2015, the parties reached a confidential settlement agreement.

On September 28, 2011, we served a complaint against Mirowski Family Ventures LLC in the U.S. District Court for the Southern District of Indiana for a declaratory judgment that we have paid all royalties owed and did not breach any contractual or fiduciary obligations arising out of a license agreement. Mirowski answered and filed counterclaims requesting damages. On May 13, 2013, Mirowski Family Ventures served us with a complaint alleging breach of contract in Montgomery County Circuit Court, Maryland, and they amended this complaint on August 1, 2013. On July 29, 2013, the Indiana case was dismissed. On September 10, 2013, we removed the case to the United States District Court for the District of Maryland. On June 5, 2014, the District Court granted Mirowski’s motion to remand the case to the Montgomery County Circuit Court. On September 24, 2014, following a jury verdict against us, the Montgomery County Circuit Court entered a judgment that we breached our license agreement with Mirowski and awarded damages of $308 million. On October 28, 2014, the Montgomery County Circuit Court denied our post-trial motions seeking to overturn the judgment. On November 19, 2014, we filed an appeal with the Maryland Court of Special Appeals.

On April 24, 2014, Dr. Qingsheng Zhu and Dr. Julio Spinelli, acting jointly on behalf of the stockholder representative committee of Action Medical, Inc. (Action Medical), filed a lawsuit against us and our subsidiary, Cardiac Pacemakers, Inc. (CPI), in the U.S. District Court for the District of Delaware. The stockholder representatives allege that we and CPI breached a contractual duty to pursue development and commercialization of certain patented heart pacing methods and devices and to return certain patents.

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Refer to Note J - Income Taxes for information regarding our tax litigation.

Matters Concluded Since December 31, 2013

On February 1, 2008, Wyeth Corporation (Wyeth) and Cordis Corporation filed an amended complaint for patent infringement against Abbott Laboratories, adding us and Boston Scientific Scimed, Inc. as additional defendants to the complaint. The suit alleged that the PROMUS® coronary stent system, supplied to us by Abbott, infringes three U.S. patents owned by Wyeth and licensed to Cordis. The suit was filed in the U.S. District Court for the District of New Jersey seeking monetary and injunctive relief. Wyeth and Cordis subsequently withdrew their infringement claim as to one of the patents, and the District Court found the remaining two patents invalid. Wyeth and Cordis filed an appeal and, on June 26, 2013, the Court of Appeals for the Federal Circuit affirmed the District Court’s judgment in favor of Boston Scientific. On October 13, 2013, Wyeth’s motion for rehearing or rehearing en banc was denied. The deadline for further appeals lapsed on January 13, 2014.

On May 25, 2010, G. David Jang, M.D. filed suit against Boston Scientific Scimed, Inc. and us alleging breach of contract relating to certain patent rights covering stent technology. In October 2011, the U.S. District Court for the District of Delaware entered judgment in favor of us on the pleadings. Dr. Jang filed an appeal on August 28, 2012. On September 5, 2013, the Court of Appeals for the Third Circuit vacated the ruling and remanded the case to the District Court. On March 31, 2014, the parties entered into a confidential settlement agreement. On April 2, 2014, the case was dismissed.

On May 16, 2013, Vascular Solutions, Inc. filed suit against us, alleging that our Guidezilla™ guide extension catheter infringes three U.S. patents owned by Vascular Solutions. The suit was filed in the U.S. District Court for the District of Minnesota seeking monetary and injunctive relief. On May 28, 2013, Vascular Solutions filed an amended complaint adding an allegation of copyright infringement. On June 10, 2013, Vascular Solutions filed a motion requesting a preliminary injunction. On July 11, 2013, we answered the amended complaint and filed a counterclaim against Vascular Solutions, alleging that its Guideliner™ guide extension catheter infringes a U.S. patent owned by us. On December 12, 2013, the District Court granted the motion for a preliminary injunction and on December 26, 2013, we filed an appeal. On April 15, 2014, the Court of Appeals for the Federal Circuit vacated the preliminary injunction. On July 30, 2014, we and Vascular Solutions entered into a confidential settlement agreement and the case was subsequently dismissed.

On August 2, 2013, Medtronic Ardian Luxembourg S.a.r.l. filed a complaint against Boston Scientific Corporation and Boston Scientific Medizintechnik, GmbH in the Düsseldorf District Court in Germany alleging that the sale of our Vessix renal denervation product infringes a German patent owned by Medtronic Ardian. On December 29, 2014, the parties reached a confidential settlement and dismissed the case.

On September 23, 2013, Kardiametrics, LLC filed a complaint in the United States District Court for the District of Delaware alleging that the sale of our FilterWire EZ Embolic Protection System, Sterling balloon catheters, Carotid NexStent and Carotid WallStent products infringe two patents owned by Kardiametrics. On January 24, 2014, we filed a motion to dismiss the case or, in the alternative, to stay the case pending an arbitration. On February 18, 2014, Kardiametrics dismissed its original complaint and filed a new complaint. On March 14, 2014, we filed a motion to dismiss the new case or, in the alternative, to stay the new case pending an arbitration. On May 28, 2014, Kardiametrics voluntarily dismissed its case.

NOTE L – STOCKHOLDERS' EQUITY

Preferred Stock

We are authorized to issue 50 million 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 December 31, 2014 and 2013, we had no shares of preferred stock issued or outstanding.

Common Stock

We are authorized to issue 2.0 billion shares of common stock, $0.01 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.

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On January 25, 2013, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.0 billion of our common stock. During 2014, we repurchased approximately 10 million shares of our common stock for $125 million. During 2013, we repurchased approximately 51 million shares of our common stock for $500 million. During 2012, we repurchased approximately 105 million shares of our common stock for $600 million. Repurchased shares are available for reissuance under our equity incentive plans and for general corporate purposes, including acquisitions. As of December 31, 2014, we had remaining $535 million authorized under our 2013 share repurchase program. There were approximately 248 million shares in treasury as of December 31, 2014 and 238 million shares in treasury as of December 31, 2013.

NOTE M – STOCK OWNERSHIP PLANS

Employee and Director Stock Incentive Plans

In March and May 2011, our Board of Directors and stockholders, respectively, approved our 2011 Long-Term Incentive Plan (the 2011 LTIP), authorizing up to 146 million shares of our common stock. The 2011 LTIP covers officers, directors, employees and consultants, and provides for the grant of restricted or unrestricted common stock, deferred stock units (DSU), options to acquire our common stock, stock appreciation rights, performance awards (market-based and performance-based DSUs) and other stock and non-stock awards. Shares reserved under our current and former stock incentive plans totaled approximately 179 million as of December 31, 2014. 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 2011 LTIP 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 110 percent 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, including restricted stock awards and deferred stock units, issued to employees are generally granted with an exercise price of zero and typically vest in five equal annual installments. These awards represent our commitment to issue shares to recipients after the 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.

The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
(in millions, except per share data)	2014			2013			2012
Cost of products sold	$	6		$	8		$	15
Selling, general and administrative expenses	79			79			69
Research and development expenses	18			18			24
	103			105			108
Less: income tax benefit	(28		)	(29		)	(32		)
	$	75		$	76		$	76
Net impact per common share - basic	$	0.06		$	0.06		$	0.05
Net impact per common share - assuming dilution	$	0.06		$	0.06		$	0.05

Stock Options

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted during 2014, 2013 and 2012 using the following estimated weighted-average assumptions:

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	Year Ended December 31,
	2014			2013			2012
Options granted (in thousands)	4,943			1,992			4,726
Weighted-average exercise price	$	13.02		$	7.44		$	6.23
Weighted-average grant-date fair value	$	5.07		$	2.84		$	2.60
Black-Scholes Assumptions
Expected volatility	37		%	36		%	43		%
Expected term (in years, weighted)	6.0			5.9			5.9
Risk-free interest rate	1.69% - 2.09%			0.89% - 1.72%			0.95% - 1.15%

Expected Volatility

We use our historical volatility and implied volatility as a basis to estimate expected volatility in our valuation of stock options.

Expected Term

We estimate the expected term of options using historical exercise and forfeiture data. We believe that this historical data provides the best estimate of the expected term of new option grants.

Risk-Free Interest Rate

We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate in our grant-date fair value assessment.

Expected Dividend Yield

We have not historically paid cash dividends to our shareholders and currently do not intend to pay cash dividends. Therefore, we have assumed an expected dividend yield of zero in our grant-date fair value assessment.

Information related to stock options for 2014, 2013 and 2012 under stock incentive plans is as follows:

	Stock Options (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2011	60,921		$	13
Granted	4,726		6
Exercised	—		—
Cancelled/forfeited	(10,766	)	15
Outstanding as of December 31, 2012	54,881		$	12
Granted	1,992		7
Exercised	(7,221	)	8
Cancelled/forfeited	(4,760	)	21
Outstanding as of December 31, 2013	44,892		$	12
Granted	4,943		13
Exercised	(4,418	)	8
Cancelled/forfeited	(5,909	)	17
Outstanding as of December 31, 2014	39,508		$	11	5.0	$	145
Exercisable as of December 31, 2014	29,380		$	12	4.0	109
Expected to vest as of December 31, 2014	9,477		10		7.9	35
Total vested and expected to vest as of December 31, 2014	38,857		$	11	4.9	$	144

The total intrinsic value of stock options exercised was $24 million in both 2014 and 2013 and less than $1 million in 2012.

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Non-Vested Stock

We value restricted stock awards and DSUs based on the closing trading value of our shares on the date of grant. Information related to non-vested stock awards during 2014, 2013 and 2012 is as follows:

	Non-Vested Stock Award Units (in thousands)		Weighted Average Grant- Date Fair Value
Balance as of December 31, 2011	33,576		$	8
Granted	17,073		6
Vested (1)	(10,158	)	9
Forfeited	(3,898	)	7
Balance as of December 31, 2012	36,593		$	7
Granted	13,913		8
Vested (1)	(10,307	)	8
Forfeited	(2,860	)	7
Balance as of December 31, 2013	37,339		$	7
Granted	7,072		13
Vested (1)	(11,205	)	7
Forfeited	(2,671	)	8
Balance as of December 31, 2014	30,535		$	9

(1) The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.

The total vesting date fair value of stock award units that vested was approximately $146 million in 2014, $80 million in 2013 and $60 million in 2012.

Market-based DSU Awards

During 2014, 2013 and 2012, we granted market-based DSU awards to certain members of our senior management team. The number of shares ultimately issued to the recipient is based on the total shareholder return (TSR) of our common stock as compared to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year performance period. In addition, award recipients must remain employed by us throughout the three-year performance period to attain the full amount of the market-based DSUs that satisfied the market performance criteria.

We determined the fair value of the 2014 market-based DSU awards to be approximately $6 million and the fair values of both the 2013 and the 2012 market-based awards to be approximately $8 million. We determined these fair values based on Monte Carlo simulations as of the date of grant, utilizing the following assumptions:

	2014			2013			2012
	Awards			Awards			Awards
Stock price on date of grant	$	13.08		$	7.39		$	6.28
Measurement period (in years)	3.0			3.0			3.0
Risk-free rate	0.66		%	0.34		%	0.38		%

We recognize the expense on these awards in our consolidated statements of operations on a straight-line basis over the three-year measurement period.

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Free Cash Flow Performance-based DSU Awards

During 2014, 2013 and 2012, we granted free cash flow performance-based DSU awards to certain members of our senior management team. The attainment of these performance-based DSUs is based on our adjusted free cash flow (FCF) measured against our internal annual financial plan performance for FCF. FCF is measured over a one-year performance period beginning January 1st of each year and ending December 31st. The number of performance-based DSUs as to which the performance criteria under this program shall be determined to have been satisfied will be in a range of 0% to 150% of the target number of performance-based DSUs awarded to the participant. In addition, award recipients must remain employed by us throughout a three-year service period (inclusive of the one-year performance period) to attain the full amount of the performance-based DSUs that satisfied the performance criteria.

We determined the fair value of the 2014 FCF awards to be approximately $5 million, based on the closing stock price at December 31, 2014 and an achievement of approximately 100% of the target payout, which is subject to approval by the Executive Compensation and Human Resources Committee of our Board of Directors. The per unit fair value is $13.25, which is the closing stock price on December 31, 2014. We determined the fair value of the 2013 FCF awards to be approximately $9 million and the per unit fair value was $12.02, and we determined the fair value of the 2012 FCF awards to be approximately $7 million and the per unit fair value was $5.73.

We recognize the expense on these awards in our consolidated statements of operations over the vesting period which is three years after the date of grant.

Expense Attribution

We recognize compensation expense for our stock using a straight-line method over the substantive vesting period. Most of our stock awards provide for immediate vesting upon death or disability of the participant. In addition, our stock grants to employees provide for accelerated vesting of our stock-based awards, other than performance-based and market-based awards, upon retirement. In accordance with the terms of our stock grants, for employees who will become retirement eligible prior to the vest date we expense stock-based awards, other than performance-based and market-based awards, over the greater of one year or the period between grant date and retirement-eligibility. The performance-based and market-based awards discussed above do not contain provisions that would accelerate the full vesting of the awards upon retirement-eligibility.

We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest. ASC Topic 718, Compensation – Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock-based award. We have applied, based on an analysis of our historical forfeitures, a weighted-average annual forfeiture rate of approximately nine percent to all unvested stock-based awards as of December 31, 2014, which represents the portion that we expect will be forfeited each year over the vesting period. We re-evaluate this analysis annually, or more frequently if there are significant changes in circumstances, and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for those shares that vest.

Unrecognized Compensation Cost

We expect to recognize the following future expense for awards outstanding as of December 31, 2014:

	Unrecognized Compensation Cost (in millions)(1)		Weighted Average Remaining Vesting Period (in years)
Stock options	$	20
Non-vested stock awards	133
	$	153	1.3

(1) Amounts presented represent compensation cost, net of estimated forfeitures.

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Employee Stock Purchase Plans

Our global employee stock purchase plan provides for the granting of options to purchase up to 50 million shares of our common stock to all eligible employees. Under the global employee stock purchase plan, we grant each eligible employee, at the beginning of each six-month offering period, an option to purchase shares of our common stock equal to not more than ten percent of the employee’s eligible compensation or the statutory limit under the U.S. Internal Revenue Code. Such options may be exercised only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. As of December 31, 2014, there were approximately 20 million shares available for future issuance under the employee stock purchase plan.

Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows:

(shares in thousands)	2014	2013	2012
Shares issued or to be issued	2,618	3,833	3,979
Range of purchase prices	$10.12 - $11.04	$5.01 - $7.96	$4.82 - $5.16

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of shares issued under the employee stock purchase plan. We recognize expense related to shares purchased through the employee stock purchase plan ratably over the offering period. We recognized $8 million in expense associated with our employee stock purchase plan in 2014, $7 million in 2013 and $4 million in 2012.

NOTE N – WEIGHTED AVERAGE SHARES OUTSTANDING

	Year Ended December 31,
(in millions)	2014	2013	2012
Weighted average shares outstanding - basic	1,324.3	1,341.2	1,406.7
Net effect of common stock equivalents	—	—	—
Weighted average shares outstanding - assuming dilution	1,324.3	1,341.2	1,406.7

We generated net losses in 2014, 2013 and 2012. Our weighted-average shares outstanding for earnings per share calculations excluded common stock equivalents of 24 million, 19 million and 8 million due to our net loss positions in 2014, 2013 and 2012, respectively.

Weighted-average shares outstanding, assuming dilution, also excludes the impact of 12 million stock options for 2014, 16 million for 2013, and 59 million for 2012, due to the exercise prices of these stock options being greater than the average fair market value of our common stock during the year.

NOTE O – SEGMENT REPORTING

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three reportable segments comprised of: Cardiovascular, Rhythm Management, and MedSurg. Our reportable segments represent an aggregate of operating segments. We have restated the 2012 information to conform to our new global reportable segment presentation.

Each of our reportable segments generates revenues from the sale of medical devices. We measure and evaluate our reportable segments based on segment net sales and operating income, excluding the impact of changes in foreign currency and sales from divested businesses. Sales generated from reportable segments and divested businesses, as well as operating results of reportable segments and corporate expenses, are based on internally-derived standard currency exchange rates, which may differ from year to year, and do not include intersegment profits. We restated segment information for the prior periods based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange rate fluctuations, and for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014, which was not material. We exclude from segment operating income certain corporate-related expenses and certain charges or credits that our chief operating decision maker considers to be non-recurring and/or non-operational, such as amounts related to goodwill and other intangible asset impairment charges; acquisition-, divestiture-, restructuring- and litigation-related charges

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and credits; and amortization expense. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income (loss) and are included in the reconciliation below.

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)	2014			2013		2012
Net sales				(restated)		(restated)
Interventional Cardiology	$	2,092		$	1,995	$	2,116
Peripheral Interventions	861			805		764
Cardiovascular	2,953			2,800		2,880
Cardiac Rhythm Management	1,922			1,882		1,887
Electrophysiology	228			154		145
Rhythm Management	2,150			2,036		2,032
Endoscopy	1,343			1,277		1,190
Urology and Women's Health	542			505		489
Neuromodulation	474			454		367
MedSurg	2,359			2,236		2,046
Net sales allocated to reportable segments	7,462			7,072		6,958
Sales generated from business divestitures	4			58		122
Impact of foreign currency fluctuations	(86		)	13		169
	$	7,380		$	7,143	$	7,249

	Year Ended December 31,
(in millions)	2014		2013			2012
Depreciation expense			(restated)			(restated)
Cardiovascular	$	120	$	111		$	107
Rhythm Management	92		99			109
MedSurg	75		73			75
Depreciation expense allocated to reportable segments	287		283			291
Impact of foreign currency fluctuations	—		(4		)	(3		)
	$	287	$	279		$	288

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	Year Ended December 31,
(in millions)	2014			2013			2012
Income (loss) before income taxes				(restated)			(restated)
Cardiovascular	$	767		$	665		$	685
Rhythm Management	289			211			217
MedSurg	746			679			590
Operating income allocated to reportable segments	1,802			1,555			1,492
Corporate expenses and currency exchange	(308		)	(203		)	(132		)
Goodwill and intangible asset impairment charges and acquisition-, divestiture-, litigation-, and restructuring-related net charges	(1,357		)	(822		)	(4,833		)
Amortization expense	(438		)	(410		)	(395		)
Operating income (loss)	(301		)	120			(3,868		)
Other expense, net	(208		)	(343		)	(239		)
	$	(509	)	$	(223	)	$	(4,107	)

	As of December 31,
(in millions)	2014		2013
Total assets
Cardiovascular	$	1,501	$	1,545
Rhythm Management	1,329		1,343
MedSurg	982		1,026
Total assets allocated to reportable segments	3,812		3,914
Goodwill	5,898		5,693
Other intangible assets, net	5,606		5,950
All other corporate assets	1,726		1,014
	$	17,042	$	16,571

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Enterprise-Wide Information (based on actual currency exchange rates)

	Year Ended December 31,
(in millions)	2014		2013		2012
Net sales			(restated)*		(restated)*
Interventional Cardiology	$	2,057	$	1,997	$	2,179
Cardiac Rhythm Management	1,912		1,886		1,908
Endoscopy	1,323		1,280		1,239
Peripheral Interventions	850		809		787
Urology and Women’s Health	535		505		500
Neuromodulation	472		453		367
Electrophysiology	227		155		147
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249
United States	$	3,885	$	3,743	$	3,756
Japan	678		744		931
Other countries	2,813		2,598		2,440
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249

*We restated segment information for the prior periods for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014.

	As of December 31,
(in millions)	2014		2013		2012
Long-lived assets
United States	$	1,002	$	998	$	1,065
Ireland	197		240		252
Other foreign countries	308		308		247
Property, plant and equipment, net	1,507		1,546		1,564
Goodwill	5,898		5,693		5,973
Other intangible assets, net	5,606		5,950		6,289
	$	13,011	$	13,189	$	13,826

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NOTE P – CHANGES IN OTHER COMPREHENSIVE INCOME

The following table provides the reclassifications out of other comprehensive income for the years ended December 31, 2014 and December 31, 2013. Amounts in the chart below are presented net of tax.

Year Ended December 31, 2014
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(16)	$141	$(19)	$106
Other comprehensive income (loss) before reclassifications	(22)	145	(10)	113
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(67)	(8)	(75)
Net current-period other comprehensive income	(22)	78	(18)	38
Ending Balance	$(38)	$219	$(37)	$144
Year Ended December 31, 2013
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(26)	$34	$(41)	$(33)
Other comprehensive income (loss) before reclassifications	10	130	31	171
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(23)	(9)	(32)
Net current-period other comprehensive income	10	107	22	139
Ending Balance	$(16)	$141	$(19)	$106

The income tax impact of the amounts in other comprehensive income for unrealized gains/losses on derivative financial instruments before reclassifications was an expense of $83 million in the year ended December 31, 2014 and an expense of $77 million in the year ended December 31, 2013. The gains and losses on derivative financial instruments reclassified from accumulated other comprehensive income were reduced by income tax impacts of $38 million in the year ended December 31, 2014 and $14 million in the year ended December 31, 2013. Refer to Note E – Fair Value Measurements for further detail on the reclassifications related to derivatives.

The income tax impact of the amounts in other comprehensive income for defined benefit and pension items before reclassifications was a benefit of $5 million in the year ended December 31, 2014 and an expense of $15 million in the year ended December 31, 2013. The gains and losses on defined benefit and pension items reclassified from accumulated other comprehensive income were reduced by income tax impacts of $5 million in the year ended December 31, 2014 and $6 million in the year ended December 31, 2013.

NOTE Q – NEW ACCOUNTING PRONOUNCEMENTS

Standards Implemented

ASC Update No. 2013-11

In July 2013, the FASB issued ASC Update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Update No. 2013-11 requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. We adopted Update No. 2013-11 beginning in our first quarter ended March 31, 2014. The adoption of Update No. 2013-11 did not impact our results of operations or financial position.

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Standards to be Implemented

ASC Update No. 2014-08

In April 2014, the FASB issued ASC Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Update No. 2014-08 changed the criteria for reporting discontinued operations and enhanced convergence of the FASB's and the International Accounting Standard Board's (IASB) reporting requirements for discontinued operations. We are required to apply this amendment, prospectively to: (1) all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years and (2) all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years. The adoption of Update No. 2014-08 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2014-09

In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Update No. 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects to be entitled to in exchange for those goods or services. We are required to apply Update No. 2014-09 for annual periods beginning after December 15, 2016 and early application is not permitted. We are in the process of determining the effect, if any, that the adoption of this standard will have on our financial position or results of operations.

ASC Update No. 2014-10

In June 2014, the FASB issued ASC Update No. 2014-10, Development Stage Entities (Topic 915):Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities. The amendments also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The elimination of the exception may change the consolidation analysis and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. We are required to apply Update No. 2014-10 for annual reporting periods beginning after December 15, 2014, and interim periods within those years. The adoption of Update No. 2014-10 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2014-15

In August 2014, the FASB issued ASC Update No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40). Update 2014-15requires management to assess an entity’s ability to continue as a going concern every reporting period, and provide certain disclosures if management has substantial doubt about the entities ability to operate as a going concern, or an express statement if not, by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Update 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update No. 2014-15 is not expected to have an impact on our financial position or results of operations.

ASC Update No. 2015-01

In January 2015, the FASB issued ASC Update No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). Update 2015-01 eliminates the concept of extraordinary items from GAAP, which requires an entity to separately classify, present, and disclose extraordinary events and transactions. Update 2015-01 is effective for the annual period beginning after December 15, 2015, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-01 is not expected to have an impact on our financial position or results of operations.

ASC Update No. 2015-02

In February 2015, the FASB issued ASC Update No. 2015-02, Consolidation (Topic 810):Amendments to the Consolidation Analysis. Update 2015-02 amended the process that a reporting entity must perform to determine whether it should consolidate certain types of legal entities.  Update 2015-02 is effective for the annual period ending after December 15, 2015, and for annual

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periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-02 is not expected to have a material impact on our financial position or results of operations.

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QUARTERLY RESULTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

	Three Months Ended
	Mar 31,			June 30,			Sept 30,			Dec 31,
2014
Net sales	$	1,774		$	1,873		$	1,846		$	1,887
Gross profit	1,237			1,310			1,296			1,327
Operating income (loss)	197			(69		)	64			(493		)
Net income (loss)	133			4			43			(299		)
Net income (loss) per common share - basic	$	0.10		$	0.00		$	0.03		$	(0.23	)
Net income (loss) per common share - assuming dilution	$	0.10		$	0.00		$	0.03		$	(0.23	)
2013
Net sales	$	1,761		$	1,809		$	1,735		$	1,838
Gross profit	1,183			1,279			1,225			1,283
Operating income (loss)	(330		)	220			103			127
Net income (loss)	(354		)	130			(5		)	108
Net income (loss) per common share - basic	$	(0.26	)	$	0.10		$	0.00		$	0.08
Net income (loss) per common share - assuming dilution	$	(0.26	)	$	0.10		$	0.00		$	0.08

Our reported results for 2014 included intangible asset impairment charges, restructuring- and litigation-related charges, acquisition- and divestiture-related net credits, discrete tax items and amortization expense (after tax) of: $135 million in the first quarter, $281 million in the second quarter, $230 million in the third quarter and $602 million in the fourth quarter. These net charges consisted primarily of: amortization expense; and litigation-related charges.

Our reported results for 2013 included goodwill and intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related charges; debt extinguishment charges; discrete tax items and amortization expense (after tax) of: $578 million in the first quarter, $117 million in the second quarter, $235 million in the third quarter and $182 million in the fourth quarter. These charges consisted primarily of: goodwill impairment charges attributable to our reorganization from geographic regions to global business units as of January 1, 2013, which changed the composition of our reporting units; amortization expense; and litigation-related charges.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (CEO) and Executive Vice President and Chief Financial Officer (CFO), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2014 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures are designed to ensure that material information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and ensure that such material information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, our CEO and CFO concluded that as of December 31, 2014, our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Management’s annual report on our internal control over financial reporting is contained in Item 7 of this Annual Report.

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The report of Ernst & Young LLP on our internal control over financial reporting is contained in Item 7 of this Annual Report.

Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2014, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is set forth in our Proxy Statement for the 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2014, and is incorporated into this Annual Report on Form 10-K by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is set forth in our Proxy Statement for the 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2014, and is incorporated into this Annual Report on Form 10-K by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is set forth in our Proxy Statement for the 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2014, and is incorporated into this Annual Report on Form 10-K by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is set forth in our Proxy Statement for the 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2014, and is incorporated into this Annual Report on Form 10-K by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is set forth in our Proxy Statement for the 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2014, and is incorporated into this Annual Report on Form 10-K by reference.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements.

The response to this portion of Item 15 is set forth under Item 8.

(a)(2) Financial Statement Schedules.

The response to this portion of Item 15 (Schedule II) follows the signature page to this report. All other financial statement schedules are not required under the related instructions or are inapplicable and therefore have been omitted.

(a)(3) Exhibits (* documents filed or furnished with this report, # compensatory plans or arrangements)

EXHIBIT NO.	TITLE
3.1	Restated By-laws of the Company (incorporated herein by reference to Exhibit 3.1, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083)
3.2	Third Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.2, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).
4.1	Specimen Certificate for shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1, Registration No. 33-46980).
4.2	Description of Capital Stock contained in Exhibits 3.1 and 3.2.
4.3	Indenture dated as of June 25, 2004 between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank) (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated June 25, 2004, File No. 1-11083).
4.4	Indenture dated as of November 18, 2004 between the Company and J.P. Morgan Trust Company, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated November 18, 2004, File No. 1-11083).
4.5	Form of First Supplemental Indenture dated as of April 21, 2006 (incorporated herein by reference to Exhibit 99.4, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
4.6	Form of Second Supplemental Indenture dated as of April 21, 2006 (incorporated herein by reference to Exhibit 99.6, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
4.7	Form of Global Security for the 5.125% Notes due 2017 in the aggregate principal amount of $250,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated November 18, 2004, File No. 1-11083).
4.8	Form of Global Security for the 5.50% Notes due 2015 in the aggregate principal amount of $400,000,000, and form of Notice to the holders thereof (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated November 17, 2005 and Exhibit 99.5, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).

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4.9	Form of Global Security for the 6.25% Notes due 2035 in the aggregate principal amount of $350,000,000, and form of Notice to holders thereof (incorporated herein by reference to Exhibit 4.2, Current Report on Form 8-K dated November 17, 2005 and Exhibit 99.7, Current Report on Form 8-K dated April 21, 2006, File No. 1-11083).
4.10	Indenture dated as of June 1, 2006 between the Company and JPMorgan Chase Bank, N.A., as Trustee (incorporated herein by reference to Exhibit 4.1, Current Report on Form 8-K dated June 9, 2006, File No. 1-11083).
4.11	Form of Global Security for the 6.40% Notes due 2016 in the aggregate principal amount of $600,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated June 9, 2006, File No. 1-11083).
4.12	6.000% Senior Note due January 15, 2020 in the aggregate principal amount of $850,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated December 10, 2009, File No. 1-11083).
4.13	7.375% Senior Note due January 15, 2040 in the aggregate principal amount of $300,000,000 (incorporated herein by reference to Exhibit 4.4, Current Report on Form 8-K dated December 10, 2009, File No. 1-11083).
4.14	2.650% Senior Note due October 1, 2018 in the aggregate principal amount of $500,000,000 (incorporated herein by reference to Exhibit 4.2, Current Report on Form 8-K dated August 8, 2013, File No. 1-11083).
4.15	4.125% Senior Note Due October 1, 2023 in the aggregate principle amount of $450,000,000 (incorporated herein by reference to Exhibit 4.3, Current Report on Form 8-K dated August 8, 2013, File No. 1-11083).
10.1	Form of Amended and Restated Credit and Security Agreement dated as of November 7, 2007 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated November 7, 2007, File No. 1-11083).
10.2	Form of Amendment No. 1 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 6, 2008 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 1-11083).
10.3	Form of Amendment No. 2 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 5, 2009 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, File No. 1-11083).
10.4	Form of Amendment No. 3 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 4, 2010 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Royal Bank of Canada. (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, File No. 1-11083).
10.5	Form of Amendment No. 4 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of October 29, 2010 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, Liberty Street Funding LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, The Bank of Nova Scotia and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.7, Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11083).

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10.6	Form of Amendment No. 5 to Amended and Restated Credit and Security Agreement and Restatement of Amended Fee Letters dated as of August 3, 2011 by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Victory Receivables Corporation, Liberty Street Funding LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch; The Bank of Nova Scotia and Royal Bank of Canada (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).
10.7	Form of Amendment No. 6 to Amended and Restated Credit and Security Agreement, Amendment #2 to Amended and Restated Receivables Sale Agreement and Restatement of Amended Fee Letter, dated as of June 29, 2012, by and among Boston Scientific Funding LLC; the Company; Old Line Funding, LLC; Royal Bank of Canada; Liberty Street Funding LLC; and The Bank of Nova Scotia (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 29, 2012, File No. 1-11083).
10.8	Form of Amendment No. 7 to Amended and Restated Credit and Security Agreement, Amendment #3 to Amended and Restated Receivables Sale Agreement, dated as of June 28, 2013, by and among Boston Scientific Funding LLC, the Company, Old Line Funding, LLC, Royal Bank of Canada, Liberty Street Funding LLC, and The Bank of Nova Scotia (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 28, 2013, File No. 1-11083).
10.9	Form of Omnibus Amendment dated as of December 21, 2006 among the Company, Boston Scientific Funding Corporation, Variable Funding Capital Company LLC, Victory Receivables Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (Amendment No. 1 to Receivables Sale Agreement and Amendment No. 9 to Credit and Security Agreement) (incorporated herein by reference to Exhibit 10.2, Annual Report on 10-K for the year ended December 31, 2006, File No. 1-11083).
10.10	Form of Amended and Restated Receivables Sale Agreement dated as of November 7, 2007 between the Company and each of its Direct or Indirect Wholly-Owned Subsidiaries that Hereafter Becomes a Seller Hereunder, as the Sellers, and Boston Scientific Funding LLC, as the Buyer (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated November 7, 2007, File No. 1-11083).
10.11	Credit Agreement dated as of April 18, 2012 by and among the Company, the several lenders parties thereto, and Bank of America, N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated April 18, 2012, File No. 1-11083).
10.12	License Agreement among Angiotech Pharmaceuticals, Inc., Cook Incorporated and the Company dated July 9, 1997, and related Agreement dated December 13, 1999 (incorporated herein by reference to Exhibit 10.6, Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-11083).
10.13	Amendment between Angiotech Pharmaceuticals, Inc. and the Company dated November 23, 2004 modifying July 9, 1997 License Agreement among Angiotech Pharmaceuticals, Inc., Cook Incorporated and the Company (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated November 23, 2004, File No. 1-11083).
10.14	Sale and Purchase Agreement dated October 28, 2010, as amended, between the Company and Stryker Corporation (incorporated herein by reference to Exhibit 10.11, Annual Report on Form 10-K for year ended December 31, 2010 and Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, File No.1-11083).
10.15	Amendment No. 3 to Sale and Purchase Agreement dated November 1, 2011, between the Company and Stryker Corporation (incorporated herein by reference to Exhibit 10.13, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).
10.16	Amendment No. 4 to Sale and Purchase Agreement dated December 1, 2011, between the Company and Stryker Corporation (incorporated herein by reference to Exhibit 10.14, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).

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10.17	Transaction Agreement, dated as of January 8, 2006, as amended, between the Company and Abbott Laboratories (incorporated herein by reference to Exhibit 10.47, Exhibit 10.48, Exhibit 10.49 and Exhibit 10.50, Annual Report on Form 10-K for year ended December 31, 2005 and Exhibit 10.1, Current Report on Form 8-K dated April 7, 2006, File No. 1-11083).
10.18	Form of Settlement Agreement and Non-Exclusive Patent Cross-License dated January 29, 2010 by and between the Company and Boston Scientific Scimed, Inc., and Johnson & Johnson (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated January 29, 2010, File No.1-11083).
10.19	Form of Plea Agreement and Sentencing Stipulations executed as of February 24, 2010 (incorporated herein by reference to Exhibit 10.66, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).
10.20	Form of Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and the Company (incorporated herein by reference to Exhibit 10.67, Annual Report on Form 10-K for year ended December 31, 2009, File No. 1-11083).
10.21	Decision and Order of the Federal Trade Commission in the matter of Boston Scientific Corporation and Guidant Corporation finalized August 3, 2006 (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, File No. 1-11083).
10.22	Guidant Corporation 1994 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.46, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
10.23	Guidant Corporation 1996 Nonemployee Directors Stock Plan, as amended (incorporated herein by reference to Exhibit 10.47, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
10.24	Guidant Corporation 1998 Stock Plan, as amended (incorporated herein by reference to Exhibit 10.48, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
10.25	Form of Guidant Corporation Option Grant (incorporated herein by reference to Exhibit 10.49, Annual Report on Form 10-K for the year ended December 31, 2006, File No. 1-11083).#
10.26	Boston Scientific Corporation 2006 Global Employee Stock Ownership Plan, as amended and restated, effective July 1, 2011 (incorporated herein by reference to Exhibit 10.27, Annual Report on Form 10-K for year ended December 31, 2011, File No. 1-11083).#
10.27	Form of Amendment of the Boston Scientific Corporation Amended and Restated 2006 Global Employee Stock Ownership Plan (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, File No. 1-11083).#
10.28	Form of Non-Qualified Stock Option Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.5, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.29	Form of Restricted Stock Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.6, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.30	Form of Restricted Stock Award Agreement (Non-Employee Directors) under the 2011 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
10.31	Form of Boston Scientific Corporation Excess Benefit Plan, as amended (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated June 29, 2005 and Exhibit 10.4, Current Report on Form 8-K dated December 16, 2008, File No. 1-11083).#

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10.32	Form of Trust under the Boston Scientific Corporation Excess Benefit Plan (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated June 29, 2005, File No. 1-11083).#
10.33	Boston Scientific Corporation Deferred Bonus Plan (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated May 11, 2010, File No. 1-11083).#
10.34	Boston Scientific Corporation Executive Retirement Plan as Amended and Restated, effective August 1, 2012 (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
10.35	Form of 2011 Performance Share Program (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 14, 2010, File No. 1-11083).#
10.36	Form of 2012 Total Shareholder Return Performance Share Program (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 16, 2011, File No. 1-11083).#
10.37	Boston Scientific Corporation 2013 Annual Bonus Plan, effective as of January 1, 2013 (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
10.38	Boston Scientific Corporation 2013 Total Shareholder Return Performance Share Program (incorporated herein by reference to Exhibit 10.5, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
10.39	Boston Scientific Corporation 2013 Free Cash Flow Performance Share Program (incorporated herein by reference to Exhibit 10.6, Current Report on Form 8-K dated October 30, 2012, File No. 1-11083).#
10.40	Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated, effective as of January 1, 2011 (incorporated herein by reference to Exhibit 10.39, Annual Report on Form 10-K for year ended December 31, 2010, File No. 1-11083).#
10.41	Amendment to Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated, effective as of January 1, 2011 (incorporated herein by reference to Exhibit 10.44, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
10.42	Form of Second Amendment of Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, File No. 1-11083).#
10.43	Form of Third Amendment of the Boston Scientific Corporation 401(k) Retirement Savings Plan, Amended and Restated (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, File No. 1-11083).#
10.44	Boston Scientific Corporation 2000 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.20, Annual Report on Form 10-K for the year ended December 31, 1999, Exhibit 10.18, Annual Report on Form 10-K for the year ended December 31, 2001, Exhibit 10.1, Current Report on Form 8-K dated December 22, 2004, Exhibit 10.3, Current Report on Form 8-K dated May 9, 2005, and Exhibit 10.3, Current Report on Form 8-K dated December 16, 2008, File No. 1-11083).#
10.45	Boston Scientific Corporation 2003 Long-Term Incentive Plan, as Amended and Restated, Effective June 1, 2008 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, File No. 1-11083).#
10.46	Boston Scientific Corporation 2011 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.49, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#

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10.47	Form of Non-Qualified Stock Option Agreement (vesting over three years) (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.48	Form of Non-Qualified Stock Option Agreement (vesting over four years) (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.49	Form of Non-Qualified Stock Option Agreement (vesting over two years) (incorporated herein by reference to Exhibit 10.20, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).#
10.5	Form of Non-Qualified Stock Option Agreement (Executive) (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
10.51	Form of Deferred Stock Unit Award Agreement (Executive) (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
10.52	Form of Non-Qualified Stock Option Agreement (Special) (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
10.53	Form of Non-Qualified Stock Option Agreement dated July 1, 2005 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated July 1, 2005, File No. 1-11083).#
10.54	Form of Stock Option Agreement (with one year service requirement for vesting upon Retirement) (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-K dated September 30, 2010, File No. 1-11083).#
10.55	Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.56	Form of Deferred Stock Unit Award Agreement (Special) (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated May 12, 2006, File No. 1-11083).#
10.57	Form of Deferred Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.58	Form of Deferred Stock Unit Award Agreement (vesting over five years) (incorporated herein by reference to Exhibit 10.16, Annual Report on 10-K for the year ended December 31, 2006, File No. 1-11083).#
10.59	Form of Deferred Stock Unit Award Agreement (vesting over two years) (incorporated herein by reference to Exhibit 10.24, Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-11083).#
10.60	Form of Deferred Stock Unit Award Agreement (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.7, Current Report on Form 8-K dated December 10, 2004, File No. 1-11083).#
10.61	Form of Deferred Stock Unit Award Agreement dated July 1, 2005 (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated July 1, 2005, File No. 1-11083).#
10.62	Form of Deferred Stock Unit Award Agreement (with one year service requirement for vesting upon Retirement) (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended September 30, 2010, File No. 1-11083).#
10.63	Form of Performance Share Unit Award Agreement (incorporated herein by reference to Exhibit 10.41, Annual Report on Form 10-K for year ended December 31, 2009, File No 1-11083).#

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10.64	Form of Restricted Stock Award Agreement (Non-Employee Directors) under the 2003 and 2011 Long-Term Incentive Plans (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).#
10.65	Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, File No. 1-11083).#
10.66	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Total Shareholder Return) (incorporated herein by reference to Exhibit 10.70, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
10.67	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Free Cash Flow) (incorporated herein by reference to Exhibit 10.71, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
10.68	Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (Special) (incorporated herein by reference to Exhibit 10.72, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
10.69	Form of Change in Control Agreement between the Company and certain Executive Officers (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated December 15, 2009, File No. 1-11083).#
10.70	Form of Offer Letter between the Company and Timothy A. Pratt dated April 9, 2008 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, File No. 1-11083).#
10.71	Form of Offer Letter dated September 6, 2011 between the Company and Michael F. Mahoney, as supplemented September 13, 2011 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated September 19, 2011, File No. 1-11083).#
10.72	Form of Amendment, dated February 14, 2012, to Offer Letter dated September 6, 2011 between the Company and Michael F. Mahoney, as supplemented September 13, 2011 (incorporated herein by reference to Exhibit 10.100, Annual Report on Form 10-K for the year ended December 31, 2011, File No. 1-11083).#
10.73	Form of Offer Letter dated November 30, 2011 between the Company and Supratim Bose (incorporated herein by reference to Exhibit 10.113, Annual Report on Form 10-K for the year ended December 3, 2012, File No. 1-11083).#
10.74	The Boston Scientific Deferred Compensation Option Program (incorporated herein by reference to Exhibit 4.1, Registration No. 333-98755).#
10.75	Boston Scientific Corporation Domestic Relocation Policy Tier 5 Executive Officer Homeowner, effective January 2007 (incorporated herein by reference to Exhibit 10.118, Annual Report on Form 10-K for the year ended December 31, 2012, File No. 1-11083).#
10.76	Form of Letter to Key Management Personnel re: Change in Control Agreement (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated February 28, 2013, File No. 1-11083).
10.77	Transition and Separation Agreement effective December 31, 2013 between the Company and Jeffrey D. Capello (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated October 22, 2013 File No. 1-11083). #

131

10.78	Form of Offer Letter by and between the Company and Daniel J. Brennan, dated October 22, 2013 (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated October 24, 2013 File No. 1-11083). #
10.79	Boston Scientific Corporation Annual Bonus Plan Performance Period January 1 - December 31, effective October 2013 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated October 22, 2013 File No. 1-11083).#
10.80	Boston Scientific Corporation Total Shareholder Return Performance Share Program, Performance Period January 1, 2014 - December 31, 2016 (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated October 22, 2013 File No. 1-11083).#
10.81	Boston Scientific Corporation Free Cash Flow Performance Share Program, Performance Period January 1, 2014 - December 31, 2014 (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated October 22, 2013 File No. 1-11083).#
10.82	Boston Scientific Corporation 2013 Annual Bonus Plan Performance Period January 1 - December 31, effective July 2013 (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 File No. 1-11083).#
10.83	Form of 2011 Long-Term Incentive Plan Global Deferred Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 File No. 1-11083).#
10.84	Form of 2011 Long-Term Incentive Plan Global Non-Qualified Stock Option Agreement (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 File No. 1-11083).#
10.85	Boston Scientific Corporation Severance Pay and Layoff Notification Plan, as amended and restated (Bridge Plan), effective August 1, 2013 (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 File No. 1-11083).#
10.86	Boston Scientific Corporation U.S. Severance Plan for Exempt Employees, as amended and restated, effective August 1, 2013 (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 File No. 1-11083).#
10.87	Boston Scientific Corporation Non-Employee Director Deferred Compensation Plan, as amended and restated, effective January 1, 2014 (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 File No. 1-11083).#
10.88	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (2014 Total Shareholder Return) incorporated herein by reference to Exhibit 10.99, Annual Report on Form 10-K for the year ended December 31, 2013 File No. 1-11083).#
10.89	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (2014 Free Cash Flow) incorporated herein by reference to Exhibit 10.100, Annual Report on Form 10-K for the year ended December 31, 2013 File No. 1-11083).#
10.90	Boston Scientific Corporation 2006 Global Employee Stock Ownership Plan, as amended and restated, effective July 1, 2014 (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, File No. 1-11083). #
10.91	Boston Scientific Corporation 2015 Annual Bonus Plan, effective as of January 1, 2015 (incorporated herein by reference to Exhibit 10.1, Current Report on Form 8-K dated October 28, 2014, File No. 1-11083). #

132

10.92	Boston Scientific Corporation 2015 Total Shareholder Return Performance Share Program (incorporated herein by reference to Exhibit 10.2, Current Report on Form 8-K dated October 28, 2014, File No. 1-11083). #
10.93	Boston Scientific Corporation 2015 Free Cash Flow Performance Share Program (incorporated herein by reference to Exhibit 10.3, Current Report on Form 8-K dated October 28, 2014, File No. 1-11083). #
10.94	Boston Scientific Corporation Executive Retirement Plan, as amended and restated effective November 1, 2014 (incorporated herein by reference to Exhibit 10.4, Current Report on Form 8-K dated October 28, 2014, File No. 1-11083). #
10.95	Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.1, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
10.96	Form of Restricted Stock Award Agreement under the 2011 Long-Term Incentive Plan (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
10.97	Form of Deferred Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.3, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
10.98	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Total Shareholder Return) (incorporated herein by reference to Exhibit 10.4, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
10.99	Form of Performance Share Unit Award Agreement under the 2011 Long-Term Incentive Plan (Free Cash Flow) (incorporated herein by reference to Exhibit 10.5, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
10.100	First Amendment to Boston Scientific Corporation Deferred Bonus Plan, effective January 1, 2015 (incorporated herein by reference to Exhibit 10.6, Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, File No. 1-11083). #
12*	Statement regarding computation of ratios of earnings to fixed charges.
21*	List of the Boston Scientific's subsidiaries as of February 12, 2015.
23*	Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP
31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

133

101* Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012; (ii) the Consolidated Balance Sheets as of December 31, 2014 and 2013; (iii) the Consolidated Statements of Stockholders' Equity for the years ended December 31, 2014, 2013 and 2012; (iv) the Consolidated Statements of Comprehensive Income (Loss) as of December 31, 2014, 2013 and 2012; (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; (vi) the notes to the Consolidated Financial Statements; and (vii) Schedule II - Valuation and Qualifying Accounts

134

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Dated: February 25, 2015	Boston Scientific Corporation
	By:	/s/ Daniel J. Brennan
		Daniel J. Brennan
		Executive Vice President and Chief Financial Officer
		(duly authorized officer and principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: February 25, 2015	By:	/s/ Daniel J. Brennan
		Daniel J. Brennan
		Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Dated: February 25, 2015	By:	/s/ Bruce L. Byrnes
		Bruce L. Byrnes
		Director

Dated: February 25, 2015	By:	/s/ Nelda J. Connors
		Nelda J. Connors
		Director

135

Dated: February 25, 2015	By:	/s/ Kristina M. Johnson, Ph.D.
		Kristina M. Johnson, Ph.D.
		Director

Dated: February 25, 2015	By:	/s/ Edward J. Ludwig
		Edward J. Ludwig
		Director

Dated: February 25, 2015	By:	/s/ Ernest Mario, Ph.D.
		Ernest Mario, Ph. D.
		Director

Dated: February 25, 2015	By:	/s/ Michael F. Mahoney
		Michael F. Mahoney
		Director, President and Chief Executive Officer
		(Principal Executive Officer)

Dated: February 25, 2015	By:	/s/ N.J. Nicholas, Jr.
		N.J. Nicholas, Jr.
		Director

136

Dated: February 25, 2015	By:	/s/ Pete M. Nicholas
		Pete M. Nicholas
		Director, Founder, Chairman of the Board

Dated: February 25, 2015	By:	/s/ Uwe E. Reinhardt, Ph.D.
		Uwe E. Reinhardt, Ph.D.
		Director

Dated: February 25, 2015	By:	/s/ David J. Roux
		David J. Roux
		Director

Dated: February 25, 2015	By:	/s/ John E. Sununu
		John E. Sununu
		Director

137

Schedule II

VALUATION AND QUALIFYING ACCOUNTS
(in millions)

Description	Balance at Beginning of Year		Charges to Costs and Expenses (a)	Deductions to Allowances for Uncollectible Accounts (b)		Charges to (Deductions from) Other Accounts (c)		Balance at End of Year
Year Ended December 31, 2014:
Allowances for uncollectible accounts and sales returns and allowances	$	112	10	(15	)	(2	)	$	105
Year Ended December 31, 2013:
Allowances for uncollectible accounts and sales returns and allowances	$	119	5	(12	)	—		$	112
Year Ended December 31, 2012:
Allowances for uncollectible accounts and sales returns and allowances	$	116	14	(7	)	(4	)	$	119

(a) Represents allowances for uncollectible accounts established through selling, general and administrative expenses.

(b) Represents actual write-offs of uncollectible accounts.

(c) Represents net change in allowances for sales returns, recorded as contra-revenue.

138

EX-12

EXHIBIT 12

BOSTON SCIENTIFIC CORPORATION

STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (unaudited)

	Year Ended December 31,
in millions	2014			2013			2012			2011		2010
Fixed charges
Interest expense and amortization of debt issuance costs (a)	$	216		$	324		$	261		$	281	$	393
Interest portion of rental expense	25			25			27			18		18
Total fixed charges	$	241		$	349		$	288		$	299	$	411
Earnings
Income (loss) before income taxes	$	(509	)	$	(223	)	$	(4,107	)	$	642	$	(1,063	)
Fixed charges, per above	241			349			288			299		411
Total earnings (deficit), adjusted	$	(268	)	$	126		$	(3,819	)	$	941	$	(652	)
Ratio of earnings to fixed charges (b)				0.36						3.15

a) The interest expense included in fixed charges above reflects only interest on third party indebtedness and excludes any interest expense accrued on uncertain tax positions, as permitted by Financial Accounting Standards Board Accounting Standards Codification™ Topic 740, Income Taxes.

b) Earnings were deficient by $268 million in 2014, $3.819 billion in 2012 and $652 million in 2010.

The ratio of earnings to fixed charges for the year ended December 31, 2014, is not necessarily indicative of results that may be expected in future years.  The data above include certain charges (credits) recorded in conjunction with goodwill and intangible asset impairments, acquisitions, divestitures, restructuring-related activities, debt extinguishment charges, amortization, and/or litigation-related charges. The ratios above should be read in conjunction with our consolidated financial statements, including the notes thereto, included in Item 8 of this Annual Report on Form 10-K, which are incorporated by reference herein.

EX-21

EXHIBIT 21

List of worldwide subsidiaries of Boston Scientific as of February 12, 2015

Structure of ownership and control:

Boston Scientific wholly owns or has a majority interest in all of the below mentioned entities.

Arter Re Insurance Company, Ltd. (Bermuda)

Asthmatx, Inc. (Delaware)

Atritech, Inc. (Delaware)

Boston Scientific (Malaysia) Sdn. Bhd. (Malaysia)

Boston Scientific (South Africa) Proprietary Limited (South Africa)

Boston Scientific (Thailand) Ltd. (Thailand)

Boston Scientific (UK) Limited (England)

Boston Scientific AG (Switzerland)

Boston Scientific Argentina S.A. (Argentina)

Boston Scientific Asia Pacific Pte. Ltd. (Singapore)

Boston Scientific B.V. (The Netherlands)

Boston Scientific Benelux NV (Belgium)

Boston Scientific Ceska republika s.r.o. (Czech Republic)

Boston Scientific Clonmel Limited (Ireland)

Boston Scientific Colombia Limitada (Colombia)

Boston Scientific Cork Limited, in liquidation (Ireland)

Boston Scientific Danmark ApS (Denmark)

Boston Scientific de Costa Rica S.R.L. (Costa Rica)

Boston Scientific de Mexico, S.A. de C.V. (Mexico)

Boston Scientific del Caribe, Inc. (Puerto Rico)

Boston Scientific do Brasil Ltda. (Brazil)

Boston Scientific Far East B.V. (The Netherlands)

Boston Scientific Funding LLC (Delaware)

Boston Scientific Gesellschaft m.b.H. (Austria)

Boston Scientific Group plc (Ireland)

Boston Scientific Hellas S.A. (Greece)

Boston Scientific Holdings Corporation (Delaware)

Boston Scientific Hong Kong Limited (Hong Kong)

Boston Scientific Iberica, S.A. (Spain)

Boston Scientific India Private Limited (India)

Boston Scientific International B.V. (The Netherlands)

Boston Scientific International Corporation (Delaware)

Boston Scientific International Finance Limited (Ireland)

Boston Scientific International S.A. (France)

Boston Scientific Ireland Limited, in liquidation (Ireland)

Boston Scientific Israel Limited (Israel)

Boston Scientific Japan K.K. (Japan)

Boston Scientific Korea Co., Ltd. (Korea)

Boston Scientific Latin America B.V. (The Netherlands)

Boston Scientific Latin America B.V. (Chile) Limitada (Chile)

Boston Scientific Lebanon SAL (Lebanon)

Boston Scientific Limited (England)

Boston Scientific Limited (Ireland)

Boston Scientific LLC (Delaware)

Boston Scientific Ltd./Boston Scientifique Ltee. (Canada)

Boston Scientific Medical Device, Inc. (Delaware)

Boston Scientific Medizintechnik GmbH (Germany)

Boston Scientific Miami Corporation (Florida)

Boston Scientific Middle East SAL (Offshore) (Lebanon)

Boston Scientific Nederland B.V. (The Netherlands)

Boston Scientific Neuromodulation Corporation (Delaware)

Boston Scientific New Zealand Limited (New Zealand)

Boston Scientific Nordic AB (Sweden)

Boston Scientific Norge AS (Norway)

Boston Scientific Philippines, Inc. (Philippines)

Boston Scientific Polska Sp. z o.o. (Poland)

Boston Scientific Portugal - Dispositivos Medicos, Lda (Portugal)

Boston Scientific Pty. Ltd. (Australia)

Boston Scientific S.A.S. (France)

Boston Scientific S.p.A. (Italy)

Boston Scientific Scimed, Inc. (Minnesota)

Boston Scientific Suomi Oy (Finland)

Boston Scientific Technologie Zentrum GmbH (Germany)

Boston Scientific Technology, Inc. (Minnesota)

Boston Scientific TIP Gerecleri Limited Sirketi (Turkey)

Boston Scientific Uruguay S.A. (Uruguay)

Boston Scientific Wayne Corporation (New Jersey)

BridgePoint Medical, Inc. (Delaware)

BSC International Medical Trading (Shanghai) Co., Ltd. (China)

BSC Medical Device Technology (Shanghai) Co., Ltd. (China)

Cameron Health, Inc. (Delaware)

Cardiac Devices, Inc. (Indiana)

Cardiac Pacemakers, Inc. (Minnesota)

Corvita Corporation (Florida)

CryoCor, Inc. (Delaware)

DCI Merger Corp. (Delaware)

EndoVascular Technologies, Inc. (Delaware)

Enteric Medical Technologies, Inc. (Delaware)

EP Technologies, Inc. (Delaware)

GCI Acquisition Corp. (Delaware)

Guidant Delaware Holding Corporation (Delaware)

Guidant do Brasil Ltda. (Brazil)

Guidant Europe NV (Belgium)

Guidant Intercontinental Corporation (Indiana)

Guidant LLC (Indiana)

Guidant Puerto Rico B.V. (The Netherlands)

Guidant Sales LLC (Indiana)

Intelect Medical, Inc. (Delaware)

IOGYN, Inc. (Delaware)

Precision Vascular Systems, Inc. (Utah)

PT Boston Scientific Indonesia (Indonesia)

Remon Medical Technologies, Inc. (Delaware)

Remon Medical Technologies Ltd. (Israel)

Revascular Therapeutics, Inc. (Delaware)

Rhythmia Medical, Inc. (Delaware)

RMI Acquisition Corp. (California)

Sadra Medical, Inc. (Delaware)

Schneider (Europe) GmbH (Switzerland)

StarMedTec GmbH (Germany)

Stream Enterprises LLC (Delaware)

Target Therapeutics, Inc. (Delaware)

Triton Micro, Inc. (Delaware)

Vessix Vascular, Inc. (Delaware)

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-3 Nos. 333-61994, 333-64991, 333-76346 and 333-188918) of Boston Scientific Corporation,

(2) Registration Statement (Form S-4 Nos. 333-22581 and 333-131608) of Boston Scientific Corporation, and

(3) Registration Statement (Form S-8 Nos. 333-25033, 333-25037, 333-36636, 333-61056, 333-61060, 333-76380, 333-98755, 333-111047, 333-131608, 333-133569, 333-134932, 333-151280, 333-174620, 333-174622, 333-188905, and 333-196672) of Boston Scientific Corporation;

of our reports dated February 25, 2015, with respect to the consolidated financial statements and schedule of Boston Scientific Corporation and the effectiveness of internal control over financial reporting of Boston Scientific Corporation included in this Annual Report (Form 10-K) of Boston Scientific Corporation for the year ended December 31, 2014.

/s/ Ernst & Young LLP

Boston, Massachusetts

February 25, 2015

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Michael F. Mahoney, certify that:

1	I have reviewed this Annual Report on Form 10-K of Boston Scientific Corporation;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  February 25, 2015	/s/ Michael F. Mahoney
	Michael F. Mahoney
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Daniel J. Brennan, certify that:

1	I have reviewed this Annual Report on Form 10-K of Boston Scientific Corporation;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  February 25, 2015	/s/ Daniel J. Brennan
	Daniel J. Brennan
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.

SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Boston Scientific Corporation (the “Company”) for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(1)	the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Boston Scientific Corporation.

By:	/s/ Michael F. Mahoney
	Michael F. Mahoney
	Chief Executive Officer
	February 25, 2015

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C.

SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Boston Scientific Corporation (the “Company”) for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(1)	the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Boston Scientific Corporation.

By:	/s/ Daniel J. Brennan
	Daniel J. Brennan
	Executive Vice President and Chief Financial Officer
	February 25, 2015

XML

Weighted Average Shares Outstanding (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share (Tables) [Abstract]

Weighted average shares outstanding

	Year Ended December 31,
(in millions)	2014	2013	2012
Weighted average shares outstanding - basic	1,324.3	1,341.2	1,406.7
Net effect of common stock equivalents	—	—	—
Weighted average shares outstanding - assuming dilution	1,324.3	1,341.2	1,406.7

XML

Income Taxes Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Deferred tax assets, net of valuation allowance		$ 486,000,000	$ 330,000,000
Incremental tax liability asserted by IRS		1,162,000,000
Income Tax Examination, Penalties and Interest Accrued		443,000,000	402,000,000
Unrecognized Tax Benefits		1,047,000,000	1,102,000,000	1,088,000,000	1,022,000,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate		903,000,000	941,000,000	919,000,000
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions		44,000,000	59,000,000	54,000,000
Unrecognized Tax Benefits, Increases Resulting from Prior Period Tax Positions		3,000,000	43,000,000	45,000,000
Unrecognized Tax Benefits, Decreases Resulting from Prior Period Tax Positions		(87,000,000)	(42,000,000)	(28,000,000)
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities		(5,000,000)	(15,000,000)	(1,000,000)
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations		(10,000,000)	(31,000,000)	(4,000,000)
Deferred Tax Assets, Operating Loss Carryforwards, Domestic		335,000,000	351,000,000
Deferred Tax Assets, Net, Current		447,000,000	288,000,000
Deferred Tax Assets, Net, Noncurrent		39,000,000	42,000,000
Deferred Tax Assets, Inventory		46,000,000	50,000,000
Deferred Tax Assets, Operating Loss Carryforwards		525,000,000	647,000,000
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals		232,000,000	221,000,000
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Restructuring Charges		20,000,000	17,000,000
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Contingencies		556,000,000	198,000,000
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Impairment Losses		4,000,000	15,000,000
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost		150,000,000	143,000,000
Federal benefit of uncertain tax positions		178,000,000	166,000,000
Deferred Tax Assets, Other		36,000,000	39,000,000
Deferred Tax Assets, Gross		1,747,000,000	1,496,000,000
Deferred Tax Assets, Valuation Allowance		450,000,000	433,000,000
Change in Deferred Tax Assets, Valuation Allowance		17,000,000
Deferred Tax Liabilities, Current		2,000,000	2,000,000
Deferred Tax Liabilities, Noncurrent		1,214,000,000	1,402,000,000
Deferred Tax Liabilities, Property, Plant and Equipment		67,000,000	78,000,000
Deferred Tax Liabilities, Derivatives		146,000,000	80,000,000
Deferred Tax Liabilities, Goodwill and Intangible Assets, Intangible Assets		1,883,000,000	2,045,000,000
Deferred Tax Liabilities, Other		2,096,000,000	2,203,000,000
Deferred Tax Liabilities		1,216,000,000	1,404,000,000
Deferred Tax Liabilities		799,000,000	1,140,000,000
Deferred Tax Liabilities, Gross		2,096,000,000	2,203,000,000
Current Federal Tax Expense (Benefit)		(2,000,000)	46,000,000	33,000,000
Income (Loss) from Continuing Operations before Income Taxes, Domestic		(1,263,000,000)	(774,000,000)	(1,265,000,000)
Income (Loss) from Continuing Operations before Income Taxes, Foreign		754,000,000	551,000,000	(2,842,000,000)
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest		(509,000,000)	(223,000,000)	(4,107,000,000)
Current State and Local Tax Expense (Benefit)		(5,000,000)	(9,000,000)	0
Current Foreign Tax Expense (Benefit)		111,000,000	105,000,000	139,000,000
Current Income Tax Expense (Benefit)		104,000,000	142,000,000	172,000,000
Deferred Federal Income Tax Expense (Benefit)		(458,000,000)	(212,000,000)	(204,000,000)
Deferred State and Local Income Tax Expense (Benefit)		(23,000,000)	(17,000,000)	(7,000,000)
Deferred Foreign Income Tax Expense (Benefit)		(13,000,000)	(15,000,000)	0
Deferred Income Tax Expense (Benefit)		(494,000,000)	(244,000,000)	(211,000,000)
Income tax (benefit) expense		(390,000,000)	(102,000,000)	(39,000,000)
Deferred Tax Assets, Operating Loss Carryforwards, Foreign		304,000,000	313,000,000
Other Comprehensive Income (Loss), Tax		21,000,000	76,000,000	70,000,000
Deferred Tax Liabilities, Undistributed Foreign Earnings		7,700,000,000
Free Trade Zone Regime Tax Incentive		7,000,000	6,000,000	7,000,000
Gross interest and penalties recognized in period		41,000,000
Income Tax Examination, Penalties and Interest Expense		26,000,000	22,000,000	34,000,000
Potential Reduction In Unrecognized Tax Benefits Over Next Twelve Months As Result Of Concluding Certain Matters	8,000,000
Deferred Tax Assets, Prepaid on Intercompany Profit		69,000,000	66,000,000
Net Deferred Tax Liabilities and Prepaid on Intercompany Profit		730,000,000	1,074,000,000
Deferred Tax Assets, Net of Valuation Allowance		$ 1,297,000,000	$ 1,063,000,000

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Borrowings and Credit Arrangements (Details)	3 Months Ended	12 Months Ended									32 Months Ended															3 Months Ended
	Sep. 30, 2013 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Uncommitted Credit Facilities With Two Commercial Japanese Banks [Member] USD ($)	Dec. 31, 2014 Uncommitted Credit Facilities With Two Commercial Japanese Banks [Member] JPY (¥)	Dec. 31, 2013 Uncommitted Credit Facilities With Two Commercial Japanese Banks [Member] USD ($)	Dec. 31, 2014 Senior Notes [Member] USD ($)	Dec. 31, 2014 Unsecured Term Loan Facility [Member] USD ($)	Dec. 31, 2014 Covenant Requirement [Member]	Dec. 31, 2014 Actual, Covenant [Member]	Dec. 31, 2014 Credit Facility One [Member] USD ($)	Apr. 18, 2012 Credit Facility One [Member] USD ($)	Dec. 31, 2014 Unsecured Term Loan Facility [Member] USD ($)	Aug. 06, 2013 Unsecured Term Loan Facility [Member] USD ($)	Dec. 31, 2014 Uncommitted Credit Facilities With Two Commercial Japanese Banks [Member]	Dec. 31, 2014 November 2015 Notes [Member] USD ($)	Dec. 31, 2014 June 2016 Notes [Member] USD ($)	Dec. 31, 2014 January 2017 Notes [Member] USD ($)	Dec. 31, 2014 October 2018 Notes [Member] USD ($)	Dec. 31, 2014 January 2020 Notes [Member] USD ($)	Dec. 31, 2014 October 2023 Notes [Member] USD ($)	Dec. 31, 2014 November 2035 Notes [Member] USD ($)	Dec. 31, 2014 January 2040 Notes [Member] USD ($)	Aug. 13, 2013 $600 million, Senior Note [Member] USD ($)	Aug. 13, 2013 $450 million, Senior Note [Member] USD ($)	Sep. 30, 2013 $600 million, Snr Note [Member] USD ($)	Sep. 30, 2013 $850 million, Senior Note [Member] USD ($)
Debt Instrument [Line Items]
Senior notes issued			$ 2,200,000,000
Repurchase rate of senior notes issued in ’09 and ’13 in event change-in-control			1.01
Long-term Debt, Current Maturities		400,000,000					400,000,000	0
Letters of Credit Outstanding, Amount		59,000,000	78,000,000
Schedule of debt maturities
Payments due in year two		680,000,000					600,000,000	80,000,000
Payments due in year three		330,000,000					250,000,000	80,000,000
Payments due in year four		840,000,000					600,000,000	240,000,000
Payments due in year five		0					0	0
Payments due, Thereafter		1,950,000,000					1,950,000,000	0
Payments due, Total		4,200,000,000					3,800,000,000	400,000,000
Summary of compliance with debt covenants
Maximum Leverage Ratio									3.5	2.4
Minimum interest coverage ratio									3.0	8.2
Borrowings and Credit Arrangements (Textuals) [Abstract]
Total debt		4,262,000,000	4,240,000,000
Debt Instrument, Interest Rate, Effective Percentage																6.25%						7.00%
Revolving credit facility		300,000,000										2,000,000,000
Interest Margin above LIBOR, Minimum												0.875%		1.00%
Interest Margin above LIBOR, Maximum												1.475%		1.75%
Current interest rate on revolving credit facility											1.275%
Commitment fee percentage											0.225%
Amount of exclusions from EBITDA related to existing restructuring plans												500,000,000
Restructuring charges remaining to be excluded from calculation of consolidated EBITDA											116,000,000
Amount of exclusions from EBITDA related to future litigation charges and payments												2,300,000,000
Legal payments remaining to be excluded from calculation of consolidated EBITDA											2,107,000,000
Long-term Debt, Gross														400,000,000
Senior notes		3,800,000,000	3,800,000,000													400,000,000	600,000,000	250,000,000	600,000,000	850,000,000	450,000,000	350,000,000	300,000,000	600,000,000	450,000,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate																								2.65%	4.125%
Debt Instrument, Interest Rate, Stated Percentage																5.50%	6.40%	5.125%	2.65%	6.00%	4.125%	6.25%	7.375%
Maximum amount of proceeds from sale of finance receivables		363,000,000		175,000,000	21,000,000,000
De-recognized receivables		167,000,000	146,000,000	134,000,000		147,000,000
Average interest rate of de-recognized receivables		3.20%	3.33%
Average discounted rates of notes receivables						1.80%									1.80%
Unsecured Term Loan Facility, Interest Rate During Period													1.50%
Quarterly term-loan principal payments													20,000,000
Repayments of Debt																										600,000,000	850,000,000
Payments of Debt Extinguishment Costs	$ 70,000,000

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Commitments and Contingencies (Details) (USD $)	0 Months Ended	3 Months Ended	12 Months Ended			78 Months Ended
	Feb. 13, 2015	Sep. 30, 2014	Dec. 31, 2014 claims patents	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014 lawsuits claims patents	Feb. 24, 2015 claims
Loss Contingencies [Line Items]
Loss Contingency, Damages Awarded, Value		$ 308,000,000
Accrual for legal matters that are probable and estimable			1,577,000,000	607,000,000		1,577,000,000
Litigation-related charges			1,036,000,000	221,000,000	192,000,000
Product liability lawsuits related to defibrillators or pacemakers			30			30
Suits Pending Against Guidant in Canada and Filed as Class Actions			6			6
Suits Pending Against Guidant in Canada, Pending Outcome of Two Lead Class Actions			4			4
Loss Contingency, Settlement Agreement, Consideration			3,000,000			3,000,000
Loss Contingency, Number of Defendants						92
Initial GI stent patents allegedly infringed (Pulnev and Hankh patents)			3			3
Additional Pulnev patents added to infringement suit			6			6
Individual Lawsuits Pending in Various State and Federal Jurisdictions Against Guidant			10			10
Minimum damages for Guidant breach of Merger Agreement			5,500,000,000
Total Amount Payable To Johnson And Johnson per Settlement Agreement	$ 600,000,000
Subsequent Event [Line Items]
Product liability cases or claims related to mesh product assigned to one judge in state court in Massachusetts							2,500
Putative class actions in Canada, Mesh							3
Subsequent Event [Member]
Subsequent Event [Line Items]
Putative class actions in the U.S., Mesh							8
Product liability cases or claims related to mesh product							25,000
Product liability cases or claims in Canada, Mesh							20
Product liability cases or claims related to mesh product - United Kingdom							10

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Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended					12 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contracts, Liability, Fair Value Disclosure						$ 2,178	$ 2,564
Accrued Contingent Consideration						(274)	(501)	(663)
Derivative Instruments, Gain (Loss) [Line Items]
Cost Method Investments						27	20
Time Deposits, at Carrying Value						255	31
Cash						181	148
Gain (loss) related to ineffective portion of hedging relationships						(1)	1
Impairment of Intangible Assets (Excluding Goodwill)	12			13	129	195	53	142
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net						105	36	(39)
Unrealized gain on derivative financial instruments						217	139
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months						128
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments at Fair Value, Net						2,470	1,952
Notional Amount of Interest Rate Derivatives							450
Interest Rate Derivatives, at Fair Value, Net						450
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net						1	1	2
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net						0	0	0
Unamortized gains on senior notes						45	54
Unamortized losses on senior notes						2	2
Unrealized gain on interest rate cash flow hedges, pretax, AOCI						2	3
Gain (loss) recognized in earnings for previously terminated interest rate swaps						9	10	11
Gain (loss) on previously terminated interest rate swaps to be reclassified within twelve months						9
Asset Impairment Charges		110	55			195	476
Debt Instrument, Fair Value Disclosure						4,613	4,602
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net						106	37	(37)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net						227	207	95
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Cost of products sold [Member] | Foreign Exchange Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net						105	36	(39)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net						227	207	95
Not Designated as Hedging Instrument [Member] | Other, net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Net gain (loss) from foreign currency transaction exposures						(70)	(56)	(41)
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net						52	45	23
Foreign Currency Transaction Gain (Loss), Realized						(18)	(11)	(18)
(Gain) Loss on hedged debt obligation [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest Expense, Other						(29)	7
Loss on hedged debt obligation [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest Expense, Other						29	(8)
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value						0	0
Derivative Instruments in Hedges, Liabilities, at Fair Value						0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds, at Carrying Value						0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value						0	0
Derivative Instruments in Hedges, Liabilities, at Fair Value						0	0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds, at Carrying Value						151	38
Foreign Currency Contract, Asset, Fair Value Disclosure						419	264
Derivative Instruments in Hedges, Assets, at Fair Value						25	1
Assets, Fair Value Disclosure						595	303
Foreign Currency Contracts, Liability, Fair Value Disclosure						36	55
Accrued Contingent Consideration						274	501
Derivative Instruments in Hedges, Liabilities, at Fair Value						0	8
Liabilities, Fair Value Disclosure						310	564
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds, at Carrying Value						151	38
Foreign Currency Contract, Asset, Fair Value Disclosure						0	0
Assets, Fair Value Disclosure						151	38
Foreign Currency Contracts, Liability, Fair Value Disclosure						0	0
Accrued Contingent Consideration						0	0
Liabilities, Fair Value Disclosure						0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds, at Carrying Value							0
Foreign Currency Contract, Asset, Fair Value Disclosure						419	264
Derivative Instruments in Hedges, Assets, at Fair Value						25	1
Assets, Fair Value Disclosure						444	265
Foreign Currency Contracts, Liability, Fair Value Disclosure						36	55
Accrued Contingent Consideration						0	0
Derivative Instruments in Hedges, Liabilities, at Fair Value						0	8
Liabilities, Fair Value Disclosure						36	63
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money Market Funds, at Carrying Value						0	0
Foreign Currency Contract, Asset, Fair Value Disclosure						0	0
Assets, Fair Value Disclosure						0	0
Foreign Currency Contracts, Liability, Fair Value Disclosure						0	0
Accrued Contingent Consideration						274	501
Liabilities, Fair Value Disclosure						$ 274	$ 501

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Borrowings and Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Borrowings and Credit Arrangements (Tables) [Abstract]

Terms of senior notes [Table Text Block]

Our senior notes consist of the following as of December 31, 2014:

	Amount (in millions)		Issuance Date	Maturity Date	Semi-annual Coupon Rate
November 2015 Notes	$	400	November 2005	November 2015	5.500%
June 2016 Notes	600		June 2006	June 2016	6.400%
January 2017 Notes	250		November 2004	January 2017	5.125%
October 2018 Notes	600		August 2013	October 2018	2.650%
January 2020 Notes	850		December 2009	January 2020	6.000%
October 2023 Notes	450		August 2013	October 2023	4.125%
November 2035 Notes	350		November 2005	November 2035	6.250%
January 2040 Notes	300		December 2009	January 2040	7.375%
	$	3,800

Schedule of debt maturities

The debt maturity schedule for the significant components of our debt obligations as of December 31, 2014 is as follows:

(in millions)	2015		2016		2017		2018		2019		Thereafter		Total
Senior notes	$	400	$	600	$	250	$	600	$	—	$	1,950	$	3,800
Term loan	—		80		80		240		—		—		400
	$	400	$	680	$	330	$	840	$	—	$	1,950	$	4,200

Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.

Summary of term loan and revolving credit facility agreement compliance with debt covenants

Our revolving credit facility agreement in place as of December 31, 2014 requires that we maintain certain financial covenants, as follows:

	Covenant Requirement	Actual as of December 31, 2014
Maximum leverage ratio (1)	3.5 times	2.4 times
Minimum interest coverage ratio (2)	3.0 times	8.2 times

(1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.

(2) Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters.

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Stock Ownership Plans (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 years	Dec. 31, 2013	Dec. 31, 2012	Feb. 24, 2014	Feb. 28, 2013	Feb. 27, 2012	Dec. 31, 2011	May 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Price				$ 13.08	$ 7.39	$ 6.28
Total Fair Value of Market Based Awards - 2012			$ 8
Total fair value of market based awards - 2013 Awards		8
Unrecognized Compensation Cost - Stock Options	20
Fair value of the Free Cash Flow (FCF) performance awards	5	9	7
Closing stock price at year end	$ 13.25	$ 12.02	$ 5.73
Target payout of Free Cash Flows (FCF) performance awards	100.00%
Stock Issued During Period, Shares, Employee Stock Purchase Plans	2,618,000	3,833,000	3,979,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	30,535,000	37,339,000	36,593,000				33,576,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 9	$ 7	$ 7				$ 8
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	7,072,000	13,913,000	17,073,000
Measurement period - market based awards - 2012 Awards	3 years
Measurement period - market based awards - 2013 Awards		3 years
Measurement period - market based awards - 2011 Awards			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate - 2012 Awards	0.66%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate - 2013 Awards		0.34%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 13	$ 8	$ 6
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(11,205,000)	(10,307,000)	(10,158,000)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	$ 7	$ 8	$ 9
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(2,671,000)	(2,860,000)	(3,898,000)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Grant Date Fair Value	$ 8	$ 7	$ 7
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	39,508,000	44,892,000	54,881,000				60,921,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	4,943,000	1,992,000	4,726,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(4,418,000)	(7,221,000)	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 8	$ 8	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(5,909,000)	(4,760,000)	(10,766,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 17	$ 21	$ 15
Stock-based compensation expense	103	105	108
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Stock, Capital Shares Reserved for Future Issuance	179,000,000
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	(28)	(29)	(32)
Share-based compensation, net of tax benefit	75	76	76
compensation expense, per share - basic	$ 0.06	$ 0.06	$ 0.05
compensation expense, per share - diluted	$ 0.06	$ 0.06	$ 0.05
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 13.02	$ 7.44	$ 6.23
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 5.07	$ 2.84	$ 2.60
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	37.00%	36.00%	43.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	6 years	5 years 10 months 24 days	5 years 10 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum	1.69%	0.89%	0.95%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum	2.09%	1.72%	1.15%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value	24	24	1
Total fair value of market based awards - 2014 Awards	6
Employee Stock Ownership Plan (ESOP), Compensation Expense	8	7	4
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 11	$ 12	$ 12				$ 13
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	145
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	29,380,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 12
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	109
Options expected to vest	9,477,000
Options expected to vest, weighted average exercise price	$ 10
Options expected to vest, weighted average remaining contractual life	7 years 10 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expected to Vest, Outstanding, Aggregate Intrinsic Value	35
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	38,857,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 11
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	4 years 10 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	144
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value	146	80	60
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate - 2011 Awards			0.38%
Amount of employees total compensation eligible for GESOP purchase	10.00%
Global Employee Stock Purchase Plan - Exercise Amount equivalent to 85% of Fair Market Value of Common Stock at beginning or end of each offering period (whichever is less)	85.00%
Unrecognized Compensation Cost - Non-vested stock awards	133
Unrecognized Compensation Cost	153
weighted average remaining vesting period	1 year 3 months
annualweightedaverageforfeiturerate	9.00%
Nonqualified Options Vesting Period	4 years
Nonqualified Options Contractual Life	10 years
voting power of all classes of stock	10.00%
Exercise price of the fair market value of our common stock on the date of grant	110.00%
Qualified options expire over a period not to exceed	5 years
Qualified options exercise price	$ 0
Qualified options vesting period	5
High end of range [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of the target number of performance-based DSUs awarded	150.00%
Employee stock purchase plan, purchase price, range	$ 11.04	$ 7.96	$ 5.16
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of the target number of performance-based DSUs awarded	0.00%
Employee stock purchase plan, purchase price, range	$ 10.12	$ 5.01	$ 4.82
2011 LTIP Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Shares Authorized								146,000,000
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	50,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	20,000,000
Cost of products sold [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	6	8	15
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	79	79	69
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 18	$ 18	$ 24

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Schedule II

12 Months Ended

Dec. 31, 2014

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

Description	Balance at Beginning of Year		Charges to Costs and Expenses (a)	Deductions to Allowances for Uncollectible Accounts (b)		Charges to (Deductions from) Other Accounts (c)		Balance at End of Year
Year Ended December 31, 2014:
Allowances for uncollectible accounts and sales returns and allowances	$	112	10	(15	)	(2	)	$	105
Year Ended December 31, 2013:
Allowances for uncollectible accounts and sales returns and allowances	$	119	5	(12	)	—		$	112
Year Ended December 31, 2012:
Allowances for uncollectible accounts and sales returns and allowances	$	116	14	(7	)	(4	)	$	119

(a) Represents allowances for uncollectible accounts established through selling, general and administrative expenses.

(b) Represents actual write-offs of uncollectible accounts.

(c) Represents net change in allowances for sales returns, recorded as contra-revenue.

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Restructuring Related Activities (Details in Narrative) (USD $) In Millions, unless otherwise specified	12 Months Ended			72 Months Ended	15 Months Ended	41 Months Ended	59 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				$ 526
Restructuring Charges	69	101	136
Payments for Restructuring	112			628
Restructuring and Related Cost, Cost Incurred to Date	717			717	717	717	717
Restructuring Related Expenses	48	23	24
Restructuring-related Costs Incurred to Date				191
2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date					94
Payments for Restructuring	93
Restructuring and Related Cost, Cost Incurred to Date	142			142	142	142	142
Restructuring-related Costs Incurred to Date					48
2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date						250
Payments for Restructuring	19					287
Restructuring and Related Cost, Cost Incurred to Date	289			289	289	289	289
Restructuring-related Costs Incurred to Date						39
2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date							152
Payments for Restructuring	0						145
Restructuring and Related Cost, Cost Incurred to Date	160			160	160	160	160
Restructuring and Related Cost, Expected Cost	160			160	160	160	160
Restructuring-related Costs Incurred to Date							8
Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				30
Payments for Restructuring	0			103
Restructuring and Related Cost, Cost Incurred to Date	126			126	126	126	126
Restructuring and Related Cost, Expected Cost	126			126	126	126	126
Restructuring-related Costs Incurred to Date				96
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				189
Restructuring Reserve	6	8		6	6	6	6
Restructuring Charges	27	56	43
Payments for Restructuring	48			247
Restructuring Related Expenses	19	20	14
Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date					25
Payments for Restructuring	38				38
Other Restructuring [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date						113
Payments for Restructuring	10					154
Other Restructuring [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date							51
Payments for Restructuring	0						55
Other Restructuring [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				0
Payments for Restructuring	0			0
Maximum [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan estimated future cash outflow	285
Restructuring and Related Cost, Expected Cost	300			300	300	300	300
Maximum [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan estimated future cash outflow	291
Restructuring and Related Cost, Expected Cost	292			292	292	292	292
Minimum [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan estimated future cash outflow	235
Restructuring and Related Cost, Expected Cost	250			250	250	250	250
Minimum [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan estimated future cash outflow	287
Restructuring and Related Cost, Expected Cost	289			289	289	289	289
Minimum [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	$ 126			$ 126	$ 126	$ 126	$ 126

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Significant Accounting Policies Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 reportablesegments	Dec. 31, 2013 reportablesegments reportingunits	Dec. 31, 2012 reportingunits reportablesegments	Dec. 31, 2011
Significant Accounting Policies [Line Items]
Number of Reportable Segments	3
Number of global reporting units	7	7
International Retirement Plan - Discount Rate - Low	1.00%
International Retirement Plan - Expected Return on Plan Assets - Low	2.75%
International Retirement Plan - Discount Rate - High	2.20%
Executive Retirement Plan Discount Rate	3.50%
Rabbi Trust Assets	$ 14,000,000	$ 17,000,000
Expense related to matching contributions	63,000,000	59,000,000	63,000,000
Defined Benefit Plan, Benefit Obligation	285,000,000	248,000,000
Defined Benefit Plan, Fair Value of Plan Assets	191,000,000	166,000,000	130,000,000
Defined Benefit Plan, Actual Return on Plan Assets	26,000,000	25,000,000
Defined Benefit Plan, Contributions by Employer	16,000,000	32,000,000
Defined Benefit Plan, Benefits Paid	(11,000,000)	(15,000,000)
Defined Benefit Plan, Transfers Between Measurement Levels	0	0
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation	(6,000,000)	(6,000,000)
Defined Benefit Plan, Amounts Recognized in Balance Sheet	94,000,000	82,000,000
Shipping, Handling and Transportation Costs	100,000,000	97,000,000	105,000,000
Foreign Currency Transaction Gain (Loss), before Tax	(18,000,000)	(11,000,000)	(18,000,000)
Equity Method Investments	10,000,000	18,000,000
Number of U.S. reporting units			6
Percent of finished goods at consignment	40.00%	40.00%
Product Warranty Accrual	25,000,000	28,000,000	26,000,000	30,000,000
Product Warranty Expense	9,000,000	12,000,000	8,000,000
Product Warranty Accrual, Payments	(12,000,000)	(10,000,000)	(12,000,000)
Valuation Allowances and Reserves, Deductions	(15,000,000)	(12,000,000)	(7,000,000)
Depreciation	287,000,000	279,000,000	288,000,000
Accounts receivable 180 days past due	26,000,000
Accounts receivable 365 days past due	11,000,000
Number of international reporting units			4
Cost Method Investments	27,000,000	20,000,000
Notes receivable from portfolio companies	17,000,000	13,000,000
Deferred Tax Liabilities, Undistributed Foreign Earnings	7,700,000,000
Executive Retirement Plan Rate of Compensation Increase	3.00%
Guidant Retirement Plan Discount Rate	4.00%
Guidant Retirement Plan Expected Return in Plan Assets	5.50%
Guidant Supplemental Retirement Plan Discount Rate	4.00%
International Retirement Plan - Expected Return on Plan Assets - High	4.10%
Concentration Risk, Customer	0	0	0
Executive retirement plan [Member]
Significant Accounting Policies [Line Items]
Defined Benefit Plan, Benefit Obligation	13,000,000	10,000,000
Defined Benefit Plan, Fair Value of Plan Assets	0	0
Defined Benefit Plan, Amounts Recognized in Balance Sheet	13,000,000	10,000,000
Guidant retirement plan [Member]
Significant Accounting Policies [Line Items]
Defined Benefit Plan, Benefit Obligation	148,000,000	120,000,000
Defined Benefit Plan, Fair Value of Plan Assets	140,000,000	114,000,000
Defined Benefit Plan, Amounts Recognized in Balance Sheet	8,000,000	6,000,000
Guidant supplement retirement plan [Member]
Significant Accounting Policies [Line Items]
Defined Benefit Plan, Benefit Obligation	34,000,000	31,000,000
Defined Benefit Plan, Fair Value of Plan Assets	0	0
Defined Benefit Plan, Amounts Recognized in Balance Sheet	34,000,000	31,000,000
Guidant healthcare retirement benefit plan [Member]
Significant Accounting Policies [Line Items]
Defined Benefit Plan, Benefit Obligation	0	3,000,000
Defined Benefit Plan, Fair Value of Plan Assets	0	0
Defined Benefit Plan, Amounts Recognized in Balance Sheet	0	3,000,000
International retirement plans [Member]
Significant Accounting Policies [Line Items]
Defined Benefit Plan, Benefit Obligation	90,000,000	84,000,000
Defined Benefit Plan, Fair Value of Plan Assets	51,000,000	52,000,000
Defined Benefit Plan, Amounts Recognized in Balance Sheet	$ 39,000,000	$ 32,000,000
Low end of range [Member]
Significant Accounting Policies [Line Items]
International Retirement Plan Rate of Compensation Increase	3.00%
Minimum [Member] | Building and Building Improvements [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Minimum [Member] | Equipment [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Minimum [Member] | Patents [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	2 years
Minimum [Member] | Technology-related [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	5 years
Minimum [Member] | Customer Relationships [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	5 years
Maximum [Member] | Building and Building Improvements [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	40 years
Maximum [Member] | Equipment [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Maximum [Member] | Patents [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	20 years
Maximum [Member] | Technology-related [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	25 years
Maximum [Member] | Customer Relationships [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Assets, Useful Life	25 years
High end of range [Member]
Significant Accounting Policies [Line Items]
International Retirement Plan Rate of Compensation Increase	6.78%

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes (Tables) [Abstract]

Tax rate

	Year Ended December 31,
	2014		2013		2012
U.S. federal statutory income tax rate	(35.0	)%	(35.0	)%	(35.0	)%
State income taxes, net of federal benefit	(6.5	)%	(7.9	)%	(0.2	)%
Effect of foreign taxes	(29.1	)%	(63.4	)%	(3.7	)%
Acquisition-related	(7.5	)%	3.5	%	—	%
Research credit	(7.0	)%	(12.2	)%	—	%
Valuation allowance	4.0	%	(12.0	)%	0.3	%
Goodwill impairment charges	—	%	65.2	%	36.4	%
Compensation-related	0.7	%	1.7	%	0.3	%
Non-deductible expenses	1.9	%	9.0	%	(0.2	)%
Uncertain domestic tax positions	2.0	%	7.0	%	0.8	%
Other, net	(0.2	)%	(1.9	)%	0.3	%
	(76.7	)%	(46.0	)%	(1.0	)%

Summary of Income Tax Contingencies [Table Text Block]

	Year Ended December 31,
	2014			2013			2012
				(restated)			(restated)
Beginning Balance	$	1,102		$	1,088		$	1,022
Additions based on positions related to the current year	44			59			54
Additions based on positions related to prior years	3			43			45
Reductions for tax positions of prior years	(87		)	(42		)	(28		)
Settlements with taxing authorities	(5		)	(15		)	(1		)
Statute of limitation expirations	(10		)	(31		)	(4		)
Ending Balance	$	1,047		$	1,102		$	1,088

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	Year Ended December 31,
(in millions)	2014			2013			2012
Domestic	$	(1,263	)	$	(774	)	$	(1,265	)
Foreign	754			551			(2,842		)
	$	(509	)	$	(223	)	$	(4,107	)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions):

	Location in	As of December 31,
Component	Balance Sheet	2014		2013
Current deferred tax asset and prepaid on intercompany profit	Deferred and prepaid income taxes	$	447	$	288
Non-current deferred tax asset	Other long-term assets	39		42
Deferred Tax Assets and Prepaid on Intercompany Profit		486		330
Current deferred tax liability	Other current liabilities	2		2
Non-current deferred tax liability	Deferred income taxes	1,214		1,402
Deferred Tax Liabilities		1,216		1,404
Net Deferred Tax Liabilities and Prepaid on Intercompany Profit		$	730	$	1,074

	As of December 31,
(in millions)	2014			2013
				(restated)
Deferred Tax Assets:
Inventory costs and related reserves	$	46		$	50
Tax benefit of net operating loss and credits	525			647
Reserves and accruals	232			221
Restructuring-related charges and purchased research and development	20			17
Litigation and product liability reserves	556			198
Investment write-down	4			15
Compensation related	150			143
Federal benefit of uncertain tax positions	178			166
Other	36			39
	1,747			1,496
Less valuation allowance	(450		)	(433		)
	1,297			1,063
Deferred Tax Liabilities:
Property, plant and equipment	67			78
Unrealized gains and losses on derivative financial instruments	146			80
Intangible assets	1,883			2,045
	2,096			2,203
Net Deferred Tax Liabilities	799			1,140
Prepaid on intercompany profit	69			66
Total Net Deferred Tax Liabilities and Prepaid on Intercompany Profit	$	730		$	1,074

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Year Ended December 31,
(in millions)	2014			2013			2012
Current
Federal	$	(2	)	$	46		$	33
State	(5		)	(9		)	—
Foreign	111			105			139
	104			142			172
Deferred
Federal	(458		)	(212		)	(204		)
State	(23		)	(17		)	(7		)
Foreign	(13		)	(15		)	—
	(494		)	(244		)	(211		)
	$	(390	)	$	(102	)	$	(39	)

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Supplemental Balance Sheet Information (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Allowance for doubtful accounts
Beginning balance	$ 112	$ 119	$ 116
Net (credits) charges to expenses	10	5	14
Utilization of allowances	(15)	(12)	(7)
Ending balance	105	112	119
Trade accounts receivable, net
Accounts receivable	1,288	1,419
Less: allowance for doubtful accounts	(76)	(81)
Less: allowance for sales returns	(29)	(31)
Trade accounts receivable, net	1,183	1,307
Inventories
Finished goods	649	598
Work-in-process	97	90
Raw materials	200	209
Inventories	946	897
Property, plant and equipment, net
Land	80	81
Buildings and improvements	944	917
Equipment, furniture and fixtures	2,633	2,461
Capital in progress	189	211
Property, plant and equipment	3,846	3,670
Less: accumulated depreciation	2,339	2,124
Property, plant and equipment, net	1,507	1,546	1,564
Accrued expenses
Payroll and related liabilities	512	488
Legal reserves	694	84
Business Combination, Contingent Consideration, Liability, Current	158	148
Other	586	628
Accrued expenses	1,950	1,348
Other long-term liabilities
Accrued income taxes	1,231	1,283
Legal reserves	883	523
Business Combination, Contingent Consideration, Liability, Noncurrent	116	353
Other Long-Term Liabilities	436	410
Other long-term liabilities	2,666	2,569
Allowance for Doubtful Accounts [Member]
Allowance for doubtful accounts
Beginning balance		88	81
Net (credits) charges to expenses		5	14
Utilization of allowances		(12)	(7)
Ending balance	$ 76	$ 81	$ 88

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Schedule II (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Valuation and Qualifying Accounts [Abstract]
Valuation Allowances and Reserves, Balance	$ 105	$ 112	$ 119	$ 116
Net (credits) charges to expenses	10	5	14
Valuation Allowances and Reserves, Deductions	(15)	(12)	(7)
Valuation Allowances and Reserves, Charged to Other Accounts	$ (2)	$ 0	$ (4)

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Fair Value Measurements (Details BS Table) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Derivatives Fair Value [Line Items]
Derivative Assets	$ 444	$ 265
Derivative Liabilities	36	63
Designated as Hedging Instrument [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value	344	238
Derivative Instruments in Hedges, Liabilities, at Fair Value	1	40
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	100	27
Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	35	23
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value	178	117
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Long Term Assets [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value	141	120
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Liabilities, at Fair Value	1	13
Currency hedge contracts [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Liabilities, at Fair Value	0	19
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value	3	1
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Long Term Assets [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Assets, at Fair Value	22	0
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]
Derivatives Fair Value [Line Items]
Derivative Instruments in Hedges, Liabilities, at Fair Value	$ 0	$ 8

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Acquisitions

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

Our consolidated financial statements include the operating results for each acquired entity from its respective date of acquisition. We do not present pro forma financial information for these acquisitions given their results are not material to our consolidated financial statements. Transaction costs associated with these acquisitions were expensed as incurred and are not material for the years ended December 31, 2014, 2013, and 2012.

2014 Acquisitions

Interventional Business of Bayer AG

On August 29, 2014, we completed the acquisition of the Interventional Division of Bayer AG (Bayer), for a total cash consideration of $414 million. We believe that this acquisition enhances our ability to offer physicians and healthcare systems a more complete portfolio of solutions to treat challenging vascular conditions. The transaction includes the AngioJet® Thrombectomy System and the Fetch® 2 Aspiration Catheter, which are used in endovascular procedures to remove blood clots from blocked arteries and veins, and the JetStream® Atherectomy System, used to remove plaque and thrombi from diseased arteries. We are integrating the operations of the Bayer business with our Peripheral Intervention and Interventional Cardiology divisions.

IoGyn, Inc.

On May 7, 2014, we completed the acquisition of the remaining fully diluted equity of IoGyn, Inc. (IoGyn). Prior to the acquisition, we held a 28 percent minority interest in IoGyn in addition to notes receivable of approximately $8 million. Total consideration was comprised of a net cash payment of $65 million at closing to acquire the remaining 72 percent of IoGyn equity and repay outstanding debt. IoGyn has developed the Symphion^TM System, a next generation system for hysteroscopic intrauterine tissue removal including fibroids (myomas) and polyps. In March 2014, IoGyn received U.S. Food & Drug Administration (FDA) approval for the system and in October 2014, we began a limited market release of the system in the United States. We are integrating the operations of the IoGyn business with our gynecological surgery business, which is part of our Urology and Women’s Health division.

In addition, we completed other acquisitions during 2014 for total consideration of $7 million cash at closing plus contingent consideration of up to $4 million.

Purchase Price Allocation

We accounted for these acquisitions as business combinations and, in accordance with ASC Topic 805, Business Combinations, we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate preliminary purchase price for Bayer and IoGyn acquisitions are as follows (in millions):

Cash, net of cash acquired	$	479
Fair value of prior interests	31
	$	510

Total consideration for the 2014 acquisitions included cash payments of $510 million, net of cash acquired, at closing of the transaction.

In addition, prior to the acquisition of IoGyn, we had an equity interest in IoGyn and held $8 million of notes receivables. We re-measured our previously held investments to their estimated acquisition-date fair value of $31 million and recorded a gain of $19 million in other, net, in the accompanying consolidated statements of operations during the second quarter of 2014. We measured the fair values of the previously held investments based on the liquidation preferences and priority of the equity interest and debt, including accrued interest.

The following summarizes the aggregate preliminary purchase price allocation for Bayer and IoGyn as of December 31, 2014:

Goodwill	$	210
Amortizable intangible assets	263
Inventory	23
Property, Plant and Equipment	17
Prepaid Transaction Service Agreement	5
Other net assets	(1		)
Deferred income taxes	(7		)
	$	510

We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	233	10 - 14	14 - 18 %
Customer Relationships	29		10	18%
Other intangible assets	1		2	14%
	$	263

We believe that the estimated intangible asset values represent the fair value at the date of acquisition and do not exceed the amount a third party would pay for the assets. These fair value measurements are based on significant unobservable inputs, including management estimates and assumptions and, accordingly, are classified as Level 3 within the fair value hierarchy prescribed by ASC Topic 820, Fair Value Measurements and Disclosures.

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, the majority of which is deductible for tax purposes. Goodwill was established due primarily to cost synergies expected to be gained from the integration of the businesses into our existing operations, as well as revenue and cash flow projections associated with future technologies, and has been allocated to our reportable segments based on the relative expected benefit. See Note D - Goodwill and Other Intangible Assets for more information related to goodwill allocated to our reportable segments.

2013 Acquisition

On November 1, 2013, we completed the acquisition of the electrophysiology business of C.R. Bard Inc. (Bard EP), for $274 million in cash. This acquisition added a strong commercial team and complementary portfolio of ablation catheters, diagnostic tools, and electrophysiology recording systems, which we believe will allow us to better serve the global Electrophysiology market through a more comprehensive portfolio offering and sales infrastructure.

Purchase Price Allocation

We accounted for this acquisition as a business combination and, in accordance with Financial Accounting Standards Board ASC Topic 805, Business Combinations, we have recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The components of the aggregate preliminary purchase price for the acquisition consummated in 2013 are as follows (in millions):

Cash, net of cash acquired	$	274
Fair value of contingent consideration	—
Fair value of prior interests	—
Fair value of debt assumed	—
	$	274

The following summarizes the aggregate purchase price allocation for the 2013 acquisition (in millions):

Goodwill	$	140
Amortizable intangible assets	112
Indefinite-lived intangible assets	—
Other net assets	19
Deferred income taxes	3
	$	274

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, the majority of which is deductible for tax purposes.

We allocated a portion of the purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	82	10	11.5%
Customer relationships	30		7	11.5%
	$	112

2012 Acquisitions

Cameron Health, Inc.

On June 8, 2012, we completed the acquisition of the remaining equity of Cameron Health, Inc. (Cameron). Cameron has developed the world's first and only commercially available subcutaneous implantable cardioverter defibrillator - the S-ICD® system. We have integrated the operations of the Cameron business into our CRM business. Total consideration included an initial $150 million cash payment at closing of the transaction, a payment of $150 million upon FDA approval of the S-ICD® system, which was paid to the former shareholders of Cameron after the receipt of FDA approval during the fourth quarter of 2012, and up to an additional $1.050 billion of potential payments upon achievement of specified revenue-based milestones over a six-year period following FDA approval.

BridgePoint Medical, Inc.

On October 4, 2012, we completed the acquisition of 100 percent of the fully diluted equity of BridgePoint Medical, Inc. (BridgePoint), a developer of catheter-based systems to treat coronary chronic total occlusions (CTOs). We have integrated the operations of the BridgePoint business into our Interventional Cardiology division. Total consideration included an initial $20 million at closing of the transaction and up to an additional $90 million of revenue-based earnouts and milestones through 2016.

Rhythmia Medical, Inc.

On October 8, 2012, we completed the acquisition of 100 percent of the fully diluted equity of Rhythmia Medical, Inc. (Rhythmia). Rhythmia is a developer of next-generation mapping and navigation solutions for use in cardiac catheter ablations and other electrophysiology procedures, including atrial fibrillation and atrial flutter. We have integrated the operations of the Rhythmia business into our Electrophysiology division. Total consideration included an initial $90 million at closing of the transaction and up to an additional $175 million of regulatory and revenue-based milestones and earnouts through 2017.

Vessix Vascular, Inc.

On November 19, 2012, we completed the acquisition of 100 percent of the fully diluted equity of Vessix Vascular, Inc. (Vessix). Vessix is a developer of a therapy to treat uncontrolled hypertension, or high blood pressure. We have integrated the operations of the Vessix business into our Peripheral Interventions division. Total consideration included an initial $125 million at closing of the transaction and up to an additional $300 million of clinical and revenue-based milestones and earnouts through 2016.

Purchase Price Allocation

The components of the aggregate purchase price for the acquisitions consummated in 2012 are as follows (in millions):

Cash, net of cash acquired	$	367
Fair value of contingent consideration	467
Fair value of prior interests	79
Fair value of debt assumed	9
	$	922

Total consideration for the 2012 acquisitions included $367 million of initial cash payments, net of cash acquired, at closing of the transactions, with potential payments of up to an additional $1.615 billion based upon achievement of certain regulatory- and commercialization-related milestones and revene-based milestones and earnouts through 2018. As of the respective acquisition dates, we recorded total contingent consideration liabilities of $467 million, representing the estimated fair value of the contingent consideration we expected to pay to the former shareholders of the acquired companies. The fair value of the contingent consideration liabilities was estimated by discounting, to present value, contingent payments expected to be made. In certain circumstances, we utilized a probability-weighted approach or monte carlo revenue simulation model to determine the fair value of contingent consideration.

Prior to the acquisition of Cameron, we had an equity interest in Cameron and held $40 million of notes receivable. We re-measured our previously held investments to their estimated acquisition-date fair value of $79 million and recorded a gain of $39 million in other, net in the accompanying consolidated statements of operations during the second quarter of 2012. We measured the fair values of the previously held investments based on the liquidation preferences and priority of the equity interests and debt, including accrued interest. In addition, we prepaid the assumed debt obligation of Cameron for approximately $9 million during the second quarter of 2012.

The following summarizes the aggregate purchase price allocation for the 2012 acquisitions (in millions):

Goodwill (non-deductible for tax purposes)	$	566
Amortizable intangible assets	189
Indefinite-lived intangible assets	132
Other net assets	15
Deferred income taxes	20
	$	922

We recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable assets acquired as goodwill, which is non-deductible for tax purposes.

We allocated a portion of the final purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	187	8	14 - 28%
Customer relationships	2		5	14%
Indefinite-lived intangible assets:
In-process research and development	132			14 - 28%
	$	321

Our technology-related intangible assets consist of technical processes, intellectual property, and institutional understanding with respect to products and processes that we will leverage in future products or processes and will carry forward from one product generation to the next. We used the income approach to derive the fair value of the technology-related intangible assets, and are amortizing them on a straight-line basis over their assigned estimated useful lives.

Customer relationships represent the estimated fair value of the non-contractual customer and distributor relationships. Customer relationships are direct relationships with physicians and hospitals performing procedures with the acquired products, and distributor relationships are relationships with third parties used to sell products, both as of the acquisition date. These relationships were valued separately from goodwill as there is a history and pattern of conducting relationships with the customers and distributors on a contractual basis. We used the replacement cost and lost profits methodology to derive the fair value of the customer relationships. The customer relationships intangible assets are being amortized on a straight-line basis over their assigned estimated useful lives.

Contingent Consideration

Certain of our acquisitions involve contingent consideration arrangements. Payment of 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 accordance with U.S. GAAP, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations.

We recorded a net benefit related to the change in fair value of our contingent consideration liabilities of $85 million during 2014, a net expense related to the change in fair value of our contingent consideration liabilities of $4 million during 2013, and a net benefit related to the change in fair value of our contingent consideration liabilities of $6 million during 2012. We made contingent consideration payments of $137 million, $165 million and $154 million in 2014, 2013 and 2012, respectively.

Changes in our contingent consideration liability were as follows (in millions):

Balance as of December 31, 2012	$	663
Amounts recorded related to new acquisitions	—
Other amounts recorded related to prior acquisitions	(1		)
Fair value adjustment	4
Contingent payments related to prior period acquisition	(165		)
Balance as of December 31, 2013	$	501
Amounts recorded related to new acquisitions	3
Other amounts recorded related to prior acquisitions	(8		)
Fair value adjustment	(85		)
Contingent payments related to prior period acquisition	(137		)
Balance as of December 31, 2014	$	274

As of December 31, 2014, the maximum amount of future contingent consideration (undiscounted) that we could be required to make associated with our acquisitions is approximately $1.908 billion.

Increases or decreases in the fair value of our contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory-, revenue- or commercialization-based milestones. The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs:

Contingent Consideration Liability	Fair Value as of December 31, 2014	Valuation Technique	Unobservable Input	Range
R&D, Regulatory and Commercialization-based Milestones	$85 million	Probability Weighted Discounted Cash Flow	Discount Rate	1.1%
			Probability of Payment	84% - 95%
			Projected Year of Payment	2015
Revenue-based Payments	$55 million	Discounted Cash Flow	Discount Rate	11.5% - 15%
			Probability of Payment	0% - 100%
			Projected Year of Payment	2015 - 2018
	$134 million	Monte Carlo	Revenue Volatility	11% - 13%
			Risk Free Rate	LIBOR Term Structure
			Projected Year of Payment	2015 - 2018

Contingent consideration liabilities are remeasured to fair value each reporting period using projected revenues, discount rates, probabilities of payment and projected payment dates. Projected contingent payment amounts related to R&D, regulatory- and commercialization-based milestones and certain revenue-based milestones are discounted back to the current period using a discounted cash flow model. Other revenue-based payments are valued using a monte carlo valuation model, which simulates future revenues during the earn out-period using management's best estimates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. Increases in projected revenues and probabilities of payment may result in higher fair value measurements. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs in isolation may result in a significantly lower or higher fair value measurement.

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended				12 Months Ended			0 Months Ended		2 Months Ended
	Nov. 01, 2013	Dec. 04, 2012	Nov. 19, 2012	Oct. 08, 2012	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Sep. 02, 2014	May 07, 2014	Dec. 31, 2013	Oct. 04, 2012	Jun. 08, 2012
Business Acquisition [Line Items]
Other Cost and Expense, Operating					$ (85)	$ 4	$ (6)
Payments to Acquire Businesses, Net of Cash Acquired					486	274	366
Maximum future contingent consideration for acquisitions completed after January 1, 2009					1,908
Initial cash payments for 2012 acquisitions							367
Potential payments based on acheiving certain milestones							1,615
Business Acquisition, Purchase Price Allocation, Notes Payable and Long-term Debt	0
Accrued Contingent Consideration					274	501	663			501
Fair value of contingent consideration recorded in purchase accounting					3	0	467
Contingent consideration recognized in the period						0
Adjustments to accrued contingent consideration					(8)	(1)
Contingent payment related to business combination					(137)	(165)
Payment to acquire in cash		20	125	90
Fair value of contingent consideration	0
Prior investments	0
Goodwill					5,898	5,693	5,973			5,693
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles					263
Total					510
Additional Acquisitions (Textuals) [Abstract]
Payment to acquire in cash		20	125	90
Future acquisition related consideration contingent upon the achievement of certain revenue-based milestones			300	175							90
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value					31
Acquisitions (Textuals) [Abstract]
Business combination, liabilities arising from contingencies, amount recognized							467
Estimated fair value of prior equity ownership interest in Sadra and Intelect	0
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability					(85)	4
Initial cash payment for Cameron acquisition												150
Potential payment due upon FDA approval of S-ICD system							150
Maximum potential payment due upon achievement of certain milestones, per Cameron agreement							1,050
Payment of contingent consideration					137	165	154
Bayer and IoGyn [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired					479
Goodwill					210
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles					263
Total					510
Acquisitions (Textuals) [Abstract]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory					23
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment					17
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets					5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net					(1)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current					(7)
Bayer [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired								414
IoGyn [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired									65
Remaining equity of IoGyn purchased									72.00%
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain					19
Acquisitions (Textuals) [Abstract]
Minority interest owned of IoGyn									28.00%
Business Combination, Consideration Transferred, Liabilities Incurred									8
2014 acquisitions (excluding Bayer and IoGyn) [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired					7
Business Combination, Contingent Consideration, Asset					4
Bard EP [Member]
Business Acquisition [Line Items]
Payment to acquire in cash	274
Additional Acquisitions (Textuals) [Abstract]
Payment to acquire in cash	274
BridgePoint [Member]
Additional Acquisitions (Textuals) [Abstract]
Percentage of equity acquired											100.00%
Rhythmia [Member]
Additional Acquisitions (Textuals) [Abstract]
Percentage of equity acquired				100.00%
2013 Acquisitions [Member]
Business Acquisition [Line Items]
Goodwill						140				140
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	112					112				112
Indefinite-lived intangible assets						0				0
Total	274					274
Acquisitions (Textuals) [Abstract]
Business Acquisition, Purchase Price Allocation, Other Noncurrent Assets						19				19
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current						3				3
2012 Acquisitions [Member]
Business Acquisition [Line Items]
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain							39
Business Acquisition, Purchase Price Allocation, Notes Payable and Long-term Debt							9
Payment to acquire in cash							367
Fair value of contingent consideration							(467)
Prior investments							79
Goodwill							566
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles							189
Indefinite-lived intangible assets							132
Total							922
Additional Acquisitions (Textuals) [Abstract]
Payment to acquire in cash							367
Note receivable from acquired company prior to acquisition												40
Acquisitions (Textuals) [Abstract]
Estimated fair value of prior equity ownership interest in Sadra and Intelect							79
Business Acquisition, Purchase Price Allocation, Other Noncurrent Assets							15
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net							321
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets, Current							20
Vessix [Member]
Additional Acquisitions (Textuals) [Abstract]
Percentage of equity acquired			100.00%
R&D- and commercialization-based milestones [Member]
Additional Acquisitions (Textuals) [Abstract]
Risk-adjusted discount rate for contingent consideration					1.10%
Acquisitions (Textuals) [Abstract]
contingent consideration liability, projected year of payment					2015
R&D- and commercialization-based milestones [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
contingent consideration liability, probability of payment					84.00%
R&D- and commercialization-based milestones [Member] | Maximum [Member]
Acquisitions (Textuals) [Abstract]
contingent consideration liability, probability of payment					95.00%
Technology-Based Intangible Assets [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired					233
Customer Contracts [Member] | 2013 Acquisitions [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired						30
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life										7 years
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation										11.50%
Customer Contracts [Member] | 2012 Acquisitions [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired							2
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life							5 years
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation							14.00%
Technology-related [Member] | Minimum [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life					10 years
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation					14.00%
Technology-related [Member] | Maximum [Member]
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life					14 years
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation					18.00%
Technology-related [Member] | 2013 Acquisitions [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired						82
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life										10 years
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation										11.50%
Technology-related [Member] | 2012 Acquisitions [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired							187
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life							8 years
Technology-related [Member] | 2012 Acquisitions [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation							14.00%
Technology-related [Member] | 2012 Acquisitions [Member] | Maximum [Member]
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation							28.00%
Customer Relationships [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired					29
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life					10 years
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation					18.00%
Other Intangible Assets [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired					1
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life					2 years
Range of Risk Adjusted Discount Rates used in Purchase Price Allocation					14.00%
Purchased research and development [Member] | 2012 Acquisitions [Member]
Acquisitions (Textuals) [Abstract]
In-Process Research and Development Acquired							$ 132
Purchased research and development [Member] | 2012 Acquisitions [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation							14.00%
Purchased research and development [Member] | 2012 Acquisitions [Member] | Maximum [Member]
Acquisitions (Textuals) [Abstract]
Range Of Risk Adjusted Discount Rates Used In Purchase Price Allocation							28.00%
Discounted cash flow [Member] | R&D- and commercialization-based milestones [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
contingent consideration liability, projected year of payment					2015
Discounted cash flow [Member] | revenue-based payments [Member] | Minimum [Member]
Additional Acquisitions (Textuals) [Abstract]
Risk-adjusted discount rate for contingent consideration					11.50%
Acquisitions (Textuals) [Abstract]
contingent consideration liability, probability of payment					0.00%
Discounted cash flow [Member] | revenue-based payments [Member] | Maximum [Member]
Additional Acquisitions (Textuals) [Abstract]
Risk-adjusted discount rate for contingent consideration					15.00%
Acquisitions (Textuals) [Abstract]
contingent consideration liability, probability of payment					100.00%
contingent consideration liability, projected year of payment					2018
Monte Carlo [Member] | R&D- and commercialization-based milestones [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
contingent consideration liability, projected year of payment					2015
Monte Carlo [Member] | revenue-based payments [Member] | Minimum [Member]
Acquisitions (Textuals) [Abstract]
Revenue Volatility - Contingent Consideration					11.00%
Monte Carlo [Member] | revenue-based payments [Member] | Maximum [Member]
Acquisitions (Textuals) [Abstract]
contingent consideration liability, projected year of payment					2018
Revenue Volatility - Contingent Consideration					13.00%

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Significant Accounting Policies Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

	Year Ended December 31,
	2014			2013			2012
Beginning balance	$	28		$	26		$	30
Provision	9			12			8
Settlements/ reversals	(12		)	(10		)	(12		)
Ending balance	$	25		$	28		$	26

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block]

	As of December 31, 2014						As of December 31, 2013
(in millions)	Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized		Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized
Executive Retirement Plan	$	13	$	—	$	13	$	10	$	—	$	10
Guidant Retirement Plan (frozen)	148		140		8		120		114		6
Guidant Supplemental Retirement Plan (frozen)	34		—		34		31		—		31
Guidant Healthcare Retirement Benefit Plan (frozen)	—		—		—		3		—		3
International Retirement Plans	90		51		39		84		52		32
	$	285	$	191	$	94	$	248	$	166	$	82

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

		Expected Return on Plan Assets	Rate of
	Discount Rate		Compensation Increase
Executive Retirement Plan	3.50%		3.00%
Guidant Retirement Plan (frozen)	4.00%	5.50%
Guidant Supplemental Retirement Plan (frozen)	4.00%
International Retirement Plans	1.00% - 2.20%	2.75% - 4.10%	3.00% - 6.78%

Schedule of Changes in Fair Value of Plan Assets [Table Text Block]

	Year Ended December 31,
(in millions)	2014			2013
Beginning fair value	$	166		$	130
Actual return on plan assets	26			25
Employer contributions	16			32
Benefits paid	(11		)	(15		)
Net transfers in (out)	—			—
Foreign currency exchange	(6		)	(6		)
Ending fair value	$	191		$	166

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New Accounting Pronouncements New Accounting Pronouncements (Policies)

12 Months Ended

Dec. 31, 2014

New Accounting Pronouncements [Abstract]

ASC Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property Plant and Equipment (Topic 360) [Policy Text Block]

ASC Update No. 2014-08

In April 2014, the FASB issued ASC Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Update No. 2014-08 changed the criteria for reporting discontinued operations and enhanced convergence of the FASB's and the International Accounting Standard Board's (IASB) reporting requirements for discontinued operations. We are required to apply this amendment, prospectively to: (1) all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years and (2) all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years. The adoption of Update No. 2014-08 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2013-11, Income Taxes (Topic 740) [Policy Text Block]

ASC Update No. 2013-11

In July 2013, the FASB issued ASC Update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Update No. 2013-11 requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. We adopted Update No. 2013-11 beginning in our first quarter ended March 31, 2014. The adoption of Update No. 2013-11 did not impact our results of operations or financial position.

ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) [Policy Text Block]

ASC Update No. 2014-09

In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Update No. 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects to be entitled to in exchange for those goods or services. We are required to apply Update No. 2014-09 for annual periods beginning after December 15, 2016 and early application is not permitted. We are in the process of determining the effect, if any, that the adoption of this standard will have on our financial position or results of operations.

ASC Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810 [Policy Text Block]

ASC Update No. 2014-10

In June 2014, the FASB issued ASC Update No. 2014-10, Development Stage Entities (Topic 915):Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities. The amendments also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The elimination of the exception may change the consolidation analysis and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. We are required to apply Update No. 2014-10 for annual reporting periods beginning after December 15, 2014, and interim periods within those years. The adoption of Update No. 2014-10 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2014-15, Presentation of Financial Statements - Going Concern [Policy Text Block]

ASC Update No. 2014-15

In August 2014, the FASB issued ASC Update No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40). Update 2014-15requires management to assess an entity’s ability to continue as a going concern every reporting period, and provide certain disclosures if management has substantial doubt about the entities ability to operate as a going concern, or an express statement if not, by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Update 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update No. 2014-15 is not expected to have an impact on our financial position or results of operations

ASC Update No. 2015-01, Income Statement - Extraordinary and Unusual Items [Policy Text Block]

ASC Update No. 2015-01

In January 2015, the FASB issued ASC Update No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). Update 2015-01 eliminates the concept of extraordinary items from GAAP, which requires an entity to separately classify, present, and disclose extraordinary events and transactions. Update 2015-01 is effective for the annual period beginning after December 15, 2015, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-01 is not expected to have an impact on our financial position or results of operations.

ASC Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis [Policy Text Block]

ASC Update No. 2015-02

In February 2015, the FASB issued ASC Update No. 2015-02, Consolidation (Topic 810):Amendments to the Consolidation Analysis. Update 2015-02 amended the process that a reporting entity must perform to determine whether it should consolidate certain types of legal entities.  Update 2015-02 is effective for the annual period ending after December 15, 2015, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-02 is not expected to have a material impact on our financial position or results of operations.

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Stockholders' Equity (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Stockholders' Equity Attributable to Parent [Abstract]
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Treasury Stock, Shares	248,000,000	238,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 535,000,000
Stock Repurchase Program, Authorized Amount		1,000,000,000
Stock Repurchased During Period, Shares	10,000,000	51,000,000	105,000,000
Payments for Repurchase of Common Stock	$ 125,000,000	$ 500,000,000	$ 600,000,000

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Divestitures (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	12 Months Ended
	Jan. 31, 2011	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase Price for Divestiture of Business	$ 1,500
Proceeds from Divestiture of Businesses			30	10	1,450
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal		12	38	15
Segment Reporting, Sales from Divested Businesses		$ 4	$ 58	$ 122

XML

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2014

Acquisitions (Tables) [Abstract]

Business Combination, Components of Purchase Price [Table Text Block]

The components of the aggregate preliminary purchase price for Bayer and IoGyn acquisitions are as follows (in millions):

Cash, net of cash acquired	$	479
Fair value of prior interests	31
	$	510

Business Combination, Purchase Price Allocation Schedule [Table Text Block]

The components of the aggregate purchase price for the acquisitions consummated in 2012 are as follows (in millions):

Cash, net of cash acquired	$	367
Fair value of contingent consideration	467
Fair value of prior interests	79
Fair value of debt assumed	9
	$	922

The following summarizes the aggregate purchase price allocation for the 2013 acquisition (in millions):

Goodwill	$	140
Amortizable intangible assets	112
Indefinite-lived intangible assets	—
Other net assets	19
Deferred income taxes	3
	$	274

The components of the aggregate preliminary purchase price for the acquisition consummated in 2013 are as follows (in millions):

Cash, net of cash acquired	$	274
Fair value of contingent consideration	—
Fair value of prior interests	—
Fair value of debt assumed	—
	$	274

The following summarizes the aggregate preliminary purchase price allocation for Bayer and IoGyn as of December 31, 2014:

Goodwill	$	210
Amortizable intangible assets	263
Inventory	23
Property, Plant and Equipment	17
Prepaid Transaction Service Agreement	5
Other net assets	(1		)
Deferred income taxes	(7		)
	$	510

The following summarizes the aggregate purchase price allocation for the 2012 acquisitions (in millions):

Goodwill (non-deductible for tax purposes)	$	566
Amortizable intangible assets	189
Indefinite-lived intangible assets	132
Other net assets	15
Deferred income taxes	20
	$	922

Description of unobservable inputs used in Level 3 fair value measurements [Table Text Block]

The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs:

Contingent Consideration Liability	Fair Value as of December 31, 2014	Valuation Technique	Unobservable Input	Range
R&D, Regulatory and Commercialization-based Milestones	$85 million	Probability Weighted Discounted Cash Flow	Discount Rate	1.1%
			Probability of Payment	84% - 95%
			Projected Year of Payment	2015
Revenue-based Payments	$55 million	Discounted Cash Flow	Discount Rate	11.5% - 15%
			Probability of Payment	0% - 100%
			Projected Year of Payment	2015 - 2018
	$134 million	Monte Carlo	Revenue Volatility	11% - 13%
			Risk Free Rate	LIBOR Term Structure
			Projected Year of Payment	2015 - 2018

The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs:

Intangible Asset	Valuation Date	Fair Value	Valuation Technique	Unobservable Input	Rate
In-Process R&D	September 30, 2014	$16 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
In-Process R&D	June 30, 2014	$83 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
Core Technology	June 30, 2014	$8 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	March 31, 2014	$6 million	Income Approach - Excess Earnings Method	Discount Rate	20%
Core Technology	March 31, 2014	$64 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	June 30, 2013	$178 million	Income Approach - Excess Earnings Method	Discount Rate	16.5%
In-Process R&D	September 30, 2012	$26 million	Income Approach - Excess Earnings Method	Discount Rate	20 - 25%
In-Process R&D	June 30, 2012	$184 million	Income Approach - Excess Earnings Method	Discount Rate	20%

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Changes in our contingent consideration liability were as follows (in millions):

Balance as of December 31, 2012	$	663
Amounts recorded related to new acquisitions	—
Other amounts recorded related to prior acquisitions	(1		)
Fair value adjustment	4
Contingent payments related to prior period acquisition	(165		)
Balance as of December 31, 2013	$	501
Amounts recorded related to new acquisitions	3
Other amounts recorded related to prior acquisitions	(8		)
Fair value adjustment	(85		)
Contingent payments related to prior period acquisition	(137		)
Balance as of December 31, 2014	$	274

Business Acquisition, Purchase Price Allocation, Intangible Assets, Description

We allocated a portion of the purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	82	10	11.5%
Customer relationships	30		7	11.5%
	$	112

We allocated a portion of the preliminary purchase price to specific intangible asset categories as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	233	10 - 14	14 - 18 %
Customer Relationships	29		10	18%
Other intangible assets	1		2	14%
	$	263

We allocated a portion of the final purchase price to specific intangible asset categories as of the respective acquisition dates as follows:

	Amount Assigned (in millions)		Weighted Average Amortization Period (in years)	Range of Risk- Adjusted Discount Rates used in Purchase Price Allocation
Amortizable intangible assets:
Technology-related	$	187	8	14 - 28%
Customer relationships	2		5	14%
Indefinite-lived intangible assets:
In-process research and development	132			14 - 28%
	$	321

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Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

	As of December 31, 2014					As of December 31, 2013
	Gross Carrying		Accumulated Amortization/			Gross Carrying		Accumulated Amortization/
(in millions)	Amount		Write-offs			Amount		Write-offs
Amortizable intangible assets
Technology-related	$	8,406	$	(3,697	)	$	8,272	$	(3,342	)
Patents	519		(342		)	513		(326		)
Other intangible assets	875		(533		)	845		(479		)
	$	9,800	$	(4,572	)	$	9,630	$	(4,147	)
Unamortizable intangible assets
Goodwill	$	15,798	$	(9,900	)	$	15,593	$	(9,900	)
Technology-related	197		—			197		—
	$	15,995	$	(9,900	)	$	15,790	$	(9,900	)

Schedule of Goodwill [Table Text Block]

The following represents our goodwill balance by new global reportable segment. We restated the prior period information to conform to the current presentation:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Balance as of December 31, 2012	$	3,249		$	577		$	2,147		$	5,973
Purchase price adjustments	3			—			—			3
Goodwill acquired	—			140			—			140
Goodwill written off	—			(423		)	—			(423		)
Balance as of December 31, 2013	$	3,252		$	294		$	2,147		$	5,693
Purchase price adjustments	(2		)	(4		)	(2		)	(8		)
Goodwill acquired	169			—			44			213
Goodwill written off	—			—			—			—
Other changes in carrying amount*	7			$	—		(7		)	—
Balance as of December 31, 2014	$	3,426		$	290		$	2,182		$	5,898

Asset Impairment Charges [Text Block]

The following is a rollforward of accumulated goodwill write-offs by global reportable segment:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Accumulated write-offs as of December 31, 2012	$	(1,479	)	$	(6,537	)	$	(1,461	)	$	(9,477	)
Goodwill written off	—			(423		)	—			(423		)
Accumulated write-offs as of December 31, 2013	$	(1,479	)	$	(6,960	)	(1,461		)	$	(9,900	)
Goodwill written off	—			—			—			—
Accumulated write-offs as of December 31, 2014	$	(1,479	)	$	(6,960	)	$	(1,461	)	$	(9,900	)

Description of unobservable inputs used in Level 3 fair value measurements [Table Text Block]

The recurring Level 3 fair value measurements of our contingent consideration liability include the following significant unobservable inputs:

Contingent Consideration Liability	Fair Value as of December 31, 2014	Valuation Technique	Unobservable Input	Range
R&D, Regulatory and Commercialization-based Milestones	$85 million	Probability Weighted Discounted Cash Flow	Discount Rate	1.1%
			Probability of Payment	84% - 95%
			Projected Year of Payment	2015
Revenue-based Payments	$55 million	Discounted Cash Flow	Discount Rate	11.5% - 15%
			Probability of Payment	0% - 100%
			Projected Year of Payment	2015 - 2018
	$134 million	Monte Carlo	Revenue Volatility	11% - 13%
			Risk Free Rate	LIBOR Term Structure
			Projected Year of Payment	2015 - 2018

The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs:

Intangible Asset	Valuation Date	Fair Value	Valuation Technique	Unobservable Input	Rate
In-Process R&D	September 30, 2014	$16 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
In-Process R&D	June 30, 2014	$83 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
Core Technology	June 30, 2014	$8 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	March 31, 2014	$6 million	Income Approach - Excess Earnings Method	Discount Rate	20%
Core Technology	March 31, 2014	$64 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	June 30, 2013	$178 million	Income Approach - Excess Earnings Method	Discount Rate	16.5%
In-Process R&D	September 30, 2012	$26 million	Income Approach - Excess Earnings Method	Discount Rate	20 - 25%
In-Process R&D	June 30, 2012	$184 million	Income Approach - Excess Earnings Method	Discount Rate	20%

Schedule of Impaired Intangible Assets [Table Text Block]

	Year Ended December 31,
(in millions)	2014		2013		2012
Technology-related	$	107	$	—	$	—
In-process research and development	88		53		142
	$	195	53		$	142

Schedule of Expected Amortization Expense [Table Text Block]

	Estimated Amortization Expense
Fiscal Year	(in millions)
2015	$	470
2016	469
2017	467
2018	464
2019	460

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries, after the elimination of intercompany transactions. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE). For any VIEs, we perform an analysis to determine whether our variable interests give us 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 entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial or operating interests in any VIEs and therefore did not consolidate any VIEs during the years ended December 31, 2014, 2013, and 2012.

On January 3, 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). Due to our continuing involvement in the operations of the Neurovascular business following the divestiture, the divestiture did not meet the criteria for presentation as a discontinued operation and, therefore, the results of the Neurovascular business are included in our results of operations for all periods presented. Refer to Note C – Divestitures for a description of this business divestiture.

Basis of Presentation

The accompanying consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-K and Regulation S-X.

Reclassifications

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units. As such, we have reclassified certain prior year amounts to conform to the current year’s presentation. We also restated segment information for the prior periods for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014. See Note D - Goodwill and Other Intangible Assets and Note O – Segment Reporting for further details.

Additionally, certain prior year cash outflows from net share settling employee equity awards to satisfy their tax withholding requirement have been reclassified from an operating activity to a financing activity within our consolidated statements of cash flows. Amounts reclassified from operating to financing activities were not material.

In addition, we restated components of our tabular disclosures of our deferred tax assets and liabilities along with our tabular rollforward of unrecognized tax benefit from prior year’s presentation, to include certain deferred tax assets that have been recorded net of valuation allowance and uncertain tax position. This restatement was performed to better present our overall deferred tax inventory and unrecognized tax positions but had no material impact on the prior year presentations of our consolidated statement of operation or consolidated balance sheet. See Note J - Income Taxes for further details.

Finally, we restated segment information for the prior periods based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange rate fluctuations. Refer to Note O - Segment Reporting for further details.

Subsequent Events

We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our financial statements. On February 13, 2015, we signed an agreement with Johnson & Johnson to settle the breach of merger agreement lawsuit brought by Johnson & Johnson against Guidant Corporation (Guidant), stemming from our acquisition of Guidant. As a result of the settlement agreement, Johnson & Johnson has agreed to dismiss permanently its action without acknowledgment of liability by Guidant. In exchange, we have agreed to make aggregate payments totaling $600 million to Johnson & Johnson. This settlement is considered a material recognized subsequent event and has been reflected appropriately in our accompanying consolidated financial statements. See Note K– Commitments and Contingencies for futher details.

In addition, those items requiring disclosure (unrecognized subsequent events) in the financial statements have been disclosed accordingly. See Note K– Commitments and Contingencies for further details.

Accounting Estimates

To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. Refer to Critical Accounting Estimates included in Item 7 of this Annual Report for further discussion.

Cash and Cash Equivalents

We record cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk to principal, and we limit our direct exposure to securities in any one industry or issuer. We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents.

We record available-for-sale investments at fair value and exclude unrealized gains and temporary losses on available-for-sale securities from earnings, reporting such gains and losses, net of tax, as a separate component of stockholders’ equity, until realized. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instrument contracts and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. We provide credit, in the normal course of business, to hospitals, healthcare agencies, clinics, doctors' offices and other private and governmental institutions and generally do not require collateral. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on historical information and management's best estimates. Amounts determined to be uncollectible are written off against this reserve. We recorded write-offs of uncollectible accounts receivable of $15 million in 2014, $12 million in 2013, and $7 million in 2012. We are not dependent on any single institution and no single customer accounted for more than ten percent of our net sales in 2014, 2013, and 2012 or accounts receivable at December 31, 2014 or 2013; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our U.S. net sales.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers in Southern Europe, specifically Greece, Italy, Spain and Portugal are subject to an increased number of days outstanding relative to other countries prior to payment. Historically, receivable balances with certain publicly-owned hospitals in these countries accumulate over a period of time and are then subsequently settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2014, if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write-offs of uncollectible amounts may increase. As of December 31, 2014, our net receivables in these countries greater than 180 days past due totaled approximately $26 million, of which approximately $11 million were past due greater than 365 days.

Revenue Recognition

We generate revenue primarily from the sale of single-use medical devices, and present revenue net of sales taxes in our consolidated statements of operations. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. We consider revenue to be realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectibility is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers, unless we are required to provide additional services, and provided we can form an estimate for sales returns. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE^® Patient Management System, which represents a future service obligation. We do not have vendor specific objective evidence of selling price available related to our future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method.

We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer.

We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above.

Warranty Obligations

We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary.

Changes in our product warranty accrual during 2014, 2013, and 2012 consisted of the following (in millions):

	Year Ended December 31,
	2014			2013			2012
Beginning balance	$	28		$	26		$	30
Provision	9			12			8
Settlements/ reversals	(12		)	(10		)	(12		)
Ending balance	$	25		$	28		$	26

Inventories

We state inventories at the lower of first-in, first-out cost or market. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory. Approximately 40 percent of our finished goods inventory as of December 31, 2014 and December 31, 2013 was at customer locations pursuant to consignment arrangements or held by sales representatives.

Property, Plant and Equipment

We state property, plant, equipment, and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings and improvements over a 20 to 40 year life; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease. Depreciation expense was $287 million in 2014, $279 million in 2013, and $288 million in 2012.

Valuation of Business Combinations

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs.

In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones.

Indefinite-lived Intangibles, including In-Process Research and Development

Our indefinite-lived intangible assets that are not subject to amortization include acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine, and in-process research and development intangible assets acquired in a business combination. Our in-process research and development represents intangible assets acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify in-process research and development acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated in-process research and development intangible asset.

We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets; in addition, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other. If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value.

We use the income approach to determine the fair values of our in-process research and development. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors: the in-process projects’ stage of completion; the complexity of the work completed as of the acquisition date; the costs already incurred; the projected costs to complete; the contribution of other acquired assets; the expected regulatory path and introduction dates by region; and the estimated useful life of the technology. We apply a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition. See Note D - Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including in-process research and development during 2014, 2013, and 2012.

For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date.

Amortization and Impairment of Intangible Assets

We record intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; definite-lived technology-related, five to 25 years; customer relationships, five to 25 years; other intangible assets, various.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.

We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). See Note D - Goodwill and Other Intangible Assets for more information related to impairments of intangible assets during 2014, 2013, and 2012.

For patents developed internally, we capitalize costs incurred to obtain patents, including attorney fees, registration fees, consulting fees, and other expenditures directly related to securing the patent.

Goodwill Valuation

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units for goodwill impairment testing purposes. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three new global reportable segments consisting of: Cardiovascular, Rhythm Management, and MedSurg. We determined our new global reporting units by identifying our operating segments and assessing whether any components of these segments constituted a business for which discrete financial information is available and whether segment management regularly reviews the operating results of any components. Through this process, we identified the following new global reporting units as of January 1, 2013: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health, and Neuromodulation. The discussion below for 2014 and 2013 relates to our global business reporting units and for 2012 relates to our former regional reporting units.

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In performing the assessment, we utilize the two-step approach prescribed under ASC Topic 350, Intangibles-Goodwill and Other (Topic 350). The first step requires a comparison of the carrying value of the reporting units, as defined, to the fair value of these units. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operating segments, and then assess whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. For our 2014 and 2013 annual impairment assessment we identified seven reporting units, including Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health and Neuromodulation. For our 2012 impairment assessments, we identified six reporting units within the U.S., including our CRM, Neuromodulation, Endoscopy, Urology and Women's Health, Electrophysiology, and Cardiovascular (consisting of Interventional Cardiology and Peripheral Interventions) franchises, which in aggregate comprised the U.S. reportable segment. In addition, we identified four international reporting units, including Europe, Middle East and Africa (EMEA); Japan; Asia Pacific; and the Americas.

When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from the respective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations, and would be considered in determining its fair value, are allocated to the individual reporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit.

During 2014, 2013, and 2012, we used only the income approach, specifically the Discounted Cash Flow (DCF) method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units.

In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows.

If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value. If we were unable to complete the second step of the test prior to the issuance of our financial statements and an impairment loss was probable and could be reasonably estimated, we would recognize our best estimate of the loss in our current period financial statements and disclose that the amount is an estimate. We would then recognize any adjustment to that estimate in subsequent reporting periods, once we have finalized the second step of the impairment test. See Note D - Goodwill and Other Intangible Assets for discussion of our goodwill impairment charges.

Investments in Publicly Traded and Privately Held Entities

We account for our publicly traded investments as available-for-sale securities based on the quoted market price at the end of the reporting period. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. 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. The book value of investments that we accounted for under the equity method of accounting was $10 million as of December 31, 2014 and $18 million as of December 31, 2013. We account for investments in entities in which we have less than a 20 percent ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee in accordance with ASC Topic 325, Investments - Other. The aggregate carrying amount of our cost method investments was $27 million as of December 31, 2014 and $20 million as of December 31, 2013. In addition, we had notes receivable from certain companies that we account for under the cost method of $17 million as of December 31, 2014 and $13 million as of December 31, 2013, which are accounted for in accordance with ASC Topic 320, Investments - Debt and Equity Securities.

Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a significant deterioration in earnings performance; recent financing rounds at reduced valuations; a significant adverse change in the regulatory, economic or technological environment of an investee; or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and we make a determination as to whether the impairment is other-than-temporary. We deem an impairment to be other-than-temporary unless we have the ability and intent to hold an investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. Impairment losses on our investments are included in other, net in our consolidated statements of operations.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2014 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2014, the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $7.7 billion. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

We provide for potential amounts due in various tax jurisdictions. In the ordinary course of conducting business in multiple countries and tax jurisdictions, there are many transactions and calculations where the ultimate tax outcome is uncertain. Judgment is required in determining our worldwide income tax provision. In our opinion, we have made adequate provisions for income taxes for all years subject to audit. Although we believe our estimates are reasonable, the final outcome of open tax matters may be different from that which we have reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results. See Note J - Income Taxes for further information and discussion of our income tax provision and balances.

Legal and Product Liability Costs

In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. See Note K - Commitments and Contingencies for discussion of our individual material legal proceedings.

Costs Associated with Exit Activities

We record employee termination costs in accordance with ASC Topic 712, Compensation - Nonretirement and Postemployment Benefits, if we pay the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of our established severance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and we can reasonably estimate the liability. We account for employee termination benefits that represent a one-time benefit in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. We record such costs into expense over the employee’s future service period, if any.

Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased, consultant fees and impairments of long-lived assets. The costs are expensed in accordance with ASC Topic 420 and ASC Topic 360, Property, Plant, and Equipment and are included in restructuring charges in our consolidated statement of operations. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, and costs to transfer product lines among facilities are included within costs of products sold and selling, general and administrative expenses in our consolidated statement of operations. See Note H - Restructuring-Related Activities for further information and discussion of our restructuring plans.

Translation of Foreign Currency

We translate all assets and liabilities of foreign subsidiaries from local currency into U.S. dollars using the year-end exchange rate, and translate revenues and expenses at the average exchange rates in effect during the year. We show the net effect of these translation adjustments in our consolidated financial statements as a component of accumulated other comprehensive income. For any significant foreign subsidiaries located in highly inflationary economies, we would re-measure their financial statements as if the functional currency were the U.S. dollar. We did not record any highly inflationary economy translation adjustments in 2014, 2013 or 2012.

Foreign currency transaction gains and losses are included in other, net in our consolidated statements of operations, net of losses and gains from any related derivative financial instruments. We recognized net foreign currency transaction losses of $18 million in 2014, $11 million in 2013, and $18 million in 2012.

Financial Instruments

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging, and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. 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. Refer to Note E – Fair Value Measurements for more information on our derivative instruments.

Shipping and Handling Costs

We generally do not bill customers for shipping and handling of our products. Shipping and handling costs of $100 million in 2014, $97 million in 2013, and $105 million in 2012 are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Research and Development

We expense research and development costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles,includingIn-Process Research and Development for our policy regarding in-process research and development acquired in connection with our business combinations and asset purchases.

Employee Retirement Plans

Following our 2006 acquisition of Guidant, we sponsor the Guidant Retirement Plan, a frozen noncontributory defined benefit plan covering a select group of current and former employees. The funding policy for the plan is consistent with U.S. employee benefit and tax-funding regulations. Plan assets, which are maintained in a trust, consist primarily of fixed-income instruments. The Guidant Retirement Plan was terminated effective December 1, 2014. The plan was partially frozen as of September 25, 1995 and completely frozen as of May 31, 2007. As a result, in general, no employees have been eligible to become a participant in the plan after September 25, 1995 and participants ceased earning additional benefits under the plan after September 25, 1995 or May 31, 2007. We expect to finalize the termination process and settle the majority of the plan’s obligations by the end of 2015. Further, we sponsor the Guidant Supplemental Retirement Plan, a frozen, nonqualified defined benefit plan for certain former officers and employees of Guidant. The Guidant Supplemental Retirement Plan was funded through a Rabbi Trust that contains segregated company assets used to pay the benefit obligations related to the plan. In addition, certain current and former employees of Guidant were eligible to receive a portion of their healthcare retirement benefits under a frozen defined benefit plan; this plan was terminated effective December 31, 2014.

In addition, we maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and division presidents and certain persons that may have served in these roles. Participants may retire with unreduced benefits once retirement conditions have been satisfied. We also maintain retirement plans covering certain international employees.

We use a December 31 measurement date for these plans and record the underfunded portion as a liability, recognizing changes in the funded status through other comprehensive income (OCI). The outstanding obligation as of December 31, 2014 and 2013 is as follows:

	As of December 31, 2014						As of December 31, 2013
(in millions)	Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized		Projected Benefit Obligation (PBO)		Fair value of Plan Assets		Underfunded PBO Recognized
Executive Retirement Plan	$	13	$	—	$	13	$	10	$	—	$	10
Guidant Retirement Plan (frozen)	148		140		8		120		114		6
Guidant Supplemental Retirement Plan (frozen)	34		—		34		31		—		31
Guidant Healthcare Retirement Benefit Plan (frozen)	—		—		—		3		—		3
International Retirement Plans	90		51		39		84		52		32
	$	285	$	191	$	94	$	248	$	166	$	82

The value of the Rabbi Trust assets used to pay the Guidant Supplemental Retirement Plan benefits included in our accompanying consolidated financial statements was approximately $14 million as of December 31, 2014 and $17 million as of December 31, 2013.

The critical assumptions associated with our employee retirement plans as of December 31, 2014 are as follows:

		Expected Return on Plan Assets	Rate of
	Discount Rate		Compensation Increase
Executive Retirement Plan	3.50%		3.00%
Guidant Retirement Plan (frozen)	4.00%	5.50%
Guidant Supplemental Retirement Plan (frozen)	4.00%
International Retirement Plans	1.00% - 2.20%	2.75% - 4.10%	3.00% - 6.78%

We base our discount rate on the rates of return available on high-quality bonds with maturities approximating the expected period over which benefits will be paid. The rate of compensation increase is based on historical and expected rate increases. We base our rate of expected return on plan assets on historical experience, our investment guidelines and expectations for long-term rates of return.

A rollforward of the changes in the fair value of plan assets for our funded retirement plans during 2014 and 2013 is as follows:

	Year Ended December 31,
(in millions)	2014			2013
Beginning fair value	$	166		$	130
Actual return on plan assets	26			25
Employer contributions	16			32
Benefits paid	(11		)	(15		)
Net transfers in (out)	—			—
Foreign currency exchange	(6		)	(6		)
Ending fair value	$	191		$	166

We also sponsor a voluntary 401(k) Retirement Savings Plan for eligible employees. We match 200 percent of employee elective deferrals for the first two percent of employee eligible compensation, and 50 percent of employee elective deferrals greater than two percent, but not exceeding six percent, of employee eligible compensation. Total expense for our matching contributions to the plan was $63 million in 2014, $59 million in 2013, and $63 million in 2012.

Net Income (Loss) per Common Share

We base net income (loss) per common share upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options whose effect would be anti-dilutive from the calculation.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Measurements (Tables) [Abstract]

Gains (losses) recognized in earnings for derivatives designed as hedging instruments

The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying consolidated statements of operations during 2014, 2013 and 2012 (in millions):

	Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)			Location in Statement of Operations
Year Ended December 31, 2014
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	227		105			Cost of products sold
	$	227	$	106
Year Ended December 31, 2013
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	207		36			Cost of products sold
	$	207	$	37
Year Ended December 31, 2012
Interest rate contracts	$	—	$	2		Interest expense
Currency hedge contracts	95		(39		)	Cost of products sold
	$	95	$	(37	)

Classification of derivative assets and liabilities within level 2

The following are the balances of our derivative assets and liabilities as of December 31, 2014 and December 31, 2013:

		As of
		December 31,		December 31,
(in millions)	Location in Balance Sheet (1)	2014		2013
Derivative Assets:
Designated Hedging Instruments
Currency hedge contracts	Other current assets	$	178	$	117
Currency hedge contracts	Other long-term assets	141		120
Interest rate contracts	Other current assets	3		1
Interest rate contracts	Other long-term assets	22		—
		344		238
Non-Designated Hedging Instruments
Currency hedge contracts	Other current assets	100		27
Total Derivative Assets		$	444	$	265
Derivative Liabilities:
Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	$	1	$	13
Currency hedge contracts	Other long-term liabilities	—		19
Interest rate contracts	Other long-term liabilities	—		8
		1		40
Non-Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	35		23
Total Derivative Liabilities		$	36	$	63

(1) We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less.

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2014 and December 31, 2013:

	As of December 31, 2014								As of December 31, 2013
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market and government funds	$	151	$	—	$	—	$	151	$	38	$	—	$	—	$	38
Currency hedge contracts	—		419		—		419		—		264		—		264
Interest rate contracts	—		25		—		25		—		1		—		1
	$	151	$	444	$	—	$	595	$	38	$	265	$	—	$	303
Liabilities
Currency hedge contracts	$	—	$	36	$	—	$	36	$	—	$	55	$	—	$	55
Accrued contingent consideration	—		—		274		274		—		—		501		501
Interest rate contracts	—		—		—		—		—		8		—		8
	$	—	$	36	$	274	$	310	$	—	$	63	$	501	$	564

Changes in the fair value of recurring fair value measurements using Level 3 inputs

Our recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to our contingent consideration liability

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

NetGainsand LossesonDerivatives not designated as hedging instruments [Table Text Block]

in millions										Location in Statement of Operations
	Year Ended December 31,
	2014			2013			2012
Gain (loss) on currency hedge contracts	$	52		$	45		$	23		Other, net
Gain (loss) on foreign currency transaction exposures	(70		)	(56		)	(41		)	Other, net
Net foreign currency gain (loss)	$	(18	)	$	(11	)	$	(18	)

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Year Ended December 31,
(in millions)	2014			2013		2012
Net sales				(restated)		(restated)
Interventional Cardiology	$	2,092		$	1,995	$	2,116
Peripheral Interventions	861			805		764
Cardiovascular	2,953			2,800		2,880
Cardiac Rhythm Management	1,922			1,882		1,887
Electrophysiology	228			154		145
Rhythm Management	2,150			2,036		2,032
Endoscopy	1,343			1,277		1,190
Urology and Women's Health	542			505		489
Neuromodulation	474			454		367
MedSurg	2,359			2,236		2,046
Net sales allocated to reportable segments	7,462			7,072		6,958
Sales generated from business divestitures	4			58		122
Impact of foreign currency fluctuations	(86		)	13		169
	$	7,380		$	7,143	$	7,249

Reconciliation of depreciation by reportable segment to total [Table Text Block]

	Year Ended December 31,
(in millions)	2014		2013			2012
Depreciation expense			(restated)			(restated)
Cardiovascular	$	120	$	111		$	107
Rhythm Management	92		99			109
MedSurg	75		73			75
Depreciation expense allocated to reportable segments	287		283			291
Impact of foreign currency fluctuations	—		(4		)	(3		)
	$	287	$	279		$	288

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	Year Ended December 31,
(in millions)	2014			2013			2012
Income (loss) before income taxes				(restated)			(restated)
Cardiovascular	$	767		$	665		$	685
Rhythm Management	289			211			217
MedSurg	746			679			590
Operating income allocated to reportable segments	1,802			1,555			1,492
Corporate expenses and currency exchange	(308		)	(203		)	(132		)
Goodwill and intangible asset impairment charges and acquisition-, divestiture-, litigation-, and restructuring-related net charges	(1,357		)	(822		)	(4,833		)
Amortization expense	(438		)	(410		)	(395		)
Operating income (loss)	(301		)	120			(3,868		)
Other expense, net	(208		)	(343		)	(239		)
	$	(509	)	$	(223	)	$	(4,107	)

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	As of December 31,
(in millions)	2014		2013
Total assets
Cardiovascular	$	1,501	$	1,545
Rhythm Management	1,329		1,343
MedSurg	982		1,026
Total assets allocated to reportable segments	3,812		3,914
Goodwill	5,898		5,693
Other intangible assets, net	5,606		5,950
All other corporate assets	1,726		1,014
	$	17,042	$	16,571

Reconciliation of sales by division and region to consolidated [Table Text Block]

	Year Ended December 31,
(in millions)	2014		2013		2012
Net sales			(restated)*		(restated)*
Interventional Cardiology	$	2,057	$	1,997	$	2,179
Cardiac Rhythm Management	1,912		1,886		1,908
Endoscopy	1,323		1,280		1,239
Peripheral Interventions	850		809		787
Urology and Women’s Health	535		505		500
Neuromodulation	472		453		367
Electrophysiology	227		155		147
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249
United States	$	3,885	$	3,743	$	3,756
Japan	678		744		931
Other countries	2,813		2,598		2,440
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

	As of December 31,
(in millions)	2014		2013		2012
Long-lived assets
United States	$	1,002	$	998	$	1,065
Ireland	197		240		252
Other foreign countries	308		308		247
Property, plant and equipment, net	1,507		1,546		1,564
Goodwill	5,898		5,693		5,973
Other intangible assets, net	5,606		5,950		6,289
	$	13,011	$	13,189	$	13,826

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Income Taxes (Details - Rate Table)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Income Tax Rate Reconciliation [Line Items]
effective income tax reconciliation, compensation-related	0.70%	1.70%	0.30%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	(35.00%)	(35.00%)	(35.00%)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes	(6.50%)	(7.90%)	(0.20%)
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential	(29.10%)	(63.40%)	(3.70%)
Effective Income Tax Rate Reconciliation, Nondeductible Expense	(7.50%)	3.50%	0.00%
Effective Income Tax Rate Reconciliation, Tax Credits, Research	(7.00%)	(12.20%)	0.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance	4.00%	(12.00%)	0.30%
Effective Income Tax Rate Reconciliation, Uncertain Domestic Tax Positions	2.00%	7.00%	0.80%
Effective Income Tax Rate Reconciliation, Other Adjustments	(0.20%)	(1.90%)	0.30%
Reported tax rate	(76.70%)	(46.00%)	(1.00%)
Other Intangible Assets [Member]
Schedule of Income Tax Rate Reconciliation [Line Items]
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses	1.90%	9.00%	(0.20%)
Goodwill [Member]
Schedule of Income Tax Rate Reconciliation [Line Items]
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses	0.00%	65.20%	36.40%

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Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net sales	$ 7,380	$ 7,143	$ 7,249
Cost of products sold	2,210	2,174	2,349
Gross profit	5,170	4,969	4,900
Operating expenses:
Selling, general and administrative expenses	2,902	2,674	2,535
Research and development expenses	817	861	886
Royalty expense	111	140	153
Amortization expense	438	410	395
Goodwill impairment charges	0	423	4,350
Intangible asset impairment charges	195	53	142
Contingent consideration expense (benefit)	(85)	4	(6)
Restructuring charges	69	101	136
Litigation-related charges	1,036	221	192
Gain on divestiture	(12)	(38)	(15)
Operating expenses	5,471	4,849	8,768
Operating income (loss)	(301)	120	(3,868)
Other income (expense):
Interest expense	(216)	(324)	(261)
Other, net	8	(19)	22
Income (loss) before income taxes	(509)	(223)	(4,107)
Income tax (benefit) expense	(390)	(102)	(39)
Net income (loss)	$ (119)	$ (121)	$ (4,068)
Net income (loss) per common share — basic	$ (0.09)	$ (0.09)	$ (2.89)
Net income (loss) per common share — assuming dilution	$ (0.09)	$ (0.09)	$ (2.89)
Weighted-average shares outstanding
Basic	1,324.3	1,341.2	1,406.7
Assuming dilution	1,324.3	1,341.2	1,406.7

XML

Goodwill and Other Intangible Assets (Details) (USD $)	3 Months Ended							6 Months Ended	9 Months Ended	12 Months Ended			6 Months Ended	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2014 reportablesegments	Dec. 31, 2013	Dec. 31, 2012 reportablesegments reportingunits	Jun. 30, 2014	Dec. 31, 2014
Goodwill [Line Items]
Goodwill										$ 5,898,000,000	$ 5,693,000,000	$ 5,973,000,000		$ 5,898,000,000
Finite-Lived Intangible Assets, Gross										9,800,000,000	9,630,000,000			9,800,000,000
Finite-Lived Intangible Assets, Accumulated Amortization										(4,572,000,000)	(4,147,000,000)			(4,572,000,000)
Goodwill, Impaired, Accumulated Impairment Loss										(9,900,000,000)	(9,900,000,000)	(9,477,000,000)		(9,900,000,000)
Goodwill (Textuals) [Abstract]
Goodwill impairment charges					423,000,000		3,602,000,000		748,000,000	0	423,000,000	4,350,000,000
Goodwill, Impairment Loss, Net of Tax					421,000,000		3,579,000,000
Intangible Assets, Net (Excluding Goodwill)										5,606,000,000	5,950,000,000	6,289,000,000		5,606,000,000
Goodwill, Purchase Accounting Adjustments										(8,000,000)	3,000,000
Goodwill, Acquired During Period										213,000,000	140,000,000
Goodwill, Other Changes										0
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges	12,000,000					13,000,000	129,000,000			195,000,000	53,000,000	142,000,000
Asset Impairment Charges		110,000,000	55,000,000							195,000,000	476,000,000
Goodwill, Gross										15,798,000,000	15,593,000,000			15,798,000,000
Indefinite-lived intangible assets, accumulated write-offs										(9,900,000,000)	(9,900,000,000)			(9,900,000,000)
Indefinite-lived intangible assets, including goodwill										15,995,000,000	15,790,000,000			15,995,000,000
Future Amortization Expense, Year One										470,000,000				470,000,000
Future Amortization Expense, Year Two										469,000,000				469,000,000
Future Amortization Expense, Year Three										467,000,000				467,000,000
Future Amortization Expense, Year Four										464,000,000				464,000,000
Future Amortization Expense, Year Five										460,000,000				460,000,000
Number of Reportable Segments										3
Number of U.S. reporting units												6
Number of international reporting units												4
International goodwill as of 12/31/12 that was reallocated to global divisions												1,764,000,000
US CV goodwill as of 12/31/12 that was reallocated to IC and PI global divisions												2,380,000,000
Fair Value Inputs, Discount Rate								1.00%
In process research and development	16,000,000	83,000,000	6,000,000	178,000,000		26,000,000	184,000,000
Core technology		8,000,000	64,000,000
Electrophysiology [Member]
Other Intangible Assets (Textuals) [Abstract]
Hypothetical change in WACC													0.50%
Hypothetical change in revenue growth rates													1.00%
Neuromodulation [Member]
Other Intangible Assets (Textuals) [Abstract]
Hypothetical change in WACC													1.00%
Hypothetical change in revenue growth rates													1.50%
Cardiovascular [Member]
Goodwill [Line Items]
Goodwill										3,426,000,000	3,252,000,000	3,249,000,000		3,426,000,000
Goodwill, Impaired, Accumulated Impairment Loss										(1,479,000,000)	(1,479,000,000)	(1,479,000,000)		(1,479,000,000)
Goodwill (Textuals) [Abstract]
Goodwill impairment charges										0	0
Goodwill, Purchase Accounting Adjustments										(2,000,000)	3,000,000
Goodwill, Acquired During Period										169,000,000	0
Goodwill, Other Changes										7,000,000
Rhythm Management [Member]
Goodwill [Line Items]
Goodwill										290,000,000	294,000,000	577,000,000		290,000,000
Goodwill, Impaired, Accumulated Impairment Loss										(6,960,000,000)	(6,960,000,000)	(6,537,000,000)		(6,960,000,000)
Goodwill (Textuals) [Abstract]
Goodwill impairment charges										0	(423,000,000)
Goodwill, Purchase Accounting Adjustments										(4,000,000)	0
Goodwill, Acquired During Period										0	140,000,000
Goodwill, Other Changes										0
MedSurg [Member]
Goodwill [Line Items]
Goodwill										2,182,000,000	2,147,000,000	2,147,000,000		2,182,000,000
Goodwill, Impaired, Accumulated Impairment Loss										(1,461,000,000)	(1,461,000,000)	(1,461,000,000)		(1,461,000,000)
Goodwill (Textuals) [Abstract]
Goodwill impairment charges										0	0
Goodwill, Purchase Accounting Adjustments										(2,000,000)	0
Goodwill, Acquired During Period										44,000,000	0
Goodwill, Other Changes										(7,000,000)
Neuromodulation [Member]
Goodwill (Textuals) [Abstract]
Level Of Excess Fair Value Over Carrying Value For Reporting Unit		55.00%											55.00%
Allocated Goodwill													1,356,000,000
U.S. CRM Reporting Unit [Member]
Other Intangible Assets (Textuals) [Abstract]
Fair Value Inputs, Long-term Revenue Growth Rate									2.50%
Global Electrophysiology (EP) Reporting Unit [Member]
Goodwill (Textuals) [Abstract]
Level Of Excess Fair Value Over Carrying Value For Reporting Unit		38.00%								26.00%			38.00%	26.00%
Allocated Goodwill													292,000,000
Technology-related [Member]
Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross										8,406,000,000	8,272,000,000			8,406,000,000
Finite-Lived Intangible Assets, Accumulated Amortization										(3,697,000,000)	(3,342,000,000)			(3,697,000,000)
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges										107,000,000	0	0
Patents [Member]
Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross										519,000,000	513,000,000			519,000,000
Finite-Lived Intangible Assets, Accumulated Amortization										(342,000,000)	(326,000,000)			(342,000,000)
Other Intangible Assets [Member]
Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross										875,000,000	845,000,000			875,000,000
Finite-Lived Intangible Assets, Accumulated Amortization										(533,000,000)	(479,000,000)			(533,000,000)
Purchased research and development [Member]
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges										88,000,000	53,000,000	142,000,000
Global CRM Reporting Unit [Member]
Goodwill (Textuals) [Abstract]
Finite-Lived Intangible Assets, Net										4,097,000,000				4,097,000,000
Technology Core [Member]
Other Intangible Assets (Textuals) [Abstract]
Indefinite-Lived Intangible Assets (Excluding Goodwill)										197,000,000	197,000,000			197,000,000
Indefinite-lived intangible assets, accumulated write-offs										0	0			0
Purchased research and development [Member]
Other Intangible Assets (Textuals) [Abstract]
Indefinite-Lived Intangible Assets (Excluding Goodwill)										181,000,000	270,000,000			181,000,000
Sadra Medical Inc [Member]
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges				51,000,000
2011 Acquisitions, excluding Sadra [Member]
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges				2,000,000
In Process Research and Development [Member]
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges	4,000,000													18,000,000
Fair Value Inputs, Discount Rate			20.00%	16.50%			20.00%
IPR&D that was impaired [Member]
Other Intangible Assets (Textuals) [Abstract]
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure										0				0
Core technology [Member]
Other Intangible Assets (Textuals) [Abstract]
Other intangible asset charges	8,000,000
Fair Value Inputs, Discount Rate		15.00%	15.00%
Minimum [Member] | In Process Research and Development [Member]
Other Intangible Assets (Textuals) [Abstract]
Fair Value Inputs, Discount Rate	16.50%	16.50%				20.00%
Maximum [Member] | In Process Research and Development [Member]
Other Intangible Assets (Textuals) [Abstract]
Fair Value Inputs, Discount Rate	20.00%	20.00%				25.00%
Vessix Charges [Member]
Other Intangible Assets (Textuals) [Abstract]
Asset Impairment Charges		67,000,000
Other In-process Research and Development Project Charges [Member]
Other Intangible Assets (Textuals) [Abstract]
Asset Impairment Charges		8,000,000
Atritech Charges [Member]
Other Intangible Assets (Textuals) [Abstract]
Asset Impairment Charges		$ 35,000,000

XML

Consolidated Statements of Comprehensive Income (Loss) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net income (loss)	$ (119)	$ (121)	$ (4,068)
Foreign currency translation adjustment	(22)	10	32
Net change in unrealized gains and losses on derivative financial instruments, net of tax	78	107	82
Net change in unrealized costs associated with certain retirement plans	(18)	22	(9)
Total other comprehensive income (loss)	38	139	105
Total comprehensive income (loss)	$ (81)	$ 18	$ (3,963)

XML

Segment Reporting (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 reportablesegments	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenue from core businesses	$ 7,376	$ 7,085	$ 7,127
Property, Plant and Equipment, Net	1,507	1,546	1,564
Total assets allocated to reportable segment	3,812	3,914
Net sales
Net sales allocated to reportable segments	7,462	7,072	6,958
Impact of foreign currency fluctuations	(86)	13	169
Net sales	7,380	7,143	7,249
Revenue by country at actual foreign currency rates	7,376	7,085	7,127
Segment Reporting, Sales from Divested Businesses	4	58	122
Operating Income Allocated to Reportable Segments	1,802	1,555	1,492
Amortization expense	(438)	(410)	(395)
Operating income allocated to reportable segments	(301)	120	(3,868)
Income (loss) before income taxes	(509)	(223)	(4,107)
Depreciation	287	279	288
Goodwill	5,898	5,693	5,973
Intangible Assets, Net (Excluding Goodwill)	5,606	5,950	6,289
Other assets unallocated to segments	1,726	1,014
TOTAL ASSETS	17,042	16,571
Long-Lived Assets	13,011	13,189	13,826
Segment Reporting (Textuals) [Abstract]
Number of reportable segments	3
United States [Member]
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	1,002	998	1,065
Net sales
Revenue by country at actual foreign currency rates	3,885	3,743	3,756
Japan [Member]
Net sales
Revenue by country at actual foreign currency rates	678	744	931
IRELAND
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	197	240	252
Other countries [Member]
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	308	308	247
Net sales
Revenue by country at actual foreign currency rates	2,813	2,598	2,440
Global Interventional Cardiology (IC) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	2,092	1,995	2,116
Corporate expenses and currency exchange [Member]
Net sales
Operating Income Unallocated to Segment	308	203	132
Depreciation	0	(4)	(3)
Special Charges [Member]
Net sales
Operating Income Unallocated to Segment	1,357	822	4,833
Amortization expense	438	410	395
Other expense, net	(208)	(343)	(239)
Global Peripheral Interventions (PI) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	861	805	764
Cardiovascular [Member]
Segment Reporting Information [Line Items]
Total assets allocated to reportable segment	1,501	1,545
Depreciation allocated to reportable segments	120	111	107
Net sales
Net sales allocated to reportable segments	2,953	2,800	2,880
Operating Income Allocated to Reportable Segments	767	665	685
Goodwill	3,426	3,252	3,249
Global CRM Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	1,922	1,882	1,887
Global Electrophysiology (EP) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	228	154	145
Rhythm Management [Member]
Segment Reporting Information [Line Items]
Total assets allocated to reportable segment	1,329	1,343
Depreciation allocated to reportable segments	92	99	109
Net sales
Net sales allocated to reportable segments	2,150	2,036	2,032
Operating Income Allocated to Reportable Segments	289	211	217
Goodwill	290	294	577
Global Endoscopy (Endo) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	1,343	1,277	1,190
Global Urology (Uro) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	542	505	489
Global Neuromodulation (NM) Reporting Unit [Member]
Net sales
Net sales allocated to reportable segments	474	454	367
MedSurg [Member]
Segment Reporting Information [Line Items]
Total assets allocated to reportable segment	982	1,026
Depreciation allocated to reportable segments	75	73	75
Net sales
Net sales allocated to reportable segments	2,359	2,236	2,046
Operating Income Allocated to Reportable Segments	746	679	590
Goodwill	2,182	2,147	2,147
Total allocated to reportable segments [Member]
Segment Reporting Information [Line Items]
Depreciation allocated to reportable segments	287	283	291
Interventional Cardiology [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	2,057	1,997	2,179
Cardiac Rhythm Management [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	1,912	1,886	1,908
Endoscopy [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	1,323	1,280	1,239
Peripheral Interventions [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	850	809	787
Urology / Women's Health [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	535	505	500
Neuromodulation [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	472	453	367
Electrophysiology [Member]
Segment Reporting Information [Line Items]
Revenue from core businesses	$ 227	$ 155	$ 147

XML

Restructuring Related Activities (Tables)

12 Months Ended

Dec. 31, 2014

Restructuring and Related Cost [Line Items]

Impact of restructuring costs on the accompanying financial statements

The following presents these costs by major type and line item within our accompanying consolidated statements of operations, as well as by program:

Year Ended December 31, 2014
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
Restructuring charges	$	42	$	—	$	—	$	27	$	69
Restructuring-related expenses:
Cost of products sold	—		—		24		—		24
Selling, general and administrative expenses	—		5		—		19		24
	—		5		24		19		48
	$	42	$	5	$	24	$	46	$	117
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
2014 Restructuring plan	$	41	$	5	24		$	43	$	113
2011 Restructuring plan	1		—		—		3		4
2010 Restructuring plan	—		—		—		—		—
Plant Network Optimization program	—		—		—		—		—
	$	42	$	5	$	24	$	46	$	117

Year Ended December 31, 2013
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
Restructuring charges	$	60		$	—	$	—	$	(15	)	$	56	$	101
Restructuring-related expenses:
Selling, general and administrative expenses	—			3		—		—			20		23
	—			3		—		—			20		23
	$	60		$	3	$	—	$	(15	)	$	76	$	124
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
2014 Restructuring plan	$	29		$	—	$	—	$	—		$	1	$	30
2011 Restructuring plan	37			3		—		(15		)	75		100
2010 Restructuring plan	—			—		—		—			—		—
Plant Network Optimization program	(6		)	—		—		—			—		(6		)
	$	60		$	3	$	—	$	(15	)	$	76	$	124

Year Ended December 31, 2012
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
Restructuring charges	$	79	$	—	$	—	$	14	$	43	$	136
Restructuring-related expenses:
Cost of products sold	—		—		8		—		—		8
Selling, general and administrative expenses	—		2		—		—		14		16
	—		2		8		—		14		24
	$	79	$	2	$	8	$	14	$	57	$	160
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
2011 Restructuring plan	$	78	$	2	$	—	$	14	$	55	$	149
2010 Restructuring plan	1		—		—		—		2		3
Plant Network Optimization program	—		—		8		—		—		8
	$	79	$	2	$	8	$	14	$	57	$	160

Summary of accrued expenses within accompanying unaudited condensed consolidated balance sheets

The following is a rollforward of the termination benefit liability associated with our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program, since the inception of the respective plan, which is reported as a component of accrued expenses included in our accompanying consolidated balance sheets:

	Restructuring Plan Termination Benefits
										Plant Network
(in millions)	2014			2011			2010			Optimization			Total
Accrued as of December 31, 2011	$	—		$	18		$	6		$	33		$	57
Charges	—			78			1			—			79
Cash payments	—			(60		)	(4		)	(24		)	(88		)
Accrued as of December 31, 2012	—			36			3			9			48
Charges	29			37			—			(6		)	60
Cash payments	—			(61		)	—			(1		)	(62		)
Other	—			—			(3		)	(2		)	(5		)
Accrued as of December 31, 2013	29			12			—			—			41
Charges	41			1			—			—			42
Cash payments	(31		)	(9		)	—			—			(40		)
Accrued as of December 31, 2014	$	39		$	4		$	—		$	—		$	43

Cumulative Restructuring Charges [Text Block]

The following presents these costs by major type and by plan:

(in millions)	2014 Restructuring plan		2011 Restructuring plan			2010 Restructuring plan		Plant Network Optimization		Total
Termination benefits	$	69	$	138		$	90	$	30	$	327
Fixed asset write-offs	—		(1		)	11		—		10
Other	25		113			51		—		189
Total restructuring charges	94		250			152		30		526
Accelerated depreciation	5		5			—		22		32
Transfer costs	24		—			—		74		98
Other	19		34			8		—		61
Restructuring-related expenses	48		39			8		96		191
	$	142	$	289		$	160	$	126	$	717

Amount Of Cash Paid In Period To Fully Or Partially Settle Specified Type Of Restructuring Cost [Text Block]

We made cash payments of $112 million in 2014 associated with restructuring initiatives pursuant to these plans, and have made total cash payments of $628 million related to our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program since committing to each plan. Each of these payments was made using cash generated from operations, and are comprised of the following:

(in millions)	2014 Restructuring plan		2011 Restructuring plan		2010 Restructuring plan		Plant Network Optimization		Total
Year Ended December 31, 2014
Termination benefits	$	31	$	9	$	—	$	—	$	40
Transfer costs	24		—		—		—		24
Other	38		10		—		—		48
	$	93	$	19	$	—	$	—	$	112
Program to Date
Termination benefits	31		$	133	$	90	$	30	$	284
Transfer costs	24		—		—		73		97
Other	38		154		55		—		247
	$	93	$	287	$	145	$	103	$	628

2014 Restructuring plan [Member]

Restructuring and Related Cost [Line Items]

Impact of restructuring costs on the accompanying financial statements

he following table provides a summary of our estimates of costs associated with the 2014 Restructuring plan by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$115 million to $135 million
Other (1)	$25 million to $35 million
Restructuring-related expenses:
Other (2)	$110 million to $130 million
	$250 million to $300 million

(1) Consists primarily of consultant fees and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2014 Restructuring plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities.

2011 Restructuring Plan [Member]

Restructuring and Related Cost [Line Items]

Impact of restructuring costs on the accompanying financial statements

The following provides a summary of our expected total costs associated with the 2011 Restructuring plan, including the Expansion, by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$138 million to $141 million
Other (1)	$112 million
Restructuring-related expenses:
Other (2)	$39 million
	$289 million to $292 million

2010 Restructuring Plan [Member]

Restructuring and Related Cost [Line Items]

Impact of restructuring costs on the accompanying financial statements

The following provides a summary of our costs associated with the 2010 Restructuring plan by major type of cost:

Type of Cost	Total amount incurred
Restructuring charges:
Termination benefits	$90 million
Fixed asset write-offs	$11 million
Other (1)	$51 million
Restructuring-related expenses:
Other (2)	$8 million
	$160 million

Plant Network Optimization [Member]

Restructuring and Related Cost [Line Items]

Impact of restructuring costs on the accompanying financial statements

The following provides a summary of our costs associated with the Plant Network Optimization program by major type of cost:

Type of cost	Total amount incurred
Restructuring charges:
Termination benefits	$30 million
Restructuring-related expenses:
Accelerated depreciation	$22 million
Transfer costs (1)	$74 million
	$126 million

XML

Segment Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three reportable segments comprised of: Cardiovascular, Rhythm Management, and MedSurg. Our reportable segments represent an aggregate of operating segments. We have restated the 2012 information to conform to our new global reportable segment presentation.

Each of our reportable segments generates revenues from the sale of medical devices. We measure and evaluate our reportable segments based on segment net sales and operating income, excluding the impact of changes in foreign currency and sales from divested businesses. Sales generated from reportable segments and divested businesses, as well as operating results of reportable segments and corporate expenses, are based on internally-derived standard currency exchange rates, which may differ from year to year, and do not include intersegment profits. We restated segment information for the prior periods based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange rate fluctuations, and for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014, which was not material. We exclude from segment operating income certain corporate-related expenses and certain charges or credits that our chief operating decision maker considers to be non-recurring and/or non-operational, such as amounts related to goodwill and other intangible asset impairment charges; acquisition-, divestiture-, restructuring- and litigation-related charges and credits; and amortization expense. Although we exclude these amounts from segment operating income, they are included in reported consolidated operating income (loss) and are included in the reconciliation below.

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)	2014			2013		2012
Net sales				(restated)		(restated)
Interventional Cardiology	$	2,092		$	1,995	$	2,116
Peripheral Interventions	861			805		764
Cardiovascular	2,953			2,800		2,880
Cardiac Rhythm Management	1,922			1,882		1,887
Electrophysiology	228			154		145
Rhythm Management	2,150			2,036		2,032
Endoscopy	1,343			1,277		1,190
Urology and Women's Health	542			505		489
Neuromodulation	474			454		367
MedSurg	2,359			2,236		2,046
Net sales allocated to reportable segments	7,462			7,072		6,958
Sales generated from business divestitures	4			58		122
Impact of foreign currency fluctuations	(86		)	13		169
	$	7,380		$	7,143	$	7,249

	Year Ended December 31,
(in millions)	2014		2013			2012
Depreciation expense			(restated)			(restated)
Cardiovascular	$	120	$	111		$	107
Rhythm Management	92		99			109
MedSurg	75		73			75
Depreciation expense allocated to reportable segments	287		283			291
Impact of foreign currency fluctuations	—		(4		)	(3		)
	$	287	$	279		$	288

	Year Ended December 31,
(in millions)	2014			2013			2012
Income (loss) before income taxes				(restated)			(restated)
Cardiovascular	$	767		$	665		$	685
Rhythm Management	289			211			217
MedSurg	746			679			590
Operating income allocated to reportable segments	1,802			1,555			1,492
Corporate expenses and currency exchange	(308		)	(203		)	(132		)
Goodwill and intangible asset impairment charges and acquisition-, divestiture-, litigation-, and restructuring-related net charges	(1,357		)	(822		)	(4,833		)
Amortization expense	(438		)	(410		)	(395		)
Operating income (loss)	(301		)	120			(3,868		)
Other expense, net	(208		)	(343		)	(239		)
	$	(509	)	$	(223	)	$	(4,107	)

	As of December 31,
(in millions)	2014		2013
Total assets
Cardiovascular	$	1,501	$	1,545
Rhythm Management	1,329		1,343
MedSurg	982		1,026
Total assets allocated to reportable segments	3,812		3,914
Goodwill	5,898		5,693
Other intangible assets, net	5,606		5,950
All other corporate assets	1,726		1,014
	$	17,042	$	16,571

Enterprise-Wide Information (based on actual currency exchange rates)

	Year Ended December 31,
(in millions)	2014		2013		2012
Net sales			(restated)*		(restated)*
Interventional Cardiology	$	2,057	$	1,997	$	2,179
Cardiac Rhythm Management	1,912		1,886		1,908
Endoscopy	1,323		1,280		1,239
Peripheral Interventions	850		809		787
Urology and Women’s Health	535		505		500
Neuromodulation	472		453		367
Electrophysiology	227		155		147
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249
United States	$	3,885	$	3,743	$	3,756
Japan	678		744		931
Other countries	2,813		2,598		2,440
	7,376		7,085		7,127
Sales generated from divested businesses	4		58		122
	$	7,380	$	7,143	$	7,249

*We restated segment information for the prior periods for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014.

	As of December 31,
(in millions)	2014		2013		2012
Long-lived assets
United States	$	1,002	$	998	$	1,065
Ireland	197		240		252
Other foreign countries	308		308		247
Property, plant and equipment, net	1,507		1,546		1,564
Goodwill	5,898		5,693		5,973
Other intangible assets, net	5,606		5,950		6,289
	$	13,011	$	13,189	$	13,826

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Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Balance Sheet Information (Tables) [Abstract]

Trade accounts receivable, net

	As of
(in millions)	December 31, 2014			December 31, 2013
Accounts receivable	$	1,288		$	1,419
Less: allowance for doubtful accounts	(76		)	(81		)
Less: allowance for sales returns	(29		)	(31		)
	$	1,183		$	1,307

Rollforward of allowances for doubtful accounts

	Year Ended December 31,
(in millions)	2014			2013			2012
Beginning balance	$	81		$	88		$	81
Net charges to expenses	10			5			14
Utilization of allowances	(15		)	(12		)	(7		)
Ending balance	$	76		$	81		$	88

Inventories

	As of
(in millions)	December 31, 2014		December 31, 2013
Finished goods	$	649	$	598
Work-in-process	97		90
Raw materials	200		209
	$	946	$	897

Property, plant and equipment, net

	As of
(in millions)	December 31, 2014		December 31, 2013
Land	$	80	$	81
Buildings and improvements	944		917
Equipment, furniture and fixtures	2,633		2,461
Capital in progress	189		211
	3,846		3,670
Less: accumulated depreciation	2,339		2,124
	$	1,507	$	1,546

Accrued expenses

	As of
(in millions)	December 31, 2014		December 31, 2013
Legal reserves	$	694	$	84
Payroll and related liabilities	512		488
Accrued contingent consideration	158		148
Other	586		628
	$	1,950	$	1,348

Other long-term liabilities

	As of
(in millions)	December 31, 2014		December 31, 2013
Accrued income taxes	$	1,231	$	1,283
Legal reserves	883		523
Accrued contingent consideration	116		353
Other long-term liabilities	436		410
	$	2,666	$	2,569

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New Accounting Pronouncements

12 Months Ended

Dec. 31, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS

Standards Implemented

ASC Update No. 2013-11

In July 2013, the FASB issued ASC Update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Update No. 2013-11 requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. We adopted Update No. 2013-11 beginning in our first quarter ended March 31, 2014. The adoption of Update No. 2013-11 did not impact our results of operations or financial position.

Standards to be Implemented

ASC Update No. 2014-08

In April 2014, the FASB issued ASC Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Update No. 2014-08 changed the criteria for reporting discontinued operations and enhanced convergence of the FASB's and the International Accounting Standard Board's (IASB) reporting requirements for discontinued operations. We are required to apply this amendment, prospectively to: (1) all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years and (2) all businesses that, on acquisition, are classified as held for sale that occur within annual periods beginning on or after December 15, 2014 and interim periods within those years. The adoption of Update No. 2014-08 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2014-09

In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Update No. 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies using International Financial Reporting Standards and U.S. GAAP. The core principle requires entities to recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration an entity expects to be entitled to in exchange for those goods or services. We are required to apply Update No. 2014-09 for annual periods beginning after December 15, 2016 and early application is not permitted. We are in the process of determining the effect, if any, that the adoption of this standard will have on our financial position or results of operations.

ASC Update No. 2014-10

In June 2014, the FASB issued ASC Update No. 2014-10, Development Stage Entities (Topic 915):Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities. The amendments also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The elimination of the exception may change the consolidation analysis and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. We are required to apply Update No. 2014-10 for annual reporting periods beginning after December 15, 2014, and interim periods within those years. The adoption of Update No. 2014-10 is not expected to have a material impact on our financial position or results of operations.

ASC Update No. 2014-15

In August 2014, the FASB issued ASC Update No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40). Update 2014-15requires management to assess an entity’s ability to continue as a going concern every reporting period, and provide certain disclosures if management has substantial doubt about the entities ability to operate as a going concern, or an express statement if not, by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Update 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update No. 2014-15 is not expected to have an impact on our financial position or results of operations.

ASC Update No. 2015-01

In January 2015, the FASB issued ASC Update No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20). Update 2015-01 eliminates the concept of extraordinary items from GAAP, which requires an entity to separately classify, present, and disclose extraordinary events and transactions. Update 2015-01 is effective for the annual period beginning after December 15, 2015, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-01 is not expected to have an impact on our financial position or results of operations.

ASC Update No. 2015-02

In February 2015, the FASB issued ASC Update No. 2015-02, Consolidation (Topic 810):Amendments to the Consolidation Analysis. Update 2015-02 amended the process that a reporting entity must perform to determine whether it should consolidate certain types of legal entities.  Update 2015-02 is effective for the annual period ending after December 15, 2015, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of Update 2015-02 is not expected to have a material impact on our financial position or results of operations.

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Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net income (loss)	$ (119)	$ (121)	$ (4,068)
Gain on sale of businesses	(12)	(38)	(15)
Depreciation and amortization	725	689	683
Deferred and prepaid income taxes	(397)	(223)	(166)
Stock-based compensation expense	103	105	108
Goodwill impairment charges	0	423	4,350
Intangible asset impairment charges	195	53	142
Net losses (gains) on investments and notes receivable	(27)	9	(37)
Contingent consideration expense (benefit)	(85)	4	(6)
Payment of contingent consideration in excess of amounts established in purchase accounting	(103)	(5)	(8)
Other, net	27	31	(7)
Trade accounts receivable	53	(101)	37
Inventories	(81)	(7)	66
Other assets	(33)	91	(68)
Accounts payable and accrued expenses	620	(9)	(111)
Other liabilities	403	209	380
Cash provided by operating activities	1,269	1,110	1,280
Investing Activities
Purchases of property, plant and equipment	(259)	(245)	(226)
Proceeds on disposals	0	53	16
Payments for acquisitions of businesses, net of cash acquired	(486)	(274)	(366)
Proceeds from business divestitures, net of costs	12	30	10
Payments for investments and acquisitions of certain technologies	(26)	(44)	(22)
Proceeds from investments and collections of notes receivable	14	5	9
Cash used for investing activities	(745)	(475)	(579)
Financing Activities
Payments of contingent consideration amounts previously established in purchase accounting	(34)	(160)	(146)
Proceeds from long-term borrowings, net of debt issuance costs	0	1,440	0
Payments on long-term borrowings	0	(1,450)	(10)
Proceeds from borrowings on credit facilities	810	340	371
Payments on borrowings from credit facilities	(810)	(340)	(380)
Payments for acquisitions of treasury stock	(125)	(500)	(600)
Cash used to net share settle employee equity awards	(51)	(28)	(20)
Proceeds from issuances of shares of common stock	60	74	21
Cash used for financing activities	(150)	(624)	(764)
Effect of foreign exchange rates on cash	(4)	(1)	3
Net increase (decrease) in cash and cash equivalents	370	10	(60)
Cash and cash equivalents at beginning of period	217	207	267
Cash and cash equivalents at end of period	587	217	207
Supplemental Information
Cash paid for income taxes, net	74	67	97
Cash paid for interest	221	329	255
Fair value of contingent consideration recorded in purchase accounting	$ 3	$ 0	$ 467

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 587	$ 217
Trade accounts receivable, net	1,183	1,307
Inventories	946	897
Deferred and prepaid income taxes	447	288
Other current assets	443	302
Total current assets	3,606	3,011
Property, plant and equipment, net	1,507	1,546
Goodwill	5,898	5,693
Other intangible assets, net	5,606	5,950
Other long-term assets	425	371
TOTAL ASSETS	17,042	16,571
Current liabilities:
Current debt obligations	403	3
Accounts payable	262	246
Accrued expenses	1,950	1,348
Other current liabilities	231	227
Total current liabilities	2,846	1,824
Long-term debt	3,859	4,237
Deferred income taxes	1,214	1,402
Other long-term liabilities	2,666	2,569
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 50,000,000 shares, none issued and outstanding
Common stock, $0.01 par value - authorized 2,000,000,000 shares; issued 1,575,018,236 shares as of December 31, 2014 and1,560,302,634 shares as of December 31, 2013	16	16
Treasury stock, at cost - 247,566,270 shares as of December 31, 2014 and 238,006,570 shares as of December 31, 2013	(1,717)	(1,592)
Additional paid-in capital	16,703	16,579
Accumulated deficit	(8,689)	(8,570)
Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(38)	(16)
Unrealized gain on derivative financial instruments	219	141
Unrealized costs associated with certain retirement plans	(37)	(19)
Total stockholders’ equity	6,457	6,539
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 17,042	$ 16,571

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

INCOME TAXES

INCOME TAXES

Our income (loss) before income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2014			2013			2012
Domestic	$	(1,263	)	$	(774	)	$	(1,265	)
Foreign	754			551			(2,842		)
	$	(509	)	$	(223	)	$	(4,107	)

The related benefit for income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2014			2013			2012
Current
Federal	$	(2	)	$	46		$	33
State	(5		)	(9		)	—
Foreign	111			105			139
	104			142			172
Deferred
Federal	(458		)	(212		)	(204		)
State	(23		)	(17		)	(7		)
Foreign	(13		)	(15		)	—
	(494		)	(244		)	(211		)
	$	(390	)	$	(102	)	$	(39	)

The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows:

	Year Ended December 31,
	2014		2013		2012
U.S. federal statutory income tax rate	(35.0	)%	(35.0	)%	(35.0	)%
State income taxes, net of federal benefit	(6.5	)%	(7.9	)%	(0.2	)%
Effect of foreign taxes	(29.1	)%	(63.4	)%	(3.7	)%
Acquisition-related	(7.5	)%	3.5	%	—	%
Research credit	(7.0	)%	(12.2	)%	—	%
Valuation allowance	4.0	%	(12.0	)%	0.3	%
Goodwill impairment charges	—	%	65.2	%	36.4	%
Compensation-related	0.7	%	1.7	%	0.3	%
Non-deductible expenses	1.9	%	9.0	%	(0.2	)%
Uncertain domestic tax positions	2.0	%	7.0	%	0.8	%
Other, net	(0.2	)%	(1.9	)%	0.3	%
	(76.7	)%	(46.0	)%	(1.0	)%

We had net deferred tax liabilities of $799 million as of December 31, 2014 and $1.140 billion as of December 31, 2013. Gross deferred tax liabilities of $2.096 billion as of December 31, 2014 and $2.203 billion as of December 31, 2013 relate primarily to intangible assets acquired in connection with our prior acquisitions. Gross deferred tax assets of $1.297 billion as of December 31, 2014 and $1.063 billion as of December 31, 2013 relate primarily to the establishment of inventory and product-related reserves; litigation, product liability and other reserves and accruals; compensation related accruals; net operating loss carryforwards and tax credit carryforwards; and the federal benefit of uncertain tax positions.

We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

Significant components of our deferred tax assets and liabilities are as follows:

	As of December 31,
(in millions)	2014			2013
				(restated)
Deferred Tax Assets:
Inventory costs and related reserves	$	46		$	50
Tax benefit of net operating loss and credits	525			647
Reserves and accruals	232			221
Restructuring-related charges and purchased research and development	20			17
Litigation and product liability reserves	556			198
Investment write-down	4			15
Compensation related	150			143
Federal benefit of uncertain tax positions	178			166
Other	36			39
	1,747			1,496
Less valuation allowance	(450		)	(433		)
	1,297			1,063
Deferred Tax Liabilities:
Property, plant and equipment	67			78
Unrealized gains and losses on derivative financial instruments	146			80
Intangible assets	1,883			2,045
	2,096			2,203
Net Deferred Tax Liabilities	799			1,140
Prepaid on intercompany profit	69			66
Total Net Deferred Tax Liabilities and Prepaid on Intercompany Profit	$	730		$	1,074

Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions):

	Location in	As of December 31,
Component	Balance Sheet	2014		2013
Current deferred tax asset and prepaid on intercompany profit	Deferred and prepaid income taxes	$	447	$	288
Non-current deferred tax asset	Other long-term assets	39		42
Deferred Tax Assets and Prepaid on Intercompany Profit		486		330
Current deferred tax liability	Other current liabilities	2		2
Non-current deferred tax liability	Deferred income taxes	1,214		1,402
Deferred Tax Liabilities		1,216		1,404
Net Deferred Tax Liabilities and Prepaid on Intercompany Profit		$	730	$	1,074

As of December 31, 2014, we had U.S. tax net operating loss carryforwards and tax credits, the tax effect of which was $335 million, as compared to $351 million as of December 31, 2013. In addition, we had foreign tax net operating loss carryforwards and tax credits, the tax effect of which was $304 million as of December 31, 2014, as compared to $313 million as of December 31, 2013. These tax attributes will expire periodically beginning in 2015. After consideration of all positive and negative evidence, we believe that it is more likely than not that a portion of the deferred tax assets will not be realized. As a result, we established a valuation allowance of $450 million as of December 31, 2014 and $433 million as of December 31, 2013, representing an increase of $17 million. The increase in the valuation allowance as of December 31, 2014, as compared to December 31, 2013, is attributable primarily due to increase in certain deferred tax assets that are more likely than not that we will not be realizable. The income tax impact of the unrealized gain or loss component of other comprehensive income and stockholders' equity was a charge of $21 million in 2014, a charge of $76 million in 2013, and a charge of $70 million in 2012.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2014 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2014, the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $7.7 billion. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

We obtain tax incentives through Free Trade Zone Regime offered in Costa Rica which allows 100% exemption from income tax in the first eight years of operations and 50% exemption in the following four years. This tax incentive resulted in income tax savings of $7 million for 2014, $6 million for 2013, and $7 million for 2012. The tax incentive for 100% exemption from income tax is expected to expire in 2023. The impact of per share earnings is immaterial for 2014, 2013 and 2012.

As of December 31, 2014, we had $1.047 billion of gross unrecognized tax benefits, of which a net $903 million, if recognized, would affect our effective tax rate. As of December 31, 2013, we had $1.102 billion of gross unrecognized tax benefits, of which a net $941 million, if recognized, would affect our effective tax rate. As of December 31, 2012, we had $1.088 billion of gross unrecognized tax benefits, of which a net $919 million, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	Year Ended December 31,
	2014			2013			2012
				(restated)			(restated)
Beginning Balance	$	1,102		$	1,088		$	1,022
Additions based on positions related to the current year	44			59			54
Additions based on positions related to prior years	3			43			45
Reductions for tax positions of prior years	(87		)	(42		)	(28		)
Settlements with taxing authorities	(5		)	(15		)	(1		)
Statute of limitation expirations	(10		)	(31		)	(4		)
Ending Balance	$	1,047		$	1,102		$	1,088

We are subject to U.S. Federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U.S. federal income tax matters through 2000, all foreign income tax matters through 2002 and substantially all material state and local income tax matters through 2005.

We have received Notices of Deficiency from the IRS reflecting proposed audit adjustments for Guidant for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. Subsequent to issuing these Notices, the IRS conceded a portion of its original assessment. The total incremental tax liability now asserted by the IRS for the applicable periods is $1.162 billion plus interest. The primary issue in dispute for all years is the transfer pricing in connection with the technology license agreements between domestic and foreign subsidiaries of Guidant. In addition, the IRS has proposed adjustments in connection with the financial terms of our Transaction Agreement with Abbott Laboratories pertaining to the sale of Guidant's vascular intervention business to Abbott in April 2006. We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment and we believe that the IRS has exceeded its authority by attempting to adjust the terms of our negotiated third-party agreement with Abbott. In addition, we believe that the IRS positions with regard to these matters are inconsistent with the applicable tax laws and the existing Treasury regulations.

We believe we have meritorious defenses for our tax filings and we have filed, or will timely file, petitions with the U.S. Tax Court contesting the Notices of Deficiency for the tax years in challenge. No payments on the net assessment would be required until the dispute is definitively resolved, which, based on experiences of other companies, could take several years. The IRS is currently examining the 2008 through 2010 tax years of Boston Scientific. During 2014, we received a Revenue Agent Report from the Internal Revenue Service (IRS) reflecting significant proposed audit adjustments for our 2008, 2009, and 2010 tax years based upon the same transfer pricing methodologies that are currently being contested in the U.S. Tax Court for our tax years 2001-2007.  As with prior years, we disagree with the transfer pricing methodologies being applied by the IRS and we expect to contest any adjustments received through appropriate IRS and judicial procedures, as appropriate. We believe our income tax reserves associated with these matters are adequate as of December 31, 2014. However, final resolution is uncertain and could have a material impact on our financial condition, results of operations, or cash flows. Also, in connection with the IRS issues, a number of agreed adjustments were contained in the IRS report, however no tax was paid on these amounts as there are outstanding tax receivables from the IRS that are currently being withheld due to the U.S. Tax Court case. As these agreed items are no longer uncertain, the amounts were reclassified from our uncertain tax positions to long-term, which are netted against the longer term receivables.

We recognize interest and penalties related to income taxes as a component of income tax expense. We had $443 million accrued for gross interest and penalties as of December 31, 2014 and $402 million as of December 31, 2013. The increase in gross interest and penalties was the result of $41 million recognized in our consolidated statements of operations. We recognized $26 million of interest and penalties related to income taxes in 2014, recognized $22 million in 2013 and recognized $34 million in 2012.

It is reasonably possible that within the next 12 months we will resolve multiple issues including transfer pricing and transactional related issues with foreign, federal and state taxing authorities, in which case we could record a reduction in our balance of unrecognized tax benefits of up to $8 million.

XML

Document and Entity Information Document (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Jan. 30, 2015	Jun. 30, 2014
Document Information [Line Items]
Entity Registrant Name	BOSTON SCIENTIFIC CORPORATION
Entity Central Index Key	0000885725
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		1,330,512,367
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 16.8

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The medical device market in which we primarily participate is largely technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Over the years, there has been litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. 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 for individual cases, but also for a series of pending and potentially related and unrelated cases. 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.

During recent years, we successfully negotiated closure of several long-standing legal matters and have received favorable legal rulings in several other matters; however, there continues to be outstanding intellectual property litigation. 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 operations and/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 maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities and commercial litigation, and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our financial position, results of operations and/or liquidity.

In addition, like other companies in the medical device industry, we are subject to extensive regulation by national, state and local government agencies in the United States and other countries in which we operate. From time to time we are the subject of qui tam actions and governmental investigations often involving regulatory, marketing and other business practices. These qui tam actions and governmental investigations could result in the commencement of civil and criminal proceedings, substantial fines, penalties and administrative remedies and have a material adverse effect on our financial position, results of operations and/or liquidity.

In accordance with ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

Our accrual for legal matters that are probable and estimable was $1.577 billion as of December 31, 2014 and $607 million as of December 31, 2013, and includes certain estimated costs of settlement, damages and defense. The increase in our legal accrual was primarily due to litigation-related charges recorded during the year. During 2014, 2013 and 2012, we recorded litigation-related charges in the amount of $1.036 billion, $221 million, and $192 million, respectively. The charges recorded in 2014 included $600 million related to the settlement agreement between our subsidiary, Guidant and Johnson & Johnson signed on February 13, 2015. We continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact our operating results, cash flows and/or our ability to comply with our debt covenants.

In management's opinion, we are not currently involved in any legal proceedings other than those specifically identified below, which, individually or in the aggregate, could have a material adverse effect on our financial condition, operations and/or cash flows. Unless included in our legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be estimated.

Patent Litigation

On September 22, 2009, Cordis Corporation, Cordis LLC and Wyeth Corporation filed a complaint for patent infringement against Abbott Laboratories, Abbott Cardiovascular Systems, Inc., Boston Scientific Scimed, Inc. and us alleging that the PROMUS® coronary stent system, supplied to us by Abbott, infringes a patent (the Llanos patent) owned by Cordis and Wyeth. The suit was filed in the U.S. District Court for the District of New Jersey seeking monetary and injunctive relief. In August 2010, Cordis filed an amended complaint to add an additional patent and in September 2010, we filed counterclaims of invalidity and non-infringement. On October 26, 2011, the District Court granted Cordis' motion to add the Promus Element stent system to the case. On February 6, 2012, the District Court granted our motion to stay the action until the conclusion of the reexaminations against the Llanos patents that are pending in the U.S. Patent and Trademark Office.

On May 19, 2005, G. David Jang, M.D. filed suit against us alleging breach of contract relating to certain patent rights covering stent technology. The suit was filed in the U.S. District Court for the Central District of California seeking monetary damages and rescission of contract. After a Markman ruling relating to the Jang patent rights, Dr. Jang stipulated to the dismissal of certain claims alleged in the complaint with a right to appeal and the parties subsequently agreed to settle the other claims. In May 2007, Dr. Jang filed an appeal with respect to the remaining patent claims and in July 2008, the Court of Appeals vacated the District Court's consent judgment and remanded the case back to the District Court for further clarification. In August 2011, the District Court entered a stipulated judgment that we did not infringe the Jang patent. Dr. Jang filed an appeal on September 21, 2011 and on August 22, 2012, the Court of Appeals vacated the District Court's judgment and remanded the case to the District Court for further proceedings. On April 18, 2014, the case was stayed pending consideration of an interlocutory appeal. On September 16, 2014, the Court of Appeals for the Federal Circuit denied our request for an interlocutory appeal. A trial is scheduled to begin on June 22, 2015.

On May 17, 2010, Dr. Luigi Tellini filed suit against us and certain of our subsidiaries, Guidant Italia S.r.l. and Boston Scientific S.p.A., in the Civil Tribunal in Milan, Italy alleging certain of our Cardiac Rhythm Management products infringe an Italian patent (the Tellini patent) owned by Dr. Tellini and seeking monetary damages. In January 2011, Dr. Tellini refiled amended claims after his initial claims were dismissed without prejudice to refile.

On September 27, 2010, Boston Scientific Scimed, Inc., Boston Scientific Ltd., Endovascular Technologies, Inc. and we filed suit against Taewoong Medical, Co., Ltd., Standard Sci-Tech, Inc., EndoChoice, Inc. and Sewoon Medical Co., Ltd for infringement of three patents on stents for use in the GI system (the Pulnev and Hankh patents) and against Cook Medical Inc. (and related entities) for infringement of the same three patents and an additional patent (the Thompson patent). The suit was filed in the U.S. District Court for the District of Massachusetts seeking monetary damages and injunctive relief. In December 2010, we amended our complaint to add infringement of six additional Pulnev patents. In January 2011, the defendants filed a counterclaim of invalidity and unenforceability. In December 2011, we amended the complaint to add Chek-Med Systems d/b/a GI Supply as a defendant.

On February 18, 2014, Atlas IP, LLC filed a complaint in the United States District Court for the Southern District of Florida alleging that the sale of our LATITUDE® Patient Management System and implantable devices that communicate with the LATITUDE® device infringe a patent owned by Atlas. On July 9, 2014, the District Court granted our motion to transfer venue to the United States District Court for the District of Minnesota. On January 12, 2015, Atlas dismissed its complaint.

On September 22, 2014, The Board of Trustees for the University of Alabama filed a complaint in the United States District Court for the Northern District of Alabama alleging that the sale of our cardiac resynchronization therapy devices infringe a patent owned by the University of Alabama.

On October 14, 2014, MK Optics, LLC filed a complaint in the United States District Court for the District of Delaware alleging that the sale of our Spyglass Direct Visualization System infringes a patent owned by MK Optics.

Product Liability Litigation

Fewer than ten individual lawsuits remain pending in various state and federal jurisdictions against Guidant alleging personal injuries associated with defibrillators or pacemakers involved in certain 2005 and 2006 product communications. Further, we are aware of approximately 30 Guidant product liability lawsuits pending in international jurisdictions associated with defibrillators or pacemakers, including devices involved in the 2005 and 2006 product communications. Six of these suits are pending in Canada and were filed as class actions, four of which are stayed pending the outcome of two lead class actions. On April 10, 2008, the Justice of Ontario Court certified a class of persons in whom defibrillators were implanted in Canada and a class of family members with derivative claims. On May 8, 2009, the Justice of Ontario Court certified a class of persons in whom pacemakers were implanted in Canada and a class of family members with derivative claims. In each case, these matters generally seek monetary damages from us. The parties in the defibrillator class action have reached an agreement in principle to settle the matter for approximately $3 million. The presiding judge approved the settlement at a hearing on March 24, 2014. We paid the initial required payments during the second quarter of 2014 and funded the publication of the settlement notice during the third quarter of 2014.

As of February 24, 2015, there were over 25,000 product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse pending against us. The cases are pending in various federal and state courts in the United States and include eight putative class actions. There were also fewer than 20 cases in Canada, inclusive of three putative class actions, and fewer than 10 claims in the United Kingdom. Generally, the plaintiffs allege personal injury associated with use of our transvaginal surgical mesh products. The plaintiffs assert design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. Over 2,500 of the cases have been specially assigned to one judge in state court in Massachusetts. On February 7, 2012, the Judicial Panel on Multi-District Litigation (MDL) established MDL-2326 in the U.S. District Court for the Southern District of West Virginia and transferred the federal court transvaginal surgical mesh cases to MDL-2326 for coordinated pretrial proceedings. During the fourth quarter of 2013, we received written discovery requests from certain state attorneys general offices regarding our transvaginal surgical mesh products. We have responded to those requests. We have established a product liability accrual for known and estimated future cases and claims asserted against us as well as costs of defense thereof associated with our transvaginal surgical mesh products. While we believe that our accrual associated with this matter is adequate, changes to this accrual may be required in the future as additional information becomes available. We intend to vigorously contest the cases and claims asserted against us; however, the final resolution is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. Initial trials involving our transvaginal surgical mesh products have resulted in both favorable and unfavorable judgments for us. We do not believe that the judgment in any one trial is representative of potential outcomes of all cases or claims related to our transvaginal surgical mesh products.

Governmental Investigations and Qui Tam Matters

On June 27, 2008, the Republic of Iraq filed a complaint against our wholly-owned subsidiary, BSSA France, and 92 other defendants in the U.S. District Court of the Southern District of New York. The complaint alleges that the defendants acted improperly in connection with the sale of products under the United Nations Oil for Food Program. The complaint also alleges Racketeer Influenced and Corrupt Organizations Act (RICO) violations, conspiracy to commit fraud and the making of false statements and improper payments, and it seeks monetary and punitive damages. On February 6, 2013, the District Court dismissed the complaint with prejudice on standing and jurisdictional grounds. On September 18, 2014, the U.S. Court of Appeals for the Second Circuit affirmed the District Court’s decision to dismiss the complaint with prejudice. On October 2, 2014, the plaintiff filed a petition for rehearing en banc. On December 2, 2014, the Second Circuit denied the petition for rehearing en banc.

On March 12, 2010, we received a Civil Investigative Demand (CID) from the Civil Division of the U.S. Department of Justice (DOJ) requesting documents and information relating to reimbursement advice offered by us relating to certain CRM devices. We are cooperating with the request.

On August 3, 2012, we were served with a qui tam complaint that had previously been filed under seal against Boston Scientific Neuromodulation Corp. in the U.S. District Court for the District of New Jersey on March 2, 2011. On August 8, 2012, we learned that the federal government had previously declined to intervene in this matter. The relators’ complaint, now unsealed, alleges that Boston Scientific Neuromodulation Corp. violated the federal and various states' false claims acts through submission of fraudulent bills for implanted devices, under-reporting of certain adverse events, and promotion of off-label uses. On September 10, 2012, the relators filed an amended complaint revising and restating certain of the claims in the original complaint. Our motion to dismiss, filed subsequently, was denied on May 31, 2013, and on June 28, 2013, we answered the amended complaint and brought certain counterclaims arising from relators’ unauthorized removal of documents from the business during their employments, which the relators moved to dismiss on July 22, 2013. The Court denied relators’ motion to dismiss the counterclaims on September 4, 2014.

On May 5, 2014, we were served with a subpoena from the U.S. Department of Health and Human Services, Office of the Inspector General. The subpoena seeks information relating to the launch of the Cognis and Teligen line of devices in 2008, the performance of those devices from 2007 to 2009, and the operation of the Physician Guided Learning Program. We are cooperating with this request.

On July 11, 2014, we were served with a subpoena from the U.S. Attorney for the District of New Jersey. The subpoena seeks information relating to BridgePoint Medical, Inc., which we acquired in October 2012, including information relating to its sale of CrossBoss^® and Stingray^® products, educational and training activities that relate to those sales and our acquisition of BridgePoint Medical. We are cooperating with this request.

On February 23, 2015, a judge for the Court of Modena (Italy) ordered a trial for Boston Scientific SpA and three of its employees, as well as numerous other defendants charged in criminal proceedings.  The charges arise from allegations that the defendants made improper donations to certain health care providers and other employees of the Hospital of Modena in order to induce them to conduct unauthorized clinical trials, as well as related government fraud in relation to the financing of such clinical trials.  We deny these allegations and intend to defend ourselves vigorously.  An initial trial hearing has been scheduled for October 28, 2015.

Other Proceedings

On September 25, 2006, Johnson & Johnson filed a lawsuit against us, Guidant and Abbott Laboratories in the U.S. District Court for the Southern District of New York. The complaint alleges that Guidant breached certain provisions of the amended merger agreement between Johnson & Johnson and Guidant (Merger Agreement) as well as the implied duty of good faith and fair dealing. The complaint further alleges that Abbott and we tortiously interfered with the Merger Agreement by inducing Guidant's breach. The complaint seeks certain factual findings, damages in an amount no less than $5.5 billion and attorneys' fees, costs, and interest. In August 2007, the judge dismissed the tortious interference claims against us and Abbott and the implied duty of good faith and fair dealing claim against Guidant. On June 20, 2011, Guidant filed a motion for summary judgment, and the hearing on this motion was held on July 25, 2012. On July 7, 2014, the judge denied Guidant’s motion. The bench trial was held in November and December. On February 13, 2015, the parties reached a settlement agreement pursuant to which Guidant will make aggregate payments to Johnson & Johnson totaling $600 million, we agreed that neither we nor our affiliates will commence, or assist any third party in commencing, proceedings of any kind, against Johnson & Johnson or its affiliates for patent infringement or seeking any remedy for patent infringement based on Johnson & Johnson or its affiliates making, having made, using, selling, offering for sale or importing the S.M.A.R.T^®, S.M.A.R.T^® Control^®, and S.M.A.R.T^® Flex stent products and Johnson & Johnson has agreed to dismiss its actions against Guidant with prejudice.

On October 5, 2007, Dr. Tassilo Bonzel filed a complaint against Pfizer, Inc. and our Schneider subsidiaries and us in the District Court in Kassel, Germany alleging that a 1995 license agreement related to a catheter patent is invalid under German law and seeking monetary damages. In June 2009, the District Court dismissed all but one of Dr. Bonzel's claims and in October 2009, he added new claims. We opposed the addition of the new claims. The District Court ordered Dr. Bonzel to select the claims he would pursue and in January 2011, he made that selection. A hearing was held on March 28, 2014 and a decision was made to take evidence at a hearing to be set at a later date. On January 23, 2015, the parties reached a confidential settlement agreement.

On September 28, 2011, we served a complaint against Mirowski Family Ventures LLC in the U.S. District Court for the Southern District of Indiana for a declaratory judgment that we have paid all royalties owed and did not breach any contractual or fiduciary obligations arising out of a license agreement. Mirowski answered and filed counterclaims requesting damages. On May 13, 2013, Mirowski Family Ventures served us with a complaint alleging breach of contract in Montgomery County Circuit Court, Maryland, and they amended this complaint on August 1, 2013. On July 29, 2013, the Indiana case was dismissed. On September 10, 2013, we removed the case to the United States District Court for the District of Maryland. On June 5, 2014, the District Court granted Mirowski’s motion to remand the case to the Montgomery County Circuit Court. On September 24, 2014, following a jury verdict against us, the Montgomery County Circuit Court entered a judgment that we breached our license agreement with Mirowski and awarded damages of $308 million. On October 28, 2014, the Montgomery County Circuit Court denied our post-trial motions seeking to overturn the judgment. On November 19, 2014, we filed an appeal with the Maryland Court of Special Appeals.

On April 24, 2014, Dr. Qingsheng Zhu and Dr. Julio Spinelli, acting jointly on behalf of the stockholder representative committee of Action Medical, Inc. (Action Medical), filed a lawsuit against us and our subsidiary, Cardiac Pacemakers, Inc. (CPI), in the U.S. District Court for the District of Delaware. The stockholder representatives allege that we and CPI breached a contractual duty to pursue development and commercialization of certain patented heart pacing methods and devices and to return certain patents.

Refer to Note J - Income Taxes for information regarding our tax litigation.

Matters Concluded Since December 31, 2013

On February 1, 2008, Wyeth Corporation (Wyeth) and Cordis Corporation filed an amended complaint for patent infringement against Abbott Laboratories, adding us and Boston Scientific Scimed, Inc. as additional defendants to the complaint. The suit alleged that the PROMUS® coronary stent system, supplied to us by Abbott, infringes three U.S. patents owned by Wyeth and licensed to Cordis. The suit was filed in the U.S. District Court for the District of New Jersey seeking monetary and injunctive relief. Wyeth and Cordis subsequently withdrew their infringement claim as to one of the patents, and the District Court found the remaining two patents invalid. Wyeth and Cordis filed an appeal and, on June 26, 2013, the Court of Appeals for the Federal Circuit affirmed the District Court’s judgment in favor of Boston Scientific. On October 13, 2013, Wyeth’s motion for rehearing or rehearing en banc was denied. The deadline for further appeals lapsed on January 13, 2014.

On May 25, 2010, G. David Jang, M.D. filed suit against Boston Scientific Scimed, Inc. and us alleging breach of contract relating to certain patent rights covering stent technology. In October 2011, the U.S. District Court for the District of Delaware entered judgment in favor of us on the pleadings. Dr. Jang filed an appeal on August 28, 2012. On September 5, 2013, the Court of Appeals for the Third Circuit vacated the ruling and remanded the case to the District Court. On March 31, 2014, the parties entered into a confidential settlement agreement. On April 2, 2014, the case was dismissed.

On May 16, 2013, Vascular Solutions, Inc. filed suit against us, alleging that our Guidezilla™ guide extension catheter infringes three U.S. patents owned by Vascular Solutions. The suit was filed in the U.S. District Court for the District of Minnesota seeking monetary and injunctive relief. On May 28, 2013, Vascular Solutions filed an amended complaint adding an allegation of copyright infringement. On June 10, 2013, Vascular Solutions filed a motion requesting a preliminary injunction. On July 11, 2013, we answered the amended complaint and filed a counterclaim against Vascular Solutions, alleging that its Guideliner™ guide extension catheter infringes a U.S. patent owned by us. On December 12, 2013, the District Court granted the motion for a preliminary injunction and on December 26, 2013, we filed an appeal. On April 15, 2014, the Court of Appeals for the Federal Circuit vacated the preliminary injunction. On July 30, 2014, we and Vascular Solutions entered into a confidential settlement agreement and the case was subsequently dismissed.

On August 2, 2013, Medtronic Ardian Luxembourg S.a.r.l. filed a complaint against Boston Scientific Corporation and Boston Scientific Medizintechnik, GmbH in the Düsseldorf District Court in Germany alleging that the sale of our Vessix renal denervation product infringes a German patent owned by Medtronic Ardian. On December 29, 2014, the parties reached a confidential settlement and dismissed the case.

On September 23, 2013, Kardiametrics, LLC filed a complaint in the United States District Court for the District of Delaware alleging that the sale of our FilterWire EZ Embolic Protection System, Sterling balloon catheters, Carotid NexStent and Carotid WallStent products infringe two patents owned by Kardiametrics. On January 24, 2014, we filed a motion to dismiss the case or, in the alternative, to stay the case pending an arbitration. On February 18, 2014, Kardiametrics dismissed its original complaint and filed a new complaint. On March 14, 2014, we filed a motion to dismiss the new case or, in the alternative, to stay the new case pending an arbitration. On May 28, 2014, Kardiametrics voluntarily dismissed its case.

XML

Consolidated Balance Sheet Paranthetical (USD $)	Dec. 31, 2014	Dec. 31, 2013
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	1,575,018,236	1,560,302,634
Common stock, shares outstanding	1,327,451,966	1,322,296,064
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury shares	247,566,270	238,006,570

XML

Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

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 foreign 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. 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 exchange rates on a consolidated basis to take advantage of offsetting transactions. We use both derivative instruments (currency forward and option contracts), and non-derivative transactions (primarily European manufacturing and distribution 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 foreign currency exchange rate changes.

Designated Foreign Currency Hedges

All of our designated currency hedge contracts outstanding as of December 31, 2014 and December 31, 2013 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 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 no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. We had currency derivative instruments designated as cash flow hedges outstanding in the contract amount of $2.178 billion as of December 31, 2014 and $2.564 billion as of December 31, 2013.

We recognized net gains of $105 million during 2014 on our cash flow hedges, as compared to $36 million of net gains during 2013, and $39 million of net losses during 2012. All currency cash flow hedges outstanding as of December 31, 2014 mature within 36 months. As of December 31, 2014, $217 million of net gains, net of tax, were recorded in accumulated other comprehensive income (AOCI) to recognize the effective portion of the fair value of any currency derivative instruments that are, or previously were, designated as foreign currency cash flow hedges, as compared to net gains of $139 million as of December 31, 2013. As of December 31, 2014, $128 million of net gains, net of tax, may be reclassified to earnings within the next twelve months.

The success of our hedging program depends, in part, on forecasts of transaction activity in various currencies (primarily Japanese yen, Euro, British pound sterling, Australian dollar and Canadian dollar). We may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activity during periods of currency volatility. In addition, changes in foreign currency exchange rates related to any unhedged transactions may impact our earnings and cash flows.

Non-designated Foreign Currency Contracts

We use currency forward contracts as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These currency forward contracts are not designated as cash flow, fair value or net investment hedges under Topic 815; are marked-to-market with changes in fair value recorded to earnings; and are entered into for periods consistent with currency transaction exposures, generally less than one year. We had currency derivative instruments not designated as hedges under Topic 815 outstanding in the contract amount of $2.470 billion as of December 31, 2014 and $1.952 billion as of December 31, 2013.

Interest Rate Hedging

Our interest rate risk relates primarily to U.S. dollar borrowings, partially offset by U.S. dollar cash investments. We have historically used interest rate derivative instruments to manage our earnings and cash flow exposure to changes in interest rates by converting fixed-rate debt into floating-rate debt or floating-rate debt into fixed-rate debt.

We designate these derivative instruments either as fair value or cash flow hedges under Topic 815. We record changes in the value of fair value hedges in interest expense, which is generally offset by changes in the fair value of the hedged debt obligation. Interest payments made or received related to our interest rate derivative instruments are included in interest expense. We record the effective portion of any change in the fair value of derivative instruments designated as cash flow hedges as unrealized gains or losses in OCI, net of tax, until the hedged cash flow occurs, at which point the effective portion of any gain or loss is reclassified to earnings. We record the ineffective portion of our cash flow hedges in interest expense. In the event the hedged cash flow does not occur, or it becomes no longer probable that it will occur, we reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time.

In the fourth quarter of 2013, we entered into interest rate derivative contracts having a notional amount of $450 million to convert fixed-rate debt into floating-rate debt, which we designated as fair value hedges, and had $450 million outstanding as of December 31, 2014. We assessed at inception, and re-assess on an ongoing basis, whether the interest rate derivative contracts are highly effective in offsetting changes in the fair value of the hedged fixed rate debt. In 2014, we recognized in interest expense, a $29 million loss on our hedged debt obligations, compared to a $7 million gain on our hedged debt obligation in 2013. We also recognized, in interest expenses, a $29 million gain on the related interest rate derivative contracts during 2014, compared to an $8 million loss on these contracts during 2013. This resulted in net gain of less than $1 million recorded in earning due to ineffectiveness in 2014 and a net loss of $1 million recorded in earnings due to ineffectiveness in 2013.

In prior years, we terminated certain interest rate derivative contracts, including fixed-to-floating interest rate contracts, designated as fair value hedges, and floating-to-fixed treasury locks designated as cash flow hedges. We began amortizing the gains and losses of these derivative instruments upon termination into earnings as a reduction of interest expense over the remaining term of the hedged debt, in accordance with Topic 815. The carrying amount of certain of our senior notes included unamortized gains of $45 million as of December 31, 2014 and $54 million as of December 31, 2013, and unamortized losses of $2 million as of December 31, 2014 and $2 million as of December 31, 2013, related to the fixed-to-floating interest rate contracts. In addition, we had pre-tax net gains within AOCI related to terminated floating-to-fixed treasury locks of $2 million as of December 31, 2014 and $3 million as of December 31, 2013. The gains that we recognized in earnings related to previously terminated interest rate derivatives were $9 million in 2014, $10 million in 2013, and $11 million in 2012. As of December 31, 2014, $9 million of net gains may be reclassified to earnings within the next twelve months from amortization of our previously terminated interest rate derivative contracts.

Counterparty Credit Risk

We do not have significant concentrations of credit risk arising from our derivative financial instruments, whether from an individual counterparty or a related group of counterparties. We manage our concentration of counterparty credit risk on our derivative instruments by limiting acceptable counterparties to a diversified group of major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to each counterparty, and by actively monitoring their credit ratings and outstanding fair values on an on-going basis. Furthermore, none of our derivative transactions are subject to collateral or other security arrangements and none contain provisions that are dependent on our credit ratings from any credit rating agency.

We also employ master netting arrangements that reduce our counterparty payment settlement risk on any given maturity date to the net amount of any receipts or payments due between us and the counterparty financial institution. Thus, the maximum loss due to credit risk by counterparty is limited to the unrealized gains in such contracts net of any unrealized losses should any of these counterparties fail to perform as contracted. Although these protections do not eliminate concentrations of credit risk, as a result of the above considerations, we do not consider the risk of counterparty default to be significant.

Fair Value of Derivative Instruments

The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying consolidated statements of operations during 2014, 2013 and 2012 (in millions):

	Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)			Location in Statement of Operations
Year Ended December 31, 2014
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	227		105			Cost of products sold
	$	227	$	106
Year Ended December 31, 2013
Interest rate contracts	$	—	$	1		Interest expense
Currency hedge contracts	207		36			Cost of products sold
	$	207	$	37
Year Ended December 31, 2012
Interest rate contracts	$	—	$	2		Interest expense
Currency hedge contracts	95		(39		)	Cost of products sold
	$	95	$	(37	)

We recognized a gain of less than $1 million in 2014, a loss of $1 million in 2013 and a de minimus amount in 2012 in earnings, related to the ineffective portion of our hedging relationships.

Net gains and losses on currency hedge contracts not designated as hedging instruments were offset by net losses and gains from foreign currency transaction exposures, as shown in the following table:

in millions										Location in Statement of Operations
	Year Ended December 31,
	2014			2013			2012
Gain (loss) on currency hedge contracts	$	52		$	45		$	23		Other, net
Gain (loss) on foreign currency transaction exposures	(70		)	(56		)	(41		)	Other, net
Net foreign currency gain (loss)	$	(18	)	$	(11	)	$	(18	)

Topic 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative instruments using the framework prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering the estimated amount we would receive or pay to transfer these instruments at the reporting date and by taking into account current interest rates, foreign currency exchange rates, the creditworthiness of the counterparty for assets, and our creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of December 31, 2014, we have classified all of our derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by Topic 820, as discussed below, because these observable inputs are available for substantially the full term of our derivative instruments.

The following are the balances of our derivative assets and liabilities as of December 31, 2014 and December 31, 2013:

		As of
		December 31,		December 31,
(in millions)	Location in Balance Sheet (1)	2014		2013
Derivative Assets:
Designated Hedging Instruments
Currency hedge contracts	Other current assets	$	178	$	117
Currency hedge contracts	Other long-term assets	141		120
Interest rate contracts	Other current assets	3		1
Interest rate contracts	Other long-term assets	22		—
		344		238
Non-Designated Hedging Instruments
Currency hedge contracts	Other current assets	100		27
Total Derivative Assets		$	444	$	265
Derivative Liabilities:
Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	$	1	$	13
Currency hedge contracts	Other long-term liabilities	—		19
Interest rate contracts	Other long-term liabilities	—		8
		1		40
Non-Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	35		23
Total Derivative Liabilities		$	36	$	63

(1) We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less.

Other Fair Value Measurements

Recurring Fair Value Measurements

On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices, where available. Where quoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value. Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

• Level 1 – Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.

• Level 2 – Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

• Level 3 – Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2014 and December 31, 2013:

	As of December 31, 2014								As of December 31, 2013
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market and government funds	$	151	$	—	$	—	$	151	$	38	$	—	$	—	$	38
Currency hedge contracts	—		419		—		419		—		264		—		264
Interest rate contracts	—		25		—		25		—		1		—		1
	$	151	$	444	$	—	$	595	$	38	$	265	$	—	$	303
Liabilities
Currency hedge contracts	$	—	$	36	$	—	$	36	$	—	$	55	$	—	$	55
Accrued contingent consideration	—		—		274		274		—		—		501		501
Interest rate contracts	—		—		—		—		—		8		—		8
	$	—	$	36	$	274	$	310	$	—	$	63	$	501	$	564

Our investments in money market and government funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as cash and cash equivalents within our accompanying consolidated balance sheets, in accordance with U.S. GAAP and our accounting policies.

In addition to $151 million invested in money market and government funds as of December 31, 2014, we had $255 million in short-term time deposits and $181 million in interest bearing and non-interest bearing bank accounts. In addition to $38 million invested in money market and government funds as of December 31, 2013, we had $31 million in short-term time deposits and $148 million in interest bearing and non-interest bearing bank accounts.

Our recurring fair value measurements using significant unobservable inputs (Level 3) relate solely to our contingent consideration liability. Refer to Note B - Acquisitions for a discussion of the changes in the fair value of our contingent consideration liability.

Non-Recurring Fair Value Measurements

We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods subsequent to initial recognition. The fair value of a cost method investment is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. The aggregate carrying amount of our cost method investments was $27 million as of December 31, 2014 and $20 million as of December 31, 2013.

During 2014 and 2013, we recorded charges of $195 million and $476 million, respectively, to adjust our goodwill and certain other intangible asset balances to their fair value. Refer to Note D - Goodwill and Other Intangible Assets, for further detailed information related to these charges and significant unobservable inputs.

The fair value of our outstanding debt obligations was $4.613 billion as of December 31, 2014 and $4.602 billion as of December 31, 2013, which was determined by using quoted market prices for our publicly-registered senior notes, classified as Level 1 within the fair value hierarchy. Refer to Note F – Borrowings and Credit Arrangements for a discussion of our debt obligations.

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

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 and accumulated write-offs of goodwill as of December 31, 2014 and 2013 is as follows:

	As of December 31, 2014					As of December 31, 2013
	Gross Carrying		Accumulated Amortization/			Gross Carrying		Accumulated Amortization/
(in millions)	Amount		Write-offs			Amount		Write-offs
Amortizable intangible assets
Technology-related	$	8,406	$	(3,697	)	$	8,272	$	(3,342	)
Patents	519		(342		)	513		(326		)
Other intangible assets	875		(533		)	845		(479		)
	$	9,800	$	(4,572	)	$	9,630	$	(4,147	)
Unamortizable intangible assets
Goodwill	$	15,798	$	(9,900	)	$	15,593	$	(9,900	)
Technology-related	197		—			197		—
	$	15,995	$	(9,900	)	$	15,790	$	(9,900	)

In addition, we had $181 million and $270 million of in-process research and development intangible assets as of December 31, 2014 and December 31, 2013, respectively.

Our technology-related intangible assets that are not subject to amortization represent technical processes, intellectual property and/or institutional understanding acquired through business combinations that are fundamental to the on-going operations of our business and have no limit to their useful life. Our technology-related intangible assets that are not subject to amortization are comprised primarily of certain acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine. We assess our indefinite-lived intangible assets at least annually for impairment and reassess their classification as indefinite-lived assets. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other.

2013 Reorganization

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. To determine the amount of goodwill within our new global reporting units, on a relative fair value basis we reallocated $1.764 billion of goodwill previously allocated to our former EMEA, Asia Pacific, Japan, and Americas international reporting units to our new global reporting units. In addition, we reallocated the goodwill previously allocated to the former U.S. divisional reporting units to each respective new global reporting unit, with the exception of the goodwill allocated to the former U.S. Cardiovascular reporting unit. The $2.380 billion of goodwill allocated to the former U.S. Cardiovascular reporting unit was reallocated between the new global Interventional Cardiology and global Peripheral Interventions reporting units on a relative fair value basis.

The following represents our goodwill balance by new global reportable segment. We restated the prior period information to conform to the current presentation:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Balance as of December 31, 2012	$	3,249		$	577		$	2,147		$	5,973
Purchase price adjustments	3			—			—			3
Goodwill acquired	—			140			—			140
Goodwill written off	—			(423		)	—			(423		)
Balance as of December 31, 2013	$	3,252		$	294		$	2,147		$	5,693
Purchase price adjustments	(2		)	(4		)	(2		)	(8		)
Goodwill acquired	169			—			44			213
Goodwill written off	—			—			—			—
Other changes in carrying amount*	7			$	—		(7		)	—
Balance as of December 31, 2014	$	3,426		$	290		$	2,182		$	5,898

*In 2014, we reallocated $7 million of goodwill between Cardiovascular and MedSurg as a result of the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014.

The 2014 and 2013 purchase price adjustments relate primarily to adjustments in taxes payable and deferred income taxes, including changes in the liability for unrecognized tax benefits.

2014 Goodwill Impairment Testing

We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist.

In the second quarter of 2014, we performed our annual goodwill impairment test for all of our reporting units, in accordance with ASC Topic 350, Intangibles-Goodwill and Other. In conjunction with our annual test, the fair value of each reporting unit exceeded its carrying value. Therefore, it was deemed not necessary to proceed to the second step of the impairment test. As a result of the 2014 annual goodwill impairment test, we identified our global Neuromodulation and global Electrophysiology reporting units as being at higher risk of potential failure of the first step of the goodwill impairment test in future reporting periods. As of the date of our annual goodwill impairment test, our global Neuromodulation reporting unit had excess fair value over carrying value of approximately 55 percent and held $1.356 billion of allocated goodwill. As of the date of our annual goodwill impairment test, our global Electrophysiology reporting unit had excess fair value over carrying value of approximately 38 percent and held $292 million of allocated goodwill. During the fourth quarter of 2014, due to changes in our expectations of the timing and amount of future revenue and cash flow related to our Electrophysiology reporting unit, we performed an interim goodwill impairment test on this reporting unit. Based on this assessment, we concluded that the fair value of the Electrophysiology reporting unit exceeded its carrying value; however the level of excess fair value over the carrying value had declined to approximately 26 percent.As of our annual goodwill impairment test date, our global Cardiac Rhythm Management (CRM) reporting unit had a fair value approximately equal to its carrying value; however, due to goodwill impairment charges in prior years, no goodwill remains within our CRM reporting unit. Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses could result in future impairments of goodwill within our reporting units including global CRM. Further, the recoverability of our CRM-related amortizable intangibles ($4.097 billion globally as of December 31, 2014) is sensitive to future cash flow assumptions and our global CRM business performance. The $4.097 billion of CRM-related amortizable intangibles is at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. An impairment of a material portion of our CRM-related amortizable intangibles carrying value would occur if the second step of the amortizable intangible test is required in a future reporting period.

On a quarterly basis, we monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets. The key variables that drive the cash flows of our reporting units and amortizable intangibles are estimated revenue growth rates and levels of profitability. Terminal value growth rate assumptions, as well as the Weighted Average Cost of Capital (WACC) rate applied are additional key variables for reporting unit cash flows. These assumptions are subject to uncertainty, including our ability to grow revenue and improve profitability levels. Relatively small declines in the future performance and cash flows of a reporting unit or asset group or small changes in other key assumptions may result in the recognition of significant goodwill or intangible asset impairment charges. For example, based on the interim goodwill assessment performed on our Electrophysiology reporting unit during the fourth quarter of 2014, keeping all other variables constant, an increase in the WACC applied of 50 basis points combined with a 100 basis point decrease in the terminal value growth rate would require that we perform the second step of the goodwill impairment test. As of the date of our annual goodwill impairment test, keeping all other variables constant, an increase in the WACC applied of 100 basis points combined with a 150 basis points decrease in the terminal value growth rate would require that we perform the second step of the goodwill impairment test for our global Neuromodulation reporting unit. The estimates used for our future cash flows and discount rates represent management's best estimates, which we believe to be reasonable, but future declines in business performance may impair the recoverability of our goodwill and intangible asset balances.

Future events that could have a negative impact on the levels of excess fair value over carrying value of our reporting units and/or amortizable intangible assets include, but are not limited to:

• decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, reductions in reimbursement levels, product actions, and/or competitive technology developments;

• declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies, product actions, and market and/or regulatory conditions that may cause significant launch delays or product recalls;

• decreases in our forecasted profitability due to an inability to successfully implement and achieve timely and sustainable cost improvement measures consistent with our expectations, increases in our market-participant tax rate, and/or changes in tax laws;

• negative developments in intellectual property litigation that may impact our ability to market certain products or increase our costs to sell certain products;

• the level of success of on-going and future research and development efforts, including those related to recent acquisitions, and increases in the research and development costs necessary to obtain regulatory approvals and launch new products;

• the level of success in managing the growth of acquired companies, achieving sustained profitability consistent with our expectations, establishing government and third-party payer reimbursement, supplying the market, and increases in the costs and time necessary to integrate acquired businesses into our operations successfully;

• changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses; and

• increases in our market-participant risk-adjusted WACC.

Negative changes in one or more of these factors, among others, could result in additional impairment charges.

2013 Charges

Following our reorganization from regions to global business units and our reallocation of goodwill on a relative fair value basis as of January 1, 2013, we conducted the first step of the goodwill impairment test for all global reporting units. As of January 1, 2013, the fair value of each global reporting unit exceeded its carrying value, with the exception of the global CRM reporting unit. We tested the global CRM intangible assets in conjunction with the second step of the goodwill test on the global CRM reporting unit, and recorded a non-cash goodwill impairment charge of $423 million ($421 million after-tax) to write down the goodwill to its implied fair value as of January 1, 2013 as a result of this analysis. The primary driver of this impairment charge was our reorganization from geographic regions to global business units as of January 1, 2013, which changed the composition of our reporting units. As a result of the reorganization, any goodwill allocated to the global CRM reporting unit was no longer supported by the cash flows of other businesses. Under our former reporting unit structure, the goodwill allocated to our regional reporting units was supported by the cash flows from all businesses in each international region. The hypothetical tax structure of the global CRM business and the global CRM business discount rate applied were also contributing factors to the goodwill impairment charge.

2012 Charges

In the second quarter of 2012, we performed our annual goodwill impairment test for all of our reporting units and concluded that the goodwill within our former EMEA reporting unit was impaired and recorded a charge of $3.602 billion ($3.579 billion after-tax). As a result of revised estimates developed during our annual strategic planning process and analysis performed in conjunction with our annual goodwill impairment test, we concluded that the revenue growth rates projected for the EMEA reporting unit were slightly lower than our previous estimates primarily driven by macro-economic factors and our performance in the European market. We updated short-term operating projections based on our most recent strategic plan for EMEA prepared by management. We reduced the EMEA long-term growth rates and terminal value growth rate projections and increased the discount rate within our 15-year DCF model for EMEA by approximately 100 basis points due to increased risk associated with our projections in this market primarily as a result of economic uncertainty in Europe. In addition, our expectations for future growth and profitability were lowered as compared to our previous estimates and reflected declines in average selling prices and volume pressures due to austerity measures.

In the third quarter of 2012, we performed an interim goodwill impairment test and recorded a non-cash $748 million (pre- and after-tax) charge associated with our former U.S. Cardiac Rhythm Management (U.S. CRM) reporting unit, primarily driven by a reduction in the estimated size of the U.S. CRM market, related adjustments to our business and other competitive factors, which led to lower projected U.S. CRM results compared to prior forecasts. The U.S. CRM market is dynamic, highly competitive and difficult to forecast; in the third quarter of 2012, we lowered our projections for the U.S. CRM market size and our future revenue levels within this market, primarily to reflect changes in expectations of average selling prices and unit growth, adjustments to our business and other competitive factors. The increased pricing pressure and lower unit volumes were primarily due to physician alignment with hospitals, efforts to reduce health care costs, focus on appropriate device usage, replacement volumes and competition, and were more impactful to the U.S. CRM business than previously estimated. In addition, we adjusted certain elements of our business and shifted investments to focus on areas expected to provide the highest future growth and financial return. As a result of these factors, we reduced the compound annual revenue growth rate of our 15 year DCF model for the U.S. CRM reporting unit by approximately 250 basis points.

The following is a rollforward of accumulated goodwill write-offs by global reportable segment:

(in millions)	Cardiovascular			Rhythm Management			MedSurg			Total
Accumulated write-offs as of December 31, 2012	$	(1,479	)	$	(6,537	)	$	(1,461	)	$	(9,477	)
Goodwill written off	—			(423		)	—			(423		)
Accumulated write-offs as of December 31, 2013	$	(1,479	)	$	(6,960	)	(1,461		)	$	(9,900	)
Goodwill written off	—			—			—			—
Accumulated write-offs as of December 31, 2014	$	(1,479	)	$	(6,960	)	$	(1,461	)	$	(9,900	)

Intangible Asset Impairment Charges

On a quarterly basis, we monitor for events or other potential indicators of impairment that would warrant an interim impairment test of our intangible assets. The recoverability of our CRM-related amortizable intangibles ($4.097 billion globally as of December 31, 2014) are sensitive to changes in future cash flow assumptions and our global CRM business performance. The $4.097 billion of CRM-related amortizable intangibles are at higher risk of potential failure of the first step of the amortizable intangible recoverability test in future reporting periods. An impairment of a material portion of our CRM-related amortizable intangibles carrying value would occur if the second step of the amortizable intangible test is required in a future reporting period. See Goodwill Impairment Charges above for discussion of future events that could have a negative impact on the levels of excess fair value over carrying value of our CRM-related amortizable intangible assets.

2014 Charges

During the fourth quarter of 2014, as a result of revised estimates in conjunction with our annual operating plan, we performed an interim impairment test of in-process research and development projects associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded an impairment charge of $18 million to write-down the balances of these in-process projects to their fair value, which was determined to be zero.

During the third quarter of 2014, we performed our annual impairment test of all in-process research and development projects, and our indefinite lived core technology assets. Based on the results of our annual test, we recorded total impairment charges of $4 million to write-down the balances of certain in-process projects to their fair value. In addition, as a result of revised estimates in conjunction with our annual operating plan, we performed an interim impairment test of core technology associated with certain of our acquisitions, and recorded an impairment charge of $8 million, for a total of $12 million of impairment charges in the third quarter of 2014.

During the second quarter of 2014, as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects and core technology associated with certain of our acquisitions. Based on our impairment assessment, and lower expected future cash flows associated with our intangible assets, we recorded impairment charges of $110 million in the second quarter of 2014. As a result of changes in our clinical strategy and lower estimates of the European and global hypertension markets, and the resulting amount of future revenue and cash flows associated with the technology acquired from Vessix, we recorded impairment charges of $67 million related to technology intangible assets during the second quarter of 2014. In addition, in the second quarter of 2014, due to revised expectations and timing as a result of the announcement of a third FDA Circulatory System Devices Panel, we recorded impairment charges of $35 million related to the in-process research and development intangible assets acquired from Atritech, Inc. (Atritech). We also recorded an additional $8 million intangible asset impairment charge associated with changes in the amount of the expected cash flows related to certain other acquired in-process research and development projects.

During the first quarter of 2014, as a result of lower estimates of the resistant hypertension market following the announcement of data from a competitor's clinical trial, we performed an interim impairment test of our in-process research and development projects and core technology associated with our acquisition of Vessix. The impairment assessments were based upon probability-weighted cash flows of potential future scenarios. Based on our impairment assessment, and lower expected future cash flows associated with our Vessix-related intangible assets, we recorded impairment charges of $55 million in the first quarter of 2014 to write-down the balance of these intangible assets to their fair value.

2013 Charges

During the second quarter of 2013 as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects associated with certain of our acquisitions. Based on the results of our impairment analyses, we revised our expectations of the market size related to Sadra Medical, Inc. (Sadra), and the resulting timing and amount of future revenue and cash flows associated with the technology acquired from Sadra. As a result of these changes, we recorded pre-tax impairment charges of $51 million to write-down the balance of these intangible assets to their fair value during the second quarter of 2013. During the second quarter of 2013, we also recorded an additional $2 million intangible asset impairment charge associated with changes in the amount of the expected cash flows related to certain other acquired in-process research and development projects.

2012 Charges

During the third quarter of 2012, we performed our annual impairment test of all in-process research and development projects, and our indefinite lived core technology assets. Based on the results of our annual test, we recorded total impairment charges of $13 million to write-down the balances of certain in-process projects to their fair value. These charges were primarily due to increased expectations in the cost to bring an in-process project to market in a certain geographic region and lower future revenue expectations associated with an in-process project.

During the second quarter of 2012, as a result of revised estimates developed in conjunction with our annual strategic planning process and annual goodwill impairment test, we performed an interim impairment test of our in-process research and development projects associated with our acquisition of Sadra. Based on our impairment analysis, we revised our expectations of the required effort, time and cost involved in completing the in-process projects and bringing the related products to market. As a result of these changes, we recorded an impairment charge of $129 million to write-down the balance of these intangible assets to their fair value during the second quarter of 2012.

We recorded these amounts in the intangible asset impairment charges caption in our accompanying consolidated statements of operations.

The nonrecurring Level 3 fair value measurements of our intangible asset impairment analysis included the following significant unobservable inputs:

Intangible Asset	Valuation Date	Fair Value	Valuation Technique	Unobservable Input	Rate
In-Process R&D	September 30, 2014	$16 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
In-Process R&D	June 30, 2014	$83 million	Income Approach - Excess Earnings Method	Discount Rate	16.5 - 20%
Core Technology	June 30, 2014	$8 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	March 31, 2014	$6 million	Income Approach - Excess Earnings Method	Discount Rate	20%
Core Technology	March 31, 2014	$64 million	Income Approach - Excess Earnings Method	Discount Rate	15%
In-Process R&D	June 30, 2013	$178 million	Income Approach - Excess Earnings Method	Discount Rate	16.5%
In-Process R&D	September 30, 2012	$26 million	Income Approach - Excess Earnings Method	Discount Rate	20 - 25%
In-Process R&D	June 30, 2012	$184 million	Income Approach - Excess Earnings Method	Discount Rate	20%

The intangible asset category and associated write downs recorded in 2014, 2013 and 2012 were as follows:

	Year Ended December 31,
(in millions)	2014		2013		2012
Technology-related	$	107	$	—	$	—
In-process research and development	88		53		142
	$	195	53		$	142

Estimated amortization expense for each of the five succeeding fiscal years based upon our intangible asset portfolio as of December 31, 2014 is as follows:

	Estimated Amortization Expense
Fiscal Year	(in millions)
2015	$	470
2016	469
2017	467
2018	464
2019	460

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Changes in Other Comprehensive Income

12 Months Ended

Dec. 31, 2014

Changes in Other Comprehensive Income [Abstract]

Comprehensive Income (Loss) Note [Text Block]

CHANGES IN OTHER COMPREHENSIVE INCOME

The following table provides the reclassifications out of other comprehensive income for the years ended December 31, 2014 and December 31, 2013. Amounts in the chart below are presented net of tax.

Year Ended December 31, 2014
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(16)	$141	$(19)	$106
Other comprehensive income (loss) before reclassifications	(22)	145	(10)	113
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(67)	(8)	(75)
Net current-period other comprehensive income	(22)	78	(18)	38
Ending Balance	$(38)	$219	$(37)	$144
Year Ended December 31, 2013
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(26)	$34	$(41)	$(33)
Other comprehensive income (loss) before reclassifications	10	130	31	171
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(23)	(9)	(32)
Net current-period other comprehensive income	10	107	22	139
Ending Balance	$(16)	$141	$(19)	$106

The income tax impact of the amounts in other comprehensive income for unrealized gains/losses on derivative financial instruments before reclassifications was an expense of $83 million in the year ended December 31, 2014 and an expense of $77 million in the year ended December 31, 2013. The gains and losses on derivative financial instruments reclassified from accumulated other comprehensive income were reduced by income tax impacts of $38 million in the year ended December 31, 2014 and $14 million in the year ended December 31, 2013. Refer to Note E – Fair Value Measurements for further detail on the reclassifications related to derivatives.

The income tax impact of the amounts in other comprehensive income for defined benefit and pension items before reclassifications was a benefit of $5 million in the year ended December 31, 2014 and an expense of $15 million in the year ended December 31, 2013. The gains and losses on defined benefit and pension items reclassified from accumulated other comprehensive income were reduced by income tax impacts of $5 million in the year ended December 31, 2014 and $6 million in the year ended December 31, 2013.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

STOCKHOLDERS' EQUITY

Preferred Stock

We are authorized to issue 50 million 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 December 31, 2014 and 2013, we had no shares of preferred stock issued or outstanding.

Common Stock

We are authorized to issue 2.0 billion shares of common stock, $0.01 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.

On January 25, 2013, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.0 billion of our common stock. During 2014, we repurchased approximately 10 million shares of our common stock for $125 million. During 2013, we repurchased approximately 51 million shares of our common stock for $500 million. During 2012, we repurchased approximately 105 million shares of our common stock for $600 million. Repurchased shares are available for reissuance under our equity incentive plans and for general corporate purposes, including acquisitions. As of December 31, 2014, we had remaining $535 million authorized under our 2013 share repurchase program. There were approximately 248 million shares in treasury as of December 31, 2014 and 238 million shares in treasury as of December 31, 2013.

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Restructuring Related Activities

12 Months Ended

Dec. 31, 2014

Restructuring Charges [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

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 research and development projects, capital, our people and other programs that we believe are important to drive our growth. As a result of these assessments, we have undertaken various restructuring initiatives in order to enhance our growth potential and position us for long-term success. These initiatives are described below.

2014 Restructuring Plan

On October 22, 2013, our Board of Directors approved, and we committed to, a restructuring initiative (the 2014 Restructuring plan). The 2014 Restructuring plan is intended to build on the progress we have made to address financial pressures in a changing global marketplace, further strengthen our operational effectiveness and efficiency and support new growth investments. Key activities under the plan include continued implementation of our ongoing Plant Network Optimization (PNO) strategy, continued focus on driving operational efficiencies and ongoing business and commercial model changes. The PNO strategy is intended to simplify our manufacturing plant structure by transferring certain production lines among facilities. Other activities involve rationalizing organizational reporting structures to streamline various functions, eliminate bureaucracy, increase productivity and better align resources to business strategies and marketplace dynamics. These activities were initiated in the fourth quarter of 2013 and are expected to be substantially completed by the end of 2015.

We estimate that the implementation of the 2014 Restructuring plan will result in total pre-tax charges of approximately $250 million to $300 million, and approximately $235 million to $285 million of these charges are expected to result in future cash outlays, of which we have made payments of $93 million to date. We have recorded related costs of $142 million 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 statement of operations. The following table provides a summary of our estimates of costs associated with the 2014 Restructuring plan by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$115 million to $135 million
Other (1)	$25 million to $35 million
Restructuring-related expenses:
Other (2)	$110 million to $130 million
	$250 million to $300 million

(1) Consists primarily of consultant fees and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2014 Restructuring plan, including program management, accelerated depreciation, and costs to transfer product lines among facilities.

2011 Restructuring Plan

On July 26, 2011, our Board of Directors approved, and we committed to, a restructuring initiative (the 2011 Restructuring plan) designed to strengthen operational effectiveness and efficiencies, increase competitiveness and support new investments, thereby increasing shareholder value. Key activities under the 2011 Restructuring plan included standardizing and automating certain processes and activities; relocating select administrative and functional activities; rationalizing organizational reporting structures; leveraging preferred vendors; and other efforts to eliminate inefficiency. Among these efforts, we expanded our ability to deliver best-in-class global shared services for certain functions and divisions at several locations in emerging markets. This action was intended to enable us to grow our global commercial presence in key geographies and take advantage of many cost-reducing and productivity-enhancing opportunities. In addition, we undertook efforts to streamline various corporate functions, eliminate bureaucracy, increase productivity and better align corporate resources to our key business strategies. On January 25, 2013, our Board of Directors approved, and we committed to, an expansion of the 2011 Restructuring plan (the Expansion). The Expansion was intended to further strengthen our operational effectiveness and efficiencies and support new investments. Activities under the 2011 Restructuring plan were initiated in the third quarter of 2011 and all activities, including those related to the Expansion, were substantially completed by the end of 2013.

The 2011 Restructuring plan, including the Expansion, is estimated to result in total pre-tax charges of approximately $289 million to $292 million, and approximately $287 million to $291 million of these charges are expected to result in cash outlays, of which we have made payments of $287 million to date. We have recorded related costs of $289 million since the inception of the plan, and recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations.

The following provides a summary of our expected total costs associated with the 2011 Restructuring plan, including the Expansion, by major type of cost:

Type of cost	Total estimated amount expected to be incurred
Restructuring charges:
Termination benefits	$138 million to $141 million
Other (1)	$112 million
Restructuring-related expenses:
Other (2)	$39 million
	$289 million to $292 million

(1) Includes primarily consulting fees, net fixed asset write-offs and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2011 Restructuring plan, including the Expansion, such as program management, accelerated depreciation, retention and infrastructure-related costs.

2010 Restructuring Plan

On February 6, 2010, our Board of Directors approved, and we committed to, a series of management changes and restructuring initiatives (the 2010 Restructuring plan) designed to focus our business, drive innovation, accelerate profitable revenue growth and increase both accountability and shareholder value. Key activities under the plan included the restructuring of certain of our businesses and corporate functions; the re-alignment of our international structure to reduce our administrative costs and invest in expansion opportunities including significant investments in emerging markets; and the re-prioritization and diversification of our product portfolio. Activities under the 2010 Restructuring plan were initiated in the first quarter of 2010 and were complete by the end of 2012.

The execution of the 2010 Restructuring plan resulted in total pre-tax charges of $160 million, and required cash outlays of $145 million. We have recorded a portion of these expenses as restructuring charges and the remaining portion through other lines within our consolidated statements of operations.

The following provides a summary of our costs associated with the 2010 Restructuring plan by major type of cost:

Type of Cost	Total amount incurred
Restructuring charges:
Termination benefits	$90 million
Fixed asset write-offs	$11 million
Other (1)	$51 million
Restructuring-related expenses:
Other (2)	$8 million
	$160 million

(1) Includes primarily consulting fees and costs associated with contractual cancellations.

(2) Comprised of other costs directly related to the 2010 Restructuring plan, including accelerated depreciation and infrastructure-related costs.

Plant Network Optimization (PNO) Program

In January 2009, our Board of Directors approved, and we committed to, a PNO program, intended to simplify our manufacturing plant structure by transferring certain production lines among facilities and by closing certain other facilities. The program was intended to improve our overall gross profit margins. Activities under the PNO program were initiated in the first quarter of 2009 and were substantially completed during 2012.

The Plant Network Optimization program resulted in total pre-tax charges of $126 million, and resulted in cash outlays of $103 million. We have recorded a portion of these expenses as restructuring charges and the remaining portion through cost of products sold within our consolidated statements of operations.

The following provides a summary of our costs associated with the Plant Network Optimization program by major type of cost:

Type of cost	Total amount incurred
Restructuring charges:
Termination benefits	$30 million
Restructuring-related expenses:
Accelerated depreciation	$22 million
Transfer costs (1)	$74 million
	$126 million

(1) Consists primarily of costs to transfer product lines among facilities, including costs of transfer teams, freight, idle facility and product line validations.

In aggregate, we recorded restructuring charges pursuant to our restructuring plans of $69 million during 2014, $101 million during 2013, and $136 million during 2012. In addition, we recorded expenses within other lines of our accompanying consolidated statements of operations related to our restructuring initiatives of $48 million during 2014, $23 million during 2013, and $24 million during 2012.

The following presents these costs by major type and line item within our accompanying consolidated statements of operations, as well as by program:

Year Ended December 31, 2014
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
Restructuring charges	$	42	$	—	$	—	$	27	$	69
Restructuring-related expenses:
Cost of products sold	—		—		24		—		24
Selling, general and administrative expenses	—		5		—		19		24
	—		5		24		19		48
	$	42	$	5	$	24	$	46	$	117
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Other		Total
2014 Restructuring plan	$	41	$	5	24		$	43	$	113
2011 Restructuring plan	1		—		—		3		4
2010 Restructuring plan	—		—		—		—		—
Plant Network Optimization program	—		—		—		—		—
	$	42	$	5	$	24	$	46	$	117

Year Ended December 31, 2013
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
Restructuring charges	$	60		$	—	$	—	$	(15	)	$	56	$	101
Restructuring-related expenses:
Selling, general and administrative expenses	—			3		—		—			20		23
	—			3		—		—			20		23
	$	60		$	3	$	—	$	(15	)	$	76	$	124
(in millions)	Termination Benefits			Accelerated Depreciation		Transfer Costs		Net Gain on Fixed Asset Disposal			Other		Total
2014 Restructuring plan	$	29		$	—	$	—	$	—		$	1	$	30
2011 Restructuring plan	37			3		—		(15		)	75		100
2010 Restructuring plan	—			—		—		—			—		—
Plant Network Optimization program	(6		)	—		—		—			—		(6		)
	$	60		$	3	$	—	$	(15	)	$	76	$	124

Year Ended December 31, 2012
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
Restructuring charges	$	79	$	—	$	—	$	14	$	43	$	136
Restructuring-related expenses:
Cost of products sold	—		—		8		—		—		8
Selling, general and administrative expenses	—		2		—		—		14		16
	—		2		8		—		14		24
	$	79	$	2	$	8	$	14	$	57	$	160
(in millions)	Termination Benefits		Accelerated Depreciation		Transfer Costs		Fixed Asset Write-offs		Other		Total
2011 Restructuring plan	$	78	$	2	$	—	$	14	$	55	$	149
2010 Restructuring plan	1		—		—		—		2		3
Plant Network Optimization program	—		—		8		—		—		8
	$	79	$	2	$	8	$	14	$	57	$	160

Termination benefits represent amounts incurred pursuant to our on-going benefit arrangements and amounts for “one-time” involuntary termination benefits, and have been recorded in accordance with ASC Topic 712, Compensation – Non-retirement Postemployment Benefits and ASC Topic 420, Exit or Disposal Cost Obligations (Topic 420). We expect to record additional termination benefits related to our restructuring initiatives in 2015 when we identify with more specificity the job classifications, functions and locations of the remaining headcount to be eliminated. Other restructuring costs, which represent primarily consulting fees, are being recorded as incurred in accordance with Topic 420. Accelerated depreciation is being recorded over the adjusted remaining useful life of the related assets, and production line transfer costs are being recorded as incurred.

We have incurred cumulative restructuring charges related to our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program of $526 million and restructuring-related costs of $191 million since we committed to each plan. The following presents these costs by major type and by plan:

(in millions)	2014 Restructuring plan		2011 Restructuring plan			2010 Restructuring plan		Plant Network Optimization		Total
Termination benefits	$	69	$	138		$	90	$	30	$	327
Fixed asset write-offs	—		(1		)	11		—		10
Other	25		113			51		—		189
Total restructuring charges	94		250			152		30		526
Accelerated depreciation	5		5			—		22		32
Transfer costs	24		—			—		74		98
Other	19		34			8		—		61
Restructuring-related expenses	48		39			8		96		191
	$	142	$	289		$	160	$	126	$	717

We made cash payments of $112 million in 2014 associated with restructuring initiatives pursuant to these plans, and have made total cash payments of $628 million related to our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program since committing to each plan. Each of these payments was made using cash generated from operations, and are comprised of the following:

(in millions)	2014 Restructuring plan		2011 Restructuring plan		2010 Restructuring plan		Plant Network Optimization		Total
Year Ended December 31, 2014
Termination benefits	$	31	$	9	$	—	$	—	$	40
Transfer costs	24		—		—		—		24
Other	38		10		—		—		48
	$	93	$	19	$	—	$	—	$	112
Program to Date
Termination benefits	31		$	133	$	90	$	30	$	284
Transfer costs	24		—		—		73		97
Other	38		154		55		—		247
	$	93	$	287	$	145	$	103	$	628

Our restructuring liability is primarily comprised of accruals for termination benefits. The following is a rollforward of the termination benefit liability associated with our 2014 Restructuring plan, 2011 Restructuring plan, 2010 Restructuring plan and Plant Network Optimization program, since the inception of the respective plan, which is reported as a component of accrued expenses included in our accompanying consolidated balance sheets:

	Restructuring Plan Termination Benefits
										Plant Network
(in millions)	2014			2011			2010			Optimization			Total
Accrued as of December 31, 2011	$	—		$	18		$	6		$	33		$	57
Charges	—			78			1			—			79
Cash payments	—			(60		)	(4		)	(24		)	(88		)
Accrued as of December 31, 2012	—			36			3			9			48
Charges	29			37			—			(6		)	60
Cash payments	—			(61		)	—			(1		)	(62		)
Other	—			—			(3		)	(2		)	(5		)
Accrued as of December 31, 2013	29			12			—			—			41
Charges	41			1			—			—			42
Cash payments	(31		)	(9		)	—			—			(40		)
Accrued as of December 31, 2014	$	39		$	4		$	—		$	—		$	43

In addition to our accrual for termination benefits, we had a $6 million liability as of December 31, 2014 and a $8 million liability as of December 31, 2013 for other restructuring-related items.

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Changes in Other Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Changes in Other Comprehensive Income [Abstract]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (38)	$ (16)	$ (26)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges and Treasury Locks, Effect Net of Tax	219	141	34
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax	(37)	(19)	41
Accumulated Other Comprehensive Income (Loss), Net of Tax	144	106	(33)
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease)	(22)	10
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Before Reclassifications, Net of Tax	145	130
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Reclassification Adjustments, Net of Tax	(10)	31
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost Recognized in Net Periodic Pension Cost, Net of Tax	(8)	(9)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	(18)	22	(9)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	113	171
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Reclassified from OCI, Net of Tax	(67)	(23)
Other Comprehensive Income (Loss), Reclassifications out of OCI, Net of Tax	(75)	(32)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	(22)	10	32
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	78	107	82
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax		107
Other comprehensive income for defined benefits and pension items, before reclassification, tax impact	5	(15)
Other Comprehensive Income (Loss), Net of Tax	38	139	105
Other Comprehensive Income (Loss), Tax	(83)	(77)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising Reclassed from OCI, Tax	38	14
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized (Gain) Loss Arising During Period, Tax	$ 5	$ 6

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Borrowings and Credit Arrangements

12 Months Ended

Dec. 31, 2014

Borrowings and Credit Arrangements [Abstract]

BORROWINGS AND CREDIT ARRANGEMENTS

BORROWINGS AND CREDIT ARRANGEMENTS

We had total debt of $4.262 billion as of December 31, 2014 and $4.240 billion as of December 31, 2013. The debt maturity schedule for the significant components of our debt obligations as of December 31, 2014 is as follows:

(in millions)	2015		2016		2017		2018		2019		Thereafter		Total
Senior notes	$	400	$	600	$	250	$	600	$	—	$	1,950	$	3,800
Term loan	—		80		80		240		—		—		400
	$	400	$	680	$	330	$	840	$	—	$	1,950	$	4,200

Note: The table above does not include unamortized discounts associated with our senior notes, or amounts related to interest rate contracts used to hedge the fair value of certain of our senior notes.

Revolving Credit Facility

We maintain a $2.000 billion revolving credit facility, maturing in April 2017, with a global syndicate of commercial banks. Eurodollar and multicurrency loans under this revolving credit facility bear interest at LIBOR plus an interest margin of between 0.875 percent and 1.475 percent, based on our corporate credit ratings and consolidated leverage ratio (1.275 percent, as of December 31, 2014). In addition, we are required to pay a facility fee based on our credit ratings, consolidated leverage ratio, and the total amount of revolving credit commitments, regardless of usage, under the agreement (0.225 percent, as of December 31, 2014). There were no amounts borrowed under our revolving credit facility as of December 31, 2014 or December 31, 2013.

Our revolving credit facility agreement in place as of December 31, 2014 requires that we maintain certain financial covenants, as follows:

	Covenant Requirement	Actual as of December 31, 2014
Maximum leverage ratio (1)	3.5 times	2.4 times
Minimum interest coverage ratio (2)	3.0 times	8.2 times

(1) Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.

(2) Ratio of consolidated EBITDA, as defined by the credit agreement, to interest expense for the preceding four consecutive fiscal quarters.

The credit agreement provides for an exclusion from the calculation of consolidated EBITDA, as defined by the agreement, through the credit agreement maturity, of any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of December 31, 2014, we had $116 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreement, are excluded from the calculation of consolidated EBITDA and any new debt issued to fund any tax deficiency payments is excluded from consolidated total debt, as defined in the agreement, provided that the sum of any excluded net cash litigation payments and any new debt issued to fund any tax deficiency payments shall not exceed $2.300 billion in the aggregate. As of December 31, 2014, we had approximately $2.107 billion of the combined legal and debt exclusion remaining. As of and through December 31, 2014, we were in compliance with the required covenants.

Any inability to maintain compliance with these covenants could require us to seek to renegotiate the terms of our credit facility or seek waivers from compliance with these covenants, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers.

Term Loan

In August 2013, we entered into a $400 million, unsecured term loan facility. Term loan borrowings under this facility bear interest at LIBOR plus an interest margin of between 1.0 percent and 1.75 percent (currently 1.5 percent), based on our corporate credit ratings and consolidated leverage ratio. The term loan borrowings are payable over a five-year period, with quarterly principal payments of $20 million commencing in the first quarter of 2016 and the remaining principal amount due at the final maturity date in August 2018, and are repayable at any time without premium or penalty. Our term loan facility requires that we comply with certain covenants, including financial covenants with respect to maximum leverage and minimum interest coverage; the maximum leverage ratio requirement is 3.5 times, our actual leverage ratio as of December 31, 2014 is 2.4 times and the minimum interest coverage ratio requirement is 3.0 times, our actual interest coverage ratio as of December 31, 2014 is 8.2 times. We had $400 million outstanding under this facility as of December 31, 2014 and December 31, 2013.

Senior Notes

We had senior notes outstanding of $3.800 billion as of December 31, 2014 and December 31, 2013, respectively. In August 2013, we issued $600 million of 2.650% senior notes due in 2018, and $450 million of 4.125% senior notes due in 2023. In September 2013, we used the proceeds, together with borrowings under our new $400 million term loan facility, to prepay $600 million of senior notes maturing in June 2014 and $850 million maturing in January 2015. We recorded a charge in the interest expense caption of our consolidated statements of operations of $70 million for premiums, accelerated amortization of debt issuance costs and investor discount costs net of accelerated amortization of interest rate hedge gains related to the early debt extinguishment. Our senior notes are publicly registered securities, are redeemable prior to maturity and are not subject to any sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to borrowings under our credit and security facility and liabilities of our subsidiaries (see Other Arrangements below).

Our senior notes consist of the following as of December 31, 2014:

	Amount (in millions)		Issuance Date	Maturity Date	Semi-annual Coupon Rate
November 2015 Notes	$	400	November 2005	November 2015	5.500%
June 2016 Notes	600		June 2006	June 2016	6.400%
January 2017 Notes	250		November 2004	January 2017	5.125%
October 2018 Notes	600		August 2013	October 2018	2.650%
January 2020 Notes	850		December 2009	January 2020	6.000%
October 2023 Notes	450		August 2013	October 2023	4.125%
November 2035 Notes	350		November 2005	November 2035	6.250%
January 2040 Notes	300		December 2009	January 2040	7.375%
	$	3,800

Our $2.2 billion of senior notes issued in 2009 and 2013 contain a change-in-control provision, which provides that each holder of the senior notes may require us to repurchase all or a portion of the notes at a price equal to 101 percent of the aggregate repurchased principal, plus accrued and unpaid interest, if a rating event, as defined in the indenture, occurs as a result of a change-in-control, as defined in the indenture. Any other credit rating changes may impact our borrowing cost, but do not require us to repay any borrowings.

The interest rate payable on our November 2015 Notes is currently 6.25 percent and the interest rate payable on our November 2035 Notes is currently 7.00 percent. Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2015 and November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2015 and November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher.

Other Arrangements

We also maintain a $300 million credit and security facility secured by our U.S. trade receivables maturing in June 2015, subject to further extension. The credit and security facility requires that we maintain a maximum leverage covenant consistent with our revolving credit facility. The maximum leverage ratio requirement is 3.5 times and our actual leverage ratio as of December 31, 2014 is 2.4 times. We had no borrowings outstanding under this facility as of December 31, 2014 and December 31, 2013.

We have accounts receivable factoring programs in certain European countries that we account for as sales under ASC Topic 860, Transfers and Servicing. These agreements provide for the sale of accounts receivable to third parties, without recourse, of up to approximately $363 million as of December 31, 2014. We have no retained interests in the transferred receivables, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. We de-recognized $167 million of receivables as of December 31, 2014 at an average interest rate of 3.2 percent, and $146 million as of December 31, 2013 at an average interest rate of 3.3 percent.

In addition, we have uncommitted credit facilities with a commercial Japanese bank that provide for borrowings, promissory notes discounting and receivables factoring of up to 21.0 billion Japanese yen (approximately $175 million as of December 31, 2014). We de-recognized $134 million of notes receivable as of December 31, 2014 at an average interest rate of 1.8 percent and $147 million of notes receivable as of December 31, 2013 at an average interest rate of 1.8 percent. De-recognized accounts and notes receivable are excluded from trade accounts receivable, net in the accompanying consolidated balance sheets.

As of December 31, 2014, we had outstanding letters of credit of $59 million, as compared to $78 million as of December 31, 2013, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2014 and 2013, none of the beneficiaries had drawn upon the letters of credit or guarantees; accordingly, we have not recognized a related liability for our outstanding letters of credit in our consolidated balance sheets as of December 31, 2014 or 2013. We believe we will generate sufficient cash from operations to fund these payments and intend to fund these payments without drawing on the letters of credit.

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Leases

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

LEASES

Rent expense amounted to $76 million in 2014, $77 million in 2013 and $80 million in 2012.

Future minimum rental commitments as of December 31, 2014 under all noncancelable lease agreements, including capital leases, were as follows (in millions):

2015	$	59
2016	51
2017	34
2018	25
2019	21
Thereafter	28
	$	218

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Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2014

Supplemental Balance Sheet Information [Abstract]

SUPPLEMENTAL BALANCE SHEET INFORMATION

SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of selected captions in our accompanying consolidated balance sheets are as follows:

Trade accounts receivable, net

	As of
(in millions)	December 31, 2014			December 31, 2013
Accounts receivable	$	1,288		$	1,419
Less: allowance for doubtful accounts	(76		)	(81		)
Less: allowance for sales returns	(29		)	(31		)
	$	1,183		$	1,307

The following is a rollforward of our allowance for doubtful accounts for 2014, 2013 and 2012:

	Year Ended December 31,
(in millions)	2014			2013			2012
Beginning balance	$	81		$	88		$	81
Net charges to expenses	10			5			14
Utilization of allowances	(15		)	(12		)	(7		)
Ending balance	$	76		$	81		$	88

Inventories

	As of
(in millions)	December 31, 2014		December 31, 2013
Finished goods	$	649	$	598
Work-in-process	97		90
Raw materials	200		209
	$	946	$	897

Property, plant and equipment, net

	As of
(in millions)	December 31, 2014		December 31, 2013
Land	$	80	$	81
Buildings and improvements	944		917
Equipment, furniture and fixtures	2,633		2,461
Capital in progress	189		211
	3,846		3,670
Less: accumulated depreciation	2,339		2,124
	$	1,507	$	1,546

Accrued expenses

	As of
(in millions)	December 31, 2014		December 31, 2013
Legal reserves	$	694	$	84
Payroll and related liabilities	512		488
Accrued contingent consideration	158		148
Other	586		628
	$	1,950	$	1,348

Other long-term liabilities

	As of
(in millions)	December 31, 2014		December 31, 2013
Accrued income taxes	$	1,231	$	1,283
Legal reserves	883		523
Accrued contingent consideration	116		353
Other long-term liabilities	436		410
	$	2,666	$	2,569

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Leases (Tables)

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Operating Leases of Lessee Disclosure [Table Text Block]

Future minimum rental commitments as of December 31, 2014 under all noncancelable lease agreements, including capital leases, were as follows (in millions):

2015	$	59
2016	51
2017	34
2018	25
2019	21
Thereafter	28
	$	218

XML

Restructuring Related Activities (Details in Tables) (USD $) In Millions, unless otherwise specified	12 Months Ended			72 Months Ended	41 Months Ended	15 Months Ended	59 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	$ (112)			$ (628)
Restructuring Charges Incurred to Date				526
Restructuring Charges	69	101	136
Restructuring Related Expenses	48	23	24
Restructuring and Related Cost, Incurred Cost	117	124	160
Restructuring-related Costs Incurred to Date				191
2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(19)				(287)
Restructuring Charges Incurred to Date					250
Restructuring and Related Cost, Incurred Cost		100	149
Restructuring-related Costs Incurred to Date					39
Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	126			126	126	126	126
Payments for Restructuring	0			(103)
Restructuring Charges Incurred to Date				30
Restructuring and Related Cost, Incurred Cost		(6)	8
Restructuring-related Costs Incurred to Date				96
2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(93)
Restructuring Charges Incurred to Date						94
Restructuring and Related Cost, Incurred Cost		30
Restructuring-related Costs Incurred to Date						48
2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	160			160	160	160	160
Payments for Restructuring	0						(145)
Restructuring Charges Incurred to Date							152
Restructuring and Related Cost, Incurred Cost		0	3
Restructuring-related Costs Incurred to Date							8
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	43	41	48	43	43	43	43	57
Payments for Restructuring	(40)	(62)	(88)	(284)
Other Restructuring Costs		5
Restructuring Charges Incurred to Date				327
Restructuring Charges	42	60	79
Restructuring Related Expenses	0	0	0
Restructuring and Related Cost, Incurred Cost	42	60	79
Employee Severance [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	4	12	36	4	4	4	4	18
Payments for Restructuring	(9)	(61)	(60)		(133)
Other Restructuring Costs		0
Restructuring Charges Incurred to Date					138
Restructuring Charges	1	37	78
Restructuring and Related Cost, Incurred Cost	1	37	78
Employee Severance [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	0	0	9	0	0	0	0	33
Payments for Restructuring	0	(1)	(24)	(30)
Other Restructuring Costs		2
Restructuring Charges Incurred to Date				30
Restructuring Charges	0	(6)	0
Restructuring and Related Cost, Incurred Cost	0	(6)	0
Employee Severance [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	39	29	0	39	39	39	39	0
Payments for Restructuring	(31)	0	0			(31)
Other Restructuring Costs		0
Restructuring Charges Incurred to Date						69
Restructuring Charges	41	29	0
Restructuring and Related Cost, Incurred Cost	41	29
Employee Severance [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	0	0	3	0	0	0	0	6
Payments for Restructuring	0	0	(4)				(90)
Other Restructuring Costs		3
Restructuring Charges Incurred to Date							90
Restructuring Charges	0	0	1
Restructuring and Related Cost, Incurred Cost	0	0	1
Impairment of an asset in value [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				10
Restructuring Charges		(15)	14
Restructuring Related Expenses		0	0
Restructuring and Related Cost, Incurred Cost		(15)	14
Impairment of an asset in value [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date					(1)
Restructuring and Related Cost, Incurred Cost		(15)	14
Impairment of an asset in value [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date				0
Restructuring and Related Cost, Incurred Cost		0	0
Impairment of an asset in value [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date						0
Restructuring and Related Cost, Incurred Cost		0
Impairment of an asset in value [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges Incurred to Date							11
Restructuring and Related Cost, Incurred Cost		0	0
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	6	8		6	6	6	6
Payments for Restructuring	(48)			(247)
Restructuring Charges Incurred to Date				189
Restructuring Charges	27	56	43
Restructuring Related Expenses	19	20	14
Restructuring and Related Cost, Incurred Cost	46	76	57
Other Restructuring [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(10)				(154)
Restructuring Charges Incurred to Date					113
Restructuring and Related Cost, Incurred Cost	3	75	55
Other Restructuring [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	0			0
Restructuring Charges Incurred to Date				0
Restructuring and Related Cost, Incurred Cost	0	0	0
Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(38)					(38)
Restructuring Charges Incurred to Date						25
Restructuring and Related Cost, Incurred Cost	43	1
Other Restructuring [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	0						(55)
Restructuring Charges Incurred to Date							51
Restructuring and Related Cost, Incurred Cost	0	0	2
Restructuring Related To Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring-related Costs Incurred to Date				61
Restructuring Related To Plan [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	4
Restructuring-related Costs Incurred to Date					34
Restructuring Related To Plan [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	0
Restructuring-related Costs Incurred to Date				0
Restructuring Related To Plan [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	113
Restructuring-related Costs Incurred to Date						19
Restructuring Related To Plan [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	0
Restructuring-related Costs Incurred to Date							8
Accelerated Depreciation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	0	0	0
Restructuring Related Expenses	5	3	2
Restructuring and Related Cost, Incurred Cost	5	3	2
Restructuring-related Costs Incurred to Date				32
Accelerated Depreciation [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	0	3	2
Restructuring-related Costs Incurred to Date					5
Accelerated Depreciation [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	0	0	0
Restructuring-related Costs Incurred to Date				22
Accelerated Depreciation [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	5	0
Restructuring-related Costs Incurred to Date						5
Accelerated Depreciation [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Incurred Cost	0	0	0
Restructuring-related Costs Incurred to Date							0
Transfer costs [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(24)			(97)
Restructuring Charges	0	0	0
Restructuring Related Expenses	24	0	8
Restructuring and Related Cost, Incurred Cost	24	0	8
Restructuring-related Costs Incurred to Date				98
Transfer costs [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	0				0
Restructuring and Related Cost, Incurred Cost	0	0	0
Restructuring-related Costs Incurred to Date					0
Transfer costs [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	0			(73)
Restructuring and Related Cost, Incurred Cost	0	0	8
Restructuring-related Costs Incurred to Date				74
Transfer costs [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	(24)					(24)
Restructuring and Related Cost, Incurred Cost	24	0
Restructuring-related Costs Incurred to Date						24
Transfer costs [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	0						0
Restructuring and Related Cost, Incurred Cost	0	0	0
Restructuring-related Costs Incurred to Date							0
Restructuring Plan [Member] | Employee Severance [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	30			30	30	30	30
Restructuring Plan [Member] | Employee Severance [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	90			90	90	90	90
Restructuring Plan [Member] | Impairment of an asset in value [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	11			11	11	11	11
Restructuring Plan [Member] | Other Restructuring [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	112			112	112	112	112
Restructuring Plan [Member] | Other Restructuring [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	51			51	51	51	51
Restructuring Related To Plan [Member] | Other Restructuring [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	39			39	39	39	39
Restructuring Related To Plan [Member] | Other Restructuring [Member] | 2010 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	8			8	8	8	8
Restructuring Related To Plan [Member] | Accelerated Depreciation [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	22			22	22	22	22
Restructuring Related To Plan [Member] | Transfer costs [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	74			74	74	74	74
Cost of products sold [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	24		8
Cost of products sold [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	0		0
Cost of products sold [Member] | Accelerated Depreciation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	0
Cost of products sold [Member] | Impairment of an asset in value [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses			0
Cost of products sold [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	0		0
Cost of products sold [Member] | Accelerated Depreciation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses			0
Cost of products sold [Member] | Transfer costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	24		8
Selling, General and Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	24	23	16
Selling, General and Administrative Expenses [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	0	0	0
Selling, General and Administrative Expenses [Member] | Impairment of an asset in value [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses		0	0
Selling, General and Administrative Expenses [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	19	20	14
Selling, General and Administrative Expenses [Member] | Accelerated Depreciation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	5	3	2
Selling, General and Administrative Expenses [Member] | Transfer costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Related Expenses	0	0	0
Minimum [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	289			289	289	289	289
Minimum [Member] | Plant Network Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	126			126	126	126	126
Minimum [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	250			250	250	250	250
Minimum [Member] | Restructuring Plan [Member] | Employee Severance [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	138			138	138	138	138
Minimum [Member] | Restructuring Plan [Member] | Employee Severance [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	115			115	115	115	115
Minimum [Member] | Restructuring Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	25			25	25	25	25
Minimum [Member] | Restructuring Related To Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	110			110	110	110	110
Maximum [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	292			292	292	292	292
Maximum [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	300			300	300	300	300
Maximum [Member] | Restructuring Plan [Member] | Employee Severance [Member] | 2011 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	141			141	141	141	141
Maximum [Member] | Restructuring Plan [Member] | Employee Severance [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	135			135	135	135	135
Maximum [Member] | Restructuring Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	35			35	35	35	35
Maximum [Member] | Restructuring Related To Plan [Member] | Other Restructuring [Member] | 2014 Restructuring plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	$ 130			$ 130	$ 130	$ 130	$ 130

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Weighted Average Shares Outstanding

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

WEIGHTED AVERAGE SHARES OUTSTANDING

	Year Ended December 31,
(in millions)	2014	2013	2012
Weighted average shares outstanding - basic	1,324.3	1,341.2	1,406.7
Net effect of common stock equivalents	—	—	—
Weighted average shares outstanding - assuming dilution	1,324.3	1,341.2	1,406.7

We generated net losses in 2014, 2013 and 2012. Our weighted-average shares outstanding for earnings per share calculations excluded common stock equivalents of 24 million, 19 million and 8 million due to our net loss positions in 2014, 2013 and 2012, respectively.

Weighted-average shares outstanding, assuming dilution, also excludes the impact of 12 million stock options for 2014, 16 million for 2013, and 59 million for 2012, due to the exercise prices of these stock options being greater than the average fair market value of our common stock during the year.

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Significant Accounting Policies Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Principles of Consolidation

Our consolidated financial statements include the accounts of Boston Scientific Corporation and our wholly-owned subsidiaries, after the elimination of intercompany transactions. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE). For any VIEs, we perform an analysis to determine whether our variable interests give us 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 entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial or operating interests in any VIEs and therefore did not consolidate any VIEs during the years ended December 31, 2014, 2013, and 2012.

On January 3, 2011, we closed the sale of our Neurovascular business to Stryker Corporation (Stryker). Due to our continuing involvement in the operations of the Neurovascular business following the divestiture, the divestiture did not meet the criteria for presentation as a discontinued operation and, therefore, the results of the Neurovascular business are included in our results of operations for all periods presented. Refer to Note C – Divestitures for a description of this business divestiture.

Basis of Presentation

The accompanying consolidated financial statements of Boston Scientific Corporation have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and with the instructions to Form 10-K and Regulation S-X.

Reclassifications

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units. As such, we have reclassified certain prior year amounts to conform to the current year’s presentation. We also restated segment information for the prior periods for the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014. See Note D - Goodwill and Other Intangible Assets and Note O – Segment Reporting for further details.

Additionally, certain prior year cash outflows from net share settling employee equity awards to satisfy their tax withholding requirement have been reclassified from an operating activity to a financing activity within our consolidated statements of cash flows. Amounts reclassified from operating to financing activities were not material.

In addition, we restated components of our tabular disclosures of our deferred tax assets and liabilities along with our tabular rollforward of unrecognized tax benefit from prior year’s presentation, to include certain deferred tax assets that have been recorded net of valuation allowance and uncertain tax position. This restatement was performed to better present our overall deferred tax inventory and unrecognized tax positions but had no material impact on the prior year presentations of our consolidated statement of operation or consolidated balance sheet. See Note J - Income Taxes for further details.

Finally, we restated segment information for the prior periods based on our internally-derived standard currency exchange rates used for the current period in order to remove the impact of foreign currency exchange rate fluctuations. Refer to Note O - Segment Reporting for further details.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our financial statements. On February 13, 2015, we signed an agreement with Johnson & Johnson to settle the breach of merger agreement lawsuit brought by Johnson & Johnson against Guidant Corporation (Guidant), stemming from our acquisition of Guidant. As a result of the settlement agreement, Johnson & Johnson has agreed to dismiss permanently its action without acknowledgment of liability by Guidant. In exchange, we have agreed to make aggregate payments totaling $600 million to Johnson & Johnson. This settlement is considered a material recognized subsequent event and has been reflected appropriately in our accompanying consolidated financial statements. See Note K– Commitments and Contingencies for futher details.

In addition, those items requiring disclosure (unrecognized subsequent events) in the financial statements have been disclosed accordingly. See Note K– Commitments and Contingencies for further details.

Use of Estimates, Policy [Policy Text Block]

Accounting Estimates

To prepare our consolidated financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting period. Our actual results may differ from these estimates. Refer to Critical Accounting Estimates included in Item 7 of this Annual Report for further discussion.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

We record cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk to principal, and we limit our direct exposure to securities in any one industry or issuer. We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents.

We record available-for-sale investments at fair value and exclude unrealized gains and temporary losses on available-for-sale securities from earnings, reporting such gains and losses, net of tax, as a separate component of stockholders’ equity, until realized. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

Concentration Risk Disclosure [Text Block]

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instrument contracts and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. We provide credit, in the normal course of business, to hospitals, healthcare agencies, clinics, doctors' offices and other private and governmental institutions and generally do not require collateral. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on historical information and management's best estimates. Amounts determined to be uncollectible are written off against this reserve. We recorded write-offs of uncollectible accounts receivable of $15 million in 2014, $12 million in 2013, and $7 million in 2012. We are not dependent on any single institution and no single customer accounted for more than ten percent of our net sales in 2014, 2013, and 2012 or accounts receivable at December 31, 2014 or 2013; however, large group purchasing organizations, hospital networks and other buying groups have become increasingly important to our business and represent a substantial portion of our U.S. net sales.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers in Southern Europe, specifically Greece, Italy, Spain and Portugal are subject to an increased number of days outstanding relative to other countries prior to payment. Historically, receivable balances with certain publicly-owned hospitals in these countries accumulate over a period of time and are then subsequently settled as large lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2014, if significant changes were to occur in the payment practices of these European governments or if government funding becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write-offs of uncollectible amounts may increase. As of December 31, 2014, our net receivables in these countries greater than 180 days past due totaled approximately $26 million, of which approximately $11 million were past due greater than 365 days.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

We generate revenue primarily from the sale of single-use medical devices, and present revenue net of sales taxes in our consolidated statements of operations. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. We consider revenue to be realized or realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectibility is reasonably assured. Revenue is recognized upon passage of title and risk of loss to customers, unless we are required to provide additional services, and provided we can form an estimate for sales returns. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. For revenue arrangements with multiple deliverables, where the sale of a device is combined with a future service obligation, we defer revenue on the undelivered element and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE^® Patient Management System, which represents a future service obligation. We do not have vendor specific objective evidence of selling price available related to our future service obligations; therefore, we determine our estimates of selling price using third party evidence when available; otherwise, we use our best estimate of selling price. We allocate arrangement consideration using the relative selling price method.

We generally allow our customers to return defective, damaged and, in certain cases, expired products for credit. We base our estimate for sales returns upon historical trends and record the amount as a reduction to revenue when we sell the initial product. In addition, we may allow customers to return previously purchased products for next-generation product offerings. For these transactions, we defer recognition of revenue on the sale of the earlier generation product based upon an estimate of the amount of product to be returned when the next-generation products are shipped to the customer.

We also offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum rebate percentage offered. We have entered certain agreements with group purchasing organizations to sell our products to participating hospitals at negotiated prices. We recognize revenue from these agreements following the same revenue recognition criteria discussed above.

Product Warranty Disclosure [Text Block]

Warranty Obligations

We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our CRM business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant, and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim, and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We assess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary.

Changes in our product warranty accrual during 2014, 2013, and 2012 consisted of the following (in millions):

	Year Ended December 31,
	2014			2013			2012
Beginning balance	$	28		$	26		$	30
Provision	9			12			8
Settlements/ reversals	(12		)	(10		)	(12		)
Ending balance	$	25		$	28		$	26

Inventory, Policy [Policy Text Block]

Inventories

We state inventories at the lower of first-in, first-out cost or market. We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Further, the industry in which we participate is characterized by rapid product development and frequent new product introductions. Uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory. Approximately 40 percent of our finished goods inventory as of December 31, 2014 and December 31, 2013 was at customer locations pursuant to consignment arrangements or held by sales representatives.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

We state property, plant, equipment, and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings and improvements over a 20 to 40 year life; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease. Depreciation expense was $287 million in 2014, $279 million in 2013, and $288 million in 2012.

Business Combinations Policy [Policy Text Block]

Valuation of Business Combinations

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs.

In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones.

In Process Research and Development, Policy [Policy Text Block]

Indefinite-lived Intangibles, including In-Process Research and Development

Our indefinite-lived intangible assets that are not subject to amortization include acquired balloon and other technology, which is foundational to our continuing operations within the Cardiovascular market and other markets within interventional medicine, and in-process research and development intangible assets acquired in a business combination. Our in-process research and development represents intangible assets acquired in a business combination that are used in research and development activities but have not yet reached technological feasibility, regardless of whether they have alternative future use. The primary basis for determining the technological feasibility or completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. We classify in-process research and development acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated research and development efforts. Upon completion of the associated research and development efforts, we will determine the useful life of the technology and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated in-process research and development intangible asset.

We test our indefinite-lived intangible assets at least annually during the third quarter for impairment and reassess their classification as indefinite-lived assets; in addition, we review our indefinite-lived assets for classification and impairment more frequently if changes in circumstances or indicators exist. We assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that our indefinite-lived intangible assets are impaired. If we conclude that it is more likely than not that the asset is impaired, we then determine the fair value of the intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying value in accordance with ASC Topic 350, Intangibles-Goodwill and Other. If the carrying value exceeds the fair value of the indefinite-lived intangible asset, we write the carrying value down to the fair value.

We use the income approach to determine the fair values of our in-process research and development. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors: the in-process projects’ stage of completion; the complexity of the work completed as of the acquisition date; the costs already incurred; the projected costs to complete; the contribution of other acquired assets; the expected regulatory path and introduction dates by region; and the estimated useful life of the technology. We apply a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition. See Note D - Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including in-process research and development during 2014, 2013, and 2012.

For asset purchases outside of business combinations, we expense any purchased research and development assets as of the acquisition date.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Amortization and Impairment of Intangible Assets

We record intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; definite-lived technology-related, five to 25 years; customer relationships, five to 25 years; other intangible assets, various.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.

We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). See Note D - Goodwill and Other Intangible Assets for more information related to impairments of intangible assets during 2014, 2013, and 2012.

For patents developed internally, we capitalize costs incurred to obtain patents, including attorney fees, registration fees, consulting fees, and other expenditures directly related to securing the patent.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill Valuation

Effective as of January 1, 2013, we reorganized our business from geographic regions to fully operationalized global business units. Our reorganization changed our reporting structure and changed the composition of our reporting units for goodwill impairment testing purposes. Following the reorganization, based on information regularly reviewed by our chief operating decision maker, we have three new global reportable segments consisting of: Cardiovascular, Rhythm Management, and MedSurg. We determined our new global reporting units by identifying our operating segments and assessing whether any components of these segments constituted a business for which discrete financial information is available and whether segment management regularly reviews the operating results of any components. Through this process, we identified the following new global reporting units as of January 1, 2013: Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health, and Neuromodulation. The discussion below for 2014 and 2013 relates to our global business reporting units and for 2012 relates to our former regional reporting units.

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances during the second quarter of each year for impairment, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In performing the assessment, we utilize the two-step approach prescribed under ASC Topic 350, Intangibles-Goodwill and Other (Topic 350). The first step requires a comparison of the carrying value of the reporting units, as defined, to the fair value of these units. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operating segments, and then assess whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. For our 2014 and 2013 annual impairment assessment we identified seven reporting units, including Interventional Cardiology, Peripheral Interventions, Cardiac Rhythm Management, Electrophysiology, Endoscopy, Urology and Women's Health and Neuromodulation. For our 2012 impairment assessments, we identified six reporting units within the U.S., including our CRM, Neuromodulation, Endoscopy, Urology and Women's Health, Electrophysiology, and Cardiovascular (consisting of Interventional Cardiology and Peripheral Interventions) franchises, which in aggregate comprised the U.S. reportable segment. In addition, we identified four international reporting units, including Europe, Middle East and Africa (EMEA); Japan; Asia Pacific; and the Americas.

When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from the respective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations, and would be considered in determining its fair value, are allocated to the individual reporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit.

During 2014, 2013, and 2012, we used only the income approach, specifically the Discounted Cash Flow (DCF) method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures our income producing assets. We have considered using the market approach and cost approach but concluded they are not appropriate in valuing our reporting units given the lack of relevant market comparisons available for application of the market approach and the inability to replicate the value of the specific technology-based assets within our reporting units for application of the cost approach. Therefore, we believe that the income approach represents the most appropriate valuation technique for which sufficient data are available to determine the fair value of our reporting units.

In applying the income approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our DCF analysis is based on our most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in our DCF analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates of market-participant risk-adjusted weighted average cost of capital (WACC) as a basis for determining the discount rates to apply to our reporting units’ future expected cash flows.

If the carrying value of a reporting unit exceeds its fair value, we then perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. If the carrying value of a reporting unit is zero or negative, we evaluate whether it is more likely than not that a goodwill impairment exists. If we determine adverse qualitative factors exist that would indicate it is more likely than not an impairment exists, we then perform the second step of the goodwill test. The second step of the goodwill impairment test compares the estimated fair value of a reporting unit’s goodwill to its carrying value. If we were unable to complete the second step of the test prior to the issuance of our financial statements and an impairment loss was probable and could be reasonably estimated, we would recognize our best estimate of the loss in our current period financial statements and disclose that the amount is an estimate. We would then recognize any adjustment to that estimate in subsequent reporting periods, once we have finalized the second step of the impairment test. See Note D - Goodwill and Other Intangible Assets for discussion of our goodwill impairment charges.

Equity and Cost Method Investments, Policy [Policy Text Block]

Investments in Publicly Traded and Privately Held Entities

We account for our publicly traded investments as available-for-sale securities based on the quoted market price at the end of the reporting period. We compute realized gains and losses on sales of available-for-sale securities based on the average cost method, adjusted for any other-than-temporary declines in fair value. We held no available-for-sale securities during 2014, 2013, and 2012.

We account for investments in entities over which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. 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. The book value of investments that we accounted for under the equity method of accounting was $10 million as of December 31, 2014 and $18 million as of December 31, 2013. We account for investments in entities in which we have less than a 20 percent ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee in accordance with ASC Topic 325, Investments - Other. The aggregate carrying amount of our cost method investments was $27 million as of December 31, 2014 and $20 million as of December 31, 2013. In addition, we had notes receivable from certain companies that we account for under the cost method of $17 million as of December 31, 2014 and $13 million as of December 31, 2013, which are accounted for in accordance with ASC Topic 320, Investments - Debt and Equity Securities.

Each reporting period, we evaluate our investments to determine if there are any events or circumstances that are likely to have a significant adverse effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a significant deterioration in earnings performance; recent financing rounds at reduced valuations; a significant adverse change in the regulatory, economic or technological environment of an investee; or a significant doubt about an investee’s ability to continue as a going concern. If we identify an impairment indicator, we will estimate the fair value of the investment and compare it to its carrying value. Our estimation of fair value considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and we make a determination as to whether the impairment is other-than-temporary. We deem an impairment to be other-than-temporary unless we have the ability and intent to hold an investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. Impairment losses on our investments are included in other, net in our consolidated statements of operations.

Income Tax, Policy [Policy Text Block]

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets. We consider relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes our financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years.

We have not provided U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2014 because we intend to permanently reinvest such earnings outside the U.S. As of December 31, 2014, the cumulative amount of excess financial reporting basis over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested is approximately $7.7 billion. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.

We provide for potential amounts due in various tax jurisdictions. In the ordinary course of conducting business in multiple countries and tax jurisdictions, there are many transactions and calculations where the ultimate tax outcome is uncertain. Judgment is required in determining our worldwide income tax provision. In our opinion, we have made adequate provisions for income taxes for all years subject to audit. Although we believe our estimates are reasonable, the final outcome of open tax matters may be different from that which we have reflected in our historical income tax provisions and accruals. Such differences could have a material impact on our income tax provision and operating results. See Note J - Income Taxes for further information and discussion of our income tax provision and balances.

Legal Costs, Policy [Policy Text Block]

Legal and Product Liability Costs

In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. See Note K - Commitments and Contingencies for discussion of our individual material legal proceedings.

In accordance with ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

Costs Associated with Exit or Disposal Activities or Restructurings, Policy

Costs Associated with Exit Activities

We record employee termination costs in accordance with ASC Topic 712, Compensation - Nonretirement and Postemployment Benefits, if we pay the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of our established severance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and we can reasonably estimate the liability. We account for employee termination benefits that represent a one-time benefit in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. We record such costs into expense over the employee’s future service period, if any.

Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased, consultant fees and impairments of long-lived assets. The costs are expensed in accordance with ASC Topic 420 and ASC Topic 360, Property, Plant, and Equipment and are included in restructuring charges in our consolidated statement of operations. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, and costs to transfer product lines among facilities are included within costs of products sold and selling, general and administrative expenses in our consolidated statement of operations. See Note H - Restructuring-Related Activities for further information and discussion of our restructuring plans.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Translation of Foreign Currency

We translate all assets and liabilities of foreign subsidiaries from local currency into U.S. dollars using the year-end exchange rate, and translate revenues and expenses at the average exchange rates in effect during the year. We show the net effect of these translation adjustments in our consolidated financial statements as a component of accumulated other comprehensive income. For any significant foreign subsidiaries located in highly inflationary economies, we would re-measure their financial statements as if the functional currency were the U.S. dollar. We did not record any highly inflationary economy translation adjustments in 2014, 2013 or 2012.

Foreign currency transaction gains and losses are included in other, net in our consolidated statements of operations, net of losses and gains from any related derivative financial instruments. We recognized net foreign currency transaction losses of $18 million in 2014, $11 million in 2013, and $18 million in 2012.

Derivatives, Policy [Policy Text Block]

Financial Instruments

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging, and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. 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. Refer to Note E – Fair Value Measurements for more information on our derivative instruments.

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging. 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.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling Costs

We generally do not bill customers for shipping and handling of our products. Shipping and handling costs of $100 million in 2014, $97 million in 2013, and $105 million in 2012 are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Research and Development Expense, Policy [Policy Text Block]

Research and Development

We expense research and development costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles,includingIn-Process Research and Development for our policy regarding in-process research and development acquired in connection with our business combinations and asset purchases.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Employee Retirement Plans

Following our 2006 acquisition of Guidant, we sponsor the Guidant Retirement Plan, a frozen noncontributory defined benefit plan covering a select group of current and former employees. The funding policy for the plan is consistent with U.S. employee benefit and tax-funding regulations. Plan assets, which are maintained in a trust, consist primarily of fixed-income instruments. The Guidant Retirement Plan was terminated effective December 1, 2014. The plan was partially frozen as of September 25, 1995 and completely frozen as of May 31, 2007. As a result, in general, no employees have been eligible to become a participant in the plan after September 25, 1995 and participants ceased earning additional benefits under the plan after September 25, 1995 or May 31, 2007. We expect to finalize the termination process and settle the majority of the plan’s obligations by the end of 2015. Further, we sponsor the Guidant Supplemental Retirement Plan, a frozen, nonqualified defined benefit plan for certain former officers and employees of Guidant. The Guidant Supplemental Retirement Plan was funded through a Rabbi Trust that contains segregated company assets used to pay the benefit obligations related to the plan. In addition, certain current and former employees of Guidant were eligible to receive a portion of their healthcare retirement benefits under a frozen defined benefit plan; this plan was terminated effective December 31, 2014.

In addition, we maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and division presidents and certain persons that may have served in these roles. Participants may retire with unreduced benefits once retirement conditions have been satisfied. We also maintain retirement plans covering certain international employees.

We use a December 31 measurement date for these plans and record the underfunded portion as a liability, recognizing changes in the funded status through other comprehensive income (OCI).

Earnings Per Share, Policy [Policy Text Block]

Net Income (Loss) per Common Share

We base net income (loss) per common share upon the weighted-average number of common shares and common stock equivalents outstanding during each year. Potential common stock equivalents are determined using the treasury stock method. We exclude stock options whose effect would be anti-dilutive from the calculation.

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Leases (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Leases [Abstract]
Operating Leases, Rent Expense, Net	$ 76	$ 77	$ 80
Operating Leases, Future Minimum Payments Due, Current	59
Operating Leases, Future Minimum Payments, Due in Two Years	51
Operating Leases, Future Minimum Payments, Due in Three Years	34
Operating Leases, Future Minimum Payments, Due in Four Years	25
Operating Leases, Future Minimum Payments, Due in Five Years	21
Operating Leases, Future Minimum Payments, Due Thereafter	28
Operating Leases, Future Minimum Payments Due	$ 218

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Changes in Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2014

Changes in Other Comprehensive Income [Abstract]

Changes in Other Comprehensive Income [Table Text Block]

The following table provides the reclassifications out of other comprehensive income for the years ended December 31, 2014 and December 31, 2013. Amounts in the chart below are presented net of tax.

Year Ended December 31, 2014
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(16)	$141	$(19)	$106
Other comprehensive income (loss) before reclassifications	(22)	145	(10)	113
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(67)	(8)	(75)
Net current-period other comprehensive income	(22)	78	(18)	38
Ending Balance	$(38)	$219	$(37)	$144
Year Ended December 31, 2013
(in millions)	Foreign Currency Translation Adjustments	Unrealized Gains/Losses on Derivative Financial Instruments	Defined Benefit Pension Items / Other	Total
Beginning Balance	$(26)	$34	$(41)	$(33)
Other comprehensive income (loss) before reclassifications	10	130	31	171
(Gain)/Loss reclassified from accumulated other comprehensive income	—	(23)	(9)	(32)
Net current-period other comprehensive income	10	107	22	139
Ending Balance	$(16)	$141	$(19)	$106

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Consolidated Statements of Stockholders' Equity (USD $) In Millions, except Share data, unless otherwise specified	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2011		$ 15	$ (492)	$ 16,349	$ (4,381)	$ (138)
Balance (Shares) at Dec. 31, 2011		1,531,006,390
Net income (loss)	(4,068)				(4,068)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	32					32
Net change in unrealized gains and losses on derivative financial instruments, net of tax	82					82
Net change in unrealized costs associated with certain retirement plans	(9)					(9)
Impact of stock-based compensation plans, net of tax (Shares)		11,340,798
Impact of stock-based compensation plans, net of tax				80
Acquisition of treasury stock			(600)
Balance at Dec. 31, 2012		15	(1,092)	16,429	(8,449)	(33)
Balance (Shares) at Dec. 31, 2012		1,542,347,188
Net income (loss)	(121)				(121)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	10					10
Net change in unrealized gains and losses on derivative financial instruments, net of tax	107					107
Net change in unrealized costs associated with certain retirement plans	22					22
Impact of stock-based compensation plans, net of tax (Shares)		17,955,446
Stock Issued During Period, Value, New Issues		1
Impact of stock-based compensation plans, net of tax				150
Acquisition of treasury stock			(500)
Balance at Dec. 31, 2013	6,539	16	(1,592)	16,579	(8,570)	106
Balance (Shares) at Dec. 31, 2013	1,560,302,634	1,560,302,634
Net income (loss)	(119)				(119)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	(22)					(22)
Net change in unrealized gains and losses on derivative financial instruments, net of tax	78					78
Net change in unrealized costs associated with certain retirement plans	(18)					(18)
Impact of stock-based compensation plans, net of tax (Shares)		14,715,602
Stock Issued During Period, Value, New Issues		0
Impact of stock-based compensation plans, net of tax				124
Acquisition of treasury stock			(125)
Balance at Dec. 31, 2014	$ 6,457	$ 16	$ (1,717)	$ 16,703	$ (8,689)	$ 144
Balance (Shares) at Dec. 31, 2014	1,575,018,236	1,575,018,236

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Divestitures

12 Months Ended

Dec. 31, 2014

Divestitures and Assets Held for Sale [Abstract]

DIVESTITURES

DIVESTITURES

In January 2011, we closed the sale of our Neurovascular business to Stryker Corporation for a purchase price of $1.500 billion in cash. We received $1.450 billion during 2011, an additional $10 million during 2012, $30 million during 2013 and we received the final amount due to us in 2014. At the time of divestiture, due to our continuing involvement in the operations of the Neurovascular business following the transaction, the divestiture did not meet the criteria for presentation as a discontinued operation. Our sales related to our divested Neurovascular business have declined as the various transition services and supply agreements have terminated.

We recorded a gain of $12 million during 2014, a gain of $38 million during 2013 and a gain of $15 million during 2012 associated with the transaction.

We recorded revenue related to the Neurovascular business following its divestiture of $4 million in 2014, $58 million in 2013 and $122 million in 2012.

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Weighted Average Shares Outstanding (Details) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share (Textuals) [Abstract]
Excluded common stock equivalents	24	19	8
Weighted average shares outstanding
Weighted average shares outstanding - basic	1,324.3	1,341.2	1,406.7
Net effect of common stock equivalents	0	0	0
Weighted average shares outstanding - assuming dilution	1,324.3	1,341.2	1,406.7
Employee Stock Option [Member]
Earnings Per Share (Textuals) [Abstract]
Excluded common stock equivalents	12	16	59

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Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block]

Termination benefits represent amounts incurred pursuant to our on-going benefit arrangements and amounts for “one-time” involuntary termination benefits, and have been recorded in accordance with ASC Topic 712, Compensation – Non-retirement Postemployment Benefits and ASC Topic 420, Exit or Disposal Cost Obligations (Topic 420). We expect to record additional termination benefits related to our restructuring initiatives in 2015 when we identify with more specificity the job classifications, functions and locations of the remaining headcount to be eliminated. Other restructuring costs, which represent primarily consulting fees, are being recorded as incurred in accordance with Topic 420. Accelerated depreciation is being recorded over the adjusted remaining useful life of the related assets, and production line transfer costs are being recorded as incurred.

Legal Costs, Policy [Policy Text Block]

Legal and Product Liability Costs

In the normal course of business, we are involved in various legal and regulatory proceedings, including intellectual property, breach of contract, securities litigation and product liability suits. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures or impact our ability to sell our products. We are also the subject of certain governmental investigations, which could result in substantial fines, penalties, and administrative remedies. We maintain an insurance policy providing limited coverage against securities claims, and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. We accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We analyze litigation settlements to identify each element of the arrangement. We allocate arrangement consideration to patent licenses received based on estimates of fair value, and capitalize these amounts as assets if the license will provide an on-going future benefit. See Note K - Commitments and Contingencies for discussion of our individual material legal proceedings.

In accordance with ASC Topic 450, Contingencies, we accrue anticipated costs of settlement, damages, losses for product liability claims and, under certain conditions, costs of defense, based on historical experience or to the extent specific losses are probable and estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

ASC Topic 820, Fair Value Measurements and Disclosures

We determine the fair value of our derivative instruments using the framework prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering the estimated amount we would receive or pay to transfer these instruments at the reporting date and by taking into account current interest rates, foreign currency exchange rates, the creditworthiness of the counterparty for assets, and our creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value. In doing so, we use inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means.

ASC Topic 815, Derivatives and Hedging

Financial Instruments

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging, and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements. 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. Refer to Note E – Fair Value Measurements for more information on our derivative instruments.

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging. 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.

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Stock Ownership Plans (Tables)

12 Months Ended

Dec. 31, 2014

Stock Ownership Plans [Abstract]

Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity [Table Text Block]

Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows:

(shares in thousands)	2014	2013	2012
Shares issued or to be issued	2,618	3,833	3,979
Range of purchase prices	$10.12 - $11.04	$5.01 - $7.96	$4.82 - $5.16

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

We expect to recognize the following future expense for awards outstanding as of December 31, 2014:

	Unrecognized Compensation Cost (in millions)(1)		Weighted Average Remaining Vesting Period (in years)
Stock options	$	20
Non-vested stock awards	133
	$	153	1.3

(1) Amounts presented represent compensation cost, net of estimated forfeitures.

Market-based awards, valuation assumptions [Table Text Block]

We determined the fair value of the 2014 market-based DSU awards to be approximately $6 million and the fair values of both the 2013 and the 2012 market-based awards to be approximately $8 million. We determined these fair values based on Monte Carlo simulations as of the date of grant, utilizing the following assumptions:

	2014			2013			2012
	Awards			Awards			Awards
Stock price on date of grant	$	13.08		$	7.39		$	6.28
Measurement period (in years)	3.0			3.0			3.0
Risk-free rate	0.66		%	0.34		%	0.38		%

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

Information related to non-vested stock awards during 2014, 2013 and 2012 is as follows:

	Non-Vested Stock Award Units (in thousands)		Weighted Average Grant- Date Fair Value
Balance as of December 31, 2011	33,576		$	8
Granted	17,073		6
Vested (1)	(10,158	)	9
Forfeited	(3,898	)	7
Balance as of December 31, 2012	36,593		$	7
Granted	13,913		8
Vested (1)	(10,307	)	8
Forfeited	(2,860	)	7
Balance as of December 31, 2013	37,339		$	7
Granted	7,072		13
Vested (1)	(11,205	)	7
Forfeited	(2,671	)	8
Balance as of December 31, 2014	30,535		$	9

(1) The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
(in millions, except per share data)	2014			2013			2012
Cost of products sold	$	6		$	8		$	15
Selling, general and administrative expenses	79			79			69
Research and development expenses	18			18			24
	103			105			108
Less: income tax benefit	(28		)	(29		)	(32		)
	$	75		$	76		$	76
Net impact per common share - basic	$	0.06		$	0.06		$	0.05
Net impact per common share - assuming dilution	$	0.06		$	0.06		$	0.05

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted during 2014, 2013 and 2012 using the following estimated weighted-average assumptions:

	Year Ended December 31,
	2014			2013			2012
Options granted (in thousands)	4,943			1,992			4,726
Weighted-average exercise price	$	13.02		$	7.44		$	6.23
Weighted-average grant-date fair value	$	5.07		$	2.84		$	2.60
Black-Scholes Assumptions
Expected volatility	37		%	36		%	43		%
Expected term (in years, weighted)	6.0			5.9			5.9
Risk-free interest rate	1.69% - 2.09%			0.89% - 1.72%			0.95% - 1.15%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Information related to stock options for 2014, 2013 and 2012 under stock incentive plans is as follows:

	Stock Options (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2011	60,921		$	13
Granted	4,726		6
Exercised	—		—
Cancelled/forfeited	(10,766	)	15
Outstanding as of December 31, 2012	54,881		$	12
Granted	1,992		7
Exercised	(7,221	)	8
Cancelled/forfeited	(4,760	)	21
Outstanding as of December 31, 2013	44,892		$	12
Granted	4,943		13
Exercised	(4,418	)	8
Cancelled/forfeited	(5,909	)	17
Outstanding as of December 31, 2014	39,508		$	11	5.0	$	145
Exercisable as of December 31, 2014	29,380		$	12	4.0	109
Expected to vest as of December 31, 2014	9,477		10		7.9	35
Total vested and expected to vest as of December 31, 2014	38,857		$	11	4.9	$	144

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Stock Ownership Plans

12 Months Ended

Dec. 31, 2014

Stock Ownership Plans [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

STOCK OWNERSHIP PLANS

Employee and Director Stock Incentive Plans

In March and May 2011, our Board of Directors and stockholders, respectively, approved our 2011 Long-Term Incentive Plan (the 2011 LTIP), authorizing up to 146 million shares of our common stock. The 2011 LTIP covers officers, directors, employees and consultants, and provides for the grant of restricted or unrestricted common stock, deferred stock units (DSU), options to acquire our common stock, stock appreciation rights, performance awards (market-based and performance-based DSUs) and other stock and non-stock awards. Shares reserved under our current and former stock incentive plans totaled approximately 179 million as of December 31, 2014. 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 2011 LTIP 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 110 percent 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, including restricted stock awards and deferred stock units, issued to employees are generally granted with an exercise price of zero and typically vest in five equal annual installments. These awards represent our commitment to issue shares to recipients after the 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.

The following presents the impact of stock-based compensation on our consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
(in millions, except per share data)	2014			2013			2012
Cost of products sold	$	6		$	8		$	15
Selling, general and administrative expenses	79			79			69
Research and development expenses	18			18			24
	103			105			108
Less: income tax benefit	(28		)	(29		)	(32		)
	$	75		$	76		$	76
Net impact per common share - basic	$	0.06		$	0.06		$	0.05
Net impact per common share - assuming dilution	$	0.06		$	0.06		$	0.05

Stock Options

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of stock options granted to employees under our stock incentive plans. We calculated the fair value for options granted during 2014, 2013 and 2012 using the following estimated weighted-average assumptions:

	Year Ended December 31,
	2014			2013			2012
Options granted (in thousands)	4,943			1,992			4,726
Weighted-average exercise price	$	13.02		$	7.44		$	6.23
Weighted-average grant-date fair value	$	5.07		$	2.84		$	2.60
Black-Scholes Assumptions
Expected volatility	37		%	36		%	43		%
Expected term (in years, weighted)	6.0			5.9			5.9
Risk-free interest rate	1.69% - 2.09%			0.89% - 1.72%			0.95% - 1.15%

Expected Volatility

We use our historical volatility and implied volatility as a basis to estimate expected volatility in our valuation of stock options.

Expected Term

We estimate the expected term of options using historical exercise and forfeiture data. We believe that this historical data provides the best estimate of the expected term of new option grants.

Risk-Free Interest Rate

We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate in our grant-date fair value assessment.

Expected Dividend Yield

We have not historically paid cash dividends to our shareholders and currently do not intend to pay cash dividends. Therefore, we have assumed an expected dividend yield of zero in our grant-date fair value assessment.

Information related to stock options for 2014, 2013 and 2012 under stock incentive plans is as follows:

	Stock Options (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2011	60,921		$	13
Granted	4,726		6
Exercised	—		—
Cancelled/forfeited	(10,766	)	15
Outstanding as of December 31, 2012	54,881		$	12
Granted	1,992		7
Exercised	(7,221	)	8
Cancelled/forfeited	(4,760	)	21
Outstanding as of December 31, 2013	44,892		$	12
Granted	4,943		13
Exercised	(4,418	)	8
Cancelled/forfeited	(5,909	)	17
Outstanding as of December 31, 2014	39,508		$	11	5.0	$	145
Exercisable as of December 31, 2014	29,380		$	12	4.0	109
Expected to vest as of December 31, 2014	9,477		10		7.9	35
Total vested and expected to vest as of December 31, 2014	38,857		$	11	4.9	$	144

The total intrinsic value of stock options exercised was $24 million in both 2014 and 2013 and less than $1 million in 2012.

Non-Vested Stock

We value restricted stock awards and DSUs based on the closing trading value of our shares on the date of grant. Information related to non-vested stock awards during 2014, 2013 and 2012 is as follows:

	Non-Vested Stock Award Units (in thousands)		Weighted Average Grant- Date Fair Value
Balance as of December 31, 2011	33,576		$	8
Granted	17,073		6
Vested (1)	(10,158	)	9
Forfeited	(3,898	)	7
Balance as of December 31, 2012	36,593		$	7
Granted	13,913		8
Vested (1)	(10,307	)	8
Forfeited	(2,860	)	7
Balance as of December 31, 2013	37,339		$	7
Granted	7,072		13
Vested (1)	(11,205	)	7
Forfeited	(2,671	)	8
Balance as of December 31, 2014	30,535		$	9

(1) The number of restricted stock units vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.

The total vesting date fair value of stock award units that vested was approximately $146 million in 2014, $80 million in 2013 and $60 million in 2012.

Market-based DSU Awards

During 2014, 2013 and 2012, we granted market-based DSU awards to certain members of our senior management team. The number of shares ultimately issued to the recipient is based on the total shareholder return (TSR) of our common stock as compared to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year performance period. In addition, award recipients must remain employed by us throughout the three-year performance period to attain the full amount of the market-based DSUs that satisfied the market performance criteria.

We determined the fair value of the 2014 market-based DSU awards to be approximately $6 million and the fair values of both the 2013 and the 2012 market-based awards to be approximately $8 million. We determined these fair values based on Monte Carlo simulations as of the date of grant, utilizing the following assumptions:

	2014			2013			2012
	Awards			Awards			Awards
Stock price on date of grant	$	13.08		$	7.39		$	6.28
Measurement period (in years)	3.0			3.0			3.0
Risk-free rate	0.66		%	0.34		%	0.38		%

We recognize the expense on these awards in our consolidated statements of operations on a straight-line basis over the three-year measurement period.

Free Cash Flow Performance-based DSU Awards

During 2014, 2013 and 2012, we granted free cash flow performance-based DSU awards to certain members of our senior management team. The attainment of these performance-based DSUs is based on our adjusted free cash flow (FCF) measured against our internal annual financial plan performance for FCF. FCF is measured over a one-year performance period beginning January 1st of each year and ending December 31st. The number of performance-based DSUs as to which the performance criteria under this program shall be determined to have been satisfied will be in a range of 0% to 150% of the target number of performance-based DSUs awarded to the participant. In addition, award recipients must remain employed by us throughout a three-year service period (inclusive of the one-year performance period) to attain the full amount of the performance-based DSUs that satisfied the performance criteria.

We determined the fair value of the 2014 FCF awards to be approximately $5 million, based on the closing stock price at December 31, 2014 and an achievement of approximately 100% of the target payout, which is subject to approval by the Executive Compensation and Human Resources Committee of our Board of Directors. The per unit fair value is $13.25, which is the closing stock price on December 31, 2014. We determined the fair value of the 2013 FCF awards to be approximately $9 million and the per unit fair value was $12.02, and we determined the fair value of the 2012 FCF awards to be approximately $7 million and the per unit fair value was $5.73.

We recognize the expense on these awards in our consolidated statements of operations over the vesting period which is three years after the date of grant.

Expense Attribution

We recognize compensation expense for our stock using a straight-line method over the substantive vesting period. Most of our stock awards provide for immediate vesting upon death or disability of the participant. In addition, our stock grants to employees provide for accelerated vesting of our stock-based awards, other than performance-based and market-based awards, upon retirement. In accordance with the terms of our stock grants, for employees who will become retirement eligible prior to the vest date we expense stock-based awards, other than performance-based and market-based awards, over the greater of one year or the period between grant date and retirement-eligibility. The performance-based and market-based awards discussed above do not contain provisions that would accelerate the full vesting of the awards upon retirement-eligibility.

We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest. ASC Topic 718, Compensation – Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock-based award. We have applied, based on an analysis of our historical forfeitures, a weighted-average annual forfeiture rate of approximately nine percent to all unvested stock-based awards as of December 31, 2014, which represents the portion that we expect will be forfeited each year over the vesting period. We re-evaluate this analysis annually, or more frequently if there are significant changes in circumstances, and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for those shares that vest.

Unrecognized Compensation Cost

We expect to recognize the following future expense for awards outstanding as of December 31, 2014:

	Unrecognized Compensation Cost (in millions)(1)		Weighted Average Remaining Vesting Period (in years)
Stock options	$	20
Non-vested stock awards	133
	$	153	1.3

(1) Amounts presented represent compensation cost, net of estimated forfeitures.

Employee Stock Purchase Plans

Our global employee stock purchase plan provides for the granting of options to purchase up to 50 million shares of our common stock to all eligible employees. Under the global employee stock purchase plan, we grant each eligible employee, at the beginning of each six-month offering period, an option to purchase shares of our common stock equal to not more than ten percent of the employee’s eligible compensation or the statutory limit under the U.S. Internal Revenue Code. Such options may be exercised only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. As of December 31, 2014, there were approximately 20 million shares available for future issuance under the employee stock purchase plan.

Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows:

(shares in thousands)	2014	2013	2012
Shares issued or to be issued	2,618	3,833	3,979
Range of purchase prices	$10.12 - $11.04	$5.01 - $7.96	$4.82 - $5.16

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of shares issued under the employee stock purchase plan. We recognize expense related to shares purchased through the employee stock purchase plan ratably over the offering period. We recognized $8 million in expense associated with our employee stock purchase plan in 2014, $7 million in 2013 and $4 million in 2012.