8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):     July 20, 2007

BOSTON SCIENTIFIC CORPORATION

(Exact name of registrant as specified in charter)

DELAWARE	1-11083	04-2695240
(State or other	(Commission	(IRS employer
jurisdiction of	file number)	identification no.)
incorporation)

One Boston Scientific Place, Natick, Massachusetts	01760-1537
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code:(508) 650-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 20, 2007, Boston Scientific Corporation (the “Company”) issued a press release announcing financial results for the second quarter ended June 30, 2007.  A copy of the release is furnished with this report as Exhibit 99.1.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (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 of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit

Number Description

99.1 Press Release issued by Boston Scientific Corporation dated July 20, 2007.

SIGNATURE

Pursuantto the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BOSTON SCIENTIFIC CORPORATION
Date:       July 20, 2007	By:	/s/ Lawrence J. Knopf
		Lawrence J. Knopf
		Vice President and Assistant General Counsel

EXHIBIT INDEX

Exhibit Number Description

99.1 Press Release issued by Boston Scientific Corporation dated July 20, 2007.

EX-99.1

EXHIBIT 99.1

BOSTON SCIENTIFIC ANNOUNCES RESULTS FOR

SECOND QUARTER ENDED JUNE 30, 2007

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

Highlights

·   Recorded net sales of $2.071 billion, GAAP EPS of $0.08 and adjusted* EPS of $0.18

·   Delivered operating results in the upper half of the Company’s sales and EPS ranges

·   Achieved double-digit year-over-year sales growth in all three Endosurgery businesses

·   Launched TAXUS^ÒExpress² ™in Japan

·   Resolved CRM warning letter

·   Reached agreement to settle Guidant Multi-District Litigation lawsuits

·   Marked three years of DES market leadership in the U.S.

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

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

 million, which included $273 million of ICD sales. Pro-forma international CRM sales for the second quarter of 2006 were $175 million, which included $110 million of ICD sales.

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

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

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

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

Guidance for Third Quarter 2007

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

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

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

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

Use of non-GAAP Financial Information

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

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

                                                                            CONTACT: 

Paul Donovan

508-650-8541 (office) 

508-667-5165 (mobile)

Media Relations

Boston Scientific Corporation

Dan Brennan

508-650-8538 (office)

617-459-2703 (mobile)

Investor Relations

Boston Scientific Corporation 

BOSTON SCIENTIFIC CORPORATION

CONDENSED GAAP RESULTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	June 30,
In millions, except per share data	2007			2006
Net sales	$	2,071		$	2,110
Cost of products sold		563			677
Gross profit		1,508			1,433
Selling, general and administrative expenses		752			728
Research and development expenses		275			283
Royalty expense		51			65
Amortization expense		158			165
Purchased research and development		(8	)		4,117
		1,228			5,358
Operating income/(loss)		280			(3,925	)
Other income/(expense):
Interest expense		(146	)		(111	)
Other, net		(8	)		(150	)
Income/(loss) before income taxes		126			(4,186	)
Income taxes		11			76
Net income/(loss)	$	115		$	(4,262	)
Net income/(loss) per common share - assuming dilution	$	0.08		$	(3.21	)
Weighted average shares outstanding - assuming dilution		1,499.9			1,326.8

BOSTON SCIENTIFIC CORPORATION

NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS

(Unaudited)

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

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

* Calculated by assuming option dilution of 19.8 million shares

	Three Months Ended
	June 30,
	2007			2006
Purchase accounting adjustments
Purchased research and development				$	4,184
Step-up value of inventory sold (a)					185
					4,369
Income tax expense (f)					55
Purchase accounting adjustments, net of tax				$	4,424
Acquisition-related and other costs:
Integration costs (b)	$	12		$	33
Fair-value adjustment for the sharing of proceeds feature of the Abbott stock purchase (c)					87
Charitable donation  (c)					5
		12			125
Income tax benefit (f)		(3	)		(29	)
Acquisition-related and other costs, net of tax	$	9		$	96

AAA program cancellation charges:
Purchased research and development				$	(67	)
Facility costs and severance (d)					31
Amortization expense					23
					(13	)
Income tax benefit (f)					(18	)
AAA program cancellation charges, net of tax				$	(31	)
Investment portfolio activity
Investment portfolio activity (c)	$	23		$	67
Amortization expense		4
Purchased research and development		(8	)
		19			67
Income tax benefit (f)		(5	)		(15	)
Investment portfolio activity, net of tax	$	14		$	52
Amortization and stock-based compensation expense:
Amortization expense	$	154		$	142
Stock-based compensation expense (e)		32			31
		186			173
Income tax benefit (f)		(39	)		(40	)
Amortization and stock-based compensation expense, net of tax	$	147		$	133

(a) Recorded to cost of products sold.

(b) Recorded $8 million in 2007 to selling, general and administrative expenses, $2 million to cost of products sold and $2 million to research and development expenses; recorded $32 million in 2006 to selling, general and administrative expenses, and $1 million to research and development expenses.

(c) Recorded to other, net.

(d) Recorded to research and development expenses.

(e) Recorded $21 million in 2007 to selling, general and administrative expenses, $7 million to research and development expenses and $4 million to cost of products sold; recorded $23 million in 2006 to selling, general and administrative expenses, $6 million to research and development expenses and $2 million to cost of products sold.

(f) Charges are tax effected at the Company’s anticipated effective tax rate, unless the item is unusual or infrequently occurring in accordance with APB No. 30, “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”.

BOSTON SCIENTIFIC CORPORATION

CONDENSED GAAP RESULTS OF OPERATIONS

(Unaudited)

	Six Months Ended
	June 30,
In millions, except per share data	2007			2006
Net sales	$	4,157		$	3,730
Cost of products sold		1,131			1,051
Gross profit		3,026			2,679
Selling, general and administrative expenses		1,487			1,198
Research and development expenses		564			469
Royalty expense		103			120
Amortization expense		312			203
Purchased research and development		(3	)		4,117
		2,463			6,107
Operating income/(loss)		563			(3,428	)
Other income/(expense):
Interest expense		(287	)		(148	)
Other, net		10			(179	)
Income/(loss) before income taxes		286			(3,755	)
Income taxes		51			175
Net income/(loss)	$	235		$	(3,930	)
Net income/(loss) per common share - assuming dilution	$	0.16		$	(3.66	)
Weighted average shares outstanding - assuming dilution		1,498.9			1,074.0

BOSTON SCIENTIFIC CORPORATION

NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS

(Unaudited)

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

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

** Calculated by assuming option dilution of 14.5 million shares

	Six Months Ended
	June 30,
	2007			2006
Purchase accounting adjustments
Purchased research and development				$	4,184
Step-up value of inventory sold (a)					185
					4,369
Income tax expense (f)					55
Purchase accounting adjustments, net of tax				$	4,424
Acquisition-related and other costs:
Integration costs (b)	$	24		$	33
Fair-value adjustment for the sharing of proceeds feature of the Abbott stock purchase (c)		8			87
Charitable donation (c)					5
		32			125
Income tax benefit (f)		(8	)		(29	)
Acquisition-related and other costs, net of tax	$	24		$	96

AAA program cancellation charges:
Purchased research and development				$	(67	)
Facility costs and severance (d)					31
Amortization expense					23
					(13	)
Income tax benefit (f)					(18	)
AAA program cancellations charges, net of tax				$	(31	)
Investment portfolio activity
Investment portfolio activity (c)	$	23		$	105
Amortization expense		4
Purchased research and development		(3	)
		24			105
Income tax benefit (f)		(5	)		(24	)
Investment portfolio activity, net of tax	$	19		$	81
Amortization and stock-based compensation expense:
Amortization expense	$	308		$	180
Stock-based compensation expense (e)		66			63
		374			243
Income tax benefit (f)		(78	)		(56	)
Amortization and stock-based compensation expense, net of tax	$	296		$	187

(a) Recorded to cost of products sold.

(b) Recorded $17 million in 2007 to selling, general and administrative expenses, $4 million to cost of products sold and $3 million to research and development expenses; recorded $32 million in 2006 to selling, general and administrative expenses, and $1 million to research and development.

(c) Recorded to other, net.

(d) Recorded to research and development expenses.

(e) Recorded $44 million in 2007 to selling, general and administrative expenses, $14 million to research and development expenses and $8 million to cost of products sold; recorded $43 million in 2006 to selling, general and administrative expenses, $12 million to research and development expenses and $8 million to cost of products sold.

(f) Charges are tax effected at the Company’s anticipated effective tax rate, unless the item is unusual or infrequently occurring in accordance with APB No. 30, “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”.

BOSTON SCIENTIFIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,		December 31,
In millions	2007		2006
Assets
Current assets:
Cash and cash equivalents	$	1,514	$	1,668
Trade accounts receivable, net		1,508		1,424
Inventories		837		749
Deferred income taxes		607		583
Other current assets		470		477
Total current assets		4,936		4,901
Property, plant and equipment, net		1,779		1,726
Investments		535		596
Other assets		199		237
Intangible assets, net		23,816		23,636
	$	31,265	$	31,096
Liabilities and Stockholders’ Equity
Current liabilities:
Borrowings due within one year	$	654	$	7
Accounts payable and accrued expenses		1,888		2,067
Other current liabilities		427		556
Total current liabilities		2,969		2,630
Long-term debt		8,250		8,895
Deferred income taxes		2,683		2,784
Other long-term liabilities		1,561		1,489
Stockholders’ equity		15,802		15,298
	$	31,265	$	31,096

BOSTON SCIENTIFIC CORPORATION

WORLDWIDE SALES

(Unaudited)

	Three Months Ended
	June 30,				Change
					As Reported		Constant
In millions	2007		2006		Currency Basis		Currency Basis
DOMESTIC	$	1,220	$	1,315		(7%)		(7%)
Europe		451		431		5%		(2%)
Japan		192		149		28%		36%
Inter-Continental		208		215		(3%)		(8%)
INTERNATIONAL		851		795		7%		4%
WORLDWIDE	$	2,071	$	2,110		(2%)		(3%)
	Three Months Ended
	June 30,				Change
					As Reported		Constant
In millions	2007		2006		Currency Basis		Currency Basis
Interventional Cardiology	$	767	$	964		(20%)		(21%)
Peripheral Interventions / Vascular Surgery		161		168		(5%)		(6%)
Electrophysiology		36		33		12%		11%
Neurovascular		88		82		6%		5%
Cardiac Surgery		48		38		27%		27%
Cardiac Rhythm Management		524		436		20%		18%
CARDIOVASCULAR		1,624		1,721		(6%)		(7%)
Oncology		59		52		12%		11%
Endoscopy		208		189		10%		9%
Urology		100		90		11%		11%
ENDOSURGERY		367		331		11%		10%
NEUROMODULATION		80		58		36%		34%
WORLDWIDE	$	2,071	$	2,110		(2%)		(3%)

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

BOSTON SCIENTIFIC CORPORATION

WORLDWIDE SALES

(Unaudited)

	Six Months Ended
	June 30,				Change
					As Reported		Constant
In millions	2007		2006		Currency Basis		Currency Basis
DOMESTIC	$	2,490	$	2,306		8%		8%
Europe		914		745		23%		14%
Japan		351		283		24%		29%
Inter-Continental		402		396		1%		(2%)
INTERNATIONAL		1,667		1,424		17%		12%
WORLDWIDE	$	4,157	$	3,730		11%		10%

	Six Months Ended
	June 30,				Change
					As Reported		Constant
In millions	2007		2006		Currency Basis		Currency Basis
Interventional Cardiology	$	1,570	$	1,913		(18%)		(19%)
Peripheral Interventions / Vascular Surgery		315		352		(11%)		(12%)
Electrophysiology		73		67		9%		8%
Neurovascular		179		162		10%		8%
Cardiac Surgery		97		38		159%		158%
Cardiac Rhythm Management		1,062		436		144%		139%
CARDIOVASCULAR		3,296		2,968		11%		9%
Oncology		115		106		8%		7%
Endoscopy		409		369		11%		9%
Urology		195		180		9%		8%
ENDOSURGERY		719		655		10%		8%
NEUROMODULATION		142		107		32%		31%
WORLDWIDE	$	4,157	$	3,730		11%		10%

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

BOSTON SCIENTIFIC CORPORATION

NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS - THREE MONTHS ENDED JUNE 30, 2007

(Unaudited)

	Q2 2007 Net Sales as compared to Q2 2006
	Change
In millions	As Reported Currency Basis			Constant Currency Basis			Estimated Impact of Foreign Currency
DOMESTIC	$	(95	)	$	(95	)
Europe	$	20		$	(8	)	$	28
Japan		43			54			(11	)
Inter-Continental		(7	)		(18	)		11
INTERNATIONAL		56			28			28
WORLDWIDE	$	(39	)	$	(67	)	$	28
	Q2 2007 Net Sales as compared to Q2 2006
	Change
In millions		As Reported Currency Basis			Constant Currency Basis			Estimated Impact of Foreign Currency
Interventional Cardiology	$	(197	)	$	(203	)	$	6
Peripheral Interventions/Vascular Surgery		(7	)		(11	)		4
Electrophysiology		3			3
Neurovascular		6			4			2
Cardiac Surgery		10			10
Cardiac Rhythm Management		88			79			9
CARDIOVASCULAR		(97	)		(118	)		21
Oncology		7			6			1
Endoscopy		19			16			3
Urology		10			9			1
ENDOSURGERY		36			31			5
NEUROMODULATION		22			20			2
WORLDWIDE	$	(39	)	$	(67	)	$	28

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

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

BOSTON SCIENTIFIC CORPORATION

NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS - SIX MONTHS ENDED JUNE 30, 2007

(Unaudited)

	Q2 2007 Net Sales as compared to Q2 2006
	Change
In millions	As Reported Currency Basis			Constant Currency Basis			Estimated Impact of Foreign Currency
DOMESTIC	$	184		$	184
Europe	$	169		$	104		$	65
Japan		68			82			(14	)
Inter-Continental		6			(9	)		15
INTERNATIONAL		243			177			66
WORLDWIDE	$	427		$	361		$	66
	Q2 2007 Net Sales as compared to Q2 2006
	Change
In millions		As Reported Currency Basis			Constant Currency Basis			Estimated Impact of Foreign Currency
Interventional Cardiology	$	(343	)	$	(364	)	$	21
Peripheral Interventions/Vascular Surgery		(37	)		(43	)		6
Electrophysiology		6			5			1
Neurovascular		17			13			4
Cardiac Surgery		59			59
Cardiac Rhythm Management		626			605			21
CARDIOVASCULAR		328			275			53
Oncology		9			7			2
Endoscopy		40			32			8
Urology		15			14			1
ENDOSURGERY		64			53			11
NEUROMODULATION		35			33			2
WORLDWIDE	$	427		$	361		$	66

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

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

BOSTON SCIENTIFIC CORPORATION

Q2 2007 AND ESTIMATED Q3 2007 NON-GAAP NET INCOME PER SHARE RECONCILIATION

(Unaudited)

	Net Income per Share - Assuming Dilution
	Q2 Results		Q3 Estimate		Q3 Estimate
	(Actual)		(Low)		(High)
GAAP results	$	0.08	$	0.03	$	0.08
Estimated amortization expense		0.08		0.08		0.08
Estimated acquisition-related charges		0.00		0.01		0.01
Adjusted results	$	0.16	$	0.12	$	0.17

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

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

Use of Non-GAAP Financial Measures

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

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

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

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

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

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

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

evaluation of the Company’s current operating performance and comparison to the Company’s past operating performance.

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

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

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

·   Amortization and stock compensation expense - The amount of amortization and stock compensation expense vary based on decisions made at the corporate level and the expenses are not necessarily reflective of operating performance. In addition, amortization and stock compensation expense are non-cash charges and do not impact the Company’s liquidity  

or compliance with the covenants included in its debt agreements. Further, following the Company’s acquisition of Guidant, and the related increase in the Company’s debt, management has heightened its focus on cash generation and debt pay down. Management removes the impact of stock compensation and amortization from the Company’s operating performance to assist in assessing the Company’s cash generated from operations. Management believes this is a critical metric for the Company in measuring the Company’s ability to generate cash and pay down debt. Therefore, amortization and stock compensation expense are excluded from management’s assessment of operating performance and are also excluded from the measures management uses to set employee compensation. Accordingly, management believes this may be useful information to users of its financial statements and therefore has excluded these charges for purposes of calculating these non-GAAP measures to facilitate an evaluation of the Company’s current operating performance, particularly in terms of liquidity.

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

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

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

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

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

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

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

·   Items such as stock compensation expense, though not directly affecting the Company’s cash flow position, represent compensation cost under GAAP. Stock compensation expense is not included in 

non-GAAP net income or non-GAAP net income per diluted share and therefore these measures do not reflect the full economic cost of compensating employees.

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

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

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

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

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

Usefulness of Non-GAAP Financial Measures to Investors

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

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

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