BOSTON SCIENTIFIC CORP - Quarter Report: 2024 March (Form 10-Q)

ITEM 5.

Other Information

ITEM 6.

Exhibits

SIGNATURE

Table of Contents

PART I

FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share data)

2024

2023

Net sales

Cost of products sold

Gross profit

Operating expenses:

Selling, general and administrative expenses

Research and development expenses

Royalty expense

Amortization expense

Contingent consideration net expense (benefit)

Restructuring net charges (credits)

Operating income (loss)

Other income (expense):

Interest expense

()

Other, net

()

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Preferred stock dividends

()

Net income (loss) attributable to noncontrolling interests

()

Net income (loss) attributable to Boston Scientific common stockholders

Net income (loss) per common share — basic

Net income (loss) per common share — diluted

Weighted-average shares outstanding

Basic

Diluted

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)


(in millions)	2024	2023
Net income (loss)	$	$
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		()
Net change in derivative financial instruments		()

Net change in defined benefit pensions and other items	()	()
Other comprehensive income (loss)		()
Comprehensive income (loss)	$	$
Comprehensive income (loss) attributable to noncontrolling interests	()
Comprehensive income attributable to Boston Scientific common stockholders	$	$

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of

(in millions, except share and per share data)

March 31, 2024

December 31, 2023

ASSETS

Current assets:

Cash and cash equivalents

Trade accounts receivable, net

Inventories

Prepaid income taxes

Other current assets

Total current assets

Property, plant and equipment, net

Goodwill

Other intangible assets, net

Deferred tax assets

Other long-term assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current debt obligations

Accounts payable

Accrued expenses

Other current liabilities

Total current liabilities

Long-term debt

Deferred income taxes

Other long-term liabilities

Commitments and contingencies

par value - authorized shares - shares issued as of March 31, 2024 and December 31, 2023

Common stock, $ par value - authorized shares - issued shares as of March 31, 2024 and shares as of December 31, 2023

Treasury stock, at cost - shares as of March 31, 2024 and December 31, 2023

()

Additional paid-in capital

Retained earnings

Accumulated other comprehensive income (loss), net of tax

Total stockholders’ equity

Noncontrolling interests

Total equity

TOTAL LIABILITIES AND EQUITY

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)


(in millions, except share data)	2024		2023
Preferred stock shares issued
Beginning

Preferred stock issuance
Ending
Common stock shares issued
Beginning

Impact of stock-based compensation plans

Ending

Preferred stock
Beginning	$		$

Preferred stock issuance
Ending	$		$
Common stock
Beginning	$		$

Impact of stock-based compensation plans

Ending	$		$
Treasury stock
Beginning	$	()	$	()
Repurchase of common stock
Ending	$	()	$	()
Additional paid-in capital
Beginning	$		$



Impact of stock-based compensation plans
Ending	$		$
Retained earnings/(Accumulated deficit)
Beginning	$		$	()
Net income (loss)
Net (income) loss attributable to noncontrolling interests
Preferred stock dividends			()
Ending	$		$	()
Accumulated other comprehensive income (loss), net of tax
Beginning	$		$
Changes in other comprehensive income (loss)			()
Ending	$		$
Total stockholders' equity	$		$

Noncontrolling interests
Beginning	$		$
Net income (loss) attributable to noncontrolling interests	()
Changes in other comprehensive income (loss)	()
Changes to noncontrolling ownership interest
Ending	$		$

Total equity	$		$

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
(in millions)	2024	2023
Net income (loss)	$	$
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities

Depreciation and amortization
Deferred and prepaid income taxes
Stock-based compensation expense

Net loss (gain) on investments and notes receivable
Contingent consideration net expense (benefit)


Other, net	()	()
Increase (decrease) in operating assets and liabilities, excluding purchase accounting:
Trade accounts receivable	()	()
Inventories	()	()
Other assets	()	()
Accounts payable, accrued expenses and other liabilities	()	()
Cash provided by (used for) operating activities

Investing activities:
Purchases of property, plant and equipment and internal use software	()	()
Proceeds from sale of property, plant and equipment
Payments for acquisitions of businesses, net of cash acquired	()	()
Payments for investments and acquisitions of certain technologies, net of investment proceeds	()	()

Proceeds from royalty rights

Cash provided by (used for) investing activities	()	()

Financing activities:
Payment of contingent consideration previously established in purchase accounting	()	()
Payments for royalty rights	()	()
Payments for finance leases	()
Payments on short-term borrowings	()





Proceeds from long-term borrowings, net of debt issuance costs
Cash dividends paid on preferred stock		()


Cash used to net share settle employee equity awards	()	()
Proceeds from issuances of common stock pursuant to employee stock compensation and purchase plans
Cash provided by (used for) financing activities		()

Effect of foreign exchange rates on cash	()

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents		()
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	$

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(SUPPLEMENTAL INFORMATION)


	Three Months Ended March 31,
(in millions)	2024	2023
Supplemental Information
Stock-based compensation expense	$	$

Non-cash impact of transferred royalty rights	()	()


	As of March 31,
Reconciliation to amounts within the unaudited consolidated balance sheets:	2024	2023
Cash and cash equivalents	$	$
Restricted cash and restricted cash equivalents included in Other current assets
Restricted cash equivalents included in Other long-term assets
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	$

Refer to notes to the unaudited consolidated financial statements. Amounts may not foot due to rounding.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

percent of Axonics, Inc. (Axonics), a publicly traded medical technology company primarily focused on the development and commercialization of devices to treat urinary and bowel dysfunction. The purchase price is $ in cash per share, or approximately $ billion for 100% of the fully diluted equity. On April 3, 2024, we and Axonics each received a request for additional information (Second Request) from the United States Federal Trade Commission (FTC) in connection with the FTC's review of the transaction. The issuance of the Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), until 30 days after both we and Axonics have substantially complied with the Second Request, unless the waiting period is extended voluntarily by the parties or terminated earlier by the FTC. We and Axonics expect to promptly respond to the Second Request and to continue to work cooperatively with the FTC in its review. The transaction is expected to be completed in the second half of 2024, subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction (or waiver) of other customary closing conditions. The Axonics business will be integrated into our Urology division.

2023 Acquisition

On February 20, 2023, we completed the acquisition of a majority stake investment in Acotec Scientific Holdings Limited (Acotec), a publicly traded Chinese manufacturer of drug-coated balloons and other products used in the treatment of vascular and other diseases. We consolidated this majority stake investment in Acotec based on the conclusion we control the entity, and

Table of Contents

percent of the outstanding shares of Acotec, for an upfront cash payment of HK$ per share, or $ million at foreign currency exchange rates at closing. The Acotec portfolio complements our existing Peripheral Interventions portfolio.

Purchase Price Allocation

We accounted for our majority stake investment in Acotec as a business combination in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, Business Combinations (FASB ASC Topic 805). The final purchase price was comprised of the amount presented below:

The fair value of Acotec's noncontrolling interest was based on the publicly traded market value of the remaining percent of the outstanding shares we did not acquire as of the transaction date and is presented in Stockholders' equity within our accompanying unaudited consolidated balance sheets. Goodwill was primarily established for Acotec due to opportunities for collaboration in research and development, manufacturing and commercial strategies and was not deductible for tax purposes.

%Customer relationships %Other intangible assets %$ )

Goodwill and Other Intangible Asset Impairments

Table of Contents

million in aggregate principal amount of % senior notes issued in November 2019 and due in 2027 (2027 Notes). For these nonderivative instruments, we defer recognition of the foreign currency remeasurement gains and losses within the CTA component of OCI. We reclassify these gains and losses to current period earnings within Other, net within our accompanying unaudited consolidated statements of operations only when the hedged item affects earnings, which would occur upon disposal or substantial liquidation of the underlying foreign subsidiary.

Table of Contents

, and are marked-to-market with changes in fair value recorded to earnings within Other, net within our accompanying unaudited consolidated statements of operations.

Interest Rate Hedging Instruments

Risk Management Strategy

Our interest rate risk relates primarily to U.S. dollar and euro-denominated borrowings partially offset by U.S. dollar cash investments. We use interest rate derivative instruments to mitigate the risk to our earnings and cash flows associated with exposure to changes in interest rates. Under these agreements, we and the counterparty, at specified intervals, exchange the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. We designate these derivative instruments either as fair value or cash flow hedges in accordance with FASB ASC Topic 815.

Hedge Designations and Relationships

We had interest rate derivative instruments designated as cash flow hedges outstanding as of March 31, 2024 or December 31, 2023. In the event that we designate outstanding interest rate derivative instruments as cash flow hedges, we record the changes in the fair value of the derivatives within OCI until the underlying hedged transaction occurs.

We had no interest rate derivative instruments designated as fair value hedges outstanding as of March 31, 2024 or December 31, 2023. In the event that we designate outstanding interest rate derivative instruments as fair value hedges, we record the changes in the fair values of interest-rate derivatives designated as fair value hedges and of the underlying hedged debt instruments in Interest expense, which generally offset.

$ Forward currency contractsNet investment hedge

Foreign currency-denominated debt(1)

Net investment hedge Forward currency contractsNon-designated Total Notional Outstanding$ $

(1) Foreign currency-denominated debt is the € million debt principal associated with our 2027 Notes designated as a net investment hedge.

The remaining time to maturity as of March 31, 2024 is within months for all forward currency contracts designated as cash flow hedges and generally less than for all non-designated forward currency contracts. The forward currency contracts designated as net investment hedges generally mature between one and two years. The euro-denominated debt principal designated as a net investment hedge has a contractual maturity of December 1, 2027.

The following presents the effect of our derivative and nonderivative instruments designated as cash flow and net investment hedges under FASB ASC Topic 815 within our accompanying unaudited consolidated statements of operations. Refer to Note M – Changes in Other Comprehensive Income for the total amounts relating to derivative and nonderivative instruments presented within our accompanying unaudited consolidated statements of comprehensive income (loss).

Table of Contents

$()$ Cost of products sold$ $()$ $()

Net investment hedges(2)

() Interest expense () ()Foreign currency-denominated debt

Net investment hedges(3)

() Other, net() Interest rate derivative contractsCash flow hedges Interest expense ()

Effect of Hedging Relationships on Accumulated Other Comprehensive Income

Amount Recognized in OCI on Hedges

Unaudited Consolidated Statements of Operations(1)

Amount Reclassified from AOCI into Earnings

(in millions)

Pre-Tax Gain (Loss)

Tax Benefit (Expense)

Gain (Loss) Net of Tax

Location of Amount Reclassified and Total Amount of Line Item

Pre-Tax (Gain) Loss

Tax (Benefit) Expense

(Gain) Loss Net of Tax

Three Months Ended March 31, 2023

Forward currency contracts

Cash flow hedges

()

Cost of products sold

()

Net investment hedges(2)

()

Interest expense

()

Foreign currency-denominated debt

Net investment hedges(3)

()

Other, net

Interest rate derivative contracts

Cash flow hedges

Interest Expense

(1) In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings.

(2) For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current and prior periods, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings.

(3) For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the CTA component of OCI. amounts were reclassified from AOCI to current period earnings.

Forward currency contractsNet investment hedgeInterest expense Interest rate derivative contractsCash flow hedgeInterest expense()

Table of Contents

$()Net gain (loss) on currency transaction exposuresOther, net()()Net currency exchange gain (loss)$()$()

Fair Value Measurements

(FASB ASC Topic 820), and considering the estimated amount we would receive or pay to transfer these instruments at the reporting date with respect to current currency exchange rates, interest rates, the creditworthiness of the counterparty for unrealized gain positions and our own creditworthiness for unrealized loss positions. In certain instances, we may utilize financial models to measure fair value of our derivative and nonderivative instruments. 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.

$ Forward currency contractsOther long-term assets Non-Designated Hedging Instruments Forward currency contractsOther current assets Total Derivative and Nonderivative Assets $ $ Derivative and Nonderivative Liabilities: Designated Hedging Instruments Forward currency contractsOther current liabilities$ $ Forward currency contractsOther long-term liabilities

Foreign currency-denominated debt(2)

Long-term debt Non-Designated Hedging Instruments Forward currency contractsOther current liabilities Total Derivative and Nonderivative Liabilities $ $

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

(2) Foreign currency-denominated debt is the € million debt principal associated with our 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item.

Table of Contents

$ $ $ $ $ $ $ Publicly-held equity securities Hedging instruments Licensing arrangements $ $ $ $ $ $ $ $ Liabilities Hedging instruments$ $ $ $ $ $ $ $ Contingent consideration liability Licensing arrangements $ $ $ $ $ $ $ $

Our investments in money market funds and time deposits 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 or Other current assets within our accompanying unaudited consolidated balance sheets, in accordance with GAAP and our accounting policies. In addition to $ billion invested in money market funds and time deposits as of March 31, 2024 and $ million as of December 31, 2023, we held $ million in interest-bearing and non-interest-bearing bank accounts as of March 31, 2024 and $ million as of December 31, 2023.

Our recurring fair value measurements using Level 3 inputs include those related to our contingent consideration liability. Refer to Note B – Acquisitions and Strategic Investments for a discussion of the changes in the fair value of our contingent consideration liability. In addition, our recurring fair value measurements using Level 3 inputs related to our licensing arrangements, including the contractual right to receive future royalty payments related to the Zytiga™ Drug. We maintain a financial asset and associated liability for our licensing arrangements measured at fair value within our unaudited consolidated balance sheets in accordance with FASB ASC Topic 825, Financial Instruments. We elected the fair value option to measure the financial asset and associated liability as it provides for consistency and comparability of these financial instruments with others. Refer to Note D – Hedging Activities and Fair Value Measurements to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information.

Table of Contents

millionDiscounted Cash FlowDiscount Rate%%Projected Year of Payment2024-20252025Financial Liability$ millionDiscounted Cash FlowDiscount Rate %-%%Projected Year of Payment2024-20262025

(1) Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.

Changes in the fair value of our licensing arrangements' financial asset were as follows:


(in millions)
Balance as of December 31, 2023			$
Proceeds from royalty rights			()
Fair value adjustment (expense) benefit
Balance as of March 31, 2024			$

Changes in the fair value of our licensing arrangements' financial liability were as follows:


(in millions)
Balance as of December 31, 2023			$
Payments for royalty rights			()
Fair value adjustment expense (benefit)
Balance as of March 31, 2024			$

Non-Recurring Fair Value Measurements

We hold certain assets and liabilities that are measured at fair value on a non-recurring basis in periods after initial recognition. The fair value of a measurement alternative 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. Refer to Note B – Acquisitions and Strategic Investments for a discussion of our strategic investments and Note C – Goodwill and Other Intangible Assets for a discussion of the fair values of our intangible assets including goodwill.

The fair value of our outstanding debt obligations, excluding finance leases, was $ billion as of March 31, 2024 and $ billion as of December 31, 2023. We determined fair value by using quoted market prices for our publicly registered senior notes, classified as Level 1 within the fair value hierarchy, and face value for commercial paper, term loans and credit facility borrowings outstanding. Refer to Note E – Contractual Obligations and Commitments for a discussion of our debt obligations.

Table of Contents

billion as of March 31, 2024 and $ billion as of December 31, 2023, with current obligations of $ billion as of March 31, 2024 and $ million as of December 31, 2023. %June 2025 Senior NotesMay 2020June 2025 %March 2026 Senior NotesFebruary 2019March 2026 %

December 2027 Senior Notes(3)

November 2019December 2027 %

March 2028 Senior Notes(3)

March 2022March 2028 %March 2028 Senior NotesFebruary 2018March 2028 %March 2029 Senior NotesFebruary 2019March 2029 %

March 2029 Senior Notes(3)

February 2024March 2029 %June 2030 Senior NotesMay 2020June 2030 %

March 2031 Senior Notes(3)

March 2022March 2031 %

March 2032 Senior Notes(3)

February 2024March 2032 %

March 2034 Senior Notes(3)

March 2022March 2034 %

November 2035 Senior Notes(2)

November 2005November 2035 %March 2039 Senior NotesFebruary 2019March 2039 %January 2040 Senior NotesDecember 2009January 2040 %March 2049 Senior NotesFebruary 2019March 2049 %Unamortized Debt Issuance Discount and Deferred Financing Costs2024 - 2049()()Finance Lease ObligationVarious Long-term debt$ $

(1) Coupon rates are semi-annual, except for the euro-denominated notes, which bear an annual coupon.

(2) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 Notes will be permanently reinstated to the issuance rate of % if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher.

(3) These notes are euro-denominated and presented in U.S. dollars based on the exchange rate in effect as of March 31, 2024 and December 31, 2023, respectively.

Revolving Credit Facility

On May 10, 2021, we entered into a $ billion revolving credit facility (2021 Revolving Credit Facility) with a global syndicate of commercial banks, initially scheduled to mature on May 10, 2026, with extension options, subject to certain conditions. On March 1, 2023, we entered into an amendment of the 2021 Revolving Credit Facility credit agreement, which provided for an extension of the scheduled maturity date to May 10, 2027 and replaced the London Interbank Offered Rate (LIBOR) with the Secured Overnight Financing Rate (SOFR) as the Eurocurrency Rate for Dollars, including applicable credit spread adjustments and relevant SOFR benchmark provisions, among other things described under Financial Covenant below. This facility provides backing for our commercial paper program, and outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. We had amounts outstanding under the 2021 Revolving Credit Facility as of March 31, 2024 or December 31, 2023.

Table of Contents

times times

(1) Ratio of total debt to deemed consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined by the 2021 Revolving Credit Facility credit agreement, as amended.

The 2021 Revolving Credit Facility includes the financial covenant requirement for all of our credit arrangements that we maintain the maximum permitted leverage ratio of times for the remaining term. The credit agreement provides for higher leverage ratios, at our election, for the period following a Qualified Acquisition, as defined by the agreement, for which consideration exceeds $ billion. In the event of such an acquisition, for the four succeeding quarters immediately following, including the quarter in which the acquisition occurs, the maximum permitted leverage ratio is times. It steps down for the fifth, sixth and seventh succeeding quarters to times, times and times, respectively. Thereafter, a maximum leverage ratio of times is required through the remaining term of the 2021 Revolving Credit Facility. We have elected to designate the Axonics acquisition as a Qualified Acquisition under the credit agreement, and upon closing, will increase the maximum permitted leverage ratio at that time. The agreement also provides for an exclusion of any debt incurred to fund a Qualified Acquisition, until the earlier of the acquisition close date or date of abandonment, termination or expiration of the acquisition agreement. As of March 31, 2024, we excluded $ billion of debt incurred from our leverage ratio calculation in connection with the Axonics acquisition.

The financial covenant requirement, as amended on March 1, 2023, provides for an exclusion from the calculation of consolidated EBITDA, as defined by the credit agreement, through maturity, of certain charges and expenses. The credit agreement amendment reset the starting date for purposes of calculating such permitted exclusions in each case from March 31, 2021 to December 31, 2022. Permitted exclusions include any non-cash charges and up to $ million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of March 31, 2024, we had $ 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, as defined by the agreement, provided that the sum of any excluded net cash litigation payments do not exceed $ billion plus all accrued legal liabilities as of December 31, 2022. As of March 31, 2024, we had $ billion of the litigation exclusion remaining.

Any inability to maintain compliance with this covenant could require us to seek to renegotiate the terms of our credit arrangements or seek waivers from compliance with this covenant, 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 on terms acceptable to us. In this case, all 2021 Revolving Credit Facility commitments would terminate, and any amounts borrowed under the facility would become immediately due and payable. Furthermore, any termination of our 2021 Revolving Credit Facility may negatively impact the credit ratings assigned to our commercial paper program, which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable.

Commercial Paper

Our commercial paper program is backed by the 2021 Revolving Credit Facility. We did have any commercial paper outstanding as of March 31, 2024 and December 31, 2023.

Senior Notes

We had senior notes outstanding of $ billion as of March 31, 2024 and $ billion as of December 31, 2023. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (refer to Other Arrangements below).

In February 2024, American Medical Systems Europe B.V. (AMS Europe), an indirect, wholly owned subsidiary of Boston Scientific, completed a registered public offering (the Offering) of € billion in aggregate principal amount of euro-denominated senior notes comprised of € million of % Senior Notes due 2029 and € billion of % Senior Notes due 2032 (collectively, the 2024 Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the 2024 Eurobonds, and no other subsidiary of Boston Scientific will guarantee these obligations.

Table of Contents

billion, net of investor discounts and issuance costs.

We used the net proceeds from the Offering of the 2024 Eurobonds to fund the repayment at maturity of our % Senior Notes due March 2024 and to pay accrued and unpaid interest with respect to such notes. Additionally, we plan to use the remaining net proceeds from the Offering to fund a portion of the purchase price of the Axonics acquisition and to pay related fees and expenses, and for general corporate purposes. The transaction is expected to be completed in the second half of 2024, subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction (or waiver) of other customary closing conditions. If (i) the Axonics acquisition is not consummated on or before the later of (x) January 8, 2025 (as such date may be extended in accordance with the merger agreement to no later than January 8, 2026) and (y) the date that is five business days after any later date to which we and Axonics may agree to extend the "Outside Date" in the merger agreement or (ii) AMS Europe notifies the trustee that we will not pursue consummation of the Axonics Acquisition, AMS Europe will be required to redeem each series of the notes at a special mandatory redemption price equal to % of the aggregate principal amount of such series of notes, plus accrued and unpaid interest, if any, to, but excluding, the date on which the notes will be redeemed. Refer to Note B – Acquisitions and Strategic Investments for more information on the Axonics acquisition.

Other Arrangements

We have accounts receivable factoring programs in certain European countries and with commercial banks in China and Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860. We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy.

%$ %Yen denominated % %

Renminbi denominated

% %

Other Contractual Obligations and Commitments

We had outstanding letters of credit of $ million as of March 31, 2024 and December 31, 2023, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of March 31, 2024 and December 31, 2023 we had not recognized a related liability for our outstanding letters of credit within our accompanying unaudited consolidated balance sheets.

We have a supplier financing program offered primarily in the U.S. that enables our suppliers to opt to receive early payment at a nominal discount, while allowing us to lengthen our payment terms and optimize working capital. Our standard payment term in the U.S. is 90 days. All outstanding payables related to the supplier finance program are classified within Accounts Payable within our unaudited consolidated balance sheets and were $ million as of March 31, 2024 and $ million as of December 31, 2023.

Refer to Note E – Contractual Obligations and Commitments to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for additional information on our borrowings and credit agreements.

Table of Contents

$ Allowance for credit losses()() $ $

The following is a roll forward of our Allowance for credit losses:


(in millions)	2024	2023
Beginning balance	$	$
Credit loss expense
Write-offs	()	()
Ending balance	$	$

$ Work-in-process Raw materials $ $ $ Derivative assets Licensing arrangements Other $ $

Table of Contents

$ Buildings and improvements Equipment, furniture and fixtures Capital in progress Less: accumulated depreciation $ $

Depreciation expense was $ million for the first quarter of 2024 and $ million for the first quarter of 2023.

$ Operating lease right-of-use assets Derivative assets Investments Licensing arrangements Indemnification asset Other $ $ $ Payroll and related liabilities Rebates Contingent consideration Other $ $

$ Licensing arrangements Taxes payable Other $ $

Table of Contents

$ Legal reserves Contingent consideration Licensing arrangements Operating lease liabilities Deferred revenue Other $ $

% %

Our reported tax rate is affected by recurring items such as the amount of our earnings subject to differing tax rates in foreign jurisdictions and the impact of certain receipts and charges that are taxed at rates that differ from our effective tax rate.

The principal reason for the difference between the statutory rate and our reported tax rate in the first quarter of 2024 primarily relates to certain charges for acquisition expenses as well as certain discrete benefits related to unrecognized tax benefits and stock-based compensation. In the first quarter of 2023, the primary difference between the statutory tax rate and our reported tax rate relates to certain discrete charges related to provision-to-return adjustments.

As of March 31, 2024, we had $ million of gross unrecognized tax benefits, of which a net $ million, if recognized, would affect our effective tax rate. As of December 31, 2023, we had $ million of gross unrecognized tax benefits, of which a net $ million, if recognized, would affect our effective tax rate. The change in our gross unrecognized tax benefit is primarily related to current year activity and audit activities.

It is reasonably possible that within the next 12 months, we will resolve multiple issues with foreign, federal and state taxing authorities, resulting in a reduction in our balance of unrecognized tax benefits of up to $ million.

Table of Contents

Our accrual for legal matters that are probable and estimable was $ million as of March 31, 2024 and $ million as of December 31, 2023 and includes certain estimated costs of settlement, damages and defense primarily related to product liability cases or claims related to our transvaginal surgical mesh products. A portion of this accrual is already funded through our qualified settlement fund, which is included in restricted cash and restricted cash equivalents in Other current assets of $ million as of March 31, 2024 and $ million as of December 31, 2023. Refer to Note F – Supplemental Balance Sheet Information for additional information. We did not record any litigation-related net charges during the first quarter of 2024 or 2023.

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 financial covenant.

In management's opinion, we are not currently involved in any legal proceedings other than those disclosed in our most recent Annual Report on Form 10-K and 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

Table of Contents

million in damages. Following the trial, UT has filed a motion seeking prejudgment interest and enhanced damages. The Company has filed a motion seeking judgment as a matter of law in its favor or alternatively a new trial.

Product Liability Litigation

Multiple product liability cases or claims related to transvaginal surgical mesh products designed to treat stress urinary incontinence and pelvic organ prolapse have been asserted against us, predominantly in the United States, Canada, the United Kingdom, Scotland, Ireland, and Australia. Plaintiffs generally seek monetary damages based on allegations of personal injury associated with the use of our transvaginal surgical mesh products, including design and manufacturing claims, failure to warn, breach of warranty, fraud, violations of state consumer protection laws and loss of consortium claims. We have entered into individual and master settlement agreements or are in the final stages of entering agreements with certain plaintiffs' counsel, to resolve the majority of these cases and claims. All settlement agreements were entered into solely by way of compromise and without any admission or concession by us of any liability or wrongdoing. In addition, in April 2021 the Company's Board of Directors received a shareholder demand under section 220 of the Delaware General Corporation Law, for inspection of books and records related to mesh settlements. The Company has notified our insurer and retained counsel to respond to the demand.

We have established a product liability accrual for remaining claims asserted against us associated with our transvaginal surgical mesh products and the costs of defense thereof. We continue to engage in discussions with plaintiffs’ counsel regarding potential resolution of pending cases and claims, which we continue to vigorously contest. The final resolution of the cases and claims is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity. 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 December 1, 2015, the Brazilian governmental entity known as CADE (the Administrative Council of Economic Defense), served a search warrant on the offices of our Brazilian subsidiary, as well as on the Brazilian offices of several other major medical device makers who do business in Brazil, in furtherance of an investigation into alleged anti-competitive activity with respect to certain tender offers for government contracts. On June 20, 2017, CADE, through the publication of a “technical note,” announced that it was launching a formal administrative proceeding against Boston Scientific’s Brazilian subsidiary, Boston Scientific do Brasil Ltda. (BSB), as well as against the Brazilian operations of Medtronic, Biotronik and St. Jude Medical, two Brazilian associations, ABIMED and AMBIMO and individuals for alleged anti-competitive behavior. Under applicable guidance, BSB could be fined a percentage of BSB’s 2016 gross revenues. In August 2021, the investigating commissioner issued a preliminary recommendation of liability against all of the involved companies, and also recommended that CADE impose fines and penalties. However, on October 25, 2021, the CADE Attorney General's office recommended dismissal of the charges and allegations against BSB and the individual BSB employees who were still individual defendants. Subsequently, on March 30, 2022, the Federal Prosecutor’s office issued a non-binding recommendation that is contrary to the Attorney General’s recommendation. The full Commission is considering both of these recommendations but has not yet issued its decision. We continue to deny the allegations, intend to defend ourselves vigorously and will appeal any decision of liability by the full Commission to the Brazilian courts. During such an appeal, the decision would have no force and effect, and the Court would consider the case without being bound by CADE’s decision.

Table of Contents

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.

On May 27, 2020, we completed an offering of shares of % Mandatory Convertible Preferred Stock, Series A (MCPS) at a price to the public and liquidation preference of $ per share. The net proceeds from the MCPS offering were approximately $ million after deducting underwriting discounts and commissions and offering expenses.

On June 1, 2023, (the Mandatory Conversion Date), all outstanding shares of MCPS automatically converted into shares of common stock. The conversion rate for each share of MCPS was shares of common stock. No action by the holders of the MCPS was required in connection with the mandatory conversion. Cash was paid in lieu of fractional shares in accordance with the terms of the MCPS. An aggregate of approximately million shares of common stock, including shares of common stock issued to holders of MCPS that elected to convert prior to the Mandatory Conversion Date, were issued upon conversion of the MCPS. Following the mandatory conversion of the MCPS, there were no outstanding shares of MCPS.

Refer to Note J – Stockholders' Equity to our audited financial statements contained in Item 8. Financial Statements and Supplementary Data of our most recent Annual Report on Form 10-K for information on the pertinent rights and privileges of our outstanding common stock.

Net effect of common stock equivalents Weighted average shares outstanding - diluted

MCPS(2)

(1) Represents stock options outstanding pursuant to our employee stock-based compensation plans with exercise prices that were greater than the average fair market value of our common stock for the related periods.

(2) Represents common stock issuable upon the conversion of MCPS. Refer to Note I – Stockholders' Equity for additional information.

We base Net income (loss) per common share - diluted 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, stock awards and, prior to the Mandatory Conversion Date, our MCPS, from the calculation if the effect would be anti-dilutive. The dilutive effect of MCPS is calculated using the if-converted method. The if-converted method assumes that these securities were converted to shares of common stock at the beginning of the reporting period to the extent that the effect is dilutive.

Table of Contents

shares of our common stock in the first quarter of 2024 and 2023 following the exercise of stock options, vesting of restricted stock units or purchases under our employee stock purchase plan. We did not repurchase any shares of our common stock in the first quarter of 2024 or 2023. On December 14, 2020, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $ billion of our common stock. As of March 31, 2024, we had the full amount remaining available under the authorization.

reportable segments: MedSurg and Cardiovascular, each of which generates revenues from the sale of medical devices. In accordance with FASB ASC Topic 280, Segment Reporting, we identified our reportable segments based on the nature of our products, production processes, type of customer, selling and distribution methods and regulatory environment, as well as the economic characteristics of each of our operating segments.

We measure and evaluate our reportable segments based on their respective net sales, operating income, excluding intersegment profits, and operating income as a percentage of net sales, all based on internally-derived standard currency exchange rates to exclude the impact of foreign currency, which may be updated from year to year. We exclude from operating income of reportable segments certain corporate-related expenses and certain transactions or adjustments that our chief operating decision maker (CODM) considers to be non-operational, such as amounts related to amortization expense, goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), and certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from operating income of reportable segments, they are included in reported Income (loss) before income taxes within our accompanying unaudited consolidated statements of operations and are included in the reconciliation below. Refer to Note L – Revenue for net sales by reportable segment presented in accordance with GAAP.

Table of Contents

$Cardiovascular Total net sales of reportable segments Impact of foreign currency fluctuations $ $

Income (loss) before income taxes

MedSurg

Cardiovascular

Total operating income of reportable segments

Unallocated amounts:

Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments

()

Goodwill and other intangible asset impairment charges, acquisition/divestiture-related net charges (credits), restructuring and restructuring-related net charges (credits), certain litigation-related net charges (credits) and EU MDR implementation costs

()

Amortization expense

()

Operating income (loss)

Other income (expense), net

()

Income (loss) before income taxes


Operating income margin of reportable segments	2024		2023
MedSurg		%		%
Cardiovascular		%		%

Table of Contents

operating segments.

$ $ $ $ $ Urology Neuromodulation MedSurg Interventional Cardiology Therapies Watchman Cardiac Rhythm Management Electrophysiology Cardiology Peripheral Interventions Cardiovascular Total Net Sales$ $ $ $ $ $

Refer to Note K - Segment Reporting for information on our reportable segments.


Geographic Regions	2024	2023
U.S.	$	$
Europe, Middle East and Africa
Asia-Pacific
Latin America and Canada

Total Net Sales	$	$

Emerging Markets(1)	$	$

))) )))()$

Refer to Note D – Hedging Activities and Fair Value Measurements for further detail on our net investment hedges recorded in Foreign currency translation adjustment and our cash flow hedges recorded in Net change in derivative financial instruments.

Table of Contents

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Boston Scientific Corporation is a global 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. As a medical technology leader for more than 40 years, we have advanced the practice of less-invasive medicine by helping physicians and other medical professionals diagnose and treat a wide range of diseases and medical conditions and improve patients’ quality of life by providing alternatives to surgery and other medical procedures that are typically traumatic to the body. We advance science for life by providing a broad range of high performance solutions to address unmet patient needs and reduce the cost of health care. When used in this report, the terms "we," "us," "our" and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries.

Financial Summary

Three Months Ended March 31, 2024

Our net sales for the first quarter of 2024 were $3.856 billion, compared to $3.389 billion for the first quarter of 2023. This increase of $467 million, or 13.8 percent, included operational1 net sales growth of 15.0 percent and the negative impact of 120 basis points from foreign currency fluctuations. Operational net sales growth included organic2 net sales growth of 13.1 percent and the positive impact of 190 basis points from our majority stake investment in Acotec Scientific Holdings Limited (Acotec) and the acquisitions of Apollo Endosurgery, Inc. (Apollo) and Relievant Medsystems, Inc. (Relievant) during the first, second and fourth quarters of 2023, respectively, for which there is less than a full period of comparable net sales. The increase in our net sales was primarily driven by the diversity of our product portfolio and strong execution, coupled with growth in the underlying markets in which we compete. Refer to Quarterly Results and Business Overview for a discussion of our net sales by business.

Our reported net income attributable to Boston Scientific common stockholders for the first quarter of 2024 was $495 million, or $0.33 per diluted share. Our reported results for the first quarter of 2024 included certain charges and/or credits totaling $337 million (after-tax), or $0.23 per diluted share. Excluding these items, adjusted net income attributable to Boston Scientific common stockholders3 was $832 million, or $0.56 per diluted share.

Our reported net income attributable to common stockholders for the first quarter of 2023 was $300 million, or $0.21 per diluted share. Our reported results for the first quarter of 2023 included certain charges and/or credits totaling $373 million (after-tax), or $0.26 per diluted share. Excluding these items, adjusted net income attributable to Boston Scientific common stockholders3 was $673 million, or $0.47 per diluted share.

1Operational net sales growth excludes the impact of foreign currency fluctuations.

2Organic net sales growth excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there are less than a full period of comparable net sales.

3Adjusted measures, including operational and organic net sales growth and adjusted net income attributable to Boston Scientific common stockholders, exclude certain items required by generally accepted accounting principles in the United States (GAAP), are not prepared in accordance with GAAP and should not be considered in isolation from, or as a replacement for, the most directly comparable GAAP measure. Refer to Additional Information for a discussion of management’s use of these non-GAAP financial measures.

Table of Contents

The following is a reconciliation of our results of operations prepared in accordance with GAAP to those adjusted results considered by management. Refer to Quarterly Results and Business Overview and Additional Information for a discussion of these reconciling items:


(in millions, except per share data)	Income (Loss) Before Income Taxes		Income Tax Expense (Benefit)		Net Income (Loss)		Preferred Stock Dividends		Net Income (Loss) Attributable to Noncontrolling Interests		Net Income (Loss) Attributable to Boston Scientific Common Stockholders		Impact per Share
Reported	$	608	$	115	$	493	$	—	$	(1)	$	495	$	0.33
Non-GAAP adjustments:
Amortization expense	214		29		184		—		2		182		0.12

Acquisition/divestiture-related net charges (credits)	64		(13)		77		—		—		77		0.05
Restructuring and restructuring-related net charges (credits)	46		6		40		—		—		40		0.03

Investment portfolio net losses (gains) and impairments	(14)		(3)		(11)		—		—		(11)		(0.01)
European Union (EU) Medical device regulation (MDR) implementation costs	14		2		12		—		—		12		0.01

Deferred tax expenses (benefits)	—		(37)		37		—		—		37		0.02

Adjusted	$	932	$	99	$	833	$	—	$	1	$	832	$	0.56


	Three Months Ended March 31, 2023
(in millions, except per share data)	Income (Loss) Before Income Taxes		Income Tax Expense (Benefit)		Net Income (Loss)		Preferred Stock Dividends		Net Income (Loss) Attributable to Noncontrolling Interests		Net Income (Loss) Attributable to Boston Scientific Common Stockholders		Impact per Share(4)
Reported	$	444	$	131	$	314	$	(14)	$	—	$	300	$	0.21
Non-GAAP adjustments:
Amortization expense	203		28		175		—		—		175		0.12

Acquisition/divestiture-related net charges (credits)	59		(7)		66		—		—		66		0.05
Restructuring and restructuring-related net charges (credits)	44		8		37		—		—		37		0.03

Investment portfolio net losses (gains) and impairments	21		5		16		—		—		16		0.01
European Union (EU) Medical device regulation (MDR) implementation costs	16		2		14		—		—		14		0.01

Deferred tax expenses (benefits)	—		(41)		41		—		—		41		0.03
Discrete tax items	—		(25)		25		—		—		25		0.02
Adjusted	$	787	$	100	$	687	$	(14)	$	—	$	673	$	0.47

4 For the three months ended March 31, 2023, the effect of assuming the conversion of our 5.50% Mandatory Convertible Preferred Stock, Series A (MCPS) into shares of common stock was anti-dilutive, and therefore excluded from the calculation of Net income (loss) per common share - diluted earnings per share (EPS). Accordingly, GAAP Net income (loss) and Adjusted net income were reduced by cumulative Preferred stock dividends, as presented within our unaudited consolidated statements of operations, for purposes of calculating GAAP Net income attributable to Boston Scientific common stockholders. On June 1, 2023, all outstanding shares of MCPS automatically converted into shares of common stock.

Table of Contents

Quarterly Results and Business Overview

The following section describes our net sales and results of operations by reportable segment and business. For additional information on our businesses and product offerings, refer to Item 1. Business of our most recent Annual Report on Form 10-K.


	Three Months Ended March 31,
(in millions)	2024		2023		Increase/(Decrease)
Endoscopy	$	642	$	577	11.4%
Urology	513		469		9.3%
Neuromodulation	256		234		9.5%
MedSurg	1,412		1,280		10.3%
Cardiology	1,872		1,606		16.5%
Peripheral Interventions	573		503		13.9%
Cardiovascular	2,445		2,110		15.9%


Net Sales	$	3,856	$	3,389	13.8%

The primary factors contributing to the decrease in our gross profit margin in the first quarter of 2024, as compared to the same period in the prior year, were inventory charges, period expenses and the unfavorable impact of foreign currency. These impacts were partially offset by increased sales of higher margin products.

Operating Expenses

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


	2024				2023
(in millions)	$		% of Net Sales		$		% of Net Sales
Selling, general and administrative expenses	$	1,364	35.4	%	$	1,215	35.9	%
Research and development expenses	366		9.5	%	337		9.9	%

Selling, General and Administrative expenses (SG&A Expenses)

During the first quarter of 2024, SG&A expenses increased $149 million, or 12 percent, compared to the prior year period and were 50 basis points lower as a percentage of net sales. The increase in SG&A expenses was primarily due to higher selling costs driven by higher global net sales and costs to support recent and upcoming product launches, including the Farapulse™ Pulsed Field Ablation System.

Research and Development expenses (R&D Expenses)

We remain committed to advancing medical technologies and investing in meaningful R&D projects across our businesses. During the first quarter of 2024, R&D expenses increased $29 million, or 9 percent, compared to the prior year period and were 40 basis points lower as a percentage of net sales. R&D expenses increased as a result of investments across our businesses in order to maintain a pipeline of new products that we believe will contribute to profitable sales growth.

Table of Contents

Other Operating Expenses

The following provides a summary of certain of our other operating expenses, which are excluded by management for purposes of evaluating operating performance; refer to Additional Information for a further description.

Amortization Expense

During the first quarter of 2024, Amortization expense increased $11 million, or 5 percent, compared to the prior year period. The increase in Amortization expense was driven by the addition of amortizable intangible assets associated with our recent acquisitions.

Contingent Consideration Net Expense (Benefit)

To recognize changes in the fair value of our contingent consideration liability, we recorded net charges of $17 million in the first quarter of 2024 and $12 million in the first quarter of 2023. The net charges recorded in the first quarter of 2024 related to an increase in expected payments for achievement of revenue-based earn outs as a result of over-performance. In addition, we made payments of $123 million and $68 million associated with prior acquisitions during the first quarter of 2024 and 2023, respectively, following the achievement of revenue-based earnouts. Refer to Note B – Acquisitions and Strategic Investments to our unaudited consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details related to our contingent consideration arrangements.

Restructuring and Restructuring-related Net Charges (Credits)

On February 22, 2023, our Board of Directors approved, and we committed to, a new global restructuring program (the 2023 Restructuring Plan). The 2023 Restructuring Plan will advance our Global Supply Chain Optimization strategy, which is intended to simplify our manufacturing and distribution network by transferring certain production lines among facilities and drive operational efficiencies and resiliency. Key activities under the 2023 Restructuring Plan will also include optimizing certain functional capabilities to achieve cost synergies and better support business growth. For more information, refer to 2023 Restructuring Plan contained in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our most recent Annual Report on Form 10-K.

Pursuant to the 2023 Restructuring Plan, we recorded restructuring charges in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations of $3 million in the first quarter of 2024. The restructuring reserve balance was $35 million as of March 31, 2024. In addition, we recorded restructuring-related charges of $43 million in the first quarter of 2024 primarily within Cost of products sold and SG&A Expenses. During the first quarter of 2023, we recorded restructuring charges of $20 million and restructuring-related charges of $24 million, and the restructuring reserve balance as of December 31, 2023 was $41 million.

Litigation-related Net Charges (Credits)

We did not record any litigation-related net charges (credits) during the first quarter of 2024 or 2023. We record certain legal and product liability charges, credits and costs of defense, which we consider to be unusual or infrequent and significant as Litigation-related net charges (credits) within our accompanying unaudited consolidated financial statements. All other legal and product liability charges, credits and costs are recorded within SG&A expenses.

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 the financial covenant required by our credit arrangements. Refer to Note H – Commitments and Contingencies to our unaudited consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q for discussion of our material legal proceedings.

Table of Contents

Interest Expense

The following table provides a summary of our Interest expense and average borrowing rate:


2024				2023
Interest expense (in millions)	$	(69)			$	(65)
Average borrowing rate	2.7		%		2.8		%

Interest expense increased during the first quarter of 2024 compared to the prior year period primarily due to increased debt from the registered public offering of €2.000 billion in aggregate principal amount of euro-denominated senior notes during the quarter. Our average borrowing rate remained flat during the first quarter of 2024 compared to the prior year period. Refer to Liquidity and Capital Resources and Note E – Contractual Obligations and Commitments to our unaudited consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q for more information regarding our debt obligations.

Tax Rate

Our effective tax rate from continuing operations is presented below:


	2024		2023
Effective tax rate from continuing operations	18.9	%	29.4	%

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 1, 2024.


BOSTON SCIENTIFIC CORPORATION
By:	/s/ Daniel J. Brennan

	Name:	Daniel J. Brennan
	Title:	Executive Vice President and Chief Financial Officer

BOSTON SCIENTIFIC CORP - Quarter Report: 2024 March (Form 10-Q)

Similar companies