Q2 2012 Goodwill Impairment Charge 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 23, 2012
BOSTON SCIENTIFIC CORPORATION
(Exact name of registrant as specified in charter)
(State or other
One Boston Scientific Place, Natick, Massachusetts
(Address of principal executive offices)
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 2.06. MATERIAL IMPAIRMENTS.
On July 23, 2012 Boston Scientific Corporation (the "Company") concluded in conjunction with its annual goodwill impairment test that the goodwill within its Europe, Middle East, and Africa ("EMEA") reporting unit was impaired. Consequently, the Company recorded a non-cash $3.405 billion ($3.427 billion pre-tax) estimated goodwill impairment charge associated with its EMEA reporting unit for the quarter ended June 30, 2012, primarily driven by slightly lower projected long-term growth rates due to macroeconomic factors and the Company's performance in the European market. The amount of the goodwill impairment charge is subject to finalization and is expected to be in a range of $3.1 billion to $3.7 billion. In addition, the Company recorded an impairment charge of $110 million ($129 million pre-tax) related to purchased research and development intangible assets associated with its acquisition of Sadra Medical Inc. for the quarter ended June 30, 2012, primarily driven by the Company's revised expectations of the required effort, time and cost involved in completing the in-process projects and bringing the related products to market.
Cautionary Statement Regarding Forward-Looking Information
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding the write-down of our goodwill and other asset impairments. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These risks and uncertainties, in some cases, have affected and in the future could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this document. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.
Risks and uncertainties that may cause such differences include, among other things: future economic, political, competitive, reimbursement and regulatory conditions; new product introductions and the market acceptance of those products; markets for our products, including in EMEA; expected pricing environment; expected procedural volumes; clinical trial results; demographic trends; intellectual property rights; litigation; financial market conditions, including in EMEA; the finalization of our estimated goodwill impairment charge; the execution and effect of our business strategy, including our cost-savings and growth initiatives; and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item IA - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.
Pursuant to the requirements of the Securities 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.
Date: July 26, 2012
BOSTON SCIENTIFIC CORPORATION
/s/ Vance R. Brown
Vance R. Brown
Vice President and Chief Corporate Counsel