Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year Ended December 31,
(in millions, except per share data)			2024						2023						2022
Net sales			$	16,747					$	14,240					$	12,682
Cost of products sold			5,257						4,345						3,956
Gross profit			11,490						9,896						8,727
Operating expenses:
Selling, general and administrative expenses			5,984						5,190						4,520
Research and development expenses			1,615						1,414						1,323
Royalty expense			33						46						47
Amortization expense			856						828						803
Intangible asset impairment charges			386						58						132
Contingent consideration net expense (benefit)			(5)						58						35
Restructuring net charges (credits)			16						69						24
Litigation-related net charges (credits)			—						(111)						173
Loss (gain) on disposal of businesses and assets			—						—						22
			8,887						7,553						7,078
Operating income (loss)			2,603						2,343						1,649
Other income (expense):
Interest expense			(305)						(265)						(470)
Other, net			(16)						(93)						(38)
Income (loss) before income taxes			2,282						1,985						1,141
Income tax expense (benefit)			436						393						443
Net income (loss)			1,846						1,592						698
Preferred stock dividends			—						(23)						(55)
Net income (loss) attributable to noncontrolling interests			(8)						(1)						—
Net income (loss) attributable to Boston Scientific common stockholders			$	1,853					$	1,570					$	642
Net income (loss) per common share — basic			$	1.26					$	1.08					$	0.45
Net income (loss) per common share — diluted			$	1.25					$	1.07					$	0.45
Weighted-average shares outstanding
Basic			1,471.5						1,453.0						1,430.5
Diluted			1,485.9						1,463.5						1,439.7

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

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

			Year Ended December 31,
(in millions)			2024						2023						2022
Net income (loss)			$	1,846					$	1,592					$	698
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment			225						(105)						(94)
Net change in derivative financial instruments			1						(115)						63
Net change in defined benefit pensions and other items			(8)						(9)						37
Other comprehensive income (loss)			218						(230)						6
Comprehensive income (loss)			2,064						1,362						704
Net income (loss) attributable to noncontrolling interests			(8)						(1)						—
Other comprehensive income (loss) attributable to noncontrolling interests			(7)						(10)						—
Comprehensive income (loss) attributable to noncontrolling interests			(15)						(11)						—
Comprehensive income attributable to Boston Scientific common stockholders			$	2,079					$	1,373					$	704

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

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			As of December 31,
(in millions, except share and per share data)			2024						2023
ASSETS
Current assets:
Cash and cash equivalents			$	414					$	865
Trade accounts receivable, net			2,558						2,228
Inventories			2,810						2,484
Prepaid income taxes			307						315
Other current assets			831						621
Total current assets			6,920						6,514
Property, plant and equipment, net			3,294						2,859
Goodwill			17,089						14,387
Other intangible assets, net			6,684						6,003
Deferred tax assets			3,655						3,841
Other long-term assets			1,754						1,531
TOTAL ASSETS			$	39,395					$	35,136
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current debt obligations			$	1,778					$	531
Accounts payable			960						942
Accrued expenses			2,773						2,646
Other current liabilities			887						814
Total current liabilities			6,399						4,933
Long-term debt			8,968						8,571
Deferred tax liabilities			155						134
Other long-term liabilities			1,870						1,967
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value - authorized 50,000,000 shares; 0 shares issued as of December 31, 2024 and 2023			—						—
Common stock, $0.01 par value - authorized 2,000,000,000 shares; 1,737,846,196 shares issued as of December 31, 2024 and 1,729,000,224 shares issued as of December 31, 2023			17						17
Treasury stock, at cost - 263,289,848 shares as of December 31, 2024 and 2023			(2,251)						(2,251)
Additional paid-in capital			21,056						20,647
Retained earnings			2,673						819
Accumulated other comprehensive income (loss), net of tax:			275						49
Total stockholders’ equity			21,770						19,282
Noncontrolling interests			233						248
Total equity			22,003						19,530
TOTAL LIABILITIES AND EQUITY			$	39,395					$	35,136

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

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

			Year Ended December 31,
(in millions, except share data)			2024						2023						2022
Preferred stock shares issued
Beginning			—						10,062,500						10,062,500
Conversion of mandatory convertible preferred stock to common stock			—						(10,062,500)						—
Ending			—						—						10,062,500
Common stock shares issued
Beginning			1,729,000,224						1,696,633,993						1,688,810,052
Impact of stock-based compensation plans			8,845,972						8,383,329						7,823,941
Conversion of mandatory convertible preferred stock to common stock			—						23,982,902						—
Ending			1,737,846,196						1,729,000,224						1,696,633,993
Preferred stock
Beginning			$	—					$	0					$	0
Conversion of mandatory convertible preferred stock to common stock			—						(0)						—
Ending			—						$	—					0
Common stock
Beginning			$	17					$	17					$	17
Impact of stock-based compensation plans			0						0						0
Conversion of mandatory convertible preferred stock to common stock			—						0						—
Ending			$	17					$	17					$	17
Treasury Stock
Beginning			$	(2,251)					$	(2,251)					$	(2,251)
Repurchase of common stock			—						—						—
Ending			$	(2,251)					$	(2,251)					$	(2,251)
Additional paid-in capital
Beginning			$	20,647					$	20,289					$	19,986
Conversion of mandatory convertible preferred stock to common stock			—						(0)						—
Impact of stock-based compensation plans			409						359						303
Ending			$	21,056					$	20,647					$	20,289
Retained earnings (Accumulated deficit)
Beginning			$	819					$	(750)					$	(1,392)
Net income (loss)			1,846						1,592						698
Net (income) loss attributable to noncontrolling interests			8						1						—
Preferred stock dividends			—						(23)						(55)
Ending			$	2,673					$	819					$	(750)
Accumulated other comprehensive income (loss), net of tax
Beginning			$	49					$	269					$	263
Changes in other comprehensive income (loss), net of tax:
Foreign currency translation adjustment			232						(95)						(94)
Derivative financial instruments			1						(115)						63
Defined benefit pensions and other items			(8)						(9)						37
Ending			$	275					$	49					$	269
Total stockholders' equity			$	21,770					$	19,282					$	17,573
Noncontrolling interests
Beginning			$	248					$	—					$	—
Net income (loss) attributable to noncontrolling interests			(8)						(1)						—
Changes in other comprehensive income (loss)			(7)						(10)						—
Changes to noncontrolling ownership interest			—						259						—
Ending			$	233					$	248					$	—
Total equity			$	22,003					$	19,530					$	17,573

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

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year Ended December 31,
(in millions)			2024						2023						2022
Net income (loss)			$	1,846					$	1,592					$	698
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities
Loss (gain) on disposal of businesses and assets			—						—						22
Depreciation and amortization			1,269						1,196						1,136
Deferred and prepaid income taxes			(70)						(1)						(63)
Stock-based compensation expense			266						233						220
Goodwill and other intangible asset impairment charges			386						58						132
Net loss (gain) on investments and notes receivable			79						59						1
Contingent consideration net expense (benefit)			(5)						58						35
Inventory step-up amortization			51						6						32
Debt extinguishment net charges			—						—						194
Other, net			74						73						125
Increase (decrease) in operating assets and liabilities, excluding purchase accounting:
Trade accounts receivable			(351)						(238)						(220)
Inventories			(228)						(660)						(321)
Other assets			(126)						10						(209)
Accounts payable, accrued expenses and other liabilities			243						118						(255)
Cash provided by (used for) operating activities			3,435						2,503						1,526
Investing Activities
Purchases of property, plant and equipment and internal use software			(790)						(711)						(588)
Proceeds from sale of property, plant and equipment			3						4						12
Payments for acquisitions of businesses, net of cash acquired			(4,640)						(1,811)						(1,542)
Payments for investments and acquisitions of certain technologies			(280)						(89)						(24)
Proceeds from disposal of certain businesses and assets			—						—						5
Proceeds from royalty rights			20						30						70
Proceeds from settlements of hedge contracts			—						2						56
Cash provided by (used for) investing activities			(5,687)						(2,574)						(2,011)
Financing Activities
Payment of contingent consideration previously established in purchase accounting			(131)						(39)						(335)
Payments for royalty rights			(26)						(50)						(75)
Payments for finance leases			(25)						—						—
Payments on short-term borrowings			(504)						—						(250)
Proceeds from short-term borrowings, net of debt issuance costs			24						—						—
Net increase (decrease) in commercial paper			187						(4)						(1)
Payments on long-term borrowings and debt extinguishment costs			—						—						(3,184)
Proceeds from long-term borrowings, net of debt issuance costs			2,145						—						3,270
Cash dividends paid on preferred stock			—						(28)						(55)
Cash used to net share settle employee equity awards			(87)						(56)						(53)
Proceeds from issuances of shares of common stock pursuant to employee stock compensation and purchase plans			230						182						136
Cash provided by (used for) financing activities			1,814						5						(548)
Effect of foreign exchange rates on cash			(11)						(4)						(9)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents			(450)						(70)						(1,042)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period			1,055						1,126						2,168
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period			$	606					$	1,055					$	1,126

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

BOSTON SCIENTIFIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (SUPPLEMENTAL INFORMATION)

			Year Ended December 31,
(in millions)			2024						2023						2022
Supplemental Information
Cash paid for income taxes, net			$	656					$	512					$	662
Cash paid for interest			250						259						450
Fair value of contingent consideration recorded in purchase accounting			29						273						—
Non-cash impact of transferred royalty rights			(20)						(30)						(70)
(in millions)			As of December 31,
Reconciliation to amounts within the consolidated balance sheets:			2024						2023						2022
Cash and cash equivalents			$	414					$	865					$	928
Restricted cash and restricted cash equivalents included in Other current assets			111						130						149
Restricted cash equivalents included in Other long-term assets			80						60						48
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period			$	606					$	1,055					$	1,126

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Our consolidated financial statements include the accounts of Boston Scientific Corporation's wholly owned subsidiaries and entities for which we have a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. In the first quarter of 2023, we acquired a majority stake investment in Acotec Scientific Holdings Limited (Acotec) and have elected to consolidate their financial statements on a one quarter lag.

When used in this report, the terms "we," "us," "our" and "the Company" mean Boston Scientific Corporation and its divisions and subsidiaries. We assess the terms of our investment interests to determine if any of our investees meet the definition of a variable interest entity (VIE). For any VIEs, we perform an analysis to determine whether our variable interests give us a controlling financial interest. The analysis identifies the primary beneficiary of a VIE as the enterprise that has both 1) the power to direct activities of a VIE that most significantly impact the entity’s economic performance and 2) the obligation to absorb losses of the entity or the right to receive benefits from the entity. Based on our assessments under the applicable guidance, we did not have controlling financial interests in any VIEs and, therefore, did not consolidate any VIEs during 2024, 2023 or 2022.

Basis of Presentation

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

Amounts reported in millions within this Annual Report on Form 10-K are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded numbers.

Subsequent Events

We evaluate events occurring after the date of our accompanying consolidated balance sheets for potential recognition or disclosure in our consolidated financial statements. Those items requiring recognition in the financial statements have been recorded and disclosed accordingly.

Those items requiring disclosure (non-recognized subsequent events) in the financial statements have been disclosed accordingly. Refer to Note B – Acquisitions and Strategic Investments and Note I – Commitments and Contingencies for further details.

Accounting Estimates

To prepare our consolidated financial statements in accordance with GAAP, management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, the disclosure of contingent liabilities as of the date of our consolidated financial statements and the reported amounts of our revenues and expenses during the reporting period. Our

actual results may differ from these estimates.

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

Cash and Cash Equivalents

We record Cash and cash equivalents in our consolidated balance sheets at cost, which approximates fair value. Our policy is to invest excess cash in short-term marketable securities earning a market rate of interest without assuming undue risk of loss of principal amounts invested and we limit our direct exposure to securities in any one industry or issuer. We consider cash equivalents to be all short-term marketable securities with remaining days to maturity of 90 days or less from the purchase date that can be readily converted to cash.

Restricted Cash

Amounts included in restricted cash represent cash on hand required to be set aside by a contractual agreement related to receivable factoring arrangements and deferred compensation plans and are included in Other current assets within our consolidated balance sheets. Generally, the restrictions related to the factoring arrangements lapse at the time we remit the customer payments collected by us for servicing previously sold customer receivables to the purchaser. Restrictions for deferred compensation lapse when amounts are paid to the employee.

Restricted Cash Equivalents

Restricted cash equivalents primarily represent amounts paid into various qualified settlement funds and current amounts related to our non-qualified pension plan and are included in Other current assets within our consolidated balance sheets. The restrictions related to the various qualified settlement funds will lapse as we approve amounts payable to claimants, at which time we no longer have rights to a return of the amounts paid into the various qualified settlement funds. Restricted cash equivalents included in Other long-term assets within our consolidated balance sheets are related to deferred compensation plans.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, derivative financial instruments and accounts and notes receivable. Our investment policy limits exposure to concentrations of credit risk and changes in market conditions. Counterparties to financial instruments expose us to credit-related losses in the event of nonperformance. We transact our financial instruments with a diversified group of major financial institutions with investment grade credit ratings and actively monitor their credit ratings and our outstanding positions to limit our credit exposure. In the normal course, our payment terms with customers, including distributors, hospitals, health care agencies, clinics, doctors' offices and other private and governmental institutions, are typically 30 days in the U.S. but may be longer in international markets and generally do not require collateral.

We record credit loss reserves to Allowance for credit losses when we establish Trade accounts receivable if credit losses are expected over the asset's contractual life. We base our estimates of credit loss reserves on historical experience and adjust, as necessary, to reflect current conditions using reasonable and supportable forecasts not already reflected in the historical loss information. We utilize an accounts receivable aging approach to determine the reserve to record at accounts receivable commencement for certain customers, applying country or region-specific factors. In performing the assessment of outstanding accounts receivable, regardless of country or region, we may consider significant factors relevant to collectability, including those specific to a customer such as bankruptcy, lengthy average payment cycles and type of account.

We write-off amounts determined to be uncollectible against this reserve. We are not dependent on any single institution, and no single customer accounted for more than ten percent of our net sales in 2024, 2023 and 2022; however, large group purchasing organizations, hospital networks, international distributors and dealers and other buying groups are important to our business and represent a substantial portion of our net sales.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic conditions, in both the U.S. and international economies. Our sales to government-owned or supported customers, particularly in southern Europe, are subject to an increased number of days outstanding prior to payment relative to other countries. Further, the ongoing site-of-service trend of shifting procedure volumes in the U.S. toward non-hospital settings, particularly ambulatory surgery centers and office-based labs, continues. Many of these customers are smaller than those we have historically done business with and may have more limited liquidity. We have adjusted our estimates of credit loss reserves for these customers, regions and conditions, as appropriate. We believe our Allowance for credit losses is adequate as of December 31, 2024; however, if significant changes were to occur in the payment practices of government customers, or if there is an increase in bankruptcies among our ambulatory surgery center or office-based customers, we may not be able to collect on receivables due to us from these customers, and our write-offs of uncollectible accounts may increase.

Revenue Recognition

We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors or dealers. We consider revenue to be earned when all of the following criteria are met in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers:

• We have a contract with a customer that creates enforceable rights and obligations,

• Promised products or services are identified,

• The transaction price, or the amount we expect to receive, is determinable and

• We have transferred control of the promised items to the customer.

Transfer of control is evidenced upon passage of title and risk of loss to the customer unless we are required to provide additional services. We treat shipping and handling costs performed after a customer obtains control of the good as a fulfillment cost and record these costs as a component of Selling, general and administrative expenses when incurred. We recognize revenue from consignment arrangements based on product usage, or implant, which indicates that the sale is complete. We recognize a receivable at the point in time we have an unconditional right to payment. Payment terms are typically 30 days in the U.S. but may be longer in international markets.

Deferred Revenue

We record a contract liability, or deferred revenue, when we have an obligation to provide a product or service to the customer and payment is received or due in advance of our performance. When we sell a device with a future service obligation, we defer revenue on the unfulfilled performance obligation and recognize this revenue over the related service period. Many of our Cardiac Rhythm Management (CRM) product offerings combine the sale of a device with our LATITUDE™ Patient Management System, which represents a future service obligation. Generally, we do not have observable evidence of the standalone selling price related to our future service obligations; therefore, we estimate the selling price using an expected cost plus a margin approach. We allocate the transaction price using the relative standalone selling price method. The use of alternative estimates could result in a different amount of revenue deferral.

Contract liabilities are classified within Other current liabilities and Other long-term liabilities on our accompanying consolidated balance sheets. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System. Revenue is recognized over the average service period which is based on device and patient longevity. Our contract liabilities also include deferred revenue related to the LUX-Dx™ Insertable Cardiac Monitor system, also within our CRM business, for which revenue is recognized over the average service period based on device longevity and usage. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred.

Variable Consideration

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

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

Post-Implant Services

We provide non-contractual services to customers, where necessary, to ensure the safe and effective use of certain implanted devices. Because the revenue related to the immaterial non-contractual services is recognized before they are delivered, we forward accrue the costs to provide these services at the time the devices are sold. We record these costs to Selling, general and administrative expenses within our consolidated statements of operations. We estimate the amount of time spent by our representatives performing these services and their compensation throughout the device life to determine the service cost. Changes to our business practice or the use of alternative estimates could result in a different amount of accrued cost.

Warranty Obligations

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

Inventories

We state inventories at the lower of first-in, first-out cost or net realizable value. We utilize a standard costing system, capitalizing variances between estimated and actual production costs during periods of normal production, and amortize to Cost of products sold over inventory turns. We expense manufacturing variances during periods of abnormal production, or less than 75 percent of manufacturing capacity. We did not record any abnormal production variances during the years ended December 31, 2024, 2023 or 2022.

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

Property, Plant and Equipment

We state property, plant, equipment and leasehold improvements at historical cost. We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. We depreciate buildings over a maximum life of 40 years; building improvements over the remaining useful life of the building structure; equipment, furniture and fixtures over a three to seven year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease.

Valuation of Business Combinations

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

In cases where we acquire a company in which we previously held an equity stake, we attribute a portion of the purchase price to the previously-held equity interest, which is implied based on the total purchase consideration allocable to each of the shareholders, including Boston Scientific, according to priority of equity interests. We record a gain or loss in Other, net equal to the difference between the implied fair value of our prior ownership and the book value immediately prior to the acquisition.

Where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability each reporting period and record changes in the fair value through Contingent consideration net expense (benefit) on our consolidated statements of operations. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount rates, periods, timing and amount of projected revenue or timing or likelihood of achieving regulatory, revenue or commercialization-based milestones. Payment of additional consideration is generally contingent on the acquired company reaching certain performance milestones after the acquisition date, including attaining specified revenue levels, achieving product development targets and/or obtaining regulatory approvals for products in development at the date of the acquisition.

Indefinite-lived Intangibles and IPR&D

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

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

We use the income approach to determine the fair values of our IPR&D. We base our revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected levels of market share. In arriving at the value of the in-process projects, we consider, among other factors, the in-process projects’ stage of completion, the complexity of the work completed as of the acquisition date, the costs already incurred, the projected costs to complete, the contribution of other acquired assets, the expected regulatory path and introduction dates by region and the estimated useful life of the technology. See Note C – Goodwill and Other Intangible Assets for more information related to indefinite-lived intangibles, including IPR&D.

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

Amortization and Impairment of Intangible Assets

We record definite-lived intangible assets at historical cost and amortize them over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: patents and licenses, two to 20 years; amortizable technology-related and customer relationships, five to 25 years; other intangible assets, various. In addition, we classify internal use software as an intangible asset within our accompanying consolidated balance sheets and amortize over a one to 15 year useful life. Due to the operational nature of these assets, we record the amortization of our internal use software within Cost of products sold; Selling, general and administrative expenses and Research and development expenses, as appropriate within our accompanying consolidated statements of operations, and include in Amortization expense only that associated with intangible assets acquired in a business combination or asset acquisition, as well as internally-developed patents.

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. If we determine it is more likely than not that the asset is impaired based on our qualitative assessment of impairment indicators, we test the intangible asset for

recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset or asset group, we will write the carrying value down to fair value in the period impairment is identified.

We calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset or asset group. See Note C – Goodwill and Other Intangible Assets for more information related to impairments of intangible assets.

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

Goodwill Valuation

We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination to goodwill. We test our goodwill balances, utilizing both the qualitative and quantitative approach described in FASB ASC Topic 350, in the second quarter of each year as of April 1 for impairment, or more frequently if impairment indicators are present or changes in circumstances suggest an impairment may exist.

We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. For our 2024 annual impairment assessment, we identified the following reporting units for purposes of our annual goodwill impairment test: Interventional Cardiology, Rhythm Management, Peripheral Interventions, Endoscopy, Urology and Neuromodulation. Based on the criteria prescribed in FASB ASC Topic 350, we aggregated the Interventional Cardiology Therapies and Watchman components of our Cardiology operating segment into a single Interventional Cardiology reporting unit and aggregated the Cardiac Rhythm Management and Electrophysiology components into a single Rhythm Management reporting unit.

In performing annual impairment assessments, the qualitative approach is used for testing reporting units where fair value has historically exceeded carrying value by greater than 100 percent, and all other reporting units are tested using the quantitative approach. When a quantitative test is performed, we typically use the income approach, specifically the Discounted Cash Flow method, to derive the fair value of each of our reporting units in preparing our goodwill impairment assessments. We historically selected this method as being the most meaningful in preparing our goodwill assessments because we believe the income approach most appropriately measures the fair value of our income producing assets. We make assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within our Discounted Cash Flow analysis is based on our most recent operational budgets, long range strategic plans and other estimates.

Investments in Publicly Traded and Privately-Held Entities

For publicly-held equity securities for which we do not have the ability to exercise significant influence, we account for these investments at fair value with changes in fair value recognized currently in Other, net within our accompanying consolidated statements of operations. For privately-held equity securities for which we do not have the ability to exercise significant influence, we apply the measurement alternative approach and measure these investments at cost minus impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We account for investments in entities for which we have the ability to exercise significant influence under the equity method if we hold 50 percent or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary in accordance with FASB ASC Topic 323, Investments - Equity Method and Joint Ventures. We record these investments initially at cost and adjust the carrying amount to reflect our share of the earnings or losses of the investee, including all adjustments similar to those made in preparing consolidated financial statements. Refer to Note B – Acquisitions and Strategic Investments for additional details on our investment balances.

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

investee available to us, including valuations based on recent third-party equity investments in the investee. For our investments for which we apply the measurement alternative, if the fair value of the investment is less than its carrying value, the investment is impaired and we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. For our equity method investments, if we determine an impairment is other-than-temporary, we recognize an impairment loss equal to the difference between an investment’s carrying value and its fair value. We deem an impairment to be other-than-temporary unless available evidence indicates that the valuation is more likely than not to recover up to the carrying value of the investment in a reasonable period of time, and we have both the ability and intent to hold the investment for at least the period of time needed to recover the value.

Net gains and losses and impairments associated with our investment portfolio are included within Other, net in our consolidated statements of operations.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, we determine deferred tax assets and liabilities based on differences between the financial reporting and tax bases of our assets and liabilities. We measure deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when we expect the differences to reverse. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that we will not realize some portion or all of the deferred tax assets.

With respect to uncertain tax positions, in accordance with FASB ASC Topic 740, Income Taxes, any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the consolidated financial statements at the largest amount of benefit greater than 50 percent likely to be realized upon ultimate settlement. The amount relating to uncertain tax positions is classified as a current liability in the consolidated balance sheets to the extent that we anticipate making a payment within one year.

Interest and penalties associated with income taxes are classified within Income tax expense (benefit) in our consolidated statements of operations.

We have elected to treat the impact of Global Intangible Low Taxed Income (GILTI) as a period cost reported as part of continuing operations.

See Note H – Income Taxes for further information and discussion of our income tax provision and balances.

Legal and Product Liability Costs

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

Costs Associated with Exit Activities

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

Other costs associated with exit activities may include contract termination costs and consulting fees, which are expensed in accordance with FASB ASC Topic 420 and are included within Restructuring net charges (credits) in our consolidated statements of operations. We recorded Restructuring net charges (credits) of $16 million in 2024, $69 million in 2023 and $24 million in 2022. The restructuring reserve balance as of December 31, 2024 and 2023 was $26 million and $41 million, respectively. Additionally, costs directly related to our active restructuring initiatives, including program management costs, accelerated depreciation, fixed asset write-offs and costs to transfer product lines among facilities are included within Costs of products sold, Selling, general and administrative expenses and Research and development expenses within our consolidated statements of operations. Impairment of right of use lease assets and lease termination costs directly related to our active restructuring initiatives are expensed in accordance with FASB ASC Topic 842, Leases (FASB ASC Topic 842) and included within Costs of products sold or Selling, general and administrative expenses in our consolidated statements of operations.

Translation of Foreign Currency

We translate all assets and liabilities of foreign subsidiaries from the functional currency, which is generally the local currency, into U.S. dollars using the year-end exchange rate. We show the net effect of these translation adjustments within our consolidated financial statements as a component of Accumulated other comprehensive income (loss), net of tax. We translate revenues and expenses at the average exchange rates in effect during the year. For any significant foreign subsidiaries located in highly inflationary economies, we re-measure their financial statements as if the functional currency were the U.S. dollar.

Foreign currency transaction gains and losses are included within Other, net in our consolidated statements of operations, net of gains and losses from any related derivative financial instruments.

Financial Instruments

We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with FASB ASC Topic 815*, Derivatives and Hedging* (FASB ASC Topic 815), and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our consolidated financial statements. In accordance with FASB ASC Topic 815, for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for, and has been designated as part of a hedging relationship, as well as on the type of hedging relationship. Our derivative instruments do not subject our earnings to material risk, as gains and losses on these derivatives generally offset gains and losses on the item being hedged, and we do not enter into derivative transactions for speculative purposes. Refer to Note D – Hedging Activities and Fair Value Measurements for more information on our hedging instruments.

Research and Development

We expense research and development (R&D) costs, including new product development programs, regulatory compliance and clinical research as incurred. Refer to Indefinite-lived Intangibles and IPR&D above for our policy regarding R&D projects acquired in connection with our business combinations and asset purchases.

NOTE B – ACQUISITIONS AND STRATEGIC INVESTMENTS

Our consolidated financial statements include the operating results for acquired entities from the respective dates of acquisition. We have not presented supplemental pro forma financial information for completed acquisitions or divestitures given their results are not material to our consolidated financial statements. Further, transaction costs were immaterial to our consolidated financial statements and were expensed as incurred.

On January 24, 2025, we completed our acquisition of 100 percent of Cortex, Inc. (Cortex), a privately held medical technology company focused on the development of a diagnostic mapping solution which may identify triggers and drivers outside of the pulmonary veins that are foundational to atrial fibrillation (AF). The transaction consisted of an upfront cash payment of $248 million, net of cash acquired, and up to approximately $50 million in future payments upon achievement of certain regulatory milestones. The Cortex business will be integrated into our Cardiology division.

On January 8, 2025, we announced our entry into a definitive agreement to acquire Bolt Medical, Inc. (Bolt Medical), the developer of an intravascular lithotripsy advanced laser-based platform for the treatment of coronary and peripheral artery disease. We have been an investor in Bolt Medical since 2019 and currently hold an equity stake of approximately 26 percent. The transaction price to acquire the remaining stake is expected to result in an upfront cash payment of approximately $443 million upon closing and up to an additional $221 million in future payments upon achievement of certain regulatory milestones. The transaction is expected to close during the first half of 2025, subject to customary closing conditions. The Bolt Medical business will be integrated into our Cardiology and Peripheral Interventions divisions.

On November 25, 2024, we announced our entry into a definitive agreement to acquire 100 percent of Intera Oncology®, Inc. (Intera), a privately held medical device company that provides the Intera 3000 Hepatic Artery Infusion Pump and floxuridine – a chemotherapy drug – both of which are approved by the U.S. Food and Drug Administration. The Intera 3000 pump is used to administer hepatic artery infusion therapy to treat tumors in the liver primarily caused by metastatic colorectal cancer. The purchase price consists of an upfront cash payment of approximately $175 million. The transaction is expected to close in the first half of 2025, subject to customary closing conditions. The Intera business will be integrated into our Peripheral Interventions division.

2024 Acquisitions

On September 17, 2024, we completed our acquisition of 100 percent of the outstanding equity of Silk Road Medical, Inc. (Silk Road Medical), a publicly traded medical device company that has developed an innovative platform of products to prevent stroke in patients with carotid artery disease through a minimally-invasive procedure called transcarotid artery revascularization. The transaction consisted of an upfront cash payment of $27.50 per share, or approximately $1.126 billion, net of cash acquired. The Silk Road Medical business is being integrated into our Peripheral Interventions division.

On November 15, 2024, we completed our acquisition of 100 percent of the outstanding equity of Axonics, Inc. (Axonics), a public medical technology company focused on the development and commercialization of differentiated devices to treat urinary and bowel dysfunction. The transaction consisted of an upfront cash payment of $71.00 per share, or approximately $3.409 billion, net of cash acquired. The Axonics business is being integrated into our Urology division.

Purchase Price Allocation

We accounted for these transactions as business combinations in accordance with FASB ASC Topic 805*, Business Combinations* (FASB ASC Topic 805). The preliminary purchase prices were comprised of the amounts presented below:

(in millions)			Silk Road Medical			Axonics
Payment for acquisition, net of cash acquired			$	1,126		$	3,409
			$	1,126		$	3,409

We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the transaction. The preliminary purchase price allocations were comprised of the components presented below, which represent the preliminary determination of the fair value of assets acquired and liabilities assumed, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill. The final determination of the fair value of certain assets and liabilities will be completed within the measurement period in accordance with FASB ASC Topic 805.

(in millions)			Silk Road Medical			Axonics
Goodwill			$	569		$	2,147
Amortizable intangible assets			507			1,242
Other assets acquired			117			423
Liabilities assumed			(45)			(167)
Net deferred tax liabilities			(23)			(237)
			$	1,126		$	3,409

Goodwill was primarily established for Silk Road Medical and Axonics due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.

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

			Amount Assigned (in millions)						Weighted Average Amortization Period (in years)						Risk-Adjusted Discount Rates used in Purchase Price Allocation
Silk Road Medical:
Amortizable intangible assets:
Technology-related			$	447					12						13%
Customer relationships			61						12						13%
			$	507
Axonics
Amortizable intangible assets:
Technology-related			$	1,157					12						10%
Customer relationships			85						12						10%
			$	1,242

Our technology-related intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings method, a form of the income approach, to derive the fair value of the technology-related intangible assets and are amortizing them on a straight-line basis over their assigned estimated useful lives.

2023 Acquisitions

On February 20, 2023, we completed the acquisition of a majority stake investment in 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 recorded a noncontrolling interest for the portion we do not own. We acquired approximately 65 percent of the outstanding shares of Acotec, for an upfront cash payment of HK$20.00 per share, or $519 million at foreign currency exchange rates at closing. The Acotec portfolio complements our existing Peripheral Interventions portfolio.

On April 4, 2023, we completed our acquisition of 100 percent of the outstanding equity of Apollo Endosurgery, Inc. (Apollo), a public company which offers a portfolio of devices used during endoluminal procedures to close gastrointestinal defects, manage gastrointestinal complications and aid in weight loss for patients suffering from obesity. The transaction consisted of an upfront cash payment of $636 million, net of cash acquired. The Apollo business is being integrated into our Endoscopy division.

On November 17, 2023, we completed our acquisition of 100 percent of the outstanding equity of Relievant Medsystems, Inc. (Relievant), a privately held medical technology company that developed and commercialized the Intracept® Intraosseous

Nerve Ablation System to treat vertebrogenic pain, a form of chronic low back pain. The transaction consisted of an upfront cash payment of $794 million, net of cash acquired, and additional sales-based milestones over the three years following the transaction close. These milestones, certain of which are uncapped, were estimated to have a fair value of $273 million as of the acquisition date. The Relievant business is being integrated into our Neuromodulation division.

Purchase Price Allocation

We accounted for these transactions as business combinations in accordance with FASB ASC Topic 805. The final purchase prices were comprised of the amounts presented below:

(in millions)			Acotec**(1)**			Apollo			Relievant
Payment for acquisition, net of cash acquired (2)			$	381		$	636		$	794
Fair value of contingent consideration			—			—			273
			$	381		$	636		$	1,067

(1) Excludes approximately $140 million of cash on hand at the closing of the transaction

(2) Related to Acotec, represents our majority stake investment

We recorded the assets acquired, liabilities assumed and specific to Acotec, the noncontrolling interest, at their respective fair values as of the closing date of the transaction. The final purchase price allocations were comprised of the components presented below, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill:

(in millions)			Acotec			Apollo			Relievant
Goodwill			$	337		$	378		$	731
Amortizable intangible assets			334			248			325
Other assets acquired			93			50			24
Liabilities assumed			(48)			(33)			(15)
Net deferred tax liabilities			(76)			(5)			1
Fair value of noncontrolling interest			(259)			—			—
			$	381		$	636		$	1,067

The fair value of Acotec's noncontrolling interest was based on the publicly traded market value of the remaining 35 percent of the outstanding shares we did not acquire as of the transaction date and is presented within Stockholders' equity within our accompanying consolidated balance sheets. Goodwill was primarily established for Acotec due to opportunities for collaboration in research and development, manufacturing and commercial strategies, and for Apollo and Relievant, due to synergies expected to be gained from leveraging our existing operations, as well as revenue and cash flow projections associated with future technologies, none of which is deductible for tax purposes.

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

			Amount Assigned (in millions)						Weighted Average Amortization Period (in years)						Risk-Adjusted Discount Rates used in Purchase Price Allocation
Acotec:
Amortizable intangible assets:
Technology-related			$	308					11						14%
Customer relationships			15						11						14%
Other intangible assets			11						13						14%
			$	334
Apollo:
Amortizable intangible assets:
Technology-related			$	222					11						12%
Customer relationships			26						11						12%
			$	248
Relievant:
Amortizable intangible assets:
Technology-related			$	287					12						12%
Customer relationships			38						12						12%
			$	325

Our technology-related intangible assets consist of technical processes, intellectual property and institutional understanding with respect to products and processes that we intend to leverage in future products or processes. We used the multi-period excess earnings method, a form of the income approach, to derive the fair value of the technology-related intangible assets and are amortizing them on a straight-line basis over their assigned estimated useful lives.

Contingent Consideration

Changes in the fair value of our contingent consideration liability during 2024 and 2023 associated with current and prior period acquisitions were as follows:

(in millions)
Balance as of December 31, 2022			$	149
Amount recorded related to current year acquisitions			273
Contingent consideration net expense (benefit)			58
Contingent consideration payments			(76)
Balance as of December 31, 2023			$	404
Amount recorded related to current year acquisitions			29
Contingent consideration net expense (benefit)			(5)
Contingent consideration payments and other adjustments			(257)
Balance as of December 31, 2024			$	171

In 2024, payments were primarily related to our acquisition of Farapulse, Inc. (Farapulse) and Relievant following the achievement of revenue-based earnouts and sales milestones, respectively. In 2023, payments were primarily related to our acquisition of Farapulse following the achievement of revenue milestones.

The maximum amount for certain contingent consideration is not determinable as it is uncapped and based on a percent of certain sales. As of December 31, 2024, the fair value of such uncapped contingent consideration is estimated at $147 million. As of December 31, 2024, the maximum amount that we could be required to pay under our other capped contingent consideration arrangements (undiscounted) is approximately $220 million.

The recurring Level 3 fair value measurements of our contingent consideration liability that we expect to be required to settle include the following significant unobservable inputs:

Contingent Consideration Liability			Fair Value as of December 31, 2024			Valuation Technique			Unobservable Input			Range									Weighted Average**(1)**
Revenue-based Payments and Commercialization Milestones			$171 million			Discounted Cash Flow			Discount Rate			6		%	-			15%			7%
Probability of Payment			40%			-			100%			96%
Projected Year of Payment			2025			-			2029			2027

(1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.

Projected contingent payment amounts related to our revenue-based payments and commercialization milestones are discounted back to the current period, primarily using a discounted cash flow model. Significant increases or decreases in projected revenues, probabilities of payment, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement as of December 31, 2024.

Strategic Investments

The aggregate carrying amount of our strategic investments was comprised of the following:

			As of December 31,
(in millions)			2024						2023
Equity method investments			$	278					$	219
Measurement alternative investments(1, 2)			277						194
			$	555					$	413

(1) Measurement alternative investments are privately-held equity securities without readily determinable fair values that are measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer, recognized in Other, net within our accompanying consolidated statements of operations.

(2) Includes publicly-held equity securities and convertible notes measured at fair value with changes in fair value recognized in Other, net within our consolidated statements of operations.

These investments are classified as Other long-term assets within our consolidated balance sheets, in accordance with GAAP and our accounting policies.

In 2024, the cost of our aggregated equity method investments exceeded our share of the underlying equity in net assets by $333 million, which represents amortizable intangible assets, IPR&D, goodwill and deferred tax liabilities.

NOTE C – GOODWILL AND OTHER INTANGIBLE ASSETS

The gross carrying amount of goodwill and other intangible assets and the related accumulated amortization for intangible assets subject to amortization and accumulated goodwill impairment charges are as follows:

			As of December 31, 2024												As of December 31, 2023
(in millions)			Gross Carrying Amount						Accumulated Amortization/ Write-offs						Gross Carrying Amount						Accumulated Amortization/ Write-offs
Technology-related			$	14,327					$	(8,605)					$	13,207					$	(8,101)
Patents			481						(381)						480						(387)
Other intangible assets			2,380						(1,612)						2,130						(1,500)
Amortizable intangible assets			$	17,188					$	(10,598)					$	15,817					$	(9,988)
Goodwill			$	26,989					$	(9,900)					$	24,287					$	(9,900)
IPR&D			94												54
Technology-related			—												120
Indefinite-lived intangible assets			$	94											$	174

The increase in our balance of goodwill and amortizable intangible assets is related primarily to our acquisitions of Silk Road Medical and Axonics in the third and fourth quarters of 2024, respectively.

Intangible asset impairment charges were $386 million in 2024, $58 million in 2023 and $132 million in 2022. The impairment charges recorded in 2024 were primarily associated with amortizable intangible assets established in connection with our acquisitions of Cryterion Medical, Inc. (Cryterion) and Devoro Medical, Inc. (Devoro), which were integrated into our Electrophysiology and Peripheral Interventions business units, respectively. Intangible assets acquired from Cryterion were impaired due to strong commercial adoption of our Farapulse™ Pulsed Field Ablation System in our Electrophysiology business unit and the resulting lower revenue projections and cannibalization of our cryoablation business. Intangible assets acquired from Devoro were impaired following management's decision to cancel the related program in the second quarter of 2024. The impairment charges recorded in 2023 were primarily associated with the cancellation of an IPR&D program due to the incremental time and cost to complete the program and bring the technology to market.

During the third quarter of 2024, we performed our annual IPR&D impairment test and evaluated our indefinite-lived intangible assets for impairment and concluded the assets were not impaired. We also reclassified our indefinite-lived technology-related intangible assets to amortizable intangible assets after determining they no longer have an indefinite useful life and verified that the classification of IPR&D projects recognized within our unaudited consolidated balance sheets continues to be appropriate.

The following represents a roll forward of our goodwill balance by reportable segment:

(in millions)			MedSurg						Cardiovascular						Total
Balance as of December 31, 2022			$	4,237					$	8,684					$	12,920
Goodwill acquired			1,110						337						1,447
Impact of foreign currency fluctuations and other changes			—						20						20
Balance as of December 31, 2023			$	5,347					$	9,041					$	14,387
Goodwill acquired			2,172						615						2,787
Impact of foreign currency fluctuations and purchase price and other adjustments			(35)						(51)						(86)
Balance as of December 31, 2024			$	7,483					$	9,606					$	17,089

In the second quarter of 2024, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASC Topic 350. The qualitative approach was used for testing reporting units where fair value has historically exceeded carrying value by greater than 100 percent, and all other reporting units were tested using the quantitative approach. For the reporting units tested using the quantitative approach, we determined that the fair value of the reporting units exceeded the carrying value and concluded that goodwill was not impaired or at risk of impairment.

Refer to Note A – Significant Accounting Policies for further discussion of our goodwill and intangible asset impairment testing.

Estimated Amortization expense for each of the five succeeding fiscal years based upon our amortizable intangible asset portfolio, consisting of intangible assets acquired in a business combination or asset acquisition, as well as internally developed patents, as of December 31, 2024 is as follows:

Fiscal Year			(in millions)
2025			$	893
2026			874
2027			835
2028			787
2029			769

These estimates do not include amortization expense associated with future acquisitions that have been announced but not yet completed as of December 31, 2024.

NOTE D – HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

Derivative Instruments and Hedging Activities

We address market risk from changes in foreign currency exchange rates and interest rates through risk management programs which include the use of derivative and nonderivative financial instruments. We operate these programs pursuant to documented corporate risk management policies and do not enter into derivative transactions for speculative purposes. Our derivative instruments do not subject our earnings to material risk, as the gains or losses on these derivatives generally offset losses or gains recognized on the hedged item.

We manage concentration of counterparty credit risk by limiting acceptable counterparties to major financial institutions with investment grade credit ratings, limiting the amount of credit exposure to individual counterparties and by actively monitoring counterparty credit ratings and the amount of individual credit exposure. We also employ master netting arrangements that limit the risk of counterparty non-payment on a particular settlement date to the net gain that would have otherwise been received from the counterparty. Although not completely eliminated, we do not consider the risk of counterparty default to be significant as a result of these protections. Further, none of our derivative instruments are subject to collateral or other security arrangements, nor do they contain provisions that are dependent on our credit ratings from any credit rating agency.

Currency Hedging Instruments

Risk Management Strategy

Our risk from changes in currency exchange rates consists primarily of monetary assets and liabilities; forecasted intercompany and third-party transactions; and net investments in certain subsidiaries. We manage currency exchange rate risk at a consolidated level to reduce the cost of hedging by taking advantage of offsetting transactions. We employ derivative and nonderivative instruments, primarily forward currency contracts, to reduce the risk to our earnings and cash flows associated with changes in currency exchange rates.

The success of our currency risk management program depends, in part, on forecast transactions denominated primarily in euro, Chinese renminbi, Japanese yen, British pound sterling, Australian dollar and Swiss franc. We may experience unanticipated currency exchange gains or losses to the extent the actual activity is different than forecasted. In addition, changes in currency exchange rates related to any unhedged transactions may impact our earnings and cash flows.

Hedge Designations and Relationships

Certain of our currency derivative instruments are designated as cash flow hedges under FASB ASC Topic 815, and are intended to protect the U.S. dollar value of forecasted transactions. The gain or loss on a derivative instrument designated as a cash flow hedge is recorded in the Net change in derivative financial instruments component of Other comprehensive income (loss), net of tax (OCI) within our consolidated statements of comprehensive income (loss) until the underlying third-party transaction occurs. When the underlying third-party transaction occurs, we recognize the gain or loss in earnings within Cost of products sold in our consolidated statements of operations. In the event the hedging relationship is no longer effective, or if the

occurrence of the hedged forecast transaction becomes no longer probable, we reclassify the gains or losses within Accumulated other comprehensive income (loss), net of tax (AOCI) to earnings at that time. The cash flows related to the derivative instruments designated as cash flow hedges are reported as operating activities in our consolidated statements of cash flows.

We also designate certain forward currency contracts as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in the Chinese renminbi and Japanese yen. For these derivative instruments, we elected to use the spot method to assess hedge effectiveness. We also elected to exclude the spot-forward difference, referred to as the excluded component, from the assessment of hedge effectiveness and are amortizing this amount separately, as calculated at the date of designation, on a straight-line basis over the term of the currency forward contracts. As such, we defer recognition of foreign currency gains and losses within the Foreign currency translation adjustment (CTA) component of OCI, and we reclassify amortization of the excluded component from AOCI to current period earnings within Interest expense within our consolidated statements of operations.

We designate certain euro-denominated debt as net investment hedges to hedge a portion of our net investments in certain of our entities with functional currencies denominated in the euro. As of December 31, 2024 and 2023, we designated as a net investment hedge our €900 million in aggregate principal amount of 0.625% senior notes issued in November 2019 and due in 2027 (December 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 consolidated statements of operations only when the hedged item affects earnings, which would occur upon disposal or substantial liquidation of the underlying foreign subsidiary.

We also use forward currency contracts that are not part of designated hedging relationships as a part of our strategy to manage our exposure to currency exchange rate risk related to monetary assets and liabilities and related forecast transactions. These non-designated currency forward contracts have an original time to maturity consistent with the hedged currency transaction exposures, generally less than one year, and are marked-to-market with changes in fair value recorded to earnings within Other, net in our 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 no interest rate derivative instruments designated as cash flow hedges outstanding as of December 31, 2024 and 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 December 31, 2024 and 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.

The following table presents the contractual amounts of our hedging instruments outstanding:

(in millions)						FASB ASC Topic 815 Designation						As of December 31,
			2024						2023
Forward currency contracts						Cash flow hedge						$	2,464					$	2,284
Forward currency contracts						Net investment hedge						741						333
Foreign currency-denominated debt(1)						Net investment hedge						997						997
Forward currency contracts						Non-designated						4,440						3,282
Total Notional Outstanding												$	8,642					$	6,896

(1) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge.

The remaining time to maturity as of December 31, 2024 is within 36 months for all forward currency contracts designated as cash flow hedges and generally less than one year 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 in our accompanying consolidated statements of operations. Refer to Note O – Changes in Other Comprehensive Income for the total amounts relating to derivative and nonderivative instruments presented within our consolidated statements of comprehensive income (loss).

			Effect of Hedging Relationships on Accumulated Other Comprehensive Income
			Amount Recognized in OCI on Hedges												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
Year Ended December 31, 2024
Forward currency contracts
Cash flow hedges			$	184		$	(41)		$	142					Cost of products sold			$	5,257					$	(183)		$	41		$	(141)
Net investment hedges(2)			65			(15)			51						Interest expense			305						(18)			4			(14)
Foreign currency-denominated debt
Net investment hedges(3)			60			(13)			46						Other, net			16						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense			305						1			(0)			1
Year Ended December 31, 2023
Forward currency contracts
Cash flow hedges			$	81		$	(18)		$	63					Cost of products sold			$	4,345					$	(235)		$	53		$	(182)
Net investment hedges(2)			32			(7)			25						Interest expense			265						(10)			2			(8)
Foreign currency-denominated debt
Net investment hedges(3)			(34)			8			(27)						Other, net			93						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense			265						3			(1)			2
Year Ended December 31, 2022
Forward currency contracts
Cash flow hedges			$	276		$	(62)		$	214					Cost of products sold			$	3,956					$	(209)		$	47		$	(162)
Net investment hedges(2)			41			(10)			32						Interest expense			470						(10)			2			(8)
Foreign currency-denominated debt
Net investment hedges(3)			61			(14)			47						Other, net			38						—			—			—
Interest rate derivative contracts
Cash flow hedges			—			—			—						Interest expense			470						16			(4)			13

(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. No amounts were reclassified from AOCI to current period earnings.

As of December 31, 2024, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions):

Designated Hedging Instrument						FASB ASC Topic 815 Designation						Location on Consolidated Statements of Operations						Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings
Forward currency contracts						Cash flow hedge						Cost of products sold						$	170
Forward currency contracts						Net investment hedge						Interest expense						21
Interest rate derivative contracts						Cash flow hedge						Interest expense						(1)

Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:

(in millions)						Location on Consolidated Statements of Operations						Year Ended December 31,
						2024						2023						2022
Net gain (loss) on currency hedge contracts						Other, net						$	56					$	3					$	(53)
Net gain (loss) on currency transaction exposures						Other, net						(71)						(44)						21
Net currency exchange gain (loss)												$	(16)					$	(41)					$	(31)

Fair Value Measurements

FASB ASC Topic 815 requires all derivative and nonderivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fair value of our derivative and nonderivative instruments using the framework prescribed by FASB ASC Topic 820, *Fair Value Measurements and Disclosures (*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. The following are the balances of our derivative and nonderivative assets and liabilities:

(in millions)						Location on Consolidated Balance Sheets**(1)**						As of December 31,
			2024						2023
Derivative and Nonderivative Assets:
Designated Hedging Instruments
Forward currency contracts						Other current assets						$	149					$	140
Forward currency contracts						Other long-term assets						79						107
												228						246
Non-Designated Hedging Instruments
Forward currency contracts						Other current assets						156						20
Total Derivative and Nonderivative Assets												$	384					$	266
Derivative and Nonderivative Liabilities:
Designated Hedging Instruments
Forward currency contracts						Other current liabilities						$	1					$	15
Forward currency contracts						Other long-term liabilities						—						9
Foreign currency-denominated debt(2)						Long-term debt						930						988
												931						1,012
Non-Designated Hedging Instruments
Forward currency contracts						Other current liabilities						59						38
Total Derivative and Nonderivative Liabilities												$	990					$	1,050

(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 €900 million debt principal associated with our December 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.

Recurring Fair Value Measurements

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

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

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

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

Assets and liabilities measured at fair value on a recurring basis consist of the following:

			As of
			December 31, 2024																								December 31, 2023
(in millions)			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Money market funds and time deposits			$	120					$	—					$	—					$	120					$	454					$	—					$	—					$	454
Publicly-held securities			19						—						—						19						18						—						—						18
Hedging instruments			—						384						—						384						—						266						—						266
Licensing arrangements			—						—						24						24						—						—						77						77
			$	139					$	384					$	24					$	547					$	472					$	266					$	77					$	816
Liabilities
Hedging instruments			$	—					$	990					$	—					$	990					$	—					$	1,050					$	—					$	1,050
Contingent consideration liability			—						—						171						171						—						—						404						404
Licensing arrangements			—						—						33						33						—						—						90						90
			$	—					$	990					$	203					$	1,194					$	—					$	1,050					$	494					$	1,545

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 consolidated balance sheets, in accordance with GAAP and our accounting policies. In addition to $120 million invested in money market funds and time deposits as of December 31, 2024 and $454 million as of December 31, 2023, we held $364 million in interest-bearing and non-interest-bearing bank accounts as of December 31, 2024 and $411 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 are comprised of licensing arrangements, including the contractual right to receive future royalty payments related to the Zytiga™ Drug. We own the contractual right to receive 50 percent of the future Zytiga Drug royalty payments from the licensee and remit such payments to the inventors associated with the intellectual property. We maintain a financial asset and associated liability for our licensing arrangements measured at fair value within our 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. Royalty payments we receive reduce the fair value of the financial asset and are presented within Proceeds from royalty rights, and payments we remit to inventors reduce the fair value of the financial liability and are presented within Payments for royalty rights within our consolidated statements of cash flows. We sold our right to receive and retain the other 50 percent of the future royalty payments in 2019 for an upfront cash payment, which we accounted for as a secured borrowing in accordance with FASB ASC Topic 860, Transfers and Servicing (FASB ASC Topic 860). Although we sold these rights, we continue to recognize at fair value the future royalty payments as an associated liability. Royalty payments associated with the rights we sold no longer impact our cash flows, and we present this activity as Non-cash impact of transferred royalty rights in the supplemental information to our consolidated statements of cash flows. We reduce the fair value of the associated liability when such non-cash activity occurs.

We record the fair value of the financial asset and associated liability using a discounted cash flow approach considering the probability-weighted expected future cash flows to be generated by the royalty stream. The fair value of the financial liability also considers the related contractual provisions that govern our payment obligations. Significant increases or decreases in projected cash flows of the royalty stream and the related contractual provisions that govern our payment obligations, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement of the licensing arrangements' financial asset and liability as of December 31, 2024. However, increases or decreases in the financial asset would be offset by increases or decreases in the financial liability, other than for timing of receipt and remittance; as such our earnings are not subject to material gains and losses from the licensing arrangement.

The recurring Level 3 fair value measurements of our licensing arrangements recognized within our consolidated balance sheets as of December 31, 2024 include the following significant unobservable inputs:

Licensing Arrangements			Fair Value as of December 31, 2024			Valuation Technique			Unobservable Input			Range									Weighted Average**(1)**
Financial Asset			$24 million			Discounted Cash Flow			Discount Rate			15%									15%
Projected Year of Payment			2025			-			2025			2025
Financial Liability			$33 million			Discounted Cash Flow			Discount Rate			12%			-			15%			13%
Projected Year of Payment			2025			-			2026			2025

(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, 2022			$	127
Proceeds from royalty rights			(61)
Fair value adjustment (expense) benefit			11
Balance as of December 31, 2023			$	77
Proceeds from royalty rights			(40)
Fair value adjustment (expense) benefit			(13)
Balance as of December 31, 2024			$	24

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

(in millions)
Balance as of December 31, 2022			$	159
Payments for royalty rights			(80)
Fair value adjustment expense (benefit)			12
Balance as of December 31, 2023			$	90
Payments for royalty rights			(45)
Fair value adjustment expense (benefit)			(12)
Balance as of December 31, 2024			$	33

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 $10.330 billion as of December 31, 2024 and $8.735 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.

NOTE E – CONTRACTUAL OBLIGATIONS AND COMMITMENTS

Borrowings and Credit Arrangements

We had total debt outstanding of $10.746 billion as of December 31, 2024 and $9.102 billion as of December 31, 2023, with current maturities of $1.778 billion as of December 31, 2024 and $531 million as of December 31, 2023. The debt maturity schedule for our long-term debt obligations is presented below:

						Issuance Date						Maturity Date						As of December 31,												Coupon Rate**(1)**
(in millions, except interest rates)												2024						2023
March 2025 Senior Notes(3)						March 2022						March 2025						—						1,105						0.750%
June 2025 Senior Notes						May 2020						June 2025						—						500						1.900%
March 2026 Senior Notes						February 2019						March 2026						255						255						3.750%
December 2027 Senior Notes(3)						November 2019						December 2027						935						995						0.625%
March 2028 Senior Notes(3)						March 2022						March 2028						779						829						1.375%
March 2028 Senior Notes						February 2018						March 2028						344						344						4.000%
March 2029 Senior Notes						February 2019						March 2029						272						272						4.000%
March 2029 Senior Notes(3)						February 2024						March 2029						779						—						3.375%
June 2030 Senior Notes						May 2020						June 2030						1,200						1,200						2.650%
March 2031 Senior Notes(3)						March 2022						March 2031						779						829						1.625%
March 2032 Senior Notes(3)						February 2024						March 2032						1,299						—						3.500%
March 2034 Senior Notes(3)						March 2022						March 2034						519						553						1.875%
November 2035 Senior Notes(2)						November 2005						November 2035						350						350						6.500%
March 2039 Senior Notes						February 2019						March 2039						450						450						4.550%
January 2040 Senior Notes						December 2009						January 2040						300						300						7.375%
March 2049 Senior Notes						February 2019						March 2049						650						650						4.700%
Unamortized Debt Issuance Discount and Deferred Financing Costs												2025 - 2049						(70)						(65)
Finance Lease Obligation												Various						126						5
Long-term debt																		$	8,968					$	8,571

(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 6.25% 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 December 31, 2024 and 2023, respectively.

Contractual maturities of our Senior Notes classified as long-term debt as of December 31, 2024 are as follows (in millions):

Fiscal Year
2026			255
2027			935
2028			1,123
2029			1,051
Thereafter			5,547

Revolving Credit Facility

On May 10, 2021, we entered into a $2.750 billion revolving credit facility (as amended, supplemented or otherwise modified from time to time, the 2021 Revolving Credit Facility) with a global syndicate of commercial banks. On May 10, 2024, we entered into a third amendment to the 2021 Revolving Credit Facility credit agreement, which provided for, among other things, an extension of the scheduled maturity date to May 10, 2029, an amendment of the Ratings based pricing grid of the Applicable Margin, each as defined in the credit agreement, and reset the applicable date for purposes of determining the amounts of

restructuring charges and restructuring-related expenses that may be excluded from consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined by the credit agreement, for purposes of our maximum leverage ratio covenant, from December 31, 2022 to March 31, 2024, as further discussed 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 no amounts outstanding under the 2021 Revolving Credit Facility as of December 31, 2024 or December 31, 2023.

Financial Covenant

As of December 31, 2024, we were in compliance with the financial covenant required by the 2021 Revolving Credit Facility.

			Covenant Requirement as of December 31, 2024						Actual as of December 31, 2024
Maximum permitted leverage ratio(1)			4.75 times						2.26 times

(1) Ratio of total debt to deemed consolidated EBITDA, as defined by the 2021 Revolving Credit Facility credit agreement.

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 3.75 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 $1.000 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 4.75 times. It steps down for the fifth, sixth and seventh succeeding quarters to 4.50 times, 4.25 times and 4.00 times, respectively. Thereafter, a maximum leverage ratio of 3.75 times is required through the remaining term of the 2021 Revolving Credit Facility. On November 15, 2024, we announced the closing of our acquisition of Axonics, which we had previously designated as a Qualified Acquisition under the credit agreement, increasing the maximum permitted leverage ratio to 4.75 times as of December 31, 2024.

The financial covenant requirement, as amended on May 10, 2024, provides for an exclusion from the calculation of consolidated EBITDA through maturity, of certain charges and expenses. The credit agreement amendment reset the starting date for purposes of calculating such permitted exclusions related to restructuring charges and restructuring-related expenses from December 31, 2022 to March 31, 2024. Permitted exclusions include up to $500 million in cash and non-cash restructuring charges and restructuring-related expenses associated with our current or future restructuring plans. As of December 31, 2024, we had $322 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, provided that the sum of any excluded net cash litigation payments do not exceed $1.000 billion plus all accrued legal liabilities as of December 31, 2022. As of December 31, 2024, we had $1.435 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. Outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. We had $191 million outstanding under our commercial paper program as of December 31, 2024 and no commercial paper outstanding as of December 31, 2023.

			As of December 31,
(in millions, except maturity and yield)			2024						2023
Commercial paper outstanding (at par)			$	191					$	—
Maximum borrowing capacity			2,750						2,750
Borrowing capacity available			2,559						2,750
Weighted average maturity			20 days						0 days
Weighted average yield			4.71		%				—		%

Senior Notes

We had senior notes outstanding of $10.451 billion as of December 31, 2024 and $9.136 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 (see 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 of €2.000 billion in aggregate principal amount of euro-denominated senior notes comprised of €750 million of 3.375% Senior Notes due 2029 and €1.250 billion of 3.500% 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. AMS Europe is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X. The financial condition, results of operations and cash flows of AMS Europe are consolidated in the financial statements of Boston Scientific. The offering resulted in cash proceeds of $2.145 billion, net of investor discounts and issuance costs.

We primarily used the net proceeds from the offering of the 2024 Eurobonds to fund a portion of the purchase price of the Axonics acquisition and to pay related fees and expenses, and for general corporate purposes. We also used the net proceeds to fund the repayment at maturity of our 3.450% Senior Notes due March 2024 and to pay accrued and unpaid interest with respect to such notes.

In March 2022, AMS Europe completed a registered public offering of €3.000 billion in aggregate principal amount of euro-dominated senior notes comprised of €1.000 billion of 0.750% Senior Notes due 2025, €750 million of 1.375% Senior Notes due 2028, €750 million of 1.625% Senior Notes due 2031 and €500 million of 1.875% Senior Notes due 2034 (collectively, the 2022 Eurobonds). Boston Scientific has fully and unconditionally guaranteed all of AMS Europe's obligations under the 2022 Eurobonds, and no other subsidiary of Boston Scientific will guarantee these obligations. The Offering resulted in cash proceeds of $3.270 billion, net of investor discounts and issuance costs.

We used the net proceeds from the offering of the 2022 Eurobonds to fund the tender offer and early redemption of combined aggregate principal amount of $3.275 billion of certain of our outstanding senior notes, as well as to pay accrued interest, tender premiums, fees and expenses. We recorded associated debt extinguishment net charges of $194 million during the first quarter of 2022 presented in Interest expense within our consolidated statements of operations.

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. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net in our accompanying consolidated balance sheets, are aggregated by contract denominated currency below (in millions):

			As of December 31, 2024												As of December 31, 2023
Factoring Arrangements			Amount De-recognized						Weighted Average Interest Rate						Amount De-recognized						Weighted Average Interest Rate
Euro denominated			$	176					5.3		%				$	206					5.1		%
Yen denominated			193						0.9		%				214						0.6		%
Renminbi denominated			26						2.0		%				14						2.9		%

Other Contractual Obligations and Commitments

We had outstanding letters of credit of $206 million as of December 31, 2024 and $174 million as of December 31, 2023, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of December 31, 2024 and December 31, 2023, we had not recognized a related liability for our outstanding letters of credit in our consolidated balance sheets.

As of December 31, 2024, future minimum purchase obligations, relating primarily to non-cancellable inventory commitments and capital expenditures entered in the normal course of business, were (in millions):

Fiscal Year			Unrecorded Purchase Obligations
2025			$	881
2026			220
2027			125
2028			108
2029			21
Thereafter			159
			$	1,514

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 consolidated balance sheets and were $140 million as of December 31, 2024 and $152 million as of December 31, 2023.

The following is a roll forward of outstanding payables related to our supplier finance program:

(in millions)
Balance as of December 31, 2023			$	152
Additions			664
Settlements			(677)
Balance as of December 31, 2024			$	140

NOTE F – LEASES

We have operating and finance leases for real estate including corporate offices, land, warehouse space, and vehicles and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). We recognize lease expense on a straight-line basis over the lease term for short-term leases that we do not record on our balance sheet. If there is a change in our assessment of the lease term and, as a result, the remaining lease term extends more than 12 months from the end of the previously determined lease term, or we subsequently become reasonably certain that we will exercise an option to purchase the underlying asset, the lease no longer meets the definition of a short-term lease and is accounted for as either an operating or finance lease and recognized on the balance sheet. In accordance with FASB ASC Topic 842, we account for the lease components and the non-lease components as a single lease component, with the exception of our warehouse leases. Our leases have remaining lease terms of less than 1 year to approximately 52 years, some of which may include options to extend the leases for up to 10 years. If we are reasonably certain we will exercise an option to extend the lease, the time period covered by the extension option is included in the lease term.

We determine whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

Our operating lease right-of-use assets are presented within Other long-term assets and corresponding liabilities are presented within Other current liabilities and Other long-term liabilities on our consolidated balance sheets. In December 2024, a previously executed lease for additional office and warehouse space with a noncancellable lease term of 25 years commenced, resulting in the recognition of a $122 million finance lease right-of-use asset, recorded in Property, plant, and equipment, net, in our consolidated balance sheets, as well as a corresponding current finance lease liability of less than $1 million, and noncurrent finance lease liability of $123 million, recorded in Current debt obligations and Long-term debt, respectively, in our consolidated balance sheets. The discount rate used to calculate the initial right-of-use asset and corresponding liability was 4.8%. Refer to Note E – Contractual Obligations and Commitments for information regarding our finance leases.

The following table presents supplemental balance sheet information related to our operating leases:

			As of December 31,
(in millions)			2024						2023
Assets
Operating lease right-of-use assets in Other long-term assets			$	449					$	439
Liabilities
Operating lease liabilities in Other current liabilities			81						76
Operating lease liabilities in Other long-term liabilities			401						390

The following table presents the weighted average remaining lease term and discount rate information related to our operating leases:

			As of December 31,
			2024						2023
Weighted average remaining lease term			9 years						9 years
Weighted average discount rate			3.9%						4.5%

Our operating lease cost under FASB ASC Topic 842 was $98 million in 2024, $96 million in 2023 and $91 million in 2022.

The following table presents supplemental cash flow information related to our operating leases:

			Year Ended December 31,
(in millions)			2024						2023
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows from operating leases			$	97					$	93

Right-of-use assets obtained in exchange for operating lease obligations were $117 million and $123 million for the years ended December 31, 2024 and 2023, respectively.

The following table presents the maturities of our operating lease liabilities as of December 31, 2024 (in millions):

Fiscal year			Operating Leases (1)
2025			$	94
2026			84
2027			64
2028			52
2029			43
Thereafter			227
Total future minimum operating lease payments			564
Less: imputed interest			82
Present value of operating lease liabilities			$	482

(1) Excludes expected lease payments for lease terms that have not yet commenced.

NOTE G – SUPPLEMENTAL BALANCE SHEET INFORMATION

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

Trade accounts receivable, net

			As of December 31,
(in millions)			2024						2023
Trade accounts receivable			$	2,667					$	2,338
Allowance for credit losses			(109)						(110)
			$	2,558					$	2,228

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

			Year Ended December 31,
(in millions)			2024						2023						2022
Beginning balance			$	110					$	109					$	108
Credit loss expense			41						50						35
Write-offs			(43)						(48)						(35)
Ending balance			$	109					$	110					$	109

Inventories

			As of December 31,
(in millions)			2024						2023
Finished goods			$	1,798					$	1,537
Work-in-process			193						174
Raw materials			819						773
			$	2,810					$	2,484

Approximately 22 percent of our finished goods inventory as of December 31, 2024 and 2023 was at customer locations pursuant to consignment arrangements or held by sales representatives.

Other current assets

			As of December 31,
(in millions)			2024						2023
Restricted cash and restricted cash equivalents			$	111					$	130
Derivative assets			305						159
Other			414						332
			$	831					$	621

Property, plant and equipment, net

			As of December 31,
(in millions)			2024						2023
Land			$	144					$	140
Buildings and improvements			2,019						1,843
Equipment, furniture and fixtures			3,630						3,503
Capital in progress			1,035						857
			6,827						6,343
Less: accumulated depreciation			3,533						3,484
			$	3,294					$	2,859

Depreciation expense was $412 million in 2024, $367 million in 2023 and $333 million in 2022.

Other long-term assets

			As of December 31,
(in millions)			2024						2023
Restricted cash equivalents			$	80					$	60
Operating lease right-of-use assets			449						439
Derivative assets			79						107
Investments			555						413
Indemnification asset			188						176
Other			402						336
			$	1,754					$	1,531

Accrued expenses

			As of December 31,
(in millions)			2024						2023
Legal reserves			$	177					$	206
Payroll and related liabilities			1,288						1,051
Rebates			494						389
Contingent consideration			63						304
Other			751						696
			$	2,773					$	2,646

Other current liabilities

			As of December 31,
(in millions)			2024						2023
Deferred revenue			$	306					$	266
Taxes payable			268						220
Other			313						328
			$	887					$	814

Other long-term liabilities

			As of December 31,
(in millions)			2024						2023
Accrued income taxes			$	357					$	470
Legal reserves			149						172
Contingent consideration			108						100
Operating lease liabilities			401						390
Deferred revenue			329						311
Other			527						525
			$	1,870					$	1,967

NOTE H – INCOME TAXES

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

			Year Ended December 31,
(in millions)			2024						2023						2022
Domestic			$	(261)					$	(394)					$	(1,119)
Foreign			2,542						2,379						2,260
			$	2,282					$	1,985					$	1,141

The related expense (benefit) for income taxes consisted of the following:

			Year Ended December 31,
(in millions)			2024						2023						2022
Current
Federal			$	310					$	189					$	51
State			31						15						19
Foreign			184						116						381
			526						320						451
Deferred
Federal			(131)						(82)						(92)
State			(52)						(22)						(32)
Foreign			92						176						117
			(90)						73						(7)
			$	436					$	393					$	443

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

			Year Ended December 31,
			2024						2023						2022
U.S. federal statutory income tax rate			21.0		%				21.0		%				21.0		%
State income taxes, net of federal benefit			0.1		%				0.7		%				0.7		%
Domestic taxes on foreign earnings			9.2		%				6.9		%				15.3		%
Effect of foreign taxes			(12.2)		%				(15.3)		%				(3.8)		%
Acquisition-related			1.5		%				2.2		%				4.4		%
Research credit			(3.1)		%				(2.9)		%				(4.5)		%
Valuation allowance			0.4		%				7.5		%				(1.3)		%
Compensation-related			(0.1)		%				0.5		%				0.6		%
Non-deductible expenses			0.6		%				0.4		%				0.4		%
Uncertain tax positions			1.3		%				(0.5)		%				7.7		%
Return to provision			0.5		%				(0.1)		%				(2.1)		%
Change in tax rates			0.1		%				(0.6)		%				(0.2)		%
Other, net			(0.2)		%				0.0		%				0.7		%
Reported tax rate			19.1		%				19.8		%				38.9		%

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

			As of December 31,
(in millions)			2024						2023
Deferred Tax Assets:
Inventory costs and related reserves			$	15					$	30
Tax benefit of net operating losses and credits			774						744
Reserves and accruals			320						305
Restructuring-related charges			12						14
Litigation and product liability reserves			79						88
Investment write-down			73						58
Compensation related			186						154
Federal benefit of uncertain tax positions			25						11
Intangible assets			3,059						3,394
Capitalized R&D			329						232
Operating lease liabilities			117						—
			4,990						5,029
Less: valuation allowance			(1,268)						(1,220)
			3,722						3,809
Deferred Tax Liabilities:
Property, plant and equipment			29						24
Unrealized gains and losses on derivative financial instruments			81						66
Operating right-of-use asset			111						—
Other			1						12
			222						102
Net Deferred Tax Assets			3,500						3,707
Prepaid on intercompany profit			307						315
Net Deferred Tax Assets and Prepaid on Intercompany Profit			$	3,807					$	4,022

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

			Location on Consolidated Balance Sheets			As of December 31,
Component			2024						2023
Prepaid on intercompany profit			Prepaid income taxes			$	307					$	315
Non-current deferred tax asset			Deferred tax assets			3,655						3,841
Deferred Tax Assets and Prepaid on Intercompany Profit						3,962						4,157
Non-current deferred tax liability			Deferred tax liabilities			155						134
Deferred Tax Liabilities						155						134
Net Deferred Tax Assets and Prepaid on Intercompany Profit						$	3,807					$	4,022

As of December 31, 2024 and 2023, we had U.S. federal and state tax net operating loss carryforwards and tax credits, the tax effect of which was $558 million and $540 million, respectively. In addition, we had foreign tax net operating loss carryforwards and tax credits, the tax effect of which was $216 million as of December 31, 2024, and $203 million as of December 31, 2023. These tax attributes expire periodically beginning in 2025.

After consideration of all positive and negative evidence, we believe that it is more likely than not that a portion of our deferred tax assets will not be realized. As a result, we recorded a valuation allowance of $1.268 billion as of December 31, 2024, and $1.220 billion as of December 31, 2023. The increase in the valuation allowance as of December 31, 2024, compared to

December 31, 2023, is primarily due to maintaining valuation allowances on certain foreign deferred tax assets which increased during the year and acquisition of deferred tax assets which required a valuation allowance, offset by release of valuation allowances on certain U.S. state net operating losses. The income tax impact of the unrealized gain or loss component of other comprehensive income and stockholders' equity was a charge of $30 million in 2024, a benefit of $39 million in 2023 and a charge of $56 million in 2022.

We obtain tax incentive rates through the Free Trade Zone Regime offered in Costa Rica which allows 100 percent exemption from income tax in the first eight years of operations, which will expire in 2027, and 50 percent exemption in the following four years, which will expire in 2031. This tax incentive resulted in income tax savings of $316 million, $212 million and $162 million in 2024, 2023 and 2022, respectively, and impacted Net income (loss) per common share - diluted by $0.21, $0.15 and $0.11 for 2024, 2023 and 2022, respectively. We also benefit from tax rate incentives in Puerto Rico through a Grant of Industrial Tax Exemption which will expire in 2034, with an option to extend for an additional 15 years. This incentive resulted in income tax savings of $10 million, $16 million and $21 million in 2024, 2023 and 2022, respectively, and impacted Net income (loss) per common share - diluted by $0.01, $0.01 and $0.02 in 2024, 2023 and 2022, respectively. Additionally, we benefit from tax incentive rates in Malaysia through the Principal Hub Incentive which allows a 100 percent exemption from income tax, and the Pioneer Business Exemption which allows a full tax exemption on manufacturing of specific medical device products, both of which have an option to renew for additional five-year terms and will expire in 2028 and 2029, respectively. These incentives have resulted in income tax savings of $27 million, $20 million and $17 million in 2024, 2023 and 2022, respectively and impacted Net income (loss) per common share - diluted by $0.02, $0.01 and $0.01 in 2024, 2023 and 2022, respectively. Lastly, the Company benefits from tax rate incentives on certain taxable profits in China through a High and New Technology Enterprise Regime, which will expire in 2026 with the option to renew every three years. This incentive resulted in income tax savings of less than $1 million and $6 million in 2024 and 2023, respectively, and was not applicable during 2022. The impact on Net income (loss) per common share - diluted was de minimis for both 2024 and 2023.

As of December 31, 2024, we had $506 million of gross unrecognized tax benefits, of which a net $423 million, if recognized, would affect our effective tax rate. As of December 31, 2023, we had $467 million of gross unrecognized tax benefits, of which a net $395 million, if recognized, would affect our effective tax rate. As of December 31, 2022, we had $492 million of gross unrecognized tax benefits, of which a net $410 million, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

			Year Ended December 31,
(in millions)			2024						2023						2022
Beginning Balance			$	467					$	492					$	255
Additions based on positions related to the current year			58						65						88
Additions based on positions related to prior years			20						67						177
Reductions for tax positions of prior years			(20)						(114)						(20)
Settlements with taxing authorities			—						(14)						(1)
Statute of limitation expirations			(18)						(29)						(8)
Ending Balance			$	506					$	467					$	492

We are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U.S. federal income tax matters and substantially all material state and local income tax matters through 2018. We have concluded substantially all foreign income tax matters through 2015.

In 2023, we received notification from the IRS that the examination of our 2017 and 2018 tax years was resolved. Due to the resolution of these tax years, we recorded a net tax benefit of $44 million to release the reserves related to these years. We paid tax of $16 million to the IRS reflecting the net balance of amounts due for the tax period including an increase to past transition tax installment payments for periods prior to 2023 and interest. The subsequent transition tax payment made in 2024 was increased to reflect the final audit settlement, as will the final remaining payment in 2025.

We recognize interest and penalties related to income taxes as a component of income tax expense. We had $78 million accrued for gross interest and penalties as of December 31, 2024, $70 million as of December 31, 2023, and $77 million as of December 31, 2022. Net tax expense related to interest and penalties was immaterial in 2024, 2023 and 2022.

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 $26 million.

The remaining balance of the one-time transition tax on post-1986 earnings and profits that was previously deferred from U.S. income taxes is $147 million as of December 31, 2024. The eighth and final payment will be paid by April 15, 2025.

As of December 31, 2024, we have not recorded a tax provision on approximately $20 billion of unremitted earnings of our international subsidiaries as these earnings are intended to be indefinitely reinvested overseas. We regularly review our plans for reinvestment or repatriation of unremitted foreign earnings and any future change in our plans would require us to provide for the net tax impacts of these amounts. Determining the amount of unrecognized deferred income tax related to our undistributed accumulated foreign earnings and additional outside basis differences is not practicable.

NOTE I – COMMITMENTS AND CONTINGENCIES

The medical device market in which we participate is largely technology driven. As a result, intellectual property rights, particularly patents and trade secrets, play a significant role in product development and differentiation. Over the years, there has been litigation initiated against us by others, including our competitors, claiming that our current or former product offerings infringe patents owned or licensed by them. Intellectual property litigation is inherently complex and unpredictable. In addition, competing parties frequently file multiple suits to leverage patent portfolios across product lines, technologies and geographies and to balance risk and exposure between the parties. In some cases, several competitors are parties in the same proceeding, or in a series of related proceedings, or litigate multiple features of a single class of devices. These dynamics frequently drive settlement not only for individual cases, but also for a series of pending and potentially related and unrelated cases. Although monetary and injunctive relief is typically sought, remedies and restitution are generally not determined until the conclusion of the trial court proceedings and can be modified on appeal. Accordingly, the outcomes of individual cases are difficult to time, predict or quantify and are often dependent upon the outcomes of other cases in other geographies.

During recent years, we successfully negotiated closure of several long-standing legal matters and have received favorable rulings in several other matters; however, there continues to be outstanding litigation. Adverse outcomes in one or more of these matters could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.

In addition, product liability, securities and commercial claims have been asserted against us and similar claims may be asserted against us in the future related to events not known to management at the present time. We maintain an insurance policy providing limited coverage against securities claims and we are substantially self-insured with respect to product liability claims and fully self-insured with respect to intellectual property infringement claims. The absence of significant third-party insurance coverage increases our potential exposure to unanticipated claims or adverse decisions. Product liability claims, securities and commercial litigation and other legal proceedings in the future, regardless of their outcome, could have a material adverse effect on our ability to sell certain products and on our operating margins, financial position, results of operations and/or liquidity.

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

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

Our accrual for legal matters that are probable and estimable was $326 million as of December 31, 2024, and $377 million as of December 31, 2023, and includes certain estimated costs of settlement, damages and defense primarily related to product liability cases or claims and matters assumed from acquired companies. 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 consolidated financial statements. We did not record any litigation-related net charges (credits) in 2024. We recorded litigation-related net credits of $111 million in 2023 primarily related to the settlement of offensive patent litigation and net charges of $173 million in 2022, primarily related to litigation associated with our transvaginal surgical mesh products, and other legal matters. All other legal and product liability charges, credits and costs are recorded within Selling, general and administrative expenses within our accompanying consolidated statements of operations.

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 required by our credit arrangements.

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

Patent Litigation

On November 20, 2017, The Board of Regents, University of Texas System and TissueGen. Inc. (collectively, UT), served a lawsuit against us in the Western District of Texas. The complaint against the Company alleges patent infringement of two U.S. patents owned by UT, relating to “Drug Releasing Biodegradable Fiber Implant” and “Drug Releasing Biodegradable Fiber for Delivery of Therapeutics,” and affects the manufacture, use and sale of our Synergy™ Stent System. UT primarily seeks a reasonable royalty. On March 12, 2018, the District Court for the Western District of Texas dismissed the action and transferred it to the United States District Court for the District of Delaware. On September 5, 2019, the Court of Appeals for the Federal Circuit affirmed the dismissal of the District Court for the Western District of Texas. In April 2020, the United States Supreme Court denied the UT’s Petition for Certiorari. UT proceeded with its case against the Company in Delaware. In January 2023, a jury trial was held on the issue of whether the one UT patent still asserted in the case was valid and whether it was infringed by the Company. On January 31, 2023, a jury concluded that UT’s patent was valid and willfully infringed by the Company, and awarded UT $42 million in damages. Following the trial, UT filed a motion seeking prejudgment interest and enhanced damages. The Company filed a motion seeking judgment as a matter of law in its favor or alternatively a new trial. On June 5, 2024, the Court granted the Company’s motion for judgment as a matter of law of no willful infringement, but otherwise denied the Company’s motions. The Court also denied UT’s motion for enhanced damages, awarded approximately $7 million in pre-judgment interest, and awarded post-judgment interest. On July 3, 2024, UT and the Company each filed a notice of appeal.

Upon the Company’s acquisition of Axonics on November 15, 2024, the Company assumed responsibility for all litigation pending against Axonics. Such matters included complaints filed by Medtronic, Inc., Medtronic Puerto Rico Operations Co., Medtronic Logistics LLC and Medtronic USA, Inc. (the Medtronic Parties) that asserted that aspects of Axonics’ sacral neuromodulation systems infringed patents held by the Medtronic Parties. In December 2024, the Company entered into a confidential settlement agreement that resolved all pending litigation between Axonics and the Medtronic Parties in the federal district courts, the federal appellate courts, the Patent, Trial, and Appeal Board, and the International Trade Commission.

On September 18, 2023, Axonics commenced an arbitration dispute against the Al Mann Foundation (AMF), in response to which AMF asserted multiple claims against Axonics. This arbitration will resolve, among other things, whether AMF terminated its licensing agreement with Axonics related to Axonics’ rechargeable sacral neuromodulation systems, and whether Axonics owes royalties to AMF for such products. This dispute is scheduled for an arbitration hearing in June 2025.

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

Like many healthcare companies, the Company receives inquiries and has ongoing discussions with governmental agencies with respect to the Company’s operations, such as the Securities and Exchange Commission (SEC), the Department of Justice (DOJ) and foreign regulators, including its operations in Vietnam with respect to alleged Foreign Corrupt Practices Act (FCPA) violations the Company received in March 2022. The Company has received related subpoenas for documents from the DOJ and the SEC with respect to the Vietnam matter, and is cooperating with the government while investigating these allegations. From time to time, the Company also self-discloses potential concerns to regulators. In the course of Vietnam-related discussions with the DOJ and SEC, the Company has disclosed that it is investigating other potential concerns in Vietnam and other countries.

From time to time, the Company also receives U.S.-based subpoenas and DOJ Civil Investigative Demands (CID), including the following matters: in April 2023, the Company received a DOJ subpoena that seeks documents and information related to its ambulatory electrocardiography monitoring business; in December 2023, the Company received a DOJ CID related to the provision of peripheral intervention services through office-based labs. The Company is cooperating with the DOJ in these matters.

Other Proceedings

On December 4, 2020, Enrique Jevons, individually and on behalf of all others similarly situated, filed a class action complaint against the Company, Michael F. Mahoney and Daniel J. Brennan, stemming from the recall and retirement of the LOTUS Edge™ Aortic Valve System (LOTUS System) in United States District Court for the Eastern District of New York. On December 14, 2020, the parties agreed to transfer the case to the United States District Court for the District of Massachusetts. On December 16, 2020, Mariano Errichiello, individually and on behalf of all others similarly situated, filed a second, materially similar class action complaint against the Company, Michael F. Mahoney, Joseph M. Fitzgerald, and Daniel J. Brennan in the United States District Court for the District of Massachusetts. Subsequently, on March 30, 2021, the Court consolidated the two actions, and appointed Union Asset Management Holding AG as the lead plaintiff. The plaintiffs filed an Amended Complaint in June 2021 that seeks unspecified compensatory damages in favor of the alleged class as well as unspecified equitable relief. The Company filed a Motion to Dismiss in July 2021, which, in December 2022, the Court granted in part and denied in part. On October 23, 2023, the Company reached an agreement in principle with the lead plaintiff to settle the case. The Court granted the motion for preliminary approval of the proposed settlement on December 27, 2023, and approved the settlement and dismissed the case on April 23, 2024.

On February 8, 2021, the Company received a letter from The Vladimir Gusinsky Revocable Trust, a shareholder, demanding that the Company’s Board of Directors conduct an investigation into actions by the Company’s directors and executive officers regarding statements made about the effectiveness and commercial viability of the LOTUS System. The Trust subsequently agreed to stay its demand, pending the outcome of any dispositive motion against the Amended Complaint in the class action complaint described above. The Company received letters on behalf of the Union Excavators Local 731 Pension Fund, Diane Nachbaur, and Frank Tripson, three stockholders of the Company, on July 26, 2021, July 29, 2021, and February 13, 2023, respectively, each demanding access to certain books and records of the Company, pursuant to Section 220 of the Delaware General Corporation Law, regarding the business, operations, effectiveness and commercial viability of the LOTUS system, and related items. On April 7, 2023, Diane Nachbaur filed a shareholder derivative complaint in the United States District Court for the District of Massachusetts against the Company, Michael F. Mahoney, Nelda J. Connors, Charles J. Dockendorff, Yoshiaki Fujimori, Donna A. James, Edward J. Ludwig, David Roux, John E. Sununu, Ellen M. Zane, Joseph M. Fitzgerald, Daniel J. Brennan, Shawn McCarthy, Ian Meredith, Kevin Ballinger, and Susan Vissers Lisa. On May 8, 2023, the Court stayed the case until the conclusion of the consolidated class action case. On October 18, 2023, Frank Tripson filed a shareholder derivative complaint in the Court of Chancery of the State of Delaware against the Company, Michael F. Mahoney, Daniel J. Brennan, Joseph M. Fitzgerald, Shawn McCarthy, Kevin Ballinger, Ian Meredith, Susan Vissers Lisa, Nelda J. Connors, Charles J. Dockendorff, Yoshiaki Fujimori, Donna A. James, Edward J. Ludwig, Stephen P. MacMillan, David Roux, John E. Sununu, and Ellen M. Zane. On December 15, 2023, the Court stayed that case until March 31, 2024. On March 26, 2024, the Company reached an agreement in principle with all of the plaintiffs to resolve the matters. On January 8, 2025, the United States District Court for the District of Massachusetts issued an order granting preliminary approval to the proposed settlement. A court hearing regarding final approval of the proposed settlement has been scheduled for March 25, 2025.

NOTE J – STOCKHOLDERS' EQUITY

Preferred Stock

We are authorized to issue 50 million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by our stockholders.

On May 27, 2020, we completed an offering of 10,062,500 shares of 5.50% Mandatory Convertible Preferred Stock, Series A (MCPS) at a price to the public and liquidation preference of $100 per share. The net proceeds from the MCPS offering were approximately $975 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 2.3834 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 24 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.

Prior to the Mandatory Conversion Date in 2023, the Audit Committee of our Board of Directors, pursuant to authority delegated to such committee by our Board of Directors, declared, and we paid, cash dividends of $28 million, or $1.3750 per MCPS share to holders representing dividend periods through May 2023.

Common Stock

We are authorized to issue two billion shares of common stock, $0.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by our Board of Directors, and to share ratably in our assets legally available for distribution to our stockholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the directors and can control our management and affairs. Prior to the Mandatory Conversion Date, holders of common stock were junior to holders of MCPS in terms of liquidation preference.

On December 14, 2020, our Board of Directors approved a stock repurchase program authorizing the repurchase of up to $1.000 billion of our common stock. We did not repurchase any shares of our common stock during 2024 and had the full amount available under the authorization as of December 31, 2024.

There were approximately 263 million shares in treasury as of December 31, 2024 and 2023.

NOTE K – STOCK INCENTIVE AND PURCHASE PLANS

Employee and Director Stock Incentive Plans

In 2020, our Board of Directors and stockholders approved amendments to our 2011 Long-Term Incentive Plan effective October 1, 2020 (Amended and Restated 2011 LTIP), authorizing for issuance up to 171 million shares of our common stock. The Amended and Restated 2011 LTIP covers officers, directors, employees and consultants and provides for the grant of restricted or unrestricted common stock, restricted stock units (RSUs), options to acquire our common stock, stock appreciation rights, performance awards (market-based and performance-based RSUs) and other stock and non-stock awards. Shares reserved under our current and former stock incentive plans totaled approximately 139 million as of December 31, 2024. The Executive Compensation and Human Resources Committee (the Committee) of the Board of Directors, consisting of independent, non-employee directors, may authorize the issuance of common stock and cash awards under the Amended and Restated 2011 LTIP in recognition of the achievement of long-term performance objectives established by the Committee.

Non-qualified options issued to employees are generally granted with an exercise price equal to the market price of our stock on the grant date, vest over a three or four-year service period and have a ten-year contractual life. In the case of qualified options, if the recipient owns more than ten percent of the voting power of all classes of stock, the option granted will be at an exercise price of 110 percent of the fair market value of our common stock on the date of grant and will expire over a period not to exceed five years. Non-vested stock awards, including restricted stock awards (RSAs) and RSUs issued to employees are generally granted with an exercise price of zero and typically vest in four equal annual installments. These awards represent our commitment to issue shares to recipients after the vesting period. Upon each vesting date, such awards are no longer subject to risk of forfeiture and we issue shares of our common stock to the recipient.

The following presents the impact of stock-based compensation on our consolidated statements of operations:

			Year Ended December 31,
(in millions, except per share data)			2024						2023						2022
Cost of products sold			$	14					$	12					$	12
Selling, general and administrative expenses			206						179						167
Research and development expenses			46						42						41
			266						233						220
Income tax (benefit) expense			(39)						(35)						(32)
			$	227					$	198					$	188
Net impact per common share - basic			$	0.15					$	0.14					$	0.13
Net impact per common share - assuming dilution			$	0.15					$	0.14					$	0.13

Stock Options

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

			Year Ended December 31,
			2024												2023												2022
Options granted (in thousands)			2,443												2,934												3,287
Weighted-average exercise price			$	65.00											$	47.43											$	44.02
Weighted-average grant-date fair value			$	23.30											$	16.83											$	13.64
Black-Scholes Assumptions
Expected volatility			24								%				26								%				28								%
Expected term (in years, weighted)			6.3												6.3												6.1
Risk-free interest rate			4.16%			-			4.20%						3.62%			-			4.75%						1.42%			-			3.87%

Expected Volatility

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

Expected Term

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

Risk-Free Interest Rate

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

Expected Dividend Yield

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

Information related to stock options under stock incentive plans are as follows:

			Stock Options (in thousands)						Weighted Average Exercise Price						Weighted Average Remaining Contractual Life (in years)						Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2021			21,448						$	29
Granted			3,287						44
Exercised			(2,745)						17
Cancelled/forfeited			(502)						34
Outstanding as of December 31, 2022			21,489						$	32
Granted			2,934						47
Exercised			(3,325)						25
Cancelled/forfeited			(249)						44
Outstanding as of December 31, 2023			20,850						$	36
Granted			2,443						65
Exercised			(3,866)						28
Cancelled/forfeited			(243)						50
Outstanding as of December 31, 2024			19,183						$	41					5.7						$	931
Exercisable as of December 31, 2024			12,660						35						4.5						688
Expected to vest as of December 31, 2024			6,313						52						8.1						236
Total vested and expected to vest as of December 31, 2024			18,972						$	41					5.7						$	924

The total intrinsic value of stock options exercised was $184 million in 2024, $89 million in 2023 and $72 million in 2022.

Non-Vested Stock

We value RSAs and RSUs based on the closing trading value of our shares on the date of grant. Information related to non-vested stock awards is as follows:

			Non-Vested Stock Award Units (in thousands)						Weighted Average Grant-Date Fair Value
Balance as of December 31, 2021			9,745						$	37
Granted			3,854						45
Vested(1)			(3,482)						36
Forfeited			(680)						44
Balance as of December 31, 2022			9,438						$	41
Granted			3,958						49
Vested(1)			(3,624)						39
Forfeited			(485)						44
Balance as of December 31, 2023			9,287						$	45
Granted			3,322						66
Vested(1)			(3,717)						43
Forfeited			(349)						50
Balance as of December 31, 2024			8,544						$	54

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

The total vesting date fair value of shares that vested was approximately $248 million in 2024, $171 million in 2023 and $150 million in 2022.

Market-based RSU Awards

During 2024, 2023 and 2022 we granted market-based RSU awards to certain members of our senior management team. The number of shares ultimately issued to the recipient is based on the total stockholder return (TSR) of our common stock as compared to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year period. The number of RSUs ultimately granted under this program range from 0 percent to 200 percent of the target number awarded to the participant as determined by achievement of the TSR criteria of the program. In addition, in general, award recipients must remain employed by us throughout the three-year period to attain the full amount of the market-based RSUs that satisfied the market performance criteria.

The aggregate fair value of these awards as determined based on Monte Carlo simulations as of the respective grant dates, and the related assumptions used in the valuations, are as follows:

			2024						2023						2022
			Awards						Awards						Awards
Fair value (in millions)			$	16					$	13					$	12
Stock price on date of grant			$	64.99					$	47.28					$	44.19
Measurement period (in years)			2.9						2.9						2.9
Risk-free rate			4.23		%				4.31		%				1.71		%

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

Organic Net Sales Growth and Free Cash Flow Performance-based RSU Awards

During 2024 and 2023, we granted organic net sales growth (ONSG) performance-based RSU awards to certain members of our senior management team. The attainment of these performance-based RSUs is based on our organic net sales growth over a three-year performance period against a target set by the Committee. The number of RSUs ultimately granted under this program range from 0 percent to 200 percent of the target number of performance-based RSUs awarded to the participant as determined by achievement of the performance criteria of the program.

During 2022, we granted free-cash flow performance-based RSU awards to certain members of our senior management team. The attainment of these performance-based RSUs is based on our adjusted free cash flow (AFCF) measured against our goal set by the Committee, based on our internal annual financial plan performance for AFCF. AFCF was measured over a one-year performance period beginning January 1, 2022 and ending December 31, 2022. The number of RSUs ultimately granted under this program range from 0 percent to 150 percent of the target number of performance-based RSUs awarded to the participant as determined by achievement of the performance criteria of the program. In addition, in general, award recipients must remain employed by us throughout a three-year service period (inclusive of the one-year performance period) to attain the full amount of the performance-based RSUs that satisfied the performance criteria.

The following table presents our assumptions used in determining the fair value of our ONSG and AFCF awards currently expected to vest as of December 31, 2024:

			2024 ONSG						2023 ONSG						2022 AFCF
Fair value, net of forfeitures to date (in millions)			$	22					$	20					$	7
Achievement of target payout(1)			200		%				200		%				88		%
Stock price used in determining fair value			$	64.99					$	47.28					$	46.27

(1) Company's estimate of target payout as of December 31, 2024.

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

Expense Attribution

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

We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest. FASB ASC Topic 718, Compensation – Stock Compensation allows forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock-based award. We have applied, based on an analysis of our historical forfeitures, a weighted-average annual forfeiture rate of approximately five percent to all unvested stock-based awards as of December 31, 2024, which represents the portion that we expect will be forfeited each year over the vesting period. We re-evaluate this analysis annually or more frequently if there are significant changes in circumstances and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for those shares that vest.

Unrecognized Compensation Cost

We expect to recognize the following future expense for awards outstanding as of December 31, 2024:

			Unrecognized Compensation Cost (in millions) (1)						Weighted Average Remaining Vesting Period (in years)
Stock options			$	44
Non-vested stock awards			227
			$	271					1.7

(1) Amounts presented represent compensation cost, net of estimated forfeitures.

Employee Stock Purchase Plan

In May 2022, our stockholders approved an additional 10 million shares that may be issued under our global employee stock purchase plan. Our global employee stock purchase plan provides for the granting of options to purchase up to 60 million shares of our common stock to all eligible employees. Under the global employee stock purchase plan, we grant each eligible employee, at the beginning of each six-month offering period, an option to purchase shares of our common stock equal to not more than ten percent of the employee’s eligible compensation or the statutory limit under the U.S. Internal Revenue Code. Such options may be exercised only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85 percent of the fair market value of our common stock at the beginning or end of each offering period, whichever is less. As of December 31, 2024, there were approximately 6 million shares available for future issuance under the employee stock purchase plan.

Information related to shares issued or to be issued in connection with the employee stock purchase plan based on employee contributions and the range of purchase prices is as follows:

			Year Ended December 31,
			2024												2023												2022
Shares issued or to be issued (in thousands)			2,409												2,623												2,850
Range of purchase prices			$	49.16		-			$	64.95					$	39.11		-			$	45.51					$	31.68		-			$	32.31
Expense recognized (in millions)			$	34											$	29											$	28

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of shares issued under the employee stock purchase plan. We recognize expense related to shares purchased through the employee stock purchase plan ratably over the offering period.

NOTE L – WEIGHTED AVERAGE SHARES OUTSTANDING

			Year Ended December 31,
(in millions)			2024						2023						2022
Weighted average shares outstanding - basic			1,471.5						1,453.0						1,430.5
Net effect of common stock equivalents			14.4						10.6						9.2
Weighted average shares outstanding - diluted			1,485.9						1,463.5						1,439.7

The following securities were excluded from the calculation of weighted average shares outstanding - diluted because their effect in the periods presented below would have been antidilutive:

			Year Ended December 31,
(in millions)			2024						2023						2022
Stock options outstanding(1)			—						0						6
MCPS(2)			—						10						24

(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 our MCPS. Refer to Note J – 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.

In 2023 and 2022, the effect of assuming the conversion of our MCPS into shares of common stock was anti-dilutive, and therefore excluded from the calculation of earnings per share (EPS). Accordingly, Net income (loss) was reduced by cumulative Preferred stock dividends, as presented in our consolidated statements of operations, for purposes of calculating Net income (loss) attributable to Boston Scientific common stockholders. On June 1, 2023, all outstanding shares of MCPS automatically converted into shares of common stock.

NOTE M – SEGMENT REPORTING

We aggregate our core businesses into two 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. Our chief operating decision maker (CODM) is our President and Chief Executive Officer.

We measure and evaluate our reportable segments based on their respective net sales, cost of goods sold, selling, general and administrative expenses, research and development expenses, 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 segment expenses and segment operating income certain corporate-related expenses and certain transactions or adjustments that our 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), certain litigation-related net charges (credits) and European Union (EU) Medical Device Regulation (MDR) implementation costs. Although we exclude these amounts from segment expenses and segment operating income, they are included in reported Income (loss) before income taxes within our consolidated statements of operations and are included in the reconciliation below. The CODM uses segment operating income in the budget and forecasting process and to monitor budget versus actual results, which are used in assessing the performance of the reportable segments and to allocate resources across our reportable segments. Refer to Note N – Revenue for net sales by reportable segment presented in accordance with GAAP.

A reconciliation of sales and operating income for the reportable segments to the applicable line items within our accompanying consolidated statements of operations is as follows (in millions, except percentages). Prior period amounts have been restated at constant currency to conform to the current year presentation.

			Year Ended December 31, 2024
			MedSurg			% of net sales			Cardiovascular			% of net sales			Total
Net sales of reportable segments			$	5,973					$	10,711					$	16,683
Impact of foreign currency fluctuations															64
Total net sales															16,747
Segment expenses:
Cost of products sold			1,649			27.6		%	3,404			31.8		%	5,053
Selling, general and administrative expenses			1,801			30.2		%	3,166			29.6		%	4,967
Research and development expenses			462			7.7		%	975			9.1		%	1,437
Other segment items(1)			14			0.2		%	19			0.2		%	33
Segment operating income(2)			2,046			34.3		%	3,147			29.4		%	5,193
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															(663)
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															(1,070)
Amortization expense															(856)
Operating income (loss)															2,603
Other income (expense), net															(321)
Income (loss) before income taxes															$	2,282

			Year Ended December 31, 2023
			MedSurg			% of net sales			Cardiovascular			% of net sales			Total
Net sales of reportable segments			$	5,378					$	8,714					$	14,091
Impact of foreign currency fluctuations															149
Total net sales															14,240
Segment expenses:
Cost of products sold			1,470			27.3		%	2,805			32.2		%	4,276
Selling, general and administrative expenses			1,626			30.2		%	2,749			31.5		%	4,375
Research and development expenses			427			7.9		%	855			9.8		%	1,282
Other segment items(1)			20			0.4		%	23			0.3		%	43
Segment operating income(2)			1,834			34.1		%	2,281			26.2		%	4,115
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															(377)
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															(567)
Amortization expense															(828)
Operating income (loss)															2,343
Other income (expense), net															(358)
Income (loss) before income taxes															$	1,985

			Year Ended December 31, 2022
			MedSurg			% of net sales			Cardiovascular			% of net sales			Total
Net sales of reportable segments			$	4,855					$	7,679					$	12,535
Other(3)															(60)
Impact of foreign currency fluctuations															208
Total net sales															12,682
Segment expenses:
Cost of products sold			1,401			28.9		%	2,637			34.3		%	4,038
Selling, general and administrative expenses			1,510			31.1		%	2,454			32.0		%	3,965
Research and development expenses			432			8.9		%	782			10.2		%	1,214
Other segment items(1)			23			0.5		%	22			0.3		%	45
Segment operating income(2)			1,489			30.7		%	1,784			23.2		%	3,272
Unallocated amounts:
Corporate expenses, including hedging activities and impact of foreign currency fluctuations on operating income of reportable segments															29
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															(789)
Amortization expense															(803)
Other(3)															(60)
Operating income (loss)															1,649
Other income (expense), net															(508)
Income (loss) before income taxes															$	1,141

(1) Includes royalty expense.

(2) Calculated as Net sales of reportable segments less Segment expenses.

(3) In 2022, amounts reflect sales reserves established for Italian government payback provisions, which are being disputed in the Italian court system. These amounts were not allocated to our reportable segments or considered by our CODM for resource allocation and decision-making purposes.

			Year Ended December 31,
Depreciation expense (in millions)			2024						2023						2022
MedSurg			$	110					$	103					$	88
Cardiovascular			302						263						245
Consolidated depreciation expense			$	412					$	367					$	333

			As of December 31,
Total assets (in millions)			2024						2023
MedSurg			$	3,093					$	2,888
Cardiovascular			7,084						5,988
Total assets of reportable segments			10,177						8,876
Goodwill			17,089						14,387
Other intangible assets, net			6,684						6,003
All other corporate assets			5,446						5,869
			$	39,395					$	35,136

			As of December 31,
Long-lived assets (in millions)			2024						2023
U.S.			$	1,461					$	1,300
Ireland			631						598
Costa Rica			530						373
Other countries			672						587
Property, plant and equipment, net			3,294						2,859
Goodwill			17,089						14,387
Other intangible assets, net			6,684						6,003
Operating lease right-of-use assets in Other long-term assets			449						439
			$	27,516					$	23,688

NOTE N – REVENUE

We generate revenue primarily from the sale of single-use medical devices and present revenue net of sales taxes within our consolidated statements of operations. Our business structure is organized into five operating segments. The following tables disaggregate our revenue from contracts with customers by business unit and geographic region (in millions). Generally, we allocate revenue from contracts with customers to geographic regions based on the location where the sale originated.

			Year Ended December 31,
			2024																		2023																		2022
Businesses			U.S.						Int'l						Total						U.S.						Int'l						Total						U.S.						Int'l						Total
Endoscopy			$	1,651					$	1,036					$	2,687					$	1,511					$	970					$	2,482					1,341						$	880					$	2,221
Urology			1,557						643						2,200						1,369						595						1,964						1,257						516						1,773
Neuromodulation			847						259						1,106						736						240						976						715						202						917
MedSurg			4,054						1,939						5,993						3,617						1,805						5,422						3,312						1,599						4,911
Interventional Cardiology Therapies			824						1,820						2,645						743						1,674						2,417						744						1,485						2,228
Watchman			1,371						145						1,516						1,155						119						1,274						915						103						1,019
Cardiac Rhythm Management			1,403						876						2,279						1,405						813						2,218						1,337						763						2,100
Electrophysiology			1,256						648						1,904						370						430						800						275						310						585
Cardiology			4,855						3,490						8,344						3,673						3,036						6,709						3,271						2,662						5,932
Peripheral Interventions			1,301						1,109						2,410						1,135						975						2,110						1,048						850						1,899
Cardiovascular			6,156						4,599						10,755						4,808						4,011						8,819						4,319						3,512						7,831
Other**(1)**			—						—						—						—						—						—						—						—						(60)
Total Net Sales			$	10,210					$	6,538					$	16,747					$	8,425					$	5,816					$	14,240					$	7,632					$	5,111					$	12,682

(1) In 2022, amounts reflect sales reserves established for Italian government payback provisions, which are being disputed in the Italian court system. These amounts were not allocated to our reportable segments or considered by our CODM for resource allocation and decision-making purposes.

Refer to Note M – Segment Reporting for information on our reportable segments.

			Year Ended December 31,
Geographic Regions			2024						2023						2022
U.S.			$	10,210					$	8,425					$	7,632
Europe, Middle East and Africa			3,228						2,856						2,526
Asia-Pacific			2,686						2,400						2,116
Latin America and Canada			624						560						469
Other1			—						—						(60)
Total Net Sales			$	16,747					$	14,240					$	12,682
Emerging Markets(2)			$	2,680					$	2,310					$	1,968

(1) In 2022, amounts reflect sales reserves established for Italian government payback provisions, which are being disputed in the Italian court system. These amounts were not allocated to our reportable segments or considered by our CODM for resource allocation and decision-making purposes.

(2) Periodically, we assess our list of Emerging Markets countries, and effective January 1, 2023, modified our list to include all countries except the United States, Western and Central Europe, Japan, Australia, New Zealand and Canada.

Deferred Revenue

Contract liabilities are classified within Other current liabilities and Other long-term liabilities within our accompanying consolidated balance sheets. Our deferred revenue balance was $635 million as of December 31, 2024 and $577 million as of December 31, 2023. Our contract liabilities are primarily composed of deferred revenue related to the LATITUDE™ Patient Management System within our Cardiology business, for which revenue is recognized over the average service period based on device and patient longevity. Our contract liabilities also include deferred revenue related to the LUX-Dx™ Insertable Cardiac Monitor system, also within our Cardiology business, for which revenue is recognized over the average service period based on

device longevity and usage. We recognized revenue of $231 million in 2024 that was included in the above contract liability balance as of December 31, 2023. We have elected not to disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less. In addition, we have not identified material unfulfilled performance obligations for which revenue is not currently deferred.

We capitalize sales force commissions related to contracts with customers when the associated revenue is expected to be earned over a period that exceeds one year. Deferred commissions are primarily related to the sale of devices enabled with our LATITUDE™ Patient Management System. We have elected to expense commission costs when incurred for contracts with an expected duration of one year or less. Capitalized commission fees are amortized over the period the associated products or services are transferred. Similarly, we capitalize certain recoverable costs related to the delivery of the LATITUDE™ Remote Monitoring Service. These fulfillment costs are amortized over the average service period.

Refer to Note A – Significant Accounting Policies for additional information on our accounting policies relating to revenue recognition.

NOTE O – CHANGES IN OTHER COMPREHENSIVE INCOME

The following table provides the reclassifications out of Other comprehensive income, net of tax attributable to Boston Scientific common stockholders:

(in millions)			Foreign Currency Translation Adjustments						Net Change in Derivative Financial Instruments												Net Change in Defined Benefit Pensions and Other Items						Total
Balance as of December 31, 2023			$	(96)					$	154											$	(8)					$	49
Other comprehensive income (loss) before reclassifications			246						142												(9)						379
(Income) loss amounts reclassified from accumulated other comprehensive income			(14)						(141)												1						(154)
Total other comprehensive income (loss)			232						1												(8)						225
Balance as of December 31, 2024			$	136					$	155											$	(16)					$	275

(in millions)			Foreign Currency Translation Adjustments						Net Change in Derivative Financial Instruments												Net Change in Defined Benefit Pensions and Other Items						Total
Balance as of December 31, 2022			$	(1)					$	269											$	1					$	269
Other comprehensive income (loss) before reclassifications			(87)						63												(10)						(34)
(Income) loss amounts reclassified from accumulated other comprehensive income			(8)						(178)												1						(185)
Total other comprehensive income (loss)			(95)						(115)												(9)						(219)
Balance as of December 31, 2023			$	(96)					$	154											$	(8)					$	49

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.

The gains and losses on defined benefit and pension items before reclassifications and gains and losses on defined benefit and pension items reclassified from Accumulated other comprehensive income (loss), net of tax were reduced by income tax impacts of approximately $3 million in 2024 and approximately $5 million in 2023.

NOTE P – NEW ACCOUNTING PRONOUNCEMENTS

Periodically, new accounting pronouncements are issued by the FASB or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption on our consolidated financial statements. During 2024, we implemented the following standards, none of which had a material impact on our consolidated financial statements:

ASC Update No. 2022-03

ASC Update No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions clarifies the guidance in Topic 820 related to measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, as well as introduces new disclosure requirements for these types of equity securities. We adopted Update No. 2022-03 on a prospective basis.

ASC Update No. 2023-07

ASC Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures requires disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss in addition to disclosure of amounts for other segment items and a description of its composition. We adopted Update No. 2023-07 on a retrospective basis.

Standards to be Implemented

In December 2023, the FASB issued ASC Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Update No. 2023-09 aims to enhance the transparency and decision usefulness of income tax disclosures. Update No. 2023-09 modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state, and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. Update No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and early adoption is allowed. Update No. 2023-09 should be applied on a prospective basis, however retrospective application is permitted. We expect to adopt Update No. 2023-09 prospectively. As this accounting standard update impacts disclosures only, we do not expect the adoption to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASC Update No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. Update No. 2024-03 aims to improve transparency of expense disclosures to enhance investor understanding of an entity's performance and to assist in comparing an entity's performance over time and with that of other entities. Update No. 2024-03 modifies the disclosures over certain costs and expenses and requires entities to disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion, included in each relevant expense caption, (2) within the same disclosure, certain amounts that are already required to be disclosed under current GAAP, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and (4) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Update No. 2024-03 allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date, or retrospectively to any or all prior periods presented in the financial statements. We are currently assessing the impact of Update No. 2024-03 to our consolidated financial statement disclosures.

No other new accounting pronouncements issued or effective in the period had or are expected to have a material impact on our consolidated financial statements.

NOTE Q – EMPLOYEE RETIREMENT PLANS

Defined Benefit Pension Plans

Domestic Retirement Plans

Following our 2006 acquisition of Guidant Corporation (Guidant), we assumed the Guidant Supplemental Retirement Plan, a frozen, non-qualified defined benefit plan for certain former officers and employees of Guidant. The Guidant Supplemental Retirement Plan was partially funded through a Rabbi Trust that contains segregated company assets within restricted cash used to pay the benefit obligations related to the plan.

We also maintain an Executive Retirement Plan, a defined benefit plan covering executive officers and other key contributors. Participants may retire with benefits once retirement conditions have been satisfied.

Other International Retirement Plans

In addition, we maintain retirement plans covering certain international employees.

We use a December 31 measurement date for these plans and record the net unfunded and underfunded portion as a liability within non-current liabilities, with the current portion within accrued expenses, on the consolidated balance sheets, recognizing changes primarily through OCI. As of December 31, 2024 and 2023, the funded status of our plans was unfunded or underfunded in aggregate. The outstanding obligation is as follows:

			As of December 31, 2024
(in millions)			Accumulated Benefit Obligation (ABO)						Projected Benefit Obligation (PBO)						Fair value of Plan Assets						Unfunded/Underfunded PBO Recognized
Domestic Retirement Plans			$	56					$	60					$	—					$	60
Other International Retirement Plans			150						167						100						67
			$	206					$	227					$	100					$	127

			As of December 31, 2023
(in millions)			Accumulated Benefit Obligation (ABO)						Projected Benefit Obligation (PBO)						Fair value of Plan Assets						Unfunded/Underfunded PBO Recognized
Domestic Retirement Plans			$	54					$	59					$	—					$	59
Other International Retirement Plans			145						159						101						58
			$	199					$	218					$	101					$	117

A reconciliation of the changes in the PBO for our retirement plans is as follows:

			Year Ended December 31,
(in millions)			2024						2023
Beginning obligations			$	218					$	207
Service costs			10						10
Interest costs			7						7
Actuarial (gain) loss			10						(4)
Plan curtailments/settlements			—						(0)
Plan amendments and assumption changes			4						6
Benefits paid			(10)						(10)
Impact of foreign currency fluctuations			(11)						3
Ending obligation			$	227					$	218

The critical assumptions associated with our employee retirement plans for 2024 are as follows:

			Weighted Average Discount Rate						Weighted Average Expected Return												Weighted Average Rate of Compensation Increase**(1)**
Domestic Retirement Plans			5.28%						n/a						2.00%
Other International Retirement Plans			2.50%												2.76%						3.25%

(1) Rates of compensation increase were not weighted by relative fair value. As such, the amount represents the median of the inputs and is not a weighted average.

The critical assumptions associated with our employee retirement plans for 2023 are as follows:

			Weighted Average Discount Rate						Weighted Average Expected Return						Weighted Average Rate of Compensation Increase**(1)**
Domestic Retirement Plans			4.89%						n/a						2.00%
Other International Retirement Plans			2.85%						2.66%						3.00%

(1) Rates of compensation increase were not weighted by relative fair value. As such, the amount represents the median of the inputs and is not a weighted average.

A reconciliation of the changes in the fair value of plan assets for our funded retirement plans is as follows:

			Year Ended December 31,
(in millions)			2024						2023
Beginning fair value			$	101					$	101
Actual return on plan assets			3						(1)
Employer contributions			11						11
Participant contributions			1						1
Plan curtailments/settlements			—						(0)
Actuarial gain (loss)			1						(0)
Benefits paid			(10)						(10)
Impact of foreign currency fluctuations			(8)						0
Ending fair value			$	100					$	101

For our defined benefit plans, we base our discount rate on the rates of return available on high-quality bonds with maturities approximating the expected period over which benefits will be paid. The rate of compensation increase is based on historical and expected rate increases. We base our rate of expected return on plan assets on historical experience, our investment guidelines and expectations for long-term rates of return. Our assets are invested in a variety of securities, primarily equity securities and government bonds. These securities are considered Level 1 and Level 2 investments.

Expected benefit payments are estimated based on the same assumptions used in determining our benefit obligation as of December 31, 2024. Actual benefit payments will depend on future employment and compensation, average years employed and average life spans, in addition to other factors. Changes in any of these factors could significantly impact these estimated future benefit payments. Benefit payments expected to be paid during the next ten years for our Domestic Retirement Plans and our Other International Retirement Plans are as follows:

(in millions)			Post Retirement Benefits
2025			$	20
2026			12
2027			15
2028			14
2029			10
2030 - 2034			76

Defined Contribution Plan

We also sponsor a voluntary 401(k) Retirement Savings Plan for eligible employees. We match 200 percent of employee elective deferrals for the first two percent of employee eligible compensation and 50 percent of employee elective deferrals greater than two percent, but not exceeding six percent, of employee eligible compensation. Total expense for our matching contributions to the plan was $147 million in 2024, $135 million in 2023 and $123 million in 2022.