ResMed (RMD) 10-K risk factor changes: FY2020 vs FY2019

[added: Our inability to compete successfully in our markets may harm our business.] The markets for our [added: products, which encompass Sleep and Respiratory Care] products [added: and SaaS offerings,] are highly competitive and are characterized by frequent product improvements and evolving technology.

[removed: The] [added: For our Sleep and Respiratory Care business, the] development of innovative new products by our competitors or the discovery of alternative treatments or potential cures for the conditions that our products treat could make our products noncompetitive or obsolete.

[removed: Our] [added: Our] business depends on our ability to market effectively to dealers of home healthcare products and sleep [removed: clinics.][added: clinics. We market our products primarily to home healthcare dealers and to sleep clinics that diagnose OSA and other sleep disorders, as well as to non-sleep specialist physician practices that diagnose and treat sleep disorders.]

[removed: Consolidation] [added: Consolidation] in the health care industry could have an adverse effect on our revenues and results of [removed: operations.][added: operations. Many home health care dealers and out-of-hospital health providers are consolidating, which may result in greater concentration of market power.]

[removed: If] [added: If] we are unable to support our continued growth, our business could [removed: suffer.][added: suffer. As we continue to grow, the complexity of our operations increases, placing greater demands on our management.]

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[added: If we fail to effectively integrate and capitalize on our acquisitions, combining them with our other SaaS operations, our SaaS businesses could suffer.] Part of our growth strategy includes acquiring businesses consistent with our commitment to innovation in developing products for the diagnosis and treatment of [removed: SDB] [added: sleep apnea] and respiratory care as well as our SaaS business.

The success of our [removed: acquisitions, including MatrixCare,] [added: acquisitions] will depend, in part, on our ability to successfully integrate the business and operations of the acquired companies.

[removed: We] [added: We] have made certain assumptions relating to our recent acquisitions that may prove to be materially [removed: inaccurate.][added: inaccurate. We have made certain assumptions relating to our recent acquisitions, including MatrixCare, such as:]

[removed: | | · | | projections] [added: projections] of each acquired company’s future revenue; [removed: |]

[removed: | | · | | the] [added: the] amount of goodwill and intangibles that will result from our acquisitions; [removed: |]

[removed: | | · | | acquisition] [added: acquisition] costs, including transaction, contingent consideration and integration costs; and [removed: |]

[removed: | | · | | other] [added: other] financial and strategic rationales and risks of the acquisitions. [removed: |]

[removed: We] [added: We] are subject to various risks relating to international activities that could affect our overall [removed: profitability.][added: profitability. We manufacture substantially all of our products outside the United States and sell a significant portion of our products in non-U.S. markets.]

Sales in combined Europe, Asia and other markets accounted for approximately [removed: 35% and] 38% [added: and 39%] of our net revenues in the years ended June 30, [removed: 2019] [added: 2020] and June 30, [removed: 2018] [added: 2019] respectively.

We expect that sales within these areas will account for approximately [removed: 35%] [added: 35-40%] of our net revenues in the foreseeable future.

[removed: | | · | | fluctuations] [added: fluctuations] in currency exchange rates; [removed: |]

[removed: | | · | | tariffs] [added: tariffs] and other trade barriers; [removed: |]

[removed: | | · | | compliance] [added: compliance] with foreign medical device manufacturing regulations; [removed: |]

[removed: | | · | | difficulty] [added: difficulty] in enforcing agreements and collecting receivables through foreign legal systems; [removed: |]

[removed: | | · | | reduction] [added: reduction] in third-party payor reimbursement for our products; [removed: |]

[removed: | | · | | inability] [added: inability] to obtain import licenses; [removed: |]

[removed: | | · | | changes] [added: changes] in trade policies and in U.S. and foreign tax policies; [removed: |]

[removed: | | · | | possible] [added: possible] changes in export or import restrictions; and [removed: |]

[removed: | | · | | the] [added: the] modification or introduction of other governmental policies with potentially adverse effects. [removed: |]

[removed: Government] [added: Government] and private insurance plans may not adequately reimburse our customers for our products, which could result in reductions in sales or selling prices for our [removed: products.][added: products. Our ability to sell our products depends in large part on the extent to which coverage and adequate reimbursement for our products will be available from government health administration authorities, private health insurers and other organizations.]

In other markets, such as Australia, there is currently limited or no reimbursement for devices that treat [removed: SDB] [added: sleep apnea] conditions.

A development negatively affecting reimbursement stems from the Medicare competitive bidding program mandated by the [removed: MMA.][added: Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).]

Under the program, our customers who provide [removed: home medical equipment] [added: HME] must compete to offer products in designated competitive bidding areas, or CBAs.

CPAP, and respiratory assist devices, and related supplies and accessories, which had been included in prior rounds of competitive [removed: bidding.][added: bidding, remain included in Round 2021.]

[removed: Healthcare] [added: Healthcare] reform may have a material adverse effect on our industry and our results of [removed: operations.][added: operations. In March 2010, the ACA was signed into law in the United States.]

This excise tax [removed: is] [added: was] applicable to our products that are primarily used in hospitals and sleep labs, which includes the ApneaLink, VPAP Tx, certain Respiratory Care and dental sleep products.

These changes included an aggregate reduction in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, [removed: 2013 and will remain in effect through 2027 unless additional Congressional action is taken.][added: 2013.]

[removed: On] [added: In addition, on] January 2, 2013, the American Taxpayer Relief Act of 2012, was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

For example, on December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, [removed: or Texas District Court Judge,] ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the U.S. Tax Act, the remaining provisions of the ACA are invalid as well.

[added: Failure to comply with anti-kickback and fraud regulations could result in substantial penalties and changes in our business operations.] Although in the United States we do not provide healthcare services, submit claims for third-party reimbursement, or receive payments directly from Medicare, Medicaid or other third-party payors for our products, we are subject to healthcare fraud and abuse regulation and enforcement by federal, state and foreign governments, which could significantly impact our business.

[removed: | | · | | the] [added: the] federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid. [removed: A person or entity does not need to have actual knowledge of this statute or specific intent to violate the Anti-Kickback statute itself to have committed a violation. The U.S. government has interpreted this law broadly to apply to the marketing and sales activities of manufacturers and distributors like us. Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, plus up to three times the remuneration involved. Violations of the Federal Anti-Kickback Statute can also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years. In addition, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid; |]

[removed: | | · | | federal] [added: federal] civil and criminal false claims laws and civil monetary penalty laws, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government. [removed: These laws may apply to manufacturers and distributors who provide information on coverage, coding, and reimbursement of their products to persons who do bill third-party payors. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties ranging from $11,463 to $22,927 for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs. |]

[removed: | | · | | the] [added: the] federal Physician Sunshine Act requirements under the ACA, which impose reporting and disclosure requirements on device and drug manufacturers for any “transfer of value” made or distributed by certain manufacturers of drugs, devices, biologics, and medical supplies to physicians (including doctors, dentists, optometrists, podiatrists and chiropractors), [removed: physician assistants, nurse practitioners, other practitioners,] teaching hospitals, and ownership and investment interests held by physicians and their immediate family [removed: members; |][added: members.]

[removed: | | · | | federal] [added: federal] consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm customers; and [removed: |]

For SaaS, the market for business management software is highly competitive, rapidly evolving, subject to changing technology, with low barriers to entry, shifting customer needs and frequent introductions of new products and services.

Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current business management software into their operations and, therefore, may be reluctant or unwilling to change from their current solution or provider to one of our platforms or products.

\-18\-

##### [Table of Contents](#TOC)

Our business, financial condition and results of operations could be harmed by the effects of the COVID-19 pandemic. We are subject to risks related to the global pandemic associated with COVID-19, which may have an adverse impact on certain aspects of our business.

Specifically, diagnostic pathways for sleep apnea treatment, including physician practices, HME suppliers and sleep clinics, have been impacted and, in some instances, been required, or in the future may be required, to temporarily close due to governments’ “shelter-in-place” orders, quarantines or similar orders or restrictions enacted to control the spread of COVID-19.

In some countries, new patients are prescribed sleep apnea treatment through hospitals that are directing their resources to critical care, including COVID-19 treatment.

The impact on these diagnostic and prescription pathways has resulted and may continue to result in a decrease in demand for our products designed to treat sleep apnea.

While we have experienced increased demand for our respiratory care products due to the nature of COVID-19, we cannot guarantee that demand will continue or that we will be able to identify and obtain adequate raw materials or otherwise maintain operations, supply chains and distribution systems to satisfy demand for our products in a cost-effective manner or at all.

Additionally, if the increase in demand currently being experienced for our respiratory care products declines more abruptly than expected this could adversely impact our inventory levels and may result in excess inventory, which we may be unable to sell.

Furthermore, due to governments’ varying restrictions on international and domestic travel, access to labor for our manufacturing facilities could be adversely impacted.

Our SaaS business may also be affected by COVID-19 and measures taken to control the spread of COVID-19.

Some of our existing and potential SaaS customers are HME distributors and, therefore, have been impacted, or may be impacted, by the same temporary business closures noted above.

We also have existing and potential SaaS customers that operate care facilities and are either receiving and treating patients infected with COVID-19 or are implementing significant measures to safeguard their facilities against a potential COVID-19 outbreak.

Given these challenging business conditions and the uncertain economic environment, we expect businesses will be deterred from adopting new or changing SaaS platforms, which may adversely impact our ability to engage new customers for our SaaS businesses, or expand the services used by existing customers.

Additionally, the types of restrictions enacted to control the spread of COVID-19 have resulted in most of our employees working from home, and have resulted or may result in the employees of our key suppliers and customers working from home or, as noted above, not working at all.

Neither we nor our suppliers have significant experience operating with the majority of our work forces working from home and this may disrupt our standard operations or significantly hamper our products from moving through our supply chain.

If we are unable to move products efficiently through the supply chain we may be unable to satisfy customer demand, which could negatively impact our results of operations.

Health regulatory agencies globally may also experience disruptions in their operations as a result of the COVID-19 pandemic.

Any delay or de-prioritization of our product development activities or delay in regulatory review resulting from such disruptions could materially affect our results of operations.

In addition to existing travel restrictions, countries may continue to close borders, impose prolonged quarantines, and further restrict travel, which may also disrupt our ability to move our product by air and sea.

The continued spread of COVID-19 has also led to extreme disruption and volatility in the global capital markets, which increases the cost of, and adversely impacts access to, capital and increases economic uncertainty.

While we expect COVID-19 to negatively impact certain aspects of our business, given the rapid and evolving nature of the virus and the uncertainty about its impact on society and the global economy, we cannot predict the extent to which it will affect our global operations, particularly if these impacts persist or worsen over an extended period of time.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

the impact of public health epidemics/pandemics on the global economy, such as COVID-19 that has spread globally;

Our SaaS business depends substantially on customers entering into, renewing, upgrading and expanding their agreements for cloud services, term licenses, and maintenance and support agreements with us.

Any decline in our customer renewals, upgrades or expansions could adversely affect our future operating results. We typically enter into term-based agreements for our licensed on-premises offerings, cloud services, and maintenance and support services, which customers have discretion to renew or terminate at the end of the initial term.

In order for us to improve our operating results, it is important that new customers enter into renewable agreements, and our existing customers renew, upgrade and expand their term-based agreements when the initial contract term expires.

Our customers have no obligation to renew, upgrade or expand their agreements with us after the terms have expired.

Our customers’ renewal, upgrade and expansion rates may decline or fluctuate as a result of a number of factors, including their satisfaction or dissatisfaction with our offerings, our pricing, the effects of general economic conditions, competitive offerings or alterations or reductions in our customers’ spending levels.

If our customers do not renew, upgrade or expand their agreements with us or renew on terms less favorable to us, our revenues may decline.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

Pursuant to the CARES Act, these higher phase-in rates were extended through December 31, 2020, or through the end of the COVID-19 public health emergency, and were implemented in areas other than rural areas and noncontiguous areas for the same period.

However, due to the COVID-19 pandemic, CMS removed NIVs from Round 2021 of the DMEPOS Competitive Bidding Program.

Through a series of legislative amendments, the tax was suspended beginning in 2016, and permanently repealed effective January 1, 2020.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

The CARES Act, which was signed into law in March 2020, suspended the payment reductions from May 1, 2020 through December 31, 2020, and extended the sequester by one additional year, through 2030.

Our inability to compete successfully in our markets may harm our business.

We market our products primarily to home healthcare dealers and to sleep clinics that diagnose OSA and other sleep disorders, as well as to non-sleep specialist physician practices that diagnose and treat sleep disorders.

Many home health care dealers are consolidating, which may result in greater concentration of market power.

As we continue to grow, the complexity of our operations increases, placing greater demands on our management.

If we fail to integrate our acquisitions with our operations, our business could suffer.

We have made certain assumptions relating to our recent acquisitions, including MatrixCare, such as:

| --- | --- | --- | --- |

We manufacture substantially all of our products outside the United States and sell a significant portion of our products in non-U.S. markets.

Our ability to sell our products depends in large part on the extent to which coverage and adequate reimbursement for our products will be available from government health administration authorities, private health insurers and other organizations.

In March 2010, the ACA was signed into law in the United States.

Through a series of legislative amendments, the tax was suspended for 2016 through 2019, but is scheduled to return beginning in 2020, absent further Congressional action.

While the Texas District Court Judge, as well as the Trump Administration and CMS, have stated that the ruling will have no immediate effect, it is unclear how this decision, subsequent appeals, and other efforts to repeal and replace the ACA will impact the ACA and our business.

Failure to comply with anti-kickback and fraud regulations could result in substantial penalties and changes in our business operations.

| | · | | HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. A person or entity does not need to have actual knowledge of these statutes or specific intent to violate them to have committed a violation. Further, failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties up to $57,051 per violation, not to exceed $1.7 million per calendar year for non-compliance of an identical provision and, in certain circumstances, criminal penalties with fines up to $1.5 million and/or imprisonment; |

For example, from 2016 through 2019, the Office of Inspector General, or OIG, of the Department of Health and Human Services has sent us subpoenas, informal requests and a civil investigative demand, requesting documents and other materials that relate to our business practices, marketing programs, promotional activities, and leasing programs with home medical equipment providers, medical providers, sleep labs, and physicians.

We have tentatively agreed with the government to civilly resolve the 2016 to 2019 government investigations described above for a payment of $39.5 million and we expect to also incur additional fees and administrative costs that typically accompany such a resolution.

As a result, we have reserved $41.2 million for the expenses we expect to incur in connection with this settlement.

A resolution may also include ongoing obligations, such as any imposed under a corporate integrity agreement.

However, we have not yet completed negotiations, and there can be no assurance as to whether or when the parties will finalize any such negotiated resolution or what the final terms of such a resolution will be.

The privacy and security of personally identifiable information stored, maintained, received or transmitted electronically is a major issue in the United States and abroad.

In addition, as of May 25, 2018, the General Data Protection Regulation, or GDPR, has replaced the Data Protection Directive with respect to the processing of personal data in the Economic Area, or EEA.

The GDPR also imposes strict rules on the transfer of personal data out of the EEA, including to the United States, and could be impacted by changes in law as a result of a future review of these transfer mechanisms by European regulators under the GDPR, as well as current challenges to these mechanisms in the European courts.

To comply with the new data protection rules imposed by GDPR we may be required to put in place additional mechanisms ensuring compliance.

This may be onerous and adversely affect our business, financial condition, results of operations and prospects.

Compliance with such laws and regulations causes our costs to increase and harms our business and financial condition.

Additionally, limitations on our ability to use and share personal data could adversely affect our business.

In addition, Brexit could also lead to further legislative and regulatory changes by the planned exit date of October 2019.

It remains unclear how the United Kingdom data protection laws or regulations will develop in the medium to longer term and how data transfer to the United Kingdom from the European Union will be regulated, especially if the United Kingdom leaves the European Union without a deal.

However, the United Kingdom has transposed the GDPR into domestic law with the Data Protection Act 2018 which will remain in force, even if and when the United Kingdom leaves the EU.

We are subject to extensive U.S. federal, state, local and international regulations regarding our business activities.

We receive, collect, process, use and store a large amount of information from clients and our own employees, including personally identifiable, protected health and other sensitive and confidential information.

However, there is no guarantee that these measures can provide absolute security.

Furthermore, these rules are constantly changing; for example, as stated above, the GDPR has been adopted, the EU-U.S. Safe Harbor Framework has been declared invalid and the EU-U.S. Privacy Shield Framework has recently been formally adopted by the European Commission while the standard contractual clauses are being challenged in the European courts.

Unless a product is exempt, before we can market or sell a new medical device in the United States, we must obtain FDA clearance or approval, which can be a lengthy and time-consuming process.

In addition, the FDA recently evaluated its guidance describing when it believes a manufacturer is obligated to submit a new 510(k) for modifications or changes to a previously cleared device.

Although the FDA had historically proposed a number of changes to a long-standing guidance from 1997 on this topic, the FDA concluded that manufacturers should continue adhering to the principles in the 1997 guidance.

In October 2017, the FDA issued final guidance superseding the 1997 guidance, which FDA believes preserves the basic format and content of the 1997 guidance with updates to enhance predictability, consistency, and transparency of the decision-making process.

The FDA regulates the approval, manufacturing, and sales and marketing of many of our products in the United States.

The ability of the FDA to review and clear or approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Our business activities include contacts with consumers in different parts of the world.

[removed: Overview][added: Overview]

We are a global leader in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including [removed: SDB,] [added: sleep apnea,] COPD, neuromuscular disease and other chronic diseases.

[removed: SDB] [added: Sleep apnea] includes obstructive sleep apnea and other respiratory disorders that occur during sleep.

Our cloud-based [removed: software] digital health applications, along with our [removed: devices] [added: devices,] are designed to provide connected care to improve patient outcomes and efficiencies for our customers.

Our growth has been fueled by geographic expansion, our research and product development efforts, acquisitions and an increasing awareness of [removed: SDB] [added: sleep apnea] and [added: other] respiratory conditions like chronic obstructive pulmonary disease as significant health concerns.

During fiscal year [removed: 2019,] [added: 2020,] we invested [removed: $180.7] [added: $201.9] million on research and development activities, which represents [removed: 6.9%] [added: 6.8%] of net revenues with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs.

[added: (3) Revenue Recognition.] We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry (“Sleep and Respiratory Care”) and the supply of business management software as a service to out-of-hospital health providers (“SaaS”).

Net revenue in fiscal year [removed: 2019] [added: 2020] increased to [removed: $2,606.6] [added: $2,957.0] million, an increase of [removed: 11%] [added: 13%] compared to fiscal year [removed: 2018.][added: 2019.]

Gross profit increased for the year ended June 30, [removed: 2019] [added: 2020] to [removed: $1,536.6] [added: $1,717.8] million, from [removed: $1,362.2] [added: $1,494.1] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase [removed: of $174.4] [added: $223.7] million or [removed: 13%.][added: 15%.]

Our net income for the year ended June 30, [removed: 2019] [added: 2020] was [removed: $404.6] [added: $621.7] million or [removed: $2.80] [added: $4.27] per diluted share compared to net income of [removed: $315.6] [added: $404.6] million or [removed: $2.19] [added: $2.80] per diluted share for the year ended June 30, [removed: 2018.][added: 2019.]

Total operating cash flow for fiscal year [removed: 2019] [added: 2020] was [removed: $459.1] [added: $802.3] million and at June 30, [removed: 2019,] [added: 2020,] our cash and cash equivalents totaled [removed: $147.1] [added: $463.2] million.

At June 30, [removed: 2019,] [added: 2020,] our total assets were [removed: $4.1] [added: $4.6] billion and our stockholders’ equity was [removed: $2.1] [added: $2.5] billion.

During [removed: fiscal] [added: the] year [added: ended June 30,] 2019, we repurchased 200,000 shares at a cost of $22.8 million under our share repurchase program.

We paid a quarterly dividend of [removed: $0.37] [added: $0.39] per share during fiscal [removed: 2019] [added: 2020] with a total amount of [removed: $211.7] [added: $225.1] million paid to stockholders.

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations][added: Operations]

For discussion related to the results of operations and changes in financial condition for the fiscal year ended June 30, [removed: 2018] [added: 2019] compared to fiscal year June 30, [removed: 2017,] [added: 2018,] please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the Year Ended June 30, [removed: 2018,] [added: 2019,] which was filed with the United States Securities and Exchange Commission on August [removed: 17, 2018.][added: 18, 2019.]

[removed: Fiscal] [added: Fiscal] Year Ended June 30, [removed: 2019] [added: 2020] Compared to Fiscal Year Ended June 30, [removed: 2018][added: 2019]

[added: Net Revenues.] Net revenue for the year ended June 30, [removed: 2019] [added: 2020] increased to [removed: $2,606.6] [added: $2,957.0] million from [removed: $2,340.2] [added: $2,606.6] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: $266.4] [added: $350.4] million or [removed: 11% (a] 13% [added: (a 15%] increase on a constant currency basis).

The following table summarizes our net revenue disaggregated by segment, product and region for the year ended June 30, [removed: 2019] [added: 2020] compared to the year ended June 30, [removed: 2018] [added: 2019] (in [removed: millions):][added: thousands):]

| | | [removed: Year] [added: Year] Ended June [removed: 30,] [added: 30,] | | | | | | | | | | |

| | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | | [removed: % Change] [added: % Change] | | | [removed: Constant Currency*] [added: Constant Currency*] | |

| [removed: U.S.,] [added: U.S.,] Canada and Latin [removed: America] [added: America] | | | | | | | | | | | | |

| Total Sleep and Respiratory Care | | $ | [removed: 1,420.5] [added: 1,572,327] | | $ | [removed: 1,290.1] [added: 1,420,496] | | [removed: 10] [added: 11] | | | | |

| [removed: Combined] [added: Combined] Europe, Asia and other [removed: markets] [added: markets] | | | | | | | | | | | | |

| Total Sleep and Respiratory Care | | $ | [removed: 910.3] [added: 1,030,054] | | $ | [removed: 893.1] [added: 910,287] | | [removed: 2] [added: 13] | | | [removed: 6] [added: 16] | |

| [removed: Global revenue] [added: Global revenue] | | | | | | | | | | | | |

| Total Sleep and Respiratory Care | | $ | [removed: 2,330.8] [added: 2,602,381] | | $ | [removed: 2,183.2] [added: 2,330,783] | | [removed: 7] [added: 12] | | | [removed: 9] [added: 13] | |

Net revenue from our Sleep and Respiratory Care business for the year ended June 30, [removed: 2019] [added: 2020] increased to [removed: $2,330.8] [added: $2,602.4] million from [removed: $2,183.2] [added: $2,330.8] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: $147.6] [added: $271.6] million or [removed: 7%.][added: 12%.]

Movements in international currencies against the U.S. dollar negatively impacted net revenues by approximately [removed: $40.9] [added: $29.9] million for the year ended June 30, [removed: 2019.][added: 2020.]

Excluding the impact of currency movements, total net revenue from our Sleep and Respiratory Care business for the year ended June 30, [removed: 2019] [added: 2020] increased [removed: 9%] [added: by 13%] compared to the year ended June 30, [removed: 2018.][added: 2019.]

The increase in net revenue was [added: primarily] attributable to an increase in unit sales of our [removed: devices, masks] [added: devices] and [removed: other, partially offset by] [added: masks, including as] a [removed: decline in average selling prices.][added: result of increased demand for our ventilators due to COVID-19.]

Net revenue from our Sleep and Respiratory Care business in the United States, Canada and Latin America for the year ended June 30, [removed: 2019] [added: 2020] increased to [removed: $1,420.5] [added: $1,572.3] million from [removed: $1,290.1] [added: $1,420.5] million for the year ended June 30, [removed: 2017,] [added: 2019,] an increase of [removed: $130.4] [added: $151.8] million or [removed: 10%.][added: 11%.]

Net revenue from our Sleep and Respiratory Care business in markets in combined Europe, Asia and other markets increased for the year ended June 30, [removed: 2019] [added: 2020] to [removed: $910.3] [added: $1,030.1] million from [removed: $893.1] [added: $910.3] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: $17.2] [added: $119.8] million or [removed: 2%] [added: 13%] (an increase of [removed: 6%] [added: 16%] on a constant currency basis).

The constant currency increase in sales in combined Europe, Asia and other markets predominantly reflects an increase in unit sales of our [removed: masks and other] [added: devices] and [removed: devices, partially offset by] [added: masks, including as] a [removed: decline in average selling prices.][added: result of increased demand for our ventilators due to COVID-19.]

Net revenue from devices for the year ended June 30, [removed: 2019] [added: 2020] increased to [removed: $1,361.6] [added: $1,507.8] million from [removed: $1,303.6] [added: $1,361.6] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: $58.0] [added: $146.2] million or [removed: 4%,] [added: 11%,] including an increase of [removed: 8%] [added: 7%] in the United States, Canada and Latin America and an increase of [removed: 1%] [added: 16%] in combined Europe, Asia and other markets (a [removed: 5%] [added: 19%] increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the year ended June 30, [removed: 2019] [added: 2020] increased by [removed: 6%,][added: 12%.]

Net revenue from masks and other for the year ended June 30, [removed: 2019] [added: 2020] increased to [removed: $969.2] [added: $1,094.6] million from [removed: $879.6] [added: $969.2] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: 10%,] [added: 13%,] including an increase of [removed: 13%] [added: 15%] in the United States, Canada and Latin America and an increase of [removed: 5%] [added: 8%] in combined Europe, Asia and other markets [removed: (a 9%] [added: (an 11%] increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by [removed: 12%,] [added: 14%,] compared to the year ended June 30, [removed: 2018.][added: 2019.]

Net revenue from our SaaS business for the year ended June 30, [removed: 2019] [added: 2020] was [removed: $275.8] [added: $354.6] million, compared to [removed: $157.0] [added: $275.8] million for the year ended June 30, [removed: 2018,] [added: 2019,] an increase of [removed: $118.8] [added: $78.8] million or [removed: 76%.][added: 29%.]

During fiscal year 2020, we released new products including AirFit N30, a nasal cradle mask with a front-facing tube, and AirFit F30i, a top-of-head connected full face mask as well as expanded our AirView offering to include certain respiratory care devices.

##### [Table of Contents](#TOC)

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus (“COVID-19”) as a pandemic.

Our primary goal during the COVID-19 pandemic is the preservation of life.

We have prioritized protecting the health and safety of our employees and continuing to use our employees’ talents and our resources to help society meet and overcome the challenges the pandemic poses.

We have observed increased demand for our ventilator devices and masks, which can be used to treat COVID-19 patients.

Due to governments’ varying restrictions on international and domestic travel, access to labor for our manufacturing facilities was impacted as was the availability of raw materials and components, which constrained our manufacturing capacity and restricted our ability to initially meet the substantial demand for ventilators.

Our primary focus is maximizing the availability of our ventilators and other respiratory support devices for the patients that need them the most in the countries facing the greatest challenges.

The global increase in our sales for these respiratory care products during fiscal year 2020 generally followed infection patterns around the world.

We believe the global demand for these devices has largely been met, however, this may change depending on the ability for regions to contain and control infection rates, which remains highly uncertain.

Additionally, as more becomes known about the virus and as governments pursue testing and vaccines, we may see an overall reduction in demand, and then face a corresponding risk of oversupply by us and by our competitors.

While further outbreaks in the future are highly uncertain, we expect lower demand for ventilator products for the fiscal year ending June 30, 2021.

As anticipated, we observed lower demand for our sleep devices and masks during the three months ended June 30, 2020, and we continue to expect COVID-19 will lead to a temporary decrease in demand for these products from new patients for some or all of our fiscal year 2021.

Specifically, diagnostic pathways for sleep apnea treatment, including HME suppliers and sleep clinics, have been impacted and, in some instances, been required, or in the future may be required, to temporarily close due to governments’ “shelter-in-place” orders, quarantines or similar orders or restrictions enacted to control the spread of COVID-19.

In some countries, new patients are prescribed sleep apnea treatment through hospitals that are directing their resources to critical care, including COVID-19 treatment.

The impact on these diagnostic and prescription pathways has likely resulted in a decrease in demand from new patients for our products designed to treat sleep apnea.

Given the ongoing uncertainty regarding the duration and extent of the COVID-19 pandemic and measures taken to control the spread of COVID-19, we are uncertain as to the duration and extent of decreased demand for our sleep devices.

However, due to the nature of the installed base of existing patients using our devices, we expect the demand for re-supply of our masks to be less impacted compared to devices.

Our SaaS business may also be affected by COVID-19 and measures taken to control the spread of COVID-19.

Some of our existing and potential SaaS customers are HME distributors and, therefore, have been impacted, or may be impacted, by the same temporary business closures noted above.

We also have existing and potential SaaS customers that operate care facilities and are either receiving and treating patients infected with COVID-19 or are implementing significant measures to safeguard their facilities against a potential COVID-19 outbreak.

Given these challenging business conditions and the uncertain economic environment, we expect businesses will be deterred from adopting new or changing SaaS platforms, which may adversely impact our ability to engage new customers for our SaaS businesses, or expand the services used by existing customers.

Our ability to continue to operate without any significant negative impacts will in part depend on our ability to protect our employees.

We have endeavored and continue to follow recommended actions of government and health authorities to protect our employees worldwide, but since COVID-19 was declared a pandemic in March 2020, we were able to broadly maintain our operations, and we are beginning the slow and careful process of progressively returning to work in our offices around the world.

The pandemic has not negatively impacted our liquidity position.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

| Devices | | $ | 792,766 | | $ | 743,066 | | 7 | % | | | |

| Masks and other | | | 779,561 | | | 677,430 | | 15 | | | | |

| Software as a Service | | | 354,632 | | | 275,789 | | 29 | | | | |

| Total | | $ | 1,926,959 | | $ | 1,696,285 | | 14 | | | | |

| Devices | | $ | 715,056 | | $ | 618,525 | | 16 | % | | 19 | % |

| Masks and other | | | 314,998 | | | 291,762 | | 8 | | | 11 | |

| Devices | | $ | 1,507,822 | | $ | 1,361,591 | | 11 | % | | 12 | % |

| Masks and other | | | 1,094,559 | | | 969,192 | | 13 | | | 14 | |

| Software as a Service | | | 354,632 | | | 275,789 | | 29 | | | 29 | |

| Total | | $ | 2,957,013 | | $ | 2,606,572 | | 13 | | | 15 | |

The increase was primarily due to an increase in unit sales of our devices and masks, including as a result of increased demand for our ventilators due to COVID-19.

During fiscal year 2019, we released new products including AirFit F30, a full face mask with minimal-contact cushion, and AirFit N30i and P30i, a top-of-head connected nasal and pillow mask, respectively.

\-37\-

Net Revenues.

| Devices | | $ | 743.1 | | $ | 689.6 | | 8 | % | | | |

| Masks and other | | | 677.4 | | | 600.5 | | 13 | | | | |

| Software as a Service | | | 275.8 | | | 157.0 | | 76 | | | | |

| Total | | $ | 1,696.3 | | $ | 1,447.1 | | 17 | | | | |

| Devices | | $ | 618.5 | | $ | 614.0 | | 1 | % | | 5 | % |

| Masks and other | | | 291.8 | | | 279.1 | | 5 | | | 9 | |

| Devices | | $ | 1,361.6 | | $ | 1,303.6 | | 4 | % | | 6 | % |

| Masks and other | | | 969.2 | | | 879.6 | | 10 | | | 12 | |

| Software as a Service | | | 275.8 | | | 157.0 | | 76 | | | 76 | |

| Total | | $ | 2,606.6 | | $ | 2,340.2 | | 11 | | | 13 | |

The increase is primarily due to an increase in unit sales of our devices, masks and other, partially offset by a decline in average selling prices.

The increase was predominantly due to our acquisitions of MatrixCare and HEALTHCAREfirst, which were acquired on November 13, 2018 and July 6, 2018, respectively, and MatrixCare contributed $79.2 million in net revenue for the year ended June 30, 2019.

Gross Profit.

The increase in gross margin was due primarily to manufacturing and procurement efficiencies, favorable impact from our MatrixCare acquisition, and favorable product mix, partially offset by declines in average selling prices.

Selling, General and Administrative Expenses.

Excluding the incremental selling, general and administrative expenses attributed to our recent acquisitions, selling, general and administrative expenses for the year ended June 30, 2019 increased by 4% in constant currency terms.

Research and Development Expenses.

The constant currency increase in research and development expenses was primarily due to additional expenses associated with the consolidation of recent acquisitions.

Excluding the incremental research and development expenses attributed to our recent acquisitions, research and development expenses for the year ended June 30, 2019 increased by 4% in constant currency terms.

Amortization of Acquired Intangible Assets.

The increase in amortization expense was attributable to our recent acquisitions.

Restructuring expenses.

During the year ended June 30, 2018, we incurred restructuring expenses of $18.4 million associated with a global strategic workforce planning review, which resulted in a reduction in headcount across most of our functions and locations and closure of our Paris site.

We recorded the full amount of $18.4 million during the year ended June 30, 2018, within our operating expenses, which was separately disclosed as restructuring expenses and had $1.5 million remaining in our employee related costs accrual at year end.

The restructuring expenses consisted primarily of severance payments to employees and the remaining expense relating to legal and consulting services associated with the completion of the employee severances and contract exit costs associated with the Paris site.

Litigation Settlement Expenses.

The tentative agreement includes payment by us of $39.5 million, and we expect to also incur additional fees and administrative costs that typically accompany such a resolution.

However, we have not yet completed negotiations, and there can be no assurance as to whether or when the parties will finalize any such negotiated resolution or what the final terms of such a resolution will be.

Total Other Income (Loss), Net.

The change was due primarily to an increase in interest expense to $36.2 million and a decrease in interest income to $2.3 million for the year ended June 30, 2019 compared to interest expense of $28.4 million and interest income of $16.4 million for the year ended June 30, 2018.

Income Taxes.

On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law.

Effective December 31, 2018, the accounting relating to the impact of the U.S. Tax Act was no longer considered provisional.

However, further adjustments could be required as a result of future legislation, amended tax returns, or tax examinations of the years impacted by the calculation.

We recorded additional tax expense associated with changes in the U.S. Tax Act of $6.7 million and $138.0 million during the years ended June 30, 2019 and June 30, 2018, respectively.

Net Income and Earnings per Share.

This was lower than the cash generated from operations for the year ended June 30, 2018 of $505.0 million, which was primarily due to the increase in inventories and the increase in tax payments, which increased to $242.9 million during the year ended June 30, 2019 from $170.7 million during the year ended June 30, 2018.

[removed: Foreign Currency] [added: Foreign Currency] Market [removed: Risk][added: Risk]

The table below provides information (in U.S. dollars) on our significant foreign-currency-denominated financial assets by legal entity functional currency as of June 30, [removed: 2019] [added: 2020] (in thousands):

| | | [removed: U.S.] [added: U.S.] | | | | [removed: Canadian] [added: Great Britain] | | [removed: Chinese] [added: Canadian] | [added: | Chinese |]

| | | [removed: Dollar] [added: Dollar] | | [removed: Euro] [added: Euro] | | [removed: Dollar] [added: Pound] | | [removed: Yuan] [added: Dollar] | [added: | Yuan |]

| | | [removed: (USD)] [added: (USD)] | | [removed: (EUR)] [added: (EUR)] | | [removed: (CAD)] [added: (GBP)] | | [removed: (CNY)] [added: (CAD)] | [added: | (CNY) |]

| AUD Functional: | | | | | | | | | [added: | |]

| Foreign Currency Hedges | | [removed: (75,000)] [added: (295,000)] | | [removed: (28,425)] [added: (73,025)] | | \- | | [removed: (23,304)] [added: \-] | [added: | \- |]

| USD Functional: | | | | | | | | | [added: | |]

| Foreign Currency Hedges | | \- | | \- | | [removed: (15,276)] [added: \-] | | [added: (14,687) | |] \- |

| Net Total | | \- | | \- | | [removed: (2,444)] [added: (134)] | | [added: (821) | |] \- |

| SGD Functional: | | | | | | | | | [added: | |]

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Quantitative] [added: Quantitative] and Qualitative Disclosures About Market and Business [removed: Risks][added: Risks]

The table summarizes information on instruments and transactions that are sensitive to foreign currency exchange rates, including foreign currency call options, collars and forward contracts held at June 30, [removed: 2019.][added: 2020.]

| | | | | | | | | [removed: Fair] [added: Fair] Value Assets / [removed: (Liabilities)] [added: (Liabilities)] | | |

| [removed: Foreign] [added: Foreign] Exchange [removed: Contracts] [added: Contracts] | | [removed: Year 1] [added: Year 1] | | [removed: Year 2] [added: Year 2] | | [removed: Total] [added: Total] | | [removed: June 30, 2019] [added: June 30, 2020] | | [removed: June 30, 2018] [added: June 30, 2019] |

| [removed: AUD/USD] [added: AUD/USD] | | | | | | | | | | |

| Contract amount | | [removed: 75,000] [added: \-] | | \- | | [removed: 75,000] [added: \-] | | [removed: 202] [added: \-] | | [removed: (140)] [added: 202] |

| Ave. contractual exchange rate | | [removed: AUD 1 = USD 0.7005] | | | | [removed: AUD 1 = USD 0.7005] | | | | |

| [removed: AUD/Euro] [added: AUD/Euro] | | | | | | | | | | |

| Ave. contractual exchange rate | | AUD 1 = Euro [removed: 0.6376] [added: 0.6293] | | AUD 1 = Euro [removed: 0.6330] [added: 0.58] | | AUD 1 = Euro [removed: 0.6365] [added: 0.6211] | | | | |

| [removed: SGD/Euro] [added: SGD/Euro] | | | | | | | | | | |

| Ave. contractual exchange rate | | SGD 1 = Euro [removed: 0.6498] [added: 0.6345] | | [added: SGD 1 = Euro 0.6120] | | SGD 1 = Euro [removed: 0.6498] [added: 0.6331] | | | | |

| [removed: SGD/USD] [added: SGD/USD] | | | | | | | | | | |

| Contract amount | | [removed: 173,000] [added: 295,000] | | \- | | [removed: 173,000] [added: 295,000] | | [removed: 71] [added: (183)] | | [removed: (309)] [added: 71] |

| Ave. contractual exchange rate | | SGD 1 = USD [removed: 0.7390] [added: 0.7176] | | | | SGD 1 = USD [removed: 0.7390] [added: 0.7176] | | | | |

| [removed: AUD/CNY] [added: AUD/CNY] | | | | | | | | | | |

| Contract amount | | [removed: 23,304] [added: 14,687] | | \- | | [removed: 23,304] [added: 14,687] | | [removed: (15)] [added: (83)] | | [removed: (17)] [added: (66)] |

| Ave. contractual exchange rate | | AUD 1 = CNY [removed: 4.8950] [added: 4.9450] | | | | AUD 1 = CNY [removed: 4.8950] [added: 4.9450] | | | | |

| [removed: USD/CAD] [added: USD/CAD] | | | | | | | | | | |

| Contract amount | | [removed: 15,276] [added: 22,647] | | \- | | [removed: 15,276] [added: 22,647] | | [removed: (66)] [added: (161)] | | [removed: (8)] [added: (15)] |

| Ave. contractual exchange rate | | USD 1 = CAD [removed: 1.3148] [added: 1.3695] | | | | USD 1 = CAD [removed: 1.3148] [added: 1.3695] | | | | |

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

At June 30, [removed: 2019,] [added: 2020,] we held cash and cash equivalents of [removed: $147.1] [added: $463.2] million principally comprising of bank term deposits and at-call accounts and are invested at both short-term fixed interest rates and variable interest rates.

At June 30, [removed: 2019,] [added: 2020,] there was [removed: $1,270.9] [added: $680.0] million outstanding under the revolving credit and term loan facilities, which were subject to variable interest rates.

A hypothetical 10% change in interest rates during the year ended June 30, [removed: 2019,] [added: 2020,] would not have had a material impact on pretax income.

| Assets | | 412,883 | | 139,175 | | \- | | \- | | 18,949 |

| Liability | | (414,802) | | (120,745) | | (309) | | \- | | (564) |

| Foreign Currency Hedges | | \- | | (16,852) | | \- | | \- | | (22,647) |

| Net Total | | (1,919) | | 1,578 | | (309) | | \- | | (4,262) |

| Assets | | \- | | \- | | \- | | 19,472 | | \- |

| Liability | | \- | | \- | | (134) | | (5,606) | | \- |

| Assets | | 539,940 | | 145,999 | | \- | | \- | | 12 |

| Liability | | (238,584) | | (67,624) | | \- | | \- | | \- |

| Net Total | | 6,356 | | 5,350 | | \- | | \- | | 12 |

\-48\-

##### [Table of Contents](#TOC)

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | |

| Contract amount | | 61,791 | | 11,235 | | 73,026 | | 886 | | (124) |

| Contract amount | | 84,260 | | 5,617 | | 89,877 | | 126 | | 40 |

\-49\-

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Assets | | 357,708 | | 141,544 | | \- | | 30,930 |

| Liability | | (249,136) | | (109,400) | | \- | | (3,789) |

| Net Total | | 33,572 | | 3,719 | | \- | | 3,837 |

| Assets | | \- | | \- | | 17,941 | | \- |

| Liability | | \- | | \- | | (5,109) | | \- |

| Assets | | 364,750 | | 172,093 | | \- | | 13 |

| Liability | | (211,493) | | (56,513) | | \- | | (1) |

| Foreign Currency Hedges | | (173,000) | | (113,699) | | \- | | \- |

| Net Total | | (19,743) | | 1,881 | | \- | | 12 |

\-46\-

| Contract amount | | 73,904 | | 22,740 | | 96,644 | | (124) | | (1,286) |

| Contract amount | | 113,699 | | \- | | 113,699 | | 40 | | (939) |

\-47\-

[removed: General][added: General]

[removed: Our] [added: By enabling better care, our] products [removed: and solutions are designed to] improve [removed: patient] quality of life, reduce the impact of chronic [removed: disease] [added: disease,] and lower [removed: healthcare] costs [removed: as global healthcare systems continue to drive a shift in care from hospitals to the home] [added: for consumers] and [removed: lower cost settings.][added: healthcare systems.]

Following our formation in 1989, we commercialized a treatment for [added: obstructive sleep apnea, or] OSA.

Since the development of CPAP, we have expanded our business by developing or acquiring a number of innovative products and solutions for a [removed: broader] [added: broad] range of respiratory disorders including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, portable oxygen concentrators, or POCs, and cloud-based software informatics solutions to manage patient outcomes and customer and provider business processes.

Our growth has been fueled by geographic expansion, our research and product development efforts, acquisitions and an increasing awareness of [removed: SDB] [added: sleep apnea] and respiratory conditions like COPD as significant health concerns.

[removed: These tools] [added: We have a suite of products that] are designed to allow fewer [removed: people] [added: professionals] to manage more [removed: patients,] [added: patients] and empower patients to track their own health outcomes.

We employ approximately [removed: 7,200] [added: 7,800] people and sell our products in approximately [removed: 120] [added: 140] countries through a combination of wholly owned subsidiaries and independent distributors.

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Corporate History][added: Corporate History]

Since formation we have acquired a number of businesses, including distributors, suppliers, developers of medical equipment and related technologies and software [removed: solutions] [added: solution] providers.

[removed: Segment Information][added: Segment Information]

[removed: However, following recent acquisitions, we have quantitatively and qualitatively reassessed our segment reporting and determined the SaaS segment is material to the group, and now have] [added: We operate in] two [removed: operating] segments, which are the Sleep and Respiratory Care segment and the [removed: SaaS] [added: software as a service, or SaaS,] segment.

[removed: The Market][added: The Market]

Additionally, our software solutions are focused [added: on the] out-of-hospital care market, which we believe is fragmented and underserved and where we see significant opportunity to transform and significantly improve out-of-hospital healthcare through a strategy of enabling better patient care, improving clinical decision support, and driving interoperability across out-of-hospital care settings.

[removed: Sleep][added: Sleep]

In addition, OSA has been recognized as a cause of hypertension and a significant [removed: co-morbidity] [added: comorbidity] for heart disease, stroke and diabetes.

Another study published in 2019 estimated that mild to severe [removed: sleep apnea] [added: OSA] impacts more than 936 million people worldwide, [removed: of which, it was estimated that more than 424] [added: including 54] million [removed: would have moderate to severe sleep apnea.][added: Americans.]

While [removed: OSA] [added: sleep apnea] has been diagnosed in a broad cross-section of the population, until recently, it has typically been diagnosed among middle-aged men who are obese.

However, we believe the importance of [removed: OSA] [added: sleep apnea] in women is increasingly being recognized, with nearly 40% of new PAP patients being female.

A strong association has been discovered between [removed: OSA] [added: sleep apnea] and a number of cardiovascular and metabolic diseases.

Studies have shown that [removed: SDB] [added: sleep apnea] is present in approximately 83% of patients with drug-resistant hypertension, approximately [removed: 72%] [added: 77%] of patients with [removed: type 2 diabetes,] [added: obesity,] approximately [removed: 77%] [added: 76%] of patients with [removed: obesity] [added: chronic heart failure] and approximately [removed: 76%] [added: 72%] of patients with [removed: chronic heart failure.][added: type 2 diabetes.]

[added: Sleep-Disordered Breathing and Obstructive Sleep Apnea.] Sleep-disordered breathing encompasses all disease processes that cause abnormal breathing patterns during sleep.

These include more comfortable patient interface systems; delay timers that gradually raise air pressure allowing the patient to fall asleep more easily; bilevel air devices, including [removed: Variable Positive Airway Pressure, or VPAP systems,] [added: our AirCurve 10 Series and Lumis devices,] which provide different air pressures for inhalation and exhalation; heated humidification systems to make the airflow more comfortable; and autotitration devices that [removed: reduce] [added: modulate] the average pressure delivered during the night.

[removed: Respiratory Care][added: Respiratory Care]

Our aim is to provide respiratory care solutions to patients with [removed: COPD] [added: COPD, asthma,] and other chronic respiratory diseases, such as overlap syndrome, obesity hypoventilation syndrome, or OHS, and neuromuscular disease, including amyotrophic lateral sclerosis, or ALS.

Our products cover patients ranging from those who only require therapy from CPAP [removed: or VPAP] systems at night, to those who are dependent on non-invasive or invasive ventilation for life-support and those who require portable oxygen concentrators, or POCs.

We supply CPAP and [removed: VPAP] [added: bilevel device] systems, non-invasive and invasive ventilators, humidifiers and accessories, including masks and tubing.

We also offer stationary and portable [removed: battery powered] [added: battery-powered] oxygen concentrators for the administration of long-term oxygen therapy in the home as well as data management systems designed to improve the management of patients.

[added: Chronic Obstructive Pulmonary Disease.] COPD encompasses a group of lung diseases defined by persistent airflow limitation, prolongation of exhalation and loss of elasticity in the lungs.

A recent study based on recent epidemiology data estimates that there are [removed: approximately] [added: over] 380 million people worldwide who suffer from [removed: COPD.][added: COPD, the world’s third leading cause of death.]

Some COPD patients may also suffer from [removed: co-morbid] [added: comorbid] OSA, a condition known as Overlap Syndrome.

[added: Overlap Syndrome.] In patients with Overlap Syndrome, CPAP has been shown to provide benefits in relation to reducing mortality, decreasing hospitalizations and improving lung function and gas exchange.

In patients with stable [removed: COPD] [added: COPD,] the advantages of home NIV are less [removed: clear] [added: clear,] but clinical studies have shown improvements in dyspnea scores and health-related [removed: quality of life] [added: quality-of-life] measures and reductions in hospital readmissions and intensive care stays.

[added: Obesity Hypoventilation Syndrome.] OHS is characterized by the combination of obesity, chronic alveolar hypoventilation leading to daytime hypercapnia and hypoxia and [removed: SDB] [added: sleep apnea] after the exclusion of other causes of alveolar hypoventilation.

[removed: OHS is frequently associated with OSA with an] [added: An] estimated 90% of patients [added: with OHS] also [removed: having] [added: have] OSA.

[added: Neuromuscular Disease.] Neuromuscular disease is a broad term that encompasses many diseases that either directly (via intrinsic muscle pathology) or indirectly (via nerve pathology) impair the functioning of muscles.

[removed: Business Strategy][added: Business Strategy]

We believe that the [removed: SDB] [added: sleep apnea] and respiratory care markets will continue to grow in the future due to a number of factors, including increasing awareness of OSA, CSA and COPD, improved understanding of the role of [removed: SDB] [added: sleep apnea] treatment in the management of cardiac, neurologic, metabolic and related disorders, improved understanding of the role of non-invasive ventilation in the management of COPD, and an increase in the use of digital and product technology to improve patient outcomes and create efficiencies for customers and providers.

Our strategy for expanding our business operations and capitalizing on the growth of the [removed: SDB] [added: sleep apnea] and respiratory care markets, as well as growth in out-of-hospital care settings, consists of the following key elements:

[removed: | | · | | Expand SaaS solutions in Out-of-Hospital Care Settings: Our vision is to transform and significantly improve out-of-hospital healthcare through a strategy of enabling better patient care, improving clinical decision support, and driving interoperability across out-of-hospital healthcare settings.] We [removed: offer software solutions across multiple out-of-hospital healthcare settings from home medical equipment, to home health and hospice, skilled nursing, private duty, and beyond. We] are connecting capabilities across the platforms in these out-of-hospital care settings to help our customers be more efficient, better serve people, keep them out-of-hospital, and in lower-cost, higher-quality care settings. [removed: |]

We are a global leader in digital health and cloud-connected medical devices.

We design innovative solutions to treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives.

Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, chronic obstructive pulmonary disease, or COPD, and other chronic diseases.

Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

Today, we offer a comprehensive digital solution suite for patients with COPD, including those using inhalers or supplemental oxygen as well as non-invasive or invasive ventilation.

We also provide management software to agencies providing out-of-hospital care, including home medical equipment, or HME, home health and hospice, skilled nursing, life plan community and senior living, and private duty services.

These tools are designed to enable clinicians to manage more patients efficiently and effectively, as well as enable and encourage patients’ long-term adherence to and satisfaction with their therapy.

##### [Table of Contents](#TOC)

Sleep and Respiratory Care

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

Of those impacted, it was estimated that more than 424 million would have moderate to severe sleep apnea.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus, or COVID-19, as a pandemic.

We have observed increased demand for our ventilator devices and masks, and we are working with governments, health authorities, hospitals, physicians, and patients worldwide to assess their needs, and to deliver the ventilation therapy that is essential to treat the respiratory complications of COVID-19.

Our primary focus is to maximize the availability of ResMed ventilators and other respiratory support devices for the patients that need them most.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

Software as a Service

Due to multiple acquisitions, including Brightree in April 2016, HEALTHCARE*first* in July 2018 and MatrixCare in November 2018, our operations now include platforms that comprise our SaaS business.

Our SaaS strategy is to develop a portfolio that assists durable medical equipment, or DME, HME, and other long-term care providers operate more effectively and efficiently across various out-of-hospital care settings.

Our SaaS portfolio provides services across the HME, home health and hospice, skilled nursing, life plan community and senior living, and private duty services.

Our offerings can help providers perform analytics, manage documentation and implement new reimbursement requirements as well as more effectively transfer data as patients move between different care settings.

Additionally, the continued impact of COVID-19 or a resurgence of COVID-19 may create more demand for our ventilator products.

Continue Product Development and Innovation in Sleep Apnea Products. We are committed to ongoing innovation in developing products for the diagnosis and treatment of sleep apnea.

We have been a leading innovator of products designed to treat sleep apnea more effectively, increase patient comfort and encourage compliance with prescribed therapy.

In recent years we have introduced a full suite of masks in our AirTouch and AirFit ranges, advanced and expanded the integrations of our therapy-based software solutions, including AirView, to promote greater patient adherence and during the COVID-19 pandemic, we released ResMed MaskSelector in the United States, an easy-to-use digital tool to make mask selection and sizing easier and more effective, both remotely and during in-person clinical setups.

We believe that the combination of continued product development, product and technology acquisitions and innovation are key factors to our ongoing success.

Our recent acquisitions have included a portfolio of sleep apnea products through our acquisition of Curative Medical.

Approximately 16% of our employees are devoted to research and development activities.

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

Continue Product Development and Innovation in Respiratory Care Products. We are committed to ongoing innovation of our respiratory care products that serve the needs of patients with COPD and neuromuscular diseases.

With the addition of Inova Labs POCs and our non-invasive ventilator devices with masks and accessories, we intend to continue to expand and enhance our product offerings in this area.

In recent years, we launched Mobi, which is our first ResMed\-branded portable oxygen concentrator as well as advanced and expanded the integrations of our therapy-based software solutions including AirView for Respiratory Care, enabling clinicians to remotely monitor patients on some ventilation devices and bilevel devices.

Additionally, we acquired a digital health platform for inhalers through our acquisition of Propeller Health in 2019, rounding out our portfolio to treat COPD patients through their therapy journey across different stages of their disease.

Expand SaaS Solutions in Out-of-Hospital Care Settings. Our vision is to transform and significantly improve out-of-hospital (OOH) healthcare through a strategy of enabling better patient care, improving clinical decision support, and driving interoperability across out-of-hospital healthcare settings.

Since acquiring Brightree in 2016, plus MatrixCare and HEALTHCARE*first* in 2018, we offer software solutions across multiple out-of-hospital healthcare settings including HME, home health and hospice, skilled nursing, life plan communities, senior living and private duty.

Today, our SaaS solutions serve OOH customers combining over 90 million individual accounts.

We are a global leader in the development, manufacturing, distribution and marketing of medical devices and cloud-based software solutions that diagnose, treat and manage respiratory disorders including sleep disordered breathing, or SDB, chronic obstructive pulmonary disease, or COPD, neuromuscular disease and other chronic diseases.

SDB includes obstructive sleep apnea, or OSA, and other respiratory disorders that occur during sleep.

Our cloud-based software digital health applications, along with our devices are designed to provide connected care to improve patient outcomes and efficiencies for our customers.

| PART I | Item 1 |

Prior to the three months ended December 31, 2018, we had previously determined that our software-as-a-solutions, or SaaS, line of business was not material to our global operations in terms of revenue and profit, and therefore had not been separately reported as a segment.

In the United States alone, this represents approximately 46 million people.

Sleep-Disordered Breathing and Obstructive Sleep Apnea

Chronic Obstructive Pulmonary Disease.

Overlap Syndrome.

Obesity Hypoventilation Syndrome.

Neuromuscular Disease.

| | · | | Continue Product Development and Innovation in SDB Products. We are committed to ongoing innovation in developing products for the diagnosis and treatment of SDB. We have been a leading innovator of products designed to treat SDB more effectively, increase patient comfort and encourage compliance with prescribed therapy. In 2016, we introduced a number of new software solutions including our ResMed Resupply, GoScripts and new features and enhancements within our cloud-based software offerings. Through our acquisition of Brightree, we also acquired a suite of software\-as\-a\-service solutions for U.S. based distributor and home health and hospice customers. In addition, through our acquisitions of Inova Labs and Curative Medical we acquired the Inova Labs range of POCs and a portfolio of Curative Medical SDB and ventilation products. We believe that the combination of continued product development, product and technology acquisitions and innovation are key factors to our ongoing success. In 2017, we introduced a number of new products and solutions, including AirFit N20 nasal and F20 full face masks with an InfinitySeal silicone cushion, AirMini, the world’s smallest CPAP, AirTouch F20 full face mask with Ultrasoft memory foam and new integrations and enhancements of AirView and Brightree software, including AirView Action Groups. In 2018, we introduced automatic resupply enrollment for patients managed by both Brightree and ResMed, our first ResMed\-branded portable oxygen concentrator called Mobi and a diffuser vent elbow for our latest CPAP full face masks called QuietAir. In 2019, we released new products including AirFit F30, a full face mask with minimal-contact cushion, and AirFit N30i and P30i, a top-of-head connected nasal and pillow mask, respectively. Approximately 17% of our employees are devoted to research and development activities. |

| --- | --- | --- | --- |

| | · | | Continue Product Development and Innovation in Respiratory Care Products. We are committed to ongoing innovation of our respiratory care products that serve the needs of patients with COPD and neuromuscular diseases. With the addition of Inova Labs POCs and our non-invasive ventilator devices as well as masks and accessories, we intend to continue to expand and enhance our product offerings in this area. In 2018, we launched Mobi which is our first ResMed\-branded portable oxygen concentrator. In 2019, we acquired Propeller Health and its digital health platform for inhalers, rounding out our portfolio to treat COPD patients through all stages of their disease. |

| | · | | Increase Public and Clinical Awareness. We continue to expand our existing promotional activities to increase awareness of SDB, COPD and other clinical conditions that can be treated with our industry-leading solutions. These promotional activities target both the population predisposed to SDB and medical specialists, such as pulmonologists, sleep medicine specialists, primary care physicians, cardiologists, neurologists and other medical subspecialists who treat these conditions and their associated co\-morbidities. In the last year we invested in SleepScore Labs, a joint venture between ResMed, Dr. Mehmet Oz and Pegasus Capital to help consumers better understand and improve their sleep. We also target special interest groups, including the National Stroke Association, the American Heart Association, COPD Foundation and the National Sleep Foundation, to further increase awareness of the relationship between SDB or OSA, COPD, neuromuscular disease and co-morbidities such as cardiac disease, diabetes, hypertension and obesity. The programs also support our efforts to inform the community of the dangers of sleep apnea with regard to occupational health and safety, especially in the transport industry. We have helped establish a center for clinical care and medical research at the University of California at San Diego in the fields of sleep apnea and COPD. |

| | · | | Expand into New Clinical Applications. We continually seek to identify new applications of our technology for significant unmet medical needs. Studies have established a clinical association between OSA and both stroke and congestive heart failure, and have recognized SDB as a cause of hypertension or high blood pressure. Research also indicates that SDB is independently associated with glucose intolerance and insulin resistance. Additionally, research supported by ResMed has demonstrated that the addition of non-invasive ventilation to patients with severe COPD who are receiving oxygen therapy, provides meaningful clinical benefits to the patient, and the broader healthcare system. We maintain close working relationships with a number of prominent physicians to explore new medical applications for our products and technology. |

We produce CPAP, VPAP and AutoSet systems for the titration and treatment of SDB.

Our VPAP units deliver ultra-quiet, comfortable bilevel therapy.

| | | |

| --- | --- | --- |

| AirCurve 10 CS | An adaptive servo-ventilator specifically designed to treat patients exhibiting central sleep apnea (CSA), mixed sleep apnea and periodic breathing, with or without obstructive sleep apnea. The device also features built-in wireless connectivity. Features built-in wireless connectivity and works seamlessly with ResMed’s AirView™ patient monitoring software. | December 2014 |

| Activox | Portable oxygen concentrator system. | July 2014 |

| Mobi | ResMed-branded portable oxygen concentrator system | April 2018 |

| AcuCare HFNC | The AcuCare high flow nasal cannula (HFNC) for high flow oxygen therapy. | August 2015 |

| AirFit F20 | A compact full-face mask that features an InfinitySeal silicone cushion that adapts to the unique facial contours of each patient to increase comfort, improve fit and reduce leakage. | November 2016 |

| AirFit N20 | A compact nasal mask that features an InfinitySeal silicone cushion that adapts to the unique facial contours of each patient to increase comfort, improve fit and reduce leakage. | November 2016 |

| AirTouch F20 | A compact full-face mask that features a permeable foam cushion, which creates a uniquely natural, breathable seal that allows some excess heat and sweat to escape through the cushion without compromising therapy pressure. Modular frame design allows convenient interchangeability with AirFit™ 20 InfinitySeal™ cushion. | May 2017 |

| QuietAir | A diffuser vent elbow which reduces noise and produces a gentler exhaled airflow that can be used with our AirFit F20 and AirTouch F20 full face masks. | May 2018 |

| AirFit F30 | A full-face mask that features a minimal-contact cushion, which helps prevent top-of-the-nose red marks and irritation. | October 2018 |

| AirFit N30i | A top-of-head connected nasal mask that keeps tubing out of the way and also features a cradle cushion designed to reduce facial markings and irritation. | January 2019 |

| AirFit P30i | A top-of- head connected nasal pillows system that keeps tubing out of the way so users have flexibility to sleep better in any position. | April 2019 |

To enhance patient comfort, convenience and compliance, we market a variety of other products and accessories.

These products include humidifiers, designed to help prevent the drying of nasal passages that can cause discomfort, carry bags and breathing circuits.

To assist those professionals diagnosing or managing the treatment of patients there are data communications and control products such as AirView Diagnostics, EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan and ResTraxx modules.

| S+ | A personalized sleep solution that uses patented bio-motion sensors, designed to measure an individual's sleep stages and environment, and deliver personalized feedback that helps improve sleep. | October 2014 |

| Brightree Solutions | Cloud-based software designed to improve clinical and business performance in the HME, home health, hospice, orthotic and prosthetic, HME pharmacy, home infusion and rehabilitation home care segments. Brightree’s solutions follow the natural workflow of providers to automate and improve how they manage their business and serve patients. | April 2016 |

United States, Canada and Latin America.

We market our products in most major countries in combined Europe, Asia and other markets.

In Germany, we receive payments directly from these payors.

If this excise tax had not been suspended it would be applicable to our products that are primarily used in hospitals and sleep labs, which includes the Apnealink Air, VPAP Tx, and certain respiratory care and dental sleep products.

See Note [removed: 19] [added: 17] – Legal [removed: Actions and] [added: Actions,] Contingencies [added: and Commitments] of the Notes to Consolidated Financial Statements (Part II, Item 8) included in this report.

Administrative subpoenas.

In 2016, we received federal administrative subpoenas from the Office of Inspector General of the U.S. Department of Health and Human Services.

The subpoenas requested documents and other materials related primarily to industry offerings of patient resupply software to home medical equipment providers, discounted sales and leasing to sleep labs, samples, and other promotional programs.

In addition, the Department of Justice has informally requested information about our leasing arrangements with customers.

In August 2018, we received a third subpoena, requesting documents and other materials relating to diagnostic devices and masks provided to medical providers, and diagnostic auto-scoring functions.

In February 2019, the Department of Justice provided us with a Civil Investigative Demand seeking further information concerning the industry offerings described above.

We are cooperating with the government’s requests for documents and information, including additional subpoenas on these same issues.

Responding to these investigations can consume substantial time and resources and can divert management’s attention from the business.

Additionally, as a result of these investigations, we may face litigation or have to agree to settlements that can include monetary penalties and onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

If our operations are found to violate federal law or regulations, or if we settle these investigations, we may be subject to civil and criminal penalties, damages, fines, disgorgement, exclusion from governmental health care programs, and the curtailment or restructuring of our operations, any of which could materially adversely affect our financial results and our ability to operate our business.

\-32\-

| PART I | Items 1B – 4 |

| --- | --- |

RESMED INC. AND SUBSIDIARIES

We have tentatively agreed with the government to civilly resolve these matters for a payment of $39.5 million and we expect to also incur additional fees and administrative costs that typically accompany such a resolution.

As a result, we have reserved $41.2 million for the expenses we expect to incur in connection with this settlement.

A resolution may also include ongoing obligations, such as any imposed under a corporate integrity agreement.

However, we have not yet completed negotiations, and there can be no assurance as to whether or when the parties will finalize any such negotiated resolution or what the final terms of such a resolution will be.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: \[X\]] [added: \[X\]] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE [removed: ACT OF 1934][added: ACT OF 1934]

[removed: For] [added: For] the fiscal year [removed: ended June 30, 2019][added: ended June 30, 2020]

[removed: Commission] [added: Commission] file [removed: number: 001-15317][added: number: 001-15317]

[removed: ResMed Inc.][added: ResMed Inc.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

[removed: Delaware][added: Delaware]

[removed: (State] [added: (State] or other jurisdiction of incorporation or [removed: organization)][added: organization)]

[removed: 98-0152841][added: 98-0152841]

[removed: (IRS] [added: (IRS] Employer Identification [removed: No.)][added: No.)]

[removed: 9001 Spectrum Center Blvd.][added: 9001 Spectrum Center Blvd.]

[removed: San Diego, CA 92123][added: San Diego, CA 92123]

[removed: United] [added: United] States of [removed: America][added: America]

[removed: (Address] [added: (Address] of principal executive [removed: offices)][added: offices)]

[removed: (858) 836-5000][added: (858) 836-5000]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | [removed: Trading Symbol(s)] [added: Trading Symbol(s)] | | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act][added: Act]

Yes [removed: ☒] [added: x] No [removed: ☐][added: ¨]

Yes [removed: ☐] [added: ¨] No [removed: ☒][added: x]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [removed: (§232.405] [added: (§ 232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

| Large [removed: accelerated filer] [added: Accelerated Filer] | [removed: ☒] [added: x] | Accelerated [removed: filer] [added: Filer] | [removed: ☐] [added: ¨] |

| Non-accelerated [removed: filer] [added: Filer] | [removed: ☐] [added: ¨] | Smaller [removed: reporting company] [added: Reporting Company] | [removed: ☐] [added: ¨] |

| Emerging [removed: growth company] [added: Growth Company] | [removed: ☐] [added: ¨] | | |

The aggregate market value of the voting and non-voting common equity held by non-affiliates of registrant as of December 31, [removed: 2018] [added: 2019] (the last business day of the registrant’s most recently completed second fiscal quarter), computed by reference to the closing sale price of such stock on the New York Stock Exchange, was [removed: $16,203,677,315.][added: $22,240,443,784.]

At [removed: July 29, 2019,] [added: August 7, 2020,] registrant had [removed: 143,671,055] [added: 144,900,654] shares of Common Stock, $0.004 par value, issued and outstanding.

Portions of the registrant’s definitive Proxy Statement to be delivered to stockholders in connection with the registrant’s [removed: 2019] [added: 2020] Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III of this report.

[removed: TABLE OF CONTENTS][added: ##### [Table of Contents](#TOC)]

| | Item 1A | [Risk Factors](#RISK_FACTORS) | [removed: 19] [added: 18] |

| | Item 1B | [Unresolved Staff Comments](#UNRESOLVED_STAFF_COMMENTS) | [removed: 32] [added: 34] |

| | Item 2 | [Properties](#PROPERTIES) | [removed: 32] [added: 34] |

| | Item 3 | [Legal Proceedings](#LEGAL_PROCEEDINGS) | [removed: 32] [added: 34] |

| | Item 4 | [Mine Safety Disclosures](#MINE_SAFETY_DISCLOSURES) | [removed: 33] [added: 34] |

| Part II | Item 5 | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#MARKETS_FOR_REGISTRANTS_COMMON_EQUITY) | [removed: 34] [added: 35] |

| | Item 6 | [Selected Financial Data](#SELECTED_FINANCIAL_DATA) | [removed: 36] [added: 37] |

| | Item 7 | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#MANAGEMENTS_DISCUSSION_AND_ANALYSIS) | [removed: 37] [added: 38] |

Yes x No ¨

Yes x No ¨

¨

Yes ¨ No x

TABLE OF CONTENTS

| | | | |

##### [Table of Contents](#TOC)

10-K 1 rmd-20190630x10k.htm 10-K

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

We have received no written comments regarding our periodic or current reports from the staff of the SEC that were issued 180 days or more before the end of our fiscal year [removed: 2019] [added: 2020] that remain unresolved.

Other facilities are leased in Atlanta, Georgia, and Moreno Valley, California, U.S.A.; Loyang and [removed: Galaxais,] [added: Galaxis,] Singapore; Munich, Germany; Lyon, France; Suzhou, China; and Johor Bahru, Malaysia.

At June 30, [removed: 2019,] [added: 2020,] our principal owned and leased properties were as follows:

| [removed: Location] [added: Location] | | [removed: Ownership Status (Owned] [added: Ownership Status‎(Owned] / [removed: Leased)] [added: Leased)] | [removed: Square footage] [added: Square‎footage] | | [removed: Primary Usage] [added: Primary Usage] |

| | [removed: Norwest,] Sydney, Australia | Owned | 224,000 | | Manufacturing, engineering, research and [removed: development] [added: development, sales and administration] |

| | Atlanta, Georgia | Leased | [removed: 508,000] [added: 522,000] | | Warehouse and [removed: distribution] [added: distribution; SaaS sales and administration, engineering, research and development] |

| | Moreno Valley, California | Leased | [removed: 374,000] [added: 244,000] | | Warehouse and distribution |

| | Loyang, Singapore | Leased | 95,000 | | Manufacturing [removed: facility] [added: facility, engineering, research and development] |

| | Munich, Germany | Leased | [removed: 128,000] [added: 109,000] | | Sales and [removed: distribution, research and development] [added: distribution] |

| | Johor Bahru, Malaysia | Leased | 46,000 | | [removed: Manufacturing facility] [added: Engineering, research and development] |

| | [removed: Galaxais / Connexis, Singapore] [added: Halifax, Canada] | Leased | [removed: 16,000] [added: 47,000] | | Engineering, research and development |

We are establishing a new manufacturing facility in Tuas, Singapore that will eventually replace our Loyang facility.

| | Tuas, Singapore | Leased | 268,000 | | Future manufacturing facility, currently being established |

| | Minneapolis, United States | Leased | 86,000 | | SaaS sales and administration, engineering, research and development |

| | Lyon, France | Leased | 52,000 | | Sales and distribution |

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: PART II][added: PART II]

\-34\-

##### [Table of Contents](#TOC)

\-33\-

As of [removed: June 30, 2019,] [added: July 31, 2020,] there were [removed: 20] [added: 26] holders of record of our common stock, although [added: the actual number of stockholders of our common stock is greater than this number of holders of record and] many of these holders of record own shares as nominees on behalf of other beneficial owners.

[removed: Securities] [added: Securities] Authorized for Issuance Under Equity Compensation [removed: Plans][added: Plans]

[removed: Purchases] [added: Purchases] of Equity [removed: Securities][added: Securities]

[removed: During all] [added: Since the inception] of [removed: our] [added: the] share buyback programs, we have repurchased [removed: an aggregate of] 41.8 million shares at a total cost of $1.6 billion.

[removed: (1)] On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock.

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: PERFORMANCE GRAPH][added: PERFORMANCE GRAPH]

The following graph compares the cumulative total stockholders return on our common stock from June 30, [removed: 2014] [added: 2015] through June 30, [removed: 2019,] [added: 2020,] with the comparable cumulative return of the S&P 500 index, the S&P 500 Health Care index, and the Dow Jones U.S. Medical Devices index.

The graph assumes that $100 was invested in our common stock and each index on June 30, [removed: 2014.][added: 2015.]

][added: 1](https://www.sec.gov/Archives/edgar/data/943819/000094381920000013/rmd-20200630x10kg001.jpg)]

The following table shows total indexed return of stock price plus reinvestments of dividends, assuming an initial investment of $100 at June 30, [removed: 2014,] [added: 2015,] for the indicated periods.

| | [removed: As] [added: As] of June [removed: 30,] [added: 30,] | | | | | |

| [removed: Index] [added: Index] | [removed: 2014] [added: 2015] | [removed: 2015] [added: 2016] | [removed: 2016] [added: 2017] | [removed: 2017] [added: 2018] | [removed: 2018] [added: 2019] | [removed: 2019] [added: 2020] |

In fiscal year 2019, we temporarily suspended our share repurchase program due to recent acquisitions.

As a result, we did not repurchase any shares during the twelve months ended June 30, 2020.

However, there is no expiration date for this program, and we may, at any time, elect to resume the share repurchase program as the circumstances allow.

At June 30, 2020, 12.9 million additional shares can be repurchased under the approved share repurchase program.

##### [Table of Contents](#TOC)

| ResMed Inc. | 100 | 115 | 144 | 195 | 233 | 370 |

| S&P 500 | 100 | 102 | 117 | 132 | 143 | 150 |

| S&P 500 Health Care | 100 | 96 | 106 | 112 | 125 | 136 |

| Dow Jones U.S. Medical Devices | 100 | 115 | 142 | 171 | 206 | 227 |

\-36\-

##### [Table of Contents](#TOC)

RESMED INC. AND SUBSIDIARIES

The following table summarizes purchases by us of our common stock during the fiscal year ending June 30, 2019:

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | Total Number of Shares Purchased | | | Average Price Paid per Share (USD) | | | Total Number of Shares Purchased as Part of Publicly Announced Programs (1) | | | Maximum Number of Shares that May Yet Be Purchased Under the Programs (1) | |

| July 1 - 31, 2018 | | | \- | | | \- | | | 41,636,234 | | | 13,079,779 |

| August 1 - 31, 2018 | | | \- | | | \- | | | 41,636,234 | | | 13,079,779 |

| September 1 - 30, 2018 | | | 200,000 | | $ | 114.20 | | | 41,836,234 | | | 12,879,779 |

| October 1 - 31, 2018 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| November 1 - 30, 2018 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| December 1 - 31, 2018 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| January 1 - 31, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| February 1 - 28, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| March 1 - 31, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| April 1 - 30, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| May 1 - 31, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| June 1 - 30, 2019 | | | \- | | | \- | | | 41,836,234 | | | 12,879,779 |

| Total | | | 200,000 | | $ | 114.20 | | | 41,836,234 | | | 12,879,779 |

\-34\-

| ResMed Inc. | 100 | 114 | 130 | 164 | 221 | 264 |

| S&P 500 | 100 | 105 | 107 | 124 | 139 | 150 |

| S&P 500 Health Care | 100 | 122 | 118 | 130 | 137 | 152 |

| Dow Jones U.S. Medical Devices | 100 | 118 | 135 | 167 | 202 | 243 |

The following table summarizes certain selected consolidated financial data for, and as of the end of, each of the fiscal years in the five-year period ended June 30, [removed: 2019.][added: 2020.]

The consolidated statement of income data for the years ended June 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] and the consolidated balance sheet data as of June 30, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] are derived from our audited consolidated financial statements included elsewhere in this report.

The consolidated statement of income data for the years ended June 30, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] and the consolidated balance sheet data as of June 30, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] are derived from our audited consolidated financial statements not included in this report.

| [removed: Consolidated] [added: Consolidated] Statement of Income [removed: Data] [added: Data] | | [removed: Years] [added: Years] Ended June [removed: 30,] [added: 30,] | | | | | | | | | | | | | |

| [removed: (In] [added: (In] thousands, except per share [removed: data):] [added: data):] | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | |

| Net revenue | | [removed: $] | [added: 2,957,013 | | |] 2,606,572 | | [removed: $] | 2,340,196 | | [removed: $] | 2,066,737 | | [removed: $] | 1,838,713 | [removed: | $ | 1,678,912 |]

| Cost of sales [removed: (excluding amortization] [added: (exclusive] of [removed: acquired intangible assets)] [added: amortization shown separately below)] | | | [added: 1,189,624 | | |] 1,069,987 | | | 978,032 | | | 864,992 | | | 772,216 | [removed: | | 667,516 |]

| Selling, general and administrative expenses | | | [added: 676,689 | | |] 645,010 | | | 600,369 | | | 553,968 | | | 488,057 | [removed: | | 478,627 |]

| Research and development expenses | | | [added: 201,946 | | |] 180,651 | | | 155,149 | | | 144,467 | | | 118,651 | [removed: | | 114,865 |]

| Restructuring expenses | | | [added: \- | | |] 9,401 | | | 18,432 | | | 12,358 | | | 6,914 | [removed: | | \- |]

| Litigation settlement expenses | | | [removed: 41,199] [added: (600)] | | | [removed: \-] [added: 41,199] | | | [removed: 8,500] [added: \-] | | | [removed: \-] [added: 8,500] | | | \- |

| Acquisition related expenses | | | [removed: 6,123] [added: \-] | | | [removed: \-] [added: 6,123] | | | [removed: 10,076] [added: \-] | | | [removed: \-] [added: 10,076] | | | \- |

| Income from operations | | | [added: 809,659 | | |] 579,263 | | | 541,831 | | | 425,798 | | | 428,952 | [removed: | | 409,236 |]

| Interest income (expense), net | | | [added: (39,356) | | |] (33,857) | | | (11,977) | | | (11,151) | | | 5,654 | [removed: | | 20,430 |]

| Loss attributable to equity method investments | | | [removed: (15,833)] [added: (25,058)] | | | [removed: \-] [added: (15,833)] | | | \- | | | \- | | | \- |

| Other, net | | | [added: (12,157) | | |] (10,726) | | | (8,542) | | | 4,096 | | | 4,960 | [removed: | | 6,250 |]

| Total other income (loss), net | | | [added: (76,571) | | |] (60,416) | | | (20,519) | | | (7,055) | | | 10,614 | [removed: | | 26,680 |]

| Income before income taxes | | | [added: 733,088 | | |] 518,847 | | | 521,312 | | | 418,743 | | | 439,566 | [removed: | | 435,916 |]

| Income taxes | | | [added: 111,414 | | |] 114,255 | | | 205,724 | | | 76,459 | | | 87,157 | [removed: | | 83,030 |]

| Net income | | $ | [removed: 404,592] [added: 621,674] | | $ | [removed: 315,588] [added: 404,592] | | $ | [removed: 342,284] [added: 315,588] | | $ | [removed: 352,409] [added: 342,284] | | $ | [removed: 352,886] [added: 352,409] |

| Basic earnings per share | | $ | [removed: 2.83] [added: 4.31] | | $ | [removed: 2.21] [added: 2.83] | | $ | [removed: 2.42] [added: 2.21] | | $ | [removed: 2.51] [added: 2.42] | | $ | 2.51 |

| Diluted earnings per share | | $ | [removed: 2.80] [added: 4.27] | | $ | [removed: 2.19] [added: 2.80] | | $ | [removed: 2.40] [added: 2.19] | | $ | [removed: 2.49] [added: 2.40] | | $ | [removed: 2.47] [added: 2.49] |

| Dividends per share | | $ | [removed: 1.48] [added: 1.56] | | $ | [removed: 1.40] [added: 1.48] | | $ | [removed: 1.32] [added: 1.40] | | $ | [removed: 1.20] [added: 1.32] | | $ | [removed: 1.12] [added: 1.20] |

| Basic shares outstanding | | | [added: 144,338 | | |] 143,111 | | | 142,764 | | | 141,360 | | | 140,242 | [removed: | | 140,468 |]

| Diluted shares outstanding | | | [added: 145,652 | | |] 144,484 | | | 143,987 | | | 142,453 | | | 141,669 | [removed: | | 142,687 |]

| | | [removed: As] [added: As] of June [removed: 30,] [added: 30,] | | | | | | | | | | | | | |

| [removed: Consolidated] [added: Consolidated] Balance Sheet Data (In [removed: thousands):] [added: thousands):] | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | |

| Working capital | | $ | [removed: 589,375] [added: 920,698] | | $ | [removed: 554,468] [added: 589,375] | | $ | [removed: 1,283,877] [added: 554,468] | | $ | [removed: 781,730] [added: 1,283,877] | | $ | [removed: 1,141,381] [added: 781,730] |

| Total assets | | | [added: 4,587,376 | | |] 4,107,682 | | | 3,063,923 | | | 3,468,487 | | | 3,256,705 | [removed: | | 2,181,774 |]

| Long-term debt, less current maturities | | | [added: 1,164,133 | | |] 1,258,861 | | | 269,988 | | | 1,078,611 | | | 873,332 | [removed: | | 300,594 |]

| Total stockholders’ equity | | $ | [removed: 2,072,193] [added: 2,497,027] | | $ | [removed: 2,058,980] [added: 2,072,193] | | $ | [removed: 1,960,266] [added: 2,058,980] | | $ | [removed: 1,694,831] [added: 1,960,266] | | $ | [removed: 1,587,307] [added: 1,694,831] |

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations][added: Operations]

| Amortization of acquired intangible assets* | | | 49,603 | | | 42,514 | | | 27,266 | | | 29,477 | | | 12,906 |

| Total cost of sales | | | 1,239,227 | | | 1,112,501 | | | 1,005,298 | | | 894,469 | | | 785,122 |

| Gross profit | | | 1,717,786 | | | 1,494,071 | | | 1,334,898 | | | 1,172,268 | | | 1,053,591 |

| Amortization of acquired intangible assets* | | | 30,092 | | | 32,424 | | | 19,117 | | | 17,101 | | | 11,017 |

| Total operating expenses | | | 908,127 | | | 914,808 | | | 793,067 | | | 746,470 | | | 624,639 |

* Within our consolidated statements of income for the years ended June 30, 2020, 2019, 2018, 2017 and 2016, cost of sales has been adjusted to include amortization of acquired intangible assets directly applicable to revenue.

As a result, gross profit includes amortization of acquired intangible assets relating to cost of sales and operating expenses have been reduced by this amount.

There was no impact on income from operations, income before taxes or net income, as a result of this reclassification.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

\-37\-

##### [Table of Contents](#TOC)

| Gross profit | | | 1,536,585 | | | 1,362,164 | | | 1,201,745 | | | 1,066,497 | | | 1,011,396 |

| Amortization of acquired intangible assets | | | 74,938 | | | 46,383 | | | 46,578 | | | 23,923 | | | 8,668 |

| Total operating expenses | | | 957,322 | | | 820,333 | | | 775,947 | | | 637,545 | | | 602,160 |

\-36\-

[removed: (a)] [added: (a)] Index to Consolidated Financial [removed: Statements][added: Statements]

| [Report of Independent Registered Public Accounting Firm](#AUDITORS_REPORT) | [removed: 49] [added: 51] |

| [Consolidated Balance Sheets as of June 30, [removed: 2019] [added: 2020] and [removed: 2018](#BALANCE_SHEET)] [added: 2019](#BALANCE_SHEET)] | [removed: 52] [added: 53] |

| [Consolidated Statements of Income for the years ended June 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#INCOME_STATEMENT)] [added: 2018](#INCOME_STATEMENT)] | [removed: 53] [added: 54] |

| [Consolidated Statements of Comprehensive Income for the years ended June 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#COMPREHENSIVE_INCOME)] [added: 2018](#COMPREHENSIVE_INCOME)] | [removed: 54] [added: 55] |

| [Consolidated Statements of Stockholders’ Equity for the years ended June 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#EQUITY_STATEMENT)] [added: 2018](#EQUITY_STATEMENT)] | [removed: 55] [added: 56] |

| [Consolidated Statements of Cash Flows for the years ended June 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#CASH_FLOWS)] [added: 2018](#CASH_FLOWS)] | [removed: 56] [added: 57] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_FINANCIAL_STATEMENTS) | [removed: 57] [added: 58] |

| [Schedule II – Valuation and Qualifying Accounts and Reserves](#SCHEDULE_II) | [removed: 80] [added: 81] |

[removed: (b)] [added: (b)] Supplementary [removed: Data][added: Data]

Quarterly Financial Information (unaudited)—The quarterly results for the years ended June 30, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] are summarized below (in thousands, except per share amounts):

| [removed: 2019] [added: 2019] | | [removed: First Quarter] [added: First‎Quarter] | | | [removed: Second Quarter] [added: Second‎Quarter] | | | [removed: Third Quarter] [added: Third‎Quarter] | | | [removed: Fourth Quarter] [added: Fourth‎Quarter] | | | [removed: Fiscal Year] [added: Fiscal‎Year] | |

| Net income | | | 105,737 | | | 124,639 | | | [removed: 105,417] [added: 105,416] | | | 68,797 | | | 404,592 |

| [removed: 2018] [added: 2020] | | [removed: First Quarter] [added: First‎Quarter] | | | [removed: Second Quarter] [added: Second‎Quarter] | | | [removed: Third Quarter] [added: Third‎Quarter] | | | [removed: Fourth Quarter] [added: Fourth‎Quarter] | | | [removed: Fiscal Year] [added: Fiscal‎Year] | |

| Net income | [removed: |] [added: \-] | [removed: 86,125] | [added: \-] | | [removed: 9,527] [added: \-] | [added: \-] | | [removed: 110,125] [added: \-] | | [added: 315,588] | [removed: 109,812] | [added: \-] | | 315,588 |

| Basic earnings per share | | [removed: | 0.61 | | | 0.07 | |] [added: $] | [removed: 0.77] [added: 4.31] | | [added: $] | [removed: 0.77] [added: 2.83] | | [added: $] | 2.21 |

| Diluted earnings per share | | [removed: | 0.60 | | | 0.07 | |] [added: $] | [removed: 0.76] [added: 4.27] | | [added: $] | [removed: 0.76] [added: 2.80] | | [added: $] | 2.19 |

Note: the amounts for each quarter are computed [removed: independently,] [added: independently] and, due to the computation formula, the sum of the four quarters may not equal the year.

[removed: RESMED] [added: RESMED] INC. AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: ResMed] [added: ‎ResMed] Inc.:

[removed: Opinion] [added: *Opinion] on the Consolidated Financial [removed: Statements][added: Statements*]

We have audited the accompanying consolidated balance sheets of ResMed Inc. and subsidiaries (the Company) as of June 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the [removed: three‑year] [added: three year] period ended June 30, [removed: 2019,] [added: 2020,] and the related notes and financial statement schedule II (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the [removed: three‑year] [added: three year] period ended June 30, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, [removed: 2019,] [added: 2020,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August [removed: 7, 2019] [added: 12, 2020] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

[removed: Basis] [added: *Basis] for [removed: Opinion][added: Opinion*]

[removed: Critical] [added: *Critical] Audit [removed: Matters][added: Matters*]

[removed: Determination and evaluation] [added: *Evaluation] of goodwill triggering [removed: events][added: events*]

As discussed in Notes [removed: 1(g)] [added: 1(i)] and [removed: 6] [added: 5] to the consolidated financial statements, the carrying amount of goodwill as of June 30, [removed: 2019] [added: 2020] was [removed: $1,856] [added: $1,890] million.

In the current year, the Company [removed: only] performed [added: qualitative,]

[removed: qualitative,] or Step 0, assessments to determine whether there was a greater than 50 percent likelihood that the fair value of each reporting unit was less than its carrying value.

We identified the [removed: determination and] evaluation of goodwill triggering events as a critical audit matter because such events indicate possible impairment of goodwill, which required the application of greater auditor judgment.