How does Boston Scientific manage its exposure to currency fluctuations?

Boston Scientific manages its exposure to currency exchange rate fluctuations primarily through a risk management program that includes the use of derivative financial instruments. These instruments are used to hedge foreign currency denominated firm commitments, forecasted transactions, and net investments in certain subsidiaries. The company states that these derivative transactions are not for speculative purposes and that gains and losses on these instruments substantially offset losses and gains on the underlying hedged exposures.

What is the company's stance on its internal controls and disclosure procedures?

Management, including the CEO and CFO, evaluated the effectiveness of Boston Scientific's disclosure controls and procedures as of September 30, 2007, and concluded that they were effective. Furthermore, there were no changes in the company's internal control over financial reporting during the quarter ended September 30, 2007, that materially affected or were reasonably likely to materially affect these controls.

What are the key risks associated with Boston Scientific's current strategic initiatives?

The company is undertaking expense reduction measures and divesting certain non-strategic assets. Key risks associated with these initiatives include potential unintended consequences such as distraction of management and employees, business disruption, employee attrition beyond planned reductions, reduced employee productivity, difficulty attracting or retaining key personnel, and the risk of litigation related to headcount reductions. Divestitures also carry risks of diverting management attention, incurring significant costs, losing customer relationships and revenues from divested businesses, and potential disruption of operations. Delays or failures in completing divestitures or receiving regulatory approvals could also negatively impact the business.

What proportion of Boston Scientific's debt is subject to fixed interest rates?

As of September 30, 2007, $5.646 billion of Boston Scientific's outstanding debt obligations was at fixed interest rates, representing 69 percent of its total debt or 82 percent of its net debt balance. This indicates a significant portion of the company's debt is protected from short-term interest rate increases.

BSX 10-Q Quarterly Report Q3 FY2007 — Revenue, Net Income, EPS

Summary

Boston Scientific Corporation's (BSX) Q3 2007 10-Q filing primarily details the company's approach to managing market risks, particularly currency exchange rate and interest rate fluctuations. The company actively uses derivative financial instruments to hedge these risks, aiming to offset potential losses and gains. As of September 30, 2007, BSX had significant outstanding currency derivative contracts totaling $4.409 billion and interest rate derivative contracts totaling $1.750 billion, indicating a proactive strategy to mitigate financial volatility. Furthermore, the filing confirms the effectiveness of BSX's disclosure controls and procedures as of September 30, 2007, with no material changes in internal controls over financial reporting during the quarter. Investors should note that the company is undergoing expense reduction measures and divesting non-strategic assets. While intended to improve the operating cost structure and competitive positioning, these actions carry inherent risks, including potential business disruption, unintended consequences, and litigation, which could impact financial condition and future results.

Key Highlights

1Boston Scientific actively manages currency exchange rate risk using derivative instruments, with $4.409 billion in contract amounts outstanding as of September 30, 2007.
2The company also manages interest rate risk through derivative instruments, with $1.750 billion in notional amounts outstanding as of September 30, 2007.
3Management concluded that BSX's disclosure controls and procedures were effective as of September 30, 2007.
4There were no material changes in internal control over financial reporting during the quarter ended September 30, 2007.
5BSX is implementing expense reduction measures, including headcount reductions and the sale of non-strategic assets, to improve its operating cost structure.
6These strategic initiatives carry risks, such as potential business disruption, employee attrition, and litigation.
7Approximately 69% of BSX's outstanding debt was at fixed interest rates as of September 30, 2007.

BOSTON SCIENTIFIC CORP Quarterly Report for Q3 Ended Sep 30, 2007

Summary

Key Highlights

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