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evaluation of the Company's current operating performance and
comparison to the Company's past operating performance.
Material Limitations Associated with the Use of Non-GAAP Financial
Measures
Non-GAAP net income, non-GAAP net income per diluted share, and regional
and divisional revenue growth rates that exclude the impact of foreign
exchange may have limitations as analytical tools, and these non-GAAP
measures should not be considered in isolation or as a replacement for
GAAP financial measures. Some of the limitations associated with the use
of these non-GAAP financial measures are:
-- Items such as purchased research and development, the step-up value of
acquired Guidant inventory sold during the period, the CRM technology
offering charge, the loss on assets held for sale, and the fair value
adjustment related to the sharing of proceeds feature of the Abbott
stock purchase reflect economic costs to the Company and are not
reflected in non-GAAP net income and non-GAAP net income per diluted
share.
-- Items such as Guidant integration costs, facility and severance costs,
employee-related costs associated with certain business optimization
initiatives, the charitable contribution, and restructuring and
litigation-related expenses that are excluded from non-GAAP net income
and non-GAAP net income per diluted share can have a material impact on
cash flows and GAAP net income and net income per diluted share.
-- Items such as amortization of purchased intangible assets, though not
directly affecting Boston Scientific's cash flow position, represent a
reduction in value of intangible assets over time. The expense
associated with this reduction in value is not included in Boston
Scientific's non-GAAP net income or non-GAAP net income per diluted
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