Boston Scientific Corp. (BSX)

In October 2016, the FASB issued ASC Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The purpose of Update No. 2016-16 is to allow an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, as opposed to waiting until the asset is sold to a third party, or impaired. Update No. 2016-16 was effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Boston Scientific adopted Update No. 2016-16 prospectively in the first quarter of 2018 and recognized a net reduction to opening retained earnings of $55 million for income tax consequences not previously recognized for intra-entity transfers of assets other than inventories. All future income tax consequences of intra-entity transfers of assets other than inventories will be recognized through Income tax expense (benefit).

Boston Scientific utilizes the asset and liability method of accounting for income taxes. Under this method, Boston Scientific determines deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities. Boston Scientific measures deferred tax assets and liabilities using the enacted tax rates and laws that will be in effect when Boston Scientific expects the differences to reverse. Boston Scientific reduces the deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that Boston Scientific will not realize some portion or all of the deferred tax assets. Boston Scientific considers relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes Boston Scientific’s financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as estimates of the impact of future taxable income and available prudent and feasible tax-planning strategies. Boston Scientific recognizes interest and penalties related to income taxes as a component of income tax expense. As part of the Tax Cut and Jobs Act of 2017 (TCJA), Boston Scientific is subject to a territorial tax system in which Boston Scientific is required to make an accounting policy in providing for tax on Global Intangible Low Taxed Income (GILTI) earned by certain foreign subsidiaries. Boston Scientific has elected to treat the impact of GILTI as a period cost and will be reported as a part of continuing operations.

Source: 10-K (filing date: 2019-02-19).

Boston Scientific Corp., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Federal
	State
	Foreign
	Current
	Federal
	State
	Foreign
	Deferred
	Income tax expense (benefit)

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., effective income tax rate (EITR) reconciliation

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	U.S. federal statutory income tax rate
	State income taxes, net of federal benefit
	Domestic taxes on foreign earnings
	Effect of foreign taxes
	Acquisition-related
	Research credit
	Valuation allowance
	Compensation-related
	Non-deductible expenses
	Uncertain tax positions
	Other, net
	Effective income tax rate, before TCJA net impact
	TCJA net impact
	Effective income tax rate

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., components of deferred tax assets and liabilities

US$ in millions

		Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Inventory costs and related reserves
	Tax benefit of net operating loss and credits
	Reserves and accruals
	Restructuring-related charges
	Litigation and product liability reserves
	Investment write-down
	Compensation related
	Federal benefit of uncertain tax positions
	Other
	Deferred tax assets, before valuation allowance
	Valuation allowance
	Deferred tax assets
	Property, plant and equipment
	Unrealized gains and losses on derivative financial instruments
	Intangible assets
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Current deferred tax asset
	Non-current deferred tax asset (included in Other long-term assets)
	Current deferred tax liability (included in Other current liabilities)
	Non-current deferred tax liability

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., adjustments to financial statements

US$ in millions

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Stockholders’ Equity
	Stockholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Stockholders’ equity (adjusted)
	Adjustment to Net Income (loss)
	Net income (loss) (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) (adjusted)

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., Financial Data: Reported vs. Adjusted

Boston Scientific Corp., adjusted financial ratios

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Boston Scientific Corp., Financial Ratios: Reported vs. Adjusted

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Current assets
	Current liabilities
	Liquidity Ratio
	Current ratio1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Liquidity Ratio
	Adjusted current ratio2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Net sales
	Profitability Ratio
	Net profit margin1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Net sales
	Profitability Ratio
	Adjusted net profit margin2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net sales
	Total assets
	Activity Ratio
	Total asset turnover1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Net sales
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Stockholders’ equity
	Solvency Ratio
	Financial leverage1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted stockholders’ equity
	Solvency Ratio
	Adjusted financial leverage2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Stockholders’ equity
	Profitability Ratio
	ROE1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Adjusted stockholders’ equity
	Profitability Ratio
	Adjusted ROE2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Total assets
	Profitability Ratio
	ROA1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA2

Based on: 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).