Edgar Filing: BOSTON SCIENTIFIC CORP

WWW.EXFILE.COM, INC. -- 15227 -- BOSTON SCIENTIFIC CORPORATION -- FORM 11-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 11-K

(Mark One):

Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2006

Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number: 1-11083

Full title of the plan and the address of the plan, if different from that of the issuer named below:

Boston Scientific Corporation

401(k) Retirement Savings Plan

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537

Audited Financial Statements

and Supplemental Schedule

Boston Scientific Corporation

401(k) Retirement Savings Plan

Year ended December 31, 2006

Boston Scientific Corporation 401(k) Retirement Savings Plan

Audited Financial Statements

and Supplemental Schedule

Year ended December 31, 2006

Contents

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	1

Audited Financial Statements

Statements of Net Assets Available for Plan Benefits	2
Statement of Changes in Net Assets Available for Plan Benefits	3
Notes to the Financial Statements	4-10

Supplemental Schedule

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)	11

Report of Independent Registered Public Accounting Firm

The 401(k) Plan Administrative and Investment Committee and Participants

Boston Scientific Corporation 401(k) Retirement Savings Plan

We have audited the accompanying statements of net assets available for plan benefits of the Boston Scientific Corporation 401(k) Retirement Savings Plan as of December 31, 2006 and 2005, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2006. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2006 and 2005, and the changes in its net assets available for plan benefits for the year ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2006, is presented for purposes of additional analysis and is not a required part of the financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. This supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

Boston, Massachusetts

June 22, 2007

Boston Scientific Corporation 401(k) Retirement Savings Plan

Statements of Net Assets Available for Plan Benefits

	December 31
	2006		2005

Assets
Investments (at fair value)	$	829,374,528	$	706,304,215
Receivables:
Participant contributions		1,995,760		—
Employer contribution		5,084,094		3,229,817
Total receivables		7,079,854		3,229,817

Net assets reflecting all investments at fair value		836,454,382		709,534,032

Adjustment from fair value to contract value for
fully benefit-responsive investment contracts		827,739		1,013,100

Net assets available for plan benefits	$	837,282,121	$	710,547,132

See notes to the financial statements.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Statement of Changes in Net Assets Available for Plan Benefits

Year Ended December 31, 2006

Additions to net assets attributed to:

Investment Income:
Interest	$	4,713,988
Dividends		34,164,826
		38,878,814

Contributions:
Participants		65,690,691
Employer		45,448,217
Participant rollovers		8,675,552
		119,814,460

Assets transferred in		25,350,767

Total additions		184,044,041

Deductions from net assets attributed to:

Benefits paid to participants		56,363,380
Net depreciation in fair value of investments		873,572
Service fees		72,100

Total deductions		57,309,052

Net increase		126,734,989

Net assets available for plan benefits:

Beginning of year		710,547,132
End of year	$	837,282,121

See notes to the financial statements.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements

December 31, 2006

1.	DESCRIPTION OF THE PLAN

The following description of the Boston Scientific Corporation (the Company) 401(k) Retirement Savings Plan, as amended (the Plan) provides only general information. Participants should refer to the Summary Plan Description and the Plan for a more complete description of the Plan's provisions, including defined terms. Copies are available from the 401(k) Plan Administrative and Investment Committee (the Committee). Capitalized terms used in this description shall each have the meanings set forth in the Plan.

General

The Plan is a defined contribution plan covering all Eligible Employees who have completed thirty days of service and have attained eighteen years of age. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

In March 2006, the assets of Advanced Bionics Corporation 401(k) Plan, CryoVascular Systems Inc. 401(k) Plan, and Rubicon Medical 401(k) Plan were merged into the Plan. Total assets transferred in amounted to $25,350,767.

Contributions

An eligible non-Highly Compensated Employee may contribute between 1% and 25% (1% and 15% for Highly Compensated Employees) of his or her pretax annual compensation, as defined in the Plan, up to established federal limits indexed annually. In addition, a Participant may contribute between 1% and 10% of his or her compensation on an after-tax basis each year.

Effective January 1, 2005, the Company’s matching contribution is equal to (i) 200% of the elective pretax contributions made on behalf of the Participant for the period which do not exceed 2% of the Participant’s compensation for such period, plus (ii) 50% of the elective pretax contributions made on behalf of the Participant for the period which exceed 2% but do not exceed 6% of the Participant’s compensation.

At the discretion of the Company’s Board of Directors, the Company may make additional discretionary contributions to the Plan. Employees with three or more years of credited service on December 31, 1992 will be fully vested in such amounts and all other employees will become fully vested in such amounts after five years of credited service (20% vesting after each year). No additional discretionary contribution was made for 2006 or 2005.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

1.	DESCRIPTION OF THE PLAN (CONTINUED)

On September 24, 2004, the Board of Directors approved an enhancement to the Plan that provided for a one-time discretionary contribution to the Plan for Eligible Employees as defined in Amendment No. 3 to the Plan. The contribution was equal to the Participant’s years of service as of December 31, 2004 multiplied by three percent of the Participant’s eligible 2004 compensation, with a maximum contribution of $41,000. All contributions fully vest after five years of eligible service (20% vesting after each year). The total contribution was equal to $112,834,458, of which $97,691,282 was deposited to the Plan in 2005 based on established federal limits. The excess contribution was credited to a non-qualified plan.

The Plan also provides for an investment fund to hold shares of Pfizer Inc. (Pfizer) common stock transferred from the Pfizer Savings and Investment Plan on behalf of former Schneider employees. The Company acquired Schneider Worldwide in September 1998. No additional contributions can be made to the Pfizer Common Stock Fund and earnings within this fund are allocated in accordance with the Participant’s current investment elections under the Plan. A Participant can transfer amounts out of the Pfizer Common Stock Fund to other investment funds within the Plan.

Participant Accounts and Vesting

A Participant can allocate his or her account among various investment funds. Each Participant's account is credited with the Participant's contribution, the Company’s contribution and an allocation of the earnings and losses for the Participant’s particular investment funds. Each Participant is fully vested in his or her account, except as discussed above regarding discretionary contributions.

Participant Loans

Subject to certain limitations, a Participant may borrow from his or her account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of his or her account balance. Loan terms range up to 5 years or up to 10 years for the purchase of a primary residence. However, Participants of the defined contribution plans of acquired companies may retain the loan terms granted under their former plans. Loans are secured by the balance in the Participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Committee. Principal and interest are repaid ratably through automatic payroll deductions.

Effective January 1, 2006 the number of loans permitted to be outstanding per Participant has been reduced to one. All outstanding loans as of December 31, 2005, will be grandfathered, and only new loan requests will be subject to this rule.

Payment of Benefits

All benefit payments are made in the form of a lump-sum distribution equal to the value of the Participant’s account, whether as cash distributions or rollovers. If a terminated Participant's account is valued at and remains in excess of $5,000 (less any rollover amounts), the Participant has the option of leaving the funds invested in

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

1.	DESCRIPTION OF THE PLAN (CONTINUED)

the Plan until attaining the age of 62. While employed at the Company, a Participant may withdraw all or a portion of his or her elective contributions to the extent necessary to meet a Financial Hardship, as defined in the Plan.

Effective January 1, 2006, the Plan was amended to reduce the number of permitted Financial Hardship withdrawals from four to two per calendar year.

Participants may make withdrawals for any reason after attaining age 59 ½. Disabled Participants, as defined in the Company’s group long-term disability contract, are allowed to take withdrawals at any time regardless of age. The Plan also allows withdrawals regardless of age from Participant’s after-tax and rollover accounts for any reason.

Forfeitures

At December 31, 2006 and 2005 forfeited non-vested accounts totaled $1,711,885 and $618,520 respectively. The increase during 2006 is due to forfeitures relating to the one-time discretionary contribution. These amounts will be used to (a) restore any amount previously forfeited as required by applicable regulations; (b) pay reasonable expenses of administering the Plan; and (c) reduce future employer matching contributions. Also, in 2005, employer contributions were reduced by $17,722 from forfeited non-vested accounts. Employer contributions were not reduced by forfeited non-vested accounts in 2006.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncement

In December 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP). The FSP defines the circumstances in which an investment contract is considered fully benefit responsive and provides certain reporting and disclosure requirements for fully benefit responsive investment contracts in defined contribution health and welfare and pension plans. The financial statement presentation and disclosure provisions of the FSP are effective for financial statements issued for annual periods ending after December 15, 2006 and are required to be applied retroactively to all prior periods presented for comparative purposes. The provisions of the FSP have been complied with for the period ended December 31, 2006.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

As required by the FSP, investments in the accompanying Statements of Net Assets Available for Plan Benefits include fully benefit responsive investment contracts recognized at fair value. AICPA Statement of Position 94-4-1, Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans, as amended, requires fully benefit responsive investment contracts to be reported at fair value in the Plan’s Statement of Net Assets Available for Plan Benefits with a corresponding adjustment to reflect these investments at contract value. The requirements of the FSP have been applied retroactively to the Statement of Net Assets Available for Plan Benefits as of December 31, 2005 presented for comparative purposes. Adoption of the FSP had no effect on the Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 2006.

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.

Basis of Accounting

The accounting records of the Plan are maintained on the accrual basis.

Investment Valuation and Income Recognition

The Plan’s investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year end. Securities listed on a registered stock exchange are valued by the Plan Administrator at the last reported sales price on the last business day of the Plan year. Participant notes receivable are valued at cost, which approximates fair value.

Vanguard Retirement Savings Trust is a common collective trust (CCT) fund which invests in fully benefit-responsive contracts. The fair value of the traditional guaranteed investment contracts in the CCT is based on the discounted expected future cash flows for each contract. The fair value of the wrapper contracts in the CCT is based on re-bid rates for those same contracts. The fair value of the mutual funds in the CCT is based on quoted market prices. Bonds and bond trusts are valued using the latest bid price provided by pricing services plus accrued interest. The fair value of the CCT is adjusted to contract value, in accordance with the FSP. Contract value represents contributions made plus interest accrued at the contract value, less withdrawals.

Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates.

3.	INVESTMENTS

The following investments represent five percent or more of the Plan’s net assets.

	December 31,
	2006		2005

Vanguard 500 Index Fund Investor Shares	$	141,589,359	$	118,738,001
Boston Scientific Corporation Common Stock Fund		107,145,255		137,925,737
Vanguard Wellington Fund Investor Shares		95,381,059		72,391,531
Vanguard International Growth Fund		89,829,791		56,410,055
Vanguard Retirement Savings Trust		86,847,565		77,835,142
Vanguard Windsor II Fund Investor Shares		83,288,037		62,748,581
Vanguard Growth Index Fund Investor Shares		76,665,824		63,995,486
Vanguard Mid-Cap Growth Fund		47,439,879		*
Vanguard Total Bond Market Index Fund		43,162,805		35,626,288

* Amount did not exceed five percent or more of the Plan’s assets in the prior year.

During 2006, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $873,572 as follows:

Mutual funds	$	41,347,695
Common stock		(42,221,267	)
	$	(873,572	)

4.	TRANSACTIONS WITH PARTIES-IN-INTEREST

The Plan invests in certain funds managed by an affiliate of Vanguard Fiduciary Trust Company (Vanguard). Vanguard acts as trustee for only those investments as defined by the Plan. Transactions in such investments qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules.

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

4.	TRANSACTIONS WITH PARTIES-IN-INTEREST (CONTINUED)

Fees for legal, accounting and other services rendered during the year by parties-in-interest were paid by the Company.

5.	RISKS AND UNCERTAINTIES

The Plan and its participants invest in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect Participants' account balances and the amounts reported in the statements of net assets available for plan benefits.

6.	INCOME TAX STATUS

The Plan has received a determination letter from the Internal Revenue Service dated March 4, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to bring the Plan’s operations into compliance with the code.

7.	RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of the net assets available for plan benefits per the financial statements to the Form 5500 as of December 31, 2006 and 2005:

	December 31,
	2006			2005

Net assets available for plan benefits per the financial
statements	$	837,282,121		$	710,547,132
Less: Adjustment from fair value to contract
value for fully benefit responsive
investment contracts		(827,739	)		—
Deemed distributions		(2,172	)		(11,885	)
Net assets available for plan benefits per the 5500		836,452,210			710,535,247

Boston Scientific Corporation 401(k) Retirement Savings Plan

Notes to the Financial Statements (continued)

8.	SUBSEQUENT EVENTS

In April 2007, the assets of the EndoTex Interventional Inc. 401(k) Plan, which totaled approximately $1,000,000, were merged into the Plan.

Effective January 1, 2007, the Plan was amended to allow for the automatic compensation reduction authorization for employees who satisfy the eligibility requirements of the Plan on or after January 1, 2007. Also, effective January 1, 2007, the Plan will accept Roth elective deferrals made on behalf of participants, and has further reduced the number of permitted hardship withdrawals from two to one per year.

Boston Scientific Corporation 401(k) Retirement Savings Plan

EIN #04-2695240

Plan #001

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

December 31, 2006

			Current
Identity of Issue	Shares or Units		Value

* Vanguard Group:
500 Index Fund Investor Shares		1,084,228		141,589,359
Wellington Fund Investor Shares		2,941,137		95,381,059
International Growth Fund		3,764,869		89,829,791
Retirement Savings Trust		86,847,565		86,019,826
Windsor II Fund Investor Shares		2,396,778		83,288,037
Growth Index Fund Investor Shares		2,575,271		76,665,824
Mid-Cap Growth Fund		2,779,138		47,439,879
Total Bond Market Index Fund		4,320,601		43,162,805

* Boston Scientific Corporation Common Stock Fund		6,236,627		107,145,255

Pfizer Common Stock Fund		285,792		7,402,008

T. Rowe Price Small-Cap Stock Fund-Advisor Class		965,262		32,876,812

* Participants’ notes receivable 5.00% - 10.75%				18,573,873

			$	829,374,528

* Indicates party-in-interest to the Plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.


		Boston Scientific Corporation 401(k) Retirement Savings Plan


Date: June 28, 2007	By:	/s/ Jamie Rubin
		Jamie Rubin
		Member, 401(k) Plan Administrative and Investment Committee

EXHIBIT INDEX

Exhibit Number

Description

Consent of Independent Auditors