8-K/A 1 d8ka.txt FORM 8-K/A DATED FEBRUARY 16, 2001 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------- Form 8-K/A ---------- Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 February 16, 2001 Date of Report (Date of earliest event reported) ResMed Inc (Exact name of registrant as specified in its charter) Delaware 0-26038 (State or other jurisdiction of incorporation) (Commission File Number) 98-0152841 (IRS Employer Identification No) 14040 Danielson Street, Poway CA (Address of principal executive offices) 92064-6857 (Zip Code) (858) 746 2400 Registrant's Telephone number, including area code Not Applicable (Former name or former address, if changed since last report) ================================================================================ -------------------------------------------------------------------------------- The undersigned registrant hereby amends item 7 on its current report on Form 8- K dated March 2, 2001 as set out below: -------------------------------------------------------------------------------- Item 7 FINANCIAL STATEMENTS, UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS A. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED Independent auditors' report dated April 12, 2001. Audited Consolidated Balance Sheets of MAP Medizin - Technologie GmbH for the years ended December 31, 2000 and December 31, 1999. Audited Consolidated Statements of Income for the years ended December 31, 2000 and 1999. Audited Consolidated Statements of Stockholders' Equity for the years ended December 31, 2000 and 1999. Audited Consolidated Statements of Cash Flows for the years ended December 31, 2000 and 1999. Notes to the Consolidated Financial Statements. B. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Pro Forma Condensed Consolidated Financial Statements of ResMed Inc as of December 31, 2000 for the year ended June 30, 2000, and six months ended December 31, 2000, respectively. C. EXHIBITS 2.1 Purchase Agreement dated February 16, 2001 between MAP Medizin - Technologie GmbH and ResMed Beteiligungs GmbH, a fully owned subsidiary of ResMed Inc.(1) 23.1 Consent of Haarmann, Hemmelrath & Partner. 99.3 Press Release, dated February 19, 2001, issued by ResMed, Inc. (1) ------- (1) Previously filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 30, 2001 ResMed Inc /s/ ADRIAN M SMITH -------------------------------------------------- Vice President Finance and Chief Financial Officer HAARMANN, HEMMELRATH & PARTNER GMBH Report of Independent Accountants --------------------------------- We have audited the accompanying consolidated balance sheets as of December 31, 2000 and 1999, the related statements of income for the fiscal years 2000 and 1999, the statements of stockholders' equity for the fiscal years 2000 and 1999 as well as the statements of cash flows for the fiscal years 2000 and 1999 of MAP Medizin-Technologie GmbH, Martinsried. Those consolidated financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of MAP Medizin-Technologie GmbH, Martinsried, as of December 31, 2000 and 1999 and the results of its operations and cash flows for the fiscal years 2000 and 1999 in conformity with generally accepted accounting principles in the US. Munich, April 12, 2001 Haarmann, Hemmelrath & Partner GmbH Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft /s/ ZELGER WIRTSCHAFTSPRUFER /s/ EICHLER WIRTSCHAFTSPRUFER ---------------------------- ----------------------------- Zelger Wirtschaftsprufer Eichler Wirtschaftsprufer -F1- MAP Medizin-Technologie GmbH Consolidated Balance Sheets December 31, 2000 and 1999 (in thousands)

Note December 31, December 31, 2000 1999 DM DM ------------------------------------- ASSETS Current assets: Cash and cash equivalents 540 288 Accounts receivable, net of allowance for doubtful accounts of DM295 and DM228 at December 31, 2000 and 1999, respectively 4 6,056 5,042 Inventories, net 5 17,336 12,361 Prepaid expenses and other current assets 6 1,856 1,071 ------------------------------ Total Current assets 25,788 18,762 ------------------------------ Goodwill, net of accumulated amortization of DM 7,740 and DM 4,481 at December 31, 2000 and 1999, respectively 8 57,446 60,705 Patents, net of accumulated amortization of DM 11 and nil at December 31, 2000 and 1999, respectively 8 203 106 Property, Plant and Equipment, net of accumulated depreciation of DM 3,274 and DM 2,126 at December 31, 2000 and 1999, respectively 9 3,548 3,737 Other Non Current Assets 50 50 ------------------------------ Total Non Current Assets 61,247 64,598 ------------------------------ Total Assets 87,035 83,360 ============================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Bank overdraft 10 2,707 1,911 Bank borrowings 10 15,610 11,210 Accounts payable 3,222 2,238 Income taxes payable 1,889 418 Accrued expenses 11 12,330 9,171 Deferred tax liability 7 1,246 2,274 Shareholders' Loans 1,025 1,000 ------------------------------ Total Current Liabilities 38,029 28,222 ------------------------------ Non-current Liabilities: Bank borrowings 10 12,307 20,790 Other non-current liabilities 12 427 - ------------------------------ Total Non-current Liabilities 12,734 20,790 ------------------------------ Stockholders' Equity Common stock 100 100 Additional paid-in-capital 34,464 34,464 Retained earnings (losses) 1,707 (216) Accumulated other comprehensive income 1 - ------------------------------ Total Stockholders' Equity 36,272 34,348 ------------------------------ Total Liabilities and Stockholders' Equity 87,035 83,360 ==============================

See accompanying notes to the consolidated financial statements. -F2- MAP Medizin-Technologie GmbH Consolidated Statements of Income December 31, 2000 and 1999 (in thousands)

Note December 31, December 31, 2000 1999 DM DM ------------------------------------- Net revenue 52,302 47,024 Cost of sales (22,444) (17,366) ------------------------------ Gross Profit 29,858 29,658 ------------------------------ Operating expenses: Selling, general and administrative (23,542) (23,526) Research and development (3,836) (3,518) ------------------------------ Total operating expenses (27,378) (27,044) ------------------------------ Income from operations 2,480 2,614 Other income (expenses) Interest expense, net (2,241) (1,782) ------------------------------ Income before Income Taxes 239 832 ------------------------------ Income taxes 7 1,684 (2,651) ------------------------------ Net Income/ (loss) 1,923 (1,819) ==============================

See accompanying notes to the consolidated financial statements. -F3- MAP Medizin-Technologie GmbH Consolidated Statements of Stockholders' Equity (in thousands)

Common Additional Retained Accumulated other Total Comprehensive Stock Paid-in capital Earnings Comprehensive Stockholders' Income (losses) Income (loss) Equity DM DM DM DM DM DM --------------------------------------------------------------------------------------------- Balances as of January 1, 1999 100 34,464 1,603 - 36,167 1,603 ============================================================================================= Net Loss -- -- (1,819) (1,819) (1,819) Foreign currency translation adjustments -- -- -- --------------------------------------------------------------------------------------------- Balances as of December 31, 1999 100 34,464 (216) -- 34,348 (216) ============================================================================================= Net Income -- -- 1,923 1,923 1,923 Foreign currency translation adjustments 1 1 1 --------------------------------------------------------------------------------------------- Balances as of December 31, 2000 100 34,464 1,707 1 36,272 1,708 =============================================================================================

See accompanying notes to the consolidated financial statements. -F4- MAP Medizin-Technologie GmbH Consolidated Statements of Cash Flows December 31, 2000 and 1999 (in thousands)

December 31, December 31, 2000 1999 DM DM ---------------------------- Cash Flows from Operating Activities Net Income (Loss) 1,923 (1,819) ---------------------------- Adjustments to reconcile Net Income (Loss) to Net Cash provided by Operating Activities: Depreciation and amortization 1,353 1,103 Goodwill amortization 3,259 3,259 Deferred income taxes (1,028) 786 Changes in operating assets and liabilities: Accounts receivable, net (1,014) (1,342) Inventories (4,975) (2,935) Prepaid expenses and other current assets (785) (193) Accounts payable and accrued expenses 4,021 3,033 Income taxes payable 1,471 757 ---------------------------- Net cash provided by operating activities 4,225 2,649 ---------------------------- Cash Flows Used in Investing Activities: Purchases of intangible assets (108) (106) Purchases of property, plant and equipment (1,606) (3,920) Proceeds from sale of property, plant and equipment 454 2 ---------------------------- Net cash used in investing activities (1,260) (4,024) ---------------------------- Cash Flows Used in Financing Activities: Proceeds from bank borrowings 4,400 4,010 Repayment of bank borrowings (8,483) (8,010) Proceeds from bank overdraft 796 1,538 Shareholders' loans 25 0 Proceeds from capital lease 550 0 ---------------------------- Net cash used in financing activities (2,712) (2,462) ---------------------------- Effect of exchange rate changes on cash (1) (1) ---------------------------- Net increase/(decrease) in cash and cash equivalents 252 (3,838) ---------------------------- Cash and cash equivalents at beginning of period 288 4,126 ---------------------------- Cash and cash equivalents at end of period 540 288 ============================ Supplemental disclosure of cash flow information: Income taxes paid 633 5 Interest paid 1,853 1,761 =============================

See accompanying notes to the consolidated financial statements. -F5- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 1. Organization and Basis of Presentation MAP Medizin-Technologie GmbH (in the following "MAP GmbH" or "Company") is a company formed under the German Company Law for limited liability companies as of July 10, 1998 and has its seat in Martinsried/Germany. MAP GmbH is the holding company for MAP Medizintechnik fur Arzt und Patient GmbH & Co. KG, Martinsried/Germany. MAP Medizintechnik fur Arzt und Patient GmbH & Co, Martinsried/Germany, designs, manufacturers and markets devices for the evaluation and treatment of sleep disordered breathing ("SDB"), primarily obstructive sleep apnea. Furthermore, MAP GmbH is the holding company for distribution and sales companies in France, Switzerland, Austria and The Netherlands. 2. Summary of Significant Accounting Principles A. Consolidation ------------- The consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. B. Revenue Recognition ------------------- Revenue on product sales is recorded at the time of shipment. Service revenue received in advance from service contracts is initially capitalized and progressively recognized as revenue over the life of the service contract. C. Inventories ----------- Inventories, including work-in-process, are valued at the lower of cost or market. Cost is determined primarily on the basis of weighted average cost. Market value is the selling price in ordinary course of business, less the costs of completion, marketing and distribution. D. Patents ------- The registration costs for new patents are capitalized and amortized over the estimated useful life of the patent, generally 10 years. In the event of a patent being superseded, the unamortized costs are written off immediately. -F6- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 2. Summary of Significant Accounting Principles (Continued) E. Goodwill -------- Goodwill arising from business acquisitions is amortized on a straight line basis over a period of 20 years. The Company carries goodwill at cost net of accumulated amortization. The Company reviews its goodwill carrying value when events indicate that an impairment may have occurred in goodwill. If, based on the undiscounted cash flows, management determines goodwill is not recoverable, goodwill is written down to its discounted cash flow value and the amortization period is reassessed. Amortization expense of goodwill was DM 3,259,000 and DM 3,259,000 for the year's end December 31, 2000 and 1999, respectively. F. Property, Plant and Equipment ----------------------------- Property, plant and equipment is recorded at cost of acquisition and/or production and is amortized over the expected useful life. Depreciation is computed using the following methods and over the following useful lives: Method of Period of Balance Sheet Item Depreciation Depreciation ------------------ ------------- ------------ Computer equipment straight-line 3 to 5 years Fixtures and Office Equipment straight-line 2 to 10 years Maintenance and repairs are charged to expense as incurred. G. Warranty -------- Estimated future warranty obligations related to certain products are provided by charges to operations in the period in which the related revenue is recognized. H. Income Taxes ------------ The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. -F7- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 2. Summary of Significant Accounting Principles (Continued) I. Foreign Currency ---------------- The financial statements drawn up in foreign currencies are translated into German Marks (DM). Assets and liabilities of foreign subsidiaries, whose functional currencies are not DM, are translated into DM at the exchange rate as of the balance sheet date, and revenue and expense transactions are translated at the average rates for the year. Cumulative translation adjustments are recognized as part of comprehensive income and are included in accumulated other comprehensive income/(loss) in the consolidated balance sheet until such time as the subsidiary is sold or substantially or completely liquidated. J. Research and Development ------------------------ All research and development costs are expensed in the period incurred. K. Financial Instruments --------------------- The carrying value of financial instruments, such as of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value because of their short-term nature. The Company does not hold or issue financial instruments for trading purposes. The fair value of financial instruments is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties. L. Impairment of Long-Lived Assets ------------------------------- The Company periodically evaluates the carrying value of long-lived assets to be held and used, including certain identifiable intangible assets, when events and circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less cost to sell. M. Cash and Cash equivalents ------------------------- Cash equivalents, including certificates of deposit and other highly liquid investments are stated at cost, which approximates market. Investments with original maturities of 90 days or less are considered cash equivalents for the purposes of the consolidated statements of cash flows. -F8- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 3. Business Acquisitions Acquisition of MAP Medizintechnik fur Arzt und Patient GmbH & Co. KG, Martinsried/Germany By way of agreement dated August 14, 1998, the Company acquired with immediate effect all shareholdings in MAP Medizintechnik fur Arzt und Patient GmbH & Co. KG, Martinsried/Germany, at a price of DM 65,077,000. TDM ------ Fair value of assets acquired (109) Goodwill on acquisition 65,186 ------ Consideration 65,077 ====== The excess of the purchase price over fair value of the net identifiable assets acquired is allocated to goodwill and is amortized on a straight line basis over twenty years. 4. Trade Accounts receivables Dec 31, 2000 Dec 31, 1999 TDM TDM ------------------------------ Trade receivables 6,351 5,270 Less allowance for doubtful accounts (295) (228) ------------------------------ 6,056 5,042 ============================== 5. Inventories Inventories, net were comprised of the following as of December 31, 2000 and 1999: Dec 31, 2000 Dec 31, 1999 TDM TDM ------------------------------ Raw materials and supplies 2,758 2,040 Work in progress 88 902 Finished goods 14,490 9,419 ------------------------------ 17,336 12,361 ============================== -F9- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 6. Prepaid Expenses and Other Current Assets Dec 31, 2000 Dec 31, 1999 TDM TDM ------------------------------ Receivable from shareholders' 184 184 Other receivables 638 -- Prepaid expenses 199 120 Prepayments 94 -- Other 741 767 ------------------------------ 1,856 1,071 ============================== 7. Income taxes The provision for income taxes is presented below: 2000 1999 TDM TDM ----------------------- Current income taxes 695 (2,130) Deferred income taxes 989 (521) Total income taxes 1,684 (2,651) ======================= The provision for income taxes differs from the amount of income tax computed by applying the applicable income tax rates mentioned above to pretax income as a result of the following (in thousands): 2000 1999 TDM TDM ------------------------- Computed "expected" tax expenses (127) (441) Reconciliation to provision for income taxes: Effect of changes in German tax rates on deferred tax balances 492 -- Tax effect of non deductible goodwill (671) (671) Tax effect of intercompany writedown 3,686 -- Change in valuation allowance (1,162) (1,094) Effect of non German tax rates (482) (411) Other (52) (34) 1,684 (2,651) ========================= On January 1, 2001, the German Federal tax rate was reduced such that the Company's effective tax rate on its German income reduced from 53% to 38%. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are comprised of the following at December 31, 2000 and 1999: -F10- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 7. Income taxes (Continued) Dec 31, 2000 Dec 31, 1999 TDM TDM --------------------------- Deferred tax assets: ------------------- R&D software 214 -- Intercompany profit in inventory 277 280 Net operating losses carried forward 4,037 1,760 4,528 2,040 Less valuation allowance (2,256) (1,094) Net deferred tax asset 2,272 946 --------------------------- Deferred tax liabilities: ------------------------ Patents (77) (57) Accelerated goodwill tax deduction (3,364) (3,163) Other (77) - --------------------------- (3,518) (3,220) --------------------------- Net deferred tax liability (1,246) (2,274) ============================ The valuation allowance at December 31, 2000 and 1999, primarily relates to a provision for uncertainty as to the utilization of net operating loss carryforwards. The net change in the valuation allowance was an increase of DM 1,162,000 for the year ended December 31, 2000. The measurement of deferred tax assets and liabilities at December 31 each year reflect foreign currency translation adjustments, changes in enacted tax rates and changes in temporary differences. 8. Intangible Assets Dec 31, 2000 Dec 31, 1999 TDM TDM ----------------------------- Goodwill 65,186 65,186 Accumulated amortization (7,740) (4,481) ----------------------------- 57,446 60,705 ============================= Patents 214 106 Accumulated depreciation and amortization (11) -- ----------------------------- 203 106 ============================= 9. Property, Plant and Equipment Dec 31, 2000 Dec 31, 1999 TDM TDM ----------------------------- Machinery and equipment 2,796 2,671 Fixtures and office equipment 1,712 1,682 Computer equipment 2,314 1,510 ----------------------------- 6,822 5,863 Accumulated depreciation and amortization (3,274) (2,126) ----------------------------- 3,548 3,737 ============================== -F11- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 10. Bank borrowings Current bank borrowings:

Bank Dec 31, Dec 31, Term Interest rate Securities 2000 1999 TDM TDM ------------------------------------------------------------------------------------------------------------------- Overdraft facilities: Dresdner Bank 927 1,313 13.75 % Accounts receivables and inventories (70%) Bayerische Landesbank 1,779 505 13.75 % Accounts receivables and inventories (30%) Bank Nationale de Paris 1 93 2,707 1,911 Term loans: Dresdner Bank 7,200 7,200 3/14/01 7.225 % Accounts receivables and inventories (70%) Dresdner Bank 810 810 1/3/01 7.225 % Accounts receivables and inventories (70%) Dresdner Bank 7,600 3,200 2/28/01 7.3870 % Accounts receivables and inventories (70%) 15,610 11,210 18,317 13,121 ===================================================================================================================

Non current bank borrowings:

Bank Dec 31, Dec 31, Term Interest rate Securities 2000 1999 TDM TDM ------------------------------------------------------------------------------------------------------------------- Term loans: Dresdner Bank 11,767 18,967 8/31/03 7.225 % Accounts receivables and inventories (70%) Dresdner Bank 540 1,823 8/31/03 7.225 % Accounts receivables and inventories (70%) ------------------------------------------------------------------------------------------------------------------- 12,307 20,790 =========================================================================================================================

The Company has overdraft facilities in the amount of TDM 3,500 with Dresdner Bank and in the amount of TDM 1,500 with Bayerische Landesbank. 11. Accrued expenses Accrued expenses at December 31, 2000 and 1999 consist of the following: Dec 31, 2000 Dec 31, 1999 TDM TDM ------------------------------ Employee related cost 2,269 2,174 Consultant and professional fees 203 275 Service warranties 119 112 Deferred revenue 6,873 4,355 Value added taxes 1,093 1,114 Interest payable 423 0 Other 1,350 1,141 ------------------------------ 12,330 9,171 ============================== -F12- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 12. Commitments The Company leases Buildings, Motor vehicles and Computer equipment under operating leases. Rental charges on these items are expensed as incurred. At December 31, 2000 the Company had the following future minimum lease payments under non cancelable operating leases:

2001 2002 2003 2004 2005 TOTAL TDM TDM TDM TDM TDM TDM ---------------------------------------------------- Computer equipment 158 114 114 48 0 434 Rent 1,139 944 900 521 0 3,504 Motor vehicles 542 361 64 0 0 967 1,839 1,419 1,078 569 0 4,905 ====================================================

Rent expense under operating leases for the years ended December 31, 2000 and 1999 were approximately TDM 900 and TDM 550, respectively. The Company leases Computer software under capital leases for which the liability is shown as other current liabilities in the amount of TDM 123 and as other non-current liabilities in the amount of TDM 427. The term of the contract is 48 months with the first repayment commencing January 1, 2001. The interest rate of the contract is 7.25 %. 13. Events after the Balance Sheet Date On February 16, 2001 ResMed Beteiligungs GmbH, a wholly owned subsidiary of ResMed Inc, acquired all the issued capital of the Company from its existing shareholders. 14. Legal actions The Management of the Company is not aware of any legal actions or contingencies against the Company. In January 2001, the Company filed a lawsuit in the Civil Chamber of Munich Court against Hofrichter GmbH seeking actual and exemplary monetary damages for the unauthorized and infringing use of the Company's trademarks and patents. While the Company is prosecuting the above action, there can be no assurance that the Company will be successful. -F13- MAP Medizin-Technologie GmbH and Subsidiaries Notes to the Consolidated Financial Statements December 31, 2000 and 1999 15. Segment Reporting The Company operates solely in the sleep disordered breathing sector of the respiratory medicine industry. The Company therefore believes that given the single market focus of its operations and the interdependence of its products that the Company operates as a single segment. The Company assesses performance and allocates resources on the basis of a single operating entity. The Company generates over 90% of its revenue in Germany and therefore believes its operations are conducted in one geographic segment. Martinsried, April 12, 2001 /s/ DR STEFAN MADAUS ----------------------------- Dr Stefan Madaus Managing Director /s/ CASPAR GRAF STAUFFENBERG ----------------------------- Caspar Graf Stauffenberg Chief Financial Officer /s/ HARALD VOGELE ----------------------------- Harald Vogele Chief Operating Officer -F14- ResMed Inc Pro Forma Condensed Consolidated Financial Information The following unaudited pro forma condensed consolidated financial statements present the estimated effects of the acquisition of MAP Medizin - Technologie GmbH. The Pro Forma Condensed Consolidated Statements of Operations for the year ended June 30, 2000 and the six months ended December 31, 2000 assume that the purchase occurred on July 1, 1999 and July 1, 2000 respectively. Also presented is the unaudited December 31, 2000 Pro Forma Condensed Consolidated Balance Sheet giving effect to the purchase of MAP GmbH as if it had been consummated on December 31, 2000. See "Note 1 - Basis of Presentation". The pro forma information is based on the historical consolidated financial statements of ResMed Inc and the historical financial statements of MAP GmbH adjusted for related preliminary estimates and assumptions. The pro forma adjustments are applied to the historical consolidated financial statements of ResMed Inc and MAP GmbH to account for the MAP GmbH acquisition using the purchase method of accounting. Under purchase accounting, the total purchase price of MAP GmbH was allocated to the assets and liabilities acquired based on their fair values as of the acquisition date, with the excess of purchase price over the fair value of tangible and identifiable intangible assets acquired less the fair value of liabilities assumed recorded as goodwill. Although the final allocation may differ, the Pro Forma Condensed Consolidated financial information reflects ResMed Inc management's best estimate based on currently available information. The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the actual results that would have occurred had the purchase been consummated on the applicable date indicated. Moreover, they are not intended to be indicative of future results of operations or financial position. These unaudited pro forma financial statements should be read in conjunction with the Notes to the Pro Forma Condensed Consolidated Financial Statements, the audited financial statements and notes for MAP GmbH included herein and the audited historical consolidated financial statements of ResMed Inc. -F15- ResMed Inc Unaudited Pro Forma Condensed Consolidated Balance Sheet December 31, 2000 (in thousands of dollars, except share and per share data)

MAP GmbH ResMed Inc Business Pro forma Historical Historical Adjustments Notes Consolidated --------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 16,857 260 - $ 17,117 Marketable securities - available-for-sale 1,322 - - 1,322 Accounts receivable, net 28,965 2,916 - 31,881 Inventories 19,790 8,347 428 2(b) 28,565 Deferred income taxes 2,400 - - 2,400 Prepaid expenses and other current assets 6,345 894 - 7,239 --------------------------------------------------------------------------- Total current assets 75,679 12,417 428 88,524 --------------------------------------------------------------------------- Property, plant and equipment, net 53,947 1,709 - 55,656 Patents, net 1,352 98 - 1,450 Goodwill, net 5,228 27,659 21,117 2(b) 54,004 Other assets 4,039 24 - 4,063 --------------------------------------------------------------------------- Total assets $140,245 41,907 21,545 $203,697 =========================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Account payables $ 8,662 1,551 - $ 10,213 Accrued expenses 12,233 5,937 550 1 18,720 Income taxes payable 7,014 909 - 7,923 Other loans - 494 - 494 Bank overdraft - 1,303 - 1,303 Deferred tax liability - 600 - 600 Current portion of long-term debt 4,500 7,516 - 12,016 --------------------------------------------------------------------------- 32,409 18,310 550 51,269 Long term debt less current portion thereof - 5,926 57,110 2(b) 63,036 Other non current liabilities - 206 - 206 --------------------------------------------------------------------------- Total liabilities 32,409 24,442 57,660 114,511 --------------------------------------------------------------------------- Stockholders' equity: Common Stock 125 48 (48) 125 Additional paid-in-capital 46,029 16,594 (16,594) 46,029 Retained Earnings 78,985 822 (19,472) 60,335 Accumulated other comprehensive income (17,303) 1 (1) (17,303) --------------------------------------------------------------------------- 107,836 17,465 (36,115) 89,186 --------------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $140,245 41,907 21,545 $203,697 =========================================================================== See accompanying notes to unaudited pro forma condensed consolidated financial statements.

-F16- ResMed Inc Unaudited Pro Forma Condensed Consolidated Statement Of Operations Six Months Ended December 31, 2000 (in thousands of dollars, except per share data)

MAP GmbH ResMed Inc Business Pro forma Historical Historical Adjustments Notes Consolidated --------------------------------------------------------------------------- Net revenues $65,448 12,967 0 $78,415 Cost of sales 21,340 5,275 483 2(f) 27,098 --------------------------------------------------------------------------- Gross profit 44,108 7,692 (483) 51,317 --------------------------------------------------------------------------- Operating expenses: Selling, general and administrative 20,315 5,400 473 2(d) 26,188 Research and development 4,894 1,125 0 6,019 --------------------------------------------------------------------------- Total operating expenses 25,209 6,525 473 32,207 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Income from operations 18,899 1,167 (956) 19,110 --------------------------------------------------------------------------- Other income: Interest income, net 103 (737) (1,282) 2(c) (1,916) Government grants 72 0 0 72 Other income, net 1,381 0 0 1,381 --------------------------------------------------------------------------- Total other income, net 1,556 (737) (1,282) (463) --------------------------------------------------------------------------- Income before income taxes 20,455 430 (2,238) 18,647 --------------------------------------------------------------------------- Income taxes 6,977 (729) (559) 2(e) 5,689 --------------------------------------------------------------------------- Net income $13,478 1,159 (1,679) $12,958 =========================================================================== Basic earnings per share 0.44 0.42 Diluted earnings per share 0.41 0.39 Basic shares outstanding 30,923 30,923 Diluted shares outstanding 33,150 33,150 See accompanying notes to unaudited pro forma condensed consolidated financial statements.

-F17- ResMed Inc Unaudited Pro Forma Condensed Statement Of Operations Year Ended June 30, 2000 (in thousands of dollars, except per share data)

MAP GmbH ResMed Inc Business Pro Forma Historical Historical Adjustments Notes Consolidated ---------------------------------------------------------------------------- Net revenues $115,615 23,934 0 $139,549 Cost of sales 36,991 10,597 1,078 2(f) 48,666 ---------------------------------------------------------------------------- Gross profit 78,624 13,337 (1,078) 90,883 ---------------------------------------------------------------------------- Operating expenses: Selling, general and administrative 36,987 10,503 770 2(d) 48,260 Research and development 8,499 1,684 0 10,183 ---------------------------------------------------------------------------- Total operating expenses 45,486 12,187 770 58,443 ---------------------------------------------------------------------------- Income from operations 33,138 1,150 (1,848) 32,440 ---------------------------------------------------------------------------- Other income: Interest income, net 801 (760) (3,280) 2(c) (3,239) Government grants 279 0 0 279 Other, net (52) 0 0 (52) ---------------------------------------------------------------------------- Total other income, net 1,028 (760) (3,280) (3,012) ---------------------------------------------------------------------------- Income before income taxes 34,166 390 (5,128) 29,428 ---------------------------------------------------------------------------- Income taxes 11,940 993 (1,598) 2(e) 11,335 ---------------------------------------------------------------------------- Net income $ 22,226 (603) (3,530) $ 18,093 ============================================================================ Basic earnings per share 0.74 0.60 Diluted earnings per share 0.69 0.56 Basic shares outstanding 30,153 30,153 Diluted shares outstanding 32,303 32,303

See accompanying notes to unaudited pro forma condensed consolidated financial statements. -F18- ResMed Inc Notes To Unaudited Pro Forma Condensed Consolidated Financial Statements 1. Basis of Presentation The accompanying unaudited pro forma condensed statements of operations present the historical results of operations of ResMed Inc and MAP GmbH for the year ended June 30, 2000 and the six months ended December 31, 2000, with pro forma adjustments as if the transaction had taken place on July 1, 1999 and July 1, 2000, respectively. The unaudited pro forma condensed balance sheet presents the historical balance sheets of ResMed Inc and MAP GmbH as of December 31, 2000 with pro forma adjustments as if the transaction had been consummated as of December 31, 2000, in a transaction accounted for as a purchase in accordance with accounting principles generally accepted in the United States of America. The total purchase price of MAP GmbH was approximately $57.1 million, representing bank loans and costs. The preliminary allocation of the purchase price to intangible assets, based on the estimated fair values of the acquired assets and assumed liabilities and an independent appraisal of intangible assets, consists of the following (dollars in thousands): Goodwill $48,776 In-process technology 18,100 ------- Total allocated to intangibles $66,876 ======= The Company expects to finalize the purchase price allocation within one year and does not anticipate material adjustments to the preliminary purchase price allocation. Amounts allocated to goodwill are amortized on a straight-line basis over its estimated useful life of 20 years. Purchased in-process technology was expensed upon acquisition because technological feasibility had not been established and no further alternative uses existed. The value of in-process technology was calculated by identifying research projects in areas for which technological feasibility had not been established, estimating the costs to develop the purchased in-progress technology into commercially viable products, estimating the resulting net cash flows from such products, discounting the net cash flows to present value, and applying the reduced percentage completion of the projects thereto. The discount rates used in the analysis were between 27% and 33% and were based on the risk profile of the acquired assets. The Company believes that the assumptions used to value the acquired intangibles were reasonable at the time of the acquisition. No assurance can be given, however, that the underlying assumptions used to estimate expected project revenues, development costs or profitability, or the events associated with such projects, will transpire as estimated. For these reasons among others, actual results may vary from the projected results. -F19- ResMed Inc Notes To Unaudited Pro Forma Condensed Consolidated Financial Statements 1. Basis of Presentation (Continued) In addition as indicated in its February 19, 2001 press release, ResMed Inc intends to take a restructuring charge on acquisition of MAP GmbH. The restructuring charge relates primarily to the sale and/or closure of MAP GmbH's French operations and is currently estimated at approximately $550,000, subject to possible change at a later date. This amount has been included within the Pro Forma Condensed Consolidated Balance Sheet as at December 31, 2000. MAP GmbH's French operations incurred net losses of $1,534,000 and $1,168,000 for the year ended June 30, 2000 and six months ended December 31, 2000 respectively. No adjustment has been made in the Pro Forma Condensed Consolidated Statement of Operations for either period. Certain other reclassifications have been made to the historical financial statements of MAP GmbH to conform to the pro forma condensed financial statement presentation. 2. Pro Forma Adjustments The following adjustments give pro forma effect to the Transaction (dollars in thousands): a) Purchase Price of MAP GmbH is made up of the following components: Payment of cash funded through Cash and Cash equivalents and Bank loans $56,910 Acquisition costs 200 ------- Total Exchange Consideration $57,110 ======= b) To adjust the assets and liabilities to their estimated fair values (dollars in thousand): Net assets acquired of MAP GmbH at December 31, 2000 $ 17,465 Fair value adjustments to assets and liabilities: Inventories 428 Pre Acquisition MAP GmbH Goodwill (27,659) In Progress Technology 18,100 Goodwill on acquisition 48,776 -------- $ 57,110 ======== The following adjustments to the unaudited pro forma statements of operations reflect: c) The acquisition was funded through bank debt assuming an interest charge of 6.25% per annum. Interest expense was $4,040,000 and $2,019,000 for the year ended June 30, 2000 and six month period ended December 31, 2000 respectively. The bank debt replaces existing MAP GmbH debt with a consequent reduction in interest expense of $760,000 and $737,000 for the year ended June 30, 2000 and the six month period ended December 31, 2000, respectively. -F20- ResMed Inc Notes To Unaudited Pro Forma Condensed Consolidated Financial Statements 2. Pro Forma Adjustments (Continued) d) The amortization of excess of costs over acquired net assets over an estimate life of 20 years. Such amortization expense is subject to possible adjustment at a later date. Amortization expense was $2,437,000 and $1,220,000 for the year ended June 30, 2000 and the six month period ended December 31, 2000, respectively. Amortization expense associated with existing Goodwill in the MAP GmbH financial statements has been reversed. The amortization expense reversed was $1,667,000 and $747,000 for the year ended June 30, 2000 and the six month period ended December 31, 2000, respectively. e) The tax effect, using German statutory rate, on the net pro forma adjustments. f) Revaluation of Inventory to Net Sales value on acquisition. Net profit adjustment was $1,078,000 and $483,000 for the year ended June 30, 2000 and the six month period ended December 31, 2000 respectively. The Pro Forma Condensed Consolidated Statements of Operations do not reflect any cost savings or economies of scale that the Corporation's management believes might have been achieved had the transaction occurred at the beginning of the period presented. -F21-