Covidien: Corporate Overview

Covidien:Corporate Overview

2 | Financial data as of May 2010

Who We Are

42,000 employees

50,000 different medical products

$11 billion company

Top 10 healthcare company


Covidien is …

• A global medical device and pharmaceutical manufacturing company with nearly $11 billion in annual revenue

• Well positioned with a diverse portfolio of products and technologies in attractive franchises

• A company with a committed to quality and innovation; dedicated to clinical solutions

• Highly efficient and productive, producing strong margins and cash flow

• A leading player across our portfolio


Our Mission and Goal

Create and deliver innovative healthcare solutions, developed in ethical collaboration with medical professionals, which enhance the quality of life for patients and improve outcomes for our customers and our shareholders.

Become the leading global healthcare products company by creating innovative medical solutions for better patient outcomes and delivering value through clinical leadership and excellence in everything we do.

Our Goal

Our Mission


Our Values

We strive to fully understand our marketplace, our customers, our communities and our employees, and to enter into relationships with a sense of honesty, fairness and trust.

We are integral partners working with our colleagues and customers to generate innovative ideas that solve challenging healthcare problems.

We each take responsibility for delivering outstanding results to our partners, patients and teammates, while affirming our commitment to integrity and the highest standards of ethical conduct.

We are caring professionals committed to improving the health and well-being of patients around the world.

Diversity

Compassion

Collaboration

Accountability


Strategic Focus Areas for Covidien

Customer Focus Innovation

GlobalizationHigh-

PerformanceOrganization

Maintain a customer mindset in everything we do.We consistently act with our customer in mind and strive to understand their needs. We collaborate with both internal and external customers to create innovative solutions for better outcomes.

Globalize to accelerate growthWe seek to understand local requirements and needs to develop product portfolios that are relevant to the markets we serve. We leverage the full potential of our diverse workforce to employ a global mindset and infrastructure to maximize the Company’s potential throughout the world.

Innovate for better outcomesWe are committed to developingapproaches and solutions throughout the organization that address unmet needs. We will challenge ourselves to think, listen and act differently to drive creativity in everything we do.

Focus on communication and executionaligned to the Company’s missionWe provide employees the information and tools to accelerate the execution of ourobjectives. We promote consistent accountability and encourage people to take risks.


Covidien is Committed to…

Managing portfolio for growth, margin and ROIC expansion

Continuing to build new product flow with clinically relevant offerings

Focusing on BD&L activity that complements current franchises

Recruiting and retaining top talent throughout the organization

Assuring commitment to service, quality and compliance

Maintaining strong balance sheet and ample cash flow to support growth, investments and shareholder interests


Intense Focus On Innovation

Doubled annual patent filings since 2004

Creating more intellectual property and more aggressively protecting our technology

Launched an Innovation Council and Innovation Awards program

Increased R&D investments from $262MM in 2006 to $438MM in 2009

Sales from new products increased 3X since 2006


Experienced Management Team

Jim MuseSVP,

Global Supply Chain

Rich MeeliaPresident, CEO

Our management team averages over 25 years of healthcare and/or functional experience

Chuck DockendorffEVP,

Chief FinancialOfficer

Amy WendellSVP,

Business Development

Mike DunfordSVP,

Human Resources

John MastersonSVP,

General Counsel

Eric KrausSVP,

Corp. Communications

Joe AlmeidaPresident,

Medical Devices

Tim WrightPresident,

Pharmaceuticals& Imaging

Jim ClemmerPresident,

Medical Supplies


Segment Overview

Medical Devices

• Surgical Devices• Energy-based Devices• Respiratory and Monitoring Solutions• Vascular Therapies

• Specialty Pharmaceuticals• Active Pharmaceutical Ingredients• Radiopharmaceuticals• Contrast Products

Pharmaceutical & Imaging Products

Medical Supplies

• Nursing Care• Monitoring & OR Products• SharpSafety • Original Equipment Manufacture


Medical Devices


• Dosage Pharmaceuticals• Active Pharmaceutical Ingredients• Radiopharmaceuticals• Contrast Agents

Pharmaceuticals Medical Supplies

• Nursing Care• SharpSafety• Monitoring & OR Products • Original Equipment Manufacture

2009 Sales by Business Segment$11 Billion

27%

57%

16%


2009 Net Sales by Business Segment$11 Billion

Medical Devices$6.1B

Pharmaceutical Products$2.9B Medical Supplies

$1.7B


• Dosage Pharmaceuticals• Active Pharmaceutical Ingredients• Radiopharmaceuticals• Contrast Agents

• Nursing Care• SharpSafety• Monitoring & OR Products • Original Equipment

Manufacturer

27%

57%

16%


United States$6.2B

Europe$2.6B

OtherAmericas

$0.6B

2009 Net Sales by Geography$11 Billion

Asia-Pacific$1.4B


Covidien’s Origin

Major Acquisitions

Wound Care, Urology, Vascular Compression, Incontinent Care

Acquired numerous smaller companies from 1996 – present

Year

1994

1998

1998

2000

Needles & Syringes, Sutures, Dialysis, Enteral Feeding

Wound Closure, Laparoscopic Instruments, Electrosurgery

Respiratory, Imaging and Pharmaceutical

Specialty


Strong Line-Up of Well Recognized Brands


Economic Environment

Unprecedented recent foreign exchange volatility

U.S. recession and global economic slowdown

Restricted credit availability

Raw material prices


Covidien Well Positioned

Broad product line across multiple healthcare categories

Less than 5% of revenues are considered capital equipment

Modest exposure to elective surgical procedures

Global footprint and growing non-US business

Strong balance sheet, ample cash on hand, good cash flow generation


Medical Devices Update•2009 sales growth 2% (8%

operational)•Strong growth in endomechanical,

soft tissue repair, vascular and energy

•VNUS, Bacchus and Aspect acquisitions integrated and contributing to growth

•ev3 acquisition expected to provide access to new markets

•Focus on bariatric, hernia and biosurgery growth initiatives; vascular expansion; emerging market opportunities

•Recent 2010 launches: new SILS™ instruments, next generation EGIA

Universal, hemorrhoid stapler* Operational growth, net sales growth excluding the impact of foreign currency exchange, is a non-GAAP measure.


Pharmaceuticals Update

• Acquired proven, patented drug technology to build pipeline

• Developing capabilities in formulation, regulatory, clinical development and Risk Evaluation & Mitigation Strategies (REMS)

• Expanding commercial sales force and medical affairs to market licensed products in branded pain

• Maria announcement will help ease moly shortage, but supply chain remains fragile and unpredictable

• New product releases:


Medical Supplies Update

•2009 sales growth (2%) (flat operational)•Broad portfolio with many products #1

or #2 in their markets•Continue to sell value beyond price in

many commoditized markets•Pruning portfolio of lower margin, slow

growth offerings•Managing business with minimal

investment for cash and ROIC

Covidien: Corporate Overview

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