ResMed Annual Report 2001

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FY2001 Annual Report · ResMed

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healthy
sleep

for a healthy

e
f
i
l

annual report 2001

Innovators in Sleep and Respiratory Medicine

ResMed's Mission Statement

Continue global leadership in sleep medicine based on innovative technology advancing the diagnosis,
treatment, and management of sleep-disordered breathing.

Corporate Aims and Objectives

ResMed is a leading developer, manufacturer, and marketer of products for the diagnosis and management
of sleep-disordered breathing. ResMed operates through direct offices in the United States, the United
Kingdom, Switzerland, Sweden, Singapore, New Zealand, Netherlands, Malaysia, Germany, France,
Australia, and Austria and through a network of distributors in over 47 other countries.

ResMed is committed to advancing innovative technology in sleep and respiratory medicine and
commercializing innovative products that incorporate these technologies on a global basis. In reaching its
goals, ResMed will at all times act ethically in dealing with both customers and employees.

Contents

1 business overview

2 financial summary

4 2001 highlights

5 chairman’s report

11 strategic review

14 medical advisory board

19 operations review

23 shareholders’ information

24 ten-year financial summary

26 board of directors

Cover: healthy sleep for a healthy life

You can’t be healthy unless your sleep is healthy. The vital role that sleep plays in good health and
well-being is only now being recognized. Sleep is just as important as physical fitness and good nutrition.

Statements contained in this Annual Report, which are not historical facts, including any projections regarding future opportunities in current and
new markets, are “forward-looking” statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the
forward-looking statements. Such risks and uncertainties are more fully discussed in the Company’s Annual Report on Form 10-K for its most
recent fiscal year.

Sometimes I’d fall

asleep at work

Often I would

feel exhausted

business overview

ResMed is a leading developer, manufacturer, and
marketer of innovative products for diagnosing, treating,
and managing sleep-disordered breathing (SDB). SDB
includes obstructive sleep apnea (OSA) and related
respiratory disorders that occur during sleep.

ResMed employs approximately 950 people in ten regions
and distributes to over 60 countries. In fiscal 2001,
ResMed sales were $155 million, and operating cash flow
was $30 million. The company has a history of solid
financial performance. Since listing in June 1995,
ResMed has met or exceeded First Call Consensus
earnings per share estimates for 25 consecutive quarters
and has maintained a growth rate in excess of 30% per
annum in revenues and net income (excluding recent MAP
acquisition charges).

Since formation in 1989, the company has maintained its
focus on the under-penetrated but strongly growing SDB
market. Led by a strong, experienced management team
and Medical Advisory Board, ResMed has undertaken a
productive research and product development effort and
significant geographic expansion. These factors, together
with increased awareness of SDB as an important health
concern, have fueled the company's rapid growth.

In February 2001, ResMed acquired MAP Medizin-
Technologie GmbH. MAP is the leading German
designer, manufacturer, and distributor of medical devices
for the diagnosis and treatment of SDB, with a particular
focus on OSA. This acquisition enhances the company's
position in Europe, particularly in Germany, the second
largest market worldwide for OSA products.

The SDB market

The market for SDB therapies is large and relatively
undeveloped. In its "Wake Up America" report to Congress
in 1993, the National Commission on Sleep Disorders
Research estimated that approximately 40 million
individuals in the United States suffer from chronic
disorders of sleep and wakefulness, such as sleep apnea,
insomnia, and narcolepsy.

SDB is an umbrella term that encompasses all
physiological processes that cause detrimental breathing
patterns during sleep. Manifestations of SDB include
OSA, central sleep apnea (CSA), and hypoventilation
syndromes that occur during sleep. Hypoventilation
syndromes are generally associated with obesity, chronic
obstructive pulmonary disease (COPD), neuromuscular
disease, and upper airway resistance changes.

Waking up to sleep

While the importance of good nutrition and physical
fitness has long been recognized, the vital role that sleep
plays in good health is only now being acknowledged.
The consequences of SDB can severely affect health and
mortality, yet awareness among primary care physicians is
low. As a result, patients often find themselves receiving
treatment for other conditions when the cause of their
symptoms originates in their sleep.

Treating SDB as part of disease management in a range
of diseases is of primary importance. Several recent
studies have shown that SDB is strongly associated with
hypertension, the leading risk factor for the development
of both stroke and congestive heart failure (CHF). In
addition, over 60% of post-stroke patients and 50% or
more of patients with CHF have SDB.

The risk of developing hypertension,
a major risk factor for cardiovascular
and cerebrovascular disease, is two
to three times higher in patients
with OSA.
Peppard et al. New England Journal
of Medicine May 2000

financial summary

Net revenue

Income

*after MAP
acquisition costs of
$18.2M

Income from operations
Income before income taxes
Net income

Assets and shareholders’ equity

Net income per common share and equivalent

Shareholders’ equity
Assets

#Gross assets include $61M of assets due to MAP acquisition. Shareholders’
equity is net of $18.2M of costs associated with MAP acquisition.

*after MAP
acquisition costs
of $18.2M

2001 highlights

August 2000
Listed by Fortune magazine as one of the 100 Fastest Growing Companies in the US for second consecutive year.

October 2000
Listed by Forbes magazine as one of the 200 Best Small Companies in America for fourth consecutive year. Ranked #34.

November 2000
ResMed Chairman Peter Farrell received AT&T International Business Leadership Award 2000 from the San Diego World
Trade Center.

January 2001
Ranked #1 Medical Products Company by Investor's Business Daily.
Embletta Portable Diagnostic System (PDS) introduced.

February 2001
Acquired MAP Medizin-Technologie GmbH, Munich, Germany.

June 2001
Issued $180 million through private placement of convertible subordinated notes due 2006.

July 2001
Listed by Fortune Small Business magazine as one of America's 100 Fastest Growing Small Business Companies.
Ranked #30.

August 2001
Listed by Business Week as one of the 100 Hottest-Growth Companies for the third consecutive year. Ranked #31.

Above: MAP executives Harald Vögele, Stefan Madaus, and Caspar Stauffenberg

chairman’s report

It is with distinct pleasure that I write the Chairman's report
for fiscal 2001, our 12th year of operations. We had a
great year in 2000. In fact we have had a great decade,
and our success in fiscal 2001 in growing our sleep
business as profitably as we did should provide
considerable encouragement to all ResMed shareholders
and staff as we go forward. The company grew 34% at the
top line to finish with net revenues of $155.2 million;
excluding acquisitions costs, we also grew 34% at the
bottom line to a net income of $29.9 million, while
maintaining a gross margin of 67.5%. Earnings per share,
again exclusive of acquisitions, was $0.89 on a fully-
diluted basis compared to $0.69 per share in fiscal 2000,
an increase of 29%. An excellent performance.

In addition, the ratio of net income to revenues at 19.3%
was virtually identical to the 19.2% we achieved in fiscal
2000. And, very encouragingly, we finished the year with
days sales outstanding of 60 days, due primarily to
increased efforts, which were focused on US receivables.
Several new products were also released during the year,
and one of the real success stories was our Ultra Mirage
nasal mask interface which, although only released into
the US market in the June 2000 quarter, became the
second most popular medical product in HomeCare's
catalog in terms of requests for literature and information.
In short, we had another excellent year, and once again

I would like to acknowledge the dedication and teamwork
of my colleagues, particularly ResMed's sales and
marketing executives who grew their respective revenue
lines as well as they did. I will now highlight further
milestones and then address what I see, in the near-term
crystal ball, for sleep-disordered breathing (SDB).

One of the major commercial steps we took during fiscal
2001 was the purchase of MAP Medizin-Technologie
GmbH (MAP), a private SDB company based in Munich,
Germany. The total purchase price, including legal,
accounting, and other expenses associated with the
transaction, was approximately $70 million, or about
three times MAP's revenue base. The June 2001 quarter
was our first full quarter with MAP on board; our top-line
growth was an impressive 49%, quarter on year-ago
quarter; even without MAP our revenue growth was still an
impressive 31%, in line with our expectations.

We are very pleased with the MAP acquisition, which was
finalized in February of this year; we are meeting our
goals to reduce expenses, particularly with the closure of
MAP's money-losing French operations, and we are also
meeting revenue growth expectations. One of the reasons
for this is the excellent cooperation of MAP's senior
management: Dr Stefan Madaus, Harald Vogele, and
Caspar Stauffenberg; we appreciate their support. In the

g o o d

n u t r i t i o n

h e a l t h y
s l e e p

The triumvirate of health
proposed by Dr. William C. Dement,

Director, Stanford Sleep Disorders Clinic and
Research Center, Stanford University, USA

p h y s i c a l

f i t n e s s

March quarter, we wrote off $17.7 million of in-process
MAP R&D and took a restructuring charge of $0.6 million
to close MAP's French operation; the closure was
completed in June 2001. This reduced ResMed's net
income for fiscal 2001 to $11.6 million or $0.35 per
share on a fully diluted basis.

In order to pay for MAP, and to provide funds for future
initiatives, we completed a $180 million convertible bond
issue, including $30 million in over-allotment. The
offering was ably managed by Merrill Lynch and Deutsche
Bank with the further help of William Blair & Co.,
Macquarie Bank, and UBS Warburg. The five-year bond
offering was keenly priced with a coupon rate of 4%, a
three-year makewhole call at 150% of the conversion
price and a 20% share premium for the conversion price;
the conversion price ended up at $60.60 based on a
closing share price of $50.50, at the time of the offering.
Our goal was to place at least 50% of the bonds outside
the US market and to do it efficiently with minimal share
price impact. Our goals were more than met: the offering
was completed in three days on three continents; the
share price fell only 2% during the marketing phase; and
non-US placement was over 55%. The $30 million green
shoe was booked in July and is, therefore, not reflected in

the accompanying balance sheet. The successful
convertible bond issue allowed us to pay off all of the
MAP debt and has left us with close to $130 million in
cash and marketable securities to provide us with on-
going financial flexibility.

For the past two years, I have referred to the triumvirate of
health proposed by Stanford's Dr. William C. Dement. At
the risk of sounding like a broken record, I emphasize its
importance once again. Sleep is equally important to our
physical well-being as adequate nutrition and physical
activity. And this message is finally being heard. At
the University of
Harvard Medical School and
Pennsylvania Medical School, separate divisions of sleep
medicine have been set up. In addition, the worldwide
public health concern with the level of untreated SDB, and
its major manifestation, obstructive sleep apnea (OSA), is
alive but perhaps not so well; the rate of diagnosis and
treatment still lags incidence, so the problem is getting
worse rather than better. Even without a full-court press,
the global market is growing at around 20%; however,
this growth in treatment initiation is nowhere near enough
to deal with an issue which was described over eight years
ago in a New England Journal of Medicine editorial (April,
1993) as a major public health problem on a level

Michael Massie, age 42, was already suffering from high blood
pressure and a stress related illness when he had a stroke in July
1999. He spent the following year in a rehabilitation ward
learning how to walk, talk, and look after himself.

Night staff in the ward observed that Michael snored loudly and
stopped breathing for long periods of time while asleep. He
would wake suddenly with a fright and on occasion became
agitated. During the day, he was very sleepy and reluctant to
take part in therapy.

At the time, research into sleep apnea was being undertaken in
the ward. Michael was diagnosed with OSA and started on a
ResMed AutoSet T while hospitalized. His drowsiness decreased
significantly, and he was more able to engage in his
rehabilitation therapy.

Michael's health is now stable, and he lives at home with family
and community support.

equivalent to that of tobacco smoking. So what needs to
be done? As I have stated before, the major problem is
still one of raising public and physician awareness to the
dangers of untreated SDB because of its profound
connection with hypertension, the concomitant risk of
premature death, and the deleterious impact of untreated
SDB on quality of life.

The number one risk factor for both stroke and congestive
heart failure (CHF) is hypertension. And it is well to
remember that heart disease is the number one killer and
the third most important cause of morbidity, while stroke
is the number three cause of death and the number one
cause of morbidity. Given these statistics, and the fact that
SDB has been variously estimated as being prevalent in
50% to 80% of CHF and stroke sufferers, it is a sine qua
non that these patients be diagnosed and treated for their
SDB. This is not only because of the stated impact of
untreated SDB on quality of life, but because of the
serious cardiovascular consequences of having combined
SDB and hypertension coupled with a serious co-
morbidity, such as stroke or CHF. The latter circumstances
will almost certainly result in an early exit from life's
freeway for these patients. It is, therefore, vital that the
medical community (particularly stroke neurologists,

Michael Massie
stroke victim, Australia

cardiologists, and rehabilitation physicians) be alerted to
the issue of untreated SDB and its grossly deleterious
consequences. I will come back to this theme.

that patients with
imperative
Furthermore,
neuromuscular and motor neurone diseases as well as
chronic obstructive pulmonary disease (COPD) also be
tested for SDB/OSA. Specifically, patients with COPD,
muscular dystrophy, kyphoscoliosis, multiple sclerosis, and
amyotrophic lateral sclerosis (ALS) often have horrific
sleep architecture, due to both their disease and the fact
that a lot of them have concomitant SDB; the diagnosis
of the latter is hugely important to both the morbidity
and mortality of people with these disease states.
Unfortunately, the progress being made in addressing
these problems is way too gradual, but the medical
literature is beginning to alert the wider medical
community to the importance of the issue.

We continue to make excellent progress with respect to
both CHF and stroke and the clinical connection with
SDB. Oxford has just completed a randomized controlled
trial (RCT) of 30 patients treated with ResMed's AutoSet CS
against sham treatment. We eagerly await their results.
And in another large RCT, shortly to be published in

Walter Pfeffer
heart failure patient, Germany

Eighteen years ago, heart illness forced 50-year-old Walter to retire from his job
because he could no longer cope with the physical demands. Then a few years
ago he started to suffer from severe fatigue during the day, which finally made
it impossible for him even to chat with friends without repeatedly and abruptly
falling fast asleep. Having less and less energy and motivation, increased
problems concentrating, and cognitive difficulties as well, he became
increasingly reclusive. He completely abandoned his hobbies and no longer
went on holiday.

About one year ago Walter went to see a doctor about his heart condition and
was assessed for sleep disorders for the first time. The study revealed that he
suffered from Cheyne-Stokes respiration during sleep.

Walter started therapy using ResMed's AutoSet CS, which rapidly improved his
quality of life. The fatigue symptoms during the day improved dramatically and
his general state of health stabilized so much that in recent months Walter has
been able to take part in light recreational sports again and has already
planned his next holiday.

The Lancet, the Oxford group has shown that nasal CPAP
significantly lowers blood pressure, in an intention to treat
study, and the effect was even more pronounced when
subjects were on antihypertensive therapy. In addition, we
now have over 150 CHF patients on AutoSet CS in
Europe. We continue to learn as we initiate further
treatment of CHF patients with AutoSet CS. Very
encouraging sets of results have been obtained in
Germany on small numbers of patients. For example, over
three to six months in compliant CHF patients, it has been
observed that maximum oxygen uptake, six minute walk
and left ventricular ejection fractions have significantly
improved, in some cases by in excess of 30%. We look
forward to receiving further feedback as these studies
progress. In addition, we have begun a prospective FDA
trial on CHF patients using AutoSet CS, compared with
conventional oxygen therapy, at six sites across the US. It
is early days, but we remain optimistic about the potential.

On the stroke front progress continues, albeit at a
somewhat slow pace. There is certainly interest by
neurologists in the SDB space; for example, ResMed, in its
relationship with the US National Stroke Association
(NSA), sponsored a two-hour seminar on SDB and stroke
at the annual NSA meeting held last September in

Toronto. Nearly 6% of the total neurologists in the United
States attended this session; we are running a similar
seminar this August at the annual NSA meeting to be held
in San Diego. We expect even more interest by stroke
neurologists in SDB, and it is our hope that there will soon
be a subsequent substantial increase in both the diagnosis
and treatment of SDB in stroke patients. What we have
learned thus far is that treating patients in the acute phase
of stroke is difficult and it seems as though diagnosis and
treatment in the rehabilitation phase may make the most
sense, at least in this initial phase of our work. At the
moment we are actively working on some strategic alliances
to address this problem.

What we can say is that the data we have seen thus far
suggests that the best current basis for the treatment of
SDB/OSA in both stroke and CHF is with ResMed's
devices. These products incorporate our patented
autotitrating algorithms (in AutoSet T and AutoSet CS)
coupled with ResMed's mask interfaces. Furthermore, it is
important to recognize that very sick patients cannot be
easily handled by conventional sleep labs, either patients
can't be easily moved from the ward or rehabilitation
facility to a sleep lab, or the sleep lab is not capable of
dealing with patients with such co-morbidities. In short,

As a cardiologist, I know the importance of
aggressive treatment of sleep apnea. And as
a patient, I know the difficulty in maximizing
patient compliance due to uncomfortable masks,
loud machines, and unnecessarily high pressures.
I have tried many CPAP machines, and the ResMed
AutoSet T is simply the "Lexus of the line": it is
quiet, comfortable, and easy to use. I recommend
it to my patients.
AD, Cardiologist, Michigan, US

This is certainly one area where it is high time to wake up
to sleep.

One of the real challenges I alluded to was the
unfortunate ignorance in the wider community concerning
the importance of diagnosing and treating SDB. The
major continuing issue here is one of education. However,
when the horses of SDB finally bolt from the barn, as is
widely expected, the sleep community runs the risk of
being virtually overwhelmed by SDB patients. What is to
be done? There's no question that current sleep labs will
be buried under the increased diagnostic load, since
many sleep centers currently have long waitlists. It would
seem that the paradigm needs to drastically change to
address the overwhelming prevalence and incidence of
SDB. Legitimate concerns have been raised about the
specificity and sensitivity of home sleep diagnostic testing.
I believe that these concerns are currently minor ones for
two reasons. First, technology has evolved to the point
where the concerns of specificity and sensitivity are
probably more imaginary than real; second, much
cheaper and less sophisticated diagnostic technology can
be used when a sleep physician is involved in the
equation, since trained sleep physicians take a sleep
history and use their clinical judgement in conjunction
with the diagnostic sleep test. On top of this, the use of
nasal CPAP for SDB is extraordinarily effective and does
little harm if there were to be some unlikely false positives,
assuming sleep-trained personnel remain involved. In
short, in this instance diagnostic certainty is not needed.
In this context, let me refer to a very apropos editorial,
which Dr. Michael Coppola, a member of ResMed's

Embletta portable diagnostic system

the sleep lab needs to be taken to the bedside. In this
case, our portable sleep lab is Flaga's Embletta PDS. This
device is a highly specific and sensitive nine-channel sleep
diagnostic system with excellent software (Somnologica
3.0) and great portability. We look forward to progressing
our global stroke and CHF initiatives.

Another area of great concern, which was recently
highlighted in the British medical journal Thorax, is the
danger of serious motor vehicle accidents in patients with
undiagnosed OSA. There are now several dozen
publications in the peer-reviewed literature emphasizing
the severe dangers of individuals who drive while sleep
deprived from untreated sleep apnea. There is little doubt
that this is a major public health issue; data in the
literature indicate that the frequency of traffic accidents in
untreated sleep apnea sufferers varies from a factor of
three to 12 times the normal accident rate, depending upon
the study. The good news is that when the apnea is treated
successfully with nasal continuous positive airway pressure
(CPAP), the frequency of traffic accidents, in compliant
OSA sufferers, is completely normalized. Insurers and
motor vehicle authorities, among others, need to start
seriously addressing the carnage and the cost on the
nations' roads due to unrecognized sleep apnea sufferers.

be the overseer of home-based studies; certainly the
engagement of sleep labs in home testing would go a long
way to addressing such a serious public health challenge.

ResMed is now approaching 1000 employees. Almost
50% of this year's additional staff was the 180 employees
we gained from our MAP acquisition; the rest of the
additions were to handle our continuing growth in all
global markets. We have added four further record
quarters during the last fiscal year so that ResMed has
now managed a run of 25 quarters of record revenue and
net income since we went public in June 1995. This
welcome performance was due to the efforts of all
employees; we welcome the new additions and thank
both our new and old staff for their commitment and
teamwork. I would also like to thank members of the
Board of Directors for their input and support.

The Board was also delighted to welcome Dr. Christopher
Bartlett, Professor of Business Administration at Harvard
Business School. Chris is already making his Board
presence felt in terms of helping the company address its
strategic organizational needs as ResMed's global growth
continues. Significant thanks are also due to our Medical
Advisory Board whose input continues to be highly valued
and regarded.

Once more ResMed was named by Forbes as one of the
200 Best Small Companies in America; in addition,
ResMed was named by both Business Week, for the third
consecutive year, and Fortune Small Business in their
respective top 100 high growth business performers lists.
We welcome this continuing recognition.

Finally, I would like to thank our shareholders for their
support during this past fiscal year. We continue to
examine a number of strategic growth opportunities where
we believe our particular knowledge of sleep-disordered
breathing could add significant value.

We will also continue to try to wake people up to the
importance of healthy sleep. It is our ongoing mission.

Medical Advisory Board, alerted me to earlier this year
and which was published in the New England Journal of
Medicine and authored by Dr. Jerome Kassirer (NEJM
320, 1489 (1989)). Let me quote Dr. Kassirer:

Excessive testing has many causes, besides the quest for
diagnostic certainty. Some are a function of the forces
imposed on the physician by our system of patient
care–for example, pressure from peers and supervisors,
the convenience with which tests are ordered, the
demands of the patient or family, and the desire to avoid
malpractice claims. Others stem from physicians'
personal practices and whims–among them, curiosity
about test results, ignorance of the characteristics of
tests, financial motives, and irrational and ossified habits.

Kassirer continued:

therapy

is high

How should we handle uncertainty? To a large degree,
the level of diagnostic certainty needed in decision-
making is a function of the characteristics of available
therapies. When a specific
in
effectiveness and low in risk, one can tolerate substantial
diagnostic uncertainty (and therefore avoid having to
carry out many tests)–not only because the treatment
cures the disease, but also because it will cause little
harm to patients who do not have the disease. By
contrast, any therapy that is not highly effective or that
produces considerable morbidity must be given only
when the level of diagnostic uncertainty is minimal.

Dr Kassirer makes points that we believe the wider sleep
community needs to consider in the context of
undiagnosed SDB/OSA being a major public health
problem that is not being adequately addressed by the
current modus operandi. In short, how one should
address a disease with a prevalence of almost 10% of the
population is a very thorny issue deserving of serious
debate. However, there is movement at the station. Todd
Eiken, RPSGT, a sleep technologist who oversees a sleep
center in Minnesota, is an advocate of home sleep studies
done under the auspices of the sleep lab; he had
previously started a home sleep-monitoring program
when he worked for a sleep center in Alabama. His
concern is that sleep labs can't possibly handle the
needed load in the time available and that labs should
take the initiative on home sleep testing. To quote him:

The sleep community as a whole should be the
innovators and determine how home sleep testing should
be used; there are benefits for everyone.

It seems logical that home testing will occur and it should be
overseen by sleep-trained personnel. The sleep lab ought to

strategic review

ResMed’s S6 CPAP device
and Ultra Mirage Mask

positive airway pressure therapy. At June 30, ResMed had
over 400 patents granted or pending and over 100
registered designs worldwide. Up to 8% of revenues have
been invested in research and development.

Expand geographic presence. ResMed sells its
products in over 60 countries to sleep clinics, home
healthcare dealers, and third-party payers. The company
intends to increase sales and marketing efforts in its
principal markets as well as expand its presence in new
geographic regions.

78% of long-distance truck drivers
have Obstructive Sleep Apnea.
Stoohs et al. Chest May 1995

Increase public and clinical awareness. ResMed
intends to continue the expansion of promotional activities
to increase awareness of SDB. These promotional activities
target the population with a predisposition to SDB as well
as primary care physicians and specialists, such as
pulmonologists, cardiologists, and neurologists. In addition,
the company also targets patient advocacy groups,
including the US National Sleep Foundation, the US

People with sleep apnea are 15 times more
likely to be involved in a traffic accident.
Horstmann et al. Sleep 2000

ResMed believes that the SDB market will continue to
grow due to a number of factors. These factors include
increasing awareness of OSA and improved under-
standing of the role of SDB treatment in the management
of cardiovascular disease. Areas of focus within
cardiovascular disease include hypertension, stroke, and
congestive heart failure. The company's strategy for
expanding business operations and capitalizing on the
growth of the SDB market consists of the following
key elements.

to ongoing

is committed

Continue product development and innovation.
ResMed
in
developing products for the diagnosis and treatment of
SDB. The company has been a leading innovator of
products designed to more effectively treat sleep apnea,
increase patient comfort, and encourage compliance with

innovation

Susana Lopez puts the finishing
touches to a ResMed S6 CPAP

ResMed's acquisition of MAP, the market leader in Germany,
has deepened the company's presence in Europe. The
combination of MAP and ResMed Germany makes
ResMed the largest sleep company in Germany, which has
the second largest SDB market in the world. MAP's
strengths in research and development, sales and
marketing, and local distribution complement those
of ResMed and will strengthen ResMed's market
leadership position throughout Europe. The acquisition of
MAP represents a significant step forward in ResMed's
global strategy.

National Stroke Association,
the American Heart
Association, and the Australian National Stroke Foundation.

Expand into new clinical applications. ResMed
continually seeks to identify new applications of its
technology for significant unmet medical needs. The
relations with
company maintains close working
prominent physicians to assist this process.

Leverage the experience of our management
team and Medical Advisory Board. ResMed's senior
management team has extensive experience in the field of
SDB and in the medical device industry in general. The
Medical Advisory Board is comprised of experts in the field
of SDB, including Dr. Colin Sullivan, the inventor of nasal
CPAP for the treatment of OSA. ResMed intends to
continue leveraging the experience and expertise of these
individuals, maintaining its innovative approach to
developing products, and increasing awareness of the
serious medical problems caused by untreated SDB.

Innovation, application, awareness, and
presence in 2001

In fiscal 2001, ResMed focused significant attention on
increasing its presence in Europe and expanding its
presence in the SDB market around the world.

medical advisory board

Terence M. Davidson,
MD, FACS, is Professor of
Surgery in the Division of
Otolaryngology–Head
and Neck Surgery at the
University of California,
San Diego, School of
Medicine. He is Section
Chief of Head and Neck
Surgery at the Veterans
Administration, San
Diego Healthcare
System and Associate
Dean for Continuing
Medical Education at
the University of
California San Diego.
He is also Director of the
UCSD Head and Neck
Surgery Sleep Clinic in
La Jolla, CA.

Neil J. Douglas,
MD, FRCP, is Professor of
Respiratory and Sleep
Medicine, University of
Edinburgh, an Honorary
Consultant Physician,
Royal Infirmary of
Edinburgh, and Director
of the Scottish National
Sleep Laboratory. He is
Vice President of the
Royal College of
Physicians of Edinburgh
and Chairman of the
British Sleep Foundation.
He is a past Chairman of
the British Sleep Society
and past Secretary of the
British Thoracic Society.
He has published over
200 papers on breathing
during sleep.

Nicholas Hill,
MD, is Professor of
Medicine at Brown
University and Director
of Critical Care Services
at Rhode Island Hospital
and Pulmonary Medicine
at the Miriam Hospital,
both in Providence. He is
a Fellow of the American
College of Chest
Physicians and a member
of the Planning
Committee for the
American Thoracic
Society. His main
research interests are in
the acute and chronic
applications of non-
invasive positive pressure
ventilation for treating
lung disease.

Claudio Bassetti,
MD, is a leader in
studying the implications
of SDB on stroke and is
Head of the Neurology
Clinic and Vice-
Chairman of the
Neurology Department at
the University Hospital,
Zurich. Dr. Bassetti is a
member of the American
Academy of Neurology,
the American Sleep
Disorders Association,
and the scientific
committee of the
European Sleep Research
Society (ESRS). He is also
a member of several
Swiss medical boards
and sits on the editorial
boards of Sleep
Medicine, European
Neurology, and Swiss
Archives of Neurology
and Psychiatry. He has
produced over 100
publications.
(photo not available)

Michael Coppola,
MD, is a leading
pulmonary, critical care
and sleep disorders
physician in private
practice in Massachusetts.
He is an attending
physician at Baystate
Medical Center and
Mercy Hospital in
Springfield, MA, and a
Fellow of the American
College of Chest
Physicians. He is
Chairman of the
Massachusetts Sleep
Breathing Disorders
Society. He is also the
Medical Director of
Winmar Diagnostics, a
sleep-disordered
breathing specialty
company, and Associate
Clinical Professor of
Medicine at Tufts
University School of
Medicine.

Barry J. Make,
MD, is Director,
Emphysema Center
and Pulmonary
Rehabilitation National
Jewish Medical and
Research Center and
Professor of Pulmonary
Sciences and Critical
Care Medicine of the
University of Colorado
School of Medicine. He
has served on
numerous national and
international
committees for
respiratory and
cardiovascular
diseases. His research
and clinical work has
resulted in a large
number of publications
on mechanisms,
treatment, and
rehabilitation of chronic
respiratory disease.
(photo not available)

Colin Sullivan,
MD, PhD, FRACP, FAA is
Chairman of the MAB
and inventor of nasal
CPAP for the treatment
of OSA. He is Professor
of Medicine and
Director of the David
Read Research
Laboratory and
Australian Centre for
Advanced Medical
Technology at the
Sydney University
Medical School. He
established the Centre
for Respiratory Failure
and Sleep Disorders at
the Royal Prince Alfred
Hospital, the Pediatric
Sleep laboratories at the
New Children's Hospital,
and Sydney Children's
Hospital. Dr. Sullivan is
a Fellow of the Royal
Australian College of
Physicians and
Australian Academy of
Science. He has
continued to contribute
to ResMed's innovation,
product development,
and clinical testing.

J. Woodrow Weiss,
MD, is Associate
Professor of Medicine
and Co-Chairman of
the Division of Sleep
Medicine at Harvard
Medical School as well
as Chief, Pulmonary &
Critical Care Medicine,
Beth Israel Deaconess
Medical Center, Boston
MA. Dr. Weiss is an
internationally
recognized researcher
in sleep disorders
medicine.

Helmut Teschler,
MD, is Associate
Professor and Head of
the Department of
Respiratory Medicine
and Sleep Medicine,
Ruhrlandklinik, Medical
Faculty, University of
Essen, Germany. He is
a Fellow of each of the
following Associations:
German Pneumology
Society, American
Thoracic Society,
European Respiratory
Society, and American
Sleep Disorders
Association. He is an
internationally
recognized researcher
in respiratory medicine
and sleep disorders
medicine.

B. Tucker Woodson,
MD, FACS, is Associate
Professor of
Otolaryngology and
Communication
Sciences at the Medical
College of Wisconsin,
a Diplomat of the
American Academy of
Sleep Medicine, and a
Fellow of the American
Academy of
Otolaryngology–Head
and Neck Surgery and
the American College
of Surgeons. Dr.
Woodson is the
Director of the Medical
College of
Wisconsin/Froedert
Memorial Lutheran
Hospital Center for
Sleep. He also sits on
multiple committees for
the American Academy
of Sleep Medicine and
American Academy of
Otolaryngology.

1
Normally during sleep
the muscles that
control the tongue and
soft palate, hold the
airway open.

3
If these muscles relax too
much, the airway can
become blocked,
preventing breathing.

This is an obstructive apnea.

2
If these muscles relax, the
airway narrows, causing
snoring and breathing
difficulties.

SDB explained

Obstructive sleep apnea (OSA). The upper airway has
no rigid support and is held open by active contraction of
upper airway muscles. Normally during deep sleep, these
muscles relax and the upper airway narrows slightly. People
with narrow upper airways and poor muscle tone, however,
are prone to temporary upper airway collapses during
sleep. A complete collapse is called an obstructive apnea,
and a partial obstruction is referred to as a hypopnea.
These breathing irregularities result in lowering of blood
oxygen concentration, causing the central nervous system
to react to the lack of oxygen or increased carbon dioxide
and signal the body to respond. Typically, the individual
subconsciously arouses from sleep, opening the upper
airway. After a few gasping breaths, the individual slips
back into sleep, and the process begins again.

Sleep fragmentation and the loss of the deeper levels of
sleep caused by OSA can lead to excessive daytime
sleepiness, reduced cognitive function (including memory
loss and lack of concentration), depression, and irritability.
OSA sufferers also experience increases in heart rate and
elevations of blood pressure. Several studies indicate that
the oxygen desaturation, increased heart rate, and elevated

blood pressure caused by OSA may be associated with
increased risk of cardiovascular morbidity and mortality
due to angina, stroke, and heart attack. Patients with OSA
have been shown to have impaired daytime performance
in a variety of cognitive functions, including problem
solving, response speed, and visual motor coordination.
Studies have also linked OSA to increased occurrence of
traffic and workplace accidents.

Generally, an individual seeking treatment for the
symptoms of OSA is referred by a general practitioner to
a specialist for further evaluation. The diagnosis of OSA
typically involves monitoring the patient during sleep.
During the testing, the respiratory parameters and sleep
patterns are monitored along with other vital signs such as
blood pressure, heart rate, and blood oxygen levels.
These tests allow sleep clinicians to detect any sleep
disturbances such as apneas, hypopneas, or sub-
conscious awakenings.

The number of sleep clinics in the US alone has expanded
from 100 in 1985 to over 2000 today. Almost 10% of the
general adult population suffers from sleep disorders.
Despite the high prevalence, very few of those affected
have been clinically diagnosed. Healthcare professionals
are often unable to diagnose OSA because they are
unaware that such non-specific symptoms as fatigue,
snoring, and irritability are characteristic of OSA.

Lynn Sawyer
obstructive sleep apnea patient, Australia

Sixty-three-year-old Lynn Sawyer only discovered he had sleep apnea two
months ago after telling his cardiologist how tired and washed out he was
feeling. Even after heart surgery, Lynn knew things were not right. A very active
man all his life, Lynn was extremely tired all the time. Often he couldn’t even
stay awake at the dinner table. After a quick trip down the corridor from the
cardiologist’s rooms to the sleep physician, Lynn’s life changed for the better.
He was diagnosed with obstructive sleep apnea.

“I spent a night in a sleep laboratory, hooked up with leads and wires. The
physician showed me two graphs of my sleep that demonstrated clearly how
many times I was waking up throughout the night.

“He then sent me back to the sleep lab for a second night, this time on a CPAP
machine. The difference was amazing! I literally leapt out of bed. I could feel
the difference immediately.

“Now I’m a new man. I bounce out of bed. I feel great and have more energy
and stamina,” says Lynn.

While OSA has been diagnosed in a broad cross-
section of the population, it seems predominant
among obese, middle-aged men and those who
smoke, consume alcohol in excess, or use muscle-
relaxing drugs. In addition, patients being treated for
certain other conditions, including those undergoing
dialysis treatment or suffering from diabetes, may be
medically predisposed to OSA.

The risk of motor vehicle crashes due
to OSA is removed when patients are
treated with CPAP.
C. F. George. Thorax 2001

Positive airway pressure therapy for OSA
patients. Continuous positive airway pressure
(CPAP) provides a non-invasive means of treating
OSA. Dr. Colin Sullivan, the Chairman of ResMed's
Medical Advisory Board, invented nasal CPAP as a
treatment for OSA in 1980. Today, use of CPAP is
generally acknowledged as the most effective and
least invasive therapy for managing OSA.

During CPAP treatment, a patient sleeps with a nasal
or full face mask connected to a small, portable
airflow generator that delivers room air at a

continuous positive pressure. The flow generator
supplies just enough positive air pressure to prevent
the upper airway from collapsing. Positive airway
pressure applied in this manner acts like an "air splint"
to keep the upper airway open and unobstructed.

ResMed's S6 range of CPAP systems has three
models to suit different patient needs and is
renowned for its small, elegant casing, extremely low
noise, light weight, and exceptional reliability.

Positive airway pressure therapy and SDB in
stroke patients. Positive airway pressure therapy
has evolved in recent years with the introduction of
ResMed's AutoSet T. AutoSet T automatically adjusts
the amount of pressure to suit the patient’s needs as
they vary throughout the night due to sleep stage
and body position. This form of customized
treatment delivers lower mean pressures and is more
comfortable than conventional CPAP. AutoSet T
adapts to patients' needs as they vary from one night
to the next over time. This means AutoSet T can be
considered appropriate for treating SDB in patients
who undergo dynamic changes in the severity of
their OSA over time.

AutoSet T technology enables continuous tailoring of
treatment and logging of clinical data so that patients

need not undergo additional titration studies as their
pressure requirements change. Clinicians can gather 200
days of compliance data and 30 days of efficacy data to
monitor and help patients through rehabilitation. ResMed
has commenced trials for diagnosis and treatment of OSA
in stroke and congestive heart failure patients with the
AutoSet T at a limited number of key sites around the world.
Moving forward, ResMed intends to further investigate the
presence of SDB in patients with hypertension, stroke, and
congestive heart failure.

Over 60% of stroke patients have SDB.
Bassetti et al. Sleep 1999

Positive airway pressure therapy for CHF patients.
Around 60% of patients with congestive heart failure (CHF)
have SDB. Of these, 36% manifest a serious condition
known as Cheyne-Stokes respiration (CSR), 12% manifest
OSA, and the rest manifest a combination of central and
obstructive abnormal breathing (Lipkin et al. Lancet Aug
1999). With CSR, also known as periodic breathing, the
patient's breathing continuously cycles between under-
breathing (may stop altogether) and over-breathing.

ResMed's new AutoSet CS (not available for sale in the US,
but currently undergoing FDA trials) is an automatically
adjusting device designed to treat CSR, CSA, and OSA.
The device automatically adjusts pressure on a breath-by-
breath basis, delivering varying degrees of ventilatory
assistance to stabilize breathing and reduce CSR. The
AutoSet CS responds to the dynamic nature of these
patients' disease states and recovery needs. The device is
fully portable and has a number of features designed to
improve patient comfort and compliance. Trials are showing
that the AutoSet CS provides better control of CSR than
other forms of respiratory therapy. In Germany, about 150
CHF patients have been treated with the AutoSet CS, and
the initial results are extremely promising.

Positive airway pressure therapy for COPD
patients. COPD (chronic obstructive pulmonary disease)
is a group of diseases, the most common being chronic
bronchitis and emphysema. The common characteristic of
COPD is obstruction to the airflow in and out of the lungs.
People with COPD may eventually require supplementary
oxygen and rely on mechanical ventilatory assistance.

ResMed's VPAP devices deliver bilevel therapy, which
involves two pressure levels: a higher level for inspiration
and a lower level for expiration. Bilevel therapy is
recommended for some OSA patients and for a range of
COPD patients who require breathing assistance.
ResMed manufactures five VPAP models for home,
hospital, and acute care environments.

Innovation–the way forward. Positive airway pressure
is not a cure but a therapy for managing SDB, and it must
be used on a daily basis as long as treatment is required.
Patient compliance has been a major factor in the efficacy
of positive airway pressure treatment. Early generations
of CPAP units provided limited patient comfort and
convenience. Patients experienced soreness from the
repeated use of poorly fitting nasal masks and had difficulty
falling asleep with the CPAP device operating at the
prescribed pressure. In recent years, product innovations
have improved patient comfort and compliance.

Innovative products and features include more comfortable
mask systems; delay timers, which gradually increase air
pressure to allow the patient to fall asleep more easily;
autotitrating systems such as AutoSet T; and heated
humidification systems, such as ResMed’s HumidAire,
which makes the air from a CPAP system more
comfortable to breathe.

Following the innovative Bubble Cushion technology
released in 1991, ResMed released the Mirage Mask in
1997. The Mirage Mask uses the air from the flow generator
to create a more comfortable and better seal. In 1999,
ResMed launched the Mirage Full Face Mask, which provides
an effective method of applying mechanical ventilatory
assistance and can be used to address mouth leak in
conventional bilevel or CPAP therapy. In 2000, the company
released the Ultra Mirage Mask, the next generation of the
Mirage nasal mask. It has been well received by both
clinicians and patients. Now the company is releasing the
next generation of the Mirage Full Face Mask.

In 2001, ResMed began distributing the Embletta PDS
(portable diagnostic system), a fully portable diagnostic
system used to screen for SDB in sleep clinics, hospitals,
and patients' homes. This portable system gives sleep
clinics and specialists the means to expand their
capabilities and increase patient throughput.

operations review

AutoSet T product training at ResMed Germany

Product development

ResMed has a strong record of innovation in the sleep
market. In 1989, ResMed introduced its first nasal CPAP
device. Since then the company has been committed to
an ongoing program of product advancement and
development. Current product development efforts are
focused on both improving current products and
expanding into new product applications. In the three
fiscal years ended June 30, 2001, 2000, and 1999,
ResMed
invested $11,146,000, $8,499,000, and
$6,542,000 respectively, on research and development.

ResMed's mask systems are excellent examples of the
company's commitment
to product development.
ResMed's engineers have integrated their research and
development efforts with feedback from patients and
professionals to maintain a constant evolution of quality
and comfort in mask systems. ResMed's Mirage family of
masks is among the most popular in the world.

Manufacturing

ResMed's principal manufacturing facility is located in
Sydney, Australia. Sydney operations consist primarily of
research, development, testing, manufacturing, and
assembling of flow generators, masks, and accessories.

The newly acquired MAP German manufacturing
operation is based in Munich. The products are primarily
flow generators that have been developed by a small,
internal team. The manufacturing process consists of
major sub-assemblies produced externally by sub-
contractors. Final assembly and testing of finished
products is performed in-house.

Sales and marketing

ResMed currently markets its products in over 60 countries
using a network of distributors, independent manu-
facturers' representatives, and a direct sales force.
ResMed attempts to tailor its marketing approach to each
regional market, based on local awareness of SDB as a
health problem, physician referral patterns, consumer
preferences, and local reimbursement policies.

North America and Latin America. In the United
States, sales and marketing activities are conducted
through a field sales organization made up of regional
territory representatives, program development specialists,
diagnostic system specialists, regional sales directors, and
independent manufacturers' representatives.

ResMed also promotes and markets its products directly to
sleep clinics. Patients who are diagnosed with OSA and
prescribed CPAP treatment are typically referred by the

World Class

Manufacturing

techniques

improve

efficiency on

the ResMed

S6 CPAP line

diagnosing sleep clinic to a home healthcare dealer to fill
the prescription. The home healthcare dealer, in
consultation with the referring physician, will assist the
patient in selecting the equipment, fit the patient with the
appropriate mask and set the flow generator pressure to
the prescribed level.

Canadian and Latin American sales are conducted
through independent distributors. Sales in North America
and Latin America accounted for 52%, 54%, and 57% of
net revenues for the fiscal years ended June 30, 2001,
2000, and 1999, respectively.

Europe. ResMed markets its products in all major
European countries. The company has wholly owned
subsidiaries in the United Kingdom, Switzerland, Sweden,
Germany, France, and Austria, and uses independent
distributors to sell products in other areas of Europe.
Distributors are selected in each country based on their
knowledge of respiratory medicine and a commitment to
SDB therapy. In subsidiaries, a local senior manager is
responsible for direct national sales. MAP conducts its
sales efforts through a direct sales force and subsidiaries
in Germany, Austria, the Netherlands and Switzerland.

ResMed’s Executive Vice President is responsible for
coordination of all European activities and, in conjunction
with local management, the direct sales activity in Europe.

Sales in Europe accounted for 39%, 35%, and 34% of
net revenues for the fiscal years ended June 30, 2001,
2000, and 1999, respectively.

Asia Pacific/rest of world. Marketing in Australia and
the rest of the world is the responsibility of the Executive
Vice President. Sales in Australia and the rest of the world
accounted for 9%, 11%, and 9% of net revenues for the
fiscal years ended June 30, 2001, 2000, and 1999,
respectively.

Strategic partnerships. In addition to internal sales
efforts, ResMed works with the following organizations to
promote public and clinical awareness of SDB and OSA:

US National Stroke Association and Australian
National Stroke Foundation. ResMed has developed
strategic alliances with the US National Stroke Association
and the Australian National Stroke Foundation to increase
awareness about the high prevalence of SDB in the stroke
survivor population. ResMed is working on a number of
programs, including a symposium on stroke and SDB at
this year's North American Stroke Meeting.

American Heart Association. ResMed is working with the
Western Affiliates of the American Heart Association on a
number of local programs to increase awareness and
education about SDB.

Physiotherapist Julie Skelton fits a patient with a ResMed
Mirage Mask at Cedar Court Healthsouth Rehabilitation
Hospital, Melbourne, Australia

US National Sleep Foundation. The US National Sleep
Foundation is a nonprofit organization dedicated to
improving public health and safety by raising the level of
awareness and education toward sleep related programs
and research. ResMed has been an active corporate
partner and has supported the National Sleep Foundation
for a number of years.

ResMed believes that its affiliations and continued work
with these organizations raises the awareness of SDB as a
significant health concern.

Cedar Court Healthsouth Rehabilitation Hospital.
Cedar Court, in Melbourne, Australia, is set to open one
of the first dedicated on-site sleep clinics within the
rehabilitation environment. ResMed is sponsoring one of
the two beds; both beds will be fitted with a ResMed
Embla sleep recorder as well as an AutoSet T. ResMed will
capitalize on this experience in its endeavor to globally
expand the rehabilitation OSA market.

People

As of June 30, 2001, ResMed had approximately 950
employees, of which approximately 37% were employed in
warehousing and manufacturing, 14% in research and

development, 29% in sales and marketing, and 20% in
administration and information technology. The company's
employees and consultants are primarily based in Australia,
Germany, the United States, Europe, and Asia Pacific.

Properties

ResMed owns its principal executive offices and US
distribution center, a 144,000 square-foot (13,378
square-meter) facility located in Poway, California, just
outside San Diego. Primary manufacturing operations are
situated in Sydney, Australia, a 120,000 square-foot
(11,148 square-meter) facility also owned by ResMed.
Sales and warehousing facilities are leased in Oxford,
England; Mönchengladbach, Germany; Lyon, France;
Trollhättan, Sweden; and Singapore.

MAP's principal offices are located in Munich, Germany,
in a 44,000 square-foot (4,088 square-meter) leased
facility. MAP's subsidiaries also lease sales and warehouse
facilities in Lyss, Switzerland; Villach, Austria; and
s'Hertogenbosch, Netherlands.

shareholders’ information

ten year financial summary

Year ended June 30

In thousands, except per share data

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

Net revenues

155,156

115,615

88,627

66,519

49,180

34,562

23,501

13,857

7,650

3,356

Income from operations

44,269*

33,138

25,255

17,363

8,327

3,595

2,787

1,289

637

Income before income taxes

45,541*

34,166

24,577

16,112

11,087

6,561

3,781

1,831

1,205

Net income

Basic EPS

Diluted EPS

29,857*

22,226

16,102

10,611

7,465

4,503

2,833

1,232

0.96*

0.89*

0.74

0.69

0.55

0.52

0.37

0.35

0.26

0.16

0.19

0.16

0.10

0.09

846

0.09

0.06

(95)

315

0.04

0.02

* Numbers after MAP acquisition are: Income from operations 26,042; Income before income taxes 27,314; Net income 11,630; Basic EPS 0.37; Diluted EPS 0.35

Annual meeting of shareholders

Form 10-K

The annual meeting of shareholders will be held on
Monday, November 5, 2001, at 4.00pm at ResMed Inc.,
14040 Danielson St, Poway, CA, USA.

Market for the company's common stock
and related shareholders’ matters

The company's shares are traded on the New York Stock
Exchange (primary listing) and the Australian Stock
Exchange under the symbol RMD. Prior to September
1999, ResMed was listed on the NASDAQ-AMEX national
stock market under the symbol RESM. The company
began trading on the Nasdaq market on June 2, 1995.

The company does not intend to pay cash dividends with
respect to its common stock in the foreseeable future. High
and low closing sale price information for the company's
common stock for the applicable quarters is shown below.

2001

2000

High

Low

High

Low

Quarter One

38.38

24.63

17.19

11.82

Quarter Two

41.50

25.50

23.13

12.75

Quarter Three

47.00

36.65

39.62

20.34

Quarter Four

57.68

37.91

38.06

22.00

Copies of the ResMed Inc. annual report on Form 10-K, as
filed with the Securities and Exchange Commission, are
available upon request without charge. Please address written
requests to Walter Flicker, Corporate Secretary, ResMed Inc.,
14040 Danielson St, Poway, CA 92064-6857 USA.

Shareholder and investor inquiries

ResMed has a World Wide Web site containing details
about the company, its products, SDB, and information for
sleep professionals, as well as the latest company news
releases. You can visit the web site at www.resmed.com.

To directly receive copies of company news and other
investor information, please contact Walter Flicker,
Corporate Secretary, ResMed Inc., 14040 Danielson St,
Poway, CA 92064-6857 USA.
Tel: +1 858 746 2400; Fax: +1 858 746 2830;
E-mail: InvestorRelations@ResMed.com.

Security analysts and institutional investors are invited to
contact Adrian M. Smith, Vice President, Finance, ResMed
Inc., Tel: +61 2 9886 5000 or Walter Flicker, Corporate
Secretary, ResMed Inc.
Tel +1 858 746 2400 or 1800 424 0737 (US only).

As at June 30

In thousands

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

Working capital

144,272

47,550

32,529

32,759

34,395

30,844

27,354

5,010

2,589

1,501

Long-term debt

150,000

274

578

787

386

163

218

Shareholders’ equity

100,366

93,972

71,647

50,773

44,625

38,986

28,867

5,630

2,895

1,689

Total assets

288,090

115,594

89,889

64,618

54,895

47,299

35,313

9,608

5,173

2,886

Transfer agent and registrar

Inquiries regarding transfer requirements, lost certificates,
and changes of address should be directed to either of the
following:

(2) pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act and any other applicable securities laws.

Legal counsel

American Stock Transfer and Trust Company, 40 Wall
Street, New York, NY 10005. Tel: +1 718 921 8275.

Latham and Watkins, 650 Town Center Drive, Suite
2000, Costa Mesa, CA 92626 USA.

Computershare, Level 3, 60 Carrington Street,
Sydney NSW 2000. Tel: +61 2 8234 5000.

Independent auditors

KPMG Peat Marwick LLP, 750B Street, Suite 3000,
San Diego, CA 92101 USA.

Convertible notes inquiries

The indenture trustee for the notes is American Stock
Transfer and Trust Company. Inquiries regarding the notes
should be directed to American Stock Transfer and Trust
Company, 40 Wall Street, New York, NY 10005.
Tel: +1 718 921 8275.

The notes and the common stock issuable upon
conversion of the notes (the "Securities") have not been
registered under the Securities Act or any other state or
foreign securities laws. Thus, unless and until they are
registered under the Securities Act, the securities may not
be offered, sold, pledged, or otherwise transferred except
(1) in compliance with the registration requirements of the
Securities Act and all other applicable securities laws, or

board of directors

Chairman of the Board

Directors

Peter C. Farrell

President, Chief
Executive Officer,
ResMed, Inc.

Christopher A.
Bartlett

Donagh
McCarthy

Gary W.
Pace

Professor of
Business
Administration and
Chair, Program for
Global Leadership,
Harvard Business
School

President, CEO
and Chairman of
the Board of
Protiveris Inc., a
startup Biotech
company based in
Rockville, Maryland

President and
Chief Executive
Officer, RTP
Pharma Inc. (a
biopharmaceutical
research
corporation)

Christopher G.
Roberts

Executive Vice
President,
ResMed, Inc.

Michael A.
Quinn

CEO of
international
venture fund.
Formerly CEO of
a medical device
company and
co-founder of NYSE
listed environmental
company

Senior Executives

Mark Abourizk
Michael Berthon-Jones
Don Darkin
David D'Cruz
Norman DeWitt
Robert Douglas
Walter Flicker
Robert Frater
Elliott Glick
Steve Hyde
Curt Kenyon
Brett Lenthall
Stefan Madaus
William Nicklin
Alain Perséguers
Ron Richard
Klaus Schindhelm
Joerg Schneider
Adrian Smith
Deirdre Stewart
Jonathan Wright

Vice President, Intellectual Property and Legal Affairs (Asia Pacific)
Vice President, Clinical Research
Vice President, Product Development
Vice President, Quality Assurance and Regulatory Affairs
General Counsel
Vice President, Corporate Marketing
Corporate Secretary
Vice President, Innovation
Vice President, US Operations
Vice President, Technology Ventures
Vice President, US Sales & Marketing
Vice President, Information Systems
Chief Executive, MAP
Vice President, Manufacturing
Chief Executive, Southern Europe
Vice President, US Marketing
Vice President, Global Operations
Chief Executive, ResMed Germany
Vice President, Finance and Chief Financial Officer
Vice President, New Business Development and Clinical Education and Training
Vice President, Global New Business

2000 – 1992 highlights

Business
00 Begins trading on the New York Stock Exchange (NYSE); secondary listing of common stock on the Australian Stock
Exchange (ASX); 2-for-1 stock split; enters into partnership with US National Stroke Association; purchases business
activities of Swedish distributor Einar Egnell AB

99 Acquires holding in Flaga hf becoming distributor of Embla sleep diagnostic equipment in US and selected other countries

98 Construction of new Australian premises begins; 3-year agreement signed with Invacare Corp. for distribution of

selected products in the US; 2-for-1 stock split

97 Liquid silicone manufacturing assets of TQR Pty Ltd acquired; awarded $2 million competitive Government R & D Grant;
NSW State Government offers financial assistance for the expansion of Sydney manufacturing plant; Singaporean and
Malaysian distributor Innovmedics acquired and ResMed Singapore Pte Ltd established for direct distribution in SE Asia

96 German distributor Priess Med Technik purchased and ResMed Priess GmbH & Co established in Germany; business

activities of French distributor Premium Medical S.A.R.L. purchased and ResMed SA established in France

95 Company name changed to ResMed; lists on NASDAQ, raising US$24 million

94 ResCare group incorporates as Delaware Corporation

93 Nomura Jafco invests

92 Medtronic distribution agreement terminated; direct distribution to USA market

Products
00 ResMed S6 CPAP system; Ultra Mirage Mask; enhanced AutoSet T; enhanced VPAP; AutoScan; Embla sleep recorder

99 AutoSet T & AutoSet PDS devices; Mirage Full Face Mask; Mirage Disposable Full Face Mask; ResControl

98 AutoSet Clinical II device; AutoSet Portable II Plus device; VPAP II ST-A & VPAP MAX bilevel devices

97 AutoSet Portable II device; HumidAire active humidifier; Mirage Mask; SCAN 2.0; UCU 2

96 Comfort device; ResCap II headgear; VPAP II bilevel device

95 Alert CPAP device; AutoSet Portable device; Modular Mask frame; Pediatric CPAP device; SCAN software;

SULLIVAN V CPAP device; UCU (Universal Control Unit)

94 AutoSet Clinical device; Infant Mask; SmartStart; SULLIVAN IV CPAP device; VPAP bilevel device

93 Bubble Mask - Series 3; Constant CPAP (Germany); ResCap headgear; SULLIVAN III CPAP device

92 HC100 active humidifier

Awards
00 Ranked 58 in Business Week as one of the 100 Hottest-Growth Companies ($25m to $500m annual sales) in the U.S;

wins two Australian Technology Awards for excellence, the first in the Development of Biotechnology, Pharmaceutical
Technology and Medical Instrumentation and the second in the globalization of technology pioneered in Australia;
ranked in Forbes Magazine in the 200 Best Small Companies in America for fourth year in a row

99 Ranked 67 by Business Week as one of the 100 Hottest-Growth Companies ($25m to $500m annual sales) in the
US; ranked 94 by Fortune as one of America's Fastest-Growing Companies; ranked 27 by Forbes Magazine in the
200 Best Small Companies in America

98 Dr. Peter Farrell named San Diego's Entrepreneur of the Year in Health Sciences; Ranked 63 by Forbes Magazine in
the 200 Best Small Companies in America; wins NSW Exporter of the Year Award across all industry categories

97 Dr. Peter Farrell receives David Dewhurst Award for significant contributions to biomedical engineering; named by

Deloitte & Touche as one of the Technology Fast 500 (received again in 1998); ranked 172 by Forbes Magazine in
the 200 Best Small Companies in America; Australian Venture Capital Award (Best Expansion Phase Investee
Company category)

95 Australian State Exporter of the Year Award
92 Austrade Exporter of the Year Awards Finalist

AutoScan, AutoSet, AutoSet CS, AutoSet T, AutoView, Bubble Cushion, Bubble Mask, HumidAire, Mirage, ResCap, ResControl, ResMed, SCAN, SmartStart, S6,
SULLIVAN, Ultra Mirage, VPAP, and VPAP MAX are trademarks of ResMed Ltd.

Now I can drive for hours

I feel twenty

years old again

Germany
ResMed GmbH & Co. KG
Rudolfstraße 10
D-41068 Mönchengladbach
Germany
Telefon: +49 02161 / 3521-0
Telefax: +49 02161 / 3521-299
reception@resmed.de

MAP GmbH & Co KG
Fraunhoferstrasse 16
D-82152 Martinsried, Germany
Telefon: +49 89 89518-6
Telefax: +49 89 89518-714
info.de@map-med.com
www.map-med.com

France
ResMed SA
Parc de la Bandonnière
2 rue Maurice Audibert 69800
Saint Priest, France
Tel: +33 (4) 37 251 251
Fax: +33 (4) 37 251 260
reception@resmed.fr

Australia
ResMed Ltd
97 Waterloo Road
North Ryde NSW 2113
Australia
Tel: +61 (2) 9886 5000
or 1 800 658 189
Fax: +61 (2) 9878 0120
reception@resmed.com.au

Global Offices

World Headquarters
ResMed Inc.
14040 Danielson St
Poway CA 92064-6857 USA
Tel: +1 (858) 746 2400
or 1 800 424 0737
Fax: +1 (858) 746 2900
usreception@resmed.com

United States
ResMed Corp
14040 Danielson St
Poway CA 92064-6857 USA
Tel: +1 (858) 746 2400
or 1 800 424 0737
Fax: +1 (858) 746 2900
usreception@resmed.com

United Kingdom
ResMed (UK) Limited
67B Milton Park
Abingdon Oxon OX14 4RX UK
Tel: +44 (1235) 862 997
Fax: +44 (1235) 831 336
reception@resmed.co.uk

Sweden
ResMed Sweden AB
Industrigatan 2
461 37 Trollhättan Sweden
Tel: +46 520 420 110
Fax: +46 520 397 15
reception@resmed.se

Singapore
ResMed Singapore Pte Ltd
57 Ubi Ave 1
#07-09 Ubi Centre Singapore 408936
Tel: +65 284 7177
Fax: +65 284 7787
reception@resmed.com.sg

New Zealand
ResMed NZ Ltd
PO Box 51-048
Pakuranga Auckland New Zealand
Tel: +0800 737 633 (NZ toll free)
Fax: +0800 737 634 (NZ toll free)
reception@resmed.com.au

Malaysia
ResMed Malaysia Sdn Bhd
Suite E-10-20, Plaza Mon’t Kiara
No.2, Jalan 1/70C, Mon’t Kiara
50480 Kuala Lumpur Malaysia
Tel: +60 (3) 6201 7177
Fax: +60 (3) 6201 2177
reception@resmed.com.my

Japan
ResMed KK
Nihonbashi Hisamatsu Bldg., 4F
2-28-1 Nihonbashi-Hamacho
Chuo-Ku
Tokyo 103-0007
Japan
Tel: +81 (3) 3662 5056
Fax: +81 (3) 3662 5040