ResMed

The art and science of

RESMED

2007 ANNUAL REPORT

T A B L E O F C O N T E N T S

Chairman’s report

The art of innovation

The science of leadership

The art of awareness

The science of growth

Managing our expansion

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COVER: “The Sleeping Muse,”
by Romanian-born sculptor
Constantin Brancusi
(1876–1957). This breakthrough
sculpture made the transition
from descriptive naturalism to
abstract purity of form. The
image’s subtle features and
closed eyes convey a classical
sense of repose. Brancusi’s art
combined simplicity and
sophistication.

“Sleep is the golden chain
that ties health and our
bodies together.”
— Thomas Dekker

With his “Sleeping Muse,” renowned

sculptor Constantin Brancusi led the

way for a generation of modernist

sculptors. ResMed has achieved its

own breakthrough with bold thinking

that continues to lead the sleep therapy

industry. Our expertise is both a

science and an art. Since 1989, we

have transformed the practice of sleep

medicine with our portfolio of high-

quality masks and flow generators.

For patients with sleep-disordered

breathing, our artistry means more

treatment options, improved health

and better sleep.

RESMED 2007 ANNUAL REPORT 1

Chairman’s Report

Peter C. Farrell
CEO and Chairman of the Board

Results

For fiscal year ending June 30, 2007, ResMed achieved $716.3M in revenues, an

increase of 18% over 2006 revenues while pro forma net income* rose 16% to

$125.8M, 18% of revenues. Pro forma diluted earnings per share* were $1.59 and

operating income was $174.3M, an increase of 13% over the prior year.

Total operating cash flow for fiscal 2007 was $91.1M, resulting in cash and cash

equivalents of $258M. The balance sheet demonstrates our financial strength,

with a 24% increase in assets to $1.25B. Shareholders’ equity was up 26% to

$931M, from $738M in fiscal 2006, underlining our continued commitment to

maximizing shareholder value.

Market Growth

During the past fiscal year, we continued our efforts in building awareness of

both the prevalence and negative health consequences of untreated sleep-

disordered breathing (SDB). With nearly two decades behind us, we have barely

scratched the surface of this extremely under-penetrated market. Our global

team is dedicated to battling ignorance of the disorder around the world with

education and awareness programs focused on not only the patients, but also

physicians in the non-sleep medical community. With over 3,500 peer-reviewed

clinical studies published to date in the medical literature, we are beginning to

see some light at the end of the tunnel in our efforts to break down the medical

silos, so the academic medical world will “Wake Up To Sleep.” Even in the United

States, the most penetrated SDB market, it is estimated the market is just

10% penetrated. As baby boomers continue to age and the health epidemics

of obesity and diabetes continue to grow, the need for our technology will also

grow. The current global sleep therapy market is estimated to be $2.0 billion,

but the potential market is at least 10 times that figure. ResMed is uniquely

positioned to capitalize on this growth as our core competencies lie firmly

within sleep and respiratory medicine.

2 RESMED 2007 ANNUAL REPORT

New Products

In fiscal year 2007, we launched a number of market development initiatives, as

well as new products. ResMed has always been known for innovative mask tech-

nologies; we are the leading supplier of positive airway pressure (PAP) masks

worldwide. In 2007, we did not disappoint with our three new mask offerings,

giving our customers and patients an unprecedented selection of choices. Our

new full face mask, the Mirage Quattro,™ is a fourth generation, fully redesigned

product with newly patented features. The Quattro has reinforced our dedica-

tion to quality and innovation and has been met with rave reviews by both

customers and patients. The Mirage Liberty™ is a combination of technologies

that brings together into one product the comfort of our nasal pillows with the

efficacy of a full face mask. We also incrementally but significantly improved our

market-leading Mirage Swift™ nasal pillow system. Unbelievably, we’ve made it

86% quieter than its predecessor and, at 2.5 oz or 70g, it is one of the lightest

of all nasal masks. These new products will help us to maintain the market share

we have captured over the past few years, as well as provide us with growth driv-

The science of sleep

Income from Operations
IN MILLIONS*

$174.3

$154.1

$108.6

$85.4

$67.2

0303

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*Pro forma income and EPS figures
exclude the impact of stock-based
compensation, restructuring expenses,
AJCA repatriation tax, aquisition
related expenses and voluntary
product recall expenses.

ers throughout fiscal 2008 and beyond.

On the flow generator side, we have also made

significant progress. Earlier this fiscal year we

completed the full launch of the VPAP Adapt SV™

adaptive servo-ventilator, designed primarily to

“ We don’t invest
in businesses,
we invest in people.”
Peter Farrell

treat periodic breathing or Cheyne-Stokes respiration, which is often exhibited

in patients with advanced heart failure. However, we recently realized that the

true potential of this product went far beyond its original scope. In the fall of

Assets and
Shareholder Equity
IN MILLIONS

2006, the Mayo Clinic published a peer-reviewed study showing that 15% of all

patients passing through their sleep clinic suffered from complex sleep apnea.

Later in the year, the same group published a further study confirming that the

Adapt SV was far superior to the current standard of care therapy. Our propri-

etary Adapt SV algorithm is unique in its ability to treat complex sleep apnea

and is the only device shown to be efficacious in treating this difficult group of

patients. In addition to the astounding success of the Adapt SV, we also added

another VPAP product to the armamentarium: the VPAP Malibu™ bilevel. The

latter combines our superior AutoSet™ algorithm with our industry-leading VPAP

platform into one powerful new treatment option for noncompliant obstructive

sleep apnea patients. In conjunction with our additions to the VPAP line, we also

launched a new flow generator targeting the value segment of the business;

1,252.0

1,012.9

931.2

774.1

738.1

549.2

459.6

474.1

361.5

286.4

0303

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07

SHAREHOLDER EQUITY
ASSETS

RESMED 2007 ANNUAL REPORT 3

The science of sleep

Net Revenue
IN MILLIONS

$716.3

$607.0

marketed as the C-Series Tango™, this device constitutes our initial thrust into

the value end of the market. Indeed we are delighted to provide customers the

choice of a ResMed product across the whole CPAP spectrum when they make

their purchasing decisions.

$425.5

$339.3

$273.6

In an effort to stand totally behind our commitment to quality and patient care,

we announced a voluntary recall of approximately 300,000 units of our extremely

popular S8™ flow generator line. We were aware that seven of these units had

exhibited defects that we found of concern, so we decided to replace all potential-

0303

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ly affected units, at the cost of approximately $60M. As the news rolled out, we

were pleased to discover that our customers appreciated our proactive commu-

nication; in fact they made a point of letting us know they would continue to

stand behind us.

Market Development

In our ongoing effort to raise awareness and grow our business, we were busy

with new initiatives, which are now beginning to gain traction. We were the

first to highlight the effects SDB has on cardiovascular disease to the medical

community; now most of the major cardiac associations advocate screening

and treating cardiac patients for SDB. We now have our sights firmly focused

on the next big epidemic, type 2 diabetes. There are over 18M diabetic patients

in the US and 90% suffer from adult onset or type 2 diabetes. In this latter

group, there is a reported SDB prevalence rate of around 80%, so we believe

all patients with type 2 diabetes should be screened for SDB. The clinical data

have shown that not only does CPAP therapy eliminate their sleep apnea, but

it also improves blood pressure, glucose control and insulin sensitivity.(1) The

diabetes community is also unique in that many of these patients are vigilant

about their disease and are constantly seeking new ways to improve their

health. In addition, the primary clinicians who work with these patients to

Pro Forma Diluted EPS
IN MILLIONS* (split adjusted)

$1.59

$1.42

$1.03

$0.82

$0.66

0303

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improve their disease management are diabetes educators, who are not only

*Pro forma income and EPS figures
exclude the impact of stock-based
compensation, restructuring expenses,
AJCA repatriation tax, aquisition
related expenses and voluntary
product recall expenses.

accessible but also very knowledgeable about comorbidities, and can be eas-

ily brought up to speed on the need to treat SDB in this patient group.

We have also expanded our strategic initiatives in the occupational health and

safety field, with a particular focus on the transportation industry. We have

added staff to our internal OccHealth team and they are now geared up to

work with the major transportation companies in the US to help them screen

and treat their drivers. You will hear more about this opportunity from Chris

4 RESMED 2007 ANNUAL REPORT

The science of sleep

Lofgren, CEO of Schneider National, in subsequent pages. Other initiatives we

are working on include home ventilation and anesthesia. On the latter front,

some recent changes in JCAHO’s recommended national patient safety guide-

Pro Forma Net Income
IN MILLIONS*

$125.8

$108.6

lines indicate that acute care hospitals will soon begin to screen patients

pre-operatively with diagnostic screeners such as ApneaLink™, and treat those

$73.8

patients affected with SDB.

$57.3

$45.7

As we expand the above initiatives, as well as our public relations campaign

globally, we are optimistic about our potential for continuing solid organic

growth in 2008 and beyond. In fact, we have only just begun the fight to lift

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the veil of ignorance of this debilitating disorder.

Executive Team

We also have the right team in place to execute this strategy,

in fact our

management strength has never been better. With Kieran Gallahue overseeing

global operations, Keith Serzen overseeing US operations, Lasse Beijer in Europe

and Paul Eisen in Asia Pacific region, we have a seasoned group of experienced

managers implementing our global expansion. This year we also saw the depar-

ture of one of our long-term senior executives, Adrian Smith, the former COO

for Europe. Adrian was an extremely able executive who will be greatly missed.

We wish him the best and we are grateful to have Lasse to fill Adrian’s role. With

over 20 years of experience in the European market, we believe Lasse has the

right skill set and experience to move our European business forward in 2008.

*Pro forma income and EPS figures
exclude the impact of stock-based
compensation, restructuring expenses,
AJCA repatriation tax, aquisition
related expenses and voluntary
product recall expenses.

Cashflow from Operations
IN MILLIONS

$99.0

$91.1

Finally, I would like to take this opportunity to thank all 3,000 ResMed employ-

$76.5

$71.1

ees. Without the dedication and loyalty this entire team has shown this year, we

$59.3

would not have had the success we experienced. I am first to say, we do not

invest in businesses, we invest in people and we have assembled one of the finest

groups of individuals I have ever had the privilege to serve. I would also like to

thank the Board of Directors for their guidance and leadership this year, as well

as our loyal customers and patients who make it all worthwhile. We might have

traveled far but we still have a long road ahead to lift the veil of ignorance about

untreated SDB. I thank everyone associated with ResMed for their encourage-

ment and support.

Peter C. Farrell, PhD AM
Chairman and Chief Executive Officer

ResMed Inc.
* Pro forma income and EPS figures exclude the impact of stock-based compensation, restructuring expenses,

AJCA repatriation tax, acquisition related expenses and voluntary product recall expenses.

RESMED 2007 ANNUAL REPORT 5

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I N N O V A T E | E D U C A T E | G R O W

The art of

F

rom the beginning, ResMed’s strategy has been to innovate with the

highest quality products, educate patients and clinicians about sleep-

disordered breathing, and invest for global growth. In 2007, we delivered

on our promise of innovation by launching a record six new products in a

single year.

Our newest product cycle builds on the strength of our existing portfolio. It

also broadens our market share for flow generators at both ends of the spec-

trum. While our VPAP Adapt SV targets the high-margin specialty segment,

the Tango brings ResMed quality, service, and branding to the value segment

for the first time.

Our constant innovation translates to masks that fit, sophisticated algorithms

that enhance patient comfort and compliance, and performance that cus-

tomers have come to trust. At the same time, our value-added products and

large production volumes support healthy margins.

6 RESMED 2007 ANNUAL REPORT

I N N O V A T E | E D U C A T E | G R O W

ResMed had more than 1, 600 patents and
876 design registrations granted or
pending worldwide as of June 2007.

F L O W G E N E R A T O R S

VPAP Adapt SV: Breakthrough
• First device for periodic
breathing cleared by the
US Food and Drug
Administration for home and
hospital use

• Treats the 15% of patients
with complex sleep apnea

VPAP Malibu: Intelligence
• The most effective

auto-adjusting bilevel
on the market

• Advanced AutoSet
algorithm delivers
comfort and simplicity

C-Series Tango: Value
• Streamlined feature set
at an affordable price

• Strategic barrier to
entry for would-be
competitors

M A S K S

Mirage Liberty: Fusion
• New category for ResMed

Mirage Quattro: Advancement
• ResMed’s fourth generation

Mirage Swift II: Evolution
• Successor to the

• Combines the low profile and
comfort of nasal pillows with
full face functionality

full face mask

• The first major advance in
cushion technology since
the Ultra Mirage™ mask

Mirage Swift™ nasal pillows
system, the industry’s
best-selling mask

• 86% quieter than its

predecessor

RESMED 2007 ANNUAL REPORT 7

I N N O V A T E | E D U C A T E | G R O W

The science of

A conversation with ResMed President Kieran T. Gallahue on ResMed’s VPAP

Adapt SV, the first device cleared to treat central sleep apnea, mixed sleep

apnea, and periodic breathing such as Cheyne-Stokes respiration in US

hospital and homecare environments.

Q. What makes treating complex sleep apnea so challenging?
A. Complex sleep apnea patients frequently exhibit both obstructive and central

apneas complicating the therapeutic process. Clinicians were frustrated with

the difficulty of providing effective care. Due to its unique algorithm, the Adapt

SV provides improved patient care while simultaneously reducing the cost of care.

8 RESMED 2007 ANNUAL REPORT

I N N O V A T E | E D U C A T E | G R O W

Q. How is ResMed’s solution unique?
A. The Adapt SV uses a ResMed proprietary algorithm. We first launched this

product as the AutoSet CS2™ in Europe, targeting patients with heart failure.

When we released the Adapt SV under a broader focus in the United States,

we were releasing a product powered by a market-proved algorithm that has

helped thousands of heart failure and complex sleep apnea patients for more

than five years.

Q. Why is the Adapt SV such a breakthrough?
A. Our algorithm adapts to patients’ needs breath by breath, improving the

time spent in slow-wave and REM sleep. We are able to enhance quality of life

for patients while reducing healthcare costs. Like the full range of ResMed

products, the Adapt SV combines good patient care with healthy economics.

RESMED 2007 ANNUAL REPORT 9

I N N O V A T E | E D U C A T E | G R O W

The art of

I

n 2007, ResMed continued to spread the word about sleep-disordered

breathing. The ResMed-supported “Sleep Well, Be Healthy” public relations

program continued to generate significant press coverage of the potentially

life-threatening disorder. The US campaign has landed airtime on “The View”

and “Good Morning America.”

Now we are going global with our PR strategy, raising the profile of ResMed

products from Berlin to Beijing. We captured the attention of the UK media

when Matt Hampson, a paralyzed rugby star recently outfitted with a compact

ResMed Elisée ventilator, told reporters, “It should make a massive difference

to my life.”

At the same time, we continued to build awareness among primary care physi-

cians and specialists. Untreated sleep-disordered breathing is clinically linked

with some of the most challenging and expensive conditions in healthcare –

heart failure, hypertension, diabetes and obesity. More recently, it has been tied

to greater risks during and after surgery, and more accidents on the job.

In 2007, we focused on specialists whose patients can benefit most from

ResMed’s products, including cardiologists, diabetes educators, endocrinolo-

gists and anesthesiologists.

10 RESMED 2007 ANNUAL REPORT

I N N O V A T E | E D U C A T E | G R O W

Cardiology

Approximately half of all heart failure patients experience sleep-disordered

breathing. Currently 11% of sleep lab referrals come from cardiologists, up from

very few five years ago, according to Wachovia Securities research. For

patients with heart failure and hypertension, the American College of

Cardiology, the Heart Failure Society of America and the National Institutes of

Health all recommend screening and treatment for sleep-disordered breath-

ing. Last year, ResMed brought this message home at medical conferences

across the United States and around the world.

Type 2 Diabetes

Recently,

journals such as The New England Journal of Medicine and The

Diabetes Educator have raised the level of discussion about the relationship

between sleep and diabetes. ResMed is taking a global approach to diabetes

outreach. In the past year we partnered with Diabetes Australia, initiated a

prevalence study in India, and exhibited at key meetings on both sides of the

Atlantic, including the European Association for the Study of Diabetes, the

American Association of Diabetes Educators, the American Diabetes

Association and the Endocrine Society.

More than 80% of patients with type 2 diabetes
suffer from sleep-disordered breathing.2

Anesthesiology

In patients with undiagnosed sleep apnea, anesthesia and other pain medica-

tions may cause the airway to collapse during and after surgery. In 2006, the

American Society of Anesthesiologists (ASA) recommended anesthesiologists

to assess pre-operatively whether patients have obstructive sleep apnea for

appropriate airway management both during and after surgery. In January

2008, the Joint Commission on Accreditation of Healthcare Organizations, or

JCAHO, is slated to require US hospitals not only to screen for obstructive sleep

apnea before surgery, but also to develop a post-operative treatment protocol

based on best practices.

RESMED 2007 ANNUAL REPORT 11

I N N O V A T E | E D U C A T E | G R O W

Schneider National: driving opportunity

For ResMed, occupational health and safety is accelerating an important
opportunity. Untreated sleep-disordered breathing takes a serious toll on
job performance, causing daytime sleepiness, a loss of concentration and
a far greater risk of accidents. To make highways safer for everyone, truck-
ing companies are starting to screen and treat their drivers for obstructive
sleep apnea.

Schneider National, a longtime ResMed customer and the largest truckload
is helping to drive the trend. The company
carrier in North America,
covers the full cost of a sleep study and treatment for drivers identified as
at risk for sleep apnea, representing 28% of its fleet.
Schneider screened and treated more than 1,000 drivers
for sleep apnea in 2006 alone.

“Safety is our No. 1 core value, and as a company we have
recognized that fatigue is a big contributor to safety
incidents,” says Schneider President and CEO Chris
Lofgren, who suffers from mild sleep apnea himself. “The
ability of our drivers to react quickly and thoughtfully is
vital to being a safe member of the motoring public.”

Results that deliver 3
Over the long haul,
Schneider has:

• Cut total medical costs by
49% per treated driver

• Reduced accidents by 30%

• Nearly doubled driver

retention

3 Schneider National

Schneider relies on ResMed’s web-based ResTraxx™
system – the first of its kind for wireless, remote monitoring
– to improve patient compliance, and many of its drivers
use ResMed flow generators and masks. Schneider’s groundbreaking
program is overseen by Mark Berger, M.D., a Fellow of the American College
of Chest Physicians. It has become a model for the entire trucking industry,
winning the National Sleep Foundation’s Healthy Sleep Community Award
in 2007.

The program has lowered Schneider’s healthcare costs, most notably from
fewer cardiac and pulmonary claims and lower in-patient admissions. It has
also reduced accidents and increased driver retention. And it keeps the
company ahead of regulations under consideration by the US Department
of Transportation that would require the screening and treatment of sleep
apnea for all 9 million US commercial truck drivers.

Says Wendy Sullivan, Schneider’s manager of occupational health and a
registered nurse: “If trucking companies think they are not paying for sleep
apnea, they are.”

12 RESMED 2007 ANNUAL REPORT

I N N O V A T E | E D U C A T E | G R O W

The science of

T

oday, ResMed is helping patients breathe easier in 68 countries. We are No.

1 or No. 2 in every market we serve, and we believe this success is only the

beginning. We are building our business to continue leading the high-growth

and under-penetrated sleep industry.

During 2007,

international demand for our products remained strong.

In

France, we moved into a newly expanded facility in Lyon. This allowed us to

support our continued growth in the core business and our expanded venti-

lation strategy, including the commercialization of the Saime product acquired

in 2005. In the United Kingdom, we opened more Centers for Healthy Sleep,

retail shops that put our products straight into consumers’ hands.

In Asia, we expanded our distribution relationships with Teijin Pharma Limited

and Fukuda Denshi and launched direct marketing operations in New Delhi

and Shanghai. Over the long term, emerging markets like China, India and

Eastern Europe represent an opportunity to help vast numbers of people with

our sleep and ventilation solutions.

Driving ResMed’s global growth is our new Innovation Center in Sydney, where

Australian Prime Minister, the Honorable John Howard, cut the ribbon in

February 2007. The 200,000-square-foot campus has doubled our specialized

manufacturing and assembly plant, enabling us to meet rising demand. The

design brings research and development, engineering, manufacturing and our

commercial operations closer together to inspire a steady stream of new ideas.

Global sleep therapy sales are projected to grow an
average of 16 percent a year to $2.9 billion by 2010.
Canaccord Adams

RESMED 2007 ANNUAL REPORT 13

Managing our expansion

Leading a global innovator like ResMed requires significant expertise

in the sleep industry and medical device sector. Our executive team

has the depth of experience, an intimate understanding of each

market’s inner workings, and the proven ability to execute profitably

with each new product cycle. Today, we are prepared to take our

company to its next level of growth, enabling ResMed products to

help even greater numbers of patients around the world.

EXECUTIVE TEAM, STANDING, FROM LEFT: Paul Eisen, Senior Vice President, Asia Pacific – five years in ResMed management, David Pendarvis,
Senior Vice President, Organizational Development, and General Counsel – five years in ResMed management, Keith Serzen, Chief Operating
Officer, Americas – four years in ResMed management, Brett Sandercock, Chief Financial Officer – nine years in ResMed management,
Robert Douglas, Chief Operating Officer, Sydney – six years in ResMed management

SEATED, FROM LEFT: Peter C. Farrell, PhD, DSc, AM, Chairman and CEO – 18 years in ResMed management, Kieran T. Gallahue, President & COO,
ResMed Global – four years in ResMed management

NOT PICTURED: Lasse Beijer, Chief Operating Officer, Europe – nine years in ResMed management

BOARD OF DIRECTORS, FROM LEFT: Gary Pace 2,3 John Wareham 1,3 Ronald A. Taylor 2,3 Peter Farrell, Chairman of the Board of Directors
Michael A. Quinn 1,3 Donagh McCarthy 2,3 Christopher Roberts 1,3 Richard Sulpizio 2,3

1 Member of the Audit Committee
2 Member of the Compensation Committee
3 Member of the Nominating and Governance Committee

Note: Bold Blue denotes committee chair

14 RESMED 2007 ANNUAL REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2007
Commission file number: 001-15317
RESMED INC.
(Exact name of registrant as specified in its Charter)
Delaware
(State or other jurisdiction of incorporation or organization)
98-0152841
(IRS Employer Identification No.)
14040 Danielson Street
Poway, CA 92064-6857
United States of America
(Address of principal executive offices)
(858) 746-2400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of each class
Common Stock, $.004 Par Value
Name of each exchange upon which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes [ x ] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Act. Yes [ ] No [ x ]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [ x ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (S 229.405 of
this Chapter) is not contained herein and will not be contained to the best of registrant’s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act.

Non-accelerated filer [ ]

Large accelerated filer [ x ]

Accelerated filer [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes [ ] No [ x ]
The aggregate market value of the voting stock held by non-affiliates of registrant as of December 31, 2006 (the
last business day of the registrant’s most recently completed second fiscal quarter), computed by reference to the
closing sale price of such stock on the New York Stock Exchange, was approximately $3,684,206,000. (All
directors, executive officers, and 10% stockholders of registrant are considered affiliates.)
At August 17, 2007, registrant had 77,485,037 shares of Common Stock, $.004 par value, issued and outstanding.
This number excludes 2,657,518 shares held by the registrant as treasury shares.
Portions of the registrant’s definitive Proxy Statement to be delivered to shareholders in connection with the
registrant’s 2007 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by
reference into Part III of this report.

CONTENTS

Cautionary Note Regarding Forward Looking Statements

Part I .

Item 1

Business

Item 1A Risk Factors

Item 2

Properties

Item 3

Legal Proceedings

Item 4

Submission of Matters to a Vote of Security Holders

Part II

Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Item 6

Selected Financial Data

Item 7 Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Item 7A Quantitative and Qualitative Disclosures About Market and Business Risks

Item 8

Consolidated Financial Statements and Supplementary Data

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

Item 9A Controls and Procedures

Item 9B Other Information

Part III

Item 10 Directors and Executive Officers of the Registrant

Item 11 Executive Compensation

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

Item 13 Certain Relationships and Related Transactions

Item 14 Principal Accountant Fees and Services

Part IV Item 15 Exhibits and Consolidated Financial Statement Schedules

Signatures

2

2

18

26

26

26

27

29

31

45

47

48

48

48

51

51

51

51

51

51

S-1

Activa, ActiveCell, Adapt SV, Adaptiv, Aerial, Aero-Click, Aero-Fix, ApneaLink, AutoVPAP, AutoScan,
AutoSet, AutoSet CS, AutoSet Spirit, AutoSet T, AutoSet Vantage, AutoSet.com, AutoSet-CS.com, AutoView,
Bubble Cushion, Bubble Mask, Elisée, Eole, Escape, Helia, HumidAire, IPAP MAX, IPAP MIN, Kidsta,
Magellan, Malibu, MAP, MEPAL, Meridian, MESAM, minni Max, Mirage, Protégé, Moritz biLEVEL, Papillon,
Poly-MESAM, ResCap, ResControl, ResMed, S6, S7, S8, SELFSET, SleepVantage, SmartStart, Spirit, Spiro+,
Sullivan, Swift, Tango, TiControl, Ultra Mirage, Vential, VPAP, VS Easyfit are our trademarks.

As used in this 10-K, the terms “we”, “us”, “our” and “the Company” refer to ResMed Inc., a Delaware
corporation, and its subsidiaries, on a consolidated basis, unless otherwise stated.

- 1 -

PART I

Cautionary Note Regarding Forward-Looking Statements

This report contains or may contain certain forward-looking statements and information that are based
on the beliefs of our management as well as estimates and assumptions made by, and information
currently available to our management. All statements other than statements regarding historical facts
are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “seek,” “will,”
“will continue,” “estimate,” “plan,” “future” and other similar expressions generally identify forward-
looking statements, including, in particular, statements regarding the development and approval of
new products and product applications, market expansion, pending litigation, and the development of
new markets for our products, such as cardiovascular and stroke markets. These forward-looking
statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. You are cautioned not to place undue reliance on these forward-looking statements each
of which applies only as of the date of this report. Such forward-looking statements reflect the views
of our management at the time such statements are made and are subject to a number of risks,
uncertainties, estimates and assumptions, including, without limitation, and in addition to those
identified in the text surrounding such statements, those identified in Item 1A “Risk Factors” and
elsewhere in this report.

In addition, important factors to consider in evaluating such forward-looking statements include
changes or developments in social, economic, market, legal or regulatory circumstances, changes in
our business or growth strategy or an inability to execute our strategy due to changes in our industry
or the economy generally, the emergence of new or growing competitors, the actions or omissions of
third parties, including suppliers, customers, competitors and governmental authorities, the impact of
future developments related to the recently announced product recall, and various other factors subject
to risks and uncertainties which could cause actual results to materially differ from those projected or
implied in the forward-looking statements. Should any one or more of these risks or uncertainties
materialize, or the underlying estimates or assumptions prove incorrect, actual results may vary
significantly from those expressed in such forward-looking statements, and there can be no assurance
that the forward-looking statements contained in this report will in fact occur.

ITEM 1

BUSINESS

General

We are a leading developer, manufacturer and distributor of medical equipment for treating,
diagnosing, and managing sleep-disordered breathing and other
respiratory disorders. Sleep-
disordered breathing, or SDB, includes obstructive sleep apnea, or OSA, and other respiratory
disorders that occur during sleep. When we were formed in 1989, our primary purpose was to
commercialize a treatment for OSA developed by Professor Colin Sullivan. This treatment, nasal
Continuous Positive Airway Pressure, or CPAP, was the first successful noninvasive treatment for
OSA. CPAP systems deliver pressurized air, typically through a nasal mask, to prevent collapse of the
upper airway during sleep.

Since the development of CPAP, we have developed a number of innovative products for SDB and
other respiratory disorders including airflow generators, diagnostic products, mask systems, headgear
and other accessories. Our growth has been fuelled by geographic expansion, increased awareness of
respiratory conditions as a significant health concern among physicians and patients, and our research
and product development efforts.

We employ approximately 2,700 people and sell our products in over 68 countries through a
combination of wholly owned subsidiaries and independent distributors.

- 2 -

together with any
Our web site address is www.resmed.com. We make our periodic reports,
amendments, available on our web site, free of charge, as soon as reasonably practicable after we
electronically file or furnish the reports with the Securities and Exchange Commission.

Corporate History

ResMed Inc., a Delaware corporation, was formed in March 1994 as the ultimate holding company
for our Americas, Asia-Pacific and European operating subsidiaries. On June 1, 1995, we completed
an initial public offering of common stock and on June 2, 1995 our common stock commenced
trading on the NASDAQ National Market. On September 30, 1999 we transferred our principal public
listing to the New York Stock Exchange, or NYSE, trading under the ticker symbol RMD. On
November 25, 1999, we established a secondary listing of our common stock via Chess Depositary
Instruments, or CDI’s, on the Australian Stock Exchange, or ASX, also under the symbol RMD. Ten
CDI’s on the ASX represent one share of our common stock on the NYSE. On July 1, 2002, we
converted our ASX listing status from a foreign exempt listing to a full listing.

Our Australian subsidiary, ResMed Holdings Limited, was originally organized in 1989 by Dr. Peter
Farrell to acquire from Baxter Center for Medical Research Pty Limited, or Baxter, the rights to
certain technology relating to CPAP treatment as well as Baxter’s existing CPAP device business.
Baxter had sold CPAP devices in Australia since 1988, having acquired the rights to the technology in
1987.

Since formation we have acquired a number of operating businesses including:

Name of Entity

Dieter W. Priess Medtechnik
Premium Medical SARL
Innovmedics Pte Ltd
EINAR Egnell AB
MAP Medizin Technologie GmbH
Labhardt AG
Servo Magnetics Inc.
John Stark and Associates
Respro Medical Company Limited
Resprecare BV
Hoefner Medizintechnik GmbH
Saime SA
Pulmomed Medizinisch-Technische Geräte GmbH
PolarMed Holding AS
Western Medical Marketing

Date of Acquisition

February 7, 1996
June 12, 1996
November 1, 1997
January 31, 2000
February 16, 2001
November 15, 2001
May 14, 2002
July 24, 2002
July 2, 2003
December 1, 2004
February 14, 2005
May 19, 2005
July 1, 2005
December 1, 2005
October 4, 2006

Segment Information

The Company believes that, given the single market focus of its operations solely in the sleep-
disordered breathing sector of the respiratory medicine industry, and the inter-dependence of its
products, the Company operates as a single operating segment. See Note 16 – Segment Information of
the Notes to Financial Statements (Part II, Item 8) for financial information regarding segment
reporting. Financial information about our revenues from and assets located in foreign countries is
also included in the notes to our consolidated financial statements.

The Market

Sleep is a complex neurological process that includes two distinct states: rapid eye movement, or
REM, sleep and non-rapid eye movement, or non-REM, sleep. REM sleep, which is about 20-25% of

- 3 -

total sleep experienced by adults, is characterized by a high level of brain activity, bursts of rapid eye
movement, increased heart and respiration rates, and paralysis of many muscles. Non-REM sleep is
subdivided into four stages that generally parallel sleep depth; stage 1 is the lightest and stage 4 is the
deepest.

The upper airway has no rigid support and is held open by active contraction of upper airway muscles.
Normally, during REM sleep and deeper levels of non-REM sleep, upper airway muscles relax and
the airway narrows. Individuals with narrow upper airways or poor muscle tone are prone to
temporary collapses of the upper airway during sleep, called apneas, and to near closures of the upper
airway called hypopneas. These breathing irregularities result
in a lowering of blood oxygen
concentration, causing the central nervous system to react to the lack of oxygen or increased carbon
dioxide and signaling the body to respond. Typically, the individual subconsciously arouses from
sleep, causing the throat muscles to contract, opening the airway. After a few gasping breaths, blood
oxygen levels increase and the individual can resume a deeper sleep until the cycle repeats itself.
Sufferers of OSA typically experience ten or more such cycles per hour. While these awakenings
greatly impair the quality of sleep, the individual is not normally aware of these disruptions. In
addition, OSA has recently been recognized as a cause of hypertension and a significant co-morbidity
for heart disease, stroke and diabetes.

Scientists estimate that one in five adults have some form of obstructive sleep apnea. In the United
States alone, this represents approximately 43 million people. Despite the high prevalence of OSA,
there is a general lack of awareness of OSA among both the medical community and the general
public. It is estimated that less than 10% of those with OSA have been diagnosed or treated. Many
healthcare professionals are often unable to diagnose OSA because they are unaware that such
non-specific symptoms as excessive daytime sleepiness, snoring, hypertension and irritability are
characteristic of OSA.

While OSA has been diagnosed in a broad cross-section of the population, it is predominant among
middle-aged men and those who are obese, smoke, consume alcohol in excess or use muscle-relaxing
and pain-killing drugs. A strong association has been discovered between OSA and a number of
cardiovascular diseases. Recent studies have shown that SDB is present in approximately 80% of
patients with drug-resistant hypertension, approximately 60% of stroke patients and approximately
50% of patients with congestive heart failure. More recently, studies have shown a connection
between SDB and diabetes: recent studies indicate that SDB is independently associated with glucose
intolerance and insulin resistance.

Sleep-Disordered Breathing and Obstructive Sleep Apnea

Sleep-disordered breathing encompasses all physiological processes that cause detrimental breathing
patterns during sleep. Manifestations include OSA, central sleep apnea, or CSA, and hypoventilation
syndromes that occur during sleep. Hypoventilation syndromes are generally associated with obesity,
chronic obstructive lung disease and neuromuscular disease. OSA is the most common form of SDB.

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 an increase in heart rate and an elevation of
blood pressure during the cycle of apneas. 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, and studies have linked OSA to
increased occurrences of traffic and workplace accidents.

- 4 -

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 requires monitoring
the patient during sleep at either a sleep clinic or the patient’s home. During overnight testing,
respiratory parameters and sleep patterns may be monitored, along with other vital signs such as heart
rate and blood oxygen levels. Simpler tests, using devices such as our Apnealink, or our automatic
positive airway pressure devices, monitor airflow during sleep, and use computer programs to analyze
airflow patterns. These tests allow sleep clinicians to detect any sleep disturbances such as apneas,
hypopneas or subconscious awakenings. We estimate that there are currently around 3,000 sleep
clinics in the United States, a substantial portion of which are affiliated with hospitals. The number of
sleep clinics has expanded significantly from approximately 100 such facilities in 1985.

Existing Therapies

Before 1981, the primary treatment for OSA was a tracheotomy, a surgical procedure to cut a hole in
the patient’s windpipe to create a channel for airflow. Most recently, alternative treatments have
involved either uvulopalatopharyngoplasty, or UPPP, in which surgery is performed on the upper
airway to remove excess tissue and to streamline the shape of the airway, implanting a device to add
support to the soft palate, or mandibular advancement, in which the lower jaw is moved forward to
widen the patient’s airway. UPPP alone has a poor success rate; however, when performed in
conjunction with multi-stage upper airway surgical procedures, a greater success rate has been
claimed. These combined procedures, performed by highly specialized surgeons, are expensive and
involve prolonged and often painful recovery periods.

CPAP, by contrast, is a non-invasive means of treating OSA. CPAP was first used as a treatment for
OSA in 1980 by Dr. Colin Sullivan, the past Chairman of our Medical Advisory Board. CPAP
systems were commercialized for treatment of OSA in the United States in the mid 1980’s. 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 interface connected to a small portable airflow
generator that delivers room air at a positive pressure. The patient breathes in air from the flow
generator and breathes out through an exhaust port in the interface. Continuous air pressure applied in
this manner acts as a pneumatic splint to keep the upper airway open and unobstructed. Interfaces
include nasal masks and nasal pillows. Sometimes, when a patient leaks air through their mouth, a
full-face mask may need to be used, rather than a nasal interface.

CPAP is not a cure and therefore, must be used on a nightly basis as long as treatment is required.
Patient compliance has been a major factor in the efficacy of CPAP treatment. Early generations of
CPAP units provided limited patient comfort and convenience. Patients experienced soreness from the
repeated use of nasal masks and had difficulty falling asleep with the CPAP device operating at the
prescribed pressure. In more recent years, product innovations to improve patient comfort and
compliance have been developed. These include more comfortable patient interface systems; delay
timers that gradually raise air pressure allowing the patient to fall asleep more easily; bilevel air flow
generators, including Variable Positive Airway Pressure, or VPAP systems, which provide different
air pressures for inhalation and exhalation; heated humidification systems to make the airflow more
comfortable; and autotitration devices that reduce the average pressure delivered during the night.

Business Strategy

We believe that the SDB market will continue to grow in the future due to a number of factors
including increasing awareness of OSA, improved understanding of the role of SDB treatment in the
management of cardiac, neurologic, metabolic and related disorders, and an increase in home-based

- 5 -

diagnosis. Our strategy for expanding our business operations and capitalizing on the growth of the
SDB market consists of the following key elements:

Continue Product Development and Innovation. We are committed to ongoing innovation in
developing products for the diagnosis and treatment of SDB. We have been a leading innovator of
products designed to more effectively treat SDB, increase patient comfort and encourage compliance
with prescribed therapy. For example, in 1999 we introduced the Mirage Full Face Mask. This mask
contains an inflatable air pocket, which conforms to the patient’s facial contours, creating a more
comfortable and better seal. In 2002, we introduced the AutoSet Spirit flow generator, our second-
generation autotitrating device that adapts to the patient’s breathing patterns to more effectively treat
OSA. In 2003, we introduced the Mirage Activa nasal mask, with active cushion technology to
automatically seal mask leaks. In 2004, we introduced the Mirage Swift nasal pillows system, a less
obtrusive, lightweight, and flexible alternative to nasal masks. In 2005, we introduced the S8 range of
CPAP, a small flow generator with optional integrated humidification. In 2007, we launched several
new patient interfaces including the Mirage Quattro, a full face mask that offers dual-wall cushion
with spring air technology which accommodates movement during sleep, and the Mirage Liberty,
which combines our nasal pillow technology in a full face mask product with a minimalist design. We
believe that continued product development and innovation are key factors to our ongoing success.
Approximately 12% of our employees are devoted to research and development activities. In fiscal
year 2007, we invested $50.1 million, or 7% of our revenues, in research and development.

Expand Geographic Presence. We market our products in over 68 countries to sleep clinics, home
healthcare dealers and third party payers. We intend to increase our sales and marketing efforts in our
principal markets, as well as expand the depth of our presence in other geographic regions.

Increase Public and Clinical Awareness. We intend to continue to expand our existing
promotional activities to increase awareness of SDB and our
treatment alternatives. These
promotional activities target the population with predisposition to SDB as well as primary care
physicians and specialists, such as cardiologists, neurologists and pulmonologists. In addition, we also
the American Heart
interest groups,
target special
Association and the National Sleep Foundation.

including the National Stroke Association,

During fiscal years 2007, 2006 and 2005, we donated $Nil, $0.8 million and $0.5 million,
to the ResMed Foundation in the United States, and the ResMed Foundation in
respectively,
Australia, to further enhance research and awareness of SDB. The contributions to the Foundations
reflect ResMed’s commitment to medical research into sleep-disordered breathing, particularly the
treatment of obstructive sleep apnea.

Expand into New Clinical Applications. We continually seek to identify new applications of our
technology for significant unmet medical needs. Recent studies have established a clinical association
between OSA and both stroke and congestive heart failure, and have recognized SDB as a cause of
hypertension or high blood pressure. Research also indicates that SDB is independently associated
with glucose intolerance and insulin resistance. We have developed a device for the treatment of
Cheyne-Stokes breathing in patients with congestive heart failure. In addition, we maintain close
working relationships with a number of prominent physicians to explore new medical applications for
our products and technology. We have recently received Food and Drug Administration, or FDA,
in the United States for the treatment of respiratory
clearance and launched a new product
insufficiency due to central sleep apnea, mixed apnea and periodic breathing, called the Adapt SV.
The Adapt SV uses a technology known as adaptive servo-ventilation and was first made available to
a select group of U.S. key opinion leader sites beginning in the third quarter of fiscal year 2006.
Adaptive servo-ventilation, utilizes an advanced algorithm to calculate a patient-specific minute
ventilation target and automatically adjusts pressure support to maintain the target. We believe this

- 6 -

technology has allowed physicians to successfully treat complex breathing disorders in some patients
who had previously tried and failed traditional positive airway pressure therapy.

Leverage the Experience of our Management Team. Our senior management team has extensive
experience in the medical device industry in general, and in the field of SDB in particular. We intend
to continue to leverage the experience and expertise of these individuals to maintain our innovative
approach to the development of products and increase awareness of the serious medical problems
caused by SDB.

Products

Our portfolio of products for the treatment of OSA and other forms of SDB includes airflow
generators, diagnostic products, mask systems, headgear and other accessories.

Air Flow Generators

We produce CPAP, VPAP and AutoSet systems for the titration and treatment of SDB. The flow
generator systems deliver positive airway pressure through a patient interface, either a small nasal
mask, nasal pillows system, or full-face mask.

Our VPAP units deliver ultra-quiet, comfortable bilevel therapy. There are two preset pressures: a
higher pressure as the patient breathes in, and a lower pressure as the patient breathes out. Breathing
out against a lower pressure makes treatment more comfortable, particularly for patients who need
high pressure levels or for those with impaired breathing ability.

AutoSet systems are based on a proprietary technology to monitor breathing and can also be used in
the diagnosis, treatment and management of OSA. CPAP and VPAP flow generators accounted for
approximately 52%, 52% and 49% of our net revenues in fiscal years 2007, 2006 and 2005,
respectively.

- 7 -

With the acquisition of Saime SA in May 2005, we increased our presence in the European homecare
ventilation market. The VS and Elisée range of products are sophisticated, yet easy to use for
physicians, clinicians and patients. We believe these devices complement our VPAP III, VPAP Adapt
SV and Autoset CS2 for patients who need ventilatory assistance.

VPAP PRODUCTS

DESCRIPTION

VPAP II

COMFORT

VPAP II ST

Bilevel portable device providing different
pressure levels for
inhalation and exhalation,
improved pressure switching and reduced noise
output and spontaneous breath triggering.

Bilevel device with limited features.

Bilevel portable device with spontaneous and
spontaneous/timed breath triggering modes of
operation.

VPAP II STA

Bilevel device with alarms.

VPAP MAX

Moritz S#*

Moritz ST#*

VPAP III

VPAP III ST

Bilevel ventilatory support
the
treatment of adult patients with respiratory
insufficiency or respiratory failure.

system for

Bilevel portable device providing different
pressure levels for inhalation and exhalation with
integrated humidifier.

and
Bilevel ST device with
spontaneous/timed breath triggering modes of
operation, and with power failure alarms, system
with integrated humidifier.

spontaneous

Updated Bilevel portable device encompassing
improved pressure synchronization, spontaneous
breath triggering and reduced noise.

Bilevel

portable

ST
improved

device
Updated
pressure
encompassing
synchronization, spontaneous and spontaneous/
timed breath triggering modes of operation and
reduced noise.

DATE OF
COMMERCIAL
INTRODUCTION

March 1996

March 1996

April 1996

August 1998

November 1998

October 2001

October 2001

April 2003

April 2003

VPAP III STA

An upgraded Bi-level device with alarm features. August 2004

Adapt SV

VPAP Malibu

The newest and most highly evolved bilevel
device which uses adaptive servo-ventilation
technology to treat patients with central sleep
apnea, mixed apnea and periodic breathing.

bilevel

Auto-adjusting
the
smooth pressure waveform of the VPAP Adapt
SV to achieve ultimate comfort for non-compliant
CPAP users.

utilizing

device

March 2006

April 2007

* Not cleared for marketing in the United States
# Sold outside United States only

- 8 -

VENTILATION PRODUCTS

DESCRIPTION

DATE OF
COMMERCIAL
INTRODUCTION

Helia 2*#

Eole 3 XLS*#

VS Serena*#

VS Ultra*#

VS Integra*#

Elisée 350*#

Elisée 150*#

Elisée 370*#

Dual mode ventilator that combines volumetric
and barometric ventilation modes.

August 1998

device

providing

Ventilator
conventional
volumetric ventilation through both controlled
and assisted-controlled ventilation with etv
functions.

December 1999

Bi-level ventilator providing all ventilation
modes with two pressure levels.

June 2001

Dual mode ventilator that combines volumetric
and barometric ventilation from leakage to valve
type with single or double limb circuit.

March 2002

combines
Pressure
pressure modes with leakage or valve ventilators.

ventilator

support

that

for use

Ventilator
in Intensive Care Unit
combining all conventional ventilation modes,
diagnostic and monitoring functions.

March 2002

December 2003

Ventilator device that combines volumetric and
barometric ventilation modes with single or
double limb circuit.

June 2004

for use

Ventilator
in Intensive Care Unit
combining all conventional ventilation modes,
diagnostic functions with external monitoring
interface for ventilation loops.

September 2004

Elisée 250*#

Ventilator for use in transport and emergency
situations.

April 2005

* Not cleared for marketing in the United States
# Sold outside United States only

- 9 -

AIR FLOW
GENERATORS

Automatic Positive
Airway Pressure

AutoSet CS*#

AutoSet T

AutoSet Spirit

Magellan*#

AutoSet Respond

AutoSet CS2*#

CPAP

Max II nCPAP*#

DESCRIPTION

DATE OF
COMMERCIAL
INTRODUCTION

ventilatory

Automatic
device
specifically designed to normalize ventilation in
congestive heart failure patients with Cheyne
Stokes respiration.

assistance

December 1998

Autotitrating device, which continually adjusts
CPAP treatment pressure based on patient airway
resistance.

March 1999

Modular, autotitrating device with advanced
compliance monitoring and optional
integrated
humidifier.

September 2001

Autotitrating device using airway resistance
measurement.

March 2003

Autotitrating device with basic
monitoring and optional integrated humidifier.

compliance

September 2003

Modular, automatic device specifically designed
to normalize ventilation in congestive heart
failure patients with Cheyne Stokes respiration.
The device has an optional integrated humidifier.

August 2004

CPAP device with
humidifier. Features
pressure swings.

or without

integrated
low noise and reduced

April 1997

Mini Max nCPAP*#

CPAP device with integrated and attachable
humidifier and low noise levels.

March 2000

ResMed S6 series

ResMed S7 series

Quiet, compact CPAP device with various
comfort features.

June 2000

A CPAP device with
humidifier.

optional

integrated

July 2002

ResMed S8 Series

A small CPAP device with optional integrated
humidification.

June 2005

C-Series Tango

An entry level CPAP device with optional
humidification

March 2007

* Not cleared for marketing in the United States
# Sold outside United States only

- 10 -

Mask Systems and Diagnostic Products

Mask systems are one of the most important elements of SDB treatment systems. Masks are a primary
determinant of patient comfort and as such may drive or impede patient compliance with therapy. We
have been a consistent innovator in masks, improving patient comfort while minimizing size and
weight. Masks, accessories, motors and diagnostic products accounted for approximately 48%, 48%
and 51% of our net revenues in fiscal years 2007, 2006 and 2005, respectively.

MASK PRODUCTS

Mirage Mask

Ultra Mirage Mask

Mirage Full Face
Mask Series 2

Papillon Mask*#

Mirage Vista Mask
Ultra Mirage Full Face
Mask
Mirage Activa Mask

Mirage Swift

Silent Papillon
Mask*#
Hospital Full Face
Mask
Hospital Nasal Mask

Ultra Mirage II

Meridian Nasal Mask

Mirage Swift II

Mirage Quattro

Mirage Liberty

DESCRIPTION

DATE OF
COMMERCIAL
INTRODUCTION

October 2001

August 1997

June 2000

characteristics

the Mirage system with
improved
and

Proprietary mask design with a contoured nasal
cushion that adjusts to patient’s facial contours.
Quiet, light and low profile.
Advanced version of
reduced
noise
forehead bridge.
Mirage-based full-face mask system. Provides an
effective method of applying ventilatory assist
Noninvasive Positive Pressure Ventilation therapy.
Can be used to address mouth- breathing problems
in conventional bilevel or CPAP therapy.
Nasal mask with only four major parts, allows
simplified handling for patients and distributors.
Small nasal mask without forehead supports.
Full-face mask incorporating our latest adjustable
forehead support technology.
Seal
Nasal mask
technology to mitigate leak and improve patient
comfort.
A light and unobtrusive nasal cannula mask
system.
A low noise nasal mask with simplified assembly. March 2005

system utilizing Active

April 2002

August 2004

October 2003

November 2002
August 2003

Disposable full face mask specifically designed for
hospital use.
Disposable nasal mask specifically designed for
hospital use.
Advanced version of
the Ultra Mirage Nasal
System with improved comfort and ease of fit
through enhanced forehead pads and support.
A value line nasal mask that
comfortable.
Improved design to reduce noise and airflow
pattern.
ResMed’s
face mask,
fourth generation full
delivering an individualized fit for over 95% of
users.
A full face mask that seals individually at the
mouth and nose. With less skin contact and an
open field of vision, this unobtrusive mask feels
light on the face.

is simple yet

April 2005

April 2005

July 2005

February 2006

April 2007

April 2007

May 2007

* Not cleared for marketing in the United States
# Sold outside United States only

- 11 -

We market sleep recorders for the diagnosis and titration of SDB in sleep clinics and hospitals. These
diagnostic systems record relevant respiratory and sleep data, which can be analyzed by a sleep
specialist or physician who can then tailor an appropriate OSA treatment regimen for the patient.

DIAGNOSTIC PRODUCTS

DESCRIPTION

Poly-MESAM Portable
Diagnostic System*α#

Configurable cardio-respiratory polygraphy
includes ECG,
system up to 8 channels,
thorax and abdomen belts, PLMS sensor.

DATE OF
COMMERCIAL
INTRODUCTION

February 1995

MEPAL Diagnostic
System*α#

Polysomnography system designed for use in
the sleep laboratory.

February 1999

Emblaα

Emblettaα

MEPAL mobil *α#
Diagnostic System

ApneaLink
(MicroMesam)

sleep

Digital
provides
recorder
comprehensive sleep diagnosis in a sleep
laboratory.

that

October 1999

Pocket-size digital
ambulatory sleep studies.

recorder

that performs

November 2000

Ambulatory polysomnography system.

March 2001

A portable Sleep Apnea screening device for
use by sleep professionals and primary care
physicians.

April 2004

ApneaLink + Oximetry

A portable Sleep Apnea screening device with
oximetry measurement

June 2007

* Not cleared for marketing in the United States
# Sold outside United States only
α Not manufactured by ResMed

- 12 -

Accessories and Other Products

To enhance patient comfort, convenience and compliance, we market a variety of other products and
accessories. These products include humidifiers, such as the HumidAire, H2i and H3i, which connect
directly with the CPAP, VPAP and AutoSet flow generators to humidify and heat the air delivered to
the patient. Their use helps prevent the drying of nasal passages that can cause discomfort. Other
optional accessories include cold passover humidifiers, carry bags and breathing circuits. To assist
those professionals diagnosing or managing the treatment of patients there are data communications
and control products such as the ResLink, ResControl and ResControl II modules that facilitate the
transfer of data and other information to and from the flow generators. Since the May 2002
acquisition of ResMed Motor Technologies Inc., we have also sold custom electric motors, primarily
for use in data storage and aerospace applications, but we do not expect custom electric motor sales to
contribute material revenues in the future.

Product Development and Clinical Trials

We have a strong track record in innovation in the sleep market. In 1989, we introduced our first
CPAP device. Since then we have been committed to an ongoing program of product advancement
and development. Currently, our product development efforts are focused on not only improving our
current product offerings, but also expanding into new product applications.

In 1999, we introduced the AutoSet T flow generator, an autotitrating device that adapts to the
patient’s breathing patterns to effectively prevent apneas. In 2001, we introduced our next generation
autotitrating device, the AutoSet Spirit. The AutoSet Spirit is an autotitrating modular device with
optional integrated humidifier. In 2003, we introduced the Activa nasal mask using our patented
Active Cushion Technology, which automatically seals mask leaks. In 2004, we launched our Mirage
Swift mask, a light and unobtrusive nasal cannula mask system. Also, in 2004 we launched an
improved AutoSet CS 2 (outside the United States only) to treat congestive heart failure patients with
significant central sleep apnea. In 2006, we launched the Adapt SV within the United States. This
product is for the treatment of respiratory insufficiency due to central sleep apnea, mixed apnea and
periodic breathing and uses a technology known as adaptive servo-ventilation.

We continually seek to identify new applications of our technology for significant unmet medical
needs. SDB is associated with a number of symptoms beyond excessive daytime sleepiness and
irritability. Recent studies have established a clinical association between SDB and hypertension,
stroke, congestive heart failure and diabetes. We support clinical trials in the United States, Germany,
France, the United Kingdom, Italy, Switzerland and Australia to develop new clinical applications for
our technology.

We consult with physicians at major sleep centers throughout the world to identify technological
trends in the treatment of SDB. Some of these physicians served on our Medical Advisory Board
during fiscal year 2006. During fiscal year 2007, we reorganized our Medical Advisory Board into
several regional advisory boards. New product ideas are also identified by our marketing staff, direct
sales force, network of distributors, manufacturers’ representatives, customers and patients. Typically,
our internal development staff then develops these ideas, where appropriate, into new products.

In fiscal years 2007, 2006 and 2005 we invested $50.1 million, $37.2 million and $30.0 million,
respectively, on research and development.

Sales and Marketing

We currently market our products in over 68 countries using a network of distributors, independent
manufacturers’ representatives and our direct sales force. We attempt to tailor our marketing approach

- 13 -

to each national market, based on regional awareness of SDB as a health problem, physician referral
patterns, consumer preferences and local reimbursement policies.

North America and Latin America. Our products are typically purchased by a home healthcare
dealer who then sells the products to the patient. The decision to purchase our products, as opposed to
those of our competitors, is made or influenced by one or more of the following individuals or
organizations: the prescribing physician and his or her staff; the home healthcare dealer; the insurer
and the patient. In the United States, our sales and marketing activities are conducted through a field
sales organization made up of regional territory representatives, program development specialists and
regional sales directors. Our U.S. field sales organization markets and sells products to home
healthcare dealer branch locations throughout the United States.

We also promote and market our products directly to sleep clinics. Patients who are diagnosed with
OSA and prescribed CPAP treatment are typically referred by the 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.

In the United States, our sales employees are managed by the Chief Operating Officer Americas and
Vice President of Sales. Sales in North and Latin America accounted for 53%, 52% and 51% of our
net revenues for fiscal years 2007, 2006 and 2005, respectively.

Europe. We market our products in most major European countries. We have wholly-owned
subsidiaries in Austria, Finland, France, Germany, Spain, Sweden, Norway, Netherlands, Switzerland
and the United Kingdom that sell our products directly into those countries. We use independent
distributors to sell our 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 each country
in which we have a subsidiary, a local senior manager is responsible for direct national sales. In many
countries in Europe, we sell our products to home healthcare dealers who then sell the products to the
patients. In Germany, we also operate a home healthcare company, in which we provide products and
services directly to patients, and receive reimbursement directly from third party payers.

Our European Chief Operating Officer 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%, 39% and 41% of our total net revenues for fiscal years 2007, 2006 and 2005, respectively.

Asia Pacific. Marketing in Asia Pacific and the rest of the world is the responsibility of our Senior
Vice President Sales & Marketing Asia Pacific. We have wholly–owned subsidiaries in Australia,
Hong Kong, Japan, Malaysia, New Zealand, Singapore, China and India that sell our products directly
into those countries. We use a combination of our direct sales force and independent distributors in
Australia and New Zealand, and use independent distributors to sell our products elsewhere in Asia
Pacific. Sales in Asia Pacific and the rest of the world accounted for 8%, 9% and 8% of our total net
revenues for the fiscal years 2007, 2006 and 2005, respectively.

Other Marketing Efforts. We continue to pursue other suitable opportunities with professional and
healthcare associations to raise awareness of the co-morbidity of SDB in cardiovascular disease
patients, including coronary artery disease, congestive heart failure, hypertension and stroke.

We also continue to work to raise awareness of SDB in diabetes. Current research is increasingly
showing an independent association between OSA and type 2 diabetes. Accordingly, we initiated a
study investigating the prevalence of OSA in the type 2 diabetic population. Due to the high

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prevalence of the SDB and type 2 diabetes, we are now actively supporting the American Association
of Diabetes Educators and are in the process of setting up further initiatives to develop the SDB
market in the diabetic population. ResMed is also reaching out to diabetes patients. Through our
partnership with the American Diabetes Association, a sleep laboratory is now present at every
Diabetes Expo meeting where patients have the opportunity to learn about diabetes self-management.

Manufacturing

Our principal manufacturing facility is located in Sydney, Australia and comprises a 155,000 square
foot manufacturing facility. Our manufacturing operations consist primarily of assembly and testing
of our flow generators, masks and accessories. Of the numerous raw materials, parts and components
purchased for assembly of our therapeutic and diagnostic sleep disorder products, most are
off-the-shelf items available from multiple vendors. We generally manufacture to our internal sales
forecasts and fill orders as received. Over the last few years, the manufacturing processes have been
transformed along lean manufacturing guidelines to flow lines staffed by dedicated teams. Each team
is responsible for the manufacture and quality of their product group and decisions are based on
performance and quality measures, including customer feedback.

Our quality management system is based upon the requirements of ISO 9001, ISO 13485, FDA
Quality System Regulations for Medical Devices and the Medical Device Directive (93/42/EEC). Our
Sydney, Australia and San Diego, California facilities are each accredited to ISO 9001 and ISO
13485. These two sites have third party audits conducted by the ISO certification bodies at regular
intervals.

As part of the acquisition of Saime SA on May 19, 2005, we acquired a 7,000 square foot
manufacturing facility in Paris, France. This facility is accredited to ISO 13485 and is primarily
responsible for the assembly of the Saime brand of mechanical ventilators and associated accessories.

We also manufacture high-quality electric motors for our flow generator devices at our ResMed
Motor Technologies Inc. facility. We have recently leased a larger site of 72,000 square feet at
Chatsworth, California and moved our Resmed Motor Technology operations into this facility during
the year ended June 30, 2007.

Third-Party Reimbursement

The cost of medical care in many of the countries in which we operate is funded in substantial part by
government and private insurance programs. In Germany, we receive payments directly from these
payers. Outside Germany, although we do not generally receive payments for our products directly
from these payers, our success in major markets is dependent upon the ability of patients to obtain
adequate reimbursement for our products.

In the United States, our products are purchased primarily by home healthcare dealers, hospitals or
sleep clinics, which then invoice third-party payers directly for reimbursement. Domestic third-party
payers include Medicare, Medicaid and corporate health insurance plans. These payers may deny
reimbursement if they determine that a device is not used in accordance with cost-effective treatment
methods, or is experimental, unnecessary or inappropriate. The long-term trend towards managed
healthcare, or legislative proposals to reform healthcare, could control or significantly influence the
purchase of healthcare services and products and could result in lower prices for our products. In
some foreign markets, such as Spain, France and Germany, government reimbursement is currently
available for purchase or rental of our products, however, subject to constraints such as price controls
or unit sales limitations. In Australia and in some other foreign markets, there is currently limited or
no reimbursement for devices that treat OSA.

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For example, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the 2003
Act) reduced medical reimbursement for respiratory drugs and home oxygen to homecare providers
and placed a freeze on current reimbursement levels for Durable Medical Equipment (DME) through
2008. As required by the 2003 Act, Medicare plans to implement competitive bidding of durable
medical equipment in 10 of the largest Metropolitan Statistical Areas (MSA) by the end of 2007, and
in 80 of the largest MSAs by the end of 2009. In addition, the U.S. Congress passed the Deficit
Reduction Act of 2005 (2005 Act) in February 2006 which contained Medicare payment reductions
for home oxygen equipment, and certain durable medical equipment classified by Medicare as capped
rental equipment. In August 2006, the Centers for Medicare and Medicaid Services published a
proposed regulation to implement the 2005 Act which could reduce Medicare reimbursement in 2007
for oxygen equipment. Additional reimbursement reductions for home oxygen were proposed in
President Bush’s Fiscal Year 2007 budget proposal, and could also be enacted into law. Both the
federal government and state legislatures are considering options for containing growth in the
Medicaid program.

Even though we do not file claims or bill governmental programs and other third-party payers directly
for reimbursement for our products sold in the United States, we are still subject to laws and
regulations relating to governmental programs, and any violation of these laws and regulations could
result in civil and criminal penalties, including fines. In particular, the federal Anti-Kickback Law
prohibits persons from knowingly and willfully soliciting,
receiving, offering or providing
remuneration, directly or indirectly, to induce either the referral of an individual, or the furnishing,
recommending or arranging for a good or service, for which payment may be made under a Federal
healthcare program such as the Medicare and Medicaid programs. The government has interpreted
this law broadly to apply to the marketing and sales activities of manufacturers and distributors like
us. Many states have adopted laws similar to the federal Anti-Kickback Law. We are also subject to
other federal and state fraud laws applicable to payment from any third-party payer. These laws
prohibit persons from knowingly and willfully filing false claims or executing a scheme to defraud
any healthcare benefit program, including private third-party payers. These laws may apply to
manufacturers and distributors who provide information on coverage, coding and reimbursement of
their products to persons who bill third-party payers. We continuously strive to comply with these
laws and believe that our arrangements do not violate these laws. Liability may still arise from the
intentions or actions of the parties with whom we do business or from a different governmental
agency interpretation of the laws.

Service and Warranty

We generally offer one-year and two-year limited warranties on our flow generator products.
Warranties on mask systems are for 90 days. In most markets, we rely on our distributors to repair our
products with parts supplied by us. In the United States, home healthcare dealers generally arrange
shipment of products to our San Diego facility for repair.

We receive returns of our products from the field for various reasons. We believe that the level of
returns experienced to date is consistent with levels typically experienced by manufacturers of similar
devices. We provide for warranties and returns based on historical data.

Competition

The markets for our products are highly competitive. We believe that the principal competitive factors
in all of our markets are product features, reliability and price. Customer support, reputation and
efficient distribution are also important factors.

We compete on a market-by-market basis with various companies, some of which have greater
financial, research, manufacturing and marketing resources than us. In the United States, our principal

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market, Respironics Inc.; DeVilbiss, a division of Sunrise Medical Inc.; Nellcor Puritan Bennett, a
division of Covidien Ltd.; and Fisher & Paykel Healthcare Corporation Limited are the primary
competitors for our products. Our principal European competitors are also Respironics, DeVilbiss,
and Nellcor Puritan Bennett, as well as regional European manufacturers. The disparity between our
resources and those of our competitors may increase as a result of the trend towards consolidation in
the healthcare industry. In addition, our products compete with surgical procedures and dental
appliances designed to treat OSA and other SDB related respiratory conditions. The development of
new or innovative procedures or devices by others could result in our products becoming obsolete or
noncompetitive, which would harm our revenues and financial condition.

Any product developed by us that gains regulatory clearance will have to compete for market
acceptance and market share. An important factor in such competition may be the timing of market
introduction of competitive products. Accordingly, the relative speed with which we can develop
testing and regulatory clearance processes and supply commercial
products, complete clinical
quantities of the product to the market are important competitive factors. In addition, our ability to
compete will continue to be dependent on the extent to which we are successful in protecting our
patents and other intellectual property.

Patents and Proprietary Rights and Related Litigation

Through our subsidiaries ResMed Limited, MAP Medizin-Technologie GmbH, ResMed Motor
Technologies Inc., and Saime SAS, we own or have licensed rights to 271 issued United States
patents (including 82 design patents) and 376 issued foreign patents. In addition, there are 338
pending United States patent applications (including 113 design patent applications), 641 pending
foreign patent applications, 610 registered foreign designs and 266 pending foreign designs. Some of
these patents, patent applications and designs relate to significant aspects and features of our products.

Of our patents, 13 United States patents and 27 foreign patents are due to expire in the next five years,
with 1 foreign patent due to expire in 2008, 2 in 2010, 16 in 2011, and 8 in 2012; and 7 United States
patents in 2008, 2 United States patents in 2010, and 4 United States patents in 2011. We believe that
the expiration of these patents will not have a material adverse impact on our competitive position.

We rely on a combination of patents, trade secrets, copyrights, trademarks and non-disclosure
agreements to protect our proprietary technology and rights.

Litigation may be necessary to enforce patents issued to us, to protect our rights, or to defend third-
party claims of infringement by us of the proprietary rights of others. Patent laws regarding the
enforceability of patents vary from country to country. Therefore, there can be no assurance that
patent issues will be uniformly resolved, or that local laws will provide us with consistent rights and
benefits.

Government Regulations

Our products are subject to extensive regulation particularly as to safety, efficacy and adherence to
FDA Quality System Regulation, and related manufacturing standards. Medical device products are
subject to rigorous FDA and other governmental agency regulations in the United States and similar
regulations of foreign agencies abroad. The FDA regulates the introduction, manufacture, advertising,
labeling, packaging, marketing, distribution and record keeping for such products, in order to ensure
that medical products distributed in the United States are safe and effective for their intended use. In
addition, the FDA is authorized to establish special controls to provide reasonable assurance of the
safety and effectiveness of most devices. Non-compliance with applicable requirements can result in
import detentions, fines, civil penalties, injunctions, suspensions or losses of regulatory approvals,

- 17 -

recall or seizure of products, operating restrictions, refusal of the government to approve product
export applications or allow us to enter into supply contracts, and criminal prosecution.

The FDA requires that a manufacturer introducing a new medical device or a new indication for use
of an existing medical device obtain either a Section 510(k) premarket notification clearance or a
premarket approval, or PMA, before introducing it into the U.S. market. Our products currently
marketed in the United States are marketed in reliance on 510(k) pre-marketing clearances as either
Class I or Class II devices. The process of obtaining a Section 510(k) clearance generally requires the
submission of performance data and often clinical data, which in some cases can be extensive, to
demonstrate that the device is “substantially equivalent” to a device that was on the market before
1976 or to a device that has been found by the FDA to be “substantially equivalent” to such a
pre-1976 device. As a result, FDA approval requirements may extend the development process for a
considerable length of time. In addition, in some cases, the FDA may require additional review by an
advisory panel, which can further lengthen the process. The PMA process, which is reserved for new
devices that are not substantially equivalent to any predicate device and for high-risk devices or those
that are used to support or sustain human life, may take several years and requires the submission of
extensive performance and clinical information.

As a medical device manufacturer, all of our domestic and Australian manufacturing facilities are
subject to inspection on a routine basis by the FDA. We believe that our design, manufacturing and
quality control procedures are in substantial compliance with the FDA’s regulatory requirements.

Sales of medical devices outside the United States are subject to regulatory requirements that vary
widely from country to country. Approval for sale of our medical devices in Europe is through the CE
mark process. Where appropriate, our products are CE marked to the European Union’s Medical
Device Directive. Under the CE marketing scheme, our products are classified as either Class I or
Class II. Our devices are listed in Australia with the Therapeutic Goods Administration, or TGA, and
in Canada with Health Canada.

Employees

As of June 30, 2007, we had approximately 2,700 employees or full time consultants, of which
approximately 1,100 persons were employed in warehousing and manufacturing, 300 in research and
development and 1,300 in sales, marketing and administration. Of our employees and consultants,
approximately, 1,150 were located in Australia, 550 in the United States, 900 in Europe and 100 in
Asia.

We believe that the success of our business will depend, in part, on our ability to attract and retain
qualified personnel. None of our employees is covered by a collective bargaining agreement. We
believe that our relationship with our employees is good.

ITEM 1A RISK FACTORS

Before deciding to purchase, hold or sell our common stock, you should carefully consider the risks
described below in addition to the other cautionary statements and risks described elsewhere, and the
other information contained, in this Report and in our other filings with the SEC, including our
subsequent reports on Forms 10-Q and 8-K. The risks and uncertainties described below are not the
only ones we face. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial may also affect our business. If any of these known or unknown risks or
uncertainties actually occurs with material adverse effects on us, our business, financial condition and
results of operations could be seriously harmed. In that event, the market price for our common stock
will likely decline, and you may lose all or part of your investment.

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Our inability to compete successfully in our markets may harm our business. The markets for
our sleep-disordered breathing products are highly competitive and are characterized by frequent
product improvements and evolving technology. Our ability to compete successfully depends, in part,
on our ability to develop, manufacture and market innovative new products. The development of
innovative new products by our competitors or the discovery of alternative treatments or potential
cures for the conditions that our products treat could make our products noncompetitive or obsolete.
Current competitors, new entrants, academics, and others are trying to develop new devices,
alternative treatments or cures, and pharmaceutical solutions to the conditions our products treat.

financial,

some of our competitors have greater

research and development,
Additionally,
manufacturing and marketing resources than we do. The past several years have seen a trend towards
consolidation in the healthcare industry and in the markets for our products. Industry consolidation
could result in greater competition if our competitors combine their resources or if our competitors are
acquired by other companies with greater resources than ours. This competition could increase
pressure on us to reduce the selling prices of our products or could cause us to increase our spending
on research and development and sales and marketing. If we are unable to develop innovative new
products, maintain competitive pricing, and offer products that consumers perceive to be as reliable as
those of our competitors, our sales or gross margins could decrease which would harm our business.

Our business depends on our ability to market effectively to dealers of home healthcare
products and sleep clinics. We market our products primarily to home healthcare dealers and to
sleep clinics that diagnose OSA and other sleep disorders. We believe that home healthcare dealers
and sleep clinics play a significant role in determining which brand of product a patient will use. The
success of our business depends on our ability to market effectively to home healthcare dealers and
sleep clinics to ensure that our products are properly marketed and sold by these third parties.

We have limited resources to market to approximately the 3,000 U.S. sleep clinics and the more than
6,000 home healthcare dealer branch locations, most of which use, sell or recommend several brands
of products. In addition, home healthcare dealers have experienced price pressures as government and
third-party reimbursement has declined for home healthcare products, and home healthcare dealers
are requiring price discounts and longer periods of time to pay for products purchased from us. We
cannot assure you that sleep clinic physicians will continue to prescribe our products, or that home
healthcare dealers or patients will not substitute competing products when a prescription specifying
our products has been written.

We have expanded our marketing activities to target the population with a predisposition to sleep-
disordered breathing as well as primary care physicians and various medical specialists. We cannot
assure you that these marketing efforts will be successful in increasing awareness or sales of our
products.

Any inability to market effectively our products outside the U.S. could impact our
profitability. Approximately half our revenues are generated outside the U.S., in over 68 different
countries. Many of these countries have unique regulatory, medical and business environments, which
may adversely impact our ability to market our products. If we are unable to market effectively our
products outside the U.S., our overall financial performance could decline.

Fluctuations in foreign currency exchange rates could result in declines in our reported sales
and earnings. Since our international sales and a significant portion of our manufacturing costs are
denominated in local currencies and not in U.S. dollars, our reported sales and earnings are subject to
fluctuations in foreign exchange rates. We had foreign currency transaction losses in recent periods
and may have further losses in the future. We expect that international sales will continue to be a
significant portion of our business and that a significant portion of our manufacturing costs and
research and development costs will continue to be denominated in Australian dollars.

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If we are unable to support our continued growth, our business could suffer. We have
experienced rapid and substantial growth. As we continue to grow, the complexity of our operations
increases, placing greater demands on our management. Our ability to manage our growth effectively
depends on our ability to implement and improve our financial and management information systems
on a timely basis and to effect other changes in our business including, the ability to monitor and
improve manufacturing systems, information technology, and quality and regulatory compliance
systems, among others. Unexpected difficulties during expansion, the failure to attract and retain
qualified employees, the failure to successfully replace or upgrade our management information
systems, the failure to manage costs or our inability to respond effectively to growth or plan for future
expansion could cause our growth to stop. If we fail to manage effectively and efficiently our growth,
our costs could increase faster than our revenues and our business could suffer.

If we fail to integrate our recent acquisitions with our operations, our business could
suffer. During the past three fiscal years we have acquired Western Medical Marketing, PolarMed,
Pulmomed, Saime, Hoefner and Resprecare. We continue to integrate these acquisitions into our
operations. The integration requires significant efforts from each company and we may find it
difficult to integrate the operations as personnel may leave and licensees, distributors or suppliers may
terminate their arrangements or demand amended terms to these arrangements. Additionally, our
management may have their attention diverted while trying to integrate these companies. If we are not
able to successfully integrate the operations, we may not realize the anticipated benefits of these
acquisitions.

We are subject to various risks relating to international activities that could affect our overall
profitability. We manufacture substantially all of our products outside the U.S. and sell a
significant portion of our products in non-U.S. markets. Sales outside North and Latin America
accounted for approximately 47% and 48% of our net revenues in the years ended June 30, 2007 and
2006, respectively. We expect that sales within these areas will account for approximately 50% of our
net revenues in the foreseeable future. Our sales outside of North America and our operations in
Europe, Australia and Asia are subject to several difficulties and risks that are separate and distinct
from those we face in our U.S. operations, including:

•

•

•

•

•

•

•

•

•

fluctuations in currency exchange rates;

tariffs and other trade barriers;

compliance with foreign medical device manufacturing regulations;

difficulty in enforcing agreements and collect receivables through foreign legal systems;

reduction in third party payer reimbursement for our products;

inability to obtain import licenses;

changes in trade policies and in U.S. and foreign tax policies;

possible changes in export or import restrictions; and

the modification or introduction of other governmental policies with potentially adverse effects.

Government and private insurance plans may not adequately reimburse patients for our
products, which could result in reductions in sales or selling prices for our products. Our
ability to sell our products depends in large part on the extent to which reimbursement for the cost of
our products will be available from government health administration authorities, private health
insurers and other organizations. These third party payers are increasingly challenging the prices
charged for medical products and services and can, without notice, deny coverage for treatments that
may include the use of the Company’s products. Therefore, even if a product is approved for

- 20 -

marketing, we cannot assure you that reimbursement will be allowed for the product, that the
reimbursement amount will be adequate or, that the reimbursement amount, even if initially adequate,
will not subsequently be reduced. For example, in some markets, such as Spain, France and Germany,
government reimbursement is currently available for purchase or rental of our products but is subject
to constraints such as price controls or unit sales limitations. In other markets, such as Australia and
the United Kingdom, there is currently limited or no reimbursement for devices that treat sleep-
disordered breathing conditions. Additionally,
regulation concerning the
healthcare industry or third party or governmental coverage and reimbursement, particularly
legislation or regulation limiting consumers’ reimbursement rights, may harm our business.

future legislation or

As we continue to develop new products, those products will generally not qualify for reimbursement,
if at all, until they are approved for marketing. In the United States, we sell our products primarily to
home healthcare dealers and to sleep clinics. We do not file claims and bill governmental programs or
other third party payers directly for reimbursement for our products. However, we are still subject to
laws and regulations relating to governmental reimbursement programs, particularly Medicaid and
Medicare.

In addition to reimbursement for our products, our customers depend in part on reimbursement by
government and private health insurers
in
reimbursement, if they occur, may have a material impact on our customers. Any material impact on
our customers may indirectly affect our sales to those customers, or the collectibility of receivables
we have from those customers.

for other products. Any proposed reductions

Failure to comply with anti-kickback and fraud regulations could result in substantial penalties
and changes in our business operations.
In particular, the federal Anti-Kickback Law prohibits
persons from knowingly and willfully soliciting, receiving, offering or providing remuneration,
directly or indirectly, to induce either the referral of an individual, or the furnishing, recommending or
arranging for a good or service, for which payment may be made under a federal healthcare program
such as the Medicare and Medicaid programs. The U.S. government has interpreted this law broadly
to apply to the marketing and sales activities of manufacturers and distributors like us. Many states
and other governments have adopted laws similar to the federal Anti-Kickback Law. We are also
subject to other federal and state fraud laws applicable to payment from any third party payer. These
laws prohibit persons from knowingly and willfully filing false claims or executing a scheme to
defraud any healthcare benefit program, including private third party payers. These laws may apply to
manufacturers and distributors who provide information on coverage, coding, and reimbursement of
their products to persons who do bill third party payers. Any violation of these laws and regulations
could result in civil and criminal penalties (including fines), increased legal expenses and exclusions
from governmental reimbursement programs, all of which could have a material adverse effect upon
our business, financial conditions and results of operations.

Complying with Food and Drug Administration, or FDA, and other regulations is an expensive
and time-consuming process, and any failure to comply could have a materially adverse effect
on the Company’s business, financial condition, or results of operations. We are subject to
various federal, state, local and international regulations regarding our business activities. Failure to
comply with these regulations could result in, among other things, recalls of our products, substantial
fines and criminal charges against us or against our employees. Furthermore, our products could be
subject to recall if the FDA or we determine, for any reason, that our products are not safe or
effective. Any recall or other regulatory action could increase our costs, damage our reputation, affect
our ability to supply customers with the quantity of products they require and materially affect our
operating results. For example, in April 2007 we announced a worldwide voluntary product recall of
approximately 300,000 of our S8 flow generators manufactured between July 2004 and May 2006.
We have determined that there is a remote potential for a short circuit in the power connector. In only
seven cases worldwide, device failures have led to thermal damage to the device, with a remote

- 21 -

potential to ignite material external to the device. To date, no significant property damage or patient
injury has been reported. The estimated cost of this action is $59.7 million, which we recognized as an
expense in the year ended June 30, 2007. We cannot assure you that this will be the total cost for the
recall or that the total cost will not significantly exceed our estimates. Moreover, we cannot predict
the effect this recall and the negative publicity associated with the recall will have on our reputation
among physicians and customers. Our results of operations could be severely impacted if we have
failed to accurately estimate the costs of this product recall or if physicians and customers cease to
recommend and purchase our products as a result of this product recall.

Product sales, introductions or modifications may be delayed or canceled as a result of FDA
regulations or similar foreign regulations, which could cause our sales and profits to
decline. Before we can market or sell a new medical device in the United States, we must obtain
FDA clearance, which can be a lengthy and time-consuming process. We generally receive clearance
from the FDA to market our products in the United States under Section 510(k) of the Federal Food,
Drug, and Cosmetic Act or our products are exempt from the Section 510(k) clearance process. We
have modified some of our Section 510(k) approved products without submitting new Section 510(k)
notices, which we do not believe were required. However, if the FDA disagrees with us and requires
us to submit new Section 510(k) notifications for modifications to our existing products, we may be
required to stop marketing the products while the FDA reviews the Section 510(k) notification.

Any new product introduction or existing product modification could be subjected to a lengthier, more
rigorous FDA examination process. For example, in certain cases we may need to conduct clinical
trials of a new product before submitting a 510(k) notice. Additionally, we may be required to obtain
premarket approvals for our products. The requirements of these more rigorous processes could delay
product introductions and increase the costs associated with FDA compliance. Marketing and sale of
our products outside the United States are also subject to regulatory clearances and approvals, and if
we fail to obtain these regulatory approvals, our sales could suffer.

We cannot assure you that any new products we develop will receive required regulatory approvals
from U.S. or foreign regulatory agencies.

The Company is subject to substantial regulation related to quality standards applicable to its
manufacturing and quality processes. Failure by the Company to comply with these standards
could have an adverse effect on the Company’s business, financial condition, or results of
operations. The FDA regulates the approval, manufacturing, and sales and marketing of many of
the Company’s products in the U.S. Significant government regulation also exists in Canada, Japan,
Europe, and other countries in which the Company conducts business. As a device manufacturer, the
Company is required to register with the FDA and is subject to periodic inspection by the FDA for
compliance with the FDA’s Quality System Regulation (“QSR”) requirements, which require
manufacturers of medical devices to adhere to certain regulations, including testing, quality control
and documentation procedures. In addition, the federal Medical Device Reporting regulations require
the Company to provide information to the FDA whenever there is evidence that reasonably suggests
that a device may have caused or contributed to a death or serious injury or, if a malfunction were to
occur, could cause or contribute to a death or serious injury. Compliance with applicable regulatory
requirements is subject to continual review and is rigorously monitored through periodic inspections
by the FDA. In the European Community,
the Company is required to maintain certain ISO
certifications in order to sell its products and must undergo periodic inspections by notified bodies to
obtain and maintain these certifications. Failure to comply with current governmental regulations and
quality assurance guidelines could lead to temporary manufacturing shutdowns, product recalls or
related field actions, product shortages or delays in product manufacturing. Efficacy or safety
concerns, an increase in trends of adverse events in the marketplace, and/or manufacturing quality
issues with respect to the Company’s products could lead to product recalls or related field actions,
withdrawals, and/or declining sales.

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Off-label marketing of our products could result in substantial penalties. Clearance under
Section 510(k) only permits us to market our products for the uses indicated on the labeling cleared by
the FDA. We may request additional label indications for our current products, and the FDA may
deny those requests outright, require additional expensive clinical data to support any additional
indications or impose limitations on the intended use of any cleared products as a condition of
clearance. If the FDA determines that we have marketed our products for off-label use, we could be
subject to fines, injunctions or other penalties.

Disruptions in the supply of components from our single source suppliers could result in a
significant reduction in sales and profitability. We purchase uniquely configured components for
our devices from various suppliers, including some who are single-source suppliers for us. We cannot
assure you that a replacement supplier would be able to configure its components for our devices on a
timely basis or, in the alternative, that we would be able to reconfigure our devices to integrate the
replacement part.

A reduction or halt in supply while a replacement supplier reconfigures its components, or while we
reconfigure our devices for the replacement part, would limit our ability to manufacture our devices,
which could result in a significant reduction in sales and profitability. We cannot assure you that our
inventories would be adequate to meet our production needs during any prolonged interruption of
supply.

Our intellectual property may not protect our products, and/or our products may infringe on
the intellectual property rights of third parties. We rely on a combination of patents, trade secrets
and non-disclosure agreements to protect our intellectual property. Our success depends, in part, on
our ability to obtain and maintain United States and foreign patent protection for our products, their
uses and our processes to preserve our trade secrets and to operate without infringing on the
proprietary rights of third parties. We have a number of pending patent applications, and we do not
know whether any patents will issue from any of these applications. We do not know whether any of
the claims in our issued patents or pending applications will provide us with any significant protection
against competitive products or otherwise be commercially valuable. Legal standards regarding the
validity of patents and the proper scope of their claims are still evolving, and there is no consistent
law or policy regarding the valid breadth of claims. Additionally, there may be third party patents,
patent applications and other intellectual property relevant to our products and technology which are
not known to us and that block or compete with our products.

We face the risks that:

•

•

third parties will infringe our intellectual property rights;

our non-disclosure agreements will be breached;

• we will not have adequate remedies for infringement;

•

•

our trade secrets will become known to or independently developed by our competitors; or

third parties will be issued patents that may prevent the sale of our products or require us to
license and pay fees or royalties in order for us to be able to market some of our products.

Litigation may be necessary to enforce patents issued to us, to protect our proprietary rights, or to
defend third party claims that we have infringed upon proprietary rights of others. For example, we
are currently appealing the decision of a court in Germany that entered judgment in favor of certain
plaintiffs that had claimed they should be listed as co-inventors on two of our German patent
applications. The defense and prosecution of patent claims, including these pending claims, as well as
participation in other inter-party proceedings, can be expensive and time consuming, even in those

- 23 -

instances in which the outcome is favorable to us. If the outcome of any litigation or proceeding
brought against us were adverse, we could be subject to significant liabilities to third parties, could be
required to obtain licenses from third parties, could be forced to design around the patents at issue or
could be required to cease sales of the affected products. A license may not be available at all or on
commercially viable terms, and we may not be able to redesign our products to avoid infringement.
Additionally, the laws regarding the enforceability of patents vary from country to country, and we
cannot assure you that any patent issues we face will be uniformly resolved, or that local laws will
provide us with consistent rights and benefits.

We are subject to potential product liability claims that may exceed the scope and amount of
our insurance coverage, which would expose us to liability for uninsured claims. We are subject
to potential product liability claims as a result of the design, manufacture and marketing of medical
devices. In April 2007, we announced a worldwide voluntary product recall of approximately 300,000
of our S8 flow generators manufactured between July 2004 and May 2006. We have determined that
there is a remote potential for a short circuit in the power connector which can cause the device to fail.
In only seven cases worldwide, device failures have led to thermal damage to the device, with a
remote potential to ignite material external to the device. To date, no significant property damage or
patient injury has been reported. However, we would likely be subject to product liability claims
should any of these devices malfunction, resulting in injury to a patient or damage to property. Any
product liability claim brought against us, with or without merit, could result in the increase of our
product liability insurance rates. In addition, we would have to pay any amount awarded by a court in
excess of our policy limits. Our insurance policies have various exclusions, and thus we may be
subject to a product liability claim for which we have no insurance coverage, in which case, we may
have to pay the entire amount of any award. We cannot assure you that our insurance coverage will be
adequate or that all claims brought against us will be covered by our insurance. Insurance varies in
cost and can be difficult to obtain, and we cannot assure you that we will be able to obtain insurance
in the future on terms acceptable to us or at all. A successful product liability claim brought against us
in excess of our insurance coverage, if any, may require us to pay substantial amounts, which could
harm our business.

We are subject to tax audits by various tax authorities in many jurisdictions. From time to time
we may be audited by the tax authorities and are still subject to an ongoing German tax audit. Any
final assessment resulting from this audit could result in material changes to our past or future taxable
income, tax payable or deferred tax assets, and could require us to pay penalties and interest that could
materially adversely affect our financial results.

Our quarterly operating results are subject to fluctuation for a variety of reasons. Our
operating results have, from time to time, fluctuated on a quarterly basis and may be subject to similar
fluctuations in the future. These fluctuations may result from a number of factors, including:

•

•

•

•

•

•

•

•

the introduction of new products by us or our competitors;

the geographic mix of product sales;

the success of our marketing efforts in new regions;

changes in third party reimbursement;

timing of regulatory clearances and approvals;

timing of orders by distributors;

expenditures incurred for research and development;

competitive pricing in different regions;

- 24 -

•

•

•

•

seasonality;

the cost and effect of promotional and marketing programs;

the effect of foreign currency transaction gains or losses; and

other activities of our competitors.

Fluctuations in our quarterly operating results may cause the market price of our common stock to
fluctuate.

If a natural or man-made disaster strikes our manufacturing facilities, we will be unable to
manufacture our products for a substantial amount of time and our sales and profitability will
decline. Our facilities and the manufacturing equipment we use to produce our products would be
costly to replace and could require substantial lead-time to repair or replace. The facilities may be
affected by natural or man-made disasters and in the event they were affected by a disaster, we would
be forced to rely on third party manufacturers. Although we believe we possess adequate insurance
for damage to our property and the disruption of our business from casualties, such insurance may not
be sufficient to cover all of our potential losses and may not continue to be available to us on
acceptable terms, or at all.

Delaware law, provisions in our charter and our shareholder rights plan could make it difficult
for another company to acquire us. Provisions of our certificate of incorporation may have the
effect of delaying or preventing changes in control or management which might be beneficial to us or
our security holders. In particular, our Board of Directors is divided into three classes, serving for
staggered three-year terms. Because of this classification it will require at least two annual meetings
to elect directors constituting a majority of our Board of Directors.

Additionally, our Board of Directors has the authority to issue up to 2,000,000 shares of preferred
stock and to determine the price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without further vote or action by the stockholders. The rights of the holders of
our common stock will be subject to, and may be adversely affected by, the rights of the holders of
any preferred stock that may be issued in the future. The issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control, may discourage bids for our common
stock at a premium over the market price of our common stock and may adversely affect the market
price of our common stock and the voting and other rights of the holders of our common stock.

You may not be able to enforce the judgments of U.S. courts against some of our assets or
officers and directors. A substantial portion of our assets are located outside the United States.
Additionally, two of our eight directors and three of our seven executive officers reside outside the
United States, along with all or a substantial portion of the assets of these persons. As a result, it may
not be possible for investors to enforce judgments of U.S. courts relating to any liabilities under U.S.
securities laws against our assets, those persons or their assets. In addition, we have been advised by
our Australian counsel that some doubt exists as to the ability of investors to pursue claims based on
U.S. securities laws against these assets or these persons in Australian courts.

ITEM 1B UNRESOLVED STAFF COMMENTS

We have received no written comments regarding our periodic or current reports from the staff of the
Securities and Exchange Commission that were issued 180 days or more preceding the end of our
fiscal year 2007 that remain unresolved.

- 25 -

ITEM 2

PROPERTIES

Our principal executive offices and U.S. distribution facilities, consisting of approximately 144,000
square feet, are located in Poway (North San Diego County), California in a building we own. During
the year ended June 30, 2007, we completed the construction of our new research and development
and office facilities at our existing site in Norwest, Sydney, Australia, which consists of
approximately 69,000 square feet. We own our principal manufacturing facility consisting of a
155,000 square foot complex at this same Norwest site in Sydney, Australia. During the year ended
June 30, 2007, we commenced an extension to this manufacturing facility, which we expect to
complete within the next fiscal year. We lease a 72,000 square foot facility for manufacture of
electronic motors in Chatsworth, California. On July 7, 2005, we purchased a 9.78-acre parcel of land
in San Diego for $21.0 million. The new location at Kearney Mesa, San Diego will allow us to
develop a new corporate headquarters. We commenced construction of our new corporate
headquarters during 2007 and we expect to complete the project in March 2009.

Sales and warehousing facilities are either leased or owned in South Carolina and Oregon, U.S.A.;
Abingdon, England; Munich, Germany; Bremen, Germany; Hochstadt, Germany; Lyon, France; Paris,
France; Basel, Switzerland; Trollhaettan, Sweden; Villach and Vienna, Austria; Helsinki, Finland;
Den Haag, Netherlands; Oslo, Norway; Kowloon, Hong Kong; Auckland, New Zealand and
Singapore.

ITEM 3

LEGAL PROCEEDINGS

In the normal course of business, we are subject to routine litigation incidental to our business. While
the results of this litigation cannot be predicted with certainty, we believe that their final outcome will
not have a material adverse effect on our consolidated financial statements taken as a whole.

During September and October 2004, we began receiving tax assessment notices for the audit of one
of our German subsidiaries by the German tax authorities for the years 1996 through 1998. Certain of
these adjustments are being contested and appealed to the German tax authority office. We believe no
additional provision is necessary for any tax adjustment that may result from the tax audit. However,
the outcome of the audit cannot be predicted with certainty. Should any tax audit issues be resolved in
a manner not consistent with management’s expectations, we could be required to adjust our provision
for income tax in the period of resolution.

In December 2002, three former contractors of our subsidiary MAP Medizin-Technologie GmbH
initiated proceedings in Munich 1 Regional Court (Proceedings No. 7 O 23286/02), petitioning the
Court for a declaration of inventorship with respect to MAP German Patent Applications identified as
No. 100 31 079 and 101 92 802.5 and European Patent Application No. EP 01 967 819.7. On
March 10, 2005, the Court entered judgment in favor of the plaintiffs, finding that they should be
identified as co-inventors in place of certain individual defendants. In April 2005, MAP filed an
appeal of that decision. We do not expect the outcome of this litigation to have an adverse material
effect on our consolidated financial statements.

In March 2006, an Australian university made a demand that ResMed pay extra royalties pursuant to a
current patent license agreement. ResMed rejected the demand and have informed the university that
it does not consider the claim to have merit. In February 2007, the university commenced legal action
in the Federal Court of Australia to pursue its claim against ResMed. ResMed is vigorously defending
its position and does not expect the outcome of this claim to have an adverse material effect on
ResMed’s condensed consolidated financial statements.

ITEM 4

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

- 26 -

PART II

ITEM 5 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol “RMD”.
The following table sets forth for the fiscal periods indicated the high and low closing prices for the
common stock as reported by the New York Stock Exchange.

Quarter One, ended September 30
Quarter Two, ended December 31
Quarter Three, ended March 31
Quarter Four, ended June 30

2007

2006

High

Low

High

Low

$48.40
51.08
54.26
51.41

$38.52
39.53
45.18
41.25

$40.03
42.72
44.31
48.50

$32.21
37.01
36.86
41.76

As of August 17, 2007, there were 48 holders of record of our common stock. We have not paid any
cash dividends on our common stock since the initial public offering of our common stock and we do
not currently intend to pay cash dividends in the foreseeable future. We anticipate that all of our
earnings and other cash resources, if any, will be retained for the operation and expansion of our
business and for general corporate purposes.

All share and per share information has been adjusted to reflect the two-for-one stock split effected in
the form of a 100% stock dividend that was declared on August 10, 2005 and distributed on
September 30, 2005.

Sale of Unregistered Securities

During fiscal year 2006, and pursuant to the Indenture dated June 20, 2001 between us and American
Stock Transfer & Trust Company, as trustee, holders of all of our 4% Convertible Subordinated Notes
(“the Notes”) due 2006 converted the Notes into an aggregate of approximately 3,737,593 shares of
our common stock, par value $0.004, based on a conversion price of $30.30 per share. The shares of
common stock were issued solely to existing security holders upon conversion of the Notes pursuant
to the exemption from registration provided under Section 3(a)(9) of the Securities Exchange Act
1993, as amended. We did not pay or give, directly or indirectly, any commission or other
remuneration for soliciting such conversion.

- 27 -

Purchases of Equity Securities

The following table summarizes purchases by us of our common stock during the year ended June 30,
2007:

Period

Opening Balance at
July 1, 2006

July 2006

August 2006

September 2006

October 2006

November 2006

December 2006

January 2007

February 2007

March 2007

April 2007

May 2007

June 2007

Total
Number
of Shares

Average
Price Paid
per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs(1)

Maximum Number of
Shares that May yet be
Purchased Under the
Plans or Programs(1)

2,254,918

$18.36

2,254,918

5,745,082

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

50,000

$41.83

50,000

(50,000)

Nil

Total to June 30, 2007

2,304,918

$18.87

2,304,918

5,695,082

(1) On June 6, 2002, the Board of Directors authorized us to repurchase up to 8.0 million shares of our outstanding common
stock. There is no expiration date for the repurchase of these shares. For the years ended June 30, 2007 and 2006, we
repurchased 50,000 and Nil shares at a cost of $2.1 million and $Nil, respectively. At June 30, 2007, we have repurchased a
total of 2,304,918 shares at a cost of $43.5 million. We may continue to repurchase shares of our common stock for cash in the
open market, or in negotiated or block transactions, from time to time as market and business conditions warrant.

- 28 -

ITEM 6

SELECTED FINANCIAL DATA

The following table summarizes certain selected consolidated financial data for, and as of the end of,
each of the fiscal years in the five-year period ended June 30, 2007. The data set forth below should
be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and
Results of Operations and our Consolidated Financial Statements and related Notes included
elsewhere in this Report. The consolidated statements of operations data for the years ended June 30,
2007, 2006 and 2005 and the balance sheet data as of June 30, 2007 and 2006 are derived from our
audited consolidated financial statements included elsewhere in this Report. The consolidated
statements of operations data for the years ended June 30, 2004 and 2003 and the balance sheet data
as of June 30, 2005, 2004 and 2003 are derived from our audited consolidated financial statements not
included herein. Historical results are not necessarily indicative of the results to be expected in the
future, and the results for the years presented should not be considered indicative of our future results
of operations.

Consolidated Statement of Income Data:
(In thousands, except per share data)

2007

2006

Years Ended June 30
2005

2004

2003

Net revenues
Cost of sales
Voluntary product recall expenses

$716,332
272,140
59,700

$606,996
230,101
-

$425,505
150,645
-

$339,338
122,602
-

$273,570
100,483
-

Gross profit

384,492

376,895

274,860

216,736

173,087

Selling, general and administrative
expenses
Research and development expenses
Donations to research foundations
In-process research and development
charge
Amortization of acquired intangible
assets
Restructuring expenses

237,326
50,106
-

200,168
37,216
760

135,703
30,014
500

104,706
26,169
500

85,313
20,534
-

-

-

5,268

6,897
-

6,327
1,124

870
5,152

-

-
-

-

-
-

Total operating expenses

294,329

245,595

177,507

131,375

105,847

Income from operations

90,163

131,300

97,353

85,361

67,240

Other income (expenses):
Interest income (expense), net
Other, net
Gain on extinguishment of debt

Total other income (expenses)

Income before income taxes
Income taxes

6,477
1,333
-

7,810

1,320
774
-

2,094

(808)
81
-

(727)

(1,683)
990
-

(693)

(2,549)
1,907
529

(113)

97,973
(31,671)

133,394
(45,183)

96,626
(31,841)

84,668
(27,384)

67,127
(21,398)

Net income

$ 66,302

$ 88,211

$ 64,785

$ 57,284

$ 45,729

Basic earnings per share
Diluted earnings per share
Weighted average:

$
$

0.86
0.85

$
$

1.22
1.16

$
$

0.94
0.91

$
$

0.85
0.82

$
$

0.69
0.66

Basic shares outstanding
Diluted shares outstanding

76,709
78,253

72,307
77,162

68,643
74,942

67,389
70,251

66,108
68,878

- 29 -

All share and per share information has been adjusted to reflect the two-for-one stock split effected in
the form of a 100% stock dividend that was declared on August 10, 2005 and distributed on
September 30, 2005.

Consolidated Balance Sheet Data:
(In thousands)

Working capital
Total assets
Long-term debt, less current

maturities

Total stockholders’ equity

2007

2006

2005

2004

2003

As of June 30

$ 466,396 $ 381,284 $141,659 $222,230
549,151
1,252,042

1,012,921

774,146

$191,322
459,595

87,648
931,222

116,212
738,148

58,934
474,065

113,250
361,499

113,250
286,433

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among ResMed Inc., The S&P 500 Index
And The S&P Health Care Equipment Index

$350

$300

$250

$200

$150

$100

$50

$0

6/02

6/03

6/04

6/05

6/06

6/07

ResMed Inc.

S&P 500

S&P Health Care Equipment

* $100 invested on 6/30/02 in stock or index-including reinvestment of dividends.  Fiscal year ending June 30.

Copyright © 2007, Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm

- 30 -

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Overview

Management’s discussion and analysis (“MD&A”) of financial condition and results of operations is
intended to help the reader understand the results of operations and financial condition of Resmed Inc.
MD&A is provided as a supplement to, and should be read in conjunction with selected financial data
and consolidated financial statements and notes, included herein.

We are a leading developer, manufacturer and distributor of medical equipment for treating,
diagnosing, and managing sleep-disordered breathing and other
respiratory disorders. Sleep-
disordered breathing, or SDB, includes obstructive sleep apnea, or OSA, and other respiratory
disorders that occur during sleep. When we were formed in 1989, our primary purpose was to
commercialize a treatment for OSA developed by Professor Colin Sullivan. This treatment, nasal
Continuous Positive Airway Pressure, or CPAP, was the first successful noninvasive treatment for
OSA. CPAP systems deliver pressurized air, typically through a nasal mask, to prevent collapse of the
upper airway during sleep.

We have invested significant resources in research and development and product enhancement. Since
the development of CPAP, we have developed a number of innovative products for SDB and other
respiratory disorders including airflow generators, diagnostic products, mask systems, headgear and
other accessories. Our growth has been fuelled by geographic expansion, increased awareness of
respiratory conditions as a significant health concern among physicians and patients, and our research
and product development effort.

We currently employ approximately 2,700 people and market our products in over 68 countries using
a network of distributors, independent manufacturers’ representatives and our direct sales force. We
market our products primarily to home health care dealers and sleep clinics. We attempt to tailor our
marketing approach to each national market, based on regional awareness of SDB as a health
problem, physician referral patterns, consumer preferences and local reimbursement policies.

Our principal manufacturing facility is located in Sydney, Australia, and we have additional
manufacturing facilities in Combs La Ville, France and Chatsworth, California. Our manufacturing
operations consist primarily of assembly and testing of our flow generators, masks and accessories. Of
the numerous raw materials, parts and components purchased for assembly of our therapeutic and
diagnostic sleep disorder products, most are off-the-shelf items available from multiple vendors. We
generally manufacture to our internal sales forecasts and fill orders as received.

Business Acquisitions

Fiscal year ended June 30, 2007

Western Medical Marketing (“WMM”). On October 4, 2006 we acquired the business assets of
WMM, a distribution business operating in the Pacific Northwest region of the U.S. for a total cash
consideration of $0.3 million. The acquisition has been accounted as a purchase and accordingly the
results of operations of WMM have been included in our consolidated financial statements since
October 4, 2006. An amount of $0.3 million, representing the excess of the purchase price over the
fair value of the identifiable net assets acquired, has been recorded as goodwill. We have completed
our purchase price allocation at June 30, 2007.

Fiscal year ended June 30, 2006

PolarMed Holding AS (“PolarMed”). As disclosed in our consolidated financial statements and
Form 10-K for the year ended June 30, 2006, we acquired 100% of the outstanding stock of

- 31 -

PolarMed, the holding company for PolarMed AS and its affiliates, on December 1, 2005, for net cash
consideration of $6.5 million. This was comprised of $6.8 million in consideration less $0.3 million of
cash acquired. Additionally, as part of the acquisition, we assumed debt of $1.5 million. Under the
purchase agreement, we may also be required to make additional future payments of up to $3.0
million based on the achievement of certain performance milestones following the acquisition through
December 31, 2008. Of the $3.0 million in potential future payments included within the purchase
agreement, $1.0 million was paid during the year ended June 30, 2007 as a result of the successful
achievement of a performance milestone. This additional payment increased the total acquisition
consideration to $7.8 million from $6.8 million and increased the amount recorded as goodwill to $5.4
million from $4.4 million.

Pulmomed Medizinisch-Technische Geräte GmbH (“Pulmomed”). As disclosed in our
consolidated financial statements and Form 10-K for the year ended June 30, 2006, we acquired 100%
of the outstanding stock of Pulmomed on July 1, 2005 for net cash consideration of $2.5 million,
including acquisition costs. Additionally, as part of the acquisition, we assumed debt of $1.0 million.
Under the purchase agreement, we may also be required to make additional future payments of up to
$0.9 million based on the achievement of certain performance milestones following the acquisition
through June 30, 2007. Of the $0.9 million in potential future payments included within the purchase
agreement, $0.3 million was paid during the year ended June 30, 2007 as a result of the successful
achievement of a performance milestone. This additional payment was accrued at June 30, 2006,
which increased the total acquisition consideration to $2.8 million from $2.5 million and increased the
amount recorded as goodwill by $0.3 million to $2.1 million.

Fiscal year ended June 30, 2005

Saime SAS (“Saime”). We acquired 100% of the outstanding stock of Financiere ACE SAS, the
holding company for Saime and its affiliates, on May 19, 2005, for net cash consideration of $40.6
million. This consisted of $51.1 million in consideration, including acquisition costs, less $10.5
million of cash acquired. An amount of $64.8 million, representing the excess of the purchase price
over the fair value of the identifiable net assets acquired, has been recorded as goodwill.

Hoefner Medizintechnick GmbH (“Hoefner”). We acquired 100% of the outstanding stock of
Hoefner on February 14, 2005, for net cash consideration of $8.2 million. This consisted of the $10.7
million in total consideration, including acquisition costs, less $2.5 million of cash acquired. Under
the purchase agreement, additional future payments of up to $0.9 million were possible based on the
achievement of certain performance milestones following the acquisition through December 31, 2006.
Of the $0.9 million in potential future payments, $0.6 million was paid during fiscal 2006. The
remaining $0.3 million of the $0.9 million was paid during the year ended June 30, 2007 as a result of
the successful achievement of a performance milestone. This additional payment increased the total
acquisition consideration to $11.6 million and goodwill to $9.1 million.

Resprecare BV (“Resprecare”). On December 1, 2004, we acquired substantially all the assets of
Resprecare BV, our Dutch distributor, for initial consideration of $5.9 million in cash, including
acquisition costs. Under the purchase agreement, we potentially were also required to make up to $1.4
million of additional future payments based on the achievement of certain milestones. Of these
potential additional payments, $0.6 million was paid in January 2005 and a further $0.7 million was
paid in January 2006 as a result of the integration of the Dutch subsidiary of our subsidiary MAP
Medizin-Technologie GmbH, or MAP, with the newly-acquired Resprecare business. An amount of
$4.4 million, representing the excess of the purchase price over the fair value of identifiable net assets
acquired of $2.8 million, was recorded as goodwill.

- 32 -

In-Process Research and Development Charge (“IPR&D”)

On acquisition of Saime in May 2005, we recognized as an expense a charge of $5.3 million with
respect to IPR&D programs under active development by Saime that, at date of acquisition, had not
reached technological feasibility and had no alternative future use.

Stock-Based Compensation Costs

We have granted stock options to personnel, including officers and directors, under our 1995 Option
Plan (the “1995 Plan”), our 1997 Equity Participation Plan (the “1997 Plan”) and our 2006 Incentive
Award Plan, as amended (the “2006 Plan” and together with the 1995 Plan and the 1997 Plan, the
“Plans”). These options have expiration dates of seven or ten years from the date of grant and vest
over three or four years. We granted these options with the exercise price equal to the market value as
determined at the date of grant. We have also offered to our personnel, including officers and
directors, the right to purchase shares of our common stock at a discount pursuant to our employee
stock purchase plan (“ESPP”).

As of July 1, 2005, we adopted SFAS No.123(R) using the modified prospective method, which
requires measurement of compensation expense of all stock-based awards at fair value on the date of
grant and recognition of compensation expense over the service period for awards expected to vest.
Under this method, the provisions of SFAS No.123(R) apply to all awards granted or modified after
the date of adoption. In addition, the unrecognized expense of awards not yet vested at the date of
adoption, determined under the original provisions of SFAS No.123, “Accounting for Stock Based
Compensation” (“SFAS 123”), shall be recognized in net income in the periods after adoption. The
fair value of stock options is determined using the Black-Scholes valuation model. Such value is
recognized as expense over the service period, using the graded-attribution method for stock-based
awards granted prior to July 1, 2005 and the straight-line method for stock-based awards granted after
July 1, 2005.

The fair value of stock options granted under the Plans and purchase rights granted under our ESPP is
estimated on the date of the grant using the Black-Scholes option-pricing model, assuming no
dividends and the following assumptions:

Stock Options:
Weighted average grant date fair value
Weighted average risk-free interest rate
Dividend yield
Expected option life in years
Volatility

ESPP Purchase rights:
Weighted average risk-free interest rate
Dividend yield
Expected option life
Volatility

Years ended June 30
2006

2005

2007

$14.53
4.3-5.1% 3.9-4.5%

$12.75

-
4.0-5.2
26-30% 28-30%

-
3.9-5.2

$8.49
4.0%
-
3.5-4.6
31%

-
6 months

4.9-5.1% 3.2-4.9%

2.3%
-
6 months
30-41% 29-41% 31-38%

-
6 months

Expected volatilities are based on a combination of historical volatilities of our stock and implied
volatilities from traded options of our stock. The expected life represents the weighted average period
of time that options granted are expected to be outstanding giving consideration to vesting schedules

- 33 -

and our historical exercise patterns. The risk-free rate is based on the U.S. Treasury yield curve in
effect at the time of grant for periods corresponding with the expected life of the option.

Tax Expense

Our income tax rate is governed by the laws of the regions in which our income is recognized. To
date, a substantial portion of our income has been subject to income tax in Australia where the
statutory rate was 30% in fiscal years 2007, 2006 and 2005. During fiscal years 2007, 2006 and 2005,
our consolidated effective tax rate has fluctuated between approximately 32% and approximately
34%. These fluctuations have resulted from, and future effective tax rates will depend upon, numerous
factors, including the amount of research and development expenditures for which a 125% Australian
tax deduction is available, the level of non-deductible expenses, and other tax credits or benefits
available to us under applicable tax laws.

We account 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 bases. 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. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

Fiscal Year Ended June 30, 2007 Compared to Fiscal Year Ended June 30, 2006

Net Revenues. Net revenue increased for the year ended June 30, 2007 to $716.3 million from
$607.0 million for the year ended June 30, 2006, an increase of $109.3 million or 18%. The increase
in net revenue was attributable to an increase in unit sales of our flow generators, masks and
accessories. Movements in international currencies against
the U.S. dollar positively impacted
revenues by approximately $20.5 million for the year ended June 30, 2007. Excluding the impact of
favorable foreign currency movements, sales for the year ended June 30, 2007 increased by 15%
compared to the year ended June 30, 2006.

Net revenue in North and Latin America increased for the year ended June 30, 2007 to $376.7 million
from $321.0 million for the year ended June 30, 2006, an increase of $55.7 million or 17%. This
growth has been generated by increased public and physician awareness of sleep-disordered breathing
together with our continued investment in our sales force and marketing initiatives. Recent product
releases, in particular the Adapt SV, Swift II and Mirage Quattro, have also contributed to our sales
growth.

Net revenue in markets outside the Americas increased for the year ended June 30, 2007 to $339.6
million from $286.0 million for the years ended June 30, 2007 and 2006, respectively, an increase of
19%. International sales growth predominantly reflects growth in the overall sleep-disordered
breathing market and the positive impact from movements of international currencies against the U.S.
dollar. Excluding the positive impact from movements of international currencies, international sales
grew by 12%.

Sales of flow generators for the year ended June 30, 2007 totaled $370.6 million, an increase of 17%
compared to the year ended June 30, 2006, including increases of 19% in North and Latin America
and 16% elsewhere. Sales of mask systems, motors and other accessories totaled $345.8 million, an
increase of 19%, including increases of 16% in North and Latin America and 24% elsewhere, for the
year ended June 30, 2007, compared to the year ended June 30, 2006. We believe these increases
primarily reflect growth in the overall sleep-disordered breathing market and contributions from new
products.

- 34 -

Gross Profit. Gross profit increased for the year ended June 30, 2007 to $384.5 million from $376.9
million for the year ended June 30, 2006, an increase of $7.6 million or 2%. Gross profit as a
percentage of net revenue decreased for the year ended June 30, 2007 to 54% from 62% for the year
ended June 30, 2006. The decrease in gross margin is primarily due to $59.7 million of voluntary
product recall expenses that we recognized during the year ended June 30 2007. Excluding voluntary
product recall expenses, gross profit as a percentage of revenue was 62% for the year ended June 30,
2007, which is consistent with the year ended June 30, 2006. Stock-based compensation expenses of
$1.1 million have been included in cost of sales for the year ended June 30, 2007 compared to $0.9
million for the year ended June 30, 2006.

Voluntary Product Recall Expenses. On April 23, 2007, we initiated a worldwide voluntary
product recall of approximately 300,000 units of our early production S8 flow generators. In these
particular units, which were manufactured between July 2004 and May 15, 2006, there is a remote
potential for a short circuit in the power supply connector. Furthermore, in seven cases worldwide,
device failures have led to thermal damage to the device, with a remote potential to ignite material
external
to the device. We are working with our distribution partners globally to provide a
replacement device to patients who have an affected S8 flow generator.

The estimated cost of this recall action is $59.7 million which has been recognized as a charge to cost
of sales in the condensed consolidated statement of income during the year ended June 30, 2007. At
June 30, 2007, we have incurred costs of approximately $16.3 million associated with the product
recall. We expect the product recall to continue throughout fiscal year 2008. We cannot assure that the
actual costs of the product recall will not differ from the amount we have estimated and recognized in
our financial statements.

Selling, General and Administrative Expenses. Selling, general and administrative expenses
increased for the year ended June 30, 2007 to $237.3 million from $200.2 million for the year ended
June 30, 2006, an increase of $37.1 million or 19%. As a percentage of net revenue, selling, general
and administrative expenses for the year ended June 30, 2007 was 33% and is consistent with the year
ended June 30, 2006. Stock-based compensation expenses of $14.5 million have been included within
selling, general and administrative expenses for the year ended June 30, 2007 compared to $12.4
million for the year ended June 30, 2006.

The increase in selling, general and administrative expenses was primarily due to an increase in the
to support our growth, continued infrastructure
number of sales and administrative personnel
investment, particularly in our European businesses, stock-based compensation costs and other
expenses related to the increase in our sales. The increase in selling, general and administrative
expenses was also attributable to net appreciation of international currencies against the U.S. dollar,
which added approximately $9.0 million to our expenses for the year ended June 30, 2007, as reported
in U.S. dollars. As a percentage of net revenue, we expect our future selling, general and
administrative expense to continue in the historical range of 32% to 34%.

Research and Development Expenses. Research and development expenses increased for the year
ended June 30, 2007 to $50.1 million from $37.2 million for the year ended June 30, 2006, an increase
of $12.9 million or 35%. As a percentage of net revenue, research and development expenses were
7% for the year ended June 30, 2007 compared to 6% for the year ended June 30, 2006. Stock-based
compensation costs of $2.0 million have been included within research and development expenses for
both the year ended June 30, 2007 and the year ended June 30, 2006.

The increase in research and development expenses was primarily due to an increase in the number of
increased charges for consulting fees and an increase in
research and development personnel,
technical assessments incurred to facilitate development of new products. The increase in research

- 35 -

and development expenses was also attributable to net appreciation of international currencies against
the U.S. dollar, which added approximately $2.4 million to our expenses for the year ended June 30,
2007, as reported in U.S. dollars. As a percentage of net revenue, we expect our future research and
development expense to continue in the range of 6% to 7%.

Donations to Foundations.
In the years ended June 30, 2007 and 2006, we donated $Nil and $0.8
million, respectively, to the ResMed Foundation in the United States, and the ResMed Foundation in
Australia. The Foundations’ overall mission includes the education of both the public and physicians
about the inherent dangers of untreated SDB/OSA, particularly as it relates to cerebrovascular and
cardiovascular disease.

Amortization of Acquired Intangible Assets. Amortization of acquired intangible assets for the
year ended June 30, 2007 totaled $6.9 million compared to $6.3 million for the year ended June 30,
2006. The increase in amortization expense is mainly attributable to the appreciation of the Euro
against the U.S. dollar as the majority of the acquired intangible assets are denominated in Euros. The
amortized amounts in 2007 related to acquired intangible assets associated with the acquisitions of
Pulmomed, PolarMed, Saime, Hoefner and Resprecare.

Restructuring Expenses. Restructuring expenses incurred for the year ended June 30, 2007 were
$Nil compared to $1.1 million for the year ended June 30, 2006. Restructuring expenses for 2006
consisted of restructure charges associated with our integration of the separate operations of ResMed
Germany and MAP into a single operating unit. We have completed the relocation of our ResMed
Germany operation, previously located in Moenchengladbach, to Munich and associated integration
of the back office functions including customer service, logistics and administration.

Other Income (Expense), Net. Other income, net for the year ended June 30, 2007 was $7.8
million, an increase of $5.7 million over the year ended June 30, 2006. This was predominantly due to
higher interest income on additional cash balances, lower interest expense due to the reduction in our
convertible debt, which was converted into equity during the quarter ended March 31, 2006 and
higher foreign currency gains on foreign currency transactions and hedging.

Income Taxes. Our effective income tax rate decreased to approximately 32.3% for the year ended
June 30, 2007 from approximately 33.9% for the year ended June 30, 2006. Our effective income tax
rate was impacted by the tax benefit associated with the voluntary product recall expense that was
recognized during the year ended June 30, 2007. Excluding the impact of voluntary product recall
expenses, the effective income tax rate was 31.4% for the year ended June 30, 2007.

The decrease in our effective tax rate from June 30, 2006 is primarily due to the one-time additional
income tax expense of $3.5 million, which we incurred during the year ended June 30, 2006,
associated with the repatriation of $75 million in dividends received from certain controlled foreign
corporations. These dividend payments were made to take advantage of a temporary tax incentive
under the American Jobs Creation Act of 2004, which provides an 85% exclusion from U.S. taxable
income for qualifying dividends.

We continue to benefit from the Australian corporate tax rate of 30% and certain Australian research
and development tax benefits because we generate a majority of our taxable income in Australia.
Excluding the impact of tax expense associated with the dividend payment in fiscal year 2006, our
effective tax rate was 31.2%, which is broadly consistent with our effective tax rate for fiscal year
2007.

Net Income. As a result of the factors above, our net income for the year ended June 30, 2007 was
$66.3 million or $0.85 per diluted share compared to net income of $88.2 million or $1.16 per diluted

- 36 -

share for the year ended June 30, 2006. The net after tax impact of the voluntary product recall
expense of $41.8 million described above resulted in a reduction of diluted earnings per share of
$0.53 on an after-tax basis for the year ended June 30, 2007. Excluding the impact of the voluntary
product recall expense, diluted earnings per share was $1.38, an increase of 19% over the year ended
June 30, 2006.

Fiscal Year Ended June 30, 2006 Compared to Fiscal Year Ended June 30, 2005

Net Revenues. Net revenue increased for the year ended June 30, 2006 to $607.0 million from
$425.5 million for the year ended June 30, 2005, an increase of $181.5 million or 43%. The increase
in net revenue was attributable to an increase in unit sales of our flow generators, masks and
accessories and incremental sales contributed from acquisitions. Sales were negatively impacted by
the appreciation of international currencies against the U.S. dollar (decreasing sales by approximately
$11.3 million).

Excluding the impact of acquisitions and unfavorable foreign currency movements sales for the year
ended June 30, 2006 increased by 32% compared to the year ended June 30, 2005. Net revenue in
North and Latin America increased for the year ended June 30, 2006 to $321.0 million from $218.1
million for the year ended June 30, 2005, an increase of $102.9 million or 47%. This growth has been
generated by increased public and physician awareness of sleep-disordered breathing together with
our continued investment in our sales force and marketing initiatives. Recent product releases, in
particular our Mirage Swift mask and S8 flow generator platform, have also contributed strongly to
our sales growth.

Net revenue in markets outside the Americas increased for the year ended June 30, 2006 to $286.0
million from $207.4 million for the years ended June 30, 2006 and 2005 respectively, an increase of
38%. International sales growth for the year ended June 30, 2006 reflects organic growth in the
overall sleep-disordered breathing market and the recent acquisitions of Resprecare, Hoefner, Saime,
PolarMed and Pulmomed. These acquisitions contributed incremental revenue of $52.7 million for the
year ended June 30, 2006. Excluding the impact of acquisitions and unfavourable foreign currency
movements, international sales for the year ended June 30, 2006 grew by 17% compared to the year
ended June 30, 2005.

Sales of flow generators for the year ended June 30, 2006 totaled $316.6 million, an increase of 51%
compared to the year ended June 30, 2005, including increases of 47% in North and Latin America
and 53% elsewhere. Sales of mask systems, motors and other accessories totaled $290.4 million, an
increase of 35%, including increases of 47% in North and Latin America and 16% elsewhere, for the
year ended June 30, 2006, compared to the year ended June 30, 2005. These increases primarily
reflect growth in the overall sleep-disordered breathing market, acquisitions during the year, and new
product releases, particularly the Mirage Swift Mask and our new flow generator platform, the S8.

Gross Profit. Gross profit increased for the year ended June 30, 2006 to $376.9 million from $274.9
million for the year ended June 30, 2005, an increase of $102.0 million or 37%. Gross profit as a
percentage of net revenue decreased for the year ended June 30, 2006 to 62% from 65% for the year
ended June 30, 2005. The reduction in gross margin reflects the change in product and geographical
mix of sales with a higher proportion of sales in flow generators, which generate lower margins
relative to our mask sales, and higher North and Latin American sales, which also typically generate
lower margins relative to our international sales, as well as the additional stock-based compensation
costs. Stock-based compensation expenses of $0.9 million have been included within cost of sales for
the year ended June 30, 2006 as compared to no stock-based compensation expense for the year ended
June 30, 2005.

- 37 -

Selling, General and Administrative Expenses. Selling, general and administrative expenses
increased for the year ended June 30, 2006 to $200.2 million from $135.7 million for the year ended
June 30, 2005, an increase of $64.5 million or 48%. As a percentage of net revenue, selling, general
and administrative expenses for the year ended June 30, 2006 was 33%, marginally higher than 32%
in the year ended June 30, 2005. Stock-based compensation expenses of $12.4 million have been
included within selling, general and administrative expenses for the year ended June 30, 2006.
Excluding the impact of stock-based compensation expenses, as a percentage of net revenue, selling,
general and administrative expenses for the year ended June 30, 2006 were 31%, which is marginally
lower than 32% in the year ended June 30, 2005.

The increase in selling, general and administrative expenses was primarily due to stock-based
compensation costs, an increase in the number of sales and administrative personnel to support our
growth,
the acquisitions of Resprecare, Hoefner, Saime, PolarMed and Pulmomed, continued
infrastructure investment, particularly in our European businesses, and other expenses related to the
increase in our sales. As a percentage of net revenue, we expect our future selling, general and
administrative expense to continue in the historical range of 31% to 34%.

Research and Development Expenses. Research and development expenses increased for the year
ended June 30, 2006 to $37.2 million from $30.0 million for the year ended June 30, 2005, an increase
of $7.2 million or 24%. As a percentage of net revenue, research and development expenses were 6%
for the year ended June 30, 2006 compared to 7% for the year ended June 30, 2005. Stock-based
compensation costs of $2.0 million have been included within research and development expenses for
the year ended June 30, 2006. As a percentage of net revenue, we expect our future research and
development expense to continue in the range of 5% to 7%.

Donations to Foundations.
In the years ended June 30, 2006 and 2005, we donated $0.8 million
and $0.5 million, respectively, to the ResMed Foundation in the United States, and the ResMed
Foundation in Australia. The Foundations’ overall mission includes the education of both the public
and physicians about the inherent dangers of untreated SDB/OSA, particularly as it relates to
cerebrovascular and cardiovascular disease.

In-process Research and Development Charge. No in-process research and development charge
was incurred for the year ended June 30, 2006. For the year ended June 30, 2005, purchased
in-process research and development of $5.3 million was expensed upon the acquisition of Saime as
technological feasibility of the products under development had not been established and no further
alternative uses existed.

Amortization of Acquired Intangible Assets. Amortization of acquired intangible assets for the
year ended June 30, 2006 totaled $6.3 million compared to $0.9 million for the year ended June 30,
2005. The amortized amounts in 2006 related to acquired intangible assets associated with the
acquisitions of Pulmomed, PolarMed, Saime, Hoefner and Resprecare.

Restructuring Expenses. Restructuring expenses incurred for the year ended June 30, 2006 were
$1.1 million compared to $5.2 million for the year ended June 30, 2005. Restructuring expenses for
2006 consisted of restructure charges associated with our integration of the separate operations of
ResMed Germany and MAP into a single operating unit. We have completed the relocation of our
ResMed Germany operation, previously located in Moenchengladbach, to Munich and associated
integration of the back office functions including customer service, logistics and administration. We
plan to continue to monitor the progress of this restructure and adjust our business strategies and
personnel accordingly in an effort to maximize efficiencies and cost savings.

Other Income (Expense), Net. Other income, net for the year ended June 30, 2006 was $2.1
million, an increase of $2.8 million from other expense, net of $0.7 million for the year ended

- 38 -

June 30, 2005. This was predominantly due to higher interest income on additional cash balances and
the lower interest expense due to the reduction in our convertible debt, which was converted into
equity during the quarter ended March 31, 2006. Other factors included higher foreign currency gains
on foreign currency transactions and hedging offset by an impairment loss of $1.2 million on one of
our cost method investments.

Income Taxes. Our effective income tax rate increased to approximately 33.9% for the year ended
June 30, 2006 from approximately 33.0% for the year ended June 30, 2005. This was primarily due to
the one-time additional income tax expense of $3.5 million associated with the repatriation of $75
million in dividends received from certain controlled foreign corporations. These dividend payments
were made to take advantage of a temporary tax incentive under the American Jobs Creation Act of
2004, which provides an 85% exclusion from U.S. taxable income for qualifying dividends. The
repatriation of these funds to the United States provides us with increased flexibility in the utilization
of cash to further our strategic objectives.

Excluding the impact of the one-time additional income tax expense of $3.5 million relating to the
dividend repatriation, the effective tax rate for the year ended June 30, 2006 was 31.2%. This
compares to an adjusted effective tax rate of approximately 31.2% for the year ended June 30, 2005
when excluding the impact of the non-deductible in-process research and development charge of $5.3
million incurred in the prior year. We continue to benefit from the Australian corporate tax rate of
30% and certain Australian research and development tax benefits because we generate a majority of
our taxable income in Australia.

Net Income. As a result of the factors above, our net income for the year ended June 30, 2006 was
$88.2 million or $1.16 per diluted share compared to net income of $64.8 million or $0.91 per diluted
share for the year ended June 30, 2005. The net after tax impact of stock-based compensation costs,
in-process research and development charge, amortization of acquired
restructuring expenses,
intangible assets and the repatriation of funds described above resulted in a reduction of diluted
earnings per share of $0.26 and $0.12 on an after-tax basis, respectively, for the years ended June 30,
2006 and 2005.

Liquidity and Capital Resources

As of June 30, 2007 and June 30, 2006, we had cash and cash equivalents and marketable securities
available-for-sale of $277.7 million and $219.5 million, respectively. Working capital was $466.4
million and $381.3 million at June 30, 2007 and June 30, 2006, respectively. The increase in working
capital predominantly reflects the growth and profitability of the business during the year.

Inventories at June 30, 2007 increased by $41.0 million or 35% to $157.2 million compared to
June 30, 2006 inventories of $116.2 million. The increase in inventories was higher than the increase
of 18% in revenues in the year ended June 30, 2007 compared to the year ended June 30, 2006, which
we believe reflects increased inventory levels to accommodate our increasing sales and the launch of
several new products including the VPAP Malibu and Tango flow generators, and the Mirage Quattro
and Mirage Liberty masks.

Accounts receivable at June 30, 2007 were $167.8 million, an increase of $29.7 million or 21% over
the June 30, 2006 accounts receivable balance of $138.1 million. The increase was higher than the
18% incremental increase in revenues for the year ended June 30, 2007 compared to the year ended
June 30, 2006. Accounts receivable days sales outstanding of 77 days at June 30, 2007 increased by 7
days compared to 70 days at June 30, 2006. The increase was predominantly attributable to increases
in credit terms in response to competitor actions. Our allowance for doubtful accounts as a percentage
of total accounts receivable at June 30, 2007 and 2006 was 2.7% and 3.3%, respectively. The credit
quality of our customers remains consistent with our past experience.

- 39 -

During the year ended June 30, 2007, we generated cash of $91.1 million from operations. This was
lower than the cash generated from operations for the year ended June 30, 2006 of $99.0 million and
was primarily the result of the decrease in net income, higher working capital balances and product
recall costs. The cash generated from operations included a reduction of $12.4 million and $9.8
million for the years ended June 30, 2007 and 2006, respectively, due to the adoption of SFAS 123(R)
as tax benefits associated with employee stock options exercised during the year are required to be
included within cashflows from financing activities.

Capital expenditures for the years ended June 30, 2007 and 2006 aggregated $77.6 million and $102.7
million, respectively. The capital expenditures for the year ended June 30, 2007 primarily reflected
the construction of our new manufacturing, research and development building, office facilities,
computer hardware and software, rental and loan equipment and purchase of production tooling
equipment and machinery. As a result of these capital expenditures, our balance sheet reflects net
property, plant and equipment of approximately $310.6 million at June 30, 2007 compared to $245.4
million at June 30, 2006.

During the year ended June 30, 2007, we completed the construction of our new research and
development and office facilities at our existing site in Sydney, Australia. We incurred construction
costs of $12 million to complete our new building for the year ended June 30, 2007. We also
commenced an extension to our manufacturing facility in Sydney, Australia. We have incurred $7
million during the year and estimate additional construction cost of approximately $7 million to
complete the project. We expect to complete this extension within the next fiscal year and to fund the
project through a combination of cash on hand and cash generated from operations.

On July 7, 2005, we purchased a 9.78-acre parcel of land in San Diego for $21.0 million. The new
location at Kearney Mesa, San Diego will allow us to develop a new corporate headquarters. We
commenced construction of our new corporate headquarters during 2007 and to date have incurred
expenditures of $4 million. We estimate additional construction costs of $91 million to complete the
project. We expect to complete the project in March 2009 and to fund the project through a
combination of cash on hand and our undrawn revolving loan of $75 million.

Details of contractual obligations at June 30, 2007 are as follows:

In $000’s

Total

2008

2009

2010

2011

2012

Thereafter

Payments Due by Period

Long-Term Debt
Operating Leases
Capital Leases
Unconditional
Purchase
Obligations

Total Contractual
Cash Obligations

$115,434
34,506
564

$28,272
9,634
78

$43,885
8,188
78

$16,933
6,198
78

$20,319
3,900
78

$6,025
2,227
78

$
-
4,359
174

33,763

31,969

876

876

21

21

-

$184,267

$69,953

$53,027

$24,085

$24,318

$8,351

$4,533

- 40 -

Details of other commercial commitments at June 30, 2007 are as follows:

In $000’s

Total
Amounts
Committed

Amount of Commitment Expiration Per Period

2008

2009

2010

2011

2012

Thereafter

Standby Letters of Credit
Guarantees*

36
$
57,426

$ 36
607

$ -
25

$

-
270

$

-
54,627

$-
-

$

-
1,897

Total Commercial
Commitments

$57,462

$643

$25

$270

$54,627

$-

$1,897

*The above guarantees mainly relate to security provided as part of our Syndicated Facility Agreement and requirements under
contractual obligations with insurance companies transacting with our German subsidiaries.

During fiscal year 2006, and pursuant to the Indenture dated June 20, 2001 between us and American
Stock Transfer & Trust Company, as trustee, holders of all of the 4% Convertible Subordinated Notes
(“the Notes”) due 2006 converted the Notes into an aggregate of 3,737,593 shares of our common
stock, par value $0.004. The Notes were converted into 33 shares of our common stock for each
$1,000 principal amount of the Notes, at a conversion price of $30.30 per share. The dilutive impact
of these conversions has been reflected in our reported earnings per share.

On March 13, 2006, our wholly-owned subsidiaries ResMed Corp., ResMed Motor Technologies Inc.
and ResMed EAP Holdings Inc. entered into a Second Amended and Restated Revolving Loan
Agreement with Union Bank of California, N.A. as administrative agent for the Lenders (the “Loan
Agreement”), that provides for a revolving loan of up to $75 million. The Loan Agreement also
contains customary covenants,
including certain financial covenants and an obligation that we
maintain certain financial ratios, including a maximum ratio of total debt to EBITDA (as defined in
the Loan Agreement), a fixed charge coverage ratio, a minimum tangible net worth, and that certain of
our subsidiaries maintain a minimum EBITDA and liquidity. We are currently in compliance with all
of these covenants. Draws under the revolving loans must be made before March 1, 2011, at which
time all unpaid principal and interest under both loans must be repaid. The outstanding principal
amount due under the loans will bear interest at a rate equal to LIBOR plus 0.75% to 1.00%
(depending on the applicable leverage ratio). At June 30, 2007 there were no amounts outstanding
under the Loan Agreement.

On June 8, 2006, our wholly-owned Australian subsidiary, ResMed Limited, entered into a
Syndicated Facility Agreement with HSBC Bank Australia Limited as original financier, facility agent
and security trustee, that provides for a loan in three tranches.

Tranche A is a EUR 50 million term loan facility that refinances all amounts outstanding under a
previous syndicated facility agreement dated May 16, 2005 between ResMed Limited and HSBC
Bank Australia Limited, to fund the obligations of our wholly-owned French subsidiary ResMed SA
under its agreement to acquire Saime. Tranche A bears interest at a rate equal to LIBOR for deposits
denominated in EUR plus a margin of 0.80% or 0.90%, depending on the ratio of the total debt to
EBITDA of ResMed Inc. and its subsidiaries, which we refer to as the ResMed Group, for the most
recently completed fiscal year for the applicable interest period. Payments of principal must be made
to reduce the total outstanding principal amount of Tranche A to EUR 37.75 million on June 30, 2008,
EUR 27.5 million on June 30, 2009, EUR 15 million on December 31, 2009, and the entire
outstanding principal amount must be repaid in full on June 8, 2011. At June 30, 2007, the Tranche A
facility loan had an amount outstanding of $65.3 million.

Tranche B is a USD 15 million term loan facility that may only be used for the purpose of financing
capital expenditures and other asset acquisitions by the ResMed Group. Tranche B bears interest at a

- 41 -

rate equal to LIBOR for deposits denominated in EUR, Australian dollars, USD, or Sterling plus a
margin of 0.80% or 0.90%, depending on the ratio of the total debt to EBITDA of the ResMed Group
for the most recently completed fiscal year for the applicable interest period. The entire principal
amount must be repaid in full on June 8, 2011. At June 30, 2007, the Tranche B facility loan had an
amount outstanding of $6.0 million.

Tranche C is a USD 60 million term loan facility that may only be used for the purpose of the
payment by ResMed Limited of a dividend to ResMed Holdings Limited, which will ultimately be
paid to ResMed Inc. Tranche C bears interest at a rate equal to LIBOR for deposits denominated in
EUR, Australian dollars or USD plus a margin of 0.70% or 0.80%, depending on the ratio of the total
debt to EBITDA of the ResMed Group for the most recently completed fiscal year for the applicable
interest period. Payments of principal must be made to reduce the total outstanding principal amount
of Tranche C to USD 30 million on December 31, 2007 and the entire outstanding principal amount
must be repaid in full by June 8, 2009. At June 30, 2007, the Tranche C facility loan had an amount
outstanding of $40.1 million.

The loans under the Syndicated Facility Agreement are secured by a pledge of one hundred percent of
the shares of ResMed Inc.’s subsidiary, Saime, pursuant to a Pledge Agreement. The Syndicated
Facility Agreement also contains customary covenants, including certain financial covenants and an
obligation that ResMed Limited maintain certain financial ratios, including a minimum debt service
cover ratio, a maximum ratio of total debt to EBITDA and a minimum tangible net worth. The entire
principal amount of the loan and any accrued but unpaid interest may be declared immediately due
and payable in the event of the occurrence of an event of default as defined in the Syndicated Facility
Agreement. Events of default include, among other items, failure to make payments when due,
breaches of representations, warranties or covenants, the occurrence of certain insolvency events, the
occurrence of an event or change which could have a material adverse effect on ResMed Limited and
its subsidiaries, and if ResMed Inc. ceases to control ResMed Limited, ResMed Corp., ResMed SAS,
ResMed GmbH & Co. KG, ResMed (UK) Limited, Take Air Medical Handels-GmbH or Saime. At
June 30, 2007 we were in compliance with our debt covenants.

Simultaneous with the Syndicated Facility Agreement, ResMed Limited entered into a working
capital agreement with HSBC Bank Australia Limited for revolving, letter of credit and overdraft
facilities up to a total commitment of 6.5 million Australian dollars for one year, and ResMed (UK)
Limited entered into a working capital agreement with HSBC Bank plc for a revolving cash advance
facility up to a total commitment of 3 million Sterling for one year. At June 30, 2007 there was an
amount of $4.0 million outstanding under these working capital agreements.

We expect to satisfy all of our short-term liquidity requirements through a combination of cash on
hand, cash generated from operations, our $75 million undrawn revolving line of credit with Union
Bank of California and our $9.0 million undrawn facilities with HSBC.

The results of our international operations are affected by changes in exchange rates between
currencies. Changes in exchange rates may negatively affect our consolidated net revenue and gross
profit margins from international operations. We are exposed to the risk that the dollar value
equivalent of anticipated cash flows would be adversely affected by changes in foreign currency
exchange rates. We manage this risk through foreign currency option contracts.

Critical Accounting Principles and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires us to make estimates and judgments that affect our reported
amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets

- 42 -

and liabilities. On an ongoing basis we evaluate our estimates, including those related to allowance for
doubtful accounts, inventory reserves, warranty obligations, goodwill, impaired assets, intangible
assets, income taxes, deferred tax valuation allowances, contingencies and stock-based compensation
costs.

We state these accounting policies in the notes to the financial statements and at relevant sections in
this discussion and analysis. The estimates are based on the information that is currently available to
us and on various other assumptions that we believe to be reasonable under the circumstances. Actual
results could vary from those estimates under different assumptions or conditions.

We believe that the following critical accounting policies affect the more significant judgments and
estimates used in the preparation of our consolidated financial statements:

(1) Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for
estimated losses resulting from the inability of our customers to make required payments, which
results in bad debt expense. We determine the adequacy of this allowance by continually evaluating
individual customer receivables, considering a customer’s financial condition, credit history and
current economic conditions. If the financial condition of our customers were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required.

(2)
Inventory Adjustments. Inventories are stated at lower of cost or market and are determined by
the first-in, first-out method. We review the components of inventory on a regular basis for excess,
obsolete and impaired inventory based on estimated future usage and sales. The likelihood of any
material inventory write-downs is dependent on changes in competitive conditions, new product
introductions by us or our competitors, or rapid changes in customer demand.

(3) Valuation of Goodwill, Intangible and Other Long-Lived Assets. We use assumptions in
establishing the carrying value, fair value and estimated lives of our goodwill, intangibles and other
long-lived assets. The criteria used for these evaluations include management’s estimate of the asset’s
continuing ability to generate positive income from operations and positive cash flow in future
periods compared to the carrying value of the asset, as well as the strategic significance of any
identifiable intangible asset in our business objectives. If assets are considered to be impaired, the
impairment recognized is the amount by which the carrying value of the assets exceeds the fair value
of the assets. Useful lives and related amortization or depreciation expense are based on our estimate
of the period that the assets will generate revenues or otherwise be used by us. Factors that would
influence the likelihood of a material change in our reported results include significant changes in the
asset’s ability to generate positive cash flow, loss of legal ownership or title to the asset, a significant
decline in the economic and competitive environment on which the asset depends, significant changes
in our strategic business objectives, utilization of the asset, and a significant change in the economic
and/or political conditions in certain countries.

(4) Valuation of Deferred Income Taxes. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. The likelihood of a material change
in our expected realization of these assets is dependent on future taxable income, our ability to deduct
tax loss carryforwards against future taxable income, the effectiveness of our tax planning and
strategies among the various tax jurisdictions that we operate in, and any significant changes in the
tax treatment received on our business combinations.

(5) Provision for Warranty. We provide for the estimated cost of product warranties at the time the
related revenue is recognized. The amount of this provision is determined by using a financial model,
which takes into consideration actual, historical expenses and potential risks associated with our
different products. This financial model is then used to calculate the future probable expenses related

- 43 -

to warranty and the required level of the warranty provision. Although we engage in product
improvement programs and processes, our warranty obligation is affected by product failure rates and
costs incurred to correct those product failures. Should actual product failure rates or estimated costs
to repair those product failures differ from our estimates, revisions to our estimated warranty
provision would be required.

(6) Revenue Recognition. Revenue on product sales is recorded at the time of shipment, at which
time title transfers to the customer. Revenue on product sales which require customer acceptance is
not recorded until acceptance is received. Royalty revenue from license agreements is recorded when
earned. Service revenue received in advance from service contracts is initially deferred and
recognized ratably over the life of the service contract. Revenue received in advance from rental unit
contracts is initially deferred and recognized ratably over the life of the rental contract. Revenue from
sale of marketing and distribution rights is initially deferred and recognized ratably as revenue over
the life of the contract. Freight charges billed to customers are included in revenue. All freight-related
expenses are charged to cost of sales.

We do not recognize revenues to the extent that we offer a right of return or other recourse with
respect to the sale of our products or similarly offer variable sale prices for subsequent events or
activities. However, as part of our sales processes we may provide upfront discounts for large orders,
one time special pricing to support new product introductions, sales rebates for centralized purchasing
entities or price-breaks for regular order volumes. The costs of all such programs are recorded as an
In our domestic sales activities we use a number of Manufacturer
adjustment
representatives to sell our products. These representatives are paid a direct commission on sales and
act as an integral component of our domestic sales force. We do not sell our products to these
representatives, and do not recognize revenue on such shipments. Our products are predominantly
therapy-based equipment and require no installation. As such, we have no significant installation
obligations.

to revenue.

In accordance with SFAS No.123(R), we measure

(7) Stock-Based Compensation.
the
compensation of all stock-based awards at fair value on date of grant. Such value is recognized as
compensation expense over the service period, net of estimated forfeitures. The estimation of stock
awards that will ultimately vest requires judgment, and to the extent actual results differ from our
estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are
revised. We consider many factors when estimating expected forfeitures, including the type of
awards, employee class, and historical experience. Actual results may differ substantially from these
estimates.

(8) Voluntary Product Recall Expenses. We recognized an accrual for the estimated cost of the
voluntary product recall at the time the liability was probable and the related expenses could be
reasonably estimated. The amount of this accrual was determined taking into consideration the future
probable expenses directly related to the product recall including expected return rates for the affected
units, unit replacement costs, legal, consulting, logistical and administrative expenses. Should actual
product recall costs differ from our estimated costs or should we receive additional feedback from our
ongoing discussions with regulatory bodies, revisions to our estimated product recall accrual may be
required.

Recently Issued Accounting Pronouncements

In June 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes – an
interpretation of FASB Statement No. 109” and subsequently in May 2007 issued FSP FIN 48-1,
“Definition of Settlement in FASB Interpretation No. 48” (“FIN 48”), which clarifies the accounting
for uncertainty in income taxes recognized in the financial statements in accordance with FASB

- 44 -

Statement No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position
taken, or expected to be taken in a tax return. FIN 48 requires recognition of tax benefits that satisfy a
greater than 50% probability threshold and also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for
us beginning July 1, 2007 and we are currently assessing the potential impact that the adoption of this
Interpretation will have on our financial statements.

In September 2006, the FASB issued FASB No. 157, “Fair Value Measurements” (“FASB 157”),
which defines fair value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements. FASB 157 is effective
for financial statements issued for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. We are assessing the potential impact that the adoption of this
standard will have on our financial statements.

During the year ended June 30, 2007 we adopted Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements”
(“SAB 108”). SAB 108 requires analysis of misstatements using both an income statement (rollover)
approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a
one-time cumulative effect transition adjustment. The adoption of SAB 108 did not have a material
impact on our financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 gives us the irrevocable option to carry many
financial assets and liabilities at fair values, with changes in fair value recognized in earnings. SFAS
No. 159 is effective for us beginning July 1, 2008, although early adoption is permitted. We are
currently assessing the potential impact, if any, should we elect the fair value option, that adoption of
SFAS No. 159 will have on our financial statements.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET AND BUSINESS RISKS

Foreign Currency Market Risk

Our reporting currency is the U.S. dollar, although the financial statements of our non-U.S.
subsidiaries are maintained in their respective local currencies. We transact business in various
foreign currencies, including a number of major European currencies as well as the Australian dollar.
We have significant foreign currency exposure through both our Australian manufacturing activities
and international sales operations.

We have established a foreign currency hedging program using purchased currency options to hedge
foreign-currency-denominated financial assets, liabilities and manufacturing expenditures. The goal
of this hedging program is to economically guarantee or lock-in the exchange rates on our foreign
currency exposures denominated in Euro’s and the Australian dollar. Under this program, increases or
decreases in our foreign-currency-denominated financial assets, liabilities, and firm commitments are
partially offset by gains and losses on the hedging instruments. We have determined our hedge
program to be a non-effective hedge as defined under SFAS No. 133. The foreign currency
derivatives portfolio is recorded in the consolidated balance sheets at fair value and included in other
assets or other liabilities. All movements in the fair value of the foreign currency derivatives are
recorded within other income, net on our consolidated statements of income.

- 45 -

The table below provides information (in U.S. dollars) on our foreign-currency-denominated financial
assets by legal entity functional currency as of June 30, 2007 (in thousands):

Australian
Dollar
(AUD)

US
Dollar
(USD)

Euro
(EUR)

Foreign Currency Financial Assets
Great
Britain
Pound
(GBP)

New
Zealand
Dollar
(NZD)

Singapore
Dollar
(SGD)

Swedish
Krona
(SEK)

Swiss
Franc
(CHF)

Norwegian
Krone
(NOK)

$ 77,860
(34,413)

$ 88,337
(68,907)

$13,579
(6,321)

$569
(5)

43,447

19,430

7,258

564

$862
(75)

787

$ 678
-

$3,334
(7)

$ 1,459
-

678

3,327

1,459

AUD
Functional
Currency
Entities:
Assets
Liability

Net Total

USD
Functional
Currency
Entities:
Assets
Liability

$

-
-

-

58,714
-

Net Total

58,714

-
-

-

-
-

-

-
-

-

EURO
Functional
Currency
Entities:
Assets
Liability

Net Total

GBP
Functional
Currency
Entities:
Assets
Liability

Net Total

CHF
Functional
Currency
Entities:
Assets
Liability

Net Total

NOK
Functional
Currency
Entities:
Assets
Liability

Net Total

SEK
Functional
Currency
Entities:
Assets
Liability

Net Total

-
(4)

(4)

1
(191)

(190)

982
(21)

-
(1,245)

961

(1,245)

-
-

-

2
-

2

-
-

-

-
-

-

689
-

689

7,467
(888)

6,579

-
-

-

293
(59)

234

14
(941)

1
(651)

(927)

(650)

-
(149)

(149)

-
(78)

(78)

-
(1,269)

-
(112)

(1,269)

(112)

-
(15)

(15)

-
(17)

(17)

- 46 -

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
(20)

(20)

-
-

-

-
-

-

-
(129)

(129)

-
-

-

-
-

-

-
-

-

-
(31)

(31)

-
-

-

-
-

-

-
-

-

-
-

-

-
-

-

-
(14)

(14)

-
(66)

(66)

-
-

-

-
(1,231)

(1,231)

The table below provides information about our foreign currency derivative financial instruments and
presents the information in U.S. dollar equivalents. The table summarizes information on instruments
and transactions that are sensitive to foreign currency exchange rates, including foreign currency call
options held at June 30, 2007. The table presents the notional amounts and weighted average
exchange rates by contractual maturity dates for our foreign currency derivative financial instruments.
These notional amounts generally are used to calculate payments to be exchanged under the options
contracts.

(In thousands except exchange
rates)

FY 2008

FY 2009

Total

Foreign Exchange Call Options
(Receive AUD$/Pay U.S.$)
Option amount
Average contractual exchange rate AUD $1 = USD 0.8088 AUD $1 = USD 0.8383 AUD $1 = USD 0.8199

$117,000

$45,000

$72,000

Fair Value
Assets /
(Liabilities)
As of June 30
2006
2007

$3,558

$1,035

(Receive AUD$/Pay GBP$)
Option amount
Average contractual exchange rate AUD $1 = GBP 0.4300

$6,026

$-

$6,026
AUD $1 = GBP 0.4300

$82

$-

(Receive AUD$/Pay Euro)
Option amount
Average contractual exchange rate AUD $1 = Euro 0.6424 AUD $1 = Euro 0.670 AUD $1 = Euro 0.6490

$16,255

$12,191

$4,064

$209

$144

Interest Rate Risk

We are exposed to risk associated with changes in interest rates affecting the return on our cash and
cash equivalents and debt. At June 30, 2007 we had total long-term debt, including the current portion
of those obligations, of $116.0 million. All of this debt is subject to variable interest rates. A
hypothetical 10% change in interest rates during the year ended June 30, 2007, would not have a
material impact on pretax income. We have no interest rate hedging agreements.

ITEM 8

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

a)

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of June 30, 2007 and 2006
Consolidated Statements of Income for the years ended June 30, 2007, 2006 and 2005
Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the

F1
F2
F3

years ended June 30, 2007, 2006 and 2005

F4
Consolidated Statements of Cash Flows for the years ended June 30, 2007, 2006 and 2005 F5
F6
Notes to Consolidated Financial Statements
Schedule II – Valuation and Qualifying Accounts and Reserves

- 47 -

b)

Supplementary Data

Quarterly Financial Information (unaudited)—The quarterly results for the years ended
June 30, 2007 and 2006 are summarized below (in thousands, except per share amounts):

2007

Net revenues
Gross profit
Net income/(loss)
Basic earnings per share
Diluted earnings per share

2006

Net revenues
Gross profit
Net income
Basic earnings per share
Diluted earnings per share

First
Quarter
$163,605
101,296
24,999
0.33
0.32

$
$

Second
Quarter
$178,428
111,758
28,995
0.38
0.37

$
$

Third
Quarter
$ 182,990
54,232
(15,365)

($
($

0.20) $
0.20) $

Fourth
Quarter
$191,309
117,206
27,674
0.36
0.35

First
Quarter
$127,127
80,119
16,442
0.23
0.23

$
$

Second
Quarter
$146,416
91,726
22,314
0.31
0.30

$
$

Third
Quarter
$ 162,281
100,866
26,362
0.36
0.34

$
$

Fourth
Quarter
$171,172
104,184
23,093
0.31
0.30

$
$

Fiscal
Year
$716,332
384,492
66,302
0.86
0.85

$
$

Fiscal
Year
$606,996
376,895
88,211
1.22
1.16

$
$

Note: Per share amounts for each quarter are computed independently, and, due to the computation
formula, the sum of the four quarters may not equal the year. All share and per share information has
been adjusted to reflect the two-for-one stock split effected in the form of a 100% stock dividend that
was declared on August 10, 2005 and distributed on September 30, 2005.

ITEM 9

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

ITEM 9A CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required
to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and forms and that such
information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required
disclosure.
In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and management is required to
apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of our disclosure controls and procedures as of June 30,
2007. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that
our disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during our most recent
fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal
controls over financial reporting.

ITEM 9B OTHER INFORMATION

None.

- 48 -

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles in the
United States of America. The Company’s internal control over financial reporting includes those
policies and procedures that:

(i)

(ii)

(iii)

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of
the Company are being made only in accordance with
authorizations of management and directors of the Company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as
of June 30, 2007. Management based this assessment on criteria for effective internal control over
financial reporting described in “Internal Control – Integrated Framework” issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an
evaluation of the design of ResMed Inc.’s internal control over financial reporting and testing of the
operational effectiveness of its internal control over financial reporting. Management reviewed the
results of its assessment with the Audit Committee of our Board of Directors.

Based on our assessment and those criteria, management has concluded that the Company did
maintain effective internal control over financial reporting as of June 30, 2007.

KPMG LLP,
independent registered public accounting firm, who audited and reported on the
consolidated financial statements of ResMed, Inc. included in this report, has issued an attestation
report on management’s assessment of internal control over financial reporting.

- 49 -

RESMED INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
ResMed Inc.:

We have audited management’s assessment, included in the accompanying Management’s Report on Internal
Control Over Financial Reporting, that ResMed Inc. maintained effective internal control over financial reporting
as of June 30, 2007, based on criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). ResMed Inc.’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on
management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial
reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, evaluating management’s
assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

limitations,

In our opinion, management’s assessment that ResMed Inc. maintained effective internal control over financial
reporting as of June 30, 2007, is fairly stated, in all material respects, based on criteria established in Internal
Control – Integrated Framework issued by COSO. Also, in our opinion, ResMed Inc. maintained, in all material
respects, effective internal control over financial reporting as of June 30, 2007, based on criteria established in
Internal Control – Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of ResMed Inc. and subsidiaries as of June 30, 2007 and 2006,
and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash
flows for each of the years in the three-year period ended June 30, 2007, and our report dated August 27, 2007
expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

San Diego, California
August 27, 2007

- 50 -

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

PART III

Information required by this Item is herein incorporated by reference from our definitive Proxy
Statement for our November 8, 2007, Annual Meeting of Stockholders, which will be filed with the
Securities and Exchange Commission within 120 days after June 30, 2007.

The Company has filed, as exhibits to this Annual Report on Form 10-K for the year ended June 30,
2007, the certifications of its Chief Executive Officer and Chief Financial Officer required pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

On January 8, 2007, the Company submitted to the New York Stock Exchange the Annual CEO
Certification required pursuant to Section 303A.12(a) of the New York Stock Exchange Listed
Company Manual.

ITEM 11 EXECUTIVE COMPENSATION

Information required by this Item is herein incorporated by reference from our definitive Proxy
Statement for our November 8, 2007, Annual Meeting of Stockholders, which will be filed with the
Securities and Exchange Commission within 120 days after June 30, 2007.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

Information required by this Item is herein incorporated by reference from our definitive Proxy
Statement for our November 8, 2007, Annual Meeting of Stockholders, which will be filed with the
Securities and Exchange Commission within 120 days after June 30, 2007.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No material transactions.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Incorporated by reference to our definitive Proxy Statement for our November 8, 2007, meeting of
stockholders, which will be filed with the Securities and Exchange Commission within 120 days after
June 30, 2007.

PART IV

ITEM 15 EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:

(a)

(b)

3.1

3.2

Consolidated Financial Statements and Schedule – The consolidated financial statements and
schedule of the Company and its consolidated subsidiaries are set forth in the “Index to
Consolidated Financial Statements” under Item 8 of this report.

Exhibit Lists

First Restated Certificate of Incorporation of Registrant, as amended (15)

Third Restated By-laws of Registrant(12)

- 51 -

4.1

4.3

4.4

4.5

10.1

10.2

10.3

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

Form of certificate evidencing shares of Common Stock(1)

Indenture dated as of June 20, 2001, between ResMed Inc. and American Stock Transfer &
Trust Company(5)

Registration Rights Agreement dated as of June 20, 2001, by and between ResMed Inc.,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Banc
Alex Brown Inc., William Blair & Company, L.L.C., Macquarie Bank Limited and UBS
Warburg LLC(5)

Registration Rights Agreement dated May 14, 2002 between ResMed Inc. and Leslie
Hoffman(6)

1995 Stock Option Plan(1)

1997 Equity Participation Plan(3)

Licensing Agreement between the University of Sydney and ResMed Ltd dated May 17,
1991, as amended(1)

Loan Agreement between the Australian Trade Commission and ResMed Ltd dated May 3,
1994(1)

Lease for 10121 Carroll Canyon Road, San Diego CA 92131-1109, USA(4)

Sale and Leaseback Agreements for 97 Waterloo Rd, North Ryde, Australia(5)

Employment Agreement dated May 14, 2002, between Servo Magnetics Inc. and Leslie
Hoffman(6)

Agreement for the purchase of Lot 6001, Norwest Business Park, Baulkham Hills,
Australia(6)

2003 Employee Stock Purchase Plan(7)

Loan Agreement between ResMed Limited and HSBC Bank Australia Limited (11)

Securities Sale Agreement Financiere Ace S.A.S. dated as of May 4, 2005 (11)

First Amended and Restated Loan Agreement, dated as of November 1, 2005, by and
among ResMed Corp., ResMed EAP Holdings Inc. and Union Bank of California, N.A. (8)

Security Agreement, dated as of November 1, 2005, by and between ResMed EAP
Holdings Inc. and Union Bank of California, N.A. (8)

Continuing Guaranty, dated as of November 1, 2005, by and between ResMed Corp. and
ResMed EAP Holdings Inc and Union Bank of California, N.A. (8)

Commercial Promissory Note, dated as of November 1, 2005, made by ResMed Corp. and
ResMed EAP Holdings Inc. (8)

Commercial Promissory Note, dated as of November 1, 2005, made by ResMed Corp. and
ResMed EAP Holdings Inc. (8)

Second Amended and Restated Revolving Loan Agreement, dated as of March 13, 2006,
among ResMed Corp., Motor Technologies Inc., ResMed EAP Holdings Inc. and Union
Bank of California, N.A. (9)

10.19

Syndicated Facility Agreement, dated as of June 8, 2006, by and between ResMed Limited
and HSBC Bank Australia Limited (10)

- 52 -

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

21.1

23.1

31.1

31.2

32.1

Deed of Guarantee and Indemnity, dated as of June 8, 2006, by and among HSBC Bank
Australia Limited, ResMed Limited, ResMed SAS, ResMed GmbH & Co. KG, ResMed
(UK) Limited and Take Air Medical Handels-GmbH (10)

Deed of Guarantee and Indemnity, dated as of June 8, 2006, by and among HSBC Bank
Australia Limited, ResMed Inc., ResMed Corp. and ResMed Limited (10)

Working Capital Agreement, dated as of June 8, 2006, by and among ResMed (UK)
Limited and HSBC Bank plc (10)

Working Capital Agreement, dated as of June 8, 2006, by and among ResMed Limited and
HSBC Bank Australia Limited (10)

ResMed Inc. 2006 Incentive Award Plan (16)

Amendment No. 1 to the ResMed Inc. 2006 Incentive Award Plan (13)

2006 Grant agreement for Board of Directors (15)

2006 Grant agreement for Executive Officers (15)

2006 Grant agreement for Australian Executive Officers (13)

Form of Executive Agreement (14)

Subsidiaries of the Registrant (15)

Independent Registered Public Accounting Firm’s Consent and Report on Schedule (15)

Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of
2002 (15)

Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of
2002 (15)

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (15)

(1) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (No. 33-91094) declared effective on
June 1, 1995.
(2) Incorporated by reference to the Registrant’s Registration Statement on Form 8-A12G filed on April 25, 1997.
(3) Incorporated by reference to the Registrant’s 1997 Proxy Statement.
(4) Incorporated by reference to the Registrant’s Report on Form 10-K dated June 30, 1998.
(5) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2001.
(6) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2002.
(7) Incorporated by reference to the Registrant’s 2003 Definitive Proxy Statement dated October 13, 2007.
(8) Incorporated by reference to the Registrant’s Form 8-K dated November 8, 2005.
(9) Incorporated by reference to the Registrant’s Form 8-K dated March 13, 2006.
(10) Incorporated by reference to the Registrant’s Form 8-K dated June 8, 2006.
(11) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2005.
(12) Incorporated by reference to the Registrant’s Report on Form 8-K dated February 23, 2007.
(13) Incorporated by reference to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2006.
(14) Incorporated by reference to the Registrant’s Report on Form 8-K dated July 9, 2007.
(15) Filed herewith
(16) Incorporated by reference to the Registrant’s Report on Form 8-K dated November 9, 2006.

- 53 -

[THIS PAGE INTENTIONALLY LEFT BLANK]

RESMED INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
ResMed Inc.:

We have audited the accompanying consolidated balance sheets of ResMed Inc. and subsidiaries as of June 30,
2007 and 2006, and the related consolidated statements of income, stockholders’ equity and comprehensive
income, and cash flows for each of the years in the three-year period ended June 30, 2007. In connection with our
audits of the consolidated financial statements, we also have audited financial statement schedule II. These
consolidated financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of ResMed Inc. and subsidiaries as of June 30, 2007 and 2006, and the results of their
operations and their cash flows for each of the years in the three-year period ended June 30, 2007, in conformity
with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, effective July 1, 2005, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of ResMed Inc.’s internal control over financial reporting as of June 30, 2007,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated August 27, 2007, expressed an
unqualified opinion on management’s assessment of, and the effective operation of, internal control over
financial reporting.

/s/ KPMG LLP

San Diego, California
August 27, 2007

F1

RESMED INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2007 and 2006
(In thousands, except share and per share data)

Assets
Current assets:

Cash and cash equivalents
Marketable securities available-for-sale (note 4)
Accounts receivable, net of allowance for doubtful accounts of $4,704 and $4,645 at June 30, 2007 and

$ 257,792
19,950

$ 219,544
-

June 30,
2007

June 30,
2006

2006, respectively
Inventories, net (note 5)
Deferred income taxes (note 14)
Income taxes receivable
Prepaid expenses and other current assets

Total current assets

Non-current assets:

Property, plant and equipment, net of accumulated depreciation of $154,559 and $115,471 at June 30,

2007 and 2006, respectively (note 7)

Goodwill (note 8)
Other intangibles (note 8)
Deferred income taxes (note 14)
Other assets

Total non-current assets

Total assets

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable
Accrued expenses (notes 9 and 20)
Deferred revenue
Income taxes payable
Deferred income taxes (note 14)
Current portion of long-term debt (note 10)

Total current liabilities

Non-current liabilities:
Deferred income taxes (note 14)
Deferred revenue
Long-term debt (note 10)

Total non-current liabilities

Total liabilities

Commitments and contingencies (notes 17, 18 and 19)

Stockholders’ equity: (note 12)
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued
Common stock, $0.004 par value, 200,000,000 shares authorized; issued and outstanding 77,617,450 at
June 30, 2007 and 75,772,316 at June 30, 2006 (excluding 2,304,918 and 2,254,918 shares held as
Treasury stock respectively)

Additional paid-in capital
Retained earnings
Treasury stock, at cost
Accumulated other comprehensive income (note 6)

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial statements.

F2

167,821
157,204
42,109
7,952
15,971

138,147
116,194
27,071
-
9,763

668,799

510,719

310,580
206,778
46,575
9,206
10,104

245,376
195,612
48,897
5,265
7,052

583,243

502,202

$1,252,042

$1,012,921

$

$

53,039
98,324
18,865
3,410
415
28,350

45,045
40,901
15,344
22,841
435
4,869

202,403

129,435

18,297
12,472
87,648

17,642
11,484
116,212

118,417

145,338

320,820

274,773

-

-

-

-

311
421,701
436,954
(43,497)
115,753

303
353,464
370,652
(41,405)
55,134

931,222

738,148

$1,252,042

$1,012,921

RESMED INC. AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended June 30, 2007, 2006 and 2005
(In thousands, except per share data)

Net revenues
Cost of sales (A)
Voluntary product recall expenses (note 20)

Gross profit

Operating expenses:
Selling, general and administrative (A)
Research and development (A)
Donations to research foundations
In-process research and development charge
Amortization of acquired intangible assets
Restructuring expenses (note 11)

Total operating expenses

Income from operations

Other income (expenses):
Interest income (expense), net
Other, net (note 13)

Total other income (expenses), net

Income before income taxes
Income taxes (note 14)

Net income

Basic earnings per share
Diluted earnings per share (note 2-j)

Basic shares outstanding
Diluted shares outstanding

(A) Includes stock-based compensation costs as follows (note 2-r):
Cost of sales
Selling, general and administrative
Research and development

June 30,
2007

June 30,
2006

June 30,
2005

$716,332
272,140
59,700

$606,996
230,101
-

$425,505
150,645
-

384,492

376,895

274,860

237,326
50,106
-
-
6,897
-

200,168
37,216
760
-
6,327
1,124

135,703
30,014
500
5,268
870
5,152

294,329

245,595

177,507

90,163

131,300

97,353

6,477
1,333

7,810

1,320
774

2,094

(808)
81

(727)

97,973
31,671

133,394
45,183

96,626
31,841

$ 66,302

$ 88,211

$ 64,785

0.86
0.85

$
$

1.22
1.16

$
$

0.94
0.91

76,709
78,253

72,307
77,162

68,643
74,942

1,081
14,474
1,950

$

891
12,372
2,042

$

-
-
-

-

$
$

$

Total stock-based compensation costs

$ 17,505

$ 15,305

$

See accompanying notes to consolidated financial statements.

F3

RESMED INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity and Comprehensive Income
Years ended June 30, 2007, 2006 and 2005
(In thousands)

Common Stock
Shares Amount

Additional
Paid-in
Capital

Treasury Stock Retained
Shares Amount
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Total

Comprehensive
Income

Balance, June 30, 2004

69,589

$270

$132,740 (1,772) $(30,440) $217,656

$ 41,273

$361,499

Common stock issued on exercise
of options
Common stock issued on

employee stock purchase plan

Treasury stock purchases
Tax benefit from exercise of

options

Comprehensive income:
Net income
Other comprehensive income:
Foreign currency translation

adjustments

Unrealized losses on marketable

securities

Comprehensive income/(loss)

2,634

134

9

2
(1)

36,766

2,649

7,710

(482)

(10,965)

36,775

2,651
(10,966)

7,710

64,785

64,785

$ 64,785

11,617

11,617

11,617

(6)

(6)

(6)

$ 76,396

Balance, June 30, 2005

72,357

$280

$179,865 (2,254) $(41,405) $282,441

$ 52,884

$474,065

1,805

126

7

1

30,790

3,755

10,107

3,738

15

113,235

15,712

Common stock issued on exercise
of options (note 12)
Common stock issued on

employee stock purchase plan
(note 12)

Tax benefit from stock options

exercised

Common stock issued on

conversion of convertible
subordinated notes
FAS123(R) stock-based
compensation costs

Comprehensive income (note 6):
Net income
Other comprehensive income:
Foreign currency translation

adjustments

Comprehensive income/(loss)

30,797

3,756

10,107

113,250

15,712

88,211

88,211

$ 88,211

2,250

2,250

2,250

$ 90,461

Balance, June 30, 2006

78,026

$303

$353,464 (2,254) $(41,405) $370,652

$ 55,134

$738,148

Common stock issued on exercise
of options (note 12)
Common stock issued on

employee stock purchase plan
(note 12)

Treasury stock purchases
Tax benefit from exercise of

options

FAS123(R) stock-based
compensation costs
Comprehensive income:
Net income
Other comprehensive income:
Foreign currency translation

adjustments

Comprehensive income/(loss)

1,747

148

7

1

32,672

5,388

12,682

17,495

(50)

(2,092)

66,302

32,679

5,389
(2,092)

12,682

17,495

66,302

66,302

60,619

60,619

60,619

$126,921

Balance, June 30, 2007

79,921

$311

$421,701 (2,304) $(43,497) $436,954

$115,753

$931,222

See accompanying notes to consolidated financial statements.

F4

RESMED INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended June 30, 2007, 2006 and 2005
(In thousands)

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Voluntary product recall expenses
Depreciation and amortization
Provision for warranties
Deferred income taxes
Foreign currency options revaluation
Amortization of deferred borrowing costs
Stock-based compensation costs
Tax benefit from stock options exercised
Impairment of cost-method investment
Release of profit on sale of building
Purchased in-process research and development write-off

Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net
Inventories, net
Prepaid expenses and other current assets
Accounts payable, accrued expenses, income taxes and other liabilities

June 30,
2007

June 30,
2006

June 30,
2005

$ 66,302

$ 88,211

$ 64,785

59,700
47,948
1,542
(18,900)
(1,091)
193
17,505
(12,398)
-
-
-

(25,612)
(30,467)
(12,035)
(1,581)

-
40,970
1,890
(11,915)
3,796
649
15,305
(9,753)
1,156
-
-

(28,287)
(25,041)
(2,432)
24,479

-
28,292
501
(7,997)
293
834
-
-
-
(2,371)
5,268

(27,996)
(22,562)
558
31,474

Net cash provided by operating activities

91,106

99,028

71,079

Cash flows from investing activities:
Purchases of property, plant and equipment
Capitalized interest
Purchases of marketable securities—available for sale
Proceeds from sale of marketable securities—available for sale
Patent registration costs
Business acquisitions, net of cash acquired of $Nil ($262 in 2006 and $12,982 in 2005)
Purchases of non-trading investments

Net cash used in investing activities

Cash flows from financing activities:
Proceeds from issuance of common stock, net
Repayment of assumed borrowings from acquisitions
Repayment of borrowings
Proceeds from borrowings, net of borrowing costs
Tax benefit from stock option exercises
Purchases of treasury stock

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds
Interest paid, net of capitalized interest

Fair value of assets acquired in acquisitions
Liabilities assumed
Goodwill on acquisition
Acquisition costs accrued
Acquisition costs paid

Cash paid for acquisition, including acquisition costs

(77,556)
(412)
(21,950)
2,000
(3,965)
(1,912)
(1,622)

(102,749)
(1,100)
(2,000)
2,002
(3,115)
(10,526)
(2,386)

(39,691)
-
(401,546)
413,576
(2,819)
(54,425)
(1,873)

(105,417)

(119,874)

(86,778)

38,260
-
(20,060)
9,590
12,398
(2,092)

34,389
(2,195)
(46,308)
102,128
9,753
-

39,426
(65,764)
-
62,500
-
(10,966)

38,096

97,767

25,196

14,463

438

3,781

38,248
219,544

77,359
142,185

13,278
128,907

$ 257,792

$ 219,544

$ 142,185

$ 65,643
5,426

$ 44,873
4,566

$ 24,747
4,530

$

-
-
1,588
324
-

$ 11,517
(6,816)
5,553
(1,279)
1,813

$ 89,188
(99,270)
78,949
(1,726)
266

$

1,912

$ 10,788

$ 67,407

See accompanying notes to consolidated financial statements.

F5

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(1) Organization and Basis of Presentation

ResMed Inc. (referred to herein as “we”, “us”, “our” or the “Company”) is a Delaware corporation formed
in March 1994 as a holding company for the ResMed Group. Through our subsidiaries, we design,
manufacture and market equipment for the diagnosis and treatment of sleep-disordered breathing and other
respiratory disorders, including obstructive sleep apnea. Our manufacturing operations are located in
Australia, Germany, France and the United States of America. Major distribution and sales sites are located
in the United States of America, Germany, France, the United Kingdom, Switzerland, Australia and
Sweden.

All share and per share information in the notes has been adjusted to reflect the two-for-one stock split
effected in the form of a 100% stock dividend that was declared on August 10, 2005 and distributed on
September 30, 2005.

(2) Summary of Significant Accounting Policies

(a) Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned
inter-company transactions and balances have been eliminated in
subsidiaries. All significant
consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management estimates and assumptions that affect amounts
reported in the financial statements and accompanying notes. Actual results could differ from
management’s estimates.

(b) Revenue Recognition

Revenue on product sales is generally recorded upon shipment, at which time title transfers to the
customer. Revenue on product sales which require customer acceptance is not recorded until
acceptance is received. Royalty revenue from license agreements is recorded when earned. Service
revenue received in advance from service contracts is initially deferred and recognized ratably over the
life of the service contract. Revenue received in advance from rental unit contracts is initially deferred
and recognized ratably over the life of the rental contract. Revenue from sale of marketing or
distribution rights is initially deferred and recognized ratably as revenue over the life of the contract.
Freight charges billed to customers are included in revenue. All shipping and handling related expenses
are charged to cost of sales.

We do not recognize revenues to the extent that we offer a right of return or other recourse with respect
to the sale of our products, other than returns for product defects or other warranty claims, nor do we
recognize revenues if we offer variable sale prices for subsequent events or activities. However, as part
of our sales processes we may provide upfront discounts for large orders, one time special pricing to
support new product introductions, sales rebates for centralized purchasing entities or price-breaks for
regular order volumes. The costs of all such programs are recorded as an adjustment to revenue. In our
U.S. sales activities we use a number of manufacturer representatives to sell our products. These
representatives are paid a direct commission on sales and act as an integral component of our U.S. sales
force. We do not sell our products to these representatives and do not recognize revenue on such
shipments. Our products are predominantly therapy-based equipment and require no installation. As
such, we have no significant installation obligations.

F6

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

(c) Cash and Cash Equivalents

Cash equivalents include certificates of deposit, commercial paper and other highly liquid investments
and are stated at cost, which approximates market. Investments with original maturities of 90 days or
less are considered to be cash equivalents for purposes of the consolidated statements of cash flows.

(d)

Inventories

Inventories are stated at the lower of cost, determined principally by the first-in, first-out method, or
net realizable value. We review and provide for any product obsolescence in our manufacturing and
distribution operations with assessments of individual products and components (based on estimated
future usage and sales) being performed throughout the year.

(e) Property, Plant and Equipment

Property, plant and equipment, including rental equipment, is recorded at cost. Depreciation expense is
computed using the straight–line method over the estimated useful lives of the assets, generally two to
ten years except for buildings which are depreciated over an estimated useful life of 40 years.
Maintenance and repairs are charged to expense as incurred.

We capitalize interest in connection with the construction of facilities. Actual construction costs
incurred relating to facilities under active development qualify for interest capitalization. Interest
capitalization ceases when the construction of a facility is complete and available for use. During the
years ended June 30, 2007 and 2006, we capitalized $0.4 million and $1.1 million, respectively, of
interest relating to such construction costs.

(f)

Intangible Assets

The registration costs for new patents are capitalized and amortized over the estimated useful life of the
patent, generally five years. In the event of a patent being superseded, the unamortized costs are written
off immediately.

Other intangible assets are amortized on a straight-line basis over their estimated useful lives, which
range from seven to nine years. We evaluate the recoverability of intangible assets periodically and
take into account events or circumstances that warrant revised estimates of useful lives or that indicate
that impairment exists. All of our intangible assets are subject to amortization. No impairment of
intangible assets has been identified during any of the periods presented.

(g) Goodwill

We conducted our annual review for goodwill impairment during the final quarter of fiscal 2007. In
conducting our review of goodwill impairment, we identified reporting units, being components of our
operating segment, as each of the entities acquired and giving rise to the goodwill. The fair value for
each reporting unit was determined based on estimated discounted cash flows. Our goodwill
impairment review involved a two-step process as follows:

Step 1- Compare the fair value for each reporting unit to its carrying value, including goodwill. For
each reporting unit where the carrying value, including goodwill, exceeds the reporting unit’s
fair value, move on to step 2. If a reporting unit’s fair value exceeds the carrying value, no
further work is performed and no impairment charge is necessary.

F7

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

Step 2- Allocate the fair value of the reporting unit to its identifiable tangible and non-goodwill
intangible assets and liabilities. This will derive an implied fair value for the goodwill. Then,
compare the implied fair value of the reporting unit’s goodwill with the carrying amount of
the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill is
greater than the implied fair value of its goodwill, an impairment loss must be recognized for
the excess.

The results of the review indicated that no impaired goodwill exists.

(h) Foreign Currency

The consolidated financial statements of our non–U.S. subsidiaries, whose functional currencies are
other than U.S. dollars, are translated into U.S. dollars for financial reporting purposes. Assets and
liabilities of non–U.S. subsidiaries whose functional currencies are other than the U.S. dollar are
translated at period end exchange rates, and revenue and expense transactions are translated at average
exchange rates for
the period. Cumulative translation adjustments are recognized as part of
comprehensive income, as detailed in Note 6, and are included in accumulated other comprehensive
income in the consolidated balance sheets until such time as the subsidiary is sold or substantially or
completely liquidated. Gains and losses on transactions denominated in other than the functional
currency of the entity are reflected in operations.

(i) Research and Development

All research and development costs are expensed in the period incurred.

(j) Earnings per Share

We calculate earnings per share in accordance with Statement of Financial Accounting Standards
(“SFAS”) No. 128, “Earnings per Share” (“SFAS 128”), as amended by SFAS No. 123(R), “Share
Based Payments” (“SFAS 123(R)”). SFAS 128 requires the presentation of “basic” earnings per share
and “diluted” earnings per share. Basic earnings per share is computed by dividing the net income
available to common stockholders by the weighted average number of shares of common stock
outstanding. For purposes of calculating diluted earnings per share, net income is adjusted for the
after-tax amount of interest associated with convertible debt, and the denominator includes both the
weighted average number of shares of common stock outstanding and the number of dilutive common
stock equivalents such as stock options and convertible notes.

The weighted average shares used to calculate basic earnings per share were 76,709,000, 72,307,000
and 68,643,000 for the years ended June 30, 2007, 2006 and 2005, respectively. The difference
between basic earnings per share and diluted earnings per share is attributable to the impact of
outstanding stock options during the periods presented and the assumed conversion of our convertible
notes. Stock options had the effect of increasing the number of shares used in the calculation (by
application of the treasury stock method) by 1,544,000, 2,346,000 and 2,561,000 for the years ended
June 30, 2007, 2006 and 2005, respectively. The assumed conversion of our convertible notes had the
effect of increasing the number of shares used in the calculation by Nil, 2,509,000 and 3,738,000 for
the years ended June 30, 2007, 2006 and 2005, respectively. During the year ended June 30, 2006 all of
our convertible notes were converted to common stock.

F8

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

Stock options of 3,164,000, 1,103,000 and 568,000 for the years ended June 30, 2007, 2006 and 2005
respectively, were not included in the computation of diluted earnings per share as the effect of
exercising these options would have been anti-dilutive.

Basic and diluted earnings per share for the years ended June 30, 2007, 2006 and 2005 are calculated as
follows (in thousands except per share data):

Numerator:
Net income
Adjustment for interest and deferred borrowing costs,
net of income tax effect (1)

2007

2006

2005

$66,302

$88,211

$64,785

-

1,660

3,285

Net income, used in calculating diluted earnings per share

$66,302

$89,871

$68,070

Denominator:
Basic weighted-average common shares outstanding

Effect of dilutive securities:
Stock options
Convertible subordinated notes

Diluted potential common shares

Diluted weighted average shares

Basic earnings per share
Diluted earnings per share(1)

76,709

72,307

68,643

1,544
-

2,346
2,509

2,561
3,738

1,544

4,855

6,299

78,253

77,162

74,942

$
$

0.86
0.85

$
$

1.22
1.16

$
$

0.94
0.91

(1) Diluted earnings per share has been calculated after adjusting the numerator (net income) by $Nil,
$1,660,000 and $3,285,000 for the years ended June 30, 2007, 2006 and 2005, respectively, for the
effect of assumed conversion of our convertible notes, and the related reduction in interest expense,
net of tax.

(k) Financial Instruments

The carrying value of financial instruments, such as cash and cash equivalents, marketable securities
available-for-sale, accounts receivable and accounts payable, approximate their fair value because of
their short-term nature. Foreign currency option contracts are marked to market and therefore reflect
their fair value. We do not hold or issue financial instruments for trading purposes.

The fair value of financial instruments is defined as the amount at which the instrument could be
exchanged in a current transaction between willing parties.

(l) Foreign Exchange Risk Management

We enter into various types of foreign exchange contracts in managing our foreign exchange risk,
instruments encompassing forward exchange contracts and foreign
including derivative financial
currency options.

F9

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

The purpose of our foreign currency hedging activities is to protect us from adverse exchange rate
fluctuations with respect to net cash movements resulting from the sales of products to foreign
customers and Australian manufacturing activities. We enter into foreign currency option contracts to
hedge anticipated sales and manufacturing costs, principally denominated in Australian dollars and
Euros. The terms of such foreign currency option contracts generally do not exceed three years.

Our foreign currency derivatives portfolio represents a cash flow hedge program against the net cash
flow of our international manufacturing operations. We have determined our hedge program to be a
non-effective hedge as defined under SFAS 133. The foreign currency derivatives portfolio is recorded
in the consolidated balance sheets at fair value and included in other assets or other liabilities.

All movements in the fair value of the foreign currency derivatives are recorded within other income,
net in our consolidated statements of income.

We are exposed to credit-related losses in the event of non-performance by counter parties to financial
instruments. The credit exposure of foreign exchange options at June 30, 2007 and June 30, 2006 was
$3.8 million and $1.2 million, respectively, which represents the positive fair value of options held by
us.

We held foreign currency option contracts with notional amounts totaling $139.3 million and $193.4
million at June 30, 2007 and 2006, respectively, to hedge foreign currency items. These contracts
mature at various dates before December 2008.

(m) Income Taxes

We account for income taxes under the asset and liability method. We recognize deferred tax assets and
liabilities for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. 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. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the
enactment date.

(n) Marketable Securities

Management determines the appropriate classification of our investments in debt and equity securities
at the time of purchase and re-evaluates such determination at each balance sheet date. Debt securities
for which we do not have the intent or ability to hold to maturity are classified as available-for-sale.
Securities available-for-sale are carried at fair value, with the unrealized gains and losses, net of tax,
reported in accumulated other comprehensive income.

At June 30, 2007 and 2006, the investments in debt securities were classified on the accompanying
consolidated balance sheet as marketable securities-available-for-sale. These investments are
diversified among high credit quality securities in accordance with our investment policy.

(o) Warranty

Estimated future warranty costs related to certain products are charged to operations in the period in
which the related revenue is recognized. The liability for warranty costs are included in accrued
expenses in our consolidated balance sheets.

F10

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

Changes in the liability for product warranty for the year ended June 30, 2007 are as follows (in
thousands):

Balance at July 1, 2006
Warranty accruals for the year ended June 30, 2007
Warranty costs incurred for the year ended June 30, 2007
Foreign currency translation adjustments

Balance at June 30, 2007

$ 4,653
2,755
(1,214)
846

$ 7,040

(p)

Impairment of Long-Lived Assets

We periodically evaluate 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 recovered. 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 assets exceeds the fair value of the assets. Assets to be disposed of
are reported at the lower of the carrying amount or fair value less costs to sell.

(q) Cost-Method Investments

The aggregate carrying amount of our cost-method investments at June 30, 2007 and June 30, 2006
was $4.6 million and $4.1 million, respectively. We review the carrying value of these investments at
each balance sheet date. In fiscal 2007 and 2006, we recognized $Nil and $1.2 million, respectively, of
impairment losses related to our cost-method investments, which include investments in privately held
service companies, research companies and public companies. The expense associated with this
impairment has been included in the other income (expense) line within the consolidated statements of
income.

At June 30, 2007, we performed an analysis of the carrying value of these investments and an
unrealized loss of $1.7 million was identified in relation to an investment in a publicly listed company.
The severity of the impairment (fair value is approximately 49% less than the cost) and the duration of
the impairment (less than 18 months) correlate with a devaluation in the actual share price. As the
investee is a publicly listed entity its share price will fluctuate with general market movements,
however because we have no intention to sell this investment, and as the investee is involved in the
growing sleep-disordered breathing industry we do not consider this investment to be other-than-
temporary impaired at June 30, 2007. Except for this unrealized loss, we have determined that the fair
values of our other investments exceeded their carrying values.

(r) Stock-based Employee Compensation

We have granted stock options to personnel, including officers and directors, under our 1995 Option
Plan (the “1995 Plan”), our 1997 Equity Participation Plan (the “1997 Plan”) and our 2006 Incentive
Award Plan, as amended (the “2006 Plan” and together with the 1995 Plan and the 1997 Plan, the
“Plans”). These options have expiration dates of seven or ten years from the date of grant and vest over

F11

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

three or four years. We granted these options with the exercise price equal to the market value as
determined at the date of grant. We have also offered to our personnel, including officers, the right to
purchase shares of our common stock at a discount pursuant to our employee stock purchase plan
(“ESPP”).

(r) Stock-based Employee Compensation

Prior to July 1, 2005 we applied APB Opinion No. 25, “Accounting for Stock Issued to Employees”
and related Interpretations, in accounting for our equity plans. For periods prior to July 1, 2005, we
complied with the disclosure only provisions of SFAS No. 123, “Accounting for Stock-Based
Compensation”, or SFAS No. 123. Results for periods before July 1, 2005, have not been restated to
reflect, and do not include the impact of SFAS No. 123(R) as all options granted under those plans had
an exercise price equal to the market value of the underlying common stock on the date of grant (or
within permitted discounted prices as it pertains to the ESPP). The following table illustrates the effect
on net income and earnings per share for the year ended June 30, 2005, if we had applied the fair value
recognition provisions of SFAS No. 123(R) for stock option grants using the fair value based method
of accounting:

In thousands, except per share data

Net income, as reported

Deduct: Stock-based employee compensation expense determined under fair

value based method, net of related tax effects

Pro forma net income

Adjustment for interest and deferred borrowing costs, net of related tax effects

Pro forma net income used in calculating diluted earnings per share

Earnings per share:

Basic - as reported
Basic - pro forma
Diluted - as reported
Diluted - pro forma

2005

$ 64,785

(10,323)

$ 54,462
3,285

$ 57,747

$
$
$
$

0.94
0.80
0.91
0.77

F12

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(2) Summary of Significant Accounting Policies, Continued

As of July 1, 2005, we adopted SFAS No.123(R) using the modified prospective method, which
requires measurement of compensation expense of all stock-based awards at fair value on the date of
grant and recognition of compensation expense over the service period for awards expected to vest.
Under this method, the provisions of SFAS No.123(R) apply to all awards granted or modified after the
date of adoption. In addition, the unrecognized expense of awards not yet vested at the date of
adoption, determined under the original provisions of SFAS No.123 shall be recognized in net income
in the periods after adoption. The fair value of stock options is determined using the Black-Scholes
valuation model. Such value is recognized as expense over the service period, using the graded-
attribution method for stock-based awards granted prior to July 1, 2005 and the straight-line method for
stock-based awards granted after July 1, 2005. The fair value of stock options granted under our stock
option plans and purchase rights granted under our ESPP is estimated on the date of the grant using the
Black-Scholes option-pricing model with the following assumptions:

Stock Options:

Weighted average grant date fair value
Weighted average risk-free interest rate
Expected option life in years
Volatility

ESPP Purchase rights:

Weighted average risk-free interest rate
Expected option life
Volatility

2007

Years ended June 30
2006

2005

$

14.53
4.3-5.1%
4.0-5.2
26-30%

$

12.75
3.9-4.5%
3.9-5.2
28-30%

$

8.49
4.0%
3.5-4.6
31%

4.9-5.1%
6 months
30-41%

3.2-4.9%
6 months
29-41%

2.3%
6 months
31-38%

Expected volatilities are based on a combination of historical volatilities of our stock and implied
volatilities from traded options of our stock. The expected life represents the weighted average period
of time that options granted are expected to be outstanding giving consideration to vesting schedules
and our historical exercise patterns. The risk-free rate is based on the U.S. Treasury yield curve in
effect at the time of grant for periods corresponding with the expected life of the option.

(3) New Accounting Pronouncements

the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes – an
In June 2006,
interpretation of FASB Statement No. 109” and subsequently in May 2007 issued FSP FIN 48-1,
“Definition of Settlement in FASB Interpretation No. 48” (“FIN 48”), which clarifies the accounting for
uncertainty in income taxes recognized in the financial statements in accordance with FASB Statement
No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken, or expected to be
taken in a tax return. FIN 48 requires recognition of tax benefits that satisfy a greater than 50% probability
threshold and also provides guidance on de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for us beginning July 1, 2007 and we are
currently assessing the potential impact that the adoption of this Interpretation will have on our financial
statements.

In September 2006, the FASB issued FASB No. 157, “Fair Value Measurements” (“FASB 157”), which
defines fair value, establishes a framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements. FASB 157 is effective for financial

F13

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(3) New Accounting Pronouncements, Continued

statements issued for fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. We are currently assessing the potential impact that the adoption of this standard will have on
our financial statements.

During the year ended June 30, 2007 we adopted Staff Accounting Bulletin (“SAB”) No. 108, “Considering
the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements” (“SAB 108”).
SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a
balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect
transition adjustment. The adoption of SAB 108 did not have a material impact on our financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 gives us the irrevocable option to carry many
financial assets and liabilities at fair values, with changes in fair value recognized in earnings. SFAS
No. 159 is effective for us beginning July 1, 2008, although early adoption is permitted. We are currently
assessing the potential impact, if any, should we elect the fair value option, that adoption of SFAS No. 159
will have on our financial statements.

(4) Marketable securities

The estimated fair value of marketable securities available for sale as of June 30, 2007 and 2006 was $20.0
million and $Nil, respectively. At June 30, 2007 contractual maturities of all marketable securities-
available-for-sale were due less than one year. Expected maturities may differ from contractual maturities
because the issuers of the securities may have the right to prepay obligations without prepayment penalties

(5)

Inventories

Inventories, net were comprised of the following as of June 30, 2007 and 2006 (in thousands):

Raw materials
Work in progress
Finished goods

2007

2006

$ 68,911
1,965
86,328

$ 41,979
3,520
70,695

$157,204

$116,194

(6) Comprehensive Income

The components of comprehensive income, net of tax, were as follows (in thousands):

Net income
Foreign currency translation gains

Comprehensive income

2007

2006

$ 66,302
60,619

$88,211
2,250

$126,921

$90,461

We do not provide for U.S. income taxes on foreign currency translation adjustments since we do not
provide for such taxes on undistributed earnings of foreign subsidiaries.

F14

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(7) Property, Plant and Equipment

Property, plant and equipment is comprised of the following as of June 30, 2007 and 2006 (in thousands):

Machinery and equipment
Computer equipment
Furniture and fixtures
Vehicles
Clinical, demonstration and rental equipment
Leasehold improvements
Land
Buildings
Construction in progress

Accumulated depreciation and amortization

2007
$ 66,093
73,114
27,865
2,985
52,128
17,635
61,503
152,691
11,125

2006
$ 51,854
52,277
21,572
2,795
40,615
11,604
55,946
77,474
46,710

465,139
(154,559)

360,847
(115,471)

$ 310,580

$ 245,376

(8) Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the year ended June 30, 2007, were as follows:

(In thousands)
Balance at July 1, 2006
Foreign currency translation adjustments
Payment of earn-out relating to PolarMed
Payment of earn-out relating to Hoefner
Acquisition of Western Medical Marketing

Balance at June 30, 2007

2007
$195,612
9,578
1,000
331
257

$206,778

Patents and other intangibles is comprised of the following as of June 30, 2007 and June 30, 2006:

(In thousands)

Developed/core product technology
Accumulated amortization

June 30,
2007

June 30,
2006

$ 33,187
(10,028)

$31,336
(4,992)

Developed/core product technology, net of accumulated amortization

23,159

26,344

Trade names
Accumulated amortization

Trade names, net of accumulated amortization

Customer relationships
Accumulated amortization

Customer relationships, net of accumulated amortization

Patents
Accumulated amortization

Patents, net of accumulated amortization

1,761
(531)

1,663
(265)

1,230

1,398

17,685
(4,629)

16,362
(2,094)

13,056

14,268

22,683
(13,553)

16,151
(9,264)

9,130

6,887

Patents and other intangibles, net of accumulated amortization

$ 46,575

$48,897

F15

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(8) Goodwill and Other Intangible Assets, Continued

Intangible assets consist of patents, customer relationships,
trade names and developed/core product
technology and are amortized over the estimated useful life of the assets, generally between five and nine
years. There are no expected residual values related to these intangible assets.

In fiscal year 2005, as part of the acquisition of Saime, we recognized an intangible asset with respect to
developed/core product technology. Specifically, this technology related to the design and architecture of
the hardware and algorithms that formed part of Saime’s ventilation products and is the subject of patents
and other intellectual property protections. This technology is separable from goodwill as it is capable of
being sold, transferred or licensed. This represents proprietary know-how predominantly associated with the
following portfolio of products that were technologically feasible at the date of acquisition:

(i) Elisee Series: Combines all conventional ventilation modes and monitoring functions; and

(iii) VS Series (including Serena, Ultra and Integra): A new generation of ventilators using new blower

technology.

Both of these series of products continue to generate revenue which is consistent with the original
expectations. Although no assurance can be given that the underlying assumptions used to value the
in the
acquired developed/core product
assumptions used and, as a result, the net return of the Saime acquisition.

transpire as estimated, we remain confident

technology will

Amortization expense related to identifiable intangible assets, including patents, for the year ended June 30,
2007 was $9.7 million. Estimated annual amortization expense for the years ending June 30, 2008 through
including the effect of the Resprecare, Hoefner, Saime, Pulmomed and PolarMed
June 30, 2012,
acquisitions is shown below (in thousands):

Fiscal Year

2008
2009
2010
2011
2012

(9) Accrued Expenses

Accrued expenses at June 30, 2007 and 2006 consist of the following (in thousands):

Product warranties
Consulting and professional fees
Value added taxes and other taxes due
Employee related costs
Accrued interest
Marketing and promotional programs
Restructuring
Customer advance
Voluntary product recall
Other

Refer to Note 20 for further details on the voluntary product recall expenses.

F16

Amortization expense

$10,088
9,637
9,001
8,363
7,531

2007

2006

$ 7,040
3,764
8,212
23,942
235
3,828
48
1,168
45,098
4,989

$ 4,653
2,851
3,867
20,804
868
3,024
138
1,102
-
3,594

$98,324

$40,901

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(10) Long-term Debt

Long-term debt at June 30, 2007 and 2006 consists of the following (in thousands):

Long-term loan
Capital lease

Current portion of long-term debt

Long-term loan
Capital lease

Non-current portion of long-term debt

Convertible Subordinated Notes

June 30, 2007

June 30, 2006

$28,272
78

$

4,796
73

$28,350

$

4,869

$87,162
486

$115,644
568

$87,648

$116,212

During the year ended June 30, 2006 and pursuant to the Indenture dated June 20, 2001 between us and
American Stock Transfer & Trust Company, as trustee, holders of all of the 4% Convertible Subordinated
Notes (“the Notes”) due 2006 converted the Notes into an aggregate of 3,737,593 shares of our common
stock, par value $0.004. The Notes were converted into 33 shares of our common stock for each $1,000
principal amount of the Notes, at a conversion price of $30.30 per share. No payment was made for accrued
interest on the Notes surrendered for conversion and the dilutive impact of these conversions has been
reflected in the reported earnings per share.

Previous to the conversion, on January 5, 2006, we had exercised our right to call for an early redemption of
all of the Notes, which at that time had an outstanding balance of $113.25 million. We provided notice to
the trustee and the holders of the Notes that we were to redeem the Notes on March 3, 2006 at a redemption
price of approximately $1,008 per $1,000 principal amount of Notes, or 100.8% of the principal amount
thereof plus accrued and unpaid interest to the redemption date. However, as noted above, holders of all of
the Notes exercised their option to convert the Notes into our common stock.

Revolving Facility

On March 13, 2006, our wholly-owned subsidiaries ResMed Corp., Servo Magnetics Inc. and ResMed EAP
Holdings Inc. entered into a Second Amended and Restated Revolving Loan Agreement with Union Bank of
California, N.A. as administrative agent for the Lenders (the “Loan Agreement”), that provides for a
revolving loan of up to $75 million. Draws under the revolving loan must be made before March 1, 2011, at
which time all unpaid principal and interest must be repaid. The outstanding principal amount due under the
loan will bear interest at a rate equal to LIBOR plus 0.75% to 1.00% (depending on the applicable leverage
ratio). At June 30, 2007 there were no amounts outstanding under the Loan Agreement.

The obligations of ResMed Corp., Servo Magnetics Inc. and ResMed EAP Holdings Inc. under the Loan
Agreement are secured by substantially all of the personal property of each of ResMed Corp., Servo
Magnetics Inc. and ResMed EAP Holdings Inc., and are guaranteed by ResMed Inc. under an Amended and
Restated Continuing Guaranty and Pledge Agreement, which guaranty is secured by a pledge of the equity
interests in ResMed Corp., Servo Magnetics Inc. and ResMed EAP Holdings Inc. held by ResMed Inc. The
Loan Agreement also contains customary covenants, including certain financial covenants and an obligation
that ResMed Inc. maintain certain financial ratios, including a maximum ratio of total debt to EBITDA (as
defined in the Loan Agreement), a fixed charge coverage ratio, a minimum tangible net worth, and a
minimum ResMed Corp., Servo Magnetics Inc. and ResMed EAP Holdings Inc. EBITDA and liquidity. The

F17

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(10) Long-term Debt, Continued

entire principal amount of the Loan and any accrued but unpaid interest may be declared immediately due
and payable in the event of the occurrence of an event of default as defined in the Loan Agreement. Events
of default include, among other items, failure to make payments when due, the occurrence of a material
default in the performance of any covenants in the Loan Agreement or related document or a 35% or more
change in control of ResMed Inc., ResMed Corp., Servo Magnetics Inc. or ResMed EAP Holdings Inc. At
June 30, 2007, we were in compliance with our debt covenants.

Syndicated Facility

On June 8, 2006, our wholly-owned Australian subsidiary, ResMed Limited, entered into a Syndicated
Facility Agreement with HSBC Bank Australia Limited as original financier, facility agent and security
trustee, that provides for a loan in three tranches.

Tranche A is a EUR 50 million term loan facility that refinances all amounts outstanding under a previous
syndicated facility agreement dated May 16, 2005 between ResMed Limited and HSBC Bank Australia
Limited, to fund the obligations of our wholly owned French subsidiary, ResMed SAS, under its agreement
to acquire Saime SA. Tranche A bears interest at a rate equal to LIBOR for deposits denominated in EUR
plus a margin of 0.80% or 0.90%, depending on the ratio of the total debt to EBITDA of ResMed Inc. and
its subsidiaries (the “ResMed Group”) for the most recently completed fiscal year for the applicable interest
period. Payments of principal must be made to reduce the total outstanding principal amount of Tranche A
to EUR 44.5 million on June 30, 2007, EUR 37.75 million on June 30, 2008, EUR 27.5 million on June 30,
2009, EUR 15 million on December 31, 2009, and the entire outstanding principal amount must be repaid in
full on June 8, 2011. At June 30, 2007, the Tranche A facility loan had an amount outstanding of $65.3
million.

Tranche B is a USD 15 million term loan facility that may only be used for the purpose of financing capital
expenditures and other asset acquisitions by the ResMed Group. Tranche B bears interest at a rate equal to
LIBOR for deposits denominated in EUR, Australian dollars, USD or Sterling plus a margin of 0.80% or
0.90%, depending on the ratio of the total debt to EBITDA of the ResMed Group for the most recently
completed fiscal year for the applicable interest period. The entire principal amount must be repaid in full on
June 8, 2011. At June 30, 2007, the Tranche B facility loan had an amount outstanding of $6.0 million.

Tranche C is a USD 60 million term loan facility that may only be used for the purpose of the payment by
ResMed Limited of a dividend to ResMed Holdings Limited, which will ultimately be paid to ResMed Inc.
Tranche C bears interest at a rate equal to LIBOR for deposits denominated in EUR, Australian dollars or
USD plus a margin of 0.70% or 0.80%, depending on the ratio of the total debt to EBITDA of the ResMed
Group for the most recently completed fiscal year for the applicable interest period. Payments of principal
must be made to reduce the total outstanding principal amount of Tranche C to USD 30 million on
December 31, 2007 and the entire outstanding principal amount must be repaid in full by June 8, 2009. At
June 30, 2007, the Tranche C facility loan had an amount outstanding of $40.1 million.

Simultaneous with the Syndicated Facility Agreement, ResMed Limited entered into a working capital
agreement with HSBC Bank Australia Limited for revolving, letter of credit and overdraft facilities up to a
total commitment of 6.5 million Australian dollars for one year, and ResMed (UK) Limited entered into a
working capital agreement with HSBC Bank plc for a revolving cash advance facility up to a total
commitment of 3 million Sterling for one year. At June 30, 2007, there was an amount of USD 4.0 million
outstanding under these working capital agreements.

The loans under the Syndicated Facility Agreement are secured by a pledge of one hundred percent of the
shares of ResMed Inc.’s subsidiary, Saime SAS, pursuant to a Pledge Agreement. The Syndicated Facility

F18

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(10) Long-term Debt, Continued

Agreement also contains customary covenants, including certain financial covenants and an obligation that
ResMed Limited maintain certain financial ratios,
including a minimum debt service cover ratio, a
maximum ratio of total debt to EBITDA and a minimum tangible net worth. The entire principal amount of
the loan and any accrued but unpaid interest may be declared immediately due and payable in the event of
the occurrence of an event of default as defined in the Syndicated Facility Agreement. Events of default
include, among other items, failure to make payments when due, breaches of representations, warranties or
covenants, the occurrence of certain insolvency events, the occurrence of an event or change which could
have a material adverse effect on ResMed Limited and its subsidiaries, and if ResMed Inc. ceases to control
ResMed Limited, ResMed Corp., ResMed SAS, ResMed GmbH & Co. KG, ResMed (UK) Limited, Take
Air Medical Handels-GmbH or Saime SAS.

The obligations of ResMed Limited under the loan are subject to two guarantee and indemnity agreements,
one on behalf of ResMed Inc. and its U.S. subsidiary, ResMed Corp., and another on behalf of ResMed’s
international subsidiaries, ResMed SAS (other than Tranche C), ResMed GmbH & Co. KG, ResMed (UK)
Limited and Take Air Medical Handels-GmbH. At June 30, 2007, we were in compliance with our debt
covenants.

Capital Lease

As part of the acquisition of Saime we assumed a capital lease over land and buildings. This lease contains
an option to purchase the property, for nominal consideration, at the end of the lease term in September
2014.

Details of contractual debt maturities at June 30, 2007 are as follows (in thousands):

Total

2008

Payments Due by Period
2010

2011

2009

Thereafter

Long-Term Debt
Capital Leases

Total

$115,434
564

$28,272
78

$43,885
78

$16,933
78

$20,319
78

$6,025
252

$115,998

$28,350

$43,963

$17,011

$20,397

$6,277

(11) Restructuring Expenses

There were no restructuring expenses incurred during the year ended June 30, 2007 compared to $1.1
million incurred during the year ended June 30, 2006. The prior year restructuring expenses (predominantly
one-time termination benefits) were associated with the integration of the separate operations of ResMed
Germany and MAP into a single operating unit. We have substantially completed the relocation of our
ResMed Germany operation (previously located in Moenchengladbach) to Munich and integration of the
back office functions including customer service, logistics and administration.

F19

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(11) Restructuring Expenses, Continued

Following is a summary of the restructuring liabilities related to the restructure and integration of the
separate operations of ResMed Germany and MAP into a single operating unit, that were recorded during
the years ended June 30, 2006 and June 30, 2007 (in thousands):

Balance at June 30, 2004
Restructuring expenses
Cash payments

Balance at June 30, 2005

Restructuring expenses
Cash payments
Foreign currency translation

Balance at June 30, 2006

Restructuring expenses
Cash payments
Foreign currency translation

Balance at June 30, 2007

(12) Stockholders’ Equity

Accrued
employee
costs

Other
accrued
costs

Total
accrued
costs

$

-
4,673
(4,451)

$

-
479
(227)

$

-
5,152
(4,678)

$

222

$ 252

$

474

888
(1,044)
(28)

236
(408)
20

1,124
(1,452)
(8)

$

38

$ 100

$

138

-
(8)
2

-
(87)
3

-
(95)
5

$

32

$ 16

$

48

Stock Options. We have granted stock options to personnel,
in
accordance with the Plans. These options have expiration dates of seven or ten years from the date of grant
and vest over three or four years. We have granted these options with an exercise price equal to the market
value as determined at the date of grant.

including officers and directors,

At our Annual Meeting of Shareholders that was held on November 8, 2006, our shareholders approved the
2006 Plan. The 2006 Plan succeeds and replaces the 1997 Plan, which was previously adopted by the Board
of Directors and then approved by the shareholders in November 1997. In connection with the adoption of
the 2006 Plan, we have terminated the 1997 Plan as to any and all future awards. Options granted under the
1997 Plan, which remain outstanding, will continue to be governed by the 1997 Plan.

The maximum number of shares of our common stock authorized for issuance under the 2006 Plan is
7,800,000 shares. The number of securities remaining available for future issuance under the 2006 Plan at
June 30, 2007 is 5,651,850. The number of shares of our common stock available for issuance under the
2006 Plan will be reduced by (i) two and one tenth (2.1) shares for each one share of common stock
delivered in settlement of any “full-value award,” which is any award other than a stock option, stock
appreciation right or other award for which the holder pays the intrinsic value and (ii) one share for each
share of common stock delivered in settlement of all other awards. The maximum number of shares, which
may be subject to awards granted under the 2006 Plan to any individual during any calendar year, may not
exceed 1,000,000 shares of our common stock.

At June 30, 2007, there was $41.4 million in unrecognized compensation costs related to unvested stock
options. This is expected to be recognized over a weighted average period of 2.9 years. The aggregate

F20

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(12) Stockholders’ Equity, Continued

intrinsic value of the options outstanding and the options exercisable at June 30, 2007 was $82.6 million and
$78.3 million, respectively. The aggregate intrinsic value of the options exercised during the years ended
June 30, 2007 and June 30, 2006 was $48.3 million and $40.5 million, respectively. The total fair value of
options that vested during the years ended June 30, 2007 and June 30, 2006 was $13.6 million and $17.1
million, respectively. The following table summarizes option activity during the year ended June 30, 2007:

The following table summarizes option activity:

Weighted
Average
Exercise
Price

2006

Weighted
Average
Exercise
Price

2005

Weighted
Average
Exercise
Price

2007

8,102,892
2,353,650
(1,747,330)
(302,729)

$24.26
46.38
18.70
31.98

8,301,408
2,030,700
(1,805,648)
(423,568)

$19.38
38.17
17.06
26.09

8,832,712
2,336,650
(2,633,246)
(234,708)

$16.27
25.30
13.97
18.34

8,406,483

$31.43

8,102,892

$24.26

8,301,408

$19.38

Outstanding at

beginning of year

Granted
Exercised
Forfeited

Outstanding at end of

year

Exercise price range of

granted options

$40.25-$52.58

$32.99-45.46

$21.95–31.24

Options exercisable at

end of year

4,001,157

$21.69

4,262,743

$18.03

3,987,754

$16.86

The following table summarizes information about stock options outstanding at June 30, 2007.

Range of Exercise Prices

$ 0 - $10
$11 - $20
$21 - $30
$31 - $40
$41 - $50
$51 - $60

Number
Outstanding
at June 30,
2007

227,081
1,759,476
2,251,137
1,897,239
2,250,050
21,500

8,406,483

Weighted
Average
Remaining
Contractual
Life In
Years

1.79
5.16
6.18
8.27
6.49
6.59

6.40

Number
Exercisable
at June 30,
2007

227,081
1,716,136
1,609,925
418,890
29,125
-

4,001,157

Weighted
Average
Remaining
Contractual
Life In
Years

1.79
5.12
5.71
8.14
6.75
-

5.50

Employee Stock Purchase Plan (“ESPP”). The ESPP was approved by our shareholders at the Annual
General Meeting in November 2003. Under the ESPP, participants are offered the right to purchase shares
of our common stock at a discount during successive offering periods. Each offering period under the ESPP
will be for a period of time determined by the Board of Directors’ Compensation Committee of no less than
3 months and no more than 27 months. The purchase price for our common stock under the ESPP will be
the lower of 85% of the fair market value of our common stock on the date of grant or 85% of the fair
market value of our common stock on the date of purchase. An individual participant cannot subscribe for
more than $25,000 in common stock during any calendar year. On August 21, 2006, the Board of Directors

F21

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(12) Stockholders’ Equity, Continued

approved a reduction in the number of shares available for grant under the ESPP to 500,000 shares, effective
as of November 9, 2006, the date of the shareholder approval of the 2006 Plan. The number of securities
remaining available for future issuance under the ESPP at June 30, 2007 is 420,624.

During fiscal year 2007, we issued 148,639 shares to our employees in two offerings at an average share
price of $36.25. We recognized $1.6 million of stock compensation expense associated with the ESPP.

Preferred Stock.
preferred stock. No such shares were issued or outstanding at June 30, 2007.

In April 1997, the Board of Directors authorized 2,000,000 shares of $0.01 par value

Stock Purchase Rights.
In April 1997, the Company implemented a plan to protect stockholders’ rights
in the event of a proposed takeover of the Company. Under the plan, each share of the Company’s
outstanding common stock carries one right to purchase Series A Junior Participating Preferred Stock (the
“Right”). The Right enables the holder, under certain circumstances, to purchase common stock of the
Company or of the acquiring person at a substantially discounted price ten days after a person or group
publicly announces it has acquired or has tendered an offer for 20% or more of the Company’s outstanding
common stock. The plan and its accompanying Rights expired pursuant to their terms in April 2007 and the
Rights are no longer outstanding.

Common Stock. On June 6, 2002, the Board of Directors authorized the Company to repurchase up to
8.0 million shares of outstanding common stock. During fiscal years 2007 and 2006, the Company
repurchased 50,000 and Nil shares at a cost of $2.1 million and $Nil, respectively. As of June 30, 2007, we
have repurchased a total of 2.3 million shares at a cost of $43.5 million. Shares that are repurchased are
classified as treasury stock pending future use and reduce the number of shares outstanding used in
calculating earnings per share.

Convertible Subordinated Notes. During the year ended June 30, 2006, and pursuant to the Indenture
dated June 20, 2001 between us and American Stock Transfer & Trust Company, as trustee, holders of all of
the 4% Convertible Subordinated Notes due 2006 converted the notes into an aggregate of 3,737,593 shares
of the Company’s common stock, par value $0.004. The notes were converted into 33 shares of our common
stock for each $1,000 principal amount of the notes, at a conversion price of $30.30 per share. The dilutive
impact of these conversions has been reflected in the reported earnings per share.

(13) Other, net

Other, net in the consolidated statements of income is comprised of the following at June 30, 2007, 2006
and 2005 (in thousands):

Gain on foreign currency transactions and hedging
Realized (loss) on sale of marketable securities
Impairment of cost method investment
Other

2007

2006

2005

$1,203
-
-
130

$ 1,853
-
(1,156)
77

$ 36
(34)
-
79

$1,333

$

774

$ 81

F22

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(14) Income Taxes

Income before income taxes for the years ended June 30, 2007, 2006 and 2005, was taxed under the
following jurisdictions (in thousands):

U.S.
Non-U.S.

The provision for income taxes is presented below (in thousands):

Current:
Federal
State
Non-U.S.

Deferred:
Federal
State
Non-U.S.

Provision for income taxes

2007

2006

2005

$21,219
76,754

$

5,472
127,922

$

(54)
96,680

$97,973

$133,394

$96,626

2007

2006

2005

$ 5,973
984
43,614

$ 7,507
1,370
48,221

$

799
246
38,793

50,571

57,098

39,838

(977)
(225)
(17,698)

(3,353)
(390)
(8,172)

618
(29)
(8,586)

(18,900)

(11,915)

(7,997)

$ 31,671

$ 45,183

$31,841

The provision for income taxes differs from the amount of income tax determined by applying the
applicable U.S. federal income tax rate of 34% (35% for 2006 and 34% for 2005) to pretax income as a
result of the following (in thousands):

Taxes computed at statutory U.S. rate
Increase (decrease) in income taxes resulting from:
Effect of AJCA dividend repatriation
State income taxes, net of U.S. tax benefit
Non-deductible expenses
Research and development credit
Tax effect of deemed dividends
Change in valuation allowance
Effect of non-U.S. tax rates
In-process research and development write-off
Foreign tax credits
Stock-based compensation expense
Other

F23

2007

2006

2005

$33,311

$46,688

$32,853

-
982
874
(4,092)
1,438
1,580
(2,425)
-
(1,907)
1,692
218

3,537
939
777
(3,085)
1,846
1,665
(6,731)
-
(1,204)
2,006
(1,255)

-
165
580
(2,743)
590
637
(3,419)
1,791
-
-
1,387

$31,671

$45,183

$31,841

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(14) Income Taxes, Continued

Deferred tax assets and liabilities are classified as current or non-current according to the classification of
the related asset or liability. The components of the Company’s deferred tax assets and liabilities at June 30,
2007 and 2006 are as follows (in thousands):

Deferred tax assets:
Employee benefit obligations
Voluntary product recall accrual
Inventories
Provision for warranties
Provision for doubtful debts
Net operating loss carryforwards
Foreign tax credits
Unrealized foreign exchange losses
Capital loss carryover
Intercompany profit in inventories
Stock-based compensation expense
Other

Less valuation allowance

Deferred tax assets

Deferred tax liabilities:
Unrealized gain on foreign currency options
Unrealized foreign exchange gains
Property, plant and equipment
Goodwill and other intangibles
Other

Deferred tax liabilities

Net deferred tax asset

2007

2006

$ 3,634
13,530
1,587
1,681
1,028
2,827
10,416
-
490
23,660
6,076
2,126

$ 3,274
-
1,408
992
1,024
2,598
9,626
970
521
18,611
2,833
2,448

67,055
(12,612)

44,305
(10,989)

$ 54,443

$ 33,316

$

-
(3,419)
(1,494)
(15,905)
(1,022)

$

(353)
-
(1,673)
(16,500)
(531)

(21,840)

(19,057)

$ 32,603

$ 14,259

The net deferred tax assets and liabilities have been reported in the consolidated balance sheets at June 30,
2007 and 2006 as follows (in thousands):

Current deferred tax asset
Non-current deferred tax asset
Current deferred tax liability
Non-current deferred tax liability

Net deferred tax asset

2007

2006

$ 42,109
9,206
(415)
(18,297)

$ 27,071
5,265
(435)
(17,642)

32,603

$ 14,259

As of June 30, 2007, the Company had $1,664,000, and $12,860,000 of U.S. state and non-U.S. net
operating loss carryforwards, respectively, which expire in various years through 2025 or carry forward

F24

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(14) Income Taxes, Continued

indefinitely. The Company also had foreign tax credit carryforwards of $10,416,000. The foreign tax credit
carryforwards have expiration dates through 2017.

The valuation allowance at June 30, 2007, relates to a provision for uncertainty as to the utilization of
foreign tax credits of $10,416,000, net operating loss carryforwards for certain non-U.S. countries of
$1,671,000, capital loss items of $490,000 and other deferred tax assets of $34,000. We believe that it is
more likely than not that the benefits of deferred tax assets, net of any valuation allowance, will be realized.

The Company has not provided for U.S. income and foreign withholding taxes on undistributed earnings
from non-U.S. subsidiaries indefinitely invested outside the United States as of June 30, 2007. The total
amount of these undistributed earnings at June 30, 2007 amounted to approximately $379 million. Should
the Company repatriate foreign earnings, the Company would have to adjust the income tax provision in the
period management determined that the Company would repatriate earnings.

(15) Employee Retirement Plans

The Company contributes to a number of employee retirement plans for the benefit of its employees. These
plans are detailed as follows:

(1) Australia - The Company contributes to defined contribution pension plans for each employee resident in
Australia. All Australian employees, after serving a qualifying period, are entitled to benefits on retirement,
disability or death. Employees may contribute additional funds to the plans. The Company contributes to the
plans at the rate of 9% of the salaries of all Australian employees. Total Company contributions to the plans
for the years ended June 30, 2007, 2006 and 2005, were $4,798,474, $3,846,000 and $2,849,000,
respectively.

(2) United Kingdom - The Company contributes to a defined contribution plan for each permanent United
Kingdom employee. All employees, after serving a three-month qualifying period, are entitled to benefit on
retirement, disability or death. Employees may contribute additional funds to the plan. The Company
contributes to the plan at the rate of 5% of the salaries of all United Kingdom employees. Total Company
contributions to the plan were $242,586, $109,000 and $67,000 in fiscal 2007, 2006 and 2005, respectively.

(3) United States - The Company sponsors a defined contribution pension plan available to substantially all
domestic employees. Company contributions to this plan are based on a percentage of employee
contributions to a maximum of 3% of the employee’s salary. Total Company contributions to the plan were
$759,702, $531,000 and $514,000 in fiscal 2007, 2006 and 2005, respectively.

(4) Switzerland - The Company sponsors a fixed return defined contribution fund for each permanent Swiss
employee. As part of the Company’s contribution to the fund, the Company guarantees a fixed 3% net return
on accumulated contributions per annum. The Company contributes to the plan at variable rates that have
averaged 10% of salaries over the last three years. Total Company contributions to the plan were $259,041,
$182,000 and $85,000 in fiscal 2007, 2006 and 2005, respectively.

(16) Segment Information

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 inter-
dependence of its products, the Company operates as a single operating segment. The Company assesses
performance and allocates resources on the basis of a single operating entity.

F25

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(16) Segment Information, Continued

Financial information by geographic area for the years ended June 30, 2007, 2006 and 2005, is summarized
below (in thousands):

U.S.A

Germany

Australia

France

Rest of
World

Total

2007
Revenue from external customers

$376,699

107,938

19,846

75,984

135,865

$716,332

Long lived assets

$ 60,224

17,813

218,537

8,083

16,027

$320,684

2006
Revenue from external customers

$320,941

96,436

18,709

59,402

111,508

$606,996

Long lived assets

$ 54,118

17,190

162,522

7,080

11,518

$252,428

2005
Revenue from external customers

$210,495

72,824

14,160

47,537

80,489

$425,505

Long lived assets

$ 32,090

11,615

130,310

2,544

6,900

$183,459

Net revenues from external customers are based on the location of the customer. Long-lived assets of
geographic areas are those assets used in the Company’s operations in each geographical area and excludes
intangibles, deferred tax assets and goodwill.

(17) Commitments

The Company leases buildings, motor vehicles and office equipment under operating leases. As part of the
acquisition of Saime the Company assumed a capital lease for land and buildings. This lease contains an
option to purchase the property, for nominal consideration, at the end of the lease term. Rental charges for
operating leases are expensed as incurred. Rent expenses under operating leases for the years ended June 30,
2007, 2006 and 2005 were approximately $8.2 million, $7.5 million and $6.2 million, respectively. At
June 30, 2007 the Company had the following future minimum lease payments under non-cancelable
operating leases and capital leases (in thousands):

Years

2008

2009

2010

2011

2012
Thereafter

Total minimum lease payments
Less: Interest portion

Capital Leases Operating Leases

$ 99

$ 9,634

96

93

90

87
184

649
(85)

8,188

6,198

3,900

2,227
4,359

34,506
-

Present value of net minimum lease payments

$564

$34,506

F26

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(17) Commitments, Continued

Excluding lease commitments details of contractual obligations at June 30, 2007 are as follows (in
thousands):

In $000’s

Total

2008

2009

2010

2011

2012

Thereafter

Payments Due by Period

Long-Term Debt
Purchase Obligations

$115,434 $28,272 $43,885 $16,933
876

33,763

31,969

876

$20,319
21

$6,025
21

Total Contractual Obligations

$149,197 $60,241 $44,761 $17,809

$20,340

$6,046

$-
-

$-

Details of other commercial commitments at June 30, 2007 are as follows (in thousands):

Amount of Commitment Expiration Per Period

Total

2008

2009

2010

2011

2012

Thereafter

Standby Letters of Credit
Guarantees*

$
36
57,426

$ 36
607

$ -
25

$

-
270

$

-
54,627

Total Commercial Commitments

$57,462

$643

$25

$270

$54,627

$-
-

$-

$

-
1,897

$1,897

* The above guarantees mainly relate to security provided as part of our Syndicated Facility Agreement and requirements under
contractual obligations with insurance companies transacting with our German subsidiaries.

(18) Business Acquisitions

Fiscal year ended June 30, 2007

Western Medical Marketing (“WMM”). On October 4, 2006 we acquired the business assets of WMM,
a distribution business operating in the Pacific Northwest region of the U.S. for a total cash consideration of
$0.3 million. The acquisition has been accounted as a purchase and accordingly the results of operations of
WMM have been included in our consolidated financial statements since October 4, 2006. An amount of
$0.3 million, representing the excess of the purchase price over the fair value of the identifiable net assets
acquired, has been recorded as goodwill. We have completed our purchase price allocation at June 30, 2007.

Fiscal year ended June 30, 2006

PolarMed Holding AS (“PolarMed”). As disclosed in our consolidated financial statements and Form
10-K for the year ended June 30, 2006, we acquired 100% of the outstanding stock of PolarMed, the holding
company for PolarMed AS and its affiliates, on December 1, 2005, for net cash consideration of $6.5
million. This was comprised of $6.8 million in consideration less $0.3 million of cash acquired.
Additionally, as part of the acquisition, we assumed debt of $1.5 million. Under the purchase agreement, we
may also be required to make additional future payments of up to $3.0 million based on the achievement of
certain performance milestones following the acquisition through December 31, 2008. Of the $3.0 million in
potential future payments included within the purchase agreement, $1.0 million was paid during the year
ended June 30, 2007 as a result of the successful achievement of a performance milestone. This additional
payment increased the total acquisition consideration to $7.8 million from $6.8 million and increased the
amount recorded as goodwill to $5.4 million from $4.4 million.

F27

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(18) Business Acquisitions, Continued

Pulmomed Medizinisch-Technische Geräte GmbH (“Pulmomed”). As disclosed in our consolidated
financial statements and Form 10-K for the year ended June 30, 2006, we acquired 100% of the outstanding
stock of Pulmomed on July 1, 2005 for net cash consideration of $2.5 million, including acquisition costs.
Additionally, as part of the acquisition, we assumed debt of $1.0 million. Under the purchase agreement, we
may also be required to make additional future payments of up to $0.9 million based on the achievement of
certain performance milestones following the acquisition through June 30, 2007. Of the $0.9 million in
potential future payments included within the purchase agreement, $0.3 million was paid during the year
ended June 30, 2007 as a result of the successful achievement of a performance milestone. This additional
payment was accrued at June 30, 2006, which increased the total acquisition consideration to $2.8 million
from $2.5 million and increased the amount recorded as goodwill by $0.3 million to $2.1 million.

Fiscal year ended June 30, 2005

Saime SAS (“Saime”). We acquired 100% of the outstanding stock of Financiere ACE SAS, the holding
company for Saime and its affiliates, on May 19, 2005, for net cash consideration of $40.6 million. This
consisted of $51.1 million in consideration, including acquisition costs, less $10.5 million of cash acquired.
An amount of $64.8 million, representing the excess of the purchase price over the fair value of the
identifiable net assets acquired, has been recorded as goodwill.

Hoefner Medizintechnick GmbH (“Hoefner”). We acquired 100% of the outstanding stock of Hoefner
on February 14, 2005, for net cash consideration of $8.2 million. This consisted of the $10.7 million in total
consideration, including acquisition costs, less $2.5 million of cash acquired. Under the purchase agreement,
additional future payments of up to $0.9 million were possibly based on the achievement of certain
performance milestones following the acquisition through December 31, 2006. Of the $0.9 million in
potential future payments, $0.6 million was paid during fiscal 2006. The remaining $0.3 million of the $0.9
million was paid during the year ended June 30, 2007 as a result of the successful achievement of a
performance milestone. This additional payment increased the total acquisition consideration to $11.6
million and goodwill to $9.1 million.

Resprecare BV (“Resprecare”). On December 1, 2004, we acquired substantially all the assets of
Resprecare BV, our Dutch distributor, for initial consideration of $5.9 million in cash, including acquisition
costs. Under the purchase agreement, we potentially were also required to make up to $1.4 million of
additional future payments based on the achievement of certain milestones. Of these potential additional
payments, $0.6 million was paid in January 2005 and a further $0.7 million was paid in January 2006 as a
result of the integration of the Dutch subsidiary of our subsidiary MAP with the newly-acquired Resprecare
business. An amount of $4.4 million, representing the excess of the purchase price over the fair value of
identifiable net assets acquired of $2.8 million, was recorded as goodwill.

(19) Legal Actions and Contingencies

In the normal course of business, we are subject to routine litigation incidental to our business. While the
results of this litigation cannot be predicted with certainty, we believe that their final outcome will not have
a material adverse effect on our consolidated financial statements taken as a whole.

During September and October 2004, the Company began receiving tax assessment notices for the audit of
one of its German subsidiaries by the German tax authorities for the years 1996 through 1998. Certain of
these adjustments are being contested and appealed to the German tax authority office. We believe no

F28

RESMED INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(19) Legal Actions and Contingencies, Continued

additional provision is necessary for any tax adjustment that may result from the tax audit. However, the
outcome of the audit cannot be predicted with certainty. Should any tax audit issues be resolved in a manner
not consistent with management’s expectations, the Company could be required to adjust its provision for
income tax in the period of resolution.

On December 23, 2002, three former contractors of our subsidiary MAP Medizin-Technologie GmbH
initiated proceedings in Munich 1 Regional Court (Proceedings No. 7 O 23286/02), petitioning the Court for
a declaration of inventorship with respect to MAP German Patent Applications identified as No. 100 31 079
and 101 92 802.5 and European Patent Application No. EP 01 967 819.7. On March 10, 2005, the Court
entered judgement in favor of the plaintiffs, finding that they should be identified as co-inventors in place of
certain individual defendants. In April 2005, MAP filed an appeal of that decision. We do not expect the
outcome of this litigation to have an adverse material effect on our consolidated financial statements.

In March 2006, an Australian university made a demand that ResMed pay extra royalties pursuant to a
current patent license agreement. ResMed rejected the demand and have informed the university that it does
not consider the claim to have merit. On 13 February 2007, the university commenced legal action in the
Federal Court of Australia to pursue its claim against ResMed. ResMed is vigorously defending its position
and does not expect the outcome of this claim to have an adverse material effect on ResMed’s condensed
consolidated financial statements.

(20) Voluntary Product Recall Expenses

On April 23, 2007, we initiated a worldwide voluntary recall of approximately 300,000 units of our early
production S8 flow generators used for the treatment of obstructive sleep apnea. In S8 devices manufactured
between July 2004 and May 15, 2006, there is a remote potential for a short circuit in the power supply
connector. We are working with our distribution partners globally to provide a replacement device to
patients who have an affected S8 flow generator.

The estimated cost of this action is $59.7 million which has been recognized as a charge to cost of sales in
the consolidated statement of income. As of June 30, 2007 we have a remaining liability of $45.1 million
which is accrued in the consolidated balance sheet. These direct and incremental costs represent our best
estimate of probable costs based on current available data and take into account factors such as expected
return rates for the affected units, unit replacement costs, legal, consulting, logistical and temporary
contractor expenses directly associated with the recall. Accordingly, should actual product recall costs differ
from our estimated costs, material revisions to our estimated product recall accrual may be required.

Following is a summary of the liabilities related to the voluntary product recall that were recorded during
the year ended June 30, 2007 (in thousands):

Balance at June 30, 2006
Voluntary product recall expenses
Cash payments
Foreign currency translation

Balance at June 30, 2007

Total accrued costs

$

-
59,700
(16,272)
1,670

$ 45,098

F29

[THIS PAGE INTENTIONALLY LEFT BLANK]

Schedule II

RESMED INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED JUNE 30, 2007, 2006 AND 2005
(in thousands)

Year ended June 30, 2007

Applied against asset account
Allowance for doubtful accounts

Year ended June 30, 2006

Applied against asset account
Allowance for doubtful accounts

Year ended June 30, 2005

Applied against asset account
Allowance for doubtful accounts

Balance
at
Beginning
of Period

Charged
to costs
and
expenses

Other
(deductions)

Balance
at end
of
period

$4,645

1,173

(1,114)

$4,704

$3,199

1,577

(131)

$4,645

$3,197

611

(609)

$3,199

See accompanying report of independent registered public accounting firm.

RESMED INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATED August 24, 2007

ResMed Inc.

/s/ PETER C. FARRELL

Peter C. Farrell
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURE

TITLE

DATE

/S/

PETER C. FARRELL
Peter C. Farrell

/S/ BRETT A. SANDERCOCK

Brett A. Sandercock

Chief Executive Officer,
President, Chairman of the Board
(Principal Executive Officer)

Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)

August 24, 2007

August 24, 2007

/S/ CHRISTOPHER G. ROBERTS

Director

August 24, 2007

Christopher G. Roberts

/S/ MICHAEL A. QUINN
Michael A. Quinn

/S/ GARY W. PACE
Gary W. Pace

/S/ DONAGH MCCARTHY

Donagh McCarthy

/S/ RICHARD SULPIZIO

Richard Sulpizio

/S/ RON TAYLOR
Ron Taylor

/S/

JOHN P. WAREHAM
John P. Wareham

Director

Director

Director

Director

Director

Director

S-1

August 24, 2007

August 24, 2007

August 24, 2007

August 24, 2007

August 24, 2007

August 24, 2007

RESMED INC. AND SUBSIDIARIES
EXHIBIT INDEX

First Restated Certificate of Incorporation of Registrant, as amended (15)

Third Restated By-laws of Registrant (12)

Form of certificate evidencing shares of Common Stock (1)

Indenture dated as of June 20, 2001, between ResMed Inc. and American Stock Transfer & Trust Company (5)

3.1

3.2

4.1

4.3

4.4 Registration Rights Agreement dated as of June 20, 2001, by and between ResMed Inc., Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Banc Alex Brown Inc., William Blair
& Company, L.L.C., Macquarie Bank Limited and UBS Warburg LLC (5)

4.5 Registration Rights Agreement dated as of May 14, 2002 between ResMed Inc., and Mr Leslie Hoffman (6)

10.1 1995 Stock Option Plan (1)

10.2 1997 Equity Participation Plan (3)

10.3 Licensing Agreement between the University of Sydney and ResMed Ltd dated May 17, 1991, as amended (1)

10.5 Loan Agreement between the Australian Trade Commission and ResMed Limited dated May 3, 1994 (1)

10.6 Lease for 10121 Carroll Canyon Road, San Diego CA 92131-1109, USA (4)

10.7 Sale and Leaseback Agreements for 97 Waterloo Rd, North Ryde, Australia (5)

10.8 Employment Agreement dated as of May 14, 2002, between Servo Magnetics Acquisition Inc., and Mr

Leslie Hoffman (6)

10.9 Agreement for the purchase of Lot 6001, Norwest Business Park, Baulkham Hills, Australia (6)

10.10 2003 Employee Stock Purchase Plan (7)

10.11 Loan Agreement between ResMed Limited and HSBC Bank Australia Limited (11)

10.12 Securities Sale Agreement Financiere Ace S.A.S. dated as of May 4, 2005 (11)

10.13 First Amended and Restated Loan Agreement, dated as of November 1, 2005, by and among ResMed

Corp., ResMed EAP Holdings Inc. and Union Bank of California, N.A. (8)

10.14 Security Agreement, dated as of November 1, 2005, by and between ResMed EAP Holdings Inc. and

Union Bank of California, N.A. (8)

10.15 Continuing Guaranty, dated as of November 1, 2005, by and between ResMed Corp. and ResMed EAP

Holdings Inc and Union Bank of California, N.A. (8)

10.16 Commercial Promissory Note, dated as of November 1, 2005, made by ResMed Corp. and ResMed EAP

Holdings Inc. (8)

10.17 Commercial Promissory Note, dated as of November 1, 2005, made by ResMed Corp. and ResMed EAP

Holdings Inc. (8)

10.18 Second Amended and Restated Revolving Loan Agreement, dated as of March 13, 2006, among ResMed
Corp., ResMed Motor Technologies Inc., ResMed EAP Holdings Inc. and Union Bank of California, N.A. (9)

10.19 Syndicated Facility Agreement, dated as of June 8, 2006, by and between ResMed Limited and HSBC

Bank Australia Limited (10)

10.20 Deed of Guarantee and Indemnity, dated as of June 8, 2006, by and among HSBC Bank Australia Limited,
ResMed Limited, ResMed SAS, ResMed GmbH & Co. KG, ResMed (UK) Limited and Take Air Medical
Handels-GmbH (10)

10.21 Deed of Guarantee and Indemnity, dated as of June 8, 2006, by and among HSBC Bank Australia Limited,

ResMed Inc., ResMed Corp. and ResMed Limited (10)

10.22 Working Capital Agreement, dated as of June 8, 2006, by and among ResMed (UK) Limited and HSBC

Bank plc (10)

10.23 Working Capital Agreement, dated as of June 8, 2006, by and among ResMed Limited and HSBC Bank

Australia Limited (10)

10.24 ResMed Inc. 2006 Incentive Award Plan (16)

10.25 Amendment No. 1 to the ResMed Inc. 2006 Incentive Award Plan (13)

10.26 2006 Grant agreement for Board of Directors (15)

10.27 2006 Grant agreement for Executive Officers (15)

10.28 2006 Grant agreement for Australian Executive Officers (13)

10.29 Form of Executive Agreement (14)

21.1 Subsidiaries of the Registrant (15)

23.1 Independent Registered Public Accounting Firm’s Consent and Report on Schedule (15)

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (15)

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (15)

32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002 (15)

(1) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (No. 33-91094) declared effective on June 1, 1995.
(2) Incorporated by reference to the Registrant’s Registration Statement on Form 8-A12G filed on April 25, 1997.
(3) Incorporated by reference to the Registrant’s 1997 Proxy Statement.
(4) Incorporated by reference to the Registrant’s Report on Form 10-K dated June 30, 1998.
(5) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2001.
(6) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2002.
(7) Incorporated by reference to the Registrant’s 2003 Definitive Proxy Statement dated October 13, 2007.
(8) Incorporated by reference to the Registrant’s Form 8-K dated November 8, 2005.
(9) Incorporated by reference to the Registrant’s Form 8-K dated March 13, 2006.
(10) Incorporated by reference to the Registrant’s Form 8-K dated June 8, 2006.
(11) Incorporated by reference to the Registrant’s Report on Form 10-K for the year ended June 30, 2005.
(12) Incorporated by reference to the Registrant’s Report on Form 8-K dated February 23, 2007.
(13) Incorporated by reference to the Registrant’s Report on Form 10-Q for the quarter ended December 31, 2006.
(14) Incorporated by reference to the Registrant’s Report on Form 8-K dated July 9, 2007.
(15) Filed herewith.
(16) Incorporated by reference to the Registrant’s Report on Form 8-K dated November 9, 2006.

EXHIBIT 21.1

RESMED INC.
SUBSIDIARIES OF THE REGISTRANT

ResMed Corp. (a Minnesota corporation)
ResMed US Assembly Inc. (a Delaware corporation)
ResMed (Malaysia) Sdn Bhd (a Malaysian Corporation) (2)
ResMed (UK) Limited (a United Kingdom corporation) (1)
ResMed Asia Pacific Limited (incorporated under the laws of New South Wales, Australia) (1)
ResMed Deutschland GmbH (a German corporation, formerly ResMed Beteiligungs GmbH) (3)
ResMed EAP Holdings Inc. (a Delaware corporation)
ResMed Finland OY (a Finland corporation) (2)
ResMed Holdings Limited (incorporated under the laws of New South Wales, Australia)
ResMed Hong Kong Limited (a Hong Kong corporation) (2)
ResMed Germany Inc. (a Delaware corporation, formerly ResMed International Inc.)
ResMed KK (a Japanese corporation) (2)
ResMed Limited (incorporated under the laws of New South Wales, Australia) (1)
ResMed New Zealand Limited (a New Zealand Corporation) (2)
ResMed GmbH Verwaltung (a German corporation)
ResMed GmbH and Co KG (a German corporation) (4)
ResMed R&D Limited (incorporated under the laws of New South Wales, Australia) (1)
ResMed SAS (a French corporation) (2)
ResMed Singapore Pte Ltd (a Singaporean corporation) (2)
ResMed Spain SL (a Spanish corporation) (2)
ResMed Sweden AB (a Swedish corporation) (2)
ResMed Technology Motor Technologies Inc. (a Delaware corporation) (Formerly Servo Magnetics Inc.)
ResMed Schweiz AG (A Swiss corporation, formerly Labhardt AG) (2)
ResMed Austria Medizintechnik GmbH (an Austrian corporation) (2)
MAP Medische Techniek voor Arts en Patient BV (a Dutch corporation) (4)
MAP Medizin-Technologie GmbH (a German corporation) (4)
MAP Beteiligungs GmbH (a German corporation) (5)
Take Air Medical Handels GmbH (a German corporation) (6)
SCI PDG (a French corporation) (6)
OCA Beteiligung AG (a Luxembourg corporation) (6)
Hoefner Medizintechnik GmbH (a German corporation) (9)
ResMed Brasil Ltda (a Brazilian corporation) (7)
PolarMed A/S (a Danish corporation) (2)
PolarMed AS (a Norwegian corporation) (2)
ResMed Nederland BV (a Netherlands corporation) (2)
Saime SAS (a French corporation) (8)
ResMed Property Trust (incorporated under the laws of New South Wales, Australia)
ResMed Mexico, S de R.L. de C.V. (2)
ResMed India Private Ltd (2)
ResMed (Beijing) Commercial Co., Ltd (2)

(1) A subsidiary of ResMed Holdings Limited
(2) A subsidiary of ResMed EAP Holdings Inc.
(3) A subsidiary of ResMed Germany Inc.
(4) A subsidiary of ResMed Deutschland GmbH
(5) A subsidiary of MAP Medizin-Technologie GmbH
(6) A subsidiary of Saime SAS
(7) A subsidiary of ResMed Corp.
(8) A subsidiary of ResMed SAS
(9) A subsidiary of ResMed GmbH and Co KG

EXHIBIT 23.1

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

The Board of Directors and Stockholders
ResMed Inc.:

We consent to the incorporation by reference in the registration statement (Nos. 333-08013, 333-88231 and
333-115048) on Form S-8 and the registration statements (Nos. 333-70500 and 333-100825) on Form S-3 of
ResMed Inc. of our reports dated August 27, 2007, with respect to the consolidated balance sheets of ResMed
Inc. as of June 30, 2007 and 2006, and the related consolidated statements of income, stockholders’ equity and
comprehensive income and cash flows for each of the years in the three-year period ended June 30, 2007, and the
related financial statement schedule, management’s assessment of the effectiveness of internal control over
financial reporting as of June 30, 2007, and the effectiveness of internal control over financial reporting as of
June 30, 2007, which reports appear in the June 30, 2007, annual report on Form 10-K of ResMed Inc.

Our report on the consolidated financial statements dated August 27, 2007 contains an explanatory paragraph that
states that the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share
Based Payment on July 1, 2005.

/s/ KPMG LLP

San Diego, California
August 27, 2007

EXHIBIT 31.1

Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter C. Farrell, certify that:

1.

I have reviewed this annual report on Form 10-K of ResMed Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal controls over financial
reporting to be designed under our supervision,
to provide reasonable assurance regarding the
reliability of financial reporting and preparation of financial statements for external purposes in
accordance with generally accepted accounting practices; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

August 24, 2007

/s/ PETER C. FARRELL

Peter C. Farrell
Chairman and Chief Executive Officer

EXHIBIT 31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Brett Sandercock, certify that:

1.

I have reviewed this annual report on Form 10-K of ResMed Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal controls over financial
reporting to be designed under our supervision,
to provide reasonable assurance regarding the
reliability of financial reporting and preparation of financial statements for external purposes in
accordance with generally accepted accounting practices; and

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

August 24, 2007

/s/ BRETT A. SANDERCOCK

Brett A. Sandercock
Chief Financial Officer

EXHIBIT 32.1

The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350
and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be incorporated by reference in
any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date
hereof, regardless of any general incorporation language in such filing.

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned
officer of ResMed Inc., a Delaware corporation (the “Company”), hereby certifies, to his knowledge, that:

(i)

the accompanying Annual Report on Form 10-K of the Company for the year ended June 30, 2007 (the
“Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the
Securities Exchange Act of 1934, as amended; and

(ii)

the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Dated: August 24, 2007

/s/ PETER C. FARRELL

Peter C. Farrell
Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to ResMed Inc. and will be
retained by ResMed Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned
officer of ResMed Inc., a Delaware, corporation (the “Company”), hereby certifies, to his knowledge, that:

(i)

the accompanying Annual Report on Form 10-K of the Company for the year ended June 30, 2007 (the
“Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the
Securities Exchange Act of 1934, as amended; and

(ii)

the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

Dated: August 24, 2007

/s/ BRETT A. SANDERCOCK

Brett A. Sandercock
Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to ResMed Inc. and will be
retained by ResMed Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

[THIS PAGE INTENTIONALLY LEFT BLANK]

Website information
ResMed sponsors the following websites to
provide our customers with quick and easy
access to product, corporate and patient
support information:

www.resmed.com

www.myresmed.com

www.healthysleep.com

www.sleepvantage.com

ResMed also sponsors two research foundations
to promote the research and awareness of
sleep-disordered breathing.

US ResMed Foundation website:
www.resmedfoundation.org

Australian ResMed Foundation website:
www.resmedfoundation.org.au

References
( 1 ) Babu et al. Arch Intern Med. 2005;165:447-452

(2) Einhorn et al. Endocr Pract. 2007;13(4):355-362

(3) Berger et al. Chest 2006; 130(4):1575

Statements contained in this release that are not historical facts are “forward-looking” statements as
contemplated by the Private Securities Litigation Reform Act of 1995. These forward-looking statements,
including statements regarding the Company's future revenue, earnings or expenses, new product develop-
ment, new markets for the Company's products and the impact of future developments related to the recently
announced product recall, and are subject to risks and uncertainties, which could cause actual results to
materially differ from those projected or implied in the forward-looking statements. The Company cannot
be certain that it has accurately predicted the costs of the product recall, which could change in response
to additional feedback from ongoing discussions with regulatory bodies or other unforeseen circumstances.
In addition, the product recall could affect the Company’s reputation. Additional risks and uncertainties
are discussed in the Company's Annual Report on Form 10-K for its most recent fiscal year and in other reports
the Company files with the US Securities & Exchange Commission. Those reports are available on the
Company's Web site.

Transfer Agent and Registrar
Inquiries regarding transfer requirements, lost certificates
and changes of address should be directed to:

American Stock Transfer and Trust Company
59 Maiden Lane
New York, NY 10038
Tel: (718) 921-8275

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

Legal Counsel

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

Independent Auditors

KPMG LLP
750 B Street, Suite 1500
San Diego, CA 92101 USA

Shareholder and Investor Inquiries
To directly receive copies of company news, copies of
the annual report, or Form 10-K as filed with the
Securities and Exchange Commission without charge,
please contact:

Matthew Borer
Director, Investor Relations
ResMed Inc.
14040 Danielson Street
Poway, CA 92064-6857 USA
Tel: (858) 746-2280
Fax: (858) 746-2830
Email: investorrelations@resmed.com

Brett Sandercock
Chief Financial Officer
ResMed Inc.
1 Elizabeth Macarthur Drive
Bella Vista NSW 2153 Australia
Tel: +61 2 8884 1000
Fax: +61 2 8883 3114

Annual Meeting of Shareholders
November 8th, 2007
Date:
Time:
10:00 AM
Location: 1 Elizabeth Macarthur Drive

Bella Vista NSW Australia

Activa, ActiveCell, Adapt SV, Adaptiv, Aerial, Aero-Click, Aero-Fix, ApneaLink, AutoVPAP, AutoScan, AutoSet, AutoSet CS, AutoSet
Spirit, AutoSet T, AutoSet Vantage, AutoSet.com, AutoSet-CS.com, AutoView, Bubble Cushion, Bubble Mask, Elisée, Eole, Escape,
Helia, HumidAire, IPAP MAX, IPAP MIN, Kidsta, Magellan, MAP, MEPAL, Meridian, MESAM, minni Max, Mirage, Protégé, Moritz
biLEVEL, Papillon, Poly-MESAM, ResCap, ResControl, ResMed, S6, S7, S8, SELFSET, SleepVantage, SmartStart, Spirit, Spiro+,
Sullivan, Swift, TiControl, Ultra Mirage, Vential, VPAP, VS Easyfit, are trademarks of ResMed Ltd.

®2007 ResMed

RESMED 2007 ANNUAL REPORT 15

India
ResMed Asia Pacific Ltd
Indian Representative Office
Eros Corporate Towers
Level 15, Regus Business Centre
Nehru Place
New Delhi 110019
Telephone: +91 11 4223 5348
Fax: +91 11 4223 5378
Email: puneets@resmed.com.au

Japan
ResMed Japan
3F, Hongo UC building
3-35-3 Hongo
Bunko-ku
Tokyo 113-0033
Japan
Contact Mr Kazuhiko Matsushita
President, ResMed KK
Telephone+81 03 5840 6781
Fax +81 03 3812 0360

Netherlands
ResMed Nederland BV
Badhuisweg 77
2587 CD DEN HAAG
Telephone: +31 (0)70 - 79904 00
Fax: +31 (0)70 - 79904 04
Email:ReceptionDH@ResMed.nl

New Zealand
ResMed NZ Ltd
PO Box 51-048
Pakuranga Auckland
Telephone +64 9 239 0193
Fax +64 274 737 633
Email: reception@resmed.co.nz

France
ResMed SAS
Parc Technologique de Lyon,
292 Allée Jacques Monod,
69791 Saint Priest cedex
Email: reception@resmed.fr
Telephone: +33 (0)4 26 100 200
Fax: +33 (0)4 26 100 300

ResMed Paris
ZI - 25 Rue de l’Etain
77176 Savigny le Temple
Email: reception@resmed.fr
Telephone: +33 (0)1 64 19 11 11
Fax: +33 (0)1 64 41 81 30

Germany
ResMed Germany
Fraunhoferstraße 16
82152 Martinsried
Telephone: +49 (0) 89 / 99 01 - 00
Telephone: 0800 2 777 000
(Gebührenfreie Servicenummer)
Fax: +49 (0) 89 / 99 01 - 10 55
Email: reception@resmed.de

Take Air Medical
Handelsgesellschaft mbH.
Haferwende 40
28357 Bremen
Telephone: 0421 / 4 89 93 - 0
Fax: 0421 / 4 89 93 10
Email: info@take-air.de

Hong Kong
ResMed Hong Kong Limited
Room 701, Miramar Tower
132-134 Nathan Road
Tsim Sha Tsui, Kowloon
Telephone: +852 2366 0707
Fax: +852 2366 4546
Contact: reception@resmed.com.hk

Norway
PolarMed AS
Kirkevn 71A
1344 Haslum
Telephone: +47 67 11 88 60
Fax: +47 67 11 88 50
Email: post@polarmed.no
Website: www.polarmed.no

Singapore
ResMed Singapore Pte Ltd
(Shop Front)
55 Newton Road
#01-04 Revenue House
Singapore 307987
Telephone: +65 6284 7177
Fax:+65 6284 7787
Email: reception@resmed.com.sg

Sweden
ResMed Sweden AB
Industrigatan 2
S-461 37 Trollhättan
Fax: +46 (520) 397 15
Telephone: +46 (520) 420 110
Email: reception@resmed.se

Switzerland
ResMed Schweiz
Viaduktstrasse 40
4051 Basel
Telephone: +41 61 564 70 00
Fax: +41 61 564 70 10
Email: info@resmed.ch

UK
ResMed (UK) Ltd
65 Milton Park
Abingdon Oxfordshire OX14 4RX
Telephone: +44 (1235) 862 997
Fax: +44 (1235) 831 336
Email: reception@resmed.co.uk

Americas
ResMed Inc.
14040 Danielson Street
Poway CA 92064-6857
Telephone: +1 (858) 746-2400 or
Telephone: 1 800 424 0737 (US toll free)
Fax: +1 (858) 746-2900
Email: reception@resmed.com

ResMed Motor Technologies
Servo Magnetics, Inc.
9540 DeSoto Ave.
Chatsworth, CA 91311
Telephone: +1 (818) 428-6400
Fax: +1 (818) 428-6404

Australia
ResMed Campus (Manufacturing)
1 Elizabeth Macarthur Drive
Bella Vista NSW 2153
Telephone: +61 (2) 8884 1000
Telephone: 1 800 658 189 (toll free)
Fax: +61 (2) 8883 3114
Email: reception@resmed.com.au

Austria
ResMed Austria Medizintechnik GmbH
Muthgasse 36
1190 Wien
Telephone:
+43 01 803 4700
Fax: +43 1 803 4800
Email: reception@resmed.at

China
ResMed (Beijing) Commercial Co. Ltd.
Room 1759
New Century Business Building
6 Shouti South Road, Haidian District
Beijing 100044, China
Telephone: 86-10-68492133
Fax: 86-10-68492121

Finland
ResMed Finland Oy
Eteläinen Salmitie 2
02430 Masala Finland
Telephone: +358 (0) 9 8676 820
Fax: +358 (0) 9 8676 8222
Email: reception@resmed.fi

RESMED

Global leaders in sleep and respiratory medicine

www.resmed.com

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