<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                For the quarterly period ended SEPTEMBER 30, 2000


                         Commission File Number 1-13388



                               GUIDANT CORPORATION
             (Exact name of Registrant as specified in its charter)


          INDIANA                                       35-1931722
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)


                         111 MONUMENT CIRCLE, 29TH FLOOR
                        INDIANAPOLIS, INDIANA 46204-5129
                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (317) 971-2000

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
    -----            -----



The number of shares of common stock outstanding as of November 7, 2000:

        Class                                 Number of Shares Outstanding
        -----                                 ----------------------------
        Common                                          307,721,835




                                       1

<PAGE>   2


                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements


                      GUIDANT CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Dollars in millions, except per-share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED              NINE MONTHS ENDED
                                                        SEPTEMBER 30,                  SEPTEMBER 30,
                                                ----------------------------     ------------------------
                                                    2000             1999           2000           1999
<S>                                                <C>              <C>          <C>            <C>
Net sales.......................................   $600.8           $569.0       $1,899.9       $1,776.2

Cost of products sold...........................    149.2            143.7          452.3          452.5
                                                    -----            -----          -----          -----

       Gross profit.............................    451.6            425.3        1,447.6        1,323.7

Research and development........................     85.6             76.5          265.0          243.2
Purchased research and development..............     --               --             --             49.0
Sales, marketing, and administrative............    173.4            169.7          550.9          521.1
Litigation, net.................................    (12.9)            --            (23.7)            --
Foundation contribution.........................     --               20.2           10.8           20.2
Interest, net...................................     14.0             14.6           42.8           41.7
Royalties, net..................................     10.3              7.3           38.8           33.3
Amortization....................................     10.3             10.9           33.2           30.3
Other, net......................................     (7.1)             0.2           (8.4)          (6.4)
                                                    ------           -----        --------       --------

Income before income taxes and cumulative
   effect of change in accounting principle ....    178.0            125.9          538.2          391.3

Income taxes....................................     55.2             20.1          172.3          142.3
                                                    -----            -----        -------        -------

Income before cumulative effect of change
   in accounting principle .....................    122.8            105.8          365.9          249.0

Cumulative effect of change in accounting
   principle, net ..............................     --               --              --            (3.3)
                                                    ------           -----        --------       --------

       Net income...............................   $122.8           $105.8         $365.9         $245.7
                                                   ======           ======         ======         ======

Earnings per share - basic......................    $0.41            $0.35          $1.22          $0.82
                                                    =====            =====          =====          =====

Earnings per share - assuming dilution..........    $0.40            $0.34          $1.18          $0.79
                                                    =====            =====          =====          =====
</TABLE>




See notes to consolidated financial statements.


                                       2

<PAGE>   3


                      GUIDANT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              (Dollars in millions)


<TABLE>
<CAPTION>
                                                      SEPTEMBER 30,          DECEMBER 31,
                                                          2000                   1999
                                                  -------------------     ------------------
                                                      (unaudited)
<S>                                                  <C>                    <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents.......................         $80.6                  $27.8

Short-term investments..........................           4.6                    --

Accounts receivable, net of allowances
       of $16.3(2000) and $15.5(1999)...........         550.0                  476.2

Other receivables...............................          20.6                   16.5

Inventories.....................................         220.6                  242.7

Deferred income taxes...........................         116.2                  120.2

Impulse Dynamics option.........................         125.0                   --

Prepaid expenses................................          35.3                   32.7
                                                          ----                   ----

       Total Current Assets.....................       1,152.9                  916.1



OTHER ASSETS
Goodwill, net of allowances
       of $126.1(2000) and $105.6(1999).........         453.8                  467.7

Other intangible assets, net of allowances
       of $43.6(2000) and $31.0(1999)...........         193.7                  199.7

Deferred income taxes ..........................          52.8                   70.1

Investments.....................................          51.9                   46.8

Sundry .........................................          38.6                   35.3

Property and equipment, net of accumulated
       depreciation of $391.0 (2000) and
       $331.9 (1999)............................         546.8                  514.5
                                                         -----                  -----

                                                      $2,490.5               $2,250.2
                                                      ========               ========
</TABLE>



See notes to consolidated financial statements.


                                       3

<PAGE>   4


                      GUIDANT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              (Dollars in millions)

<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,          DECEMBER 31,
                                                                                     2000                   1999
                                                                             -------------------     ------------------
                                                                                (unaudited)

<S>                                                                             <C>                    <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable.......................................................             $58.8                  $68.7

Employee compensation..................................................             113.7                  108.6

Other liabilities......................................................             127.6                  179.2

Income taxes payable...................................................              50.5                   22.0

Current portion of long-term debt......................................             460.0                  360.0
                                                                                    -----                  -----

       Total Current Liabilities.......................................             810.6                  738.5


NONCURRENT LIABILITIES
Long-term debt.........................................................             430.6                  527.7

Other  ................................................................             105.5                  116.7
                                                                                    -----                  -----

                                                                                    536.1                  644.4

Commitments and contingencies

SHAREHOLDERS' EQUITY Common stock-no par value:
       Authorized shares:    1,000,000,000
       Issued shares:        307,601,000 (2000)                                     197.4                  192.9
                             307,456,000 (1999)

Additional paid-in capital.............................................             150.5                  257.2

Retained earnings......................................................             898.2                  532.2

Deferred cost, ESOP....................................................             (36.2)                 (38.5)

Treasury stock, at cost:
       Shares:  616,968................................................              --                    (32.8)

Accumulated other comprehensive income ................................             (66.1)                 (43.7)
                                                                                    ------                 ------

                                                                                  1,143.8                  867.3
                                                                                  -------                  -----

                                                                                 $2,490.5               $2,250.2
                                                                                 ========               ========
</TABLE>


See notes to consolidated financial statements.


                                       4

<PAGE>   5


                      GUIDANT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                              (Dollars in millions)
<TABLE>
<CAPTION>
                                                                        NINE MONTHS ENDED
                                                                          SEPTEMBER 30,
                                                                          -------------
                                                                     2000                   1999
                                                                     ----                   ----
                                                                            (unaudited)
<S>                                                                 <C>                   <C>
CASH PROVIDED BY OPERATING ACTIVITIES:
     Net income.........................................            $365.9                $245.7

ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
 PROVIDED BY OPERATING ACTIVITIES:
     Depreciation.......................................              65.5                  59.8
     Amortization of intangible assets..................              33.2                  30.3
     Provision for inventory and other losses...........              29.2                  25.3
     Purchased research and development.................               --                   49.0
     Other noncash expenses, net........................              43.0                  39.3
                                                                      ----                  ----
                                                                     536.8                 449.4
CHANGES IN OPERATING ASSETS AND LIABILITIES:
     Receivables, increase..............................             (98.0)                (16.4)
     Inventories, increase..............................             (13.3)                (18.0)
     Prepaid expenses and other assets, increase........              (9.1)                 (1.7)
     Accounts payable and accrued expenses,
        decrease........................................              (1.9)                (48.4)
     Income taxes payable, increase ....................             101.2                 124.2
     Other liabilities, decrease........................             (57.6)                (28.3)
     Payable to Sulzer Medica...........................              --                  (200.0)
                                                                    -------               -------

NET CASH PROVIDED BY OPERATING ACTIVITIES...............             458.1                 260.8

INVESTING ACTIVITIES:
     Additions of property and equipment, net...........            (109.5)               (129.2)
     Impulse Dynamics Option............................            (125.0)                 --
     Purchases of available-for-sale securities.........              (3.2)                (10.3)
     Sale/maturity of available-for-sale securities.....               3.1                  27.3
     Additions of other assets, net.....................              (8.2)                (35.3)
     Acquisition, net of cash acquired..................              --                  (539.2)
                                                                    -------               -------

NET CASH USED FOR INVESTING ACTIVITIES..................            (242.8)               (686.7)

FINANCING ACTIVITIES:
     Proceeds from long-term borrowings.................               --                  346.4
     Increase in borrowings, net........................               4.3                 207.4
     Purchases of common stock and other capital
       transactions, net of tax.........................            (162.9)               (111.8)
                                                                    -------               -------

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES.....            (158.6)                442.0

Effect of Exchange Rate Changes on Cash.................              (3.9)                 (1.5)
                                                                      -----                 -----

NET INCREASE IN CASH AND CASH EQUIVALENTS...............              52.8                  14.6

Cash and Cash Equivalents at Beginning of Period........              27.8                  17.3
                                                                      ----                  ----

CASH AND CASH EQUIVALENTS AT END OF PERIOD..............             $80.6                 $31.9
                                                                     =====                 =====


See notes to consolidated financial statements.

</TABLE>


                                       5

<PAGE>   6


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (In millions)
                                   (unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
necessary for a fair presentation of results of operations, financial position,
and cash flows in conformity with generally accepted accounting principles.
Operating results from interim periods are not necessarily indicative of results
that may be expected for the fiscal year as a whole. In the opinion of
management, the consolidated financial statements reflect all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the Company's results for the periods presented. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues, expenses, and related
disclosures at the date of the financial statements and during the reporting
period. Actual results could differ from these estimates.

For further information, refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.

NOTE 2 - INVENTORIES

Inventories consisted of the following:

                                      SEPTEMBER 30,          DECEMBER 31,
                                          2000                   1999
                                      -------------          ------------
       Finished products                 $135.5                 $135.1
       Work in process                     33.6                   39.9
       Raw materials and supplies          51.5                   67.7
                                         ------                 ------
                                         $220.6                 $242.7
                                         ======                 ======



                                       6

<PAGE>   7


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (In millions)
                                   (unaudited)

NOTE 3 - EARNINGS PER SHARE

The following table sets forth the computation of earnings per share:

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                          SEPTEMBER 30,                SEPTEMBER   30,
                                                                     ----------------------        ---------------------
                                                                      2000            1999          2000          1999
                                                                     ------          ------        ------        -------
<S>                                                                  <C>             <C>           <C>           <C>
Income before cumulative effect of
   accounting change...........................................      $122.8          $105.8        $365.9        $249.0

Cumulative effect of accounting change, net..................          --              --            --            (3.3)
                                                                     ------          ------        ------        -------

Net income.....................................................      $122.8          $105.8        $365.9        $245.7
                                                                     ======          ======        ======        ======

Weighted-average common shares outstanding.....................      301.10          300.54        300.78        300.44

Effect of employee stock options...............................        9.22           10.62          9.57         10.78
                                                                     ------          ------        ------        -------

Weighted-average common shares outstanding
   and assumed conversions.....................................      310.32          311.16        310.35        311.22
                                                                     ======          ======        ======        ======

EARNINGS PER SHARE - BASIC:

Income before cumulative effect of
   accounting change...........................................       $0.41           $0.35         $1.22         $0.83

Cumulative effect of accounting change, net..................          --              --            --           (0.01)
                                                                     ------          ------        ------        -------

       EARNINGS PER SHARE - BASIC..............................       $0.41           $0.35         $1.22          $0.82
                                                                     ======          =======       ======        =======

EARNINGS PER SHARE - ASSUMING DILUTION:

Income before cumulative effect of
   accounting change...........................................       $0.40           $0.34         $1.18          $0.80

Cumulative effect of accounting change, net..................          --              --            --            (0.01)
                                                                     ------          ------        ------        -------

       EARNINGS PER SHARE - ASSUMING DILUTION..................       $0.40           $0.34         $1.18          $0.79
                                                                     ======          ======        ======        =======
</TABLE>


                                       7

<PAGE>   8


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4  - COMPREHENSIVE INCOME

Comprehensive income comprises net income adjusted for the changes in foreign
currency translation adjustments and unrealized gains or losses on
available-for-sale securities. For the third quarter of 2000 and 1999,
comprehensive income was $108.6 million and $111.7 million, respectively.
Comprehensive income for the nine months ended September 30, 2000 and 1999 was
$343.5 million and $227.8 million, respectively.

NOTE 5 - SEGMENT INFORMATION

                                THREE MONTHS ENDED        NINE MONTHS ENDED
                                    SEPTEMBER 30,            SEPTEMBER 30,
GEOGRAPHIC INFORMATION:         2000         1999         2000          1999
                                ----         ----         ----          ----
NET SALES(1):
United States                  $419.8       $398.5      $1,349.3      $1,262.2
International                   181.0        170.5         550.6         514.0
                               ------       ------      --------      --------

                               $600.8       $569.0      $1,899.9      $1,776.2
                               ======       ======      ========      ========

(1) Revenues are attributed to countries based on location of the customer.

                                   SEPTEMBER 30,              DECEMBER 31,
LONG-LIVED ASSETS:                     2000                       1999
                                       ----                       ----

United States                         $499.2                    $467.6
International                           47.6                      46.9
                                      ------                    ------
                                      $546.8                    $514.5
                                      ======                    ======


                                THREE MONTHS ENDED        NINE MONTHS ENDED
NET SALES OF CLASSES                SEPTEMBER 30,            SEPTEMBER 30,
OF SIMILAR PRODUCTS:            2000         1999         2000          1999
                                ----         ----         ----          ----


Vascular intervention          $263.7       $290.1      $  907.0     $  932.0
Cardiac rhythm management       305.7        266.3         913.0        781.7
Cardiac & vascular surgery       31.4         12.6          79.9         62.5
                               ------       ------      --------     --------

                               $600.8       $569.0      $1,899.9     $1,776.2
                               ======       ======      ========     ========

NOTE 6 - TECHNOLOGY AGREEMENT

On April 3, 2000, Guidant signed a broad agreement with Johnson & Johnson that
covers various technologies and patents. As part of the agreement, Guidant
obtained an exclusive option from Impulse Dynamics, N.V. to acquire emerging
cardiovascular technology for the treatment of heart failure. Under the terms of
the agreement, Guidant paid Impulse Dynamics $125 million for the exclusive
right to evaluate cardiovascular technology currently under development by
Impulse Dynamics. Guidant is currently conducting research into a number of
scientific and clinical aspects of Impulse Dynamics' heart failure technology
and anticipates that this research will be completed before the end of 2000. The
$125 million payment will be accounted for as a current asset until Guidant
determines whether or not to proceed with the acquisition of the exclusive
rights to this technology. If Guidant proceeds with that acquisition, additional
payments would be approximately $300 million plus certain potential contingent
payments. In addition, Guidant and Cordis Corporation (Cordis),



                                       8

<PAGE>   9


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - TECHNOLOGY AGREEMENT (CONTINUED)


a wholly owned subsidiary of Johnson & Johnson, have agreed to dismiss all
current litigation between them and agree to resolve the remaining disputes in
future arbitration proceedings. The process for the first arbitration began in
October 2000 and the hearing is expected to take place in mid-2001. Also as part
of this agreement, Cordis and Guidant received licenses to the other's patents
involved in the disputes to ensure future product availability. Finally, the
agreement establishes Cordis as a U.S. distributor of rapid-exchange balloon
dilatation catheters supplied by Guidant.

NOTE 7 - NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended, which
is required to be adopted in years beginning after June 15, 2000. The Company
adopted the new pronouncement effective October 1, 2000. This pronouncement
establishes accounting and reporting standards for derivative financial
instruments and hedging activities. SFAS No. 133 requires, among other things,
the Company to recognize all derivatives as either assets or liabilities on the
balance sheet at fair value. Derivatives not qualifying as hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in its fair value will either be offset
against the change in fair value of the hedged assets, liabilities, or firm
commitments through income or recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings.

Based on the Company's derivative positions at September 30, 2000, the Company
has determined that the adoption of SFAS No. 133 will not have a material effect
on the earnings and financial position of the Company. As a result of adopting
SFAS No. 133, the Company has discontinued its use of foreign exchange option
contracts and is now utilizing foreign exchange forward contracts with major
international financial institutions. The critical terms of the forward
contracts are the same as the underlying forecasted transactions; therefore,
changes in the fair value of the derivatives should be highly effective in
offsetting changes in the expected cash flows from the forecasted transaction.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements,
which summarizes the SEC staff's views regarding the recognition and reporting
of revenues in certain transactions. The Company will be required to adopt SAB
No. 101 in the fourth quarter of 2000. The adoption of SAB No. 101 will not have
a material impact on the Company's results of operations or financial position.

NOTE 8 - CONTINGENCIES

The Company is a party to various legal actions that have arisen in the normal
course of business. The following is a listing of cases in which Guidant is a
defendant which are required to be disclosed under generally accepted accounting
principles. A listing of additional cases in which Guidant is a plaintiff is
available in the Company's most recent report on Form 10-K filed with the
Securities and Exchange Commission, as updated by subsequent filings on Form
10-Q.


                                       9


<PAGE>   10


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CONTINGENCIES (CONTINUED)

On October 3, 1997, Cordis Corporation (Cordis), a wholly owned subsidiary of
Johnson & Johnson, filed suit against the Company and Advanced Cardiovascular
Systems, Inc. (ACS), the Company's wholly owned subsidiary, alleging that the
sale of the ACS MULTI-LINK Coronary Stent infringes the Palmaz/Schatz patents
owned by Cordis. In addition, on December 2, 1997, Cordis filed suit against ACS
alleging that the ACS RX ROCKET Coronary Dilatation Catheter infringes the
Pinchuk patents owned by Cordis. On April 3, 2000, the parties agreed to dismiss
all patent litigation between them and resolve remaining disputes in future
arbitration proceedings. As part of the agreement, the parties received licenses
to the other's patents involved in the disputes. The arbitration proceedings
will determine what, if any, payments need to be made. In the arbitration
proceeding regarding the Palmaz/Schatz patents, Cordis is allowed to assert a
limited number of claims from the following United States patents: 5,102,417;
4,733,762; and 5,902,332. The timing of the arbitration hearing will depend on
the timing of the lawsuits filed by Cordis against Boston Scientific Corporation
(BSC) and Medtronic AVE, Inc. on the Palmaz/Schatz patents. In the arbitration
proceeding regarding the Pinchuk patents, Cordis is allowed to assert a limited
number of claims from the following United States patents: 5,156,612; 5,304,197;
5,449,371; and 5,738,653. The arbitration process regarding the Pinchuk patents
began in October 2000 and the arbitration hearing is expected to take place in
mid-2001.

On November 6, 1997, Medtronic, Inc. (Medtronic) filed suit against ACS in the
District Court of Minnesota, alleging that the ACS RX MULTI-LINK Coronary Stent
infringes a patent owned by Medtronic. Trial by jury commenced on October 18,
1999, and in late November 1999, the court granted ACS' and Guidant's motions
for a directed verdict of non-infringement. A Final Judgment of non-infringement
was entered on January 12, 2000. Medtronic has appealed. Medtronic filed a
second complaint alleging the ACS MULTI-LINK OTW, the ACS MULTI-LINK RX DUET,
the ACS MULTI-LINK OTW DUET, and SOLO Coronary Stents and MEGALINK Peripheral
Stent infringed the same patent. In this new complaint, as well as the complaint
in the earlier action, Medtronic is seeking injunctive relief and monetary
damages. In view of the appeal in the first lawsuit, the parties have agreed to
a stay of the second lawsuit pending the outcome of the appeal.

On February 18, 1998, Arterial Vascular Engineering, Inc. (n/k/a Medtronic AVE,
Inc.) filed suit against ACS in the District Court of Delaware alleging that the
sale of the ACS MULTI-LINK Coronary Stent infringes certain patents owned by
Medtronic AVE. The suit is consolidated with a suit by ACS alleging infringement
by Medtronic AVE of certain ACS stent patents. The Medtronic AVE complaint also
alleges misappropriation of trade secrets and breach of a confidentiality
agreement by ACS. In the lawsuit, Medtronic AVE is seeking injunctive relief,
monetary damages, and to invalidate ACS stent patents asserted against Medtronic
AVE. The trial is currently scheduled to commence in August 2001. However, ACS
and Medtronic AVE have filed a joint motion with the court to stay the
litigation until September 2002. The joint motion is subject to approval of the
court.

In a lawsuit originally filed against ACS on May 31, 1994, SciMed Life Systems,
Inc. (SciMed), a subsidiary of BSC, alleged that the ACS RX ELIPSE coronary
dilatation catheter and the ACS RX MULTILINK coronary stent system infringe
certain patents owned by SciMed. On June 15, 1999, the Court entered an order
granting a motion for summary judgment of non-infringement in favor of ACS.
SciMed appealed this decision. On May 17, 2000, the Company and BSC agreed on a
settlement structure covering all patent litigation pending between the two
companies. As part of the settlement, the parties have agreed that SciMed's
appeal will continue and there may be a payment required based on the outcome of
the appeal. The payment, if any, will not be material. A hearing on SciMed's
appeal occurred on October 2, 2000.


                                       10

<PAGE>   11


                      GUIDANT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CONTINGENCIES (CONTINUED)

On March 31, 1999, Pacesetter, Inc., filed suit against Guidant Sales
Corporation (GSC) and Cardiac Pacemakers, Inc. (CPI), a wholly owned subsidiary
of the Company, in the Central District of California, alleging that rate
responsive pacemakers or defibrillators having rate responsive pacing
(including, by name, the VIGOR SR and VIGOR DR pacemakers) infringe two patents
owned by Pacesetter. In the lawsuit, Pacesetter is seeking injunctive relief and
monetary damages.

The Company believes that it has substantial and meritorious defenses against
the above infringement claims and intends to vigorously contest them. The
Company has filed suit and has lawsuits and other legal actions currently
outstanding against most of the companies discussed above. While it is not
possible to predict or determine the outcomes of the legal actions brought
against it, or to provide an estimate of any additional losses, if any, that may
arise, the Company believes the costs associated with all of these actions will
not have a material adverse effect on its consolidated financial position or
liquidity, but could possibly be material to the consolidated results of
operations of any one period.

Further, additional claims may be asserted in the future relative to events
currently unknown to management. Management believes that the Company's
risk-management practices, including insurance coverage, are reasonably adequate
to protect against potential product liability losses.



                                       11

<PAGE>   12


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

Guidant Corporation (Guidant or the Company) is a global company that designs,
develops, manufactures, and markets a broad range of innovative, high-quality
therapeutic medical devices for the treatment of cardiovascular and vascular
diseases. Guidant is a leader in the medical device industry and offers: i)
peripheral and coronary stents, coronary balloon dilatation catheters, and
related accessories; ii) automatic implantable cardioverter defibrillator (AICD)
systems, which are used to detect and treat abnormally fast heart rhythms
(tachycardia); iii) a full line of implantable pacemaker systems used to manage
slow or irregular heart rhythms (bradycardia); iv) implantable resynchronization
therapy for the treatment of heart failure; v) products for use in minimally
invasive vascular surgeries, including the treatment of abdominal aortic
aneurysms (AAA); and vi) products for use in minimally invasive cardiac
surgeries, and products to perform cardiac artery bypass grafting (CABG) on a
beating heart. Guidant has principal operations in the United States, Western
Europe, and Japan. The Company markets its products in nearly 100 countries
through a direct sales force in the United States and a combination of direct
sales representatives and independent distributors in international markets.

Cardiovascular disease continues to be the leading cause of death in the United
States. Guidant's product portfolio has made it a leader in the cardiovascular
markets it serves, but Guidant is also committed to developing innovative
products that will address significant remaining unmet clinical needs. Guidant's
business strategy is to design therapeutic products which improve the quality of
patient care and reduce treatment costs. In implementing this strategy, the
Company focuses on the following three areas which it believes are critical to
its future success: (i) global product innovation, (ii) economic partnerships
with customers worldwide, and (iii) organizational excellence.


                                       12

<PAGE>   13


The following tables are summaries of the Company's net sales and major costs
and expenses excluding the impact of special items. For purposes of analysis the
Company employs a concept of operating income, which is defined as gross profit
less research and development and sales, marketing, and administrative expenses,
excluding special items.

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED           NINE MONTHS ENDED
                                            SEPTEMBER 30,               SEPTEMBER 30,
                                         ------------------         ---------------------
                                          2000        1999            2000         1999
                                         ------      ------         --------     --------

                                                       (Dollars in millions)
                                                           (unaudited)
<S>                                      <C>         <C>            <C>          <C>
Total net sales                          $600.8      $569.0         $1,899.9     $1,776.2

Cost of products sold                     149.2       135.4            452.3        426.3
                                         ------      ------         --------     --------

     Gross profit                         451.6       433.6          1,447.6      1,349.9

Research and development                   85.6        75.8            265.0        241.5
Sales, marketing, and administrative      173.4       168.9            550.9        517.9
                                         ------      ------         --------     --------
                                          259.0       244.7            815.9        759.4

Operating income                         $192.6      $188.9(1)        $631.7       $590.5(1)
                                         ======      ======         ========     ========


                                                    AS A PERCENT OF NET SALES
                                         ------------------------------------------------
                                         THREE MONTHS ENDED           NINE MONTHS ENDED
                                            SEPTEMBER 30,               SEPTEMBER 30,
                                         ------------------         ---------------------
                                          2000        1999            2000         1999
                                         ------      ------         --------     --------

Total net sales                           100.0%      100.0%           100.0%       100.0%

Cost of products sold                      24.8        23.8             23.8         24.0
                                         ------      ------         --------     --------

     Gross profit                          75.2        76.2             76.2         76.0

Research and development                   14.2        13.3             14.0         13.6
Sales, marketing, and administrative       28.9        29.7             29.0         29.2
                                           ----        ----         --------         ----
                                           43.1        43.0             43.0         42.8

Operating income                           32.1%       33.2%(1)         33.2%        33.2%(1)
                                         ======      ======         ========     ========

</TABLE>


(1)Excludes a purchased research and development charge of $49.0 million in the
first quarter of 1999. Also excludes the impact of stay-pay and the purchase
accounting write-up of acquired Intermedics inventory sold for a total of $9.8
million and $31.1 million for the three and nine month periods ended September
30, 1999, respectively. Therefore, the cost of products sold, gross profit,
research and development, and sales, marketing, and administrative lines
displayed above do not agree to the reported consolidated statement of income
presentation for 1999.


                                       13

<PAGE>   14


OPERATING RESULTS - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000

The Company had worldwide net sales of $600.8 million for the three months ended
September 30, 2000, reflecting an increase of $31.8 million or 6% over 1999.
Growth in unit volume of 12% increased net sales, while price declines and
fluctuations in foreign currency exchange rates decreased net sales 4% and 2%,
respectively. Unfavorable foreign currency exchange rates decreased net sales
$13.5 million.

Sales for the nine months ended September 30, 2000, of $1,899.9 million
increased $123.7 million or 7% over the same period in 1999. Unit volume growth
of 12% was offset by price declines of 4% and unfavorable foreign currency
exchange rate impact of 1%. Growth for the nine month period ended September 30,
2000, was also impacted by the sale of the general surgery product line in July
1999. General surgery product sales were $27.6 million for the nine months ended
September 30, 1999. Revenue growth for the nine months ended September 30, 2000,
would have totaled 10% excluding unfavorable exchange rate impact and 1999
revenues from general surgery.

Sales growth in both periods was driven by AICDs, the ANCURE(R) ENDOGRAFT(R)
System for endovascular AAA repair, pacemakers, and angioplasty systems. In
addition, emerging therapies to treat heart failure and peripheral vascular
disease continued to show promising growth. Growth in these areas was offset
somewhat by a decline in stent revenues.

Worldwide AICD system sales of $165.6 million grew 20.7% for the three months
ended September 30, 2000, as compared to the three months ended September 30,
1999. Growth was 23.5% for the same periods in the U.S. For the nine months
ended September 30, 2000, AICD system sales were $506.0 million, representing
growth of $86.8 million or 20.7% over the first nine months of 1999. Growth in
both periods is due to the market launch of the VENTAK(R) PRIZM(TM) implantable
defibrillation system in the U.S. in February 2000. Guidant received approval to
market the VENTAK PRIZM 2 dual-chamber implantable pacemaker/defibrillator in
the third quarter of 2000 and launched this product worldwide on November 8,
2000. At 32cc in volume and 12mm thin, this device has unmatched longevity of
six years under typical conditions and is the world's smallest, thinnest,
dual-chamber pacemaker/defibrillator. Also in the third quarter of 2000, Guidant
received U.S. approval to market the VENTAK PRIZM HE System, which provides
physicians and their patients the same small, physiologic shape and full feature
set as the VENTAK PRIZM System, but with 41 J of stored energy designed for
patients with high defibrillation thresholds. This family of technology choices
leverages the capabilities of Guidant's ZOOM(TM) Programming System, which was
also released in the third quarter of 2000. The ZOOM Programming System is used
by physicians and clinicians to analyze data from Guidant's implantable



                                       14
<PAGE>   15
defibrillator and pacemaker systems. The ZOOM System offers a faster, more
intuitive interface with the implanted devices.

Pacemaker product sales were $140.1 million for the three months ended September
30, 2000, compared to $129.1 million for the three months ended September 30,
1999. United States and international sales of these products increased 11.0%
and 4.8%, respectively, for the three months ended September 30, 2000, compared
to the three months ended September 30, 1999. Sales of these products for the
nine months of 2000 were $407.1 million compared to $362.3 million in the same
period of 1999, representing growth of 12.4%. Sales for the nine months ended
September 30, 1999, reflect the impact of the Intermedics acquisition for only
eight months, as that transaction was completed February 1, 1999, and was
accounted for using the purchase method of accounting. In addition, pacemaker
sales growth in both periods was driven by the PULSAR(TM) MAX family of dual
sensor pacemakers and the DISCOVERY(TM) family of pacemakers.

Sales of coronary stents in the United States during the three months ended
September 30, 2000, were $111.5 million compared to $146.9 million during the
same period in 1999. Stent units declined 16% in the U.S. and declines in
average selling prices decreased revenues 8% from the quarter ended September
30, 1999. Management believes that reductions in customer owned inventory in
anticipation of the October U.S. market release of the MULTI-LINK TETRA(TM)
Coronary Stent System as well as market share erosion related to competitive
stent launches during 2000 drove the unit decline. Average selling prices for
stent products in the U.S. declined by 3% sequentially versus the second quarter
of 2000, which is in line with recent trends. International sales of these
products during the third quarter of 2000 were $53.5 million compared to $58.3
million during the third quarter of 1999. International unit growth during the
same period of 11% was offset by the negative impact of price declines of 13%
and a 6% foreign exchange rate impact. Unit growth in Europe of 19% in the third
quarter of 2000 over the third quarter of 1999, reflects the release of the
TETRA in Europe which was fully launched in June 2000. The TETRA incorporates
Guidant's VTS(TM)(Variable Thickness Strut) technology which is designed to
provide enhanced flexibility, deliverability, and surface area coverage while
maintaining radial strength. Worldwide stent revenues were $616.3 million for
the nine months ended September 30, 2000, as compared to $679.1 million for the
nine months ended September 30, 1999. Stent unit volumes were flat for the nine
months ended September 30, 2000, compared to the same period in 1999. The
decrease in revenue compared to 1999 reflects the negative impact of price
declines of 9% and a



                                       15
<PAGE>   16



1% foreign exchange rate impact. Guidant also launched the MULTI-LINK ULTRA(TM)
Coronary Stent System in September of 2000 in the U.S. The ULTRA is Guidant's
first coronary stent that is specifically designed for the treatment of larger
native coronary arteries, those with diameters from 3.5 to 5.0 mm.

Angioplasty sales of $87.9 million increased 10.3% for the three month period
ending September 30, 2000, as compared to September 30, 1999, driven by
international growth, particularly in Japan. Market acceptance of the
CrossSail(TM) and OpenSail(TM) Coronary Dilatation Catheters, launched during
2000 in most geographies, contributed to the growth. The CrossSail offers the
smallest profile of any rapid exchange dilatation catheter currently available.
Angioplasty sales for the nine months ended September 30, 2000, were $261.7
million, an increase of 9.2% from the same period in 1999.

Sales of Guidant's ANCURE system and accessories were $18.7 million in the third
quarter of 2000 compared to $12.1 million in the second quarter of 2000,
representing growth of 54.5%. Guidant's ANCURE system received FDA approval in
September 1999, providing a less-invasive approach for treating AAA. Three-year
follow-up data on the ANCURE system shows that use of the ANCURE system leads to
a steadily decreasing aneurysm diameter over time in a majority of patients. The
ANCURE has precisely positioned hooks and a one-piece polyester body that allows
the implant to adapt to changes that occur over time within the aorta, while
maintaining the implant's original position. For the nine months ended September
30, 2000, ANCURE sales were $38.1 million.

Sales of cardiac surgery products were $12.2 million in the third quarter of
2000 as compared to $11.9 million in the third quarter of 1999. For the first
nine months of 2000, these sales were $40.7 million as compared to $32.1 million
in the first nine months of 1999. Cardiac surgery sales include the VASOVIEW
UNIPORT(TM) PLUS Endoscopic Vessel Harvesting System and products produced by
CardioThoracic Systems, Inc. (CTS). CTS was acquired in a pooling of interests
transaction on November 15, 1999. CTS introduced the ACHIEVE(TM) Off-Pump
Stabilization System during the third quarter of 2000. The ACHIEVE System
combines tools which enable the physician to access the back portion of the
heart with Guidant's off-pump (beating heart) multi-vessel CABG system. Beating
heart procedures potentially reduce post-operative hospital stay, cost, and
surgical complications, while preserving the clinical outcomes associated with
conventional surgery.



                                       16
<PAGE>   17



For the quarter ended September 30, 2000, cost of products sold represents 24.8%
of net sales. Cost of products sold for the quarter ended September 30, 1999,
includes the impact of purchase accounting adjustments related to the write-up
of acquired Intermedics inventory and the impact of stay-pay for Intermedics
manufacturing personnel during the shut-down of the acquired facilities. The
impact of these two items was $8.3 million during the third quarter of 1999.
Cost of products sold, as adjusted to exclude these two items, represented 23.8%
of net sales for the quarter ended September 30, 1999. The increase of cost of
products sold as a percentage of sales in the third quarter of 2000 over the
adjusted third quarter of 1999 was due principally to manufacturing start-up
costs in preparation for the launch of TETRA and PRIZM 2 in the U.S. and the
impact of price declines on sales. Cost of products sold as a percentage of net
sales was 23.8% for the first nine months ended September 30, 2000, as compared
to 24.0% for the same period of 1999, excluding stay-pay and the impact of
purchase accounting adjustments for 1999.

The Company continued to invest aggressively in research and development.
Research and development expense was $85.6 million in the third quarter of 2000
or 14.2% of sales as compared to $75.8 million in the third quarter of 1999 or
13.3% of sales. Research and development spending for the nine months ended
September 30, 2000, and September 30, 1999, was $265.0 million and $241.5
million, respectively. The 1999 research and development spending excludes
stay-pay and a $49 million pre-tax charge related to the appraised value of
in-process research and development for the Intermedics acquisition. Research
and development spending in 2000 includes: (i) development of implantable
resynchronization therapy for the treatment of heart failure; (ii) development
of treatments for atrial arrhythmias; (iii) development of radiotherapy devices
for coronary and peripheral restenosis; (iv) research related to local drug
delivery efforts; and (v) development of peripheral stents, balloons,
guidewires, embolic protection devices, and other devices used to treat
peripheral vascular disease, including carotid occlusions. The Company intends
to continue its aggressive research and development spending to maintain its
commitment to bring new technologies to the market and provide cost-effective
therapies to treat cardiovascular and vascular diseases.

Sales, marketing, and administrative expenses increased $4.5 million or 2.7% for
the three months ended September 30, 2000, compared to the same period in 1999,
excluding stay-pay in 1999. These expenses for the nine months ended September
30, 2000, increased by $33.0 million or 6.4% over the nine months ended
September 30,



                                       17
<PAGE>   18



1999, excluding stay-pay in 1999. Growth in sales and marketing expenses were
somewhat offset by declines in general and administrative expenses in both
periods.

Operating income for the quarter ended September 30, 2000, as previously
defined, was $192.6 million compared to $188.9 million for the quarter ended
September 30, 1999. Sales growth of 5.6% was offset by cost of products sold and
research and development expenses increasing as a percentage of sales. For the
nine months ended September 30, 2000, operating income was $631.7 million
compared to $590.5 million, or growth of 7.0%. Operating income growth for the
nine months ended September 30, 2000, was driven by year to date sales growth of
7.0%.

Net other expenses for the third quarter of 2000 were $27.5 million which
includes interest, royalties, amortization, and other. Net other expenses for
the quarter ended September 30, 1999, were $32.2 million excluding a gain on an
equity investment and the loss on disposal of general surgery. This decrease in
net other adjusted expenses of $4.7 million is due principally to income from an
up-front license access fee on a cardiac and vascular surgery product in the
third quarter of 2000. For the nine months ended September 30, 2000, net other
expenses were $106.4 million. Net other expenses, excluding a $16.6 million
non-cash gain on an equity investment and the loss on general surgery, were
$112.5 million for the nine months ended September 30, 1999.

Income before taxes of $178.0 million for the quarter ending September 30, 2000,
reflects a $12.9 million benefit from a favorable legal ruling involving a
cardiac and vascular surgery product. In July 2000 the Federal Circuit Court
overturned both a Federal District Court's finding that Origin Medsystems, Inc.
(Origin), a subsidiary of Guidant, infringed a General Surgical Innovations,
Inc. patent and a jury's subsequent finding that Origin's infringement of that
patent was willful. The previous ruling resulted in the Company accruing damages
of $12.9 million. Income before taxes for the third quarter of 2000 improved
13.6% over the adjusted third quarter of 1999 income before taxes of $156.7
million. For the nine months ended September 30, 2000, income before taxes of
$538.2 million increased 12.6% over the nine months ended September 30, 1999,
adjusted income before taxes. Income before tax growth in both periods is driven
by operating income growth, lower other expenses, and the impact of the
favorable legal ruling.



                                       18
<PAGE>   19



Excluding the effect of the special charges in 1999, the effective income tax
rates for the quarters ended September 30, 2000, and 1999, were 31.0% and 37.3%,
respectively. For the nine months ended September 30, 2000, and 1999, the
adjusted effective tax rates were 32.0% and 37.5%, respectively. This
improvement in the adjusted tax rates reflect the benefit of increased overseas
manufacturing and the fact that CTS losses were not deductible in the first nine
months of 1999. CTS was acquired in the fourth quarter of 1999 in a tax-free
stock-for-stock transaction. Reported income taxes in the third quarter of 1999
include adjustments related to an Internal Revenue code regulation which
accelerated the utilization of pre-acquisition net operating loss carryovers
from Guidant's acquisitions of EndoVascular Technologies, Inc., in 1997 and CTS.
The Company's effective tax rate for the third quarter of 2000 of 31.0% reflects
the reduction of the year-to-date rate to 32.0% from 32.5% and stems principally
from the ramp-up of coronary stent manufacturing in Guidant's tax-advantaged
Ireland operation. Management currently estimates that the 2000 effective tax
rate will remain at 32.0%.

Net income and earnings per share, assuming dilution, were $122.8 million and
$0.40, respectively, for the third quarter of 2000. Net income and earnings per
share for the quarter ended September 30, 1999, excluding the impact of the
special items, were $98.2 million and $0.32 per share, assuming dilution. This
represents an increase in adjusted net income of $24.6 million or 25.1% and is a
result of the growth in income before taxes and the decrease in the effective
tax rate. Reported net income for the quarter ended September 30, 1999, was
$105.8 million.

Net income and earnings per share, assuming dilution, were $365.9 million and
$1.18, respectively, for the nine months ended September 30, 2000. This reflects
an increase of $67.2 million or 22.5% over the adjusted net income for the first
nine months of 1999 due to the same factors discussed above. Reported net income
in 1999 also includes the net impact of $3.3 million for the cumulative effect
of a change in accounting principle, net of income taxes.

LIQUIDITY AND FINANCIAL CONDITION

The Company generated cash flows which were more than sufficient to fund
operations during the nine months ended September 30, 2000. Cash and cash
equivalents were $80.6 million at September 30, 2000, an increase of $52.8
million over December 31, 1999.

Working capital of $342.3 million at September 30, 2000, increased $164.7
million from the prior year-end level. The increase is attributable to the
acquisition of



                                       19
<PAGE>   20


the Impulse Dynamics option; an increase in accounts receivable of $73.8
million; the increase in cash of $52.8 million; and a $51.6 million decrease in
other current liabilities predominantly related to payments associated with the
Intermedics and CTS acquisitions. This was offset by an increase in the portion
of borrowings classified as short-term. The current ratio at September 30, 2000,
was 1.4:1 compared to 1.2:1 at December 31, 1999. The Company believes its cash
from operations is sufficient to fund essentially all future working capital
needs and discretionary operating spending requirements.

Net cash used for investing activities totaled $242.8 million for the nine
months ended September 30, 2000, compared to $686.7 million for the same period
in 1999. The acquisition of Intermedics and the disposal of general surgery were
a $539.2 million net use of cash in 1999. The payment of the Intermedics
litigation settlement of $200 million in the first quarter of 1999 is included
in operating activities. Net additions of property and equipment of $109.5
million for the nine months ended September 30, 2000, compared to $129.2 million
for the same period in 1999, were also significant uses of cash for investing
activities during both periods.

Net cash used in financing activities totaled $158.6 million for the nine months
ended September 30, 2000. This reflects $162.9 million of net cash outlays under
the Company's systematic stock repurchase program used to offset dilution
resulting from issuance of stock under employee stock option and award plans.
This amount is net of proceeds received upon exercise. The Company ended its
systematic share repurchase program in the third quarter of 2000. Given the
growth in Guidant's share price from the time of the initial public offering,
the share repurchase program was a significant use of cash. Management
anticipates that the availability of extra cash as a result of discontinuing the
program will allow for the pay-down of debt and result in interest expense
savings while financing the growth of the company internally. The Company
estimates the savings will more than offset the dilutive impact of the
additional shares issued due to stock option exercises. However, as authorized
by the Board of Directors of Guidant, the Company may repurchase, from time to
time, shares of common stock. These additional shares may be repurchased at the
discretion of Guidant's management and may or may not be on a systematic basis.

Net proceeds of $346.4 million were received from the issuance of seven year,
6.15% long-term notes in the first quarter of 1999. In addition, commercial
paper was issued to finance the acquisition of Intermedics on February 1, 1999.

At September 30, 2000, the Company had outstanding borrowings of $890.6 million
at a weighted average interest rate of 6.57% through the issuance of commercial
paper,



                                       20
<PAGE>   21



bank borrowings, and long-term notes due in 2006. Bank borrowings represent
short-term uncommitted credit facilities with various commercial banks. The
commercial paper borrowings are supported by two credit facilities aggregating
$950 million. There are currently no outstanding borrowings under these
facilities. Current cash flow projections estimate $460 million of total debt
will be paid down over the next twelve months and the Company has classified
this amount as short-term debt at September 30, 2000. The increase in the amount
classified as short-term over December 31, 1999, relates to the forecasted cash
savings from the termination of the systematic share repurchase program.

The Company believes that amounts available through existing commercial paper
programs should be adequate to fund maturities of short-term borrowings. The
Company also expects its cash from operations to be adequate to meet its
obligations to make interest payments on its debt and other anticipated
operating cash needs, including planned capital expenditures. Capital
expenditures are expected to be approximately $155 million in 2000, primarily
due to continued investment in the Company's U.S. manufacturing and
administrative facilities. On April 3, 2000, the Company signed an agreement
with Johnson & Johnson covering various technologies and patents. As a result of
this agreement, Guidant paid $125 million for the exclusive right to evaluate
cardiovascular technology currently under development by Impulse Dynamics. If
Guidant chooses to acquire the rights to this technology, additional payments
would be approximately $300 million plus potential contingent payments.
Guidant's credit facilities provide sufficient flexibility that any remaining
payments, if the transaction is consummated, could be financed through issuing
commercial paper instruments. The initial $125 million payment was financed
through the issuance of commercial paper and is recorded as a current asset at
September 30, 2000.

The Company has recognized net deferred tax assets aggregating $169.0 million at
September 30, 2000, compared to $190.3 million at December 31, 1999. In view of
the consistent profitability of its past operations, the Company believes that
all these assets will be substantially recovered and that no significant
additional valuation allowances are necessary.

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, the Company cautions investors that any forward-looking statements or
projections made by the Company, including those made in this document, are
subject to risks and uncertainties which may cause actual results to differ
materially from those projected. Economic, competitive, governmental,
technological, and other factors which may affect the Company's operations are
discussed in Exhibit 99.1 filed herewith.




                                       21
<PAGE>   22
                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings

On September 15, 2000, Medtronic and Medtronic AVE, Inc., a wholly owned
subsidiary of Medtronic, filed a declaratory judgment action against the Company
and CPI in the United States District Court for Minnesota requesting that the
court rule that Medtronic does not infringe certain of CPI's patents for atrial
fibrillation technology or that these patents are not valid. The Company has
filed a motion to dismiss the action, which the court denied on October 5, 2000.

On December 23, 1999, ACS brought suit against Medtronic and Medtronic AVE, Inc.
(collectively, Medtronic) in the Northern District of California alleging that
the S670 with Discrete Technology Rapid Exchange Coronary Stent System infringes
a patent of ACS. Additionally, on December 28, 1999, ACS filed a Notice of
Arbitration with the American Arbitration Association. The lawsuit has been
stayed pending the outcome of the arbitration. An arbitration hearing is
expected to be held in February 2001.

On November 26, 1996, the Company, CPI, GSC, and Eli Lilly and Company (Lilly)
filed a patent infringement suit against St. Jude Medical, Inc. and its
subsidiaries, Pacesetter, Inc. and Ventritex, Inc. (collectively, St. Jude), in
the United States District Court for the Southern District of Indiana (the
Indiana Action). In the complaint, as amended, the Company alleges that all of
St. Jude's defibrillator products are the same or similar to certain Ventritex
devices which Ventritex agreed that it would not contest infringed valid,
enforceable claims of certain fundamental U.S. defibrillator patents licensed to
CPI. Among other defenses to this action, St. Jude claimed that it had a license
to these patents because it acquired, in 1996, certain assets or stock of
several Telectronics companies, including rights under a license agreement (the
Telectronics Agreement) entered into in 1994 among CPI, Lilly, and certain
entities affiliated with Telectronics Holdings Ltd. (Telectronics). The Company
asserted that licensing rights under the Telectronics Agreement did not transfer
to St. Jude, and the purported transfer of the Telectronics Agreement to St.
Jude was null and void under the terms of the Telectronics Agreement. The
complaint seeks an injunction against further sales of infringing defibrillator
products, damages for past sales, and a finding of willful infringement. The
Indiana Action had been stayed to allow an arbitrator to rule on the validity of
the purported transfer of the Telectronics Agreement. The question of the
validity of the purported transfer of the Telectronics Agreement was arbitrated
in a proceeding involving the Company, CPI, GSC, Lilly, and Telectronics.

On July 10, 2000, the arbitrator determined in a Final Award that St. Jude's
1996 acquisition of certain Telectronics' assets and stock did not satisfy the
transfer requirements of the License Agreement, and that the purported transfer
of the Telectronics Agreement to St. Jude was null and void. The United States
District Court for the Southern District of Indiana lifted the stay on August 4,
2000. Trial is scheduled to begin in June 2001.

On February 1, 1999, Deborah Charms filed suit against Medtronic, the Company
and CPI in the United States District Court for the Western District of Texas
alleging that unspecified defibrillation products of Medtronic and CPI infringe
a patent owned by Charms. On February 3, 2000, the court entered an order that
all claims alleged by Charms to have been infringed by the Company and CPI were
invalid and granted the defendants' motion for summary judgment. Charms
appealed, and the appeal has been fully briefed, but arguments on the appeal
have not been scheduled.

On February 18, 1998, Arterial Vascular Engineering, Inc. (n/k/a Medtronic AVE,
Inc.) filed suit against ACS in the District Court of Delaware alleging that
the sale of the ACS MULTI-LINK Coronary Stent infringes certain patents owned
by Medtronic AVE. The suit is consolidated with a suit by ACS alleging
infringement by Medtronic AVE of certain ACS stent patents. The Medtronic AVE
complaint also alleges misappropriation of trade secrets and breach of a
confidentiality agreement by ACS. In the lawsuit, Medtronic AVE is seeking
injunctive relief, monetary damages and to invalidate ACS stent patents
asserted against Medtronic AVE. The trial is currently scheduled to commence in
August 2001. However, ACS and Medtronic AVE have filed a joint motion with the
court to stay the litigation until September 2002. The joint motion is subject
to approval of the court.



                                       22


<PAGE>   23


                                     PART II
                                OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

(a)    Exhibits.  The following documents are filed as exhibits to this report:

                     10       364-Day Credit Agreement dated as of August
                              23, 2000, among the Company, certain banks,
                              and Morgan Guaranty Trust Company of New
                              York as administrative agent

                     27       Financial Data Schedule

                     99       Factors Possibly Affecting Future Operating
                              Results

(b) Reports on Form 8-K. During the quarter for which this Report on Form 10-Q
is filed, the registrant filed no reports on Form 8-K.





                                       23


<PAGE>   24
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.




                               GUIDANT CORPORATION
                                  (Registrant)




Date    November 14, 2000         /s/ Keith E. Brauer
                                  ------------------------------------
                                      Keith E. Brauer
                                      Vice President, Finance and
                                      Chief Financial Officer





Date    November 14, 2000         /s/ Michael A. Sherman
                                  ----------------------------
                                      Michael A. Sherman
                                      Corporate Controller and
                                      Chief Accounting Officer



                                       24

<PAGE>   25


                                  Exhibit List


     10        364-Day Credit Agreement dated as of August 23, 2000, among the
               Company, certain banks, and Morgan Guaranty Trust Company of New
               York as administrative agent

     27        Financial Data Schedule

     99        Factors Possibly Affecting Future Operating Results