<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 JUNE 30, 2001


                         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 August 3, 2001:

             Class                                 Number of Shares Outstanding
             -----                                 ----------------------------
            Common                                          304,327,582


<PAGE>   2

                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements


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

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED            SIX MONTHS ENDED
                                                      JUNE 30,                    JUNE 30,
                                            -------------------------    -------------------------
                                                2001          2000           2001          2000
<S>                                         <C>            <C>           <C>            <C>
Net sales ..............................     $   656.3     $   668.4      $ 1,327.3     $ 1,299.1

Cost of products sold ..................         155.6         162.3          325.1         303.1
                                             ---------     ---------      ---------     ---------

       Gross profit ....................         500.7         506.1        1,002.2         996.0

Research and development ...............          92.7          93.0          183.4         179.4
Sales, marketing, and administrative ...         212.9         191.9          416.0         377.5
Interest, net ..........................           9.0          15.4           18.4          28.8
Royalties, net .........................          10.6          14.5           20.4          28.5
Amortization ...........................          11.0          11.4           21.8          22.9
Other, net .............................           4.4          (1.6)           5.8          (1.3)
Foundation contribution ................            --            --             --          10.8
Litigation settlement gain, net ........            --            --             --         (10.8)
Special charge .........................            --            --           25.0            --
                                             ---------     ---------      ---------     ---------


Income before income taxes .............         160.1         181.5          311.4         360.2

Income taxes ...........................          44.8          57.2           84.9         117.1
                                             ---------     ---------      ---------     ---------

       Net income ......................     $   115.3     $   124.3      $   226.5     $   243.1
                                             =========     =========      =========     =========

Earnings per share - basic .............     $    0.38     $    0.41      $    0.75     $    0.81
                                             =========     =========      =========     =========

Earnings per share - diluted ...........     $    0.38     $    0.40      $    0.74     $    0.78
                                             =========     =========      =========     =========
</TABLE>


See notes to consolidated financial statements.


                                       2
<PAGE>   3

                               GUIDANT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                              (Dollars in millions)



                                                       JUNE 30,    DECEMBER 31,
                                                         2001         2000
                                                     -----------   ------------
                                                     (unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents ........................     $  256.2     $  163.0

Short-term investments ...........................          5.7          5.6

Accounts receivable, net of allowances
       of $22.1(2001) and $18.3(2000) ............        594.0        587.8

Other receivables ................................         30.9         23.4

Inventories ......................................        217.4        225.6

Deferred income taxes ............................        134.9        137.1

Prepaid expenses .................................         32.5         19.8
                                                       --------     --------

       Total Current Assets ......................      1,271.6      1,162.3



OTHER ASSETS
Goodwill, net of allowances
       of $129.9(2001) and $132.8(2000) ..........        438.8        451.3

Other intangible assets, net of allowances
       of $55.7(2001) and $47.7(2000) ............        182.7        191.2

Deferred income taxes ............................         45.2         52.0

Investments ......................................         40.0         38.7

Sundry ...........................................         54.7         50.4

Property and equipment, net of accumulated
       depreciation of $425.6 (2001) and
       $403.7 (2000) .............................        592.1        575.5
                                                       --------     --------

                                                       $2,625.1     $2,521.4
                                                       ========     ========


See notes to consolidated financial statements.


                                       3
<PAGE>   4

                               GUIDANT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                              (Dollars in millions)


<TABLE>
<CAPTION>
                                                               JUNE 30,          DECEMBER 31,
                                                                2001                 2000
                                                            --------------      --------------
                                                              (unaudited)
<S>                                                         <C>                 <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable ......................................     $         66.3      $         59.2

Employee compensation .................................               82.5               126.8

Other liabilities .....................................              150.4               139.3

Income taxes payable ..................................               75.1                83.9

Short-term debt .......................................              350.0               300.0
                                                            --------------      --------------

       Total Current Liabilities ......................              724.3               709.2


NONCURRENT LIABILITIES
Long-term debt ........................................              547.0               508.9

Other .................................................              118.0               119.8
                                                            --------------      --------------

                                                                     665.0               628.7

Commitments and contingencies .........................                 --                  --

SHAREHOLDERS' EQUITY
Common stock, no par value:
       Authorized shares: 1,000,000,000
       Issued shares:     309,028,000 (2001)                         226.1               214.9
                          308,476,000 (2000)

Additional paid-in capital ............................              179.7               167.8

Retained earnings .....................................            1,133.0               906.5

Deferred cost, ESOP ...................................              (33.1)              (35.4)

Treasury stock, at cost
       Shares: 4,714,000 (2001) .......................             (181.7)                 --

Accumulated other comprehensive income ................              (88.2)              (70.3)
                                                            --------------      --------------

                                                                   1,235.8             1,183.5
                                                            --------------      --------------

                                                            $      2,625.1      $      2,521.4
                                                            ==============      ==============
</TABLE>

See notes to consolidated financial statements.


                                       4
<PAGE>   5

                               GUIDANT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Dollars in millions)
                                   (unaudited)

                                                            SIX MONTHS ENDED
                                                                 JUNE 30,
                                                                 --------
                                                            2001         2000
                                                          -------      -------

CASH PROVIDED BY OPERATING ACTIVITIES:
     Net income .......................................   $ 226.5      $ 243.1

ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
 PROVIDED BY OPERATING ACTIVITIES:
     Depreciation .....................................      46.3         42.7
     Amortization of goodwill and other
        intangible assets .............................      21.7         22.9
     Provision for inventory and other losses .........      44.8         19.8
     Other noncash expenses, net ......................      34.3         16.7
                                                          -------      -------
                                                            373.6        345.2
CHANGES IN OPERATING ASSETS AND LIABILITIES:
     Receivables, increase ............................     (41.2)       (99.8)
     Inventories, increase ............................     (36.2)       (15.3)
     Prepaid expenses and other assets,
        increase ......................................     (19.0)        (3.6)
     Accounts payable and accrued liabilities,
        decrease ......................................     (34.6)       (20.0)
     Income taxes payable, increase ...................       3.4         92.6
     Other liabilities, increase (decrease) ...........      30.4        (29.5)
                                                          -------      -------

NET CASH PROVIDED BY OPERATING ACTIVITIES .............     276.4        269.6

INVESTING ACTIVITIES:
     Additions of property and equipment, net .........     (70.2)       (66.3)
     Impulse Dynamics Option ..........................        --       (125.0)
     Purchases of available-for-sale investments ......      (2.9)        (0.3)
     Sale/maturity of investments .....................       1.2          3.1
     Increase in other assets, net ....................        --         (9.5)
                                                          -------      -------

NET CASH USED FOR INVESTING ACTIVITIES ................     (71.9)      (198.0)

FINANCING ACTIVITIES:
     Increase in borrowings, net ......................      91.2        126.6
     Purchase of common stock and other capital
        transactions ..................................    (184.6)      (167.4)
                                                          -------      -------

NET CASH USED FOR FINANCING ACTIVITIES ................     (93.4)       (40.8)

Effect of Exchange Rate Changes on Cash ...............     (17.9)        (0.1)
                                                          -------      -------

NET INCREASE IN CASH AND CASH EQUIVALENTS .............      93.2         30.7

Cash and Cash Equivalents at Beginning of Period ......     163.0         27.8
                                                          -------      -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD ............   $ 256.2      $  58.5
                                                          =======      =======


See notes to consolidated financial statements.


                                       5
<PAGE>   6

                               GUIDANT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Dollars in millions, except per share data)
                                   (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, 2000.

NOTE 2 - INVENTORIES

Inventories consisted of the following:

                                                 JUNE 30,      DECEMBER 31,
                                                  2001              2000
                                               -----------    --------------
         Finished products                       $123.4           $133.0
         Work in process                           47.2             44.0
         Raw materials and supplies                46.8             48.6
                                                 ------           ------
                                                 $217.4           $225.6
                                                 ======           ======


                                       6
<PAGE>   7

                               GUIDANT CORPORATION
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED         SIX MONTHS ENDED
                                                              JUNE 30,                  JUNE 30,
                                                       ---------------------     ---------------------
                                                         2001         2000         2001         2000
                                                         ----         ----         ----         ----
<S>                                                    <C>          <C>          <C>          <C>
Net income .......................................     $  115.3     $  124.3     $  226.5     $  243.1
                                                       ========     ========     ========     ========

Weighted-average common shares outstanding .......       301.22       300.78       302.16       300.83

Effect of employee stock options .................         4.34         8.46         5.35         9.74
                                                       --------     --------     --------     --------

Weighted-average common shares outstanding
   and assumed conversions .......................       305.56       309.24       307.51       310.57
                                                       ========     ========     ========     ========

Earnings per share - basic .......................     $   0.38     $   0.41     $   0.75     $   0.81
                                                       ========     ========     ========     ========

Earnings per share - diluted .....................     $   0.38     $   0.40     $   0.74     $   0.78
                                                       ========     ========     ========     ========
</TABLE>

During the second quarter of 2001, approximately 24 million potential common
shares were not included in the computation of earnings per share-diluted since
they would have been anti-dilutive.

NOTE 4  - COMPREHENSIVE INCOME

Comprehensive income comprises net income adjusted for the changes in foreign
currency translation adjustments and unrealized gains or losses on foreign
currency derivative contracts and available-for-sale securities. For the second
quarter of 2001 and 2000, comprehensive income was $99.5 million and $122.4
million, respectively. Comprehensive income for the six months ended June 30,
2001 and 2000 was $208.6 million and $234.9 million, respectively.


                                       7
<PAGE>   8

                               GUIDANT CORPORATION
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - SEGMENT INFORMATION

                              THREE MONTHS ENDED        SIX MONTHS ENDED
                                   JUNE 30,                 JUNE 30,
GEOGRAPHIC INFORMATION:       2001         2000         2001         2000
                              ----         ----         ----         ----

NET SALES(1):
United States               $  456.0     $  480.4     $  932.1     $  929.5
International                  200.3        188.0        395.2        369.6
                            --------     --------     --------     --------

                            $  656.3     $  668.4     $1,327.3     $1,299.1
                            ========     ========     ========     ========

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

                              JUNE 30,   DECEMBER 31,
LONG-LIVED ASSETS:              2001        2000
                                ----        ----

United States                 $ 537.7     $ 523.5
International                    54.4        52.0
                              -------     -------
                              $ 592.1     $ 575.5
                              =======     =======



                               THREE MONTHS ENDED         SIX MONTHS ENDED
NET SALES OF CLASSES                JUNE 30,                  JUNE 30,
OF SIMILAR PRODUCTS:           2001         2000         2001         2000
                               ----         ----         ----         ----

Vascular intervention        $  289.2     $  314.9     $  603.5     $  630.8
Cardiac rhythm management       334.4        318.6        644.7        607.3
Endovascular solutions           14.3         19.6         43.6         32.6
Cardiac surgery                  18.4         15.3         35.5         28.4
                             --------     --------     --------     --------

                             $  656.3     $  668.4     $1,327.3     $1,299.1
                             ========     ========     ========     ========


NOTE 6 - SPECIAL CHARGE

Guidant recorded a $25.0 million pre-tax special charge to first quarter
earnings to account for expenses for a field action related to the
first-generation VENTAK(R) PRIZM(TM) Implantable Defibrillator and the voluntary
recall of the ANCURE(R) ENDOGRAFT(R) System. Management believes that this
amount will be sufficient to fund all expenses related to these two actions.

NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS

On July 20, 2001, the Financial Accounting Standards Board issued SFAS 141,
Business Combinations, and SFAS 142, Goodwill and Other Intangible Assets. These
two statements modify the method of accounting for business combinations entered
into after June 30, 2001, and address accounting for goodwill and intangible
assets. Under SFAS 141, all business combinations initiated after June 30, 2001,
will be accounted for using the purchase method. Under SFAS 142, goodwill will
no longer be amortized, but will be subject to annual impairment tests. SFAS 142
will be adopted by Guidant on January 1, 2002. Management has not yet determined
the effect that these new pronouncements will have on its results of operations
and financial position.


                                       8
<PAGE>   9

                               GUIDANT CORPORATION
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 the Company is involved is
available in the Company's most recent report on Form 10-K filed with the
Securities and Exchange Commission.

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 System 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; however, the Company currently anticipates that the arbitration process
will begin in October 2001. 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 December 2001.

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 System 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 Court has approved a joint motion to stay
the litigation until September 2002.

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 or other legal actions currently
outstanding against 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.


                                       9
<PAGE>   10

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

Guidant Corporation pioneers lifesaving technology, giving an opportunity for
better life today to 7 million cardiac and vascular patients worldwide. The
Company, driven by a strong entrepreneurial culture of 10,000 employees,
develops, manufactures, and markets a broad array of products and services that
enable less invasive care for some of life's most threatening medical
conditions. Guidant offers: i) coronary and peripheral stent systems, balloon
dilatation catheters, and related accessories used for opening blocked arteries;
ii) implantable defibrillator systems, which are used to detect and treat
abnormally fast heart rhythms (tachycardia); iii) implantable pacemaker systems
used to manage slow or irregular heart rhythms (bradycardia); iv) implantable
cardiac resynchronization therapy for the treatment of heart failure; v)
products for use in minimally invasive endovascular procedures, including the
treatment of abdominal aortic aneurysms (AAA); vi) products to perform leading
edge cardiac surgery procedures such as Off Pump Coronary Revascularization with
Endoscopic Saphenous vein harvesting (OPCRES); and vii) intravascular
radiotherapy systems for artery disease. 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.


                                       10
<PAGE>   11

The following tables are summaries of the Company's net sales and major
expenses. For purposes of analysis and discussion herein, the Company employs
the concepts of operating expenses and operating income. Operating expenses are
defined as research and development and sales, marketing, and administrative
expenses. Operating income is defined as gross profit less operating expenses.

                                        THREE MONTHS ENDED    SIX MONTHS ENDED
                                              JUNE 30,             JUNE 30,
                                        -------------------  -------------------
                                          2001       2000      2001       2000
                                          ----       ----      ----       ----
                                                 (Dollars in millions)
                                                      (unaudited)

Net sales                               $  656.3   $  668.4  $1,327.3   $1,299.1


Cost of products sold                      155.6      162.3     325.1      303.1
                                        --------   --------  --------   --------

     Gross profit                          500.7      506.1   1,002.2      996.0

Research and development                    92.7       93.0     183.4      179.4
Sales, marketing, and administrative       212.9      191.9     416.0      377.5
                                        --------   --------  --------   --------

     Operating expenses                    305.6      284.9     599.4      556.9


Operating income                        $  195.1   $  221.2  $  402.8   $  439.1
                                        ========   ========  ========   ========



                                             AS A PERCENT OF NET SALES
                                      ----------------------------------------
                                      THREE MONTHS ENDED     SIX MONTHS ENDED
                                           JUNE 30,              JUNE 30,
                                      ------------------    ------------------
                                       2001        2000      2001        2000
                                       ----        ----      ----        ----

Net sales                              100.0%      100.0%    100.0%      100.0%

Cost of products sold                   23.7        24.3      24.5        23.3
                                      ------      ------    ------      ------

     Gross profit                       76.3        75.7      75.5        76.7

Research and development                14.1        13.9      13.8        13.8
Sales, marketing, and administrative    32.5        28.7      31.4        29.1
                                      ------      ------    ------      ------

     Operating expenses                 46.6        42.6      45.2        42.9

Operating income                        29.7%       33.1%     30.3%       33.8%
                                      ======      ======    ======      ======


                                       11
<PAGE>   12

OPERATING RESULTS - THREE AND SIX MONTHS ENDED JUNE 30, 2001

The Company had worldwide net sales of $656.3 million for the three months ended
June 30, 2001, reflecting a decrease of $12.1 million or 2% compared to the same
period in 2000. Growth in unit volume of 6% increased net sales, while price
declines and fluctuations in foreign currency exchange rates decreased net sales
5% and 3%, respectively. Unfavorable foreign currency exchange rates decreased
net sales $18.3 million. Second quarter 2001 sales on a constant currency basis
were 1% higher than the second quarter of 2000, which was previously the
Company's highest sales quarter. Sales for the six months ended June 30, 2001,
of $1,327.3 million, increased $28.2 million or 2% over the same period in 2000.
Unit volume growth of 9% increased net sales, while price declines of 5% and
unfavorable foreign currency exchange rate impact of 2% decreased net sales.

Worldwide implantable defibrillator system sales of $183.7 million grew 2% for
the three months ended June 30, 2001, as compared to the three months ended June
30, 2000. International sales growth was 20%, or 30% on a constant currency
basis, and was driven primarily by contributions from European operations. For
the six months ended June 30, 2001, implantable defibrillator system sales were
$355.1 million, representing growth of $14.6 million or 4% over the first six
months of 2000. Implantable defibrillator sales growth was due to market
expansion driven by further acceptance of this therapy and expanded indications
as well as Guidant's continuing introduction of next generation products.

Pacemaker product sales were $150.7 million for the three months ended June 30,
2001, compared to $137.8 million for the three months ended June 30, 2000,
representing 9% growth worldwide, 12% on a constant currency basis. Sales growth
was led by the U.S. at 15% and by European sales of these products at 12%, or
20% on a constant currency basis for the three months ended June 30, 2001,
compared to the prior year. Sales of these products for the first half of 2001
were $289.6 million compared to $267.0 million in the first half of 2000,
representing growth of 8%. Sales growth was driven in part by the U.S. release
of the PULSAR(TM) MAX II Pacemaker System in May 2001. The PULSAR MAX II
incorporates Guidant's separate, simultaneous dual-chamber electrograms and
ventricular rate regulation, which are unique in the industry. Sales growth can
also be attributed to a 32% increase in the number of cardiac rhythm management
field personnel in the U.S. sales organization during the past twelve months.


                                       12
<PAGE>   13

Guidant is a pioneer in medical solutions for heart failure, a medical condition
in which the heart is unable to pump enough blood to meet the metabolic needs of
the body. It affects well over 5 million people in the U.S., an estimated 6.5
million in Europe, and 2.4 million in Japan. Guidant first released its family
of products designed specifically for the treatment of patients with heart
failure, the CONTAK CD(TM) and CONTAK TR(TM) systems, in Europe in November
1999. Research in this area has shown that device systems like the CONTAK CD and
TR offer the potential to relieve symptoms and positively impact the lives of
heart failure patients who at this time have few therapeutic alternatives.
Worldwide sales of these products for the three and six month periods ended June
30, 2001, were $14.9 million and $26.6 million, compared to $7.3 million and
$13.5 million in the prior year, representing growth of 104% and 97%,
respectively. These results were included in reported implantable defibrillator
and pacemaker sales, as appropriate.

Guidant applied for FDA approval of the CONTAK CD in February 2001. On July 10,
2001, the Company presented an initial analysis of clinical results of Guidant's
CONTAK CD cardiac resynchronization defibrillator trial to an advisory panel of
the FDA. Based on the presentation, the panel voted not to recommend the CONTAK
CD for approval. Guidant continues to work closely with the FDA to bring this
product to market in a timely manner.

On July 18, 2001, Guidant announced the European market release of its CONTAK
RENEWAL(TM) Cardiac Resynchronization Therapy Defibrillator. The RENEWAL device
for heart failure treatment contains new therapeutic and diagnostic capabilities
that are designed to help physicians better manage their patients' conditions.
The Company also announced the first human implants worldwide of the CONTAK
RENEWAL 2, the third generation device to treat patients with heart failure.

Worldwide coronary stent system revenues were $187.6 million for the three
months ended June 30, 2001, compared to $223.9 million for the three months
ended June 30, 2000. U.S. sales were $130.2 million for the second quarter of
2001 compared to $165.8 million for the same period in 2000. Second quarter
average selling prices for stent systems in the U.S. decreased by 9% compared to
the same period in the prior year and by less than 3% compared to the first
quarter 2001. Consistent with our experience over the past several quarters, the
Company believes that pricing declines of 1-3% sequentially could continue on
such systems in future quarters. International sales of these products during
the second quarter of 2001 were $57.5 million compared to $58.1 million in the
second quarter of 2000. Stent system unit


                                       13
<PAGE>   14

volumes increased international sales by 21%, primarily driven by sales in
Europe. Price declines and foreign exchange rates decreased international sales
by 12% and 10%, respectively. Worldwide stent revenues were $400.4 million for
the six months ended June 30, 2001, as compared to $451.4 million for the six
months ended June 30, 2000.

European coronary stent system sales growth was driven by the launch of the
MULTI-LINK PENTA(TM) and the MULTI-LINK PIXEL(TM) Coronary Stent Systems. The
MULTI-LINK PENTA, Guidant's fifth and most advanced broad use coronary stent
system, contains technological innovations designed to help physicians better
access and treat blockages in coronary arteries. The MULTI-LINK PENTA received
FDA approval in May 2001. The MULTI-LINK PIXEL, released in Europe earlier in
2001, is designed for small diameter vessels. The MULTI-LINK PIXEL received FDA
approval in June 2001 and will be launched in the U.S. in the third quarter of
2001.

Guidant's rapid progress in the expansion of its portfolio of stenting products
recently included the FDA approval of three non-coronary stent systems: the RX
HERCULINK PLUS(TM) Biliary Stent System, the OMNILINK(TM) Biliary Stent System,
and the DYNALINK(TM) Biliary Self-Expanding Stent System. These devices will be
utilized in the treatment of malignant biliary obstructions and offer physicians
a variety of sizes and delivery methods. Guidant also received approval in July
2001 to market the DYNALINK(TM) Peripheral Self-Expanding Stent System in Europe
which is indicated for treating peripheral vascular disease. Peripheral vascular
disease, which is characterized by reduced blood flow to the lower extremities
due to atherosclerosis, affects more than 12 million people in North America and
Europe, with approximately 600,000 newly diagnosed cases each year. Sales of
non-coronary stent systems are classified as endovascular solutions rather than
vascular intervention.

Angioplasty system and accessory sales of $97.6 million increased 10% for the
three months ended June 30, 2001, compared to the three months ended June 30,
2000. Worldwide sales growth of these products was 16% on a constant currency
basis and was driven by international growth, particularly in Japan. Angioplasty
sales for the six months ended June 30, 2001, were $196.1 million, an increase
of 13% from the same period in 2000. Continued market acceptance of the RX
CROSSSAIL(TM) and OTW OPENSAIL(TM) Coronary Dilatation Catheters, launched
during 2000 in most geographies, contributed to the growth. Guidant received FDA
approval in March 2001 for the POWERSAIL(TM) and HIGHSAIL(TM) Coronary
Dilatation Catheters. POWERSAIL is on the rapid exchange platform, while
HIGHSAIL is an over-the-wire device.


                                       14
<PAGE>   15

Sales of Guidant's ANCURE ENDOGRAFT System and accessories for the treatment of
abdominal aortic aneurysms were $1.1 million for the three months ended June 30,
2001, compared to $12.1 million for the three months ended June 30, 2000. For
the six months ended June 30, 2001, ANCURE sales were $18.7 million compared to
$19.4 million during the same period in the prior year. In March 2001, the
Company voluntarily halted the production of its ANCURE system and subsequently
performed a voluntary recall and halted sales. These actions were taken as a
result of Guidant's identification of certain deficiencies in the Company's
ANCURE-related regulatory processes and communications with the FDA, primarily
related to the ANCURE deployment system. Patients who have received ANCURE
implants to date are not affected by this action as the safety of the implanted
product is supported by extensive positive long-term data.

In July 2001, the FDA granted Guidant an investigational device exemption that
allows implants to resume. The clinical trial protocol provides for 2,000
implants at 300 centers in the U.S. and allows Guidant's ANCURE system to be
used to treat patients under informed consent. It requires collection of
delivery system performance data during the implant procedure, as well as 30-day
patient follow-up. Guidant continues to work closely and constructively with the
FDA to return the ANCURE System to full market release as soon as possible. The
Company is preparing for full release in the fourth quarter pending FDA
approval.

Sales of cardiac surgery products were $18.4 million for the three months ended
June 30, 2001, as compared to $15.3 million for the three months ended June 30,
2000, representing growth of 20%. For the first six months of 2001 these sales
were $35.5 million as compared to $28.5 million in the first six months of 2000.
Cardiac surgery sales include the VASOVIEW(R) UNIPORT(TM) PLUS Endoscopic Vessel
Harvesting System and the ACHIEVE(TM) Off-Pump Stabilization System, introduced
during the third quarter of 2000. The ACHIEVE System combines proprietary
technology which enables the physician to access the back portion of the heart
with Guidant's off-pump (beating heart) multi-vessel coronary artery bypass
grafting system. This allows for bypass procedures without stopping the
patient's heart and eliminates the need for a patient to be placed on a
heart-lung machine. Beating heart procedures potentially reduce post-operative
hospital stay, cost, neuro-cognitive effects, and surgical complications, while
preserving the clinical outcomes associated with conventional surgery.


                                       15
<PAGE>   16

For the three months ended June 30, 2001, cost of products sold represented
23.7% of net sales compared to 24.3% for the three months ended June 30, 2000.
This decrease was driven by productivity gains and increased production of
pacemaker and defibrillator products, offset by decreased ANCURE production and
unfavorable currency fluctuation. Cost of products sold as a percentage of net
sales was 24.5% for the first six months of 2001 as compared to 23.3% for the
first six months of 2000. The increase was driven by lower gross margins for
sales under the Cordis distribution agreement offset by the productivity gains
and increased production of pacemaker and defibrillator products discussed
above.

The Company continued to invest aggressively in research and development due to
its commitment to bring a new level of lifesaving cardiac and vascular
technology to patients. Research and development expense was $92.7 million for
the second quarter of 2001, or 14.1% of net sales, as compared to $93.0 million
in the second quarter of 2000, or 13.9% of net sales. Research and development
spending for the six months ended June 30, 2001, and June 30, 2000, was $183.4
million and $179.4 million, respectively. In addition to investments in the
development of next-generation models of existing product lines, research and
development spending in 2001 includes: (i) development of implantable
resynchronization therapy for the treatment of heart failure; (ii) research
related to drug coated stents for the prevention and treatment of artery
disease; (iii) development of intravascular radiotherapy devices for artery
disease; (iv) development of peripheral stents, balloons, guidewires, embolic
protection devices, and other devices used to treat peripheral vascular disease,
including carotid and neurovascular occlusions; and (v) development of
treatments for atrial arrhythmias. The Company intends to continue its
aggressive research and development spending to maintain its commitment to bring
new technologies to patients and provide cost-effective therapies to treat
cardiovascular and vascular diseases.

Guidant's research and development efforts have yielded key clinical milestones
in the second quarter of 2001. In May 2001, the Company announced that the first
patients have been enrolled in the Company's ACTION study supporting the
PHARMA-LINK(TM) Drug Coated Stent Program. The ACTION study will be Guidant's
drug coated stent trial to gain CE Mark approval for its drug coated stent
system. The Company also plans to use the ACTION study as the basis for its
submission of investigational device exemption with the FDA.


                                       16
<PAGE>   17

In the U.S., Guidant continues to aggressively enroll patients in the COMPANION
study, the first controlled study that will evaluate the effects of cardiac
resynchronization on both mortality and hospitalization rates in heart failure
patients not otherwise indicated for a pacemaker or implantable defibrillator.
This trial will collect and evaluate clinical data on up to 2,200 patients in
approximately 120 centers across the U.S. to advance the treatment of heart
failure patients. Guidant has currently enrolled over 1,030 patients in the
COMPANION study in the U.S.

Sales, marketing, and administrative expenses increased $21.0 million or 11% for
the three months ended June 30, 2001, compared to the same period in 2000. These
expenses for the six months ended June 30, 2001, increased by $38.5 million or
10% over the six months ended June 30, 2000. Growth in sales and marketing
expenses was somewhat offset by declines in general and administrative expenses.
Sales and marketing expense growth was driven by increased field and clinical
personnel in the U.S. who support clinicians during cardiac rhythm management
implant procedures.

Operating income for the three months ended June 30, 2001, as previously
defined, was $195.1 million compared to $221.2 million for the three months
ended June 30, 2000. The decrease of 12% in operating income was a result of a
2% decrease in sales and an increase in sales and marketing expenses as a
percent of sales. For the six months ended June 30, 2000, operating income of
$402.8 million decreased $36.3 million or 8% over the six months ended June 30,
2000, and was driven by Guidant's investment in its sales force.

Interest expense decreased $6.4 million for the second quarter of 2001 compared
to the second quarter of 2000. Interest expense decreased by $10.4 million for
the six months ended June 30, 2001, compared to the same period in the prior
year. This decrease was driven by a lower average debt outstanding in addition
to lower interest rates in 2001. Royalty expense decreased by $3.9 million for
the second quarter of 2001 compared to the second quarter of 2000, and by $8.1
million for the six months ended June 30, 2001, compared to the same period in
the prior year. This decrease was caused by the end of a royalty agreement in
October 2000 associated with certain vascular intervention products. "Other,
net" expenses increased $6.0 million for the second quarter of 2001 compared to
the second quarter of 2000, and by $7.1 million for the six months ended June
30, 2001, compared to the same period in 2000. This was caused by write-offs of
certain fixed assets in 2001 in addition to gains recognized on sales of
investments in 2000.


                                       17
<PAGE>   18

In April 2001, the Company announced a field action concerning the
first-generation VENTAK(R) PRIZM(TM) Implantable Defibrillator. A small number
of these devices have switched to Safety Mode because of a rare interaction
between the device and a specific memory component. All of these devices
continue to deliver lifesaving therapy - full-output shock delivery to treat
dangerous tachyarrhythmias, as well as single-chamber pacing to treat slow heart
rhythms. All field inventory of devices that contain this memory component were
returned to the Company to prevent the inconvenience of future occurrences. The
Company offers a software solution designed to non-invasively return full
functionality to any implanted device affected by the component interaction. The
Company recorded a $25.0 million pre-tax special charge to first quarter
earnings to account for expenses associated with this action and the previously
discussed ANCURE recall. Management believes that this amount will be sufficient
to fund all expenses related to these two actions.

The effective income tax rates for the quarter ended June 30, 2001 and 2000,
were 28.0% and 31.5%, respectively. Excluding the effect of the special charge
in 2001, the effective tax rates for the six months ended June 30, 2001 and
2000, were 28.0% and 32.5%, respectively. The improvement in the adjusted tax
rate reflects Guidant's strategic investments in overseas manufacturing in lower
tax jurisdictions and increased investments in research and development, which
generate federal and state research and development tax credits.

Net income and earnings per share-diluted were $115.3 million and $0.38,
respectively, in the second quarter of 2001. Net income and earnings per
share-diluted for the quarter ended June 30, 2000, were $124.3 million and $0.40
per share, respectively. This represents a decrease in net income of $9.0
million or 7%. Excluding the special charge, net income and earnings per
share-diluted were $242.2 million and $0.79, respectively, for the six months
ended June 30, 2001. This reflects a decrease of $0.9 million compared to
net income for the first six months of 2000. Reported net income for the six
months ended June 30, 2001, was $226.5.


                                       18
<PAGE>   19

LIQUIDITY AND FINANCIAL CONDITION

The Company generated cash flows which were more than sufficient to fund
operations during the six months ended June 30, 2001. Cash and cash equivalents
were $256.2 million at June 30, 2001, an increase of $93.2 million over December
31, 2000.

Working capital of $547.3 million at June 30, 2001, increased $94.2 million from
the prior year-end level. The current ratio at June 30, 2001, is 1.8:1 compared
to 1.6:1 at December 31, 2000. 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 $71.9 million for the six months
ended June 30, 2001, compared to $198.0 million for the same period in 2000.
This was driven by net additions of property and equipment of $70.2 million and
$66.3 million for the first half of 2001 and 2000, respectively, in addition to
the $125.0 million paid for the Impulse Dynamics option in 2000.

Net cash used for financing activities totaled $93.4 million for the six months
ended June 30, 2001, compared to $40.8 million for the same period in 2000. In
the third quarter of 2000, the Company ended its systematic share repurchase
program, which had been in place since the Company's founding to offset dilution
due to stock option programs. In April 2001, the Company announced that it would
repurchase up to $200 million of its common shares on the open market or in
privately negotiated transactions. The purchase was completed by the end of May
2001. Shares were repurchased opportunistically, at the discretion of Guidant
management, to accomplish the same goal of offsetting dilution caused by stock
option programs.

At June 30, 2001, the Company had outstanding borrowings of $897 million at a
weighted average interest rate of 5.13% through the issuance of commercial
paper, 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 show that $350 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 June 30, 2001.


                                       19
<PAGE>   20

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 $150 million in 2001, primarily
due to continued investment in the Company's manufacturing and research
facilities.

The Company has recognized net deferred tax assets aggregating $180.1 million at
June 30, 2001, compared to $189.1 million at December 31, 2000. In view of the
consistent profitability of its past operations, the Company believes that all
of 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 filed herewith.


                                       20
<PAGE>   21

                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings

On October 10, 1995, the Company filed suit against Medtronic, Inc. in the
Northern District of California alleging that the Medtronic FALCON coronary
dilatation catheter infringes a patent of the Company. On August 25, 1999, the
court granted the Company's motions for summary judgment of infringement,
validity and enforceability of the patent. A jury trial was held on the
Company's claim of willful infringement and damages. On November 3, 1999, the
jury returned its verdict finding that Medtronic had willfully infringed the
patent and awarded the Company $5.4 million in damages. On May 17, 2000, the
court entered judgment awarding the Company $5.4 million in compensatory
damages, $1.6 million in enhanced damages and prejudgment interest and costs.
Medtronic has appealed and a hearing on Medtronic's appeal took place in June
2001.

On December 23, 1999, the Company brought suit against Medtronic, Inc. and
Medtronic AVE, Inc. (collectively, "Medtronic") in the Northern District of
California alleging that the S660 and S670 Rapid Exchange Coronary Stent Systems
infringe a patent of the Company. Additionally, on December 28, 1999, the
Company filed a Notice of Arbitration with the American Arbitration Association
("AAA"). The lawsuit has been stayed pending the outcome of the arbitration. An
arbitration hearing was held in February 2001. However, one of the panel members
died before a decision was rendered and the remaining two panel members were not
able to reach a decision. As a result, on July 16, 2001, Medtronic filed a
Notice of Arbitration with the AAA requesting a new arbitration hearing. On
August 1, 2001, the Company amended its prior Notice of Arbitration to request a
new arbitration hearing and to add the following Medtronic products to the
arbitration: BeStent 2, S7, R1S and R2.

The Company historically had a number of disputes with Boston Scientific
Corporation ("BSC") and its subsidiary, SciMed Life Systems, Inc. ("SciMed"). On
May 17, 2000, the Company and BSC agreed on a settlement structure covering all
patent litigation pending between the two companies. The parties agreed to
dismiss all litigation, except for the completion of certain appeals. An appeal
continues to be pending in the lawsuit filed on August 12, 1998, by the Company
against SciMed and BSC in the Southern District of Indiana alleging that
SciMed's NIR stent infringes certain patents. On June 28, 2000, the court
granted BSC's and SciMed's motion for summary judgment of non-infringement and
entered a final judgment dismissing the case. The


                                       21
<PAGE>   22

                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings (continued)

Company appealed this decision and the hearing took place in May 2001. On August
6, 2001, the U.S. Court of Appeals for the Federal Circuit, in a decision
favorable to the Company, vacated in significant part the judgment of
non-infringement of a number of claims from several of the Company's patents
because the judgment was based on an erroneous claim construction.

On March 31, 1999, Pacesetter, Inc., a subsidiary of St. Jude Medical, Inc.,
filed suit against Guidant Sales Corporation and Cardiac Pacemakers, Inc.,
subsidiaries 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. On February 16, 2001, the District Court dismissed the case
at the request of the parties.

Recently, the Company tried a patent infringement action involving two patents
against St. Jude Medical, Inc., in U.S. District Court in Indianapolis. On July
3, 2001, the jury found that the two patents are valid and that St. Jude's
implantable cardioverter defibrillators infringe one of these two patents. The
patent, which St. Jude was found to infringe, expired in March 2001. The jury
awarded the company damages of $140.0 million against St. Jude for St. Jude's
infringement of this patent. The sum does not include pre or post judgment
interest. Post trial motions and appeals to the Federal Circuit Court of Appeals
will likely follow and no judgments are likely to be paid, if at all, until
those proceedings have run their course. Furthermore, since the amount of
damages, if any, which the Company may receive cannot be quantified until the
legal process is complete, no gain has been recorded in the financial statements
for this award.


                                       22
<PAGE>   23

                                     PART II
                                OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security-Holders

The Company's Annual Meeting of Shareholders was held on May 21, 2001. The
following matters were voted on at the meeting:

Election of Directors:

NAME                                   FOR                     WITHHELD

Kim B. Clark                           261,050,861             2,212,806
Maurice A. Cox, Jr.                    260,976,621             2,287,046
Nancy-Ann Min DeParle                  260,986,641             2,277,026
Ronald W. Dollens                      261,047,245             2,216,422
Enrique C. Falla                       261,048,582             2,215,085


Approval of the 2001 Guidant Corporation Employee Stock Purchase Plan:

For               257,045,847
Against             4,557,666
Abstain             1,660,154

Ratification of the appointment by the Board of Directors of Ernst & Young LLP
as independent auditors for the year 2001:

For               261,757,221
Against               594,394
Abstain               912,052


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits. The following document is filed as an exhibit to this report:
         99       Factors Possibly Affecting Future Operating Results


                                       23
<PAGE>   24

                                     PART II
                                OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K (continued)

(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.


                                       24
<PAGE>   25

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      August 13, 2001               /s/ KEITH E. BRAUER
                                        -------------------
                                        Keith E. Brauer
                                        Vice President, Finance and
                                        Chief Financial Officer





Date      August 13, 2001               /s/ MICHAEL A. SHERMAN
                                        ----------------------
                                        Michael A. Sherman
                                        Corporate Controller and
                                        Chief Accounting Officer


                                       25