---



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 March 31, 2003

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 ___

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X            No ___

The number of shares of common stock
outstanding as of May 6, 2003:

|Class  | Number of Shares Outstanding
|------ | ----------------------------
|Common | 309,303,377                 

---

# PART IFINANCIAL INFORMATION

# Item 1. Financial
Statements

GUIDANT CORPORATION
Consolidated
Statements of Income(In millions, except
per share data) (unaudited)

|                                              | Three Months Ended
March 31,
|--------------------------------------------- | ----------------------------
|
|Net sales                                     |                             
|Cost of products sold                         |                             
|                                              |                             
|Gross profit                                  |                             
|Research and development                      |                             
|Purchased in-process research and development |                             
|Sales, marketing and administrative           |                             
|Interest, net                                 |                             
|Royalties, net                                |                             
|Amortization                                  |                             
|Other, net                                    |                             
|Litigation                                    |                             
|                                              |                             
|Income before income taxes                    |                             
|Income taxes                                  |                             
|                                              |                             
|Net income                                    |                             
|                                              |                             
|Earnings per share - basic                    |                             
|                                              |                             
|Earnings per share - diluted                  |                             
|                                              |                             
|Dividends declared per common share           |                             
|                                              |                             
|                                              |                             

See notes to consolidated financial
statements

---

GUIDANT CORPORATION Consolidated Balance
Sheets(In millions, except
share data)

|                                                               | March 31,2003 | December 31,2002
|-------------------------------------------------------------- | ------------- | ----------------
|
|Assets                                                         |               |                 
|Current Assets                                                 |               |                 
|Cash and cash equivalents                                      |               |                 
|Short-term investments                                         |               |                 
|Accounts receivable, net of allowances                         |               |                 
|of $33.4 (2003) and $32.8 (2002)                               |               |                 
|Inventories                                                    |               |                 
|Deferred income taxes                                          |               |                 
|Prepaid expenses and other current assets                      |               |                 
|                                                               |               |                 
|Total Current Assets                                           |               |                 
|Other Assets                                                   |               |                 
|Goodwill, net of allowances of $159.5 (2003) and $159.4 (2002) |               |                 
|Other intangible assets, net of allowances of $65.4 (2003) and |               |                 
|$61.9 (2002)                                                   |               |                 
|Deferred income taxes                                          |               |                 
|Investments                                                    |               |                 
|Sundry                                                         |               |                 
|                                                               |               |                 
|                                                               |               |                 
|Property and equipment, net of accumulated depreciation of     |               |                 
|$579.5 (2003) and $555.3 (2002)                                |               |                 
|                                                               |               |                 
|                                                               |               |                 
|                                                               |               |                 

See notes to consolidated financial
statements

---

GUIDANT CORPORATION Consolidated Balance
Sheets(In millions, except
share data)

|                                       | March 31,2003 | December 31,2002
|-------------------------------------- | ------------- | ----------------
|
|Liabilities and Shareholders' Equity   |               |                 
|Current Liabilities                    |               |                 
|Accounts payable                       |               |                 
|Employee compensation                  |               |                 
|ANCURE litigation accrual              |               |                 
|Other liabilities                      |               |                 
|Income taxes payable                   |               |                 
|Short-term debt                        |               |                 
|                                       |               |                 
|Total Current Liabilities              |               |                 
|Noncurrent Liabilities                 |               |                 
|Long-term debt                         |               |                 
|Other                                  |               |                 
|                                       |               |                 
|                                       |               |                 
|Commitments and contingencies          |               |                 
|Shareholders' Equity                   |               |                 
|Preferred stock:                       |               |                 
|Authorized shares:      50,000,000     |               |                 
|Issued shares:                  none   |               |                 
|Common stock, no par value:            |               |                 
|Authorized shares:  1,000,000,000      |               |                 
|Issued shares:           308,992,000   |               |                 
|Additional paid-in capital             |               |                 
|Retained earnings                      |               |                 
|Deferred cost, ESOP                    |               |                 
|Unearned compensation                  |               |                 
|Treasury stock, at cost:               |               |                 
|Shares:   180,000 (2003)               |               |                 
|2,388,000 (2002)                       |               |                 
|Accumulated other comprehensive income |               |                 
|                                       |               |                 
|                                       |               |                 
|                                       |               |                 
|                                       |               |                 
|                                       |               |                 
|                                       |               |                 
|                                       |               |                 

See notes to consolidated financial
statements

---

GUIDANT CORPORATION Consolidated
Statements of Cash Flows(In millions)(unaudited)

|                                                             | Three Months EndedMarch 31,
|------------------------------------------------------------ | ---------------------------
|
|Cash Provided by Operating Activities                        |                            
|Net income                                                   |                            
|Adjustments to Reconcile Net Income to Cash                  |                            
|Provided by Operating Activities                             |                            
|Depreciation                                                 |                            
|Amortization of other intangible assets                      |                            
|Provision for inventory and other losses                     |                            
|Purchased in-process research and development                |                            
|Other noncash, net                                           |                            
|                                                             |                            
|                                                             |                            
|Changes in Operating Assets and Liabilities                  |                            
|Receivables                                                  |                            
|Inventories                                                  |                            
|Prepaid expenses and other current assets                    |                            
|Accounts payable and accrued liabilities                     |                            
|Income taxes payable                                         |                            
|Other liabilities                                            |                            
|                                                             |                            
|Net Cash Provided by Operating Activities                    |                            
|Investing Activities                                         |                            
|Purchases of available-for-sale investments                  |                            
|Sale/maturity of investments                                 |                            
|Additions of property and equipment, net                     |                            
|Additions of other assets, net                               |                            
|Purchase of in-process research and development              |                            
|                                                             |                            
|Net Cash Used for Investing Activities                       |                            
|Financing Activities                                         |                            
|Increase (decrease) in borrowings, net                       |                            
|Issuance of common stock under stock plans and other capital |                            
|transactions                                                 |                            
|Repurchase of common stock                                   |                            
|                                                             |                            
|Net Cash Provided by (Used for) Financing Activities         |                            
|Effect of Exchange Rate Changes on Cash                      |                            
|                                                             |                            
|Net Increase in Cash and Cash Equivalents                    |                            
|Cash and Cash Equivalents at Beginning of Period             |                            
|                                                             |                            
|Cash and Cash Equivalents at End of Period                   |                            
|                                                             |                            

See notes to consolidated financial
statements

---

GUIDANT CORPORATION Notes to Consolidated
Financial Statements(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. A discussion of the Companys significant accounting
policies is described in the Significant Accounting Policies section of
Managements Discussion and Analysis of Results of Operations and Financial
Condition.

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, 2002. As used herein, the terms
the Company and Guidant mean Guidant Corporation and its
consolidated subsidiaries.

# Note 2 
Stock-Based Compensation

The Company has adopted the
disclosure-only provisions of SFAS 123, Accounting for Stock-Based Compensation, as
amended by SFAS 148, Accounting for Stock-Based CompensationTransition and
Disclosure. Accordingly, the Company accounts for stock-based compensation under
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees,and related interpretations, using the intrinsic value method. The following table
illustrates the effect on net income and earnings per share if the Company had applied the
fair value recognition provisions of SFAS 123 to all stock-based employee compensation.
The pro forma impact on net income assumes a forfeiture rate of approximately 10%. These
pro forma amounts may not be representative of the effects on reported net income for
future years due to the uncertainty of stock option grant volume and potential changes in
assumptions driven by market factors.

|                                                                     | Three Months EndedMarch 31,
|-------------------------------------------------------------------- | ---------------------------
|
|Reported net income                                                  |                            
|Deduct: Total stock option employee compensation expense, net of tax |                            
|                                                                     |                            
|Pro forma net income                                                 |                            
|                                                                     |                            
|Earnings per share:                                                  |                            
|Basic--as reported                                                   |                            
|                                                                     |                            
|Basic--pro forma                                                     |                            
|                                                                     |                            
|Diluted--as reported                                                 |                            
|                                                                     |                            
|Diluted--pro forma                                                   |                            
|                                                                     |                            

In February 2003, Guidants
Board of Directors authorized the issuance of approximately 2.3 million restricted shares
of common stock (U.S.) and restricted stock units (outside the U.S.) to over 2,000
employees. Restricted stock awards granted to certain executive officers vest over six
years. Awards granted to other employees vest over three years. Grants may vest earlier
upon a qualifying disability, death, retirement or change in control. This grant includes
a performance element that allows vesting to accelerate if certain Guidant share price
performance measures are met. Specifically, 1/3 of the general grant will vest immediately
upon achievement of 25%, 50% and 75% appreciation of the 60-day moving average stock price
from the date of grant ($34.37 on February 18,
2003). Portions of the executive officer grant may accelerate from 6 years to 3 years
under this same performance measure. Guidant recorded $79.0 million of unearned
compensation in conjunction with this grant, representing the fair value of the restricted
stock awards on the date of grant. The unearned compensation will be recognized as
compensation expense ratably over the vesting period or earlier based on the performance
element. The related expense totaled $2.8 million in the first quarter of 2003. The
Company expects to record approximately $21.0 million of compensation expense during 2003
related to this award, absent the achievement of a performance measure.

---

GUIDANT CORPORATIONNotes to Consolidated Financial Statements

# Note 3  Inventories

Inventories consisted of the
following:

|                           | March 31,2003 | December 31,2002
|-------------------------- | ------------- | ----------------
|Finished products          |               | $148.7          
|Work in process            |               | 61.7            
|Raw materials and supplies |               | 113.0           
|                           |               |                 
|                           |               | $323.4          
|                           |               |                 

# Note 4  Earnings
Per Share

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

|                                                             | Three Months Ended
March 31,
|------------------------------------------------------------ | ----------------------------
|
|Net income                                                   |                             
|                                                             |                             
|Weighted average common shares outstanding                   |                             
|Effect of dilutive stock options and restricted stock awards |                             
|                                                             |                             
|Weighted average common shares outstanding                   |                             
|and assumed conversions                                      |                             
|                                                             |                             
|Earnings per share-basic                                     |                             
|                                                             |                             
|Earnings per share-diluted                                   |                             
|                                                             |                             

Earnings per share-diluted excludes
29 million and 25 million shares related to stock options for the quarters ended March 31,
2003 and 2002, as the exercise price per share of these stock options was greater than the
average market value, resulting in an anti-dilutive effect on earnings per share-diluted.

---

# GUIDANT CORPORATIONNotes to Consolidated
Financial Statements

# Note 5 
Comprehensive Income

Comprehensive income comprises net
income adjusted for the changes in: i) foreign currency translation adjustments; ii)
unrealized gains or losses on foreign currency derivative contracts designated and
qualifying as cash flow hedges; and iii) market value changes in available-for-sale
securities. For the first quarter of 2003 and 2002, comprehensive income was $114.3
million and $132.8 million. The decrease in comprehensive income for the three-month
period ended March 31, 2003, compared to the same period in 2002, was primarily due to
decreased net income, partially offset by the strengthening of the Euro compared to the
U.S. dollar.

# Note 6  Segment
Information

|              | Three Months Ended
March 31,
|------------- | ----------------------------
|
|Net Sales(1): |                             
|U.S.          |                             
|International |                             
|              |                             
|              |                             
|              |                             

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

|                   | March 31,2003 | December 31,2002
|------------------ | ------------- | ----------------
|Long-lived Assets: |               |                 
|U.S.               |               | $564.7          
|International      |               | 86.2            
|                   |               |                 
|                   |               | $650.9          
|                   |               |                 
|                   |               |                 

|                                       | Three Months Ended
March 31,
|-------------------------------------- | ----------------------------
|
|Net Sales:                             |                             
|Implantable cardioverter defibrillator |                             
|systems                                |                             
|Pacemaker systems                      |                             
|Coronary stent systems                 |                             
|Angioplasty and intravascular          |                             
|radiotherapy systems and accessories   |                             
|Emerging therapies                     |                             
|                                       |                             
|                                       |                             
|                                       |                             
|                                       |                             

---

# GUIDANT CORPORATIONNotes to Consolidated
Financial Statements

# Note 7 
Acquisitions and Pending Acquisitions

Biosensors International: In
March 2003, the Company completed its acquisition of certain assets of Biosensors
International's (Biosensors) everolimus eluting stent program, including an exclusive
worldwide license to Biosensors polymer formulation technology in the field of
everolimus eluting stents and a nonexclusive license to use this technology with other
drugs in drug eluting stents. Additionally, Guidant acquired the option of manufacturing
and commercializing the Biosensors everolimus eluting stent that has been used in
Biosensors clinical trials. Guidant recorded a $20.5 million in-process research and
development (IPRD) charge in connection with the purchase, since technological feasibility
of the project has not been attained and the research has no alternative future uses.
Biosensors may receive additional milestone payments over the course of clinical
development and upon CE Mark approval. In addition, Biosensors will receive royalties on
future sales of products utilizing Biosensors technology.

Bioerodible Vascular
Solutions: In March 2003, Guidant acquired the majority interest in Bioerodible
Vascular Solutions (BVS) for $10.0 million. BVS is developing vascular stent platforms
designed to be absorbed by tissue following the restoration of blood flow in patients with
coronary artery disease. Guidant has the option to purchase the remaining interest for
$6.0 million beginning in January 2004 and is required to purchase it if certain
conditions are met. Guidant expects any additional consideration to be recorded as IPRD.
Guidant recorded a $16.0 million IPRD charge in connection with the purchase of the
majority interest and a related milestone payment, since technological feasibility of the
project has not been attained and the research has no alternative future uses. Guidant may
pay milestone payments over the course of clinical development.

X Technologies, Inc.:In March
2003, Guidant entered into an agreement to acquire the stock of X Technologies, Inc. (X
Technologies). X Technologies manufactures the FX miniRAIL, a coronary device for the
treatment of de novo lesions and in-stent restenosis. The acquisition will be effective
upon satisfaction of certain conditions, including U.S. Food and Drug Administration (FDA)
approval for the FX miniRAIL. X Technologies will receive a $60.0 million cash payment on
the effective date of the transaction and may receive additional cash milestone payments
based on future performance criteria. Guidant provided a $6.4 million revolving line of
credit to X Technologies, which will be deemed additional consideration upon the effective
date of the acquisition.

Certain of Guidants
acquisitions involve contingent consideration. Payment of the additional consideration is
generally contingent upon the acquired companies reaching certain performance-related
milestones, including specified revenue levels, product development targets or regulatory
approvals or filings. At March 31, 2003, Guidants accrual for milestone obligations
totaled $20.8 million, which will be paid during the next three years. In addition, future
undiscounted contingent consideration for performance-related milestones on acquisitions range
from $6.0 million to $380.0 million payable from 2003 to 2008, depending on when and if
milestones are attained. Potential milestone payments during the next 12 months range from $6.0
million to $80.0 million.

The operating results of all
acquisitions are included in the Companys consolidated financial statements from the
date of each acquisition.

# Note 8  Dividend

The Companys Board of Directors
declared a second quarter dividend for 2003 of $0.08 per common share outstanding. The
dividend of approximately $25.0 million is payable June 30, 2003, to shareholders of
record on June 16, 2003.

# Note 9 
Contingencies

A discussion of the Companys
policies with respect to legal proceedings and other loss contingencies is described in
the Significant Accounting Policies section of Managements
Discussion and Analysis of Results of Operations and Financial Condition. The
description of legal proceedings in Part II, Item 1 (Legal Proceedings) to
this filing is incorporated herein by reference.

---

Item 2. Managements
Discussion and Analysis of Results of Operations and Financial Condition(Dollars
in millions except per share data)(unaudited)

Guidant Corporation pioneers
lifesaving technology for millions of cardiac and vascular patients worldwide. Guidant
develops, manufactures and markets the following products and services that enable
less-invasive care for some of lifes most threatening medical conditions:

- Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally
fast heart rhythms (tachycardia), including implantable cardiac resynchronization therapy
cardioverter defibrillator (CRT-D) systems used to treat heart failure
- Implantable pacemaker systems used to manage slow or irregular heart rhythms
(bradycardia), including implantable cardiac resynchronization therapy cardioverter
pacemaker (CRT-P) systems used to treat heart failure
- Coronary stent systems for the treatment of coronary artery disease
- Angioplasty dilatation catheters, intravascular radiotherapy systems and related accessories for the treatment of coronary
              artery disease
- Products for emerging therapies including noncoronary stent and angioplasty products,
beating heart surgery, endoscopic vessel harvesting and less-invasive endovascular
procedures for the treatment of abdominal aortic aneurysms (AAA)

Guidant has principal operations in
the U.S., Europe and Japan. The Company markets its products in nearly 100 countries
through a direct sales force in the U.S. and a combination of direct sales representatives
and independent distributors in international markets. As used herein, the terms the
Company and Guidant mean Guidant Corporation and its consolidated
subsidiaries.

---

# Operating Results 
Three Months Ended March 31, 2003

# Summary

# Sales

ICD Systems

Worldwide net sales of ICD systems in
the first quarter of 2003 were $332.4 million, an increase of 72% over the same period in
2002. ICD system sales include sales of CRT-D systems. Growth in unit volume, price
increases and favorable fluctuations in foreign currency exchange rates increased net sales by 55%,
12% and 5%. U.S. ICD system sales increased 75% to $273.0 million, while international net
sales of $59.4 million were up 57% over the same period in the prior year. Net sales of
ICD systems increased due to the following:

- Positive impact of MADIT II and preliminary
COMPANION clinical trial results on the international ICD market
- Market acceptance of
CONTAK RENEWAL® CRT-D System launched in the U.S. in late January 2003
- Continued
acceptance of the PRIZM® family of ICD Systems
- International sales of CONTAK RENEWAL
2 CRT-D System and VITALITY ICD System
- Addition of over 190 sales representatives
dedicated to cardiac rhythm management products in the U.S.

Guidant launched or received FDA
approval for three ICD systems in the first quarter of 2003: the CONTAK RENEWAL, the
VITALITY AVT® and the PRIZM AVT.

The Medicare Coverage Advisory
Committee (MCAC) voted unanimously that the evidence was adequate to apply the findings of
the MADIT II trial to all Medicare patients who meet the inclusion and exclusion criteria
for the MADIT II trial. MCAC recommended to the Center for Medicare and Medicaid Services
(CMS) to expand reimbursement coverage for MADIT II indications. The final decision for
reimbursement rests with CMS.

Pacemaker Systems

Worldwide pacemaker system sales were
$160.0 million for the quarter ended March 31, 2003, an increase of 13% over the prior
year. These revenues include sales of CRT-P systems outside the U.S. Growth in unit
volume, price increases and favorable fluctuations in foreign currency exchange rates increased net
sales by 3%, 5% and 5%. U.S. pacemaker system sales grew 11% to $101.7 million and
international sales grew 17% to $58.3 million for the three months ended March 31, 2003
compared to the prior year period. Pacemaker system sales were driven by continued
acceptance of the INSIGNIA family of pacemakers launched in the U.S. in June 2002
and the previously mentioned increase in the sales organization dedicated to cardiac
rhythm management products. Also contributing to sales growth in the first quarter of 2003
was the latest addition to the INSIGNIA family, the INSIGNIA Entra, approved by the FDA in
February 2003.

---

Coronary Stent Systems

Worldwide coronary stent system sales
for the first quarter of 2003 were $222.0 million, consistent with first quarter 2002
sales of $220.9 million. Decreases in unit volume and pricing of 2% each were offset by
favorable foreign currency fluctuations of 4%. U.S. sales were $134.4 million ($117.3 million to
U.S. end-users) for the first quarter of 2003 compared to $157.9 million ($149.0 million
to U.S. end-users) for the first quarter of 2002. This decrease is attributable to
customers reducing metallic stent inventory in anticipation of drug eluting stents.
Sales in the U.S. include sales of dilatation catheters to Cordis Corporation.
International sales of coronary stent systems during the first quarter of 2003 were $87.6
million compared to $63.0 million in the first quarter of 2002. Sales of coronary stent
systems for the first quarter of 2003 were driven by:

- MULTI-LINK ZETA Coronary Stent System launched in the U.S. in September 2002
- 11% volume growth in Europe compared to the first quarter of 2002 despite competitive
introductions of drug eluting stent therapy and a new metallic stent in the second quarter
of 2002
- Sales growth in Japan from Guidants MULTI-LINK TRI-STAR Coronary Stent System
launched in the fourth quarter of 2001 and the introduction of the MULTI-LINK PENTA
Coronary Stent System in March 2003

The introduction of drug eluting
stents is expected to increase the value of coronary stenting substantially. Competitive
U.S. entry of drug eluting stents occurred in April 2003. Guidant expects these
introductions to reduce the market for metallic stents materially in the U.S. Guidant
expects to bring its first drug eluting stent to market through its everolimus program in
2005. Guidant licensed the exclusive right to use everolimus on drug eluting stents from
Novartis. The Company has supplemented internal work on its everolimus eluting stent
program with the acquisition of certain assets of Biosensors everolimus eluting
stent program. See Note 7 in the consolidated financial statements for further description
of this acquisition.

Sales of coronary stent systems were
not materially impacted by the voluntary recall of the MULTI-LINK VISION Coronary
Stent System in March 2003. The MULTI-LINK VISION was introduced in February 2003 to a
limited number of accounts. Guidant plans to return this system to the European market in
the second quarter of 2003.

Angioplasty and
Intravascular Radiotherapy Systems and Accessories

Angioplasty and intravascular radiotherapy systems and accessories
sales, including atherectomy products, totaled $100.1 million in the first quarter of 2003
compared to $95.1 million during the first quarter of 2002. Sales growth reflects
increases in unit volume and favorable foreign exchange rates of 1% and 7%, offset by price declines
of 3%. Sales include the rapid-exchange (RX) CROSSAIL and the over-the-wire (OTW)
OPENSAIL Coronary Dilatation Catheters.

Worldwide sales of the GALILEO®
Intravascular Radiotherapy System were $15.0 million during the first quarter of 2003
compared to $6.1 million during the same period in 2002, principally due to unit volume
growth. The GALILEO System is used for the treatment of in-stent restenosis, the
recurrence of a blockage in a coronary artery that had been previously propped open with a
coronary stent. The latest generation of this system, the GALILEO III, was launched
in the U.S. in September 2002.

---

Emerging Therapies

Worldwide sales of noncoronary stent
and angioplasty products totaled $20.8 million in the first quarter of 2003, representing
25% growth over the same period in the prior year. Growth in unit volume, price increases
and favorable fluctuations in foreign currency exchange rates increased net sales of these products
by 14%, 4% and 7%. Growth was driven by the DYNALINK® Self Expanding Biliary Stent
System and the AGILTRAC Peripheral Dilatation Catheter, with continued acceptance of
the RX HERCULINK® PLUS, OMNILINK Biliary Stent Systems and the ACCULINK 
Carotid Stent System in Europe.

Sales of cardiac surgery systems were
$25.4 million for the quarter ended March 31, 2003, compared to $20.3 million in the prior
year comparable period, representing 25% growth, primarily due to increased unit volume.
Sales growth was driven by the VASOVIEW® Endoscopic Vessel Harvesting System. Also
contributing to the increase was the HEARTSTRING Proximal Seal System introduced in
September 2002 to facilitate anastomosis.

Sales of the ANCURE ENDOGRAFT System
and accessories for the treatment of AAA were $9.7 million for the three months ended
March 31, 2003, compared to $15.6 million for the three months ended March 31, 2002. On
April 16, 2003, the Company announced that it is evaluating strategic alternatives for its
endograft business.

# Cost of Products Sold

Cost of products sold was $215.6
million in the first quarter of 2003, representing 24.4% of sales compared to 24.2% in the
first quarter of 2002. During the period the Company recognized expenses associated with
the voluntary recall of the MULTI-LINK VISION Coronary Stent System. The Company
maintained its gross profit as a percentage of sales despite these charges and the decline
in U.S. stent sales. During the period, Guidant experienced improvement in manufacturing
efficiencies, increased volume and improved pricing.

---

# Research and Development

Guidant continued to invest
aggressively in research and development in the first quarter of 2003. Research and
development expense was $117.8 million for the quarter ended March 31, 2003, or 13.3% of
net sales, compared to $100.7 million in 2002, or 14.2% of net sales.

Important developments on current
projects include:

- COMPANION Clinical Trial - Prospective, multi-center, randomized study of patients with advanced heart failure.  Preliminary
         results of the COMPANION clinical trial demonstrated 19% reduction in the primary endpoint of combined all-cause death and
         hospitalization by adding CRT-D systems to optimal drug therapy and 43% reduction in all-cause mortality for heart failure
         patients who received Guidant's CRT-D system.
- DECREASE HF Clinical Trial - Heart failure study designed to demonstrate the safety and effectiveness of the flexible pacing
         modes offered in Guidant's newest CRT-D systems began in March 2003.
- FUTURE I Clinical Trial - Study that evaluates the safety of an everolimus eluting coronary stent utilizing a bioabsorbable
         drug-delivery coating compared to a metallic stent platform in previously untreated lesions.  Announcement of six-month
         results on March 30, 2003, supports the use of everolimus for drug eluting stents.  The FUTURE II clinical trials include a
         larger population and just completed enrollment.  In addition to FUTURE I and II, Guidant plans to initiate the SPIRIT FIRST
         trial, a dose-selection feasibility study with the MULTI-LINK VISION Coronary Stent System and everolimus, upon successful
         completion and analysis of preclinical studies.
- ARCHeR Clinical Trial - Study designed to evaluate the safety and effectiveness of carotid artery stenting as a minimally
         invasive alternative for treating carotid artery disease in patients ineligible for surgery or at high surgical risk.
         Announcement of preliminary 30-day results on March 30, 2003, were positive.

Guidant recorded a pre-tax IPRD
charge of $36.5 million in the first quarter of 2003 related to the following
acquisitions:

- Biosensors International  - Guidant purchased certain assets of Biosensors International (Biosensors), resulting in $20.5 million of IPRD.  Guidant also obtained an
         exclusive worldwide license to Biosensors' polymer formulation technology in the field of everolimus eluting stents and a
         non-exclusive license to this technology for use with other drugs in drug eluting stents.  Additionally, Guidant acquired the
         option of manufacturing and commercializing the Biosensors everolimus eluting stent that has been used in Biosensors'
         clinical trials.
- Bioerodible Vascular Solutions  - Guidant purchased the majority interest in Bioerodible Vascular Solutions (BVS), an early-stage developer of
         bioabsorbable stents, resulting in a $16.0 million IPRD charge.  Bioabsorbable stents are designed to be absorbed by tissue
         following the restoration of blood flow in patients with coronary artery disease.

See Note 7 to the consolidated
financial statements for further details regarding these acquisitions.

Guidant recorded a pre-tax IPRD
charge of $6.8 million in the first quarter of 2002 in connection with its worldwide
co-exclusive license agreement with Novartis Pharma AG and Novartis AG granting Guidant
rights to utilize the drug everolimus in drug eluting stents for the treatment of coronary
and peripheral vascular diseases.

---

# Sales, Marketing and
Administrative

Sales, marketing and administrative
expenses were $278.6 million for the three months ended March 31, 2003, an increase of
$56.9 million compared to the same period in 2002. The increase was the result of sales
growth and continued expansion of the global sales organization, specifically U.S. sales
representatives dedicated to cardiac rhythm management.

# Interest

Net interest was $1.1 million of
income for the three months ended March 31, 2003, compared to $4.1 million of expense for
the same period in 2002. The favorable change was driven by a lower average outstanding
debt balance, increased interest income due to larger balances in cash and cash
equivalents and short-term investments and lower interest rates on borrowings, in part due
to interest rate swap agreements not in effect during the first quarter of 2002.

# Royalties

Net royalties expense totaled $14.4
million in the first quarter of 2003 compared to $11.3 million for the same period in
2002. The $3.1 million increase was primarily due to increased sales of ICD systems.

# Litigation

The Company recorded $64.9 million of
litigation expense in the first quarter of 2003 in connection with the anticipated
resolution of the previously announced ANCURE ENDOGRAFT System Department of Justice
investigation. The total reserve at March 31, 2003 was $92.0 million.

# Income Tax Expense

The income tax rates for the quarters
ended March 31, 2003 and 2002, were 37.8% and 25.6%. The increase in the income tax rate
is due to first quarter 2003 non-tax-deductible charges including the $64.9 million
litigation reserve and the IPRD charge for the acquisition of a majority interest in BVS.

---

# LIQUIDITY AND FINANCIAL
CONDITION

|                                           | March 31, 2003 | December 31, 2002
|------------------------------------------ | -------------- | -----------------
|Dollars in millions, except per share data |                |                  
|Cash and cash equivalents (1)              |                | $  1,105.0       
|Working capital                            |                | $  1,548.7       
|Current ratio                              |                | 2.7:1.0          
|Net cash position (2)                      |                | $     746.9      
|Days receivable outstanding                |                | 73               
|Inventory turnover                         |                | 2.75             

(1)      A substantial portion of cash and cash equivalents is held as a permanent investment by Guidant's non-U.S. subsidiaries.
     (2)      Net cash position is the sum of cash and cash equivalents and short-term investments less total debt.

The Company believes its cash from
operations is adequate to meet anticipated working capital needs. Certain of
Guidants acquisitions involve contingent consideration. Payment of the additional
consideration is generally contingent upon the acquired companies reaching certain
performance-related milestones. At March 31, 2003, Guidants accrual for milestone
obligations totaled $20.8 million, which will be paid during the next three years. In
addition, future undiscounted contingent consideration for performance-related milestones
on acquisitions range from $6.0 million to $380.0 million payable from 2003 to 2008,
depending on when and if milestones are attained. Potential milestone payments during the
next 12 months range from $6.0 million to $80.0 million.

# Summary of Cash Flows

|                                          | March 31, 2003 | March 31, 2002 | Change
|----------------------------------------- | -------------- | -------------- | ------
|In millions                               |                |                |       
|Net cash provided by (used in):           |               
|Operating activities                      |                | $ 110.3        |       
|Investing activities                      |                | (53.3          | )     
|Financing activities                      |                | 9.5            |       
|Effect of exchange rate changes on cash   |                | 23.7           |       
|                                          |                |                |       
|Net increase in cash and cash equivalents |                | $   90.2       |       
|                                          |                |                |       

Net cash provided by operating
activities was $110.3 million for the first quarter of 2003, a decrease of $60.6 million
from the prior year primarily due to:

- $41.9 million decrease in net income, adjusted for noncash items, in the first quarter of 2003 compared to 2002
- $30.4 million decrease in accounts payable and accrued liabilities including increased performance-based employee bonus
         payouts in 2003; $50.0 million termination fee to Cook, Inc. incurred in 2002, paid in 2003; offset by $62.0 million
         litigation reserve accrued in 2003 for the ANCURE ENDOGRAFT System investigation

---

Net cash used in investing activities
was $53.3 million for the first quarter of 2003, an increase of $10.0 million from the
prior year primarily due to the $17.0 million payment made in March 2003 to purchase
certain assets of Biosensors compared to $6.8 million paid to Novartis in the prior year.

Net cash provided by financing
activities was $9.5 million for the first quarter of 2003, compared to net cash used of
$46.9 million in the prior year, a change of $56.4 million. This change was primarily due
to the decrease in payments on long-term debt.

The effect of exchange rate changes
on cash increased $29.2 million for the three months ended March 31, 2003, compared to the
same period in 2002 primarily due to the strengthening of the Euro and Guidants
increasing cash levels offshore. Effective January 1, 2003, Guidants manufacturing
affiliate in Ireland changed from Euro to U.S. dollar functional currency since the
majority of transactions are now denominated in U.S. dollars.

At March 31, 2003, the Company had
outstanding borrowings of $369.6 million at a weighted average interest rate of 2.80%,
including the effect of interest rate swap agreements. Outstanding borrowings included
short-term bank borrowings of $6.7 million, along with long-term notes of $362.9 million,
which include interest rate swap agreements valued at $13.0 million, due 2006. At March
31, 2003, Guidant had interest rate swap agreements with a notional amount of $350.0
million, converting the fixed interest rate to a variable interest rate indexed to LIBOR.
Bank borrowings represent short-term uncommitted credit facilities with various commercial
banks. At March 31, 2003, the Company had a $400.0 million credit facility that permits
borrowings through August 2003 and a $400.0 million credit facility that permits
borrowings through August 2007. There are currently no outstanding borrowings under these
arrangements, which carry a variable rate of interest.

The Company believes that cash and
cash equivalent balances will be adequate to fund maturities of short-term borrowings,
obligations to make interest payments on its debt and other anticipated operating cash
needs for 2003, including planned capital expenditures of approximately $230.0 million in
2003.

The Company has recognized net
deferred tax assets aggregating $289.4 million at March 31, 2003, compared to $263.9
million at December 31, 2002. In view of the consistent profitability of its past
operations, the Company believes that these assets will be substantially recovered and
that no significant additional valuation allowances are necessary.

---

# Significant Accounting
Policies

It is important to understand
Guidants accounting policies in order to understand its financial statements. The
most significant policies are described in Note 2 and elsewhere in the Notes to the
Consolidated Financial Statements in the Companys latest Annual Report on Form 10-K.

In preparing the financial statements
in accordance with generally accepted accounting principles, management must often 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. Some of those judgments can be subjective and complex.
Consequently, actual results could differ from those estimates. The accounting policies
that are most subject to important estimates or assumptions include those described below.
The Notes to the Consolidated Financial Statements in our latest Annual Report on Form
10-K described above and this 10-Q provide additional information about managements
evaluation of these items.

Guidant continually evaluates the
accounting policies and estimates it uses to prepare the consolidated financial
statements. In cases where management estimates are used, they are based on historical
experience, information from third-party professionals, and various other assumptions
believed to be reasonable.

Inventory Reserves  The
Company values its inventory at the lower of cost, determined on a first-in, first-out
method, or market. Reserves are estimated for excess, slow moving and obsolete inventory
as well as inventory with a carrying value in excess of its net realizable value. The
Company reviews inventory on hand at least quarterly and records provisions for excess and
obsolete inventory based on several factors, including current assessment of future
product demand, anticipated release of new products into the market, historical experience
and product expiration. The Companys industry is characterized by rapid product
development and frequent new product introductions. Uncertain timing of product approvals,
variability in product launch strategies, product recalls and variation in product
utilization all impact the estimates related to excess and obsolete inventory.

Product Warranties 
Provisions for estimated expenses related to product warranties are recorded at the time
the products are sold. Estimates for warranty costs are calculated based primarily upon
historical warranty experience, but may include assumptions related to anticipated changes
in warranty costs and failure rates. Assumptions and historical warranty experience are
evaluated on at least a quarterly basis to determine the continued appropriateness of such
assumptions. Warranty cost accruals are adjusted from time to time when warranty claim
experience differs from estimates.

---

Valuation of Purchased In-Process
Research and Development (IPRD), Goodwill and Other Intangible Assets  When a
business combination occurs, the purchase price is allocated based upon the fair value of
tangible assets, intangible assets, IPRD and goodwill as required by SFAS 141, Business
Combinations. The Company recognizes IPRD in business combinations for the portion of
the purchase price allocated to the appraised value of in-process technologies, defined as
those technologies relating to products that have not received FDA approval and have no
alternative future use. The portion assigned to in-process technologies excludes the value
of core and developed technologies, which are recognized as intangible assets when
purchased. Valuations require the use of significant estimates. The amount of the purchase
price allocated to IPRD is determined by estimating the future cash flows of the
technology and discounting the net cash flows back to their present values. Goodwill
represents the excess of cost over the fair value of identifiable net assets of the
business acquired and the amount allocated to IPRD. The methodologies used in arriving at
these estimates are in accordance with accepted valuation methods.

Goodwill is required to be tested for
impairment annually, or more frequently if changes in circumstances or the occurrence of
events suggest impairment exists. The test for impairment requires us to make several
estimates about fair value, most of which are based on projected cash flows. Furthermore,
our projections of future cash flows require several estimates, including the expected
life cycles of the technologies acquired. Our estimates associated with goodwill
impairment tests are considered to be significant due to the judgment required in
determining fair value amounts, including projected future cash flows.

Income Taxes  Guidant
operates in multiple tax jurisdictions with different tax rates and must determine the
allocation of income to each of these jurisdictions based on estimates and assumptions. In
the normal course of business, the Company will undergo scheduled reviews by taxing
authorities regarding the amount of taxes due. These reviews include questions regarding
the timing and amount of deductions and the allocation of income among various tax
jurisdictions. Tax reviews often require an extended period of time to resolve and may
result in income tax adjustments if changes to the allocation are required between
jurisdictions with different tax rates.

Legal Proceedings and Other Loss
Contingencies  The Company is subject to various legal proceedings, many
involving routine litigation incidental to the business. Other matters contain allegations
that are not routine and involve compensatory, punitive or treble damage claims, or claims
for injunctive relief related to alleged infringement of a third partys patents, or
seek declarations affecting the validity of the Companys patents. Litigation
outcomes are not within the Companys complete control, are difficult to predict and
often are resolved over long periods of time. Estimating probable losses requires the
analysis of multiple possible outcomes that often depend on judgments about potential
actions by third parties. Loss contingencies are recorded as liabilities in the
consolidated financial statements when it is both i) probable or known that a liability
has been incurred, and ii) the amount of the loss is reasonably estimable, in accordance
with SFAS 5, Accounting for Contingencies. If the reasonable estimate of a probable
or known loss is a range and no amount within the range is a better estimate, the minimum
amount of the range is recorded as a liability. If a loss contingency is not probable or
not reasonably estimable, a liability is not recorded in the consolidated financial
statements.

---

# Field Actions

As further described in the
Companys Annual Report on Form 10-K and Exhibit 99.1 to this filing, the medical device industry is subject to
substantial regulation, including by the FDA and comparable international agencies. In
addition to requiring clearance or approval to market new or improved devices, the Company is subject to regulation as a device manufacturer.  Regulations cover many aspects of the Company's operations, including quality systems, marketing and device reporting.

From time to time, the Company
initiates field actions with respect to market-released products.  These actions may include
product recalls or communications with a significant number of physicians about a product or
labeling issue.  The scope of such actions range from very minor issues affecting a small number
of units to more significant actions.

In February 2003, the Company introduced the
MULTI-LINK VISION Coronary Stent System to a limited number of accounts in Europe and Australia.
On March 31, 2003, the Company announced its voluntary withdrawal of the system as the result of
customer observations regarding a small number of stents becoming dislodged from their delivery
systems.  Patients who have received the stent are not affected by this action.  Guidant expects to reintroduce the product
during the second quarter of 2003.

Also in February 2003, the Company introduced the VITALITY PLUS ICD
System, an extended-longevity defibrillator, in a limited number of international accounts.  The Company
elected to discontinue distribution of the system following its receipt of performance data from a key supplier that made it difficult to assure the system would
meet extended-longevity expectations.  The remainder of the Companys VITALITY family of products
remains available to physicians.

In April 2003, the Company notified a small number
of physicians who had been shipped affected product that the feet on certain AXIUS Vacuum Stabilizers were not malleable.  The Company has
corrected the issue and does not believe it presents a safety risk to patients.

In May 2003, the Company recalled one lot of the MULTI-LINK PIXEL
Coronary Stent System as the result of irregularities in packaging.

In May 2003, the Company issued follow-up information to physicians following the Company's
multi-chambered pacemakers that have tachycardia response features.  The information relates to an extremely rare
battery measurement error that may result from the devices programming.  The Company is not aware of any
adverse health events affecting patients.  The issue is expected to be resolved through a non-invasive
programming adjustment.

---

# Cautionary Factors

This report includes forward-looking
statements, including statements concerning accounting estimates, expectations with
respect to announced transactions and related milestone payments, anticipated litigation
outcomes and related reserves, sales trends, recovery of tax assets, cash flows and the
timing of product developments. The statements are based on assumptions about many
important factors, including assumptions concerning:

- The development of the coronary stent market, including the introduction of drug eluting stents by the Company's
         competitors, which is expected to substantially affect the market for coronary stents generally.
- The effects of operating in a highly regulated industry, the necessity for appropriate reimbursement of therapies and the
         significance of legal matters in Guidant's industry.
- Other factors included on Exhibit 99.1 to this filing, which is incorporated herein by reference.

Actual results may differ materially.
The Company does not undertake to update its forward-looking statements.

# Item 4. Controls and
Procedures

Within 90 days prior to the date of
this report, an evaluation was carried out, under the supervision of and with the
participation of the Companys management, including the Companys chief
executive officer (CEO) and chief financial officer (CFO), of the Companys
disclosure controls and procedures. Based on the evaluation, the CEO and CFO have
concluded that the Companys disclosure controls and procedures are effective.

Subsequent to the date of the
evaluation, there were no significant changes in the Companys internal controls or
in other factors that could significantly affect these controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.

---

# PART II OTHER INFORMATION

Item 1. Legal Proceedings

A discussion of the Companys
policies with respect to legal proceedings and other loss contingencies is provided in
Significant Accounting Policies of Managements Discussion and
Analysis of Results of Operations and Financial Condition.

On October 3, 1997, Cordis
Corporation (Cordis), a subsidiary of Johnson & Johnson, filed suit against the
Company alleging that the sale of the Companys stent products infringes the
Palmaz/Schatz patents owned by Cordis. On April 3, 2000, the parties agreed to dismiss all
patent litigation between them and resolve remaining disputes in arbitration proceedings.
As part of the agreement, each party received licenses to the others patents
involved in the disputes. The arbitration proceeding regarding the Palmaz/Schatz patents
will resolve whether Cordis is entitled to damages based on a limited number of remaining
claims under U.S. patent 4,733,762. A ruling is expected in mid 2003. In a separate
arbitration, Guidant has asserted claims against Cordis under Guidants Lau/Lam
patents. The arbitration process commenced in the first quarter of 2002, with Guidant
asserting claims under U.S. patents 5,514,154 and 6,066,167 relating to Cordis BX
VELOCITY and OMNI BX stents. An arbitration decision is expected in early 2004.

On February 18, 1998, Arterial
Vascular Engineering, Inc. (now known as Medtronic AVE, Inc.), filed suit against the
Companys subsidiary, Advanced Cardiovascular Systems, Inc. (ACS), in the District
Court for 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 and monetary damages and to invalidate ACS stent patents asserted against Medtronic
AVE.

On March 6, 2002, Pacesetter,
Inc. (Pacesetter), a subsidiary of St. Jude Medical, Inc. (St. Jude) filed suit
against the Companys subsidiaries, Cardiac Pacemakers, Inc. (CPI) and Guidant Sales
Corporation (GSC), in the Central District of California alleging that CPI and GSC have
infringed Pacesetter patents covering various features of pacemakers and implantable
defibrillators. On the Companys motion, the case has been transferred to the
District Court for Minnesota. Currently four patents are at issue. Pacesetter is seeking
injunctive relief, monetary damages and attorney fees. Pretrial matters are scheduled
through 2003.

On December 3, 2002, the Company
filed suit against Boston Scientific Corporation (Boston Scientific) in the Northern
District of California claiming that Boston Scientifics Express 2 Monorail stent
system infringes the Companys Lau patent directed to a rapid exchange stent delivery
system. Boston Scientific subsequently filed a counterclaim alleging that the
Companys products infringe five of Boston Scientifics patents relating to
balloon dilatation. The parties are seeking injunctive relief and monetary damages.

On December 30, 2002, Boston
Scientific filed suit against the Company in the Northern District of California alleging
that the sale of the Companys stent delivery systems and balloon catheter
angioplasty products, including the MULTI-LINK ZETA, MULTI-LINK PENTA and AGIL-TRAC
products, infringe certain patents owned by Boston Scientific. In the lawsuit, Boston
Scientific is seeking injunctive relief and monetary damages.

On April 14, 2003, Medinol Ltd. filed
suit against the Company and its ACS subsidiary in the Southern District of New York
alleging that the sale of the Companys MULTI-LINK ZETA and MULTI-LINK PENTA products
infringe five Medinol patents related to stent design. The complaint seeks injunctive
relief and monetary damages.

Except with respect to the matters
described above, the outcomes of which could be material to the Company, the ultimate
liability in excess of reserves associated with other matters (including the previously
disclosed matters described below) is not expected to have a material effect on
consolidated financial position or liquidity, but could possibly be material to the
consolidated results of operations of any one period. See the Companys filing on
Form 10-K for additional information.

As previously reported, Guidant was
informed that it is a target of an investigation by the U.S. Department of Justice and the
Office of Criminal Investigations of the FDA into matters relating to the Companys
ANCURE ENDOGRAFT System for the treatment of AAA. In March 2001, the Company voluntarily
halted production and sale of the product and performed a voluntary recall following the
discovery of certain regulatory compliance deficiencies in the business unit responsible
for the sales of the product. The product was returned to full market release in August
2001 with FDA approval. The Company is cooperating fully in the investigation and has
announced $92.0 million in reserves taken as part of an anticipated resolution of the
matter.

The Company has also been served with
a number of individual suits and is aware of the filing of additional suits alleging
product liability related causes of action relating to the ANCURE System.

On June 15, 2000, Medtronic,
Inc. (Medtronic) filed a declaratory judgment action against the Company and its CPI
subsidiary in the 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 the patents are not valid. Subsequently, Guidant asserted additional
patents related to atrial fibrillation technology against Medtronic in the same court.
Currently, nine patents are being asserted against Medtronic in this consolidated
litigation. Pretrial matters are scheduled through 2003.

Anna Mirowski, Eli Lilly and Company
and two Company subsidiaries, GSC and CPI, are plaintiffs in a patent infringement suit
originally filed against St. Jude and its affiliates in November 1996 in the District
Court in Indianapolis. The suit alleges that St. Judes defibrillator products
infringe patents licensed to CPI. In July 2001, a jury found that two of the licensed
patents were valid and that St. Jude had infringed one, a patent that expired in March
2001. The jury awarded damages of $140 million against St. Jude. The Company did not
record a gain. On February 13, 2002, the court, in ruling on a number of post-trial
motions, reversed each of the three jury findings above, along with the jury award. The
court awarded St. Jude certain post-trial fees and costs (in an immaterial amount), along
with contingent expenses and attorney fees upon any retrial of the case if a retrial is
required following any appeal of the courts rulings. The plaintiffs appeal is
pending in the Federal Circuit Court of Appeals.

On March 13, 2003, the Company and
Boston Scientific filed a joint motion to dismiss without prejudice the claims and
counterclaims between them relating to the use of paclitaxel and the Companys merger
agreement (now terminated) with Cook Group Incorporated. On March 14, 2003, the Court
granted the joint motion. As further described in the Companys filing on Form 10-K,
litigation between Cook Incorporated (Cook) and Boston Scientific concerning agreements
between Cook and the Company relating to paclitaxel remains before the Court of Appeals
for the Seventh Circuit.

---

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

| | (a) | Exhibits.  The Exhibit Index is incorporated herein by reference.
| | --- | -----------------------------------------------------------------

| | (b) | Reports
on Form 8-K.  During the quarter for which this Report on Form 10-Q is filed, the
registrant filed a Current Report on Form 8-K dated January 2, 2003, reporting under Item
5 on the issuance of a press release (Exhibit 99 to such  filing) announcing the
preliminary results of the DELIVER clinical trial and anticipated termination of the
 Company's merger agreement with Cook Group Incorporated.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# 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: May 14, 2003 |  | /S/ Keith E. Brauer            
|                   |  | Vice President, Finance and    
|                   |  | Chief Financial Officer        
|                   |  |                                
|Date: May 14, 2003 |  | /S/ Peter J. Mariani           
|                   |  | Corporate Controller and       
|                   |  | Chief Accounting Officer       

---

# CERTIFICATIONS

I, Ronald W. Dollens, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Guidant Corporation;
2. Based on my knowledge,  this quarterly  report does not contain any untrue  statement of a material fact or omit to state a
material  fact  necessary to make the  statements  made,  in light of the  circumstances  under which such  statements  were made,  not
misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge,  the financial  statements,  and other  financial  information  included in this  quarterly  report,
fairly  present in all material  respects the financial  condition,  results of operations  and cash flows of the registrant as of, and
for, the periods presented in this quarterly report;
4. The  registrant's other certifying officer and I are responsible for establishing and maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                    a)  designed  such  disclosure  controls and  procedures to ensure that material  information  relating to the  registrant,
      including its consolidated subsidiaries,  is made known to us by others within those entities,  particularly during the period in
      which this quarterly report is being prepared;

                    b)  evaluated  the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior
      to the filing date of this quarterly report (the "Evaluation Date"); and

                    c)  presented in this quarterly report our conclusions  about the  effectiveness of the disclosure  controls and procedures
      based on our evaluation as of the Evaluation Date;
5. The  registrant's other certifying officer and I have disclosed,  based on our most recent evaluation,  to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

                      a)  all  significant  deficiencies  in the design or  operation  of  internal  controls  which could  adversely  affect the
      registrant's ability to record,  process,  summarize and report financial data and have identified for the registrant's  auditors
      any material weaknesses in internal controls; and

                      b)  any fraud,  whether or not material,  that involves  management or other  employees who have a significant  role in the
      registrant's internal controls; and
6. The  registrant's  other  certifying  officer  and I have  indicated  in this  quarterly  report  whether or not there were
significant changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|                       |                         | 
|---------------------- | ----------------------- | 
|Date:     May 14, 2003 | /S/ Ronald W. Dollens   | 
|                       | Chief Executive Officer

---

I, Keith E. Brauer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Guidant Corporation;
2. Based on my knowledge,  this quarterly  report does not contain any untrue  statement of a material fact or omit to state a
material  fact  necessary to make the  statements  made,  in light of the  circumstances  under which such  statements  were made,  not
misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge,  the financial  statements,  and other  financial  information  included in this  quarterly  report,
fairly  present in all material  respects the financial  condition,  results of operations  and cash flows of the registrant as of, and
for, the periods presented in this quarterly report;
4. The  registrant's other certifying officer and I are responsible for establishing and maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                      a)  designed  such  disclosure  controls and  procedures to ensure that material  information  relating to the  registrant,
      including its consolidated subsidiaries,  is made known to us by others within those entities,  particularly during the period in
      which this quarterly report is being prepared;

                      b)  evaluated  the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior
      to the filing date of this quarterly report (the "Evaluation Date"); and

                      c)  presented in this quarterly report our conclusions  about the  effectiveness of the disclosure  controls and procedures
      based on our evaluation as of the Evaluation Date;
5. The  registrant's other certifying officer and I have disclosed,  based on our most recent evaluation,  to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

                      a)  all  significant  deficiencies  in the design or  operation  of  internal  controls  which could  adversely  affect the
      registrant's ability to record,  process,  summarize and report financial data and have identified for the registrant's  auditors
      any material weaknesses in internal controls; and

                      b)  any fraud,  whether or not material,  that involves  management or other  employees who have a significant  role in the
      registrant's internal controls; and
6. The  registrant's  other  certifying  officer  and I have  indicated  in this  quarterly  report  whether or not there were
significant changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|                       |                         | 
|---------------------- | ----------------------- | 
|Date:     May 14, 2003 | /S/ Keith E. Brauer     | 
|                       | Chief Financial Officer

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99.1   EXHIBIT INDEX


          Exhibit 99.1:  Factors Possibly Affecting Future Operating Results
          Exhibit 99.2:  Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002