Global Leaders in Sleep Medicine Update

Global Leaders in Sleep and Respiratory Medicine

Investor Relations Update
Q1 2012

1 © ResMed Q1 2012 Global leaders in sleep and respiratory medicine

Forward Looking Statements

Statements contained in this release that are not historical facts are “forward-looking” statements as
contemplated by the Private Securities Litigation Reform Act of 1995.These forward-looking statements,
including statements regarding the Company’s future revenue, earnings or expenses, new product
development, and new markets for the Company's products are subject to risks and uncertainties, which
could cause actual results to materially differ from those projected or implied in the forward looking
statements. Additional risks and uncertainties are discussed in the Company's Annual Report on Form 10-
K for its most recent fiscal year and in other reports the Company files with the U.S. Securities & Exchange
Commission. Those reports are available on the Company's Web site.


Global Leader in SDB and Respiratory Medicine
Global leading developer, manufacturer and distributor of medical
devices to treat sleep-disordered breathing and other respiratory
conditions.


What We Do
• Improve quality of life for people with sleep-disordered
breathing or respiratory failure through:
– Innovative products and technology
• Raise the benchmark for effective diagnosis, therapy, patient comfort and
compliance.
– Education, awareness, screening
• Help the medical community and public to understand sleep-disordered
breathing.
• Provide tools to identify people at risk.
– Ventilation solutions
• Provide temporary or long-term ventilatory assistance.
– Monitoring systems
• Ensure therapy meets clinical requirements.


Market Opportunities
Market Size – 20% sleep apnea in the adult population.
13% Mild; 7% Moderate to Severe

7%
13%

2002
Young T, Peppard E, and Gottlieb D. Epidemiology of obstructive sleep apnea: a population health
perspective. Am J Respir Crit Care Med 2002; 165:1217-1239

What is Sleep-Disordered Breathing?
• Abnormal respiration during sleep (e.g. snoring, apneas, reduced
airflow).
• Most prevalent is obstructive sleep apnea – a collapse of the upper
airway despite ongoing breathing efforts.
• Other types include central sleep apnea characterized by the lack of
breathing effort and mixed apneas (combination of obstructive and
central sleep apnea).

Healthy upper airway Partially obstructed upper airway Obstructed upper airway


Visible and Hidden Impacts of Sleep-Disordered Breathing

SDB

Externally Internally
• Choking arousals • Hypoxemia
• Fragmented sleep • Hypercapnia
• Nocturia • Sympathetic activation
• Unrefreshed on wakening • Endothelial dysfunction
• Morning headaches • Metabolic dysregulation
• Impaired concentration • Hypertension
• Daytime sleepiness • Arrhythmias
• Myocardial infarction
• Stroke

Sleep Apnea is Prevalent in Patients with Other
Serious Conditions
Logan et al.
Drug-Resistant Hypertension 83%
J. Hypertension 2001

O’Keefe and Patterson.
Obesity 77%
Obes Surgery 2004

Oldenburg et al,
Congestive Heart Failure 76% Eur J Heart Failure, 2007

Type 2 Diabetes 72%* Einhorn et al.
Endocrine Prac 2007

Pacemakers 59% Garrigue et al.
Circulation 2007

Atrial Fibrillation 49% Gami et al.
Circulation 2004

All Hypertension 37%
Sjostrom et al.
Thorax 2002

Coronary Artery Disease 30%
Schafer et al.
Cardiology 1999

* Apnea-Hypopnea Index ≥ 5


Links Between OSA and Chronic Disease
FIGURE Possible mechanistic links between obstructive sleep apnea, obesity,
metabolic syndrome, and type 2 diabetes

Obstructive Sleep Apnea

Type 2 Diabetes
Sleep Fragmentation /
Intermittent Hypoxia Sleep Deprivation

Obesity
Oxidative Stress Neurohormonal Changes

Insulin Resistance

Inflammation

Syndrome
Metabolic
Hypertension

Dyslipidemia

Reproduced with permission from Tasali E, p MSM, 2008. Obstructive sleep apnea and metabolic syndrome: Alterations in glucose
metabolism and inflammation. Proc AM Thorax Soc. 5:207-217 (2008). Official journal of the American Thoracic Society. Copyright ©
American Thoracic Society.


Our Five Strategic Initiatives
1. Sleep-disordered breathing (SDB) and its association
with and impact on cardiovascular and cerebrovascular
diseases.
2. SDB and its association with and impact on type 2
diabetes mellitus.
3. SDB and its association with and impact on peri-
operative risk.
4. SDB and its association with and impact on
occupational health and safety.
5. Ventilatory support with respect to chronic obstructive
pulmonary disease (overlap syndrome) and
neuromuscular disease.


Company Reorganization – May 2011
• Reorganized certain business units and management
responsibilities to more effectively align activities with strategic
goals.
• Provide innovative solutions with scale and efficiency.
• Improve our ability to deliver and result in more effective
investment initiatives.
• Focus on key drivers for future growth.
• Newly-created respiratory care strategic business unit will also
focus on chronic obstructive pulmonary disease.
• Newly-created strategic business unit, ResMed Ventures and
Initiatives, will focus on opportunities in disease states related to
sleep-disordered breathing and other market opportunities tied
to our key strategic initiatives.

Our Commitment to Ventilation
Developing innovative and effective mechanical ventilation solutions to improve the
quality of life for patients and providing assistance to care-givers.

We provide:
Mechanical ventilation for congenital
defects, illness, trauma, obesity, cardiac
arrest, neuromuscular disease, pulmonary
disease and sometimes sepsis and shock.

Non-invasive ventilation solutions with the
best-in-class leak algorithms to support temporary
or long-term ventilation.

Invasive ventilation solutions for dependant patients
with value or leak ventilators providing both pressure
and volume ventilation.


Gründler GmbH Acquisition

• Integrates innovator of medical humidification
products into respiratory care business unit.
• Supplies humidification for neo-natal/pediatric,
non-invasive pressure support and intensive
care unit ventilators.
• Enables ResMed to provide a system to sell into
the home and hospital markets.
• Allows ResMed to build expertise and
competitive position in humidification.
• Leverages humidification technology between
ventilation and obstructive sleep apnea.


CareFusion and ResMed Partner in Ventilation
• Exclusive five-year distribution agreement for ventilation
products.
– Hospitals, long-term acute care facilities and skilled nursing
facilities.
• Initial focus - launch of the Stellar 100 and related products.
– Stellar provides a perfect solution for CareFusion to enter the fast-
growing non-invasive pressure support ventilation market with
ResMed’s unique performance, size and mobility features that solve
patient/ventilator synchrony and leak compensation problems.
– Competitive price differentiation.
• Non-invasive ventilation is the largest and fastest-growing
segment in America’s sub-acute ventilation market.


BiancaMed Acquisition

• First acquisition to become part of ResMed’s
newly-created Ventures and Initiatives unit.
• ResMed has been an investor since 2003.
• BiancaMed is a leading Irish medical technology company.
• Developed an innovative, accurate, convenient, non-contact device to monitor
sleep and breathing in the home and hospital.
• Developing technology for several medical and consumer applications.
– Potential future applications in chronic diseases such as heart failure and chronic
obstructive pulmonary disease.
• Enhances commitment to innovation in sleep and respiratory medicine and the
related co-morbidities by commercializing products incorporating novel
technologies.


OSA and Cardiovascular
Disease


Why Sleep Apnea and Cardiovascular Disease?
• Sleep apnea is highly prevalent in cardiovascular
disease patients1.
– 30% to 80% of patients for common CVD states.

• Obstructive sleep apnea increases risk of incident
heart failure2.
– Men ages 40-70 with AHI >30 were 68% more likely to develop
heart disease than those with AHI <5.

• Sleep apnea can cause changes in blood vessel
function that reduces blood supply to the heart in
people who are otherwise healthy3.
• Benefits of CPAP treatment:
– Continuous positive airway pressure treatment reverses blood
vessel abnormalities.
– Sleep apnea therapy lowers blood pressure4.
• 4mm Hg to 10mm Hg reduction with CPAP therapy .

1 Logan et al. J. Hypertension 2001; Schafer et al. Cardiology 1999 – Sleep apnea therapy improves cardiovascular health5.
2 Gottlieb et al, Circulation July 2010
3 Hypertension: Journal of the American Heart Association July 2010 • Left ventricular ejection fraction, six-minute walk, VO2 max, afterload, BNP.
4 Becker et al. Circulation 2003
5 Kaneko et al. NEJM 2003, Maisel et al. UCSD VA Hospital – Case Study Data
(2002), Teschler et al. AJRCCM 2001


SERVE-HF Clinical Trial
• Aim: Demonstrate that adaptive servo-ventilation therapy over
two years can improve morbidity and mortality in patients with
predominant central sleep apnea and heart failure.
• Design: randomized controlled trial with @1200 evaluable subjects.
− Control arm - optimal medical care.
− Active arm - optimal medical care plus ASV.
• Status: Actively enrolling in Europe.
• Progress: Currently enrolled over 800 patients in 60 centers.
• Main Sub-study: Demonstrate that ASV therapy improves heart
failure outcomes such as left ventricular ejection fraction and quality
of life metrics (n=300).


OSA and Diabetes


Type 2 Diabetes & OSA Clinical Connections
• 72% of patients with type 2 diabetes suffer from
obstructive sleep apnea (OSA)1.
– 86% of obese diabetics have OSA.
• OSA may have a causal role in the development
of diabetes2.
• OSA is associated with insulin resistance
(independent of obesity)3.
• Obese patients with sleep apnea are more insulin
resistant than patients with simple obesity4.
• 30% of patients presenting to a sleep clinic have 1 Einhorn et al. Endocr Pract 2007
2 Reichmuth et al. Am J Respir Crit Care Med 2005
impaired glucose tolerance or diabetes, of which 3 Ip et al Am J Respir Crit Care Med 2002, Punjabi et al. Am J

Respir Crit Care Med 2002
40% are undiagnosed5. 4 Tassone et al. Clin Endocrinol 2003
5 Meslier et al. Eur Respir J 2003


OSA and Obesity


Obesity Trends* Among U.S. Adults
(*BMI 30, or about 30 lbs. overweight for 5’4” person)

1990 2000

2010

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

Global Obesity Forecast
• In 2008, 9.8 percent of the world’s male population were obese, as were 13.8
percent of women. In 1980, these rates were 4.8 percent and 7.9 percent1.
• The World Health Organization predicts there will be 2.3 billion overweight adults
in the world by 2015 and more than 700 million of them will be obese.

1 Majid Ezzati, MD et al, of the Imperial College of London


Peri-operative Risk


Sleep Apnea Epidemic = Peri-operative Risk
• More than 40+ million US adults suffer from sleep-disordered
breathing1.
– More than 85% remain undiagnosed2.

• Increase in prevalence of obesity has led to increase in
obstructive sleep apnea3.

• High prevalence of undiagnosed obstructive
sleep apnea in the surgical patient
population (24%)4.

1 Young et al. J Am Med Ass 2004
2 Young et al. Sleep 1997
3 Newman et al. Arch Intern Med 2005
4 Chung et al. Anesthesiology 2007

Sleep-Disordered Breathing
and Occupational Health
and Safety


Transportation Agencies Recognize Link between
Sleep-Disordered Breathing and Accidents

• US
– In October 2009, the National Transportation Safety Board wrote to the US
Coast Guard and Federal Motor Carrier Safety Administration recommending
screening of all ship pilots, bus and truck drivers for sleep apnea.
– US Federal Motor Carrier Safety Administration meeting December 2011 to
discuss its medical review board’s recommendations on sleep apnea.
• UK
– Truck driver with undiagnosed
sleep apnea killed a 26-year old driver.
– Coroner in the case and father of dead man
call for UK professional drivers to be tested.


Health Plan and Disability Cost Benefits of OSA Treatment
Waste Management’s Experience % Reduction
0%
•

All Medical Costs

Short-term disability


37% reduction in total medical
costs for those treated in 1st year. -10%

absences

leaves
costs
• 79% reduction in short-term -20%

disability costs for those treated -30%
in 1st year.
-40%
• 72% reduction in short-term
disability days absent in 1st year. -50%

• 52% reduction of employees with -60%
a short-term disability leave in 1st
-70%
year.
-80%
Commercial motor vehicle operators with obstructive sleep apnea and
treated with positive airway pressure therapy (N=156)
Hoffman, et al., Journal of Occupational & Environmental Medicine, vol. -90%
52, no. 5 (2010)
-100%

Health Plan and Disability Cost Benefits of OSA Treatment
% Reduction
Schneider Trucking’s Experience
0%

Total Medical Costs

Accidents
Hospital Admissions
• Results 12 months post-CPAP
-10%
treatment1.
– 57.4% reduction in total medical -20%
expenses = $6,456/year.
-30%
– 91% reduction in hospital
admissions. -40%
– Does not include savings from
accidents. -50%

• Results from original 6-month
-60%
follow up study.
– Improved retention by 229%. -70%
– 73% reduction in accidents.
-80%

1Berger, et al., CHEST 2006 -90%

-100%


Superior Product
Innovation


New Mask Offerings Considered Best in Class
Quattro™ FX Mirage™ FX Swift™ FX

“The FX Trilogy”

S9™ Series Delivers More Comfort,
More Compliance, More Connectivity

High $
VPAP™ Adapt

Bi-Level
PRICE

Med $
Premium Segment - Elite

Low $ Value Segment – Escape

FEATURES

• Climate control • Climate control • Ultra quiet Easy-Breathe • Simple menu settings
• Wireless monitoring • Wireless monitoring • Easy-Breathe waveform makes • Seamless integration with
© ResMed 2006 • Sleep quality indicator • Sleep quality indicator breathing more comfortable optional H5i™ heated humidifier
• Comprehensive data • Simple menu settings with Climate Control
(AHI tracking, mouth • Seamless integration with • Enhanced Vsync™ technology
leak, central sleep optional H5i™ heated provides superior
apnea detection) humidifier with Climate patient–ventilator synchrony
Control


Skinit
• Skins allow a patient to fit the device into their lifestyle.
• Skins present an opportunity for cash revenue for HMEs.
• Personalization has been immensely successful across multiple industries.
• Personalization will lowering the emotional barriers to accepting therapy,
which will drive therapy adherence. Therapy adherence drives customer
revenue and patient health.
• Skins create a unique way to reconnect with patients who have abandoned
therapy and potentially bring them back in to using a device.


Stellar™ 100 – Easy Access to Quality Therapy

• Feature-rich, premium non-
invasive ventilator that can
also be used invasively.
• Light, compact and portable.
• Packed with exciting
innovative features.
• Improved leak management
system (VSync), which makes
breathing more natural for the
patient.


Financial Results


67th Consecutive Quarter of Revenue Growth

Q1 2012

Revenue $314.8M +12%
(Constant Currency) (+8%)

$50.5M
Net Income
-11%

$0.33
EPS
-8%


Sales by Region & Product
Q1 2012
Masks & Flow Generators
Accessories 54%
46%

Americas Europe 36%
54%

Asia-Pacific
10%


Annual Revenue Performance
15% 5YR CAGR
1,400,000

1,200,000

1,000,000

800,000
US$ '000

600,000

400,000

200,000

-
2006 2007 2008 2009 2010 2011

Net revenues


Net Income Growth
21% 5YR CAGR
250,000 20.0%

18.0%
200,000

16.0%
150,000
US$ '000

% of Revenue
14.0%

100,000
12.0%

50,000
10.0%

- 8.0%
2006 2007 * 2008 2009 2010 2011

Net Income Net Income as % of Revenue

* 2007 Net Income excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax.


Sustained EPS Growth
20% 5YR CAGR

$1.60
$1.44
$1.40
$1.23
$1.20

$1.00 $0.95

$0.80 $0.69 $0.70
$0.58
$0.60

$0.40

$0.20

$0.00
2006 2007* 2008 2009 2010 2011
* 2007 EPS excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax.


Balance Sheet
USD '000 Sep-11 Jun-11
Cash/ Marketable Securities 610,063 735,267
Accounts Receivable 251,103 274,352
Inventory 187,950 200,777
Other Current Assets 93,683 82,056
PP&E 432,687 462,107
Patents/ Goodw ill 331,628 283,398
Other Assets 28,178 30,965
TOTAL ASSETS 1,935,292 2,068,922

Accounts Payable 46,688 55,194
Accruals 103,274 103,787
Incom e Taxes Payable 33,262 7,988
Current portion, long term debt 4,095 163
Deferred Revenue 58,897 62,362
Long Term Debt 130,000 100,000
Deferred Incom e Tax 10,058 8,691
TOTAL LIABILITIES 386,274 338,185

Com m on Stock 815,765 799,068
Retained Earnings 1,162,380 1,111,862
Treasury Stock -629,338 -504,625
Other Com p Gain (Loss) 200,211 324,432
STOCKHOLDERS EQUITY 1,549,018 1,730,737

• Global leader in sleep medicine.
– Committed to increasing education and awareness of sleep-disordered breathing.
– Complete solutions from screening to support and monitoring.
• Advancing ventilation for respiratory care.
– Creating new benchmarks in ventilation to meet the challenges of respiratory care.
– Innovative homecare solutions to improve quality of life.
• Trusted track record, poised for greater success.
– Strong leadership and globally-diversified team of over 3,300 personnel with diverse
expertise.
– Continuous innovation and investment in research and product development.
– Ongoing journey of growth, leadership and excellence.
– Strong balance sheet.


Global Leaders in Sleep Medicine Update

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