PATIENT SAFETY TO THE CORE

2019 ANNUAL REPORT SENIOR MANAGEMENT TEAM

Joe Kiani Chief Executive Officer & Chairman of the Board PATIENT SAFETY TO THE CORE

Bilal Muhsin Chief Operating Officer

Micah Young Letter from the Chairman and CEO...... 4 Executive Vice President & Chief Financial Officer

Tom McClenahan 2019 Financial Highlights...... 8 Executive Vice President, General Counsel Raising the Bar for Patient Safety ...... 10 Tao Levy Executive Vice President, Business Development Live to Defeat the Opioid Epidemic with Masimo...... 12

Jon Coleman President, Worldwide Sales, Masimo Is Automating Care...... 16 Professional Services & Medical Affairs

Why I Believe in Masimo: Q & A with Early Masimo Adopters ...... 20 Yongsam Lee Executive Vice President & Chief Information Officer Innovation Never Stops: New Product Highlights...... 22 Anand Sampath Executive Vice President, Operations & Clinical Research What Patient Safety Means to Me: Employee Spotlight ...... 28

Tetsuro Maniwa President, Japan, Greater Integrating OEM Technology ...... 30 China & South Korea

Stacey Orsat A Global Citizen...... 32 President, EMEA

Matthew Anacone Senior Vice President, 2019 Financial Performance...... 34 North America Sales

BOARD OF DIRECTORS

Joe Kiani Chairman of the Board of Directors

Steven J. Barker, MD, PhD H Michael Cohen Sanford Fitch Thomas Harkin Adam Mikkelson Craig Reynolds Julie A. Shimer, PhD Patient Safety Is in Our DNA

LETTER FROM THE In 1989, I founded Masimo with an ambitious goal: to solve the “unsolvable” challenge of making oxim- CHAIRMAN AND CEO etry accurate and reliable, even during patient motion and low .

At the time, conventional was plagued by unreliability, delivering inaccurate data and exces- sive false alarms due to patient movement and low per- fusion. Lives were harmed and even lost because con- ventional pulse oximeters failed to accurately monitor those who needed it the most.

My dear friend and mentor, Dr. Jeremy Swan, described conventional pulse oximetry as a fair-weather friend. I believed a superior technology——one that would be accurate and reliable during challenging conditions of motion and low perfusion——was possible. In partnership with another dear friend and fellow engineer Mohamed Diab, we set out to make that goal a reality.

The Masimo Difference: Signal Extraction Technology®

In 1996, Masimo Signal Extraction Technology (SET®) was introduced at the World Congress of Anaesthesi- ologists in Australia. Over time, SET® transformed from a breakthrough technology into the standard of care for and pulse rate at top hospitals around the world. Since its launch, more than 100 independent and objective studies have shown that Masimo SET® outperforms other pulse oximetry technol- ogies, providing clinicians with unmatched sensitivity and specificity to make critical patient care decisions.1

The legacy of Masimo SET® is indelibly tied to enhanced patient safety.

As the underlying technology driving many of our solutions, SET® remains as disruptive today as when it launched. Just this past year, we’ve achieved significant accuracy specification improvements with our new line of eco- and patient-friendly RD SET® sensors. And, in line with our unrelenting pursuit of perfecting pulse oximetry for motion, we released Radius PPG™, a tetherless pulse oximetry solution powered by Masimo SET®, providing accurate monitoring for patients on the move.

From dramatically reducing the incidence of false alarms and missed true alarms to enabling critical congenital heart disease (CCHD) screening with SET® pulse oxim- etry and helping save newborns’ eyesight, the legacy of Masimo SET® is indelibly tied to enhanced patient safety. 

4 5 2019 Highlights The evidence is becoming clearer: SpHb monitoring makes a true clinical difference, helping enhance patient Our 30th anniversary, 2019, was a milestone year for safety, improve patient outcomes, and reduce the cost Masimo in multiple ways. We grew our product reve- of care. In 2019, we saw an inflection in the adoption of nue by $106 million, achieving 13% product revenue SpHb by hospitals. We believe that 2020 is poised to be growth on a constant currency basis. 2019 also saw us a year of momentum for SpHb adoption as a standard of making significant headway in emerging markets and care, just like SET®. welcoming many new customers from across the world, resulting in our best year yet for global sales. While these achievements alone are wonderful news for all of our shareholders, we plan to build on the mo- mentum of 2019 to make 2020 our best year for growth ever——aiming to surpass $1 billion in revenue. We believe that 2020 is poised to be a The Next Generation of Innovation at Masimo year of momentum for SpHb® adoption At Masimo, we’ve cultivated a can-do environment populat- ® as a standard of care, just like SET . ed by dedicated, ethical employees who thrive on passion and curiosity and are committed to the common good. As a mission-based medical technology company, we attract team members who possess the brightest minds and the Moreover, in 2019 we remained true to our commitment biggest hearts, and give them a collaborative environment to enhancing patient safety by bringing a range of inno- where they have support to develop technologies and vative products and solutions to market——each designed solutions that are the best for patient care. to make meaningful clinical differences and help clini- Just as we set out three decades ago to perfect pulse cians improve patient outcomes. From Radius PPG, a oximetry, the next generation of visionary engineers, tetherless, continuous pulse oximetry solution powered clinicians, and leaders at Masimo are hard at work ® by SET , to Halo ION™, which offers care teams a com- addressing the most pressing healthcare technology prehensive, personalized, continuous patient score, we challenges of the 21st century——each with a profound are rapidly expanding our portfolio of solutions to match commitment to enhancing patient safety. They are here, the evolving needs of modern, high-velocity healthcare. dedicating their considerable talents to our mission, not for prestige or vanity, but in service to the legacy Finally, 2019 also brought important new evidence to forged by Masimo SET®. I call them the Masimo purists. demonstrate the clinical need for noninvasive, continu- ous (SpHb) monitoring, which, like SET®, is From tackling the opioid epidemic, to delivering au- an area of continual innovation at Masimo. tomation solutions that will optimize the continuum of great care, to developing clinically useful wearable and While earlier studies showed that SpHb helped clinicians home care devices, these purists are leading the charge reduce the frequency and volume of unnecessary blood into the future of medicine. transfusions, both in high- and low-blood-loss surgery, a landmark study conducted in Limoges, France, pub- Please read on to discover how these purists, and the lished in 2019, reinforces what we have long believed: personal motivations that drive their fascination, deter- SpHb has a significant impact on patient outcomes, mination, and commitment to patient safety, are shaping amounting in that study to a 33% reduction in mortality the future of Masimo and our customers and partners—— at 30 days and 29% at 90 days after surgery.2 and why we say we are patient safety to the core. 

1Published clinical studies on pulse oximetry and the benefits of Masimo SET® can be found on our website at http://www.masimo.com. Comparative studies include independent and objective studies which are comprised of abstracts presented Joe Kiani at scientific meetings and peer-reviewed journal articles.2 Cros et al. J Clin Monit Chairman and CEO Comput. Aug 2019: 1-9.

6 7 2019 FINANCIAL HIGHLIGHTS

REVENUES 937.8

936.4 In millions of dollars 858.3

Product revenues 829.9 790.2 Royalty and other revenues

712.9 738.2

630.1 674.0

586.6 $5.85 547.2 599.3 556.8 $3.49 493.2 517.4

439.0 464.9 EARNINGS PER SHARE 405.4 406.5 $3.45 $3.44

356.4 Non-recurring litigation settlement

$2.23

$1.55 $2.36 $1.21 $1.30 $1.05 $1.07 $1.02

49.0 52.0 32.5 28.3 29.8 29.8 30.8 38.9 28.4 1.4

1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

FINANCIAL RESULTS SUMMARY

2019 Total Revenues 2019 EPS $937,837,000 $3.44

1 Included in the FY2016 Historical GAAP Earning Per Share was $3.49 per diluted share related to a $300.0 million litigation settlement agreement, of which $270.0 million was recognized as a gain on the Statement of Operations on December 31, 2016.

8 9 2019 BREAKTHROUGH STUDY 2003 BREAKTHROUGH RAISING THE BAR FOR PATIENT SAFETY Cedars-Sinai Medical Center STUDY A landmark study links Masimo SET® to reduced retinopathy of prematurity (ROP) in neonatal patients.1

BREAKTHROUGH STUDY When you look back over the last 30 years 2010 Massachusetts General Hospital of innovation at Masimo, the profound clin- A study shows SpHb monitoring helps clinicians optimize blood management.2 ical impact of our breakthrough technologies comes Next Generation SedLine® BREAKTHROUGH STUDY Brain Function Monitoring 2014 clearly into focus. What you see is a correlation be- Children’s Hospital of Fudan University A study shows Masimo SET®, when tween the development of a breakthrough Masimo combined with clinical assessment, improves critical congenital heart disease parameter and improved outcomes. Without a doubt, (CCHD) screening sensitivity to 93%.3 2016 we’ve helped raise the bar for patient safety, but we ar- BREAKTHROUGH STUDY BREAKTHROUGH 2016 Dartmouth-Hitchcock Medical Center STUDY en’t done yet. We’ll continue to push the boundaries of A study finds continuously monitoring adult patients on a post-surgical floor using Patient monitoring technologies because the evidence has SafetyNet with Masimo bedside devices

 resulted in a 60% reduction in rescue events O3® Cerebral proven what we believed from the start— and a 50% reduction in unplanned transfers Oximetry to the ICU.4 accurate monitoring enhances patient safety. BREAKTHROUGH STUDY CHU Limoges 2019 rainbow® A study finds a 33% reduction in ORi™† Joe Kiani | Chief Executive Officer mortality at 30 days and 29% at 90 days with the use of SpHb and PVi® as part of a goal-directed therapy protocol.5** 2014 BREAKTHROUGH STUDY For thirty years, Masimo has empowered clinicians with breakthrough monitoring technologies designed to help them improve patient Root® Patient outcomes. Revisit key highlights from our history to discover how Monitoring and Connectivity Platform our products have made a clinical difference. 2010 BREAKTHROUGH STUDY RAISING THE BAR FOR PATIENT SAFETY THE BAR FOR PATIENT RAISING SpHb

Additional published clinical studies on Masimo technology can be found on our website at http://www.masimo.com/evidence/featured-studies/feature/. 2003 Masimo Patient SafetyNet™* Comparative studies include independent and objective studies, which are comprised BREAKTHROUGH of abstracts presented at scientific meetings and peer-reviewed journal articles. STUDY

1Chow L.C. et al. Pediatrics. 2003 Feb; 111(2):339-45. 2Ehrenfeld et al. J Blood Disorders Transf. 2014. 5:9. 3 4 Masimo Signal Zhao et al. Lancet. 2014 Aug 30;384(9945):747-54. McGrath et al. Jt Comm J Qual Patient Saf. 2016;42(7):293- 302. 5Cros et al. J Clin Monit Comput. Aug 2019: 1-9. Extraction Technology *The use of the trademark PATIENT SAFETYNET is under license from University HealthSystem Consortium. (SET®) Pulse Oximetry **Study utilized a goal-directed fluid therapy protocol with PVi in conjunction with a protocol based on SpHb. †ORi has obtained CE Mark. Not available in the US.

Founding of Masimo

1989 1995 2003 2007 2008 2010 2013 2014 2016 2019

10 11 Live to Defeat the Opioid Epidemic with Masimo

It’s well known that monitoring with Masimo SET® can help prevent harm from opioid-induced respiratory depression in hospitals. We want to provide a similar level of safety to opioid users at home.

Tom McClenahan Executive Vice President, General Counsel

Answering the Call Closing the Gap on Opioid Safety erations: more than 50% of opioid In 2017, the U.S. Department of Since the late 1990s, opioids have overdoses occur while a person is alone and vulnerable.1 Health and Human Services (HHS) been prescribed to a wide variety officially declared the opioid- epi of patients for many different rea- Though the healthcare industry is demic a public health emergency. In sons, including postoperative and actively seeking new approaches to response, the FDA’s Center for Devic- post-surgical patients recovering pain management, opioids remain es and Radiological Health (CDRH) and healing at home as well as those a valuable tool that clinicians rely on launched an Innovation Challenge with chronic pain. Unfortunately, the to manage and alleviate pain——both to spur the development of medical last two decades have also shown in the hospital and at home. For this devices that could help curb the how addictive opioids can be——with reason, among others, it is imper- rising death toll. We answered the opioid abuse contributing to a grow- ative to develop new solutions to FDA’s call with a visionary approach ing number of deaths. enhance patient safety outside the that combines hospital-proven pulse boundaries of the hospital. oximetry technology with a novel This worrisome statistic reveals that Progress has been made, but major alert system. the opioid epidemic is impacting many different patient groups, in- gaps in protection against opioid From more than 250 submissions, cluding patients using non-prescrip- risks remain. Masimo is leveraging Masimo’s was one of eight propos- tion opioids, such as heroin and decades of industry-leading mon- als selected. We were also granted fentanyl, and those working through itoring expertise to deliver a con- “Breakthrough Device” status. recovery programs. sumer home monitoring solution that helps fill in those gaps.  This designation gives us the oppor- While there are opioid risk mitiga- tunity to work closely with the FDA tion strategies available to offset to expedite the review process, so or lessen the risk of overdose, they our groundbreaking approach is leave significant gaps in protection. available to help reduce harm as Current strategies fail to account for soon as possible. one of the most important consid-

12 13 R/IR

Delivering Hospital-proven With more than 100 independent and The unmatched sensitivity and spec- Systems to the Home Setting objective studies completed since its ificity of Masimo ® SET , in combina- Opioids are powerful painkillers, but launch, the clinical benefits of SET®—— tion with a system that accounts for they are also powerful respiratory including its ability to help care teams those who may be alone, is key to depressants. Even when taken as di- reduce the risks associated with opi- delivering the demonstrated ben- rected under the care of physicians, oid-induced respiratory depression efits of pulse oximetry in the home opioids can cause respiratory de- (OIRD)——have been documented. setting. By leveraging similar alert pression (slow or shallow breathing), system protocols to those used at In particular, a landmark study con­ which lowers blood oxygen to dan- Dartmouth-Hitchcock Medical Cen- ducted at Dartmouth-Hitchcock DIGITIZED, FILTERED, AND NORMALIZED gerous levels, leading to brain injury ter and other leading hospitals, we Medical Center demonstrated that and death. Respiratory depression are bringing hospital-proven solu- by implementing continuous pa­ is a serious risk for anyone using opi- tions to the home, enhancing patient tient monitoring with Masimo SET® oids——and a key reason that patients safety and, we hope, making a mea- and a clinician notification system, surable impact on the opioid crisis. prescribed opioids in the hospital are researchers were able to elimi- often continuously monitored for oxy- nate preventable deaths and brain Designed to enhance safety, ™ ™ R/IR DST® FST® SST MST genation (SpO2) with pulse oximetry. damage due to opioid overdose in Masimo SafetyNet will marry power- (Conventional Pulse Oximetry) Adaptive Filter Adaptive Filter post-surgical wards, as well as re­ ful SET® pulse oximetry technology duce rapid rescue events by 60%, with a novel alert system. Intended to ICU transfers by 50%, and cost by an replicate the responsiveness of hos- estimated $1.48 million annually.3-5 pital care teams, Masimo SafetyNet Masimo is leveraging decades The Dartmouth-Hitchcock Medi­ provides crucial opportunities for EVALUATION AND ANALYSIS cal Center study demonstrates the patients to self-recover or get help of industry-leading monitoring measureable differ­ence that reli- when needed. Ideal for anyone us- ing opioids, Masimo SafetyNet will expertise to deliver a consumer able, continuous monitor­ing, cou- pled with a notification system,­ can provide a level of safety and accura- have on patient outcomes. cy not available from other wearable POST PROCESSOR home monitoring solution. devices, fitness trackers, or smart- In an effort to reduce the harm phone applications.  caused by the opioid epidemic, we are ex­panding our leadership be- yond the hospital and into the con- 1ODPRN. Opioid Mortality Surveillance Report. Masimo Signal Extraction Technolo­ Public Health Ontario. https://www.publichealthon- sumer space, so that we can deliver tario.ca/-/media/documents/opioid-mortality-sur- MASIMO SET® DST 97% gy (SET®) is renowned for reliable, veillance-report.pdf?la=en. 2Shah et al. J Clin Anesth. hospital-proven­ systems in the home 2012;24(5):385-91. 3Taenzer AH et al. Anesthe- accurate oxygenation monitoring 4 setting directly to all at-risk patients. siology. 2010:112(2):282-287. Taenzer AH et al. during challenging condi­tions of Patient Safety Foundation Newsletter. 2012. Available at: http://www.apsf.org/newsletters/ motion and low perfusion. A trusted html/2012/spring/01_postop.htm. 5McGrath et al. Jt Comm J Qual Patient Saf. 2016;42(7):293-302. clinical tool that physicians rely on Masimo SafetyNet*: *Masimo SafetyNet pending FDA clearance. Product as an indicator of a patient’s phys- Opioid Safety Alert System not available. iological status, SET® has demon- In clinical settings, care teams are 0 50% 66% 97% 100% strated unmatched sensitivity and trained to respond to alarms and ad- specificity, with 3% missed true dress possible deterioration before Conventional pulse oximetry uses the standard red-over-infrared algorithm to provide SpO2, while alarms and 5% false alarms versus serious complications, such as brain Masimo SET® includes four additional algorithms, running in parallel. These algorithms distinguish 43% and 28%, respectively, with damage or death, occur. However, between the arterial signal and non-arterial and venous signal noise–—during motion and low perfusion–— competitor technology.2 the home setting is very different. by identifying and isolating the non-arterial and venous noise SpO2 components (left peak, shown in blue) from the true arterial SpO2 components (right peak, shown in red) in the signal.

14 15 97 74 15 7.0 Masimo Is 20 4.0 Automating Care

Healthcare needs more than scalable, flexible connectivity solutions. My team is at the forefront of invention and innovation at Masimo, working to provide a platform for potential advancements such as centralized device control, decision support, and closed- loop management. We believe that by supplying advanced connectivity solutions, combined with best-in-class approaches, our automation platform will help clinicians reduce manual steps and procedures—leading to enhanced patient safety and improved patient outcomes.

Omar Ahmed | Vice President, Software Engineering

The Masimo Difference: Masimo is automating care by mar­ Automating care benefits patients Signal Extraction Technology rying the undisputed power of SET® and clinicians in many ways. To un- ® Masimo Signal Extraction Tech­ and rainbow Pulse CO-Oximeters derstand the specific benefits for each, it is imperative to outline our nology (SET®) is used to monitor with powerful automation features, approach to automation. more than 700 million patients ev­ including expanded connectivity

ery year.1 The primary pulse oximetry­ and in­teroperability solutions and a Continuously Monitor at 9 of the 10 hospitals that top the variety of novel devices and systems. Advanced Parameters 2019-20 U.S. News and World Report This unique combination provides Best Hospitals Honor Roll, SET® is re­ clinicians and care teams with an At the core of our approach to nowned for accuracy and reliability, abundance of accurate, noninva- automating care is our ability to even in challenging conditions of sive, continuous patient data along- accurately monitor multiple ad- motion and low perfusion.2 side advanced automation features vanced patient parameters. With to improve workflow efficiencies. the Root Patient Monitoring and As the foundation of Masimo moni­ Combined, our approach to auto- Connectivity Platform, clinicians are toring devices, SET® provides clini­ mating care is helping clinicians de- able to centralize noninvasive tech- cians with quality patient data. Lead- liver great care while also optimizing nologies usually found on multiple ing hospitals­ and clinicians choose the continuum of care. separate devices in one comprehen- SET® because they know that with sive monitor, including advanced more accurate patient data, fewer Automating Care to Enhance rainbow SET® measurements, brain false alarms, and more true alarms, Patient Safety function monitoring, regional oxime- they can focus on what truly matters: try, blood pressure, temperature, and As more patient information be- delivering­ excellent, evidence-based ——all on an easy-to-in- comes available to clinicians through patient care. terpret, customizable display. continuous monitoring, new oppor- ® With the rainbow Pulse CO-Oxime- tunities to enhance the care experi- Further, Root serves as a connectivi- ter®, Masimo combines the power ence for both the clinician and the ty hub, drawing in patient data from of SET® with the ability to monitor patient abound. connected Masimo and third-party additional advanced parameters, in- devices and automating the elec- cluding Total Hemoglobin (SpHb), We are addressing these opportu- tronic charting of this rich, compre- Perfusion Index (Pi), Pleth Variability nities with a range of automation hensive stream in electronic medical Index (PVi), (SpMet®), solutions poised to revolutionize not records (EMR). By reducing the need (SpCO®), and only the kind of patient data that can to manually document and copy Acoustic Rate (RRa®) —— be collected and moved throughout data, the chance of transcription er- increasing the amount of continuous, the continuum of care, but also how rors is minimized, helping clinicians noninvasive patient data available that information can be used to em- focus their full attention on deliv- to clinicians to support informed power clinicians to deliver superior, ering evidence-based care rather care decisions. evidence-based care. than documentation. 

16 17 IRIS CONNECTIVITY ACROSS THE CONTINUUM OF CARE In addition to robust continuous that displays near real-time infor- Masimo is firmly monitoring capabilities, Root offers mation from connected Masimo a versatile spot-check interface that and third-party devices at a central committed to the flow streamlines data input at the bed- station. Combined with Replica, Iris Gateway® side, automating vital signs work- these alarms and alerts travel from of open data and, with flows and the calculation of early bedside devices to a clinician’s tab- warning scores (EWS). With easy-to- let or smartphone. our scalable, flexible follow prompts, cold-spot data In turn, Halo ION maximizes the queueing, and intuitive data push value of quality patient data col- automation solutions, capabilities, care teams can more lected at the bedside. Specifically, easily collect quality data and trans- Admissions, Discharges and Transfers (ADT) Electronic Medical Records (EMR) Halo ION aggregates trend data we adapt our advanced fer it upstream for use by clinicians from multiple physiologic parame- throughout the hospital and beyond. ters into a single, continuous score connectivity tools for each patient. Configured ac- Iris Connectivity Across the Continuously Monitor Advanced Patient Parameters Centralize Patient Data to Streamline Workflows cording to hospital policy, and dis- to meet the needs of Continuum of Care played and dynamically updated ® The Iris platform enables connec- at Patient SafetyNet central view each hospital’s unique Root UniView™ tivity across the continuum of care stations and on Replica mobile de- Patient Monitoring and Connectivity Platform Designed to Transform Care Intelligent Display for Next-Generation Data Aggregation and Alarm Visualization by seamlessly funneling all the data vices, Halo ION allows clinicians to device and network collected at the bedside——including leverage patient data to support third-party devices——into hospital workflow and resource allocation. infrastructure. IT systems, promoting connectivity and interoperability through stan- Combined, the Masimo approach dards-based protocols. Masimo is to automating care offers clinicians ™ firmly committed to the flow of open the ability to leverage quality data at home via Doctella , we are ex- data and, with our scalable, flexible to deliver evidence-based care panding what it means to provide automation solutions, we adapt our across the continuum. For patients, great care. this approach helps ensure en- advanced connectivity tools to meet And we are far from done. the needs of each hospital’s unique hanced care at the bedside and a device and network infrastructure. more consistent care experience. As we look forward, only one thing is certain: we are committed to au- By breaking down data siloes and The Relentless Pursuit tomating care for the benefit of cli- automating how patient information of Innovation nicians and patients alike——and will is collected and transferred, clini- At Masimo, innovation is a way of life. pursue any avenue that drives us cians and care teams have access to  ™ Nowhere is this more evident than in closer to that goal. Third-party Iris Analytics high quality, comprehensive infor- Anesthesia Infusion Pump Monitor Ventilator Hospital-wide Patient Reporting our efforts to automate care. In ear- Devices AnesthesiaMachine Pump Patient Ventilator mation about patient status through- Machine Monitor ly 2020, we acquired NantHealth’s out the hospital——helping reduce 1Estimate: Masimo data on file.2 http://health.usnews. Connected Care business (formerly variability in bedside care and en- com/health-care/best-hospitals/articles/best-hospitals- iSirona™), bolstering Masimo’s con- honor-roll-and-overview. hance patient safety and comfort. nectivity solutions with DCX™ de- vice connectivity software (formerly Transforming Patient Data into known as DeviceConX™), VCX™ pa- Actionable Insights tient vitals software (formerly known Patient SafetyNet Automating care at Masimo is more as VitalsConX™), and the HBox® Supplemental Remote Monitoring and Clinician Alarm Notification than accurate patient monitoring connectivity hub. These connectiv- and patient data management. To ity assets will help us expand and maximize the use of quality patient strengthen our automation solutions data, our state-of-the-art devices by promoting the free, open flow of Use Patient Data to Inform Management Decisions and systems are designed to dis- patient data across even more sys- play that data in meaningful ways to tems and devices. support care team workflows and enhance patient safety. By recognizing the value of open Replica™ data and scalable automation solu- Mobile Application for Supplemental Remote For example, Patient SafetyNet is a tions that allow more patients to Monitoring and Clinician Alarm Notification supplemental remote monitoring be continuously monitored on the and clinician notification system general floor, during transport, or Transform Patient Data into Actionable Insights

18 19 WHY I BELIEVE IN Question: Going forward, the ability to monitor Question: Question: Thank you for your participation. As the oxygenation of the neonatal brain What made you an advocate for What are your thoughts on the next early adopters, you have a unique will significantly benefit efforts to Masimo and how does the compa- generation of Masimo technologies outlook on the value of Masimo tech- avoid central nervous system ny’s mission align with your own? (i.e. automating care, advanced non- MASIMO nologies—both for the clinician and and hyperoxia. invasive technologies, wearable and the patient. From a clinical perspec- Dr. Goldstein: home care solutions, etc.)? How tive, how do Masimo technologies Dr. Denault: Masimo gave me 2020 equipment do you envision them improving improve patient safety? We started using SedLine in our insti- back in the 1990s. I am passionate patient safety? Q & A with Early tution, a cardiac center seeing 2,000 about doing everything I can to save Dr. Goldstein: cases a year, in 2017. Before then, we the most fragile neonates. Masimo Dr. Goldstein: Masimo Adopters Masimo technologies define patient were skeptical about processed EEG helps me do my job and more. When With Masimo, innovative technol- safety. What I mean by that is that Ma- monitors and only used near-infrared I have had a question, a suggestion, a ogy will carry information back to simo builds robust products that can spectroscopy (beginning in 2002). thought, or just needed to discuss an providers like me reliably, just in time, be trusted when the patient is coding issue regarding patient care, Masimo and without false positives, helping and nothing else is working. At first, we were quite surprised by wanted to hear from me. me extend my ability to monitor my From the beginning, a devoted group of respected clinicians and how differently our patients respond- patients and save more lives. medical authorities has fiercely advocated for Masimo technology In my patient population, fragile neo- ed to anesthesia and how often we Unlike other companies in the field, to be made accessible to practioners everywhere. Their support nates, who have low perfusion, high observed over-sedation. We have Masimo listened. Dr. Sola: and scholarship have been integral to the successful adoption of motion, and multiple confounding since significantly reduced our use For noninvasive technologies in neo- Dr. Sola: Masimo monitoring technologies around the globe. interfering extrinsic signals, reliable of intraoperative anesthesia agents. natal care, I believe the implementa- pulse oximetry was not achievable Before SET®, SpO2 monitors had tion of SpHb will lead to less expo- before Masimo. Without Masimo, For me, the major role of SedLine is to significant false alarms and false We recently asked four of these early adopters for their candid sure from blood transfusion, but also patient safety would just be a theory. personalize my anesthesia regimen readings. The original innovation by opinions on why they believe in Masimo technology. lead to more appropriate transfusion. and avoid burst suppression from Masimo gave me the opportunity In addition, I believe the implemen- Dr. Sola: overdosing, which by itself can lead to improve the care delivered in the tation of O3 in neonates will play a As a clinical neonatologist for over to unnecessary complications. centers I directed, and subsequently, major role in helping clinicians avoid four decades, I have witnessed in many centers around the world. practices that can negatively­ impact several, but not many, technological Dr. Ramsay: the developing brain. Round Table Participants advancements that have been truly Masimo provides innovative, accurate I have devoted most of my profes- useful in improving the safety of new- noninvasive technology that gives sional life to two issues: The first is Dr. Denault: Mitchell Goldstein, MD borns. Masimo pulse oximetry is one. clinically relevant, real-time informa- education. The second is finding I hope to see more technologies that Professor of Pediatrics, Loma Linda University School of Medicine tion that improves patient safety and original ways to improve the quality improve patient care become univer- Director, Neonatal ECMO Program Years ago, in a landmark study pub- treatment. Masimo has delivered of infant care, to decrease morbidity, sally adopted, just as pulse oximetry Division of Neonatology, Department of Pediatrics lished in Pediatrics, I showed that se- technology that is needed to detect and to improve survival without mor- and bedside ultrasound have been. Loma Linda University Children’s Hospital, Loma Linda, California vere retinopathy of prematurity (ROP) vital sign changes at a time interven- bidities or sequelae. I also hope to see, eventually, more and blindness in preterm babies was tion can be made and before harm technology that is environmentally Masimo, in the field of noninvasive much more prevalent than commonly can occur. responsible and affordable. monitoring, has shown a permanent Augusto Sola, MD, FAAP thought but that with the implementa- For example, Masimo technology commitment to both. Vice President, Medical Affairs, Neonatology, Masimo tion of Masimo Signal Extraction Tech- Dr. Ramsay: helps to prevent blindness in pre- Medical Director, Iberoamerican Society of Neonatology nology (SET®), from the time of birth, No patient should be categorized 1 mature infants, reduce unnecessary Dr. Denault: rates of ROP decreased significantly. as a “Failure to Rescue.” This must blood transfusions in major surgeries, Masimo brings technologies togeth- be made a major quality issue and This technology has improved and support precise anesthesia in er and continually evaluates and André Denault, MD, PhD, ABIM-CCM, FRCPC, FASE, FCCS eliminated. Nearly every major event patient safety——particularly in helping enhanced recovery programs. improves their products. The ability is preceded by a change in vital signs. Professor of Anesthesiology and Critical Care to avoid the many types of damage to combine SedLine with O3 and Department of Anesthesiology, Critical Care Division that excessive oxygen can cause. It’s Finally, Masimo technology can help other noninvasive technology is really Montréal Heart Institute and Centre Hospitalier de l’Université de Montréal Finally, more major surgery is being the main reason that, following the reduce harm from opioid-induced unique and valuable. Université de Montréal, Montréal, Quebec, Canada done in an outpatient setting and ROP study, I chose to join Masimo. It’s respiratory depression through early Masimo technology will enable home detection. By aggregating patient Dr. Ramsay: critical to educate others about how monitoring with the ability to wirelessly data collected in the ICU, clinicians Masimo, as a company, is very re- pulse oximetry can improve patient transmit to caregivers’ smart phones Michael A.E. Ramsay, MD, FRCA can quickly identify deterioration in a sponsive to physician needs and also outcomes. Some of the adverse when anomalies are detected, and Chairman, Department of Anesthesiology and Pain Management, patient at a time when an intervention to patient safety needs. Their focus effects of excess oxygen are very at a time when an intervention can Baylor University Medical Center, and President of Baylor can be made to prevent harm. on patient safety has resulted in very serious, not only for children, but also be made.  Scott & White Research Institute, Dallas, Texas for pregnant women, their fetuses, positive results. The reliability of their Chairman, Patient Safety Movement Foundation and even adults. devices has reduced patient harm and made our hospitals safer places 1Chow L.C., Wright K.W., Sola A.; CSMC Oxygen Adminis- to be as a patient. tration Study Group. Pediatrics. 2003 Feb;111(2):339-45.

20 21  Radius PPG Innovation Never Stops 

At Masimo, innovation is a way of life. It drives us to think differently and pursue new ideas. That’s why, when I Tetherless Radius PPG pulse oximetry represents a significant breakthrough in patient monitoring, providing industry-leading Masimo SET® Measure-through Motion and Low look at the list of 2019 product highlights, I’m Perfusion™ technology without a cabled connection to a monitor——allowing patients to incredibly proud of our achievements. They move about freely and comfortably while remaining continuously and reliably monitored. Featuring a feather-weight sensor with an adjustable wrist strap, each Radius PPG single- prove that our relentless drive for innovation is patient-use sensor provides four days of battery life. Multiple sensor types are available to contributing to better patient care­— support a variety of patient populations.

both in the hospital and at home. Designed to improve patient comfort and convenience while enhancing clinical workflows and efficiency, Radius PPG is suitable for use anywhere patients can benefit from mobility. Bilal Muhsin | Chief Operating Officer

22 23  Halo ION  Doctella

Halo ION aggregates trend data from multiple physio- Doctella is a secure, cloud-based patient engagement logic parameters into a single, continuous score for each and remote home care automation platform. Using intu- patient, configured according to hospital policy and dis- itive, customizable CarePrograms, home device data ag- played and dynamically updated at Patient SafetyNet gregation, and a web-based provider dashboard, Doctel- central view stations and on Replica mobile devices. By la provides a complete end-to-end home care solution, displaying the relative contribution of each parameter to allowing clinicians to create, relay, and manage treatment the score, Halo ION provides a tool to help clinicians bet- plans, patient schedules, and patient data flow. ter assess possible causes of patient deterioration.

24 25 ™  Pathway  O3

Pathway, a newborn oxygenation visualization mode for O3 Regional Oximetry is now indicated for use on Root, provides clinicians with a way to visualize a hospital’s neonatal patients in the U.S. With this expansion, recommended resuscitation protocol for a newborn’s the benefits of monitoring with O3 are now avail- oxygen saturation (SpO2) while continuously monitoring able to patients of all ages in the U.S. and beyond. SpO2 and pulse rate (PR) during the first ten minutes after birth. Pathway is intended to help streamline clinician workflow and improve protocol adherence during this critical period.

26 27 WHAT PATIENT SAFETY MEANS TO ME

At the core of Masimo is a network of “20 years ago, my father nearly lost “I appreciate Masimo’s mission in par- “Many people ask me, why Masimo? dedicated employees committed to his eyesight. Thanks to a new treat- ticular for its use of present progres- Throughout the 10 years that I have enhancing patient safety. Their hard ment, they were able to prolong his sive verbs, ‘improving’ and ‘reducing.’ worked at Masimo, my answer re- vision. It was at that point, when I This is a reminder that we aren’t solely mains the same: our commitment work and unwavering commitment saw how medical technology could focused on an end goal, but instead to improving healthcare and patient drives us closer to reaching our goals make a difference, that I decided I on continuously striving for an ideal. safety. I love working for an organi- every day. In honor of our 30th anni- wanted to be part of something that It’s the enduring effort that is im- zation where it is very clear that this versary, we asked employees at all lev- positively impacts the lives of pa- portant to me.” mission drives all of us on a daily ba- els of our organization to tell us what tients and their families, just as it had sis. I want to ensure I do my part and AUSTIN PIKE patient safety means to them and why mine—–and that’s when I discovered leave healthcare in a better place Masimo. Masimo technology not Senior Mechanical Engineer for my family, friends, and loved they have dedicated their working only helps save lives and improve ones. We all have someone who is lives to improving patient outcomes patient outcomes, every day, but it impacted by healthcare. I am driven and reducing the cost of care. also makes a difference in the lives to do what is best for patients, who of patients’ loved ones, too.” “I feel a particularly strong connec- as we all know are ultimately some- tion to two of our guiding princi- one’s family.” ANDREA WALTERS ples, ‘Do what is best for patient Area Vice President, Northeast, Sales care’ and ‘Strive to make each year MICHELLE HAHN MISSION STATEMENT better than the year before, both Area Vice President, West, Sales Improving patient outcomes personally and for the team.’ These principles align with my desire to and reducing the cost of care.® “Patient safety means getting the make a positive impact on the lives best products and services into the of those in need. At Masimo, I have “I want to know that when my hands of doctors who are respon- the opportunity, every day, to work co-workers, friends, and loved ones GUIDING PRINCIPLES sible for saving the lives of people toward our shared goal of enhanc- go to a hospital using Masimo, they who may be going through the ing patient safety and improving will be monitored with the best Remain faithful to your most difficult time of their lives. I patient outcomes, and that is deep- technology money can buy. I know promises and responsibilities. believe that our products help ly important to me.” every single Masimo team member doctors make better decisions takes pride in their work and would based on trustworthy data.” CRYSTAL WEI not allow a low-quality product to Senior Manager, Project Management leave the building.” Thrive on fascination and DAVID TODD accomplishment and not Senior Manager, IT Systems ELISA MULET greed and power. Senior Legal Administrator “Every superhero fan knows the say- ing, ‘With great power comes great “I have always been strongly re- responsibility.’ At Masimo, we say, Strive to make each year better solved to contribute to patient care, ‘Thrive on fascination and accom- “For me, patient safety means saving than the year before, both and have made my career decisions plishment and not greed and pow- lives through developing innovative personally and for the team. based on this motivation, opting er.’ For me, this means that I must technology, upholding the highest to use my background for advanc- do what is best for patient care at all standards, and delivering the best ing noninvasive patient monitoring, stages of the product development solutions for patient care. I share Make each day as fun as possible. which I find more meaningful than cycle by continuously calibrating Masimo’s mission and value being other applications of engineering. I our moral and ethical compass to part of a bigger cause and movement believe that passion is the most im- safeguard inalienable human rights.” dedicated to improving patient care.” portant factor in our pursuits, and I Do what is best for patient care. share Masimo’s passion for saving VALERY G. TELFORT JULIE JIN-CESANA and improving people’s lives. These Vice President, Engineering Vice President, Worldwide Tax shared values make me proud to be a part of the Masimo family.”

FAISAL KASHIF Clockwise from top: Valery G. Telfort, Austin Pike, Director of Engineering Julie Jin-Cesana, Michelle Hahn, Faisal Kashif, David Todd, and Crystal Wei. Not pictured: Elisa Mulet and Andrea Walters.

28 29 SELECT PARTNERS

DIGICARE

Integrating Masimo Technology into Leading Multi-parameter Monitors

Masimo technologies are integrated into more than 200 third-party monitors from 90 leading brands. Masimo SET® is more often inte- grated than any other pulse oximetry technology. In addition, many of our original equipment manufacturer (OEM) partners are enhancing the capabilities of their monitoring solutions by integrating rainbow® measurements and other advanced Masimo technologies, including NomoLine capnography solutions.

NomoLine® ISA™ SELECT PARTNERS Capno Module

MX-7™ MSX™ Low power rainbow® Very low power SET® OEM board OEM board

30 31 A GLOBAL CITIZEN Masimo’s mission and guiding principles ar- en’t restricted by borders; we are focused on ensuring global access to the technologies and health- care that we’d want for our own loved ones. We are proud of the customer relationships we have built and the patients we reached internationally in 2019, yet there are still five billion people in this world who don’t have access to safe surgery. In 2020, we will pursue all possible opportunities to do what is right for every pa- tient, everywhere, and to make a difference in all peoples’ lives. Patient safety, love, dignity, and respect for all is a goal we must never stop pursuing.

Stacey Orsat | President, EMEA

HEADQUARTERS Corporate Headquarters 52 Discovery Irvine, CA 92618, USA Tel: 949 297 7000

R&D Center Manufacturing Centers GLOBAL REACH Country Offices INTERNATIONAL Masimo Distributors OPERATIONS As a global company, Masimo Masimo OEM Partners International Headquarters employs over 5,500 people Puits-Godet 10 worldwide and maintains Masimo Capnography OEMs 2000 Neuchâtel operations in North America, Switzerland Tel: +41 32 720 1111 Europe, Latin America, the Middle East, Asia, and Australia.

R&D CENTERS MANUFACTURING CENTERS Australia Dubai Italy Saudi Arabia Suite 5.04, Level 5 DSO-DDP-Office-A4-401-407-408 Via Domenico Scarlatti 30, King Khalid Road, The Walk 52 Discovery U .S . Manufacturing Avaya House, 123 Epping Road Dubai Silicon Oasis 20124 Milano, Italy Unit no. 15 Irvine, CA 92618, USA 15776 Laguna Canyon Rd, North Ryde, NSW 2113, Australia Dubai – UAE Tel: +39 02 4507 6308 Riyadh, Kingdom of Saudi Arabia Irvine, CA 92618, USA 25 Sagamore Park Rd, Tel: 1300 627466 Tel: +971 50 929 7 939 Tel +966 558 866 513 Japan Hudson, NH 03051, USA Mexico Manufacturing Austria France Shinjuku Front Tower, 24F2-21-1 Kitashinjuku, Spain 1021 West Hastings Street Unit 500 Industrial Vallera De Mexicali, S.A. de C.V. Masimo Österreich GmbH Celtic Parc - Le Bois des Côtes Shinjuku-ku, Tokyo, 169-0074, Japan Ronda de Poniente, 12 2F Vancouver, BC V6E 0C3, Canada Calzada Del Oro No. 2001 Mariahilfer Straße 136 304 Route Nationale 6 Tel: +(81) 3-3868-5201 28760 Tres Cantos, Madrid, Spain Modulo-6, Mexicali, 21395, Mexico 1150 Wien, Austria 69760 Limonest, France Tel: +34 91 8049734 430 W. 5th St. #800 Korea Tel: +43 (0)1 533 7361 Tel: +33 (0) 4 72 17 93 70 Panama City, FL 32401, USA Industrial Vallera de Mexicali S.A. de C.V. Platinum Tower 2F, Seochodae-ro 398, Turkey Calle José López Portillo, 104-A, Parque Brazil Germany Seochu-gu, Seoul, South Korea Mustafa Kemal Mah. 2125. Sok Svärdvägen 15, 182 33 Industrial, Código Postal 83455, Rua Gal. Fernando Vasconcellos Cavalcanti Niederlassung, Deutschland Tel: +82 2 597 4900 Kolbay Is Merkezi C Blok No. 6/10 Danderyd, Sweden San Luis Rio Colorado, Sonora, Mexico de Albuquerque, 80 Lindberghstr 11, 82178 Cankaya / Ankara, Turkey Latin America Salas 402 e 404 Bloco A Puchheim, Germany Tel: +90 312 219 54 38 Sweden Manufacturing Paseo de la Reforma 404, Piso 6-602 Cotia - SP, Brazil, 06711-020 Tel: +49 89 800 65 899-0 Svärdvägen 15, Edificio Moncayo, Col. Juárez United Kingdom 182 33 Danderyd, Sweden Tel: + 55 11 3149 8181 Hong Kong México, D.F. 06600, Delegación Cuauhtémoc Matrix House, Basing View Canada 22/F Unit 6, Tower 1, Millennium City 1 Tel: +52 5511-2799 Basingstoke-Hampshire RG21 4DZ, U.K. COUNTRY OFFICES 1021 West Hastings Street Unit 500 No. 388 Kwun Tong Road Tel: +44 (0)1256 479988 Netherlands Vancouver, BC V6E 0C3, Canada Kwun Tong, Kowloon, Hong Kong Asia Pacific Hart van Brabantlaan 12-14-16 Tel: 1-888-336-0043 Tel: +852-2326-3011 31 Ubi Road 1, #04-05 5038 JL Tilburg, Netherlands THIRD PARTIES Singapore 408694 China India Tel: +31 135 832 479 Masimo Distributors Tel: +65-6521-6700 Unit 4905, Office Tower of Raffles City, 1 Floor, Billor’s Pladium, No. 19/3 Poland Masimo OEMS No. 268 Xizang Road(M), Huangpu District, Cunningham Road, Plac Kontytucji 5/17, Masimo Capnography OEMS Shanghai 200001 P.R.C. Bengaluru-560052, Karnataka, India 00-657 Warszawa, Poland Tel: +86 (21) 6378 8998 Tel: +91 80 453 88888 Tel: +48 510 036 367

32 33 FINANCIAL PERFORMANCE

ASSETS • LIABILITIES AND STOCKHOLDERS’ EQUITY • REVENUE

Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations (unaudited, in thousands) (unaudited, in thousands, except per share amounts) Year ended Year ended December 28, 2019 December 29, 2018 ASSETS REVENUE December 28, 2019 December 29, 2018 Current assets Product $936,408 $829,874 Cash and cash equivalents $567,687 $552,490 Royalty and other revenue 1,429 28,415 Short-term investments 120,000 — Total revenue 937,837 858,289 Trade accounts receivable, net of allowance for doubtful accounts 132,433 109,629 Cost of goods sold 308,665 283,397 Inventories 115,871 94,732 Gross profit 629,172 574,892 Other current assets 60,071 32,426 Operating expenses: Total current assets 996,062 789,277 Selling, general, and administrative 314,661 285,417 Lease receivable, non-current 49,936 — Research and development 93,295 81,006 Deferred costs and other contract assets 16,214 122,906 Litigation settlement, award and/or defense costs — 425 Property and equipment, net 219,552 165,972 Intangible assets, net 27,251 27,924 Total operating expenses 407,956 366,848 Goodwill 22,350 23,297 Operating income 221,216 208,044 Deferred tax assets 35,972 21,210 Non-operating income 12,950 5,732 Other non-current assets 28,791 4,232 Income before provision for income taxes 234,166 213,776 Total assets $1,396,128 $1,154,818 Provision for income taxes 37,950 20,233 Net income $196,216 $193,543

LIABILITIES AND STOCKHOLDERS’ EQUITY December 28, 2019 December 29, 2018 Net income per share: Basic $3.67 $3.70 Current liabilities Accounts payable $54,548 $40,388 Diluted $3.44 $3.45 Accrued compensation 54,705 49,486 Weighted-average shares used in per share calculations: Deferred revenue and other contract-related liabilities, current 25,939 32,054 Basic 53,434 52,296 Other current liabilities 37,027 24,627 Diluted 57,100 56,039 Total current liabilities 172,219 146,555 Other non-current liabilities 56,035 39,198 Total liabilities 228,254 185,753 Commitments and contingencies Stockholders’ equity Preferred stock — — Common stock 54 53 Treasury stock (526,580) (489,026) Additional paid-in capital 600,624 533,164 Accumulated other comprehensive loss (6,718) (6,199) Retained earnings 1,100,494 931,073 Total stockholders’ equity 1,167,874 969,065 Total liabilities and stockholders’ equity $1,396,128 $1,154,818

34 35 FINANCIAL PERFORMANCE

CASH FLOWS

Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (unaudited, in thousands) (unaudited, in thousands)

Year ended Year ended Year ended Year ended Cash flows from operating activities: December 28, 2019 December 29, 2018 Cash flows from investing activities: December 28, 2019 December 29, 2018 Net income $196,216 $193,543 Purchases of short-term investments (120,000) — Adjustments to reconcile net income to net cash provided Purchases of property and equipment (68,375) (17,126) by operating activities: Increase in intangible assets (4,117) (5,557) Depreciation and amortization 23,487 21,127 (Purchases of) proceeds from strategic investments (5,189) 453 Stock-based compensation 39,233 27,417 Business acquisition, net of cash acquired — (3,922) Loss on disposal of equipment, intangibles and other assets 357 949 Net cash used in investing activities (197,681) (26,152) Provision (benefit) for doubtful accounts 687 (439) Benefit for amount due from former foreign agent — (2,016) Benefit from deferred income taxes (5,965) (8,274) Cash flows from financing activities: Changes in operating assets and liabilities: Proceeds from issuance of common stock 28,339 44,748 (Increase) decrease in trade accounts receivable (23,580) 10,826 Repurchases of common stock (37,555) (18,478) Increase in inventories (21,257) (1,885) Other (123) (490) (Increase) decrease in other current assets (8,536) 3,843 Net cash provided by (used in) financing activities (9,339) 25,780 Increase in lease receivable, net (11,958) — Effect of foreign currency exchange rates on cash 814 (1,997) Decrease (increase) in deferred costs and other 3,308 (17,935) contract assets Net increase in cash, cash equivalents and restricted cash 15,434 237,158 (Increase) decrease in other non-current assets (226) 407 Cash, cash equivalents and restricted cash at beginning of period 552,641 315,483 Increase in accounts payable 9,934 5,211 Cash, cash equivalents and restricted cash at end of period $568,075 $ 552,641 Increase in accrued compensation 5,338 10,195 Increase in deferred revenue and other 7,739 1,420 contract-related liabilities Increase (decrease) in income taxes payable 4,079 (1,208) Increase in accrued liabilities 746 3,923 Increase (decrease) in other non-current liabilities 2,038 (7,577) Net cash provided by operating activities 221,640 239,527

36 37 FORWARD–LOOKING STATEMENTS

All statements other than statements of historical facts management; product liability claims exposure; a included in this annual report that address activities, failure to obtain expected returns from the amount of events or developments that we expect, believe, or intangible assets we have recorded; the maintenance anticipate will or may occur in the future are forward- of our brand; the amount and type of equity awards looking statements. Forward-looking statements that we may grant to employees and service providers include statements which are predictive in nature, in the future; our ongoing litigation and related which depend upon or refer to future events or matters; and other factors discussed in the “Risk conditions, or which include words such as “expects,” Factors” section of our most recent periodic reports “anticipates,” “intends,” “plans,” “believes,” “estimates” filed with the Securities and Exchange Commission or the negative of these words or other similar terms (“SEC”), including our most recent Annual Report or expressions that concern our expectations, strategy, on Form 10-K, Quarterly Reports on Form 10-Q and plans or intentions. These forward-looking statements Current Reports on Form 8-K, all of which you may are based on management’s current expectations obtain for free on the SEC’s website at www.sec.gov. and beliefs and are subject to uncertainties and Although we believe that the expectations reflected factors, all of which are difficult to predict and many of in our forward-looking statements are reasonable, which are beyond our control and could cause actual we do not know whether our expectations will prove results to differ materially and adversely from those correct. You are cautioned not to place undue reliance described in the forward-looking statements. These on these forward-looking statements, which speak risks include, but are not limited to, those related only as of the date hereof, even if subsequently made to: our dependence on Masimo SET®, products and available by us on our website or otherwise. We do not technologies for substantially all of our revenue; any undertake any obligation to update, amend or clarify failure in protecting our intellectual property; exposure these forward-looking statements, whether as a result to competitors’ assertions of intellectual property of new information, future events or otherwise, except claims; the highly competitive nature of the markets as may be required under applicable securities laws. in which we sell our products and technologies; any failure to continue developing innovative products NOTE REGARDING THIS ANNUAL REPORT and technologies; the lack of acceptance of any of our Please note that this annual report does not constitute current or future products and technologies; obtaining our “annual report to security holders” for purposes of regulatory approval of our current and future products the requirements of the SEC. For a copy of our annual and technologies; the risk that the implementation report to security holders required under Rule 14a-3 of of our international realignment will not continue to Regulation 14A of the Securities Exchange Act of 1934, as produce anticipated operational and financial benefits, amended, please refer to our Annual Report on Form 10-K including a continued lower effective tax rate; the loss for the fiscal year ended December 28, 2019, which you of our customers; the failure to retain and recruit senior may obtain for free on the SEC‘s website at www.sec.gov.

38 MASIMO • 52 DISCOVERY • IRVINE, CA 92618 • TEL: 949 297 7000

© 2020 Masimo, SET, rainbow, rainbow SET, RD SET, DCX, DeviceConX, Doctella, DST, Halo ION, HBox, Iris, Iris Analytics, Iris Gateway, ISA, iSirona, Masimo SafetyNet, Measure-through Motion and Low Perfusion, MST, MSX, MX-7, NomoLine, O3, Oxygen Reserve Index, ORi, Pathway, Pulse CO-Oximeter, PVi, Radius-PPG, Replica, Root, RRa, SedLine, Signal Extraction Technology, SpCO, SpHb, SpMet, SpOC, SST, UniView, VCX, VitalsConX, and Improving patient outcomes and reducing the cost of care are trademarks, registered trademarks, or service marks of Masimo Corporation. All other products, logos, or company names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

REGULATORY NOTICE Not all Masimo features and/or products included in this Annual Report are available in all markets .

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