##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 0-25317
 
 LIFE TECHNOLOGIES CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    33-0373077
(I.R.S. Employer
Identification No.)5791 Van Allen Way, Carlsbad, CA
    
    92008(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (760) 603-7200
 
 þ o
 o o
  Large accelerated filer
þ

    
    Accelerated filer
o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION
    
    
    3ITEM 1. Financial Statements
    
    
    3ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    36ITEM 4. Controls and Procedures
    
    
    39PART II. OTHER INFORMATION
    
    
    39ITEM 1. Legal Proceedings
    
    
    39ITEM 1A. Risk Factors
    
    
    39ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39ITEM 3. Defaults Upon Senior Securities
    
    
    39ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    40ITEM 5. Other Information
    
    
    40ITEM 6. Exhibits
    
    
    40SIGNATURES
    
    
    41INDEX TO EXHIBITS
    
    
    42EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    Financial Statements
 LIFE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share data)
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    483,606
    
    
    $
    335,930Short-term investments
    
    
    8,186
    
    
    
    Restricted cash and investments
    
    
    90,847
    
    
    
    112,387Trade accounts receivable, net of allowance for doubtful accounts of $10,801 and $14,649,
respectively
    
    
    636,837
    
    
    
    580,907Inventories, net
    
    
    364,568
    
    
    
    420,029Deferred income tax assets
    
    
    22,038
    
    
    
    25,563Prepaid expenses and other current assets
    
    
    141,044
    
    
    
    137,355Total current assets
    
    
    1,747,126
    
    
    
    1,612,171Long-term investments (includes $35,375 and $35,600 measured at fair value, respectively)
    
    
    377,852
    
    
    
    490,853Property and equipment, net
    
    
    768,635
    
    
    
    748,056Goodwill
    
    
    3,846,217
    
    
    
    3,574,779Intangible assets, net
    
    
    2,184,652
    
    
    
    2,291,767Deferred income tax assets
    
    
    11,265
    
    
    
    Other assets
    
    
    173,574
    
    
    
    181,133Total assets
    
    $
    9,109,321
    
    
    $
    8,898,759LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    115,000
    
    
    $
    80,000Accounts payable
    
    
    196,521
    
    
    
    204,279Restructuring accrual
    
    
    40,961
    
    
    
    69,099Deferred compensation and related benefits
    
    
    220,827
    
    
    
    231,851Deferred revenues and reserves
    
    
    114,978
    
    
    
    81,166Accrued expenses and other current liabilities
    
    
    187,395
    
    
    
    235,418Accrued income taxes
    
    
    142,890
    
    
    
    105,429Total current liabilities
    
    
    1,018,572
    
    
    
    1,007,242Long-term debt
    
    
    3,342,261
    
    
    
    3,396,420Pension liabilities
    
    
    204,986
    
    
    
    201,833Deferred income tax liabilities
    
    
    678,590
    
    
    
    674,215Income taxes payable
    
    
    88,217
    
    
    
    65,128Other long-term obligations, deferred credits and reserves
    
    
    98,827
    
    
    
    97,383Total liabilities
    
    
    5,431,453
    
    
    
    5,442,221Commitments and contingencies (Note 6)Stockholders equity:Preferred stock; $0.01 par value, 6,405,884 shares authorized; no shares issued or outstanding
    
    
    
    
    
    
    Common stock; $0.01 par value, 400,000,000 shares authorized; 191,692,685 and 189,629,084
shares issued, respectively
    
    
    1,917
    
    
    
    1,896Additional paid-in-capital
    
    
    4,591,702
    
    
    
    4,508,259Accumulated other comprehensive loss
    
    
    (13,871
    )
    
    
    (98,807
    )Retained earnings
    
    
    64,156
    
    
    
    9,610Less cost of treasury stock: 16,209,921 and 16,158,839 respectively
    
    
    (966,036
    )
    
    
    (964,420
    )Total stockholders equity
    
    
    3,677,868
    
    
    
    3,456,538Total liabilities and stockholders equity
    
    $
    9,109,321
    
    
    $
    8,898,759
  3




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##### Table of Contents



LIFE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 For the three months
    
    
    For the six monthsended June 30,
    
    
    ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)Revenues
    
    $
    832,763
    
    
    $
    367,791
    
    
    $
    1,608,500
    
    
    $
    718,009Cost of revenues
    
    
    280,254
    
    
    
    125,268
    
    
    
    600,413
    
    
    
    239,823Purchased intangibles amortization
    
    
    70,881
    
    
    
    17,416
    
    
    
    141,772
    
    
    
    34,319Gross profit
    
    
    481,628
    
    
    
    225,107
    
    
    
    866,315
    
    
    
    443,867Operating expenses:Selling, general and administrative
    
    
    253,014
    
    
    
    115,526
    
    
    
    494,109
    
    
    
    229,259Research and development
    
    
    81,798
    
    
    
    33,173
    
    
    
    162,119
    
    
    
    63,806Business integration costs
    
    
    28,891
    
    
    
    1,413
    
    
    
    56,289
    
    
    
    1,914Total operating expenses
    
    
    363,703
    
    
    
    150,112
    
    
    
    712,517
    
    
    
    294,979Operating income
    
    
    117,925
    
    
    
    74,995
    
    
    
    153,798
    
    
    
    148,888Other income (expense):Interest income
    
    
    666
    
    
    
    5,348
    
    
    
    2,082
    
    
    
    14,272Interest expense
    
    
    (49,700
    )
    
    
    (17,317
    )
    
    
    (97,837
    )
    
    
    (34,442
    )Other income (expense)
    
    
    (643
    )
    
    
    (357
    )
    
    
    (437
    )
    
    
    1,437Total other expense, net
    
    
    (49,677
    )
    
    
    (12,326
    )
    
    
    (96,192
    )
    
    
    (18,733
    )Income from continuing operations, before provision for income taxes
    
    
    68,248
    
    
    
    62,669
    
    
    
    57,606
    
    
    
    130,155Income tax provision
    
    
    (29,305
    )
    
    
    (15,795
    )
    
    
    (3,060
    )
    
    
    (31,162
    )Net income from continuing operations
    
    
    38,943
    
    
    
    46,874
    
    
    
    54,546
    
    
    
    98,993Net income from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,358Net income
    
    $
    38,943
    
    
    $
    46,874
    
    
    $
    54,546
    
    
    $
    100,351Basic earnings per common share:Net income from continuing operations
    
    $
    0.22
    
    
    $
    0.51
    
    
    $
    0.31
    
    
    $
    1.07Net income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Net income
    
    $
    0.22
    
    
    $
    0.51
    
    
    $
    0.31
    
    
    $
    1.08Weighted average shares outstanding
    
    
    174,722
    
    
    
    91,907
    
    
    
    174,218
    
    
    
    92,387Diluted earnings per common share:Net income from continuing operations
    
    $
    0.22
    
    
    $
    0.48
    
    
    $
    0.31
    
    
    $
    1.02Net income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Net income
    
    $
    0.22
    
    
    $
    0.48
    
    
    $
    0.31
    
    
    $
    1.03Weighted average shares outstanding
    
    
    178,951
    
    
    
    97,129
    
    
    
    177,276
    
    
    
    97,497
  4




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##### Table of Contents



LIFE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 For the six monthsended June 30,2009
    
    
    2008(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    54,546
    
    
    $
    100,351Adjustments to reconcile net income to net cash provided
by operating activities, net of effects of businesses
acquired and divested:Depreciation
    
    
    54,963
    
    
    
    19,559Amortization of intangible assets
    
    
    147,196
    
    
    
    34,319Amortization of deferred debt issue costs
    
    
    9,954
    
    
    
    1,650Amortization of purchased inventory adjustments
    
    
    62,137
    
    
    
    Amortization of purchased deferred revenue adjustments
    
    
    23,209
    
    
    
    Share-based compensation
    
    
    27,647
    
    
    
    21,735Incremental tax benefits from stock options exercised
    
    
    (3,189
    )
    
    
    (15,838
    )Deferred income taxes
    
    
    (12,167
    )
    
    
    4,730Loss on disposal of assets
    
    
    3,521
    
    
    
    707Debt discount amortization
    
    
    21,084
    
    
    
    19,754Other non-cash adjustments
    
    
    64
    
    
    
    (764
    )Changes in operating assets and liabilities:Trade accounts receivable
    
    
    (56,520
    )
    
    
    (5,595
    )Inventories
    
    
    (1,585
    )
    
    
    (21,499
    )Prepaid expenses and other current assets
    
    
    12,914
    
    
    
    2,556Other assets
    
    
    (5,266
    )
    
    
    (426
    )Accounts payable
    
    
    (17,768
    )
    
    
    (959
    )Accrued expenses and other liabilities
    
    
    (16,082
    )
    
    
    (3,632
    )Income taxes
    
    
    (53,572
    )
    
    
    (7,219
    )Net cash provided by operating activities
    
    
    251,086
    
    
    
    149,429CASH FLOWS FROM INVESTING ACTIVITIES:Maturities of available-for-sale securities
    
    
    
    
    
    
    24,930Purchases of investments
    
    
    (8,919
    )
    
    
    (3,189
    )Net cash paid for business combinations
    
    
    (45,328
    )
    
    
    (58,760
    )Net cash paid for asset purchases
    
    
    (24,540
    )
    
    
    Purchases of property and equipment
    
    
    (67,908
    )
    
    
    (28,264
    )Net cash used in investing activities
    
    
    (146,695
    )
    
    
    (65,283
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on long-term obligations
    
    
    (40,000
    )
    
    
    (138
    )Purchase of treasury stock
    
    
    (1,616
    )
    
    
    (100,000
    )Incremental tax benefits from stock options exercised
    
    
    3,189
    
    
    
    15,838Proceeds from issuance of common stock
    
    
    48,271
    
    
    
    33,423Net cash provided by (used in) financing activities
    
    
    9,844
    
    
    
    (50,877
    )Effect of exchange rate changes on cash
    
    
    33,441
    
    
    
    3,765Net increase in cash and cash equivalents
    
    
    147,676
    
    
    
    37,034Cash and cash equivalents, beginning of period
    
    
    335,930
    
    
    
    606,145Cash and cash equivalents, end of period
    
    $
    483,606
    
    
    $
    643,179
  5




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##### Table of Contents



LIFE TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation
 Financial Statement Preparation
    Principles of Consolidation
  Reclassification
  Disclosures About
Segments of an Enterprise and Related Information
 Long-Lived Assets
  6




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Computation of Earnings Per Share
   
    
    Convertible subordinated notes where the effect of
those securities is dilutive;
    
    Dilutive stock options;
    
    Dilutive restricted stock; and
    
    Employee Stock Purchase Plan (ESPP)
  Net Income
    
    
    Shares
    
    
    Earnings(in thousands, except per share data) (unaudited)
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareThree Months Ended June 30, 2009Basic earnings per share:Net income from continuing operations
    
    $
    38,943Net income from discontinued operations, net of tax
    
    
    Total basic earnings
    
    $
    38,943
    
    
    
    174,722
    
    
    $
    0.22Diluted earnings per share:Dilutive stock options
    
    
    
    
    
    
    2,979Dilutive restricted stock
    
    
    
    
    
    
    320Employee Stock Purchase Plan
    
    
    
    
    
    
    622% Convertible Senior Notes due 2023
    
    
    99
    
    
    
    868Net income from continuing operations plus assumed conversions
    
    
    39,042Net income from discontinued operations, net of tax, plus assumed conversions
    
    
    Total diluted earnings
    
    $
    39,042
    
    
    
    178,951
    
    
    $
    0.22Potentially dilutive securities not included above since they are antidilutive:Antidilutive stock options
    
    
    
    
    
    
    9,5803 1/4% Convertible Senior Notes due 2025
    
    
    
    
    
    
    7,1241 1/2 % Convertible Senior Notes due 2024
    
    
    
    
    
    
    8,821Three Months Ended June 30, 2008Basic earnings per share:Net income from continuing operations
    
    $
    46,874Net income from discontinued operations, net of tax
    
    
    Total basic earnings
    
    $
    46,874
    
    
    
    91,907
    
    
    $
    0.51Diluted earnings per share:Dilutive stock options
    
    
    
    
    
    
    2,299Dilutive restricted stock
    
    
    
    
    
    
    366Employee Stock Purchase Plan
    
    
    
    
    
    
    362% Convertible Senior Notes due 2023
    
    
    24
    
    
    
    2,4451 1/2% Convertible Senior Notes due 2024
    
    
    10
    
    
    
    76Net income from continuing operations plus assumed conversions
    
    $
    46,908Net income from discontinued operations, net of tax, plus assumed conversions
    
    
    Total diluted earnings
    
    $
    46,908
    
    
    
    97,129
    
    
    $
    0.48Potentially dilutive securities not included above since they are antidilutive:Antidilutive stock options
    
    
    
    
    
    
    1,2083 1/4% Convertible Senior Notes due 2025
    
    
    
    
    
    
    7,124
 7




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##### Table of Contents



Net Income
    
    
    Shares
    
    
    Earnings(in thousands, except per share data) (unaudited)
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareSix Months Ended June 30, 2009Basic earnings per share:Net income from continuing operations
    
    $
    54,546Net income from discontinued operations, net of tax
    
    
    Total basic earnings
    
    $
    54,546
    
    
    
    174,218
    
    
    $
    0.31Diluted earnings per share:Dilutive stock options
    
    
    
    
    
    
    2,134Dilutive restricted stock
    
    
    
    
    
    
    320Employee Stock Purchase Plan
    
    
    
    
    
    
    592% Convertible Senior Notes due 2023
    
    
    126
    
    
    
    545Net income from continuing operations plus assumed conversions
    
    
    54,672Net income from discontinued operations, net of tax, plus assumed conversions
    
    
    Total diluted earnings
    
    $
    54,672
    
    
    
    177,276
    
    
    $
    0.31Potentially dilutive securities not included above since they are antidilutive:Antidilutive stock options
    
    
    
    
    
    
    12,4323 1/4% Convertible Senior Notes due 2025
    
    
    
    
    
    
    7,1241 1/2 % Convertible Senior Notes due 2024
    
    
    
    
    
    
    8,821Six Months Ended June 30, 2008Basic earnings per share:Net income from continuing operations
    
    $
    98,993Net income from discontinued operations, net of tax
    
    
    1,358Total basic earnings
    
    $
    100,351
    
    
    
    92,387
    
    
    $
    1.08Diluted earnings per share:Dilutive stock options
    
    
    
    
    
    
    2,214Dilutive restricted stock
    
    
    
    
    
    
    373Employee Stock Purchase Plan
    
    
    
    
    
    
    352% Convertible Senior Notes due 2023
    
    
    49
    
    
    
    2,4121 1/2% Convertible Senior Notes due 2024
    
    
    19
    
    
    
    76Net income from continuing operations plus assumed conversions
    
    $
    99,061Net income from discontinued operations, net of tax, plus assumed conversions
    
    
    1,358Total diluted earnings
    
    $
    100,419
    
    
    
    97,497
    
    
    $
    1.03Potentially dilutive securities not included above since they are antidilutive:Antidilutive stock options
    
    
    
    
    
    
    2,2623 1/4% Convertible Senior Notes due 2025
    
    
    
    
    
    
    7,124
 8




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##### Table of Contents



Share-Based Compensation
     Stock Options and Purchase Rights
  Six months endedJune 30,(unaudited)
    
    2009
    
    2008Stock OptionsWeighted average risk free interest rate
    
    
    1.68
    %
    
    
    3.09
    %Expected term of share-based awards
    
    4.5
    yrs
    
    5.0
    yrsExpected stock price volatility
    
    
    46
    %
    
    
    31
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Weighted average fair value of share-based awards granted
    
    $
    11.42
    
    
    $
    15.09Purchase RightsWeighted average risk free interest rate
    
    
    1.11
    %
    
    
    4.77
    %Expected term of share-based awards
    
    0.2
    yrs
    
    1.6
    yrsExpected stock price volatility
    
    
    62
    %
    
    
    32
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Weighted average fair value of share-based awards granted
    
    $
    7.23
    
    
    $
    9.99
 9




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(in thousands, except per share amounts) (unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of revenues
    
    $
    686
    
    
    $
    819
    
    
    $
    1,598
    
    
    $
    2,221Selling, general and administrative
    
    
    6,392
    
    
    
    5,908
    
    
    
    14,070
    
    
    
    12,317Research and development
    
    
    1,139
    
    
    
    868
    
    
    
    2,443
    
    
    
    1,884Share-based compensation expense before taxes
    
    
    8,217
    
    
    
    7,595
    
    
    
    18,111
    
    
    
    16,422Related income tax benefits
    
    
    3,362
    
    
    
    2,276
    
    
    
    5,956
    
    
    
    4,995Share-based compensation expense, net of taxes
    
    $
    4,855
    
    
    $
    5,319
    
    
    $
    12,155
    
    
    $
    11,427Net share-based compensation expense per common share:Basic
    
    $
    0.03
    
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.12Diluted
    
    $
    0.03
    
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    0.12
 Restricted Stock Units
  Recent Accounting Pronouncements
 The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principlesa replacement of FASB Statement No. 162
 Subsequent Events
 Employers Disclosures about Postretirement
Benefit Plan Assets Employers Disclosures about Postretirement Benefit
Plan Assets
 10




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##### Table of Contents



Accounting for Convertible Debt
Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)
 Determining Whether an Instrument (or Embedded
Feature) is Indexed to an Entitys Own Stock Accounting for Derivative Instruments and Hedging
Activities
 Disclosures About Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133,
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51,
 Business Combinations
 Fair Value Measurements, Effective Date of SFAS 157
 2. Composition of Certain Financial Statement Items
 11




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##### Table of Contents



Fair Value of Financial Instruments
   Fair Value
    
    Carrying AmountsJune 30,
    
    December 31,
    
    June 30,
    
    December 31,2009
    
    2008
    
    2009
    
    2008(in thousands)


(unaudited)
    
    
    

(unaudited)3 1/4% Convertible Senior Notes (principal due 2025)
    
    $
    364,805
    
    
    $
    308,000
    
    
    $
    332,236
    
    
    $
    328,1141 1/2% Convertible Senior Notes (principal due 2024)
    
    
    445,667
    
    
    
    342,000
    
    
    
    400,620
    
    
    
    391,9242% Convertible Senior Notes (principal due 2023)
    
    
    443,601
    
    
    
    332,128
    
    
    
    331,033
    
    
    
    322,774Term A Loan (principal due 2013)
    
    
    1,341,113
    
    
    
    1,260,000
    
    
    
    1,365,000
    
    
    
    1,400,000Term B Loan (principal due 2015)
    
    
    996,222
    
    
    
    927,675
    
    
    
    992,500
    
    
    
    997,500Secured Loan (principal due 2010)
    
    
    35,375
    
    
    
    35,600
    
    
    
    35,375
    
    
    
    35,600
     June 30,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008(unaudited)Short-termBank deposits
    
    $
    8,186
    
    
    $
    Total short-term investments
    
    
    8,186
    
    
    
    Long-termAuction rate securities
    
    
    30,949
    
    
    
    29,407Put option
    
    
    4,426
    
    
    
    6,193Equity securities
    
    
    342,477
    
    
    
    455,253Total long-term investments
    
    
    377,852
    
    
    
    490,853Total investments
    
    $
    386,038
    
    
    $
    490,853
   12




---



##### Table of Contents



Fair Value Measurements, Effective Date of
SFAS 157
    Assets and Liabilities Measured at Fair Value on a Recurring Basis
  Fair Value Measurements at Reporting Date UsingQuoted Prices inBalance at
    
    
    Active Markets
    
    
    Significant Other
    
    
    Significant(in thousands)(unaudited)
    
    June 30,
    
    
    for Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Bank time deposits
    
    $
    8,186
    
    
    $
    8,186
    
    
    $
    
    
    
    $
    Money market funds
    
    
    113,047
    
    
    
    111,270
    
    
    
    
    
    
    
    1,777Deferred compensation plan assets
    
    
    22,084
    
    
    
    22,084
    
    
    
    
    
    
    
    Assets-derivative forward exchange contracts
    
    
    16,925
    
    
    
    
    
    
    
    16,925
    
    
    
    Assets-derivative swap contracts
    
    
    6,855
    
    
    
    
    
    
    
    6,855
    
    
    
    Auction rate securities
    
    
    30,949
    
    
    
    
    
    
    
    
    
    
    
    30,949Put option
    
    
    4,426
    
    
    
    
    
    
    
    
    
    
    
    4,426Total assets
    
    $
    202,472
    
    
    $
    141,540
    
    
    $
    23,780
    
    
    $
    37,152Liabilities-derivative forward exchange contracts
    
    
    14,615
    
    
    
    
    
    
    
    14,615
    
    
    
    Liabilities-derivative swap contracts
    
    
    859
    
    
    
    
    
    
    
    859
    
    
    
    Total liabilities
    
    $
    15,474
    
    
    $
    
    
    
    $
    15,474
    
    
    $
    
   13




---



##### Table of Contents



Accounting for Derivative Instruments and Hedging Activities The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an amendment of FASB Statement No. 115 Accounting for Certain Investments in Debt and Equity Securities
  14




---



##### Table of Contents



Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)Auction Rate
    
    
    
    
    
    
    Money Market(in thousands)(unaudited)
    
    Securities
    
    
    Put Option
    
    
    Funds
    
    
    TotalBeginning balance at January 1, 2009
    
    $
    29,407
    
    
    $
    6,193
    
    
    $
    18,260
    
    
    $
    53,860Transfers in to Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total realized/unrealized gains (losses)Included in earnings
    
    
    1,767
    
    
    
    (1,767
    )
    
    
    
    
    
    
    Revalued as part of Applied Biosystems merger
    
    
    
    
    
    
    
    
    
    
    (5,358
    )
    
    
    (5,358
    )Purchases, issuances and settlements
    
    
    (225
    )
    
    
    
    
    
    
    (11,125
    )
    
    
    (11,350
    )Ending balance at June 30, 2009
    
    $
    30,949
    
    
    $
    4,426
    
    
    $
    1,777
    
    
    $
    37,152Total amount of unrealized losses for the period
included in other comprehensive loss
attributable to the change in fair market value
of related assets still held at the reporting
date
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
  Derivative Financial Instruments
 Accounting for Derivative Investments and Hedging
Activities
  15




---



##### Table of Contents



Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    
    
    
    
    
    Balance Sheet(in thousands)(unaudited)
    
    Location
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueDerivatives designated as
cash flow hedging under 
Statement
133Forward exchange contracts
    
    Other current assets
    
    $
    4,008
    
    
    Other current liabilities
    
    $
    11,754Interest rate swap contracts
    
    Other assets
    
    
    6,855
    
    
    Other long-term obligations
    
    
    859Total
    
    
    
    
    
    $
    10,863
    
    
    
    
    
    
    $
    12,613Derivatives not designated as
hedging instruments under
Statement 133Forward exchange contracts
    
    Other current assets
    
    $
    12,917
    
    
    Other current liabilities
    
    $
    2,861Total
    
    
    
    
    
    $
    12,917
    
    
    
    
    
    
    $
    2,861Total derivatives at June 30, 2009
    
    
    
    
    
    $
    23,780
    
    
    
    
    
    
    $
    15,474
 16




---



##### Table of Contents



Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2009Amount of
    
    
    
    
    
    
    
    
    
    
    Amount ofAmount of
    
    
    Location of
    
    
    Gain/(Loss)
    
    
    Amount of
    
    
    Location of
    
    
    Gain/(Loss)(Gain)/Loss
    
    
    (Gain)/Loss
    
    
    Reclassified from
    
    
    (Gain)/Loss
    
    
    (Gain)/Loss
    
    
    Reclassified fromRecognized in
    
    
    Reclassified from
    
    
    AOCI
    
    
    Recognized in
    
    
    Reclassified from
    
    
    AOCIOCI
    
    
    AOCI into Income
    
    
    into Income
    
    
    OCI
    
    
    AOCI into Income
    
    
    into Income(in thousands)(unaudited)
    
    Effective Portion

    
    Effective PortionDerivatives in Statement
133 cash flow hedging
relationshipsForeign exchange contracts
    
    $
    10,883
    
    
    Revenue
    
    $
    (368
    )
    
    $
    (8,305
    )
    
    Revenue
    
    $
    846Interest rate swap contracts
    
    
    (7,400
    )
    
    Interest expense
    
    
    
    
    
    
    (3,658
    )
    
    Interest expense
    
    
    Total derivatives
    
    $
    3,483
    
    
    
    
    
    
    $
    (368
    )
    
    $
    (11,963
    )
    
    
    
    
    
    $
    846
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2009Amount of
    
    
    
    
    
    
    Amount ofLocation of
    
    
    (Gain)/Loss
    
    
    Location of
    
    
    (Gain)/Loss(Gain)/Loss
    
    
    recognized in
    
    
    (Gain)/Loss
    
    
    recognized inRecognized in Income
    
    
    Income
    
    
    Recognized in Income
    
    
    Income(in thousands)(unaudited)
    
    Ineffective Portion
    
    Ineffective PortionDerivatives in Statement
133 cash flow hedging
relationshipsForeign exchange contracts
    
    Other (income)/expense
    
    $
    *
    
    
    Other (income)/expense
    
    $
    *Interest rate swap contracts
    
    Other (income)/expense
    
    
    
    
    
    Other (income)/expense
    
    
    Total Derivatives
    
    
    
    
    
    $
    *
    
    
    
    
    
    
    $
    *
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2009Location of (Gain)/Loss
    
    
    Amount of (Gain)/Loss
    
    
    Location of (Gain)/Loss
    
    
    Amount of (Gain)/Loss(in thousands)(unaudited)
    
    Recognized in Income
    
    
    Recognized in Income
    
    
    Recognized in Income
    
    
    Recognized in IncomeDerivatives not designated
as hedging instruments under
Statement 133Forward exchange contracts
    
    Other income
    
    $
    (31,788
    )
    
    Other income
    
    $
    (31,841
    )Total Derivatives
    
    
    
    
    
    $
    (31,788
    )
    
    
    
    
    
    $
    (31,841
    )
 
 *
    
    De minimus amount recognized in the hedge relationship. Concentration of Credit Risk
   17




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##### Table of Contents



Inventories
  June 30,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008(unaudited)Raw materials and components
    
    $
    99,807
    
    
    $
    94,332Work in process (materials, labor and overhead)
    
    
    53,355
    
    
    
    58,091Finished goods (materials, labor and overhead)
    
    
    210,796
    
    
    
    204,858Adjustment to write up acquired finished goods inventory to fair value
    
    
    610
    
    
    
    62,748Total inventories, net
    
    $
    364,568
    
    
    $
    420,029
 Property and Equipment
  Estimated
    
    
    June 30,
    
    
    December 31,(in thousands)
    
    useful life
    
    
    2009
    
    
    2008(unaudited)Land
    
    
    
    
    
    $
    132,635
    
    
    $
    127,197Building and improvements
    
    1-50 years
    
    
    
    365,023
    
    
    
    363,385Machinery and equipment
    
    1-10 years
    
    
    
    322,970
    
    
    
    304,389Internal use software
    
    1-10 years
    
    
    
    134,808
    
    
    
    124,305Construction in process
    
    
    
    
    
    
    104,952
    
    
    
    71,641Total property and equipment
    
    
    
    
    
    
    1,060,388
    
    
    
    990,917Accumulated depreciation and amortization
    
    
    
    
    
    
    (291,753
    )
    
    
    (242,861
    )Total property and equipment, net
    
    
    
    
    
    $
    768,635
    
    
    $
    748,056
 Goodwill and Other Intangible Assets
   June 30, 2009
    
    
    December 31, 2008Weighted
    
    
    
    
    
    
    
    
    
    
    Weightedaverage
    
    
    Gross carrying
    
    
    Accumulated
    
    
    average
    
    
    Gross carrying
    
    
    Accumulated(in thousands)
    
    Life
    
    
    amount
    
    
    amortization
    
    
    Life
    
    
    amount
    
    
    amortization(unaudited)Amortized intangible assets:Purchased technology
    
    7 years
    
    $
    1,083,747
    
    
    $
    (656,547
    )
    
    8 years
    
    $
    1,056,395
    
    
    $
    (605,864
    )Purchased tradenames and trademarks
    
    9 years
    
    
    317,132
    
    
    
    (71,702
    )
    
    9 years
    
    
    314,312
    
    
    
    (55,174
    )Purchased customer base
    
    12 years
    
    
    1,422,009
    
    
    
    (108,123
    )
    
    12 years
    
    
    1,421,925
    
    
    
    (48,344
    )Other intellectual property
    
    5 years
    
    
    246,456
    
    
    
    (55,771
    )
    
    5 years
    
    
    235,304
    
    
    
    (34,238
    )Total intangible assets
    
    
    
    
    
    $
    3,069,344
    
    
    $
    (892,143
    )
    
    
    
    
    
    $
    3,027,936
    
    
    $
    (743,620
    )Intangible assets not subject to amortization:Purchased tradenames and trademarks
    
    
    
    
    
    $
    7,451
    
    
    
    
    
    
    
    
    
    
    $
    7,451
 18




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##### Table of Contents



Comprehensive Income (Loss)
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(in thousands, unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Net income, as reported
    
    $
    38,943
    
    
    $
    46,874
    
    
    $
    54,546
    
    
    $
    100,351Unrealized loss on investments, net of related tax effects
    
    
    
    
    
    
    (473
    )
    
    
    
    
    
    
    (1,469
    )Realized (gain) loss on hedging transactions, reclassed into earnings,
net of related tax effects
    
    
    368
    
    
    
    
    
    
    
    (846
    )
    
    
    Unrealized gain (loss) on hedging transactions, net of related tax effects
    
    
    (3,483
    )
    
    
    
    
    
    
    11,963
    
    
    
    Foreign currency translation adjustment, net of related tax effects
    
    
    88,600
    
    
    
    (2,700
    )
    
    
    73,819
    
    
    
    48,036Total comprehensive income
    
    $
    124,428
    
    
    $
    43,701
    
    
    $
    139,482
    
    
    $
    146,918
 Accrued Expenses and Other Current Liabilities
  June 30,
    
    
    December 31,(in thousands)
    
    2009
    
    
    2008(unaudited)Accrued hedge liabilities
    
    $
    14,615
    
    
    $
    58,602Accrued royalties
    
    
    51,015
    
    
    
    50,794Accrued warranty
    
    
    12,061
    
    
    
    12,616Accrued other
    
    
    109,704
    
    
    
    113,406Total accrued expenses and other current liabilities
    
    $
    187,395
    
    
    $
    235,418
 3. Business Combinations and Consolidations Costs
 Merger with Applied Biosystems, Inc .
  Determination of the Measurement Date for
the Market Price of Acquirer Securities Issued in a Purchase Business Combination,
 19




---



##### Table of Contents



2008(in thousands, except per share data)
    
    (unaudited)Revenue
    
    $
    1,590,440Operating Income
    
    
    207,943Net Income
    
    
    138,729Earnings per Share:Basic
    
    $
    0.80Diluted
    
    $
    0.78Basic Weighted Average Shares
    
    
    173,187Diluted Weighted Average Shares
    
    
    178,297
   Purchase Consideration:(in thousands)Fair value of common stock issued to AB Shareholders
    
    $
    1,801,770Fair value of Life Technologies options exchanged for AB options
    
    
    23,773Cash paid to AB shareholders
    
    
    3,229,192Transaction costs
    
    
    38,847Cash acquired
    
    
    (529,181
    )$
    4,564,401
 Allocation of Purchase Price:(in thousands)Current assets
    
    $
    901,018Property, plant, and equipment
    
    
    392,458Acquired intangible assets
    
    
    2,167,400In-process research and development
    
    
    65,400Goodwill
    
    
    2,580,484Other assets
    
    
    392,163Liabilities assumed
    
    
    (1,934,522
    )$
    4,564,401
  Acquired Intangible Assets(in thousands)Customer relationships
    
    $
    1,396,000Purchased technology
    
    
    342,700Acquired tradenames
    
    
    239,700PCR royalty contracts
    
    
    189,000$
    2,167,400
 20




---



##### Table of Contents



The Equity Method of
Accounting for Investments in Common Stock,
 Recognition of Liabilities in Connection with a Purchase Business Combination
 21




---



##### Table of Contents



One-Time
    
    
    One-Time
    
    
    One-TimeTermination
    
    
    Site Closure
    
    
    Relocation(in thousands) (unaudited)
    
    Costs
    
    
    Costs
    
    
    Costs
    
    
    TotalRestructuring accrual at December 31, 2008
    
    $
    65,502
    
    
    $
    
    
    
    $
    379
    
    
    $
    65,881Additional costs recorded to goodwill
    
    
    15,577
    
    
    
    1,547
    
    
    
    666
    
    
    
    17,790Amounts paid
    
    
    (52,068
    )
    
    
    (63
    )
    
    
    (218
    )
    
    
    (52,349
    )Foreign currency translation
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Restructuring accrual at June 30, 2009
    
    $
    28,995
    
    
    $
    1,484
    
    
    $
    827
    
    
    $
    31,306
 Business Consolidation Costs
  4. Long-Term Debt
  June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)
    
    (unaudited)3 1/4% Convertible Senior Notes (principal due 2025), net of unamortized discount
    
    $
    332,236
    
    
    $
    328,1141 1/2% Convertible Senior Notes (principal due 2024), net of unamortized discount
    
    
    400,620
    
    
    
    391,9242% Convertible Senior Notes (principal due 2023), net of unamortized discount
    
    
    331,033
    
    
    
    322,774Term Loan A (principal due 2013)
    
    
    1,365,000
    
    
    
    1,400,000Term Loan B (principal due 2015)
    
    
    992,500
    
    
    
    997,500Secured Loan (principal due 2010)
    
    
    35,375
    
    
    
    35,600Capital leases
    
    
    497
    
    
    
    508Total debt
    
    
    3,457,261
    
    
    
    3,476,420Less current portion
    
    
    (115,000
    )
    
    
    (80,000
    )Total long-term debt
    
    $
    3,342,261
    
    
    $
    3,396,420
   Pricing
    
    Total Leverage
    
    
    
    
    
    Revolving CreditLevel
    
    Ratio
    
    LIBOR Rate
    
    Base Rate
    
    Commitment Fee1
    
    3 3.0:1
    
    LIBOR + 2.50%
    
    Base Rate + 1.50%
    
    
    0.500
    %2
    
    < 3.0:1 but 3 2.5:1
    
    LIBOR+2.25%
    
    Base Rate + 1.25%
    
    
    0.375
    %3
    
    < 2.5:1 but 3 2.0:1
    
    LIBOR+2.00%
    
    Base Rate + 1.00%
    
    
    0.375
    %4
    
    < 2.0:1
    
    LIBOR+1.50%
    
    Base Rate + 0.50%
    
    
    0.250
    %
  22




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##### Table of Contents



Accounting for
Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash
Settlement)
   5. Lines of Credit
    23




---



##### Table of Contents



6. Commitments and Contingencies
 Letters of Credit
  Executive Employment Agreements
  Contingent Acquisition Obligations
 Business Combinations Business Combinations
 Environmental Liabilities
    Litigation
  Indemnifications
  24




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##### Table of Contents



Guarantees
 Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others
 Leases
  Pension Benefits
  Product Warranties
   (in thousands) (unaudited)
    
    2009
    
    
    2008Balance at January 1
    
    $
    12,616
    
    
    $
    213Accruals for warranties
    
    
    6,106
    
    
    
    Settlements made during the year
    
    
    (6,705
    )
    
    
    Currency translation
    
    
    44
    
    
    
    Balance at June 30
    
    $
    12,061
    
    
    $
    213
 25




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##### Table of Contents



7. Pension Plans and Postretirement Health and Benefit Program
   Domestic PlansThree months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(in thousands) (unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost (benefit)
    
    $
    76
    
    
    $
    (20
    )
    
    $
    151
    
    
    $
    Interest cost
    
    
    9,128
    
    
    
    819
    
    
    
    18,243
    
    
    
    1,591Expected return on plan assets
    
    
    (8,258
    )
    
    
    (942
    )
    
    
    (17,116
    )
    
    
    (1,853
    )Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of actuarial loss
    
    
    896
    
    
    
    19
    
    
    
    955
    
    
    
    109Net periodic pension cost (benefit)
    
    $
    1,842
    
    
    $
    (124
    )
    
    $
    2,233
    
    
    $
    (153
    )
 Postretirement PlansThree months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(in thousands) (unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    53
    
    
    $
    
    
    
    $
    106
    
    
    $
    Interest cost
    
    
    912
    
    
    
    87
    
    
    
    1,833
    
    
    
    157Expected return on plan assets
    
    
    (46
    )
    
    
    (150
    )
    
    
    (195
    )
    
    
    (299
    )Amortization of prior service cost
    
    
    60
    
    
    
    60
    
    
    
    120
    
    
    
    120Amortization of actuarial loss
    
    
    244
    
    
    
    149
    
    
    
    393
    
    
    
    299Net periodic pension cost
    
    $
    1,223
    
    
    $
    146
    
    
    $
    2,257
    
    
    $
    277
 Foreign PlansThree months ended
    
    
    Six months endedJune 30,
    
    
    June 30,(in thousands) (unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    1,151
    
    
    $
    651
    
    
    $
    2,296
    
    
    $
    1,234Interest cost
    
    
    1,196
    
    
    
    935
    
    
    
    2,358
    
    
    
    1,839Expected return on plan assets
    
    
    (883
    )
    
    
    (829
    )
    
    
    (1,735
    )
    
    
    (1,634
    )Amortization of actuarial loss
    
    
    59
    
    
    
    62
    
    
    
    123
    
    
    
    125Net periodic pension cost
    
    $
    1,523
    
    
    $
    819
    
    
    $
    3,042
    
    
    $
    1,564
 8. Income Taxes
  Accounting for Uncertainty in Income Taxes
  June 30, 2009
    
    
    December 31, 2008(in thousands)
    
    (unaudited)Gross unrecognized tax benefits at January 1
    
    $
    74,904
    
    
    $
    27,784Increases in tax positions for prior years
    
    
    10
    
    
    
    26Decreases in tax positions for prior years
    
    
    (4
    )
    
    
    (1,293
    )Increases in tax positions for current year relating to ongoing operations
    
    
    1,977
    
    
    
    5,981Increases in tax positions for current year relating to acquisition
    
    
    5,487
    
    
    
    46,200Decreases in tax positions due to settlements with taxing authorities
    
    
    
    
    
    
    (3,794
    )Gross unrecognized tax benefits
    
    $
    82,374
    
    
    $
    74,904
  26




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##### Table of Contents



9. Stock Repurchase Program
  10. Restructuring Costs
  Accounting for Costs Associated with Exit or Disposal Activities
  One-Time
    
    
    One-Time
    
    
    One-TimeTermination
    
    
    Site Closure
    
    
    Relocation(in thousands) (unaudited)
    
    Costs
    
    
    Costs
    
    
    Costs
    
    
    TotalRestructuring reserves as of December 31, 2008
    
    $
    3,218
    
    
    $
    
    
    
    $
    
    
    
    $
    3,218Charged to expenses
    
    
    6,795
    
    
    
    252
    
    
    
    2,538
    
    
    
    9,585Amounts paid
    
    
    (2,605
    )
    
    
    (13
    )
    
    
    (759
    )
    
    
    (3,377
    )Foreign currency translation
    
    
    226
    
    
    
    3
    
    
    
    
    
    
    
    229Restructuring reserves as of June 30, 2009
    
    $
    7,634
    
    
    $
    242
    
    
    $
    1,779
    
    
    $
    9,655Cumulative amount incurred to date
    
    $
    10,332
    
    
    $
    252
    
    
    $
    2,538
    
    
    $
    13,122
 11. Subsequent Events
 th
 27




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##### Table of Contents



ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-looking Statements
  OVERVIEW
  Our Business
     
    
    High-throughput gene cloning and expression technology, which allows customers to clone
and expression-test genes on an industrial scale.
    
    Pre-cast electrophoresis products, which improve the speed, reliability and convenience of
separating nucleic acids and proteins.
    
    Antibodies, which allow researchers to capture and label proteins, visualize their location
through use of Molecular Probes dyes and discern their role in disease.
    
    Magnetic beads, which are used in a variety of settings, such as attachment of molecular
labels, nucleic acid purification, and organ and bone marrow tissue type testing.
 28




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##### Table of Contents




    
    Molecular Probes fluorescence-based technologies, which facilitate the labeling of
molecules for biological research and drug discovery.
    
    Transfection reagents, which are widely used to transfer genetic elements into living cells
enabling the study of protein function and gene regulation.
    
    PCR and Real Time PCR systems and reagents, which enable researchers to amplify and detect
targeted nucleic acids (DNA and RNA molecules) for a host of applications in molecular
biology.
    
    Cell culture media and reagents used to preserve and grow mammalian cells, which are used
in large scale cGMP bio-production facilities to produce large molecule biologic therapies.
    
    RNA Interference reagents, which enable scientists to selectively turn off genes in
biology systems to gain insight into biological pathways.
    
    Capillary electrophoresis and massively parallel SOLiD(tm) DNA sequencing systems
and reagents, which are used to discover sources of genetic and epigenetic variation, to
catalog the DNA structure of organisms de novo, to verify the composition of genetic research
material, and to apply these genetic analysis discoveries in markets such as forensic human
identification.
    
    High performance mass spectrometer systems which are used in numerous applications such as
drug discovery and clinical development of therapeutics as well as in basic biological
research, food and beverage quality testing, environmental testing, and other applied or
clinical research applications.
  Life science researchers.
 Commercial producers of biopharmaceutical and other high valued proteins.
 Users who apply our technologies to enable or improve particular activities.
 CRITICAL ACCOUNTING POLICIES
 29




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##### Table of Contents



Disclosures About Segments of an Enterprise and Related
Information
 Accounting for Convertible Debt
Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement). The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles- a replacement of SFAS 162, Subsequent Events Recognition and presentation of Other-Than-Temporary Impairments, Interim Disclosures about Fair Values of Financial Instruments, Employers Disclosures about
Postretirement Benefit Plan Assets, Determining Whether an
Instrument (or Embedded Feature) is Indexed to an Entitys Own Stock, Disclosures About
Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51, Business Combinations, Fair Value Measurements Effective Date of SFAS 157
 RESULTS OF OPERATIONS
 Second Quarter of 2009 Compared to the Second Quarter of 2008
  Three months endedJune 30,(in millions)(unaudited)
    
    2009
    
    
    2008
    
    
    Increase
    
    

% IncreaseMolecular Biology Systems
    
    $
    399.1
    
    
    $
    162.8
    
    
    $
    236.3
    
    
    
    145
    %Cell Systems
    
    
    200.7
    
    
    
    192.2
    
    
    
    8.5
    
    
    
    4
    %Genetic Systems
    
    
    232.6
    
    
    
    12.8
    
    
    
    219.8
    
    
    NMCorporate and other
    
    
    0.4
    
    
    
    
    
    
    
    0.4
    
    
    NMTotal revenues
    
    $
    832.8
    
    
    $
    367.8
    
    
    $
    465.0
    
    
    
    126
    %Total gross profit
    
    $
    481.6
    
    
    $
    225.1
    
    
    $
    256.5
    
    
    
    114
    %Total gross profit margin %
    
    
    57.8
    %
    
    
    61.2
    %
 Revenue
   30




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##### Table of Contents



Gross Profit
  Operating Expenses
  Three months ended June 30,2009
    
    2008As a
    
    
    
    
    
    As aOperating
    
    percentage of
    
    Operating
    
    percentage of(in millions)(unaudited)
    
    expense
    
    revenues
    
    expense
    
    revenues
    
    $ Increase
    
    % IncreaseOperating Expenses:Selling, general and administrative
    
    $
    253.0
    
    
    
    30
    %
    
    $
    115.5
    
    
    
    31
    %
    
    $
    137.5
    
    
    
    119
    %Research and development
    
    
    81.8
    
    
    
    10
    %
    
    
    33.2
    
    
    
    9
    %
    
    
    48.6
    
    
    
    146
    %Business consolidation costs
    
    
    28.9
    
    
    
    3
    %
    
    
    1.4
    
    
    
    
    
    
    
    27.5
    
    
    NM
 Selling, general and administrative .
 Research and development .
 Business Consolidation Costs .
 Other Income (Expense)
 Interest Income
   Interest Expense
  31




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Other Income (Expense), Net
  Provision for Income Taxes
  First Six Months of 2009 compared to First Six Months of 2008
  Six months endedJune 30,(in millions)(unaudited)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    % IncreaseMolecular Biology Systems
    
    $
    765.6
    
    
    $
    325.0
    
    
    $
    440.6
    
    
    
    136
    %Cell Systems
    
    
    392.4
    
    
    
    368.9
    
    
    
    23.5
    
    
    
    6
    %Genetic Systems
    
    
    451.8
    
    
    
    24.1
    
    
    
    427.7
    
    
    NMCorporate and other
    
    
    (1.3
    )
    
    
    
    
    
    
    (1.3
    )
    
    NMTotal revenues
    
    $
    1,608.5
    
    
    $
    718.0
    
    
    $
    890.5
    
    
    
    124
    %Total gross profit
    
    $
    866.3
    
    
    $
    443.9
    
    
    $
    422.4
    
    
    
    95
    %Total gross profit margin %
    
    
    53.9
    %
    
    
    61.8
    %
 Revenue
   Gross Profit
  32




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Operating Expenses
  Six months ended June 30,2009
    
    2008As a
    
    
    
    
    
    As aOperating
    
    percentage of
    
    Operating
    
    percentage of(in millions)(unaudited)
    
    expense
    
    revenues
    
    expense
    
    revenues
    
    $ Increase
    
    % IncreaseOperating Expenses:Selling, general and administrative
    
    $
    494.1
    
    
    
    31
    %
    
    $
    229.3
    
    
    
    32
    %
    
    $
    264.8
    
    
    
    115
    %Research and development
    
    
    162.1
    
    
    
    10
    %
    
    
    63.8
    
    
    
    9
    %
    
    
    98.3
    
    
    
    154
    %Business consolidation costs
    
    
    56.3
    
    
    
    4
    %
    
    
    1.9
    
    
    
    
    
    
    
    54.4
    
    
    NM
 Selling, general and administrative .
 Research and development .
 Business Consolidation Costs .
 Other Income (Expense)
 Interest Income
   Interest Expense
   Other Income (Expense), Net
  33




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##### Table of Contents



Provision for Income Taxes
   Statutory U.S. federal income tax rate
    
    
    35.0
    %State income tax
    
    
    1.2Foreign earnings taxed at non-U.S. rates (includes a significant
benefit relating to the Singapore tax exemption grant)
    
    
    (18.5
    )Repatriation of other foreign earnings, net of related benefits
    
    
    9.8Credits and incentives
    
    
    (6.6
    )Non-deductible compensation & other adjustments
    
    
    1.8Other
    
    
    1.5Effective income tax rate
    
    
    24.2
    %
 34




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  Operating Activities.
  Investing Activities.
   Financing Activities.
  35




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##### Table of Contents



OFF BALANCE SHEET ARRANGEMENTS
  CONTRACTUAL OBLIGATIONS
  
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign Currencies
  36




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##### Table of Contents



Cash Flow Hedges
   37




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##### Table of Contents



Commodity Prices
  Interest Rates
   Fair Value Measurements
 Fair Value Measurement
 38




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##### Table of Contents



ITEM 4. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 1A. Risk Factors
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 ITEM 3. Defaults Upon Senior Securities
  39




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##### Table of Contents



ITEM 4. Submission of Matters to a Vote of Security Holders
    Total Votes for
    
    Total Votes WithheldEach Director
    
    from Each Director
    
    Term ExpiresDonald W. Grimm
    
    
    142,485,775
    
    
    
    11,478,173
    
    
    
    2012Gregory T. Lucier
    
    
    147,436,443
    
    
    
    6,527,505
    
    
    
    2012Per A. Peterson, Ph.D.
    
    
    148,807,472
    
    
    
    5,156,476
    
    
    
    2012William S. Shanahan
    
    
    148,698,032
    
    
    
    5,265,916
    
    
    
    2012
  Total Votes for
    
    Total Votes WithheldEach Director
    
    from Each Director
    
    Term ExpiresArnold J. Levine, Ph.D.
    
    
    149,622,104
    
    
    
    4,341,844
    
    
    
    2010
  
  
     
 ITEM 5. Other Information
  
 ITEM 6. Exhibits
  40




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##### Table of Contents



SIGNATURES
  LIFE TECHNOLOGIES CORPORATIONDate:
August 6, 2009By:
    
    /s/ David F. HoffmeisterDavid F. HoffmeisterChief Financial Officer(Principal Financial Officer and Authorized Signatory)
 41




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##### Table of Contents



INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    DESCRIPTION OF DOCUMENT2.1
    
    Agreement and Plan of Merger by and among Invitrogen Corporation, Atom Acquisition, LLC and Applera
Corporation dated as of June 11, 2008.(1)2.2
    
    Amendment No. 1 to Agreement and Plan of Merger by and among Invitrogen Corporation, Atom acquisition, LLC
and Applied Biosystems Inc., dated as of September 9, 2008.(2)2.3
    
    Amendment No. 2 to Agreement and Plan of Merger by and among Invitrogen Corporation, Atom acquisition, LLC
and Applied Biosystems Inc., dated as of October 15, 2008.(3)3.1
    
    Restated Certificate of Incorporation of Life Technologies.(4)3.2
    
    Fourth Amended and Restated Bylaws of Life Technologies.(5)4.1
    
    Specimen Common Stock Certificate.(6)4.2
    
    2% Convertible Senior Notes Due 2023, Registration Rights Agreement, by and among Life Technologies and
UBS Securities LLC and Credit Suisse First Boston LLC, as Initial Purchasers, dated August 1, 2003.(7)4.3
    
    Indenture, by and between Life Technologies and U.S. Bank National Association, dated August 1, 2003.(7)4.4
    
    11/2% Convertible Senior Notes Due 2024, Registration Rights Agreement, by and among
Life Technologies and UBS Securities LLC and Bear Stearns & Co Inc., as Initial Purchasers, dated February
19, 2004.(8)4.5
    
    Indenture, by and between Life Technologies and U.S. Bank National Association, dated February 19, 2004.(8)4.6
    
    Indenture, by and between Life Technologies and U.S. Bank National Association, dated as of December 14,
2004.(9)4.7
    
    3.25% Convertible Senior Notes Due 2025, Registration Rights Agreement, by and among Life Technologies and
UBS Securities LLC and Banc of America Securities LLC., as Initial Purchasers, dated June 20, 2005.(10)4.8
    
    3.25% Convertible Senior Notes Due 2025, Indenture, by and between Life Technologies and U.S. Bank
National Association, dated June 20, 2005.(10)31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
    Incorporated by reference to Registrants Current Report on Form 8-K, filed on June 16, 2008 (File No.
000-25317).(2)
    
    Incorporated by reference to Registrants Current Report on Form 8-K, filed on June 16, 2008 (File No.
000-25317).(3)
    
    Incorporated by reference to Registrants Current Report on Form 8-K, filed on October 15, 2008 (File No.
000-25317).(4)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended December 31,
2008 (File No. 000-25317), as amended.(5)
    
    Incorporated by reference to Registrants Current Report on Form 8-K, filed on July 27, 2009 (File No.
000-25317). 42




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##### Table of Contents



(6)
    
    Incorporated by reference to Registrants Registration Statement on Form S-1 (File No. 333-68665).(7)
    
    Incorporated by reference to Registrants Registration Statement on Form S-3, filed on October 29, 2003.
(File No. 333-110060).(8)
    
    Incorporated by reference to Registrants Quarterly Report on Form 10-Q for the Quarterly Period ended
March 31, 2004 (File No. 000-25317).(9)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the Year Ended December 31,
2004 (File No. 000-25317), as amended.(10)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K, filed on June 24, 2005 (File No.
000-25317). 43